How to hack the 'do-it-yourself' niche on Amazon while keeping your business numbers in check.
We are a company that produces building mortars, fillers and skim coatings in the province of Pavia. For a family business like ours, the classic sales channel is the paint shop or the building materials shop. Our articles are bought, for example, by painters who have to paint a house and also have to plaster and smooth the walls. Therefore, on physical channels, we cater purely to professionals.
In order to have a good distribution of the product in this sector, you would need to have a network of direct agents who convince, promote and recommend the product to the various local shopkeepers. This is extremely expensive for a small business like Gimod, impractical and risky because you are also forced to handle credit collection from buyers who don’t pay for goods ordered.
A few years ago, watching the umpteenth advertisement of guys 'making millions on Amazon', I asked myself, "why can't I do it too?" For a commodity like ours, Amazon was the most appropriate option for doing ecommerce, because it offered a ready-made platform, fulfillment with warehousing and shipping to customers, and the possibility to expand across Europe.
Well, I didn't expect that we would be selling across Europe in such a short time and that there would also be secondary benefits. I was amazed to see that on Amazon even business customers buy our products, even though the price on Amazon is higher than in offline shops. We have now included dedicated lines for professionals that account for 8% of the total Amazon sales. Also, thanks to the visibility our products have on Amazon, some foreign distributors have contacted me to resell my products. This low-cost strategy for brand growth worked so well that we replicated it also on Alibaba and Emag.
Definitely in March 2020, at the peak of the Covid emergency, when Amazon had shut down the supply of non-essential goods in its warehouses... We could no longer send stock to the warehouses! Without fully realising what we were up against, we decided to start managing logistics by FBM. All the other DIY retailers had run out of stock in Amazon's warehouses due to the blockage and we were the only ones in Europe who produced and shipped directly... This gave us the opportunity to climb Amazon's algorithm by ranking our products high up and to accumulate many reviews that today allow us to compete with the industry giants.
Yes, that's right...it's also true that my living room had become a packing line overnight and my mother asked me every morning with a worried face: "how many are there today?" and I: "there are more than a thousand again today!". We were literally filling up the vans of SDA couriers, which by now was looking at us rather suspiciously, thinking we had organised something shady. Ahahah! It was a crazy time!
This adventure made us fully realise that we couldn't manage everything by ourselves with these volumes: codes, warehouse, shipments, and at the same time making sure the business was profitable. We just couldn't!
Well first of all by deciding that we would never do FBM again but would only continue with FBA. We got a lot out of that period, but it was a disaster to manage all the logistics from one day to the next.
Then I realised that I needed a dedicated management control for Amazon that would tell me with just a few clicks "Now you are in surplus!" or "Now here you are in deficit!". Fortunately, I discovered ZonWizard, which manages all this with the Profit Tool.
There was one that cost us a lot in all respects. Let me tell you about it. Before I had this problem, I used to do the balance sheets at the end of the month with ZonWizard, download the invoices and look at the various margin reports.
In January 2023, I see, to my surprise, that on the order report I have many Asins on which I am making losses, and I realise that I have double the logistics commissions compared to the previous month.
I try to clear up the matter by contacting Amazon support but get no answer and I don’t understand why this happens. In the meantime, I don’t switch off the offers for fear of losing my hard-won ranking on Amazon...
"Amazon's commissions had changed without warning and I had gone into a loss. Without Zonwizard I could not have noticed..."
"ZonWizard warned me that I had negative margins on some product orders, with above-average commissions and unforeseen losses..."
Well first of all, I started checking ZonWizard's order view several times a day to see how much commission they were charging me on each order. I saw that they were charging me cross-border commissions and that 19 out of 54 Asins were for some reason outside the Pan-European. I was paying much higher commissions, without having been warned in any way of this abrupt change.
From January to April I had a profit of -200% and paid an extra €10,000 in commissions. As soon as I saw these results on the balance sheet, I deactivated the Asins, as I kept getting no decisive answers from Amazon’s support.
Fortunately, through ZonWizard I was able to punctually follow the development of the problem, realising when was the right time to block the Asins, balancing the risk and avoiding a loss in the year’s sales on Amazon.
Without the reports of the Profit Tool I dread to think what would have happened.
Yes. After at least 15 calls with support, I had the intuition that there might be some problem with the product being dangerous abroad (possible allergic reactions). So I changed the packaging, inserted all the pan-European languages, and magically since the 1st of September some of these Asins have randomly reappeared in some states.
I noticed this in ZonWizard because articles with positive margins reappeared and I saw them on the profit table.
Now I keep checking the order view and product tab in ZonWizard every day to see that all items are correctly entered in the Pan-European and have a proper margin.
The commissions I paid will not come back to me, but this management control I have implemented with the Profit tool makes me feel safer because now I always have the situation under control.
Before this problem, I used to check the Zonwizard management reports monthly, when I did the balance sheets and tax reports.
Now I have fixed quick daily checks with the ZonWizard profit tool and analytical tool views and I am much more confident that I have everything under control.
No more surprise losses!
Now that all the products are pan-European, we aim to double our turnover in Europe, and we can evaluate the investment to be made both in marketing and from a corporate point of view to open up the US market.
Furthermore, thanks to the know-how we have accumulated over the years, I have had requests from other manufacturers in the sector to market their products on Amazon.
Soon we will also structure ourselves in this direction so as to expand the range of products in our offer.
Thank you for the work you do with ZonWizard and for the support you give us. To say that ZonWizard is indispensable is reductive, it is definitely a "Lifesaving" tool for anyone selling on Amazon
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