How we achieved 28.9% Profit Margin and $200,000 Revenue in the First Year
This case study showcases a successful business transformation achieved by our team, resulting in significant financial gains for the client. Through our strategic guidance and expertise, we helped the client achieve a remarkable profit margin of 28.9% and grow their revenue from $0 to $200,000 in just one year. The case study highlights the key factors that contributed to the success and offers valuable insights for businesses seeking to achieve similar results.
Account Setup, Full Account Management, PPC Advertising, Procuring, Designing, Branding, Infographics, A+ Content, Listing SEO
Automotive, Aftermarket
Brand Overview
The owners possess extensive experience in the Automotive B2B sector spanning over two decades, engaging in procurement and trading activities for clients worldwide. Their decision to approach us was motivated by a decline in order frequency and purchase order volume from some of their longstanding clients. In an effort to mitigate the risk of dependence on incoming orders, they sought to venture into the DTC (Direct to Consumer) arena. Their contributions to the endeavor include:
- In-depth and comprehensive knowledge of Automotive Aftermarket parts
- Adept negotiating skills and extensive expertise in global logistics
- Strong business connections with various manufacturers.
Challenges
One of the main challenges is ensuring the accuracy of FITMENT data for each SKU and its inclusion on Amazon.
What is FITMENT Data?
FITMENT data, also known as compatibility information, is a crucial piece of data required for product listings on Amazon and eBay. This information informs both the customer and seller which fitment matches their vehicle. Specifically, Amazon uses this data for Automotive & Powersports Parts. When customers search for an automotive part on Amazon, they can view the product detail page to confirm if the product fits their vehicle. The page will display "Amazon confirmed fit - Make sure it fits" to indicate that the Year, Make, and Model of the vehicle match the product. A green confirmation signifies that the product fits, whereas an error indicates that it does not.
Furthermore, customers can click "See all products that fit this vehicle" to browse items that are compatible with their specific make and model. It is crucial to note that the absence of FITMENT data for your automotive parts products can significantly decrease your visibility on the platform. As such, it is essential to verify and include accurate FITMENT data for each SKU to ensure that customers can make informed purchase decisions.
Second challenge we faced was Infringement Strike from Amazon AI algorithm.
Reason why we receive the strikes for intellectual property strike from Amazon is because we use the trademarked words "Ford" , "Jeep" , "Toyota" "F-150" etc.
To overcome this we had to add the words "Compatible for" in front of the trademarked words.
ex. Compatible for Ford 2008 Explorer
Our Plan
To develop our strategic plan, we initiated an analysis of our target market's size and characteristics. Additionally, we engaged in comprehensive consultations with our client, backed by data-driven insights derived from our research on Amazon US Marketplace. After careful deliberation, we arrived at the decision to focus on Automotive Replacement Parts as our chosen product line. This decision is supported by a range of benefits that make it an attractive choice.
Then we started to plan out and start executing.
- Market Research & Profit Analysis
- Thorough Market Research of the total Market on Amazon US
- Make Competitor Analysis and keep a list of their ASINs
- Created Profit Analysis to understand our bottom line and top line profit margins
- Catalog Management
- Created Variations for each Car Manufacturer. ex. Ford, Jeep, GM etc.
- Listing Optimization for all listings
- Designed the packaging and images
- Marketing & Advertising
- We focused on SEO and made sure that all crucial keywords are all indexed into the listing
- Made A+ Enhanced Content and Brand Stores
- Created Amazon PPC Campaigns for OEM Numbers, Direct Apples to Apples ASIN Competitors, and Broad Campaigns of the Make + Year + Model + Keyword
- Account Management
- Account Health always 100% Healthy
- Seller Feedback 100% positive
- Customer Reviews all addressed properly
- Prevent Stock-Outs
- Increase product lines
Don't take our word for it, take theirs!
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Results
The Outcome of our Management
- First Year 200K+ Revenue, sold: 10,429 units
- Second Year Revenue 200K+, sold: 10,762 units with 6% TACOS & 28.9% Profit Margin which equate to 60k in Profit
Outlook of 2023
- Increase SKUs from 75 to 100
- Increase revenue & profits by 50%
- Expand to Canada Amazon Marketplace
Benefits of working with Aftermarket Automotive Replacement Parts Category:
- Has OEM Number & Partslink Number
- Direct OEM replacement which will fit per vehicle, which increases the likelihood of a successful fit and minimizes the occurrence of returns
AKA low return rate - Recurring Revenue (Replaced every year) : this product category offers the advantage of recurring revenue, with parts needing to be replaced annually, ensuring a reliable stream of income.