This blog post has been created by Teikametrics: The world leader in leveraging data science and machine learning to automate advertising on Amazon. They’re offering Bright Ideas followers exclusive, early access to their new Retail Optimization Platform, Flywheel.
What the Attraction to Amazon Sponsored Products?
Amazon Sponsored Products are one of the most effective ways to advertise. These pay-per-click (PPC) ads help you gain visibility, generate sales momentum, and increase brand awareness. They can create a powerful flywheel effect for your business, increasing your opportunities for long-term growth and scalability.
But how can I be sure I’m doing what’s necessary to optimize my advertising efforts? Data, data, data!
Business guru Peter Drucker famously said, “You can’t manage what you don’t measure.” That idea is fundamental to a data-driven optimization strategy, especially when it comes to campaign creation and keyword refinement. Amazon does this when advertising for its proprietary brands, and you should too.
Sold! I want a data-driven workflow to optimize my Sponsored Products advertising. But where do I start?
No need to sign up for data science classes. There is a simple playbook and solution that allows you to optimize your campaigns, and we’re breaking it down for you here.
It all starts with campaign structure, specifically, a mirrored campaign structure. The basic premise is to utilize coinciding automatic and manual campaigns: this will allow you to explore and exploit data throughout your workflow.
Transition Top-Performing Search Terms
It’s really hard to predict what your customers are typing into the search bar to find your products, so think of automatic campaigns as your trusty compass, pointing you in the right direction for exploration. Utilizing automatic campaigns is a great way to work smarter and not harder.
With automatic campaigns, Amazon serves your ads and does the heavy lifting for you. Use this opportunity to discover which search terms are worth investing in, and then systematically exploit those opportunities by adding them as keywords into your manual campaigns. Soon you can exert more control in manual campaigns, and that’s when the fun really starts.
Refine Keyword Match Types
At this stage, you know which search terms are working, and you’ve transferred them into a corresponding manual campaign. The next step is to refine them further. As your campaigns gain traction, you’ll have enough data to zero in on exact match keywords. How does data help you meet this goal?
Measure impressions, clicks, and sales as you watch your broad and phrase match keywords evolve into fully optimized, exact phrase matches. At this point, your data-driven approach begins to pay off. You are investing in extremely targeted keywords with the confidence that you’re spending money wisely! These refinements are the unsung heroes of your PPC campaigns.
Reduce Inefficient Ad Spend with Negative Keywords
So now you have a solid foundation with automatic campaigns discovering top performing search terms and manual campaigns that are capitalizing on those opportunities. Life is good, but it could be better.
Automatic campaigns cast a wide net to explore search term opportunities; however, this means you might be bidding on generic, broad, and often expensive terms. It’s time to home in on underperforming keywords.
The strategy is simple: identify and remove search terms that are generating clicks but not sales, then add them as negative exact match keywords. This reduces wasteful spending and ensures your product appears for the most relevant and efficient searches.
Use your metrics to kick underperforming search terms to the curb and focus on the winners. This approach to optimizing keywords will keep your flywheel spinning at full tilt.
And stay vigilant! Even the best campaigns don’t work optimally in “set-and-forget” mode. You should be monitoring and evaluating your keywords over the short and long term.
Now you have a simple playbook to run the most efficient Amazon PPC ads. Create campaigns with a structure that emphasises exploring customer data, doubling down on your top performers, and reducing your inefficient spend. If you’re feeling overwhelmed, Teikametrics Flywheel is a Retail Optimization Platform that can do this for you.
It automates this process by using machine learning to identify top search terms, convert them into keywords with the click of a button, and highlight where you’re spending money without generating sales.
On top of that, Flywheel gives you unprecedented visibility into your campaign performance and profitability. Its dynamic algorithm ensures that you’re bidding on the right keywords at the right cost. To discuss your business and guarantee that you’re maximizing a data-driven approach, sign up for a free account audit by a Teikametrics expert and get exclusive access to Flywheel.
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Click the image below to get access to the Bright Ideas eCommerce Fast Track.
The benefit of achieving some level of success is that it has put me in a position to pursue additional opportunities – and I’m extremely grateful for that.
Unfortunately, too many pies in the oven can also lead to overwhelm, dilution, and a number of other undesirable outcomes.
In today’s post, I’m going to share with you my plans for all my companies over the next 6 months. My hope is that writing about it will help me to clarify my own thinking – and ideally, you will pick up a few ideas along the way, too!
