The biggest mistake we’ve made this year...

Hey there, and welcome back for another bite to chew on.

Hope you've had a great weekend and spent some quality time with your loved ones.

We also hope you’re ready to spend the next 3 minutes and 29 seconds with us - as we dive into the biggest mistake we’ve made this year and what you can learn from it…

This week we're changing things up…

You see - we're good at talking about all the good things that we've achieved

… but we also want to show you the other side of the coin

Meaning: All the mistakes we've made and what you can learn from them.

So that's what we're talking about this week

In fact, we're talking about (probably) one of the largest mistakes we've made this year.

Ready to dive in? Let's go

Stuck with stock…

It's January 2023.

We've just gotten through a busy season of Black Friday, Cyber Monday, Christmas Sale, and what have you.

Similar to many other brands - we didn't want to be low on stock for the biggest sales of the year.

So what did we do?

We ordered a huuuge order to make sure that it didn't happen.

Nothing special about that, right?

Except - we ordered way too much…

Despite being in the game for over a decade - we made "The classic" eCommerce mistake of over-forecasting sales - and stocking up too much inventory.

But yeah - shit happens.

Even with the most advanced forecasting tools, stuff like this can happen in eCommerce.

That being said - we can't blame it on the forecasting tools.

We should just have been better.

So that's mistake #1.

Now the question remains: : How did we solve the question (Hint: We also made a BIG mistake here)

No MAP?!

We decided that the best way to turn our inventory back into cash, FAST, was to sell it at a lower-than-usual price to Amazon sellers.

The reason why we chose this strategy is that the Amazon sellers