One thing that’s great about being on Amazon a long time is seeing fads and tactics come and go. I remember when selling grocery items was the new hotness. Now with the Whole Foods merger, that’s probably a riskier proposition. I also remember when “buy something on Ali Baba and have it shipped to Amazon” was a new and innovative strategy. Now I see posts about it on reddit’s /r/entrepreneur and /r/fulfillmentbyamazon nearly daily.
The argument for getting into Private Labeling is compelling — no more scrounging in discount chain end caps. No more finding a great-selling item but being unable to replenish it. No more copyright notices from shoe companies saying you’re not an authorized reseller. Find a good item, make a good listing, drive some good traffic to establish it, and you’re set for life, right?
Unfortunately not. There are people who build whole businesses around scouring Amazon for these good performing listings with the sole aim of squatting on them. After all, if *you* found the item on Ali Baba, *they* can find the item on Ali Baba, and you already did all the market testing for them. Now all they have to do is ship it into Amazon under the proper ASIN and they can sell to your customers.
There are, of course, some things you can do to avoid squatters. You can brand your images, and you can brand your items. You can monitor listings for squatters and go through the appropriate channels with Amazon.
Or, you could just make yourself a less attractive target.
When An Item Isn’t Just An Item
I first remember seeing bundles with regards to grocery items. Because the margin on food items was not very good after accounting for FBA fees, and expiry dates meant you had to move it fast, if you were selling a fancy box of tea, you maybe couldn’t make much if you just sold that one box.
But if you shrinkwrapped 6 boxes together, suddenly the FBA fees were less onerous, the buyer felt like they were getting a good value and you moved 6x the inventory in one transaction. I even heard tales of buyers who can’t math well enough to realize when they were paying MORE on a per item basis than the boxes purchased individually, which boggles my mind.
So now bundling is a decent, though dare I say, mainstream strategy for any consumable.
So that’s a bundle. Now what is a kit?
Kits Make Your Item Cooler
So a bundle is a group of identical items — or, at best, a variety pack. (Buy this value pack of six RARE flavors of gum!) This is great, but still, any idiot with access to a shrinkwrap gun can do what you’re doing.
A kit, according to the super-scientific definition I just made up, consists of the item itself, plus one or more value-add items that make it more attractive to the buyer.
The classic example is when you buy a phone case and the seller throws in a screen protector. No, TWO screen protectors! No, TWO GORILLA GLASS screen protectors AND A FREE STYLUS! (The margin on iPhone cases must be insane.)
The last phone case I purchased had not just screen protectors but a whole little kit to install them, with an instruction card, a polishing cloth, and a little plastic scraper to help you get all the bubbles out. I did not buy the case because of the kit; I have very particular demands about phone cases. But I did buy from that particular listing because of the kit.
A kit consists of the item itself, plus one or more value-add items that make it more attractive to the buyer.
The thing about a kit is that while almost nobody is going to go out and buy the value-add items individually, there’s something quite attractive about having them thrown in. People like free stuff.
The stuff you throw in doesn’t even have to be fancy, as long as it’s at least moderately useful. I bought an LED lamp — they threw in one of those microfiber polishing cloths. What does a lamp need with a polishing cloth? I have no idea. But I added it to my polishing cloth collection and was happy to have it.
More Reasons to Do Kits
Although avoiding squatters is motivation enough to create kits, I happen to think that there are more compelling but harder-to-quantify reasons to do kits.
Stand Out In A Crowded Market
Let’s go back to those phone cases. Have you ever searched for a phone case on Amazon?
To say there are a lot of them is a vast understatement. How are you supposed to get YOUR listing any attention in that scrum? A thoughtful kit is one way. Those value-add items make the buyer feel like you thought about their situation, you understand their needs, and you’re offering these free extras to make it better.
Then suddenly, this is your listing:
Charge More and Raise Your Margins
When you have nothing in particular going for your listing (in comparison to your competition), the typical strategy is to compete on price. Sadly, this often backfires, as Amazon buyers become habituated to the idea that ‘low prices = cheap Chinese knock-offs.’ Sometimes you are in the market for knockoffs, of course, but mostly you just want to buy confidently.
