This One Mistake Could Cost YOU Thousands! (Losing Money With Amazon FBA)

Congratulations!

You are approved to sell on Amazon.

You sourced a great product that’s bound to hit it out of the park.

The copy is written, the photos are ready to go, and the listing is looking great!

The product is on its way to Amazon’s warehouse and now you can finally sit back and relax while the Benjamin’s roll in.

Right?

Wrong!

You missed a critical step. One that will potentially cost you thousands of dollars and months of time.

How Do I Know This?

Well, unfortunately, it just happened to me.

What am I talking about?

Product Quality Inspection

Recently I put out a video of me talking about my new product that just launched. I was super excited because the new launch was going well and organic sales were taking off.

I was building up my 5 star verified reviews. However, over the next 10 days I would get slammed…

I got the infamous, first 1 star review.

***cue tears of pain***

And I gotta say, it really hurt—not only my feelings, but my sales (lol).

Before, I was selling 15 units per day and then all of a sudden, BAM! 5-8 sales/day average after that.

My sales got literally cut in half all from one, stinkin’ 1 star review.

This customer reached out and told me that the product broke after only a couple uses.

I sent her a new one immediately and hoped for the best.

But then…

Another 1 star review rolled in.

FUCK!

And then a couple of people got refunds…

Ok, so by now I know I have a serious product quality problem.

It doesn’t matter how good your photos or listing is, if your product sucks YOU WILL FAIL!

This was frustrating for me because I physically went to the factory and inspected the products myself. At the time, there was nothing that jumped out at me as a big issue, but ultimately this is what I think led to the product quality problem:

  1. I ordered right before Chinese New Year – I mean literally, my order went out right before they went on vacation. I think the tight production timeline caused them to overlook some important quality factors. They were in a rush and not doing as thorough of a job as they should have.
  2. Only inspected a small sample of the whole order – When I went to check on the products, I was only able to inspect a sample that clearly did not represent enough of the total order. If I had spent more time thoroughly checking more of the units, I might have caught some defects before they were shipped out.
  3. The product is inherently prone to problems — This product has many moving parts and the construction of it is quite complex. Therefore, there is lots of room for error and quality issues. Without some serious oversight, there was bound to be issues from the get go.

As you can see, there were a number of factors that led to this product becoming a problem for me.

What Do I Do Now?

At this point I’ve had to refund nearly 10 orders out of a 300 order batch—not exactly ideal selling conditions.

I spoke with the manufacturer and they claim that none of their other customers have this problem, which I know is not true…

My competitor, who sources from this same factory, also has plenty of poor reviews and an average rating of less than 3 stars.

Now you’re probably thinking, “then why would you source from them too!?” And my answer is that, I thought that If I could physically go and inspect myself, then I could fill in where they were not. Obviously, I was wrong.

Going forward, I will sell out the rest of this inventory and close down the listing. The margins are not there for me to keep pushing this product forward. I can put my money in more cash efficient products, which I’m doing now.

Luckily, I didn’t actually lose money on this order, BUT, had this been a bigger order or a more detrimental product defect, this could seriously hurt the bank. I know firsthand guys who have lost 5 figures from problems like this.

Opportunity Cost

What I didn’t lose in money, I lost in time. If I chose a better product in the first place, I could be selling great by now without the headache of dealing with a shitty product problem.

The important thing to take away from this is to ALWAYS get your products inspected by a professional Quality Assurance company.

I thought that it would be fine for me to go, since I was close. But, as you can see, I was wrong.

It’s possible that the inspection company would have caught on to these defects and would have advised not to send the order in. This actually happens more often that you think. It sucks to know that your order is messed up but WAY better to know that now than to start getting refund after refund.

Take your time, do your due diligence, source good products, and get them thoroughly inspected. You, your wallet, and your cusotmers will thank you in the long run.

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5 Comments

  1. Connor

    That’s a pain in the ass! Interesting read though, sounds like you’re learning the lessons. Good thing to gain some experience from!

  2. Rafael Loss Costa

    Oh man, I didn’t see that coming. Neither did you. Damn.
    Can’t you do a recall or order new products with no cost?

    • hbevins

      Yeah I usually have contracts in place that will allow me to reduce the cost on the next order or they will refund me. But because I’m not reordering this product, those defective units are just a loss. It’s pretty difficult to get money back from Chinese, but in contractual situations it’s doable.

  3. Thank you for the good writeup. It in fact was once a amusement account
    it. Glance complicated to far introduced agreeable from you!
    By the way, how could we keep in touch?

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