Overview of My Companies
As of this writing, the companies I own include:
- My Amazon wholesale business (which I will simply call Amz 3P for short)
- My Bright Ideas business (including my Wholesale eCommerce Business Sytems)
- My software company
- My motorsports brand
Of these companies, the only ones with revenue today are #1 and #2 and combined, they will generate somewhere north of $3.5 million in 2018 with profits of somewhere north of $600,000.
In 2019, I expect to see significant growth with total revenue in the $5-7 million neighborhood. The challenge for me will be how to best allocate the resources I have available to me (my time, money, and team) to ensure that I get the greatest results possible.
So, with that in mind, here’s how I think my plan needs to look.
My 6 Month Strategic Plan
The primary objective of my 6 month plan is to get all my businesses performing without my day-to-day involvement – which means that I’m going to have to create enough cash flow to be able to afford to hire more people.
Fortunately, we’ve just purchased an 18,000 commercial building with a 3,000 square foot office space, so we’ll have plenty of room for new hires.
Oh…and just in case you were wondering, we don’t need all 18,000 feet. The building has 6 tenants in it, and the rent they pay more than makes the $8,000/mo mortgage payment.
The key to achieving my six month plan lies in making good decisions about resource allocation during each month during that time.
Months 1 to 3
- Devote my time to pursuing new accounts in my Amz 3P business
- Ensure the next WEBS launch goes well
- Launch my software company
Over the last year, My Amz 3P business has grown at 20% per quarter – without my barely lifting a finger, thanks to the team that I have in place.
Unfortunately, over the last 90 days, revenue was actually down to $605,299 from $722,422 in the prior 90 days.
The reason for this is that we didn’t land any new wholesale accounts – which, I have come to learn, was the result of one of my employees (who handled sourcing) mentally checking out while he was looking for a new job.
During this same period, we also lost one major account worth about $50,000 per month in revenue.
Shame on me for not paying closer attention to my sourcing agent’s level of production.
As a result of his departure, I will need to put my “sourcing agent” hat back on for long enough to get things back on track. Once I do that, I will then hire two more salespeople to handle our search for new accounts.
Until I am in a position to hire these two new employees, the activities that I (with the help of my staff) will use to pursue new accounts will include:
- Email outreach (carpet bombing)
- Telephone outreach (Dream 100 List)
- Podcast interviews (with CEOs of companies we’d like to land as suppliers)
WEBS / Flowster
Since coming out just shy of a year ago, my WEBS product has continued to surpass even my most optimistic expectations. In our first six months, we sold $850,000 worth of it.
In case you are new to my blog and don’t know what WEBS is, let me explain.
Back when I started my Amz 3P business, I set out to create a Standard Operating Procedure (SOP) for absolutely everything we did so that I could easily delegate all the grunt work to a team of virtual assistants.
Thanks to all the help from my VA team, my Amz 3P did $1.1 million in its first year which put me in a position to hire a number of full time US employees to help me to continue to grow the business – and that was key to being able to delegate myself out of a job within a year of starting the business.
As word got out about what I had created and the results we’d achieved, I was repeatedly approached by other Amazon sellers who all asked me the same thing: would I be willing to sell them a copy of my SOPs?
Ultimately, I decided to try it, and my Wholesale eCommerce Business System (WEBS) was born.
This October we will be releasing the latest version of WEBS and based upon increased affiliate support and product improvements, I’m confident that this release will be our biggest yet.
To ensure that we are able to continue to innovate and develop the product more fully, approximately 6 months ago, I formed a new software company in a partnership with another entrepreneur and we’ve had a team of developers coding ever since.
For the next release, the WEBS product will now reside in our own software platform, instead of a 3rd party platform.
So, until this next release is completed – which I estimate will be the end of October – in addition to putting my product sourcing hat back on, I will also be the one quarterbacking the upcoming WEBS release as well as the launch of the software company in which WEBS will now reside.
Months 4 to 6
Since returning to product sourcing, I have rapidly filled our pipeline with new opportunities and I expect that it won’t take me much longer than 60 to 90 days to land enough new accounts to replace the lost revenue and profits – and then some.
If all goes well, our monthly run rate will climb to over $300,000 and that will provide enough additional cash flow to hire two salespeople.
Thanks to our focus on SOPs, I don’t anticipate that it will take long for these folks to come up to speed – though you can bet I will be paying close attention to their progress!
Once I have successfully delegated myself back out of day-to-day operations at Amz 3P, I intend to put my focus on launching my motorsports brand.
The National Motorsports Owners Association (NMOA)
I have grand plans for this new brand and I’m looking forward to being able to devote the resources (my attention + startup capital) to it.
Why do this?
Before I get into what we are planning to do, let me first share the reason why I’m planning to start this business…
As things stand today, my income is heavily dependent on the success of my Amz 3P business. If that were to fail, WEBS would also fail and my income would take a massive hit.
Obviously, this would be horrible, and the way to avoid it is to create additional streams of income.
Flowster will provide one new stream from its subscription fees, but I don’t think that stream will grow fast enough without another way to attract customers.
By launching a non-Amazon business, and the SOPs that go with it, I will, in effect, be creating two new streams of income.
Stream #1 will be from the motorsports brand itself.
Stream #2 will be when I create another SOP offering like WEBS…but instead this one would be called EBS (eCommerce Business Systems) because it won’t have anything to do with wholesale on Amazon.
Assuming we succeed with the motorsports business, I will have the following 7 different streams of income:
- Amz 3P
- Bright Ideas
- Real estate investments
How I plan to grow the NMOA
Initially, the focus will be on building a large email list, and we are going to use sweepstakes to accomplish this goal. Look for upcoming posts and videos on just how we are doing.
Given that this process will be relatively simple and highly repetitive, my hope is to be able to avoid any significant day-to-day activity in our pursuit of contest sponsors.
As I mentioned, I’ll be creating a bunch more SOPs for this company – which at some point in the future, will also be for sale like WEBS is today.
To recruit sponsors, there are two methods that we’ll be testing.
Method #1 is to hire two salespeople to make calls. (I prefer to hire two instead of one so that they will compete with each other.)
Method #2 is to launch a new podcast in the motorsports space and then use that podcast to build relationships with potential sponsors. I have zero doubt that this will work – the only downside is that being the host of the show will take more of my time.
Armed with a rapidly growing email list, we’ll easily be able to monetize that list by making motorsports-specific offers on a daily basis (think daily deals).
The catch is that running the email marketing will require yet another full-time US employee.
Thanks to my need for US employees, I think it is extremely unlikely that the NMOA will generate any profits in its first 3 to 4 months. In fact, we’ll probably lose a good chunk on our way to break even, so this is one of the areas where I will be investing the proceeds from WEBS.
As the NMOA gains momentum, our portfolio of SOPs that reside in Flowster (for our internal use) will continue to expand, and at some point, once we have enough social proof from our results, this will allow me to launch EBS which will attract more users to Flowster.
In addition, I have a few other strategic partnership ideas that I plan to test.
Should any one of these ideas prove viable, we’ll be able to offer an ever increasing number of “done for you” SOPs in a variety of niches – and that will put us in a position to acquire large numbers of customers at a time like we have done with WEBS.
To make this happen, I will personally be involved in forming these partnerships.
Bright Ideas Blog
Last, but surely not least, is this blog. Excluding WEBS, over the last year, the blog generated close to $40,000 in revenue and that is a far cry from its true potential.
Much like I have been doing for years, I will continue to create the most helpful content I can. Thanks to my foray into the world of non-Amazon eCommerce – as well as launching a software company – I will have not one, but two test labs to work on and write about!
As my marketing experiments play out, you can bet I will be sharing like crazy, which should result in the blog’s audience increasing in size.
As the size of the audience increases, I will have all sorts of opportunities to monetize the audience in the following ways:
- Sales of my own digital products
- Revenue from my eCommerce Fast Track mastermind group
- Affiliate commissions
- Podcast sponsorship income
As you might guess, I greatly enjoy sharing what works for me (as well as what didn’t), so my blog will always receive my personal attention, and it’s not something I plan to delegate myself out of – at least not for some time yet!
So there you have it. Now you (and I) are clear on how I plan to invest my time and resources over the next 3 to 6 months.
While I’d love to have everything I’ve written about pan out perfectly, I doubt that will actually happen due to unforeseen events, overestimations of my talent, availability of capital, etc…
What I can tell you for sure is that it’s going to be one heck of an adventure, and I hope you choose to follow along, ask questions, and share your thoughts with me.
Want to learn more about succeeding with eCommerce?
Click the image below to get access to the Bright Ideas eCommerce Fast Track.
Who is Trent Dyrsmid?
Trent Dyrsmid is a serial entrepreneur, husband, and father. His 3 private companies generate millions a year in revenue. He is also the host of the Bright Ideas podcast. Profit Magazine named Trent’s first company as one of Canada’s PROFIT 100 fastest growing companies for two years in a row before he sold it for 7 figures in 2008. Business in Vancouver magazine named Trent a Top 40 Under 40 Entrepreneur. If you want to discover how Trent plans to grow his Amazon wholesale business from 7 to 8 figures a year, become a subscriber today.