Client Background:
Our client, a home and kitchen brand, launched a unique kitchen gadget on Amazon. The product’s innovative design and high-quality build resonated with consumers, leading to a successful launch that generated strong sales and glowing reviews. However, due to supply chain miscalculations, the brand went out of stock shortly after launch, causing their rankings and visibility to drop. When they restocked, sales were significantly slower, and the product struggled to regain its previous traction.
Challenge:
- Stockout & Rank Drop: The unexpected stockout led to a significant drop in search rankings and Buy Box eligibility, severely impacting organic visibility and sales.
- Lost Momentum: With the product no longer in the spotlight, it was challenging to capture the attention of customers who had initially driven the product’s success.
- Ineffective Restock Marketing: The brand’s return to Amazon went largely unnoticed due to ineffective promotional strategies, making it difficult to rebuild the initial buzz.
Our Approach
1. Rank Recovery Through Aggressive PPC Campaigns
Scalekey understood that regaining ranking was essential to recapturing sales velocity. We implemented a robust PPC strategy specifically focused on the product’s core keywords to boost its visibility and help it regain lost rankings. This included:
- Exact Match Keyword Targeting: We invested heavily in exact-match campaigns to target high-intent keywords that were essential to the product’s category, such as “compact kitchen organizer” and “space-saving utensil holder.” This allowed us to capture consumers actively searching for this specific type of product.
- Branded Campaigns: Since the brand had initially built a small but loyal customer base, we ran branded campaigns to remind previous customers and fans of the brand. By targeting branded keywords, we reinforced brand recall and recaptured some of the customers who had engaged with the product during the launch.
- Revamped Product Listings for Better Conversion To make the product more appealing upon its return, Scalekey optimized the listing with enhanced images, compelling bullet points, and an improved product description that addressed customers’ top concerns and desires. We also added customer testimonials from verified buyers who had shared positive feedback initially.
By refining the listing with fresh visuals and an emphasis on unique selling points—such as “compact design” and “multifunctional use”—we enhanced the product’s appeal and targeted pain points more effectively.
After Optimization:
- 12 SKUs: We identified that the client and the competitors are leaving 20000-25000 Monthly on table just by not introducing new variants in the product. We identified the gap in the niche and each variant SKU was researched, optimized, and launched profitably. Each SKU was researched, optimized, and launched profitably. We turned the account from having one failing SKU into a portfolio of 12 profitable products.
- Revenue Growth: Monthly revenue grew from $5000 to $56000
2. Cash Flow and Profit Planning
Before:
- The account had improper cash flow, and all capital was tied up in inventory for the dead listing and client was unwilling to spend more without seeing the results
After Planning:
- Monthly Profit Growth: With a careful brand management strategy and calculated ad strategy we revived the sales of the existing SKU, the client after seeing the results was confident and put in more money into more variations. With time we got consistent sales of the existing SKU and managed to get a positive contribution into the business cash flow. After introducing new variants the profit grew up to 7000$ a month.
- Profit Margin: The average profit margin for the portfolio reached 14%, allowing sustained reinvestment into new SKUs without outside capital.
- Cash Flow Strategy: Revenue from the rejuvenated first listing funded the development and marketing of new SKUs. This allowed for the gradual consistent supply chain of existing products while maintaining healthy cash flow.
3. Supply Chain and Unit economics Optimization
Before:
- FBA Fee revision: When we checked the product dimensions in the 3rd party inspection report and the fba fee that was being charged was higher because amazon changed the size tier. So we asked Amazon to open a re-measurement request and therefore we were able to save clients 0.75$ per unit.
After Optimization:
- Packaging Design Optimization: When we analysed the current packaging we came to a conclusion that there was further room for optimization. We asked the supplier to pack in a different way, allowing us to further save 0.25$ in a unit. So it was a $1 saving per unit in a low price product.
- Freight Forwarding: By partnering with reliable freight forwarders, we reduced shipping costs by 15% and improved delivery times, preventing stockouts. Also due to our better terms with the forwarder the client was able to pay when the shipment came to port for clearance, earlier the client was paying before lifting the inventory from factory.
- Inventory Management: Due to high sales volume, we predicted that there would be frequent stockouts and our PPC performance would hurt. So we proposed the supplier to make a bulk production for us, and we will pick the inventory as per convenience after paying the remaining balance of that shipment. Though, we paid initial deposit of the bulk shipment. After this, there were no stockouts and our PPC cost was reduced by 3-4%.
Results:
- From $0 to $0.3M in Annual Revenue in first year and in second year it was $0.66M in annual revenue : YOY growth was 120% in annual revenue.
- 12-SKU Portfolio: We expanded the product range from 1 dead listing to 12 highly profitable SKUs.
- $72,000 Annual Profit: The brand turned a monthly loss into 6,000 in monthly profits, yielding a healthy $72,000 in yearly profit.
- Successful Exit: After scaling the business, the client successfully exited the brand, selling it for 30 x of monthly profit.
Through comprehensive product strategy, cash flow management, and supply chain optimization, our agency helped this Amazon seller transform from a loss into a thriving brand that achieved a successful exit.