By creating thoughtful value-adds, you position your offering above the cheap crap that’s all too common, and in the class of goods that are “excellent value for only a few dollars more.” This is a trade-off almost every buyer is willing to make.
Make Your Item More Attractive to Gift
I can buy almost anything on Amazon and ship it almost anywhere, but it’s still going to arrive in an ugly brown box and a poly bag. Nothing says “I care,” quite like that, does it?
Ugly packaging notwithstanding, I’m still shipping gifts to friends and family all across the globe because I can’t be there to give it to them personally. But I tear my hair out in frustration that if I buy my friend who just published a book a coffee mug and a fancy notebook and a box of tea, they’re all going to come separately.
Not everything can be made into a giftable format. But it wouldn’t be crazy to sell a tea-bag holder and tea, notebook and a pen, a coffee mug and a coaster. Or (not that this is a kit, exactly) to up your game on presentation.
Group Like Items (especially items that are too small to sell easily on Amazon)
Even for things that aren’t giftable, you can think about, things like “If my buyer if in the market for [my item], what else are they probably in the market for?”
You can be luxe or you can be low end.
A luxe example would be a stovetop kettle that comes with an attractive tea towel. Kettles don’t really have that much to do with tea towels (this is a tea towel, in case it’s not a familiar term) but if they need a stovetop kettle, it follows that they have a stove, and tea towels are one of those useful items that one never really thinks to buy for themselves. Moreover, if you’re looking at kettles, one of the more common search terms is “whistling teakettle” which has kind of a romantic, homey vibe. It doesn’t take very much suggestion for a would-be buyer to decide that the best sort of whistling teakettle probably comes with a charming and coordinating teatowel. Especially if they were buying it for a housewarming gift because they get to take your thoughtfulness and claim it as their own.
A low end value-add item might even be easier, due to the fact that very small items are not cost-effective to sell individually on Amazon.
For instance, if you were selling a dishrack (or many other types of kitchen goods) you could easily throw in something like these marvelous little scrapers. Look at them. They are small slabs of plastic about the size of a credit card. They probably cost a quarter to make. But because of the FBA fees, they have to be sold for $5. Not that they aren’t selling for $5. But oh boy, would I be happy to buy something I was already going to buy anyway to have them thrown in.
There are likely unbranded versions available, but you could also brand them as well. Plus, any time someone squats on your dishrack listing, you just order one, verify that the scraper isn’t included, and get them booted off your listing. It’s a virtuous cycle!
So Why Isn’t Everyone Doing Kits?
Kits have so much going for them, but they are rather complicated to execute. You need to figure out what your customer might want added, source it, potentially brand it, arrange to have it included in your listings and images. You have to ship all the items to your prep service for packaging, or you have to arrange for your supplier to do it.
There are a lot of moving parts, but like so much in life, legwork on the front end makes the rest of your life much easier.
In general I think most people are not confident enough to tackle the process. Long-time Amazon sellers tell me it’s considered an Advanced Technique — but I can think of few things more discouraging for an enterprising Amazon seller than going to all the trouble to find a good product and make a good listing, only to have that listing claim-jumped from underneath him. If a little bit more strategy would prevent that, I can’t think why you wouldn’t.
How We Handle Kits At CVAP
Kits are wildly variable, so at this juncture we are working individually with each seller to brainstorm the kinds of value-adds that they might include, how they might be sourced, branded and packaged, and how to get them put together with the marquee product.
Because we’re looking at stuff with a variety of sizes and complexity, we don’t have a set price for the service. Instead, you can email me at any time and we’ll work together to find solutions that both work for us and fit within your margins. There’s a lot that clients don’t understand about prep work — often things that seem easy are actually kind of tough, and things that you’d think are big obstacles are easy to fix. That’s why we’re happy to work with you to do this kind of problem-solving.
And you’ll often find that your suppliers can do a lot more than you anticipated. I’ve been surprised myself at the flexibility they have been able to offer to client trying to build out an attractive kit. More good reason to work with people who you are able to have a relationship with!
If you’re thinking of doing private labeling and you want to chat about kits, drop me a line; I’m happy to discuss it with you!