The funny part is, once I had the physical pajamas in my hands I assumed that the hard part was over. Lesson 9,076 in entrepreneurship – it is never over and stuff is just always going to come up that you have to figure out and push through. Amazon was / is a beast – and I didn’t quite realize what I was getting myself into.
It was originally extremely important to me that I offered COO BABY pajamas on Amazon Prime. My first few months of motherhood were filled with me placing orders for random things almost exclusively on Amazon. It was quick, easy, it stored my payment information (who wants to run and find a credit card every time they want to buy something?) and returns were simple. I wanted life to be as easy as possible for all of my customers, especially new moms, and so it was always part of my business strategy and plan to offer the pajamas on Prime and to have my logistics run through FBA. FBA means Fulfillment by Amazon – basically you are outsourcing everything that happens after a sale is made to Amazon – storage, order processing, fulfillment, delivery, and return processing. I would pack up boxes with the inventory I wanted to send in, then measure, weigh, and fill out the necessary information. After that I would ship that inventory to an Amazon warehouse (or multiple warehouses, depending on what Amazon told me to do). At that point, it can take anywhere from 7-14 days for everything to get set and available for sale on the site.
The two greatest pros to utilizing Amazon as a marketplace to sell the pajamas as well as FBA to handle the logistics are time savings and exposure. Because I have a full time job, I felt that it would be really challenging for me to handle logistics and customer service right off the bat. I also wanted my customers to have the best shopping experience possible – and I knew that most people were already signed up and comfortable with Amazon’s buying process. From an exposure standpoint, though there is competition, as long as you have a strong listing, are inputting the right keywords, and have overall positive reviews – your product will get in front of a lot more people than if you just listed it on your own website to start. This made it really exciting because pretty quickly we were getting anywhere from 4-8 sales per day (some days a bit more or less) and our inventory was selling through at a pace that made me feel confident that this “little engine that could” business was not for nothing.
Even though sales did come in faster than I’d anticipated – it wasn’t totally instantaneous or automatic. I did have to spend every evening and most weekends researching how to improve the listing, maximize the audience we would reach, how to utilize and optimize ads on Google and Amazon to drive additional traffic, etc. I even hired a freelancer on Upwork to help me improve my website and to teach me how to better run ads on Amazon. Everything was trial and error – but it was fascinating to see which levers would do what and how I could tweak one tiny thing and see sales increase from there.
For me, the two biggest cons to using Amazon FBA is the cut they take from each sale (it is a large percentage which makes it difficult to be competitive from a pricing standpoint – especially when you are a small business) as well as the lack of connection I was getting to those who were buying the pajamas. Here I was, acquiring all of these new customers, and I couldn’t see any of their information beyond first name and city from where they ordered. If returns were made, I couldn’t get a read on why or specific feedback they might have.
To give some additional context, we sold about 400 sets of pajamas within our first 3-4 months, which was amazing. Out of that, roughly 35 people left reviews. A vast majority of those reviews were 5 star and positive, but we had a couple trickle in that complained the sizing didn’t work for their baby (which we’ve since improved upon). Those two reviews (out of 400 purchases) bothered me deeply. I knew in my heart that not all pajamas could fit every single child, but what bothered me the most was that I couldn’t reach out to those customers and personally tell them that I was sorry, that we would happily extend a full refund, and that we hoped they could provide further detail so that we could make the pajamas better for everyone in the future. I had no way of telling them how much I really cared. I obviously responded to their review immediately as a comment, but unfortunately I don’t believe they were notified and it’s not very easy to find – so it’s my guess they never saw my response.
I started to have a nagging sense that something just didn’t feel right about having a majority of our business rely on Amazon. My husband and I had many conversations about it and went back and forth about what we should do. He understood that I wanted a better connection with customers but also wanted me to understand just how many sales were being organically driven through Amazon. He worried that shifting the model to direct sales on our website would tank our exposure and therefore sales, stalling the growth we were seeing. I knew that he was probably right, but I couldn’t shake it. I had to trust my gut. We couldn’t depend on another company to sustain long term success and I wanted more than a transactional relationship with my customer base. We had to make a change.
Along with that business shift came a little thing called COVID-19 – and change we did…
PART 3 will be shared next Monday! Stay tuned 🙂