[Case Study: Part 2] How to Launch Private Label Products on Amazon in 2018

Ok time for part 2 of the Product Launch Case Study! In our first part, I showed you the product we will use, lowered the price to undercut our competitors and set up our follow-up email. This week we will go over Product Giveaways and the Early Reviewer Program. And most importantly why I think this is an extremely strong combination when launching products!

Other updates:

  • Part 1: We discussed the product for the case study, the FBA launch strategy that we will use, we have lowered the price & set up our email follow up campaign.
  • Part 3: Is where we started seeing the first results! This is also where I started with the PPC campaign.
  • Part 4: Last part of the case study where I show the final results.
  • Final update: Here I share how the product is currently doing and what I am doing to further improve the product.

The Amazon Product Launch Checklist

  1. Lower price – Done
  2. Set up follow-up email – Done
  3. Product giveaways ( while staying within Amazon TOS )
  4. Early review program
  5. GO HARD on PPC
  6. Increase price
  7. PROFIT?!?!

Product Giveaways

Amazon TOS

Ok before we get into the giveaways we quickly have to understand the rules. In the beginning, this was the main method to get reviews: You giveaway a product and in exchange you would request a review. Of course, Amazon is not stupid and knows that these reviewers are extremely biased into giving you a 5-star review, so they banned this method. You can read the exact rules here, but the most important points that are NOT allowed:

  • A customer posts a review in exchange for cash, a free or discounted product, a gift certificate, or a discount off a future purchase provided by a third party.

Setting up Product Giveaway Codes

I’m not going to explain this into too much detail, as this is pretty straightforward and there are other sources explaining this as well. But I do want to point out 2 pitfalls to avoid!

So you can create the codes under Advertising -> Promotions. And I always use the Percentage Off codes, where I create 99% off coupons.

Pitfall 1
Make sure to select Single-use code. So each code is restricted to 1 use. Also, you definitely make sure that “Detail page display text” is unchecked! Otherwise, Amazon will display the coupon code on your listing and everybody can use it.

Pitfall 2

So now we have 99% codes ready to go. The problem here is that the 99% discount counts over the complete order. So a customer can decide to order 999 pieces and buy your entire stock for 1% of the price. You can find some horror stores about this, from newbies who got their entire stock bought up like this.

In order to prevent this, you have to limit the order quantity to 1. You can do this under: Manage Inventory -> Edit -> Offer

Where to giveaway?

So there are a lot of different ways to giveaways your products. I will discuss some popular ones and the one I use.

Facebook groups
This is a very popular one. You can find related facebook groups, send the admin a message and ask them if you can giveaway some products in the group. This is great since it is very targeted to your niche.

Email list of Amazon customers
So in the past Amazon had customers email address in their public profile. A great way to contact Amazon customers directly! However, they have since removed this feature 🙁
Luckily someone has compiled all this info into 1 awesome Excel sheet!

And yes, I will share this list with you! Leave your email below and I will send you the download link.

This is the method I use and in order to comply with the Amazon rules I send these top reviewers a very basic message:

Hi,

We are launching a lot of new products on Amazon.com and want to giveaway a bunch of them to get them in the hands of our customers and increase our sales velocity.

The first product we will be releasing is: <your product>

Please note that since the last Amazon TOS update we are not allowed to ask for a review in exchange for the discounted product. If you want to you definitely can, but you are not required to.

So to prepare for this week I have already send out this email blast to our list and received plenty of responses.

So for this product, I have decided to giveaway only 15 products. I can always giveaway more at a later stage but normally this is enough for my methods.

Early Review Program

So the concept of this program is that Amazon will pretty much do the dirty work for you and ask your buyers to leave a review in exchange for a $3 gift card. The cost of the program is $60 and Amazon will do this until you have your first 5 reviews.

One important thing to note is that Amazon will only send out this offer to existing buyers. This isn’t some kind of magic program where you pay $60 and get 5 reviews instantly. You have to have some kind of sales velocity for this program to work, and people that are willing to leave reviews ( which can take a while ). However, since we are doing this in combination with giveaways we won’t have to worry about this.

The combination

Now here is why I think this is a very strong combination: If you have been dealing with these reviewers who want free products you can kinda get a feel of what kind of people they are. Typically they are stay-at-home moms who are strapped for cash and want to make a little bit of extra money by getting free products and reselling them on eBay. Nothing wrong with that, everybody has their own hustle.

Now with the new rules, they are not required to leave a product review anymore and can just keep the product for free. However, when they receive an email from Amazon how they can earn an extra $3 besides their free product, they are extremely likely to leave a review! This combination has worked wonders for me, and gotten me the first 5 reviews very fast!

Total cost launch so far

Giveaway Product cost: 15 x $6,11 = $91,65
Giveaway FBA fee’s: 15 x $4,71 = $70,64
Early reviewer program: $60
Total: $222,30

Next week I will share the results of the giveaway, and once we get those first reviews we can start with our PPC campaign!

Click here for part 3

[Case Study: Part 2] How to Launch Private Label Products on Amazon in 2018
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40 Comments

  1. I actually talked with amazon seller support, they told me you should not actually go to review clubs and simply buy products for reviews. Cause they know that. But giving away coupons itself is ok, its just targeting specific facebook review groups will likely get you in Amazon’s radar.

    I would love to talk with you more though since I recently launched my product 11 days ago. Would love some extra tips from you.

      1. So how do we approach the FB groups if we don’t want to get in trouble with Amazon? I heard from another seller that he asks his friends and family to do the first few review!!! Is that ok?

