195: Ensuring Maximum Profitability on Shopify and Amazon

195: Ensuring Profitability on Shopify & Amazon

September 28, 2023

With Tyler Jefcoat, Founder of Seller Accountant

Hosted by Kevin Mako, President of MAKO Design + Invent

195: Ensuring Profitability on Shopify and Amazon

Tyler Jefcoat is the founder of Seller Accountant, which helps Amazon sellers achieve maximum profitability through bookkeeping and CFO services. He has been behind 9 figures in Amazon sales and 9 figures in exits, and that’s after he founded a company himself that grew to 120 employees before being acquired. Today, Tyler is going to share valuable knowledge for inventors, startups, and small manufacturers on what direct-to-consumer selling online is, the pros and cons of Shopify vs Amazon and eBay, and the keys to success when scaling sales through direct-to-consumer selling online. 

Here are the key takeaways from the episode:

  • What is Direct to Consumer selling?
  • Funneling your customers from various platforms
  • Marketplace strategy to get customers to your shopping cart
  • Shopify vs Amazon/Ebay
  • Well designed, differentiated product sells very well on Shopify
  • A direct connection to many customers that have a number of problem solved.
  • Have your own website and drive Shopify to your website
  • Tips to Amazon profit
  • Staple products typically are better suited to Amazon
  • Product design strategy to ensure success of product sales
  • Which community is important for a customer buying something online.
  • It’s okay to be the type of product that fits your brand
  • Amazon fees are high, they take a lot of fees for each sale.
  • Amazon logistics (pick, pack, delivery), also have fees
  • Marketing on Amazon also has fees.
  • COGS is the leading indicator to how well you can market your product
  • The more margin, the more freedom you have to build an audience through advertising.
  • The less margin the more you have to be efficient for getting product to move.
  • 20% to 25% net margin is a very viable product. 30% is big for scaling. 15% is dead.
  • Know that your accounting is giving you real-time information on profitability of your hardware product sales.
  • Each of your sales channels needs to be profitable
  • Each product you have needs to be profitable.

Episode Highlights

  • 2:53 – What is D2C or Direct-To-Consumer Selling?
  • 4:08 – The most successful D2C products on Shopify are the ones that have been able to really differentiate their products
  • 5:04 – People are very unlikely to search for specific companies that sell simple, staple products
  • 5:10 – You need to find or build a marketplace to bring your buyers – think about it like a flea market
  • 5:30 – Learn the difference between your market options and choose the best-suited path for you
  • 6:10 – What is Shopify?
  • 6:30 – Build a niche product, solve a problem, and build loyalty. Loyal fans are more likely to seek you out.
  • 7:20 – Whose community matters most to you? To build your brand, think about which communities are the deciding factor on your product’s success
  • 8:17 – You can’t make money getting distracted, but you can make money if you focus on your specific market audience
  • 9:17 – The budget for your product is directly related to the cost of goods sold
  • 10:20 – Amazon and similar marketplaces deliver the eyeballs that your product needs. 
  • 10:40 – A 20-25% profit margin means you have a viable product, above that, you have a scalable product, and below that, you have a dead product.
  • 12:20 – If you have good margins, you can have an incredibly successful and scalable business
  • 13:25 – You need to be certain of what your gross profit margins are
  • 13:50 – Be sure to “grade” each of your selling channels
  • 14:00 – Each product needs to be responsible for profit
  • 15:40 – Economies of scale

Tyler Jefcoat Links:

LinkedIn

The Product Startup Podcast Links:

Instagram | LinkedIn | Facebook Page | Facebook Group | Pinterest | Twitter | YouTube

Mako Design Links:

YouTube | Instagram | LinkedIn | Facebook | Pinterest | Twitter

Kevin Mako Links:

Instagram | LinkedIn | Quora | Facebook | Twitter

Partner: PTC’s best-in-class software solutions Onshape: The only cloud-native product development platform that delivers full-featured computer-aided design (CAD), integrated product data management (PDM) and enterprise analytics in a single system, and Creo: 3D CAD solution that provides designers with the most innovative tools to build better products faster, such as generative design, additive manufacturing, real-time simulation, IIoT, and augmented reality.

Producer: MAKO Design + Invent is the original firm providing world-class consumer product development services tailored to startups, small manufacturers, and inventors. Simply put, we are the leading one-stop shop for developing your physical product from idea to store shelves, all in a high-quality, cost-effective, and timely manner. We operate as one powerhouse 30-person product design team spread across 4 offices to serve you (Austin, Miami, San Francisco, & Toronto). We have full-stack in-house industrial design, mechanical engineering, electrical engineering, patent referral, prototyping, and manufacturing services. To assist our startup and inventor clients, in addition to above, we help with business strategy, product strategy, marketing, and sales/distribution for all consumer product categories.