Lessons Learned In Business

Defining Value Propositions For Wholesale on Amazon – Wholesale Course Module 3 Part 2

Wholesale System Module 3

This Post is part of the “FREE Wholesale Training Course”.  You can view the entire course listing and introduction to the course here.

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Module 3:  Value Propositions

You can click on each of the links above to go directly to the area of the module the best interests you.  That being said, lets get right into the content!

Want to skip reading the massive wall of text?  After the entire course is released, I will make videos for each of the sections for easier consumption.  Make sure you are on our mailing list to be notified when it’s released!

Defining Value Propositions

When you think about the term “value proposition” you might start glossing your eyes over. It’s something you heard back in school when you were sleeping in Business 101.  In that class, you were told that every successful business needs to have a “unique value proposition”.  It’s pretty simple, really.  If there is nothing unique about your business, any one can copy it and shut you down.

Let’s take a look at the sourcing models in an Amazon business, and what is unique about them.

  • Arbitrage – There is very little that is unique about most arbitrage businesses.  The entire goal of arbitrage is to find an item that has a low enough price to sell it on Amazon for a profit.  Anyone with a little bit of training and a smart phone can do this.  There is an extremely low barrier to entry, and very little that is unique about it.
  • Wholesale – Most Amazon sellers using wholesale as a sourcing vehicle use this process, which provides very little value to everyone involved:
    • Contact brand owner / manufacturer.
    • Get price list.
    • Run price list through tool.
    • Pick 1 or 2 good products that have decent margins and decent volume.
    • Sell the product until the margins die on it.
    • Dump the products when the margins are too low.
    • Rinse and Repeat.
      • There is very little that is unique about this process.  Any seller can call a brand owner, open an account, and follow these steps.
  • Private Label – A large majority of private label companies have little that is unique about them.  They are buying a product that’s already made, slapping a label on it, and selling it on Amazon.  Nothing really unique there, as anyone can give China a call and say “give me 1,000 garlic presses – pronto!”
  • Building a Brand – I consider this to be different than “private label”.  When building a brand, you may be taking existing products on the market and making slight changes to improve the customer experience.  You may be building out email lists, and doing other things such as landing patents and filing for trademarks.  I believe there is a very small amount of Amazon sellers that do this successfully.  This is one of the best ways to be unique on Amazon.

As you can see, a majority of Amazon sellers do not think about ways to make themselves unique.   They are trying to take a piece of the existing pie.  They are doing nothing to separate themselves from the rest of the pack.  This is where “value propositions” come into play.

What are “value propositions” when it comes to wholesale sourcing?  They can be easily defined by a three word phrase:

“Solutions to Problems”

solutions not problems

There are a LOT of problems you can solve for brand owners.  Think about what brand owners may know about Amazon:

  • Absolutely nothing.  They’ve heard of Amazon, but it’s a magical place they know nothing about.
  • They have prejudice against Amazon, and want nothing to do with it.  They’ve heard of stories about other companies getting dominated by Amazon.  Losing control of pricing and their brand.  They are NOT fans of Amazon.
  • They have a bunch of Amazon sellers right now, and they could care less.  They just want stuff sold.  They may know very little about Amazon, other than it drives a bunch of online sales. Oh, and they know about that drone thing.
  • They have a bunch of Amazon sellers right now, and they are frustrated.  MAP is getting kicked around like the can you kicked down the road when you were little.  Their brand is taking a licking, and they don’t like it.
  • They know a lot about Amazon, and they understand exactly how things work.  They may already have a partner they are working with, or they have someone in house with extensive Amazon experience.

That’s a very wide array of education levels and potential problems.  You don’t know exactly what they know, what their feelings are, or what their problems are without talking to them and figuring it out. As a wholesale sourcing company, that’s all you are trying to do: figure out what problems the brand owner specifically has, and figuring out how to solve them.

Here’s some of the most common problems brand owners have, with potential solutions to those problems:

  • Less market share than competitors.  Potential Solutions: Run outside promotions to drive traffic to the listings.  Improve conversion rates on existing traffic by improving product detail page.  Set up PPC campaigns to drive additional traffic.  Sell on your e-commerce site or other marketplaces.
  • Poor product detail pages (including titles, bullet points, images, descriptions, etc).  Potential Solutions: Rewrite the titles, bullet points and descriptions.  Take professional photographs and lifestyle photos of the product.
  • Poor organic search rankings.  Potential Solutions: Get more reviews by creating a follow up email sequence.  Set up PPC campaigns to drive additional traffic. Run outside promotions to drive traffic to the listings.  Do keyword research to find the best keywords to rank for, and update the listing.
  • Prices have been beaten down on Amazon.  Potential Solutions: Create a MAP policy, and provide MAP monitoring service.  Handle all incoming internet requests for new accounts.
  • MAP pricing isn’t being followed.  Potential Solutions: Provide MAP monitoring service.  Handle all incoming internet requests for new accounts.  Help determine where the distribution leaks are.
  • Poor reviews / not enough reviews.  Potential Solutions: Get more reviews by creating a follow up email sequence. Set up promotions to drive more reviews.  Set follow up sequence when poor reviews are left.
  • Poor product presentation when customers receive their product.  Potential Solutions: Provide better poly bagging service.  Offer to repackage product in nicer packaging.
  • Distribution issues.  Potential Solutions: Take over distribution of the products for them.  Help find distribution leaks for them.  Send the items to FBA for them.
  • Products in their catalog aren’t available on Amazon.  Potential Solutions: Create listings for products that aren’t in Amazon’s catalog.  Do keyword research to find the best gaps in the market, and carry those products yourself.  Create campaigns to launch new products.
  • No insight to what their competitors on marketplaces are doing.  Potential Solution: Offer monthly marketplace reporting.
  • No knowledge of paid advertising online.  Potential Solution: Offer basic training on PPC.  Take over avertising campaigns for them.
  • Conversion rates are poor.  Potential Solutions: Improve Product Detail Page.  Send targeted PPC traffic to the listing.

no problemsA large majority of the problems have common solutions.  Those common solutions are your “value propositions”.  Of course there will be more problems you can encounter, which means there may be solutions to the problems that aren’t listed in this module. This is where you can become creative and come up with your own solutions and value propositions. Don’t think the value propositions in this module are the only things you can do.  The sky is the limit!

Yes, some of these things might be scary to you right now, because you have no idea how to do a lot of this stuff yourself.  By the end of this module, you should at least be somewhat fluent in most of the value propositions you may offer.  You won’t be an expert – but you’ll be in the right direction.  Run into a problem you don’t know how to solve?  Tap into your network of other Amazon sellers. Don’t have a network? Join the FREE Grow Your Online Business Facebook Group.  This is also something I can specifically help with by joining my mentoring program.

Now that we’ve defined what a value proposition is, it’s time to build a place where you can easily tell people about them.  Let’s build a company website!

Don’t know what value propositions to offer?  I can help you with them in our Mentoring Program.

Continue on to Module 3 Part 3: Building a Company Website

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Chris Potter

Chris Potter is an internet entrepreneur that loves working on businesses and helping others with their businesses. He has operated businesses that have sold over $25 million in retail sales, bought and sold a blog design business, and started websites from scratch. Skyrocket your business by joining his Mentoring Program!

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