Model
Private Label
Location
United States
Timeline
2023
This client had a budget of 15,000 USD and engaged Xpo9tial to launch a Private Label Product in the USA.
Here is a walk through of our launch process.
Product Selection
Our product selection started with the idea of selling something sustainable, something that’s in demand and has a wide customer appeal . Meanwhile, also keeping the client’s budget in mind, which was $15,000 in hand. The budget was a constraint and we had to move within that. This required us to come up with something that can be sourced within the budget while also retaining some funds or other uses.
After our extensive research, we came across a stainless steel kitchen item with the potential of 4000-7000 units monthly sales. Data from Helium10 was outstanding, high sales and revenue but there was also strong competition. So we quickly moved to using Data Dive to dig in further and analyze the possibility of this launch. After thorough evaluation, we came to a consensus, which was affirmative for the product.
There were multiple designs being sold for this product but we couldn’t do more than one given the budget constraint. So we used our asset, our evaluation sheet, to decide the best variation for us from all aspects. Having chosen the variation to go ahead with, we moved forward with taking the quotations from different suppliers.
Product Sourcing
Proceeding that, the price we got would give us 40% gross margins on the competitor’s selling price. These numbers were quite convincing, so we kicked off the launch.
The COGS was $3.85 and Selling Price: $15.99. This gives us about 26% margins and an ROI of 46% on the actual cash invested.
Keeping in mind that we’re a new seller, so in order to get ranked, our pricing strategy was to start with a 15% lower price to boost our ranking, even if it meant a lower profit margin initially, because we could increase the price once ranked.
Launch
Once the product was live, we utilized our extensive expertise in Amazon Pay per Click advertising to rank the product on the top of searches for our relevant keywords.
Preceding that, we ran a keyword evaluation through Cerebro and Data Dive and used top, high relevance keywords in our content for indexing, and PPC for ranking.
We initiated targeting 5 keywords in EXACT match type and as we were getting orders; our listing started to rank on other keywords as well. Gradually, we kept on adding ASINs, and NOW we are ranked on page 1 on more than 10 keywords which are a mix of high and low search volumes.
With a total AD spend of $8,365 we have made a cumulative revenue of +$45,000 which gave us a TACOS (Total Advertising Cost of Sale) of about 18.6%. Although we're still new in this category, there's significant room for growth.
Currently, our monthly revenue is around $11,000 and as expected, we can now increase our price since we are selling the best design, are ranked on 10+ keywords and also have some reviews, which will give us better margins and an even lower TACOS.
Scaling Strategy
Our future plans involve adding more designs and product options to improve conversion rates and grow our brand presence.
We'll also explore driving external traffic to our listings through social media and affiliate marketing. However, building a strong brand presence and customer loyalty may require a budget of $30,000 to $40,000. This investment will enable us to compete with the top sellers and continue to grow, while also ensuring we have the necessary cash flow for inventory management.