  2. Great post, thank you.
    I have a question: when sending the promo codes to these top 1000 reviewers, we’re basically looking for someone to send our free items, right? If I just gave it to 1000 random people on the internet, is there any difference? What’s the key idea here: trying to give away as many as possible, or just fewer with targeted audience?

    1. Jup that’s the goal. Give out our products for free in order to increase sales velocity. However, the more targeted our giveaways are the higher the chance they will leave a review. So if you give your products to people that are known for leaving reviews ( because they are in the top 1000 list on Amazon reviewers ), there is a good chance they will leave a review 😉

  3. To clarify, Since your promo is 99% off the reviewers still need to pay the 1% to receive your product? BTW, love this Case Study, very insightful.

      1. When you create the 99% off discount coupons, a message pops up saying that it’s more than 70% off ….I heard that you shouldn’t create coupons for more than 70% off. Is this true? or can you still do 99% off and not get in trouble with amazon?

        1. Why would you get in trouble with Amazon? They allow it. The warning just pops ups to give you an indication that people can buy your stock pretty much for free.

  4. I’ve bought products from Amazon before where the seller included a Thank You message on a business card and also suggested that I leave a review. Do you include things like this in your packaging or use another tactic? Or is this against TOS?

  5. How did you decide how many products to give away? I’ve heard that you should give away as many products a day for 7 days that your competition is getting in sales…that way you rank right next to them on Amazon’s page. What do you think of that?

    1. Giveaways are pretty expensive. So I only giveaway enough units for those first couple of reviews.

      The theory our referring on is based on: “If I giveaway enough units to match the top sellers, Amazon might rank me at the top as well”. The top sellers in my category are selling 150 units a week. That would mean I would have to spend 150 x $10,80 = $1600 on giveaways alone. I think it is more cost effective to increase your sales velocity by lowering price & PPC.

      Besides that, this theory is also based upon the fact that Amazon will count discounted sales the same as normal sales. I think there is a good chance that this is not the case. So thats another reason for me to go with lowering price & PPC, as those are “real” sales.

      1. Gotcha! Agreed…giveaways seem really expensive if the product is doing moderately well! Looking forward to your next post 🙂

  6. What type of Facebook groups do join for giveaways? I’ve done some searching for names like “Amazon discount” or “Amazon giveaways” and these groups are clearly going against the TOS. Are there any types of legit groups that don’t violate Amazon’s TOS?

    1. Yeah so If I’m selling a garlic press, I will look for kitchen & cooking FB groups. I will message the FB admin that I am doing a promo and members can get my product for free.

  7. Hi. Do you email all 1000 of those contacts? If so, how do you limit the discount codes to only 15 of them? If not, do you just randomly pick 15 from the list?

    1. You can limit the discount codes, by only giving out 15 codes to the first 15 people who reply.

  8. Hey,

    Great post.
    Do you also have the email list for Amazon UK? I’m going to request this one now.

    All the very best!

  9. Hi,

    Can you spend a little time on the production, shipping, warehousing and distribution model, including some cash flow examples for some of the products you mention? In other words, if I wanted to become an Amazon Seller, how much investment would I need and what kind of time frame to build up a business with reasonable take home cash flow.

  10. Thanks for doing this, I’m learning a lot! My question is, I read that any discount over 49% of your product price will lead to “unverified reviews”. Is this correct?

  11. Can you help explain how a seller needs to set up for state sales tax collection? Do I need to register for sales tax collection in each state? I know sites like taxjar help track all the reporting but I have no clue how to set myself up to collect the tax with the states or how much paperwork/fees that would entail.

    1. I think this is one of the aspects I should not advice you on and people should only listen to a real tax consultant. However, I use Taxjar to keep track of my VAT.

  12. Great but Confused me. When we set 99% on amazon, do we get code for that which we need to give to 15 buyers through email? You send 1000 emails. How these people will get offer? How they get code to buy the product? What happens after 15 purchases? Can we create more such offers? What software you use to get email id? Can you write on that please?

    1. Yeah you get the codes which you can then hand out to whoever you like, they are limited to 1 time use. You simply hand em the code after they agreed to it

  13. Hello ,

    I agree with Joe , some info on investment and cash flow would be helpful , great blog and much appreciated .

  14. Hi,

    My product will be coming in to amazon warehouse this weekend. I’ve got the customer email list all ready to go to send out made the email template made a follow up email etc.

    Should i wait till it arrives in the warehouse or send it out now and see who comes back to me ?

    Thanks in advance

    1. I’d say wait till it reaches the FC. Because when it reaches Amazon warehouse it might still take a week before you can send out orders.

  15. Hi, love your blog. 2 questions:

    1) “One important thing to note is that Amazon will only send out this offer to existing buyers” – so that means that the person that get the giveaway considers as existing buyers? and then amazon will send him the offer of review for 3$ gift card?
    2) Are you keeping these buyers (the ones that get the giveaways and the ERP offer) contact info for future PL’s ?

    Thanks!

  16. Hey Admin,
    I will soon launch my first product, and was wondering – do you use the reviewers list for getting full price purchases for early reviews before launch? (Like giving them full refund)

    If yes – will you be Ok with recommending on few of the reviewers in the list you trust the most, that you have positive history with and that they leave good reviews?

    1. Hi mate,

      Yeah I still use the list to launch. However, I am afraid I can’t do that for you. Because else you can just look for the other products these people have reviewed and find my products 😉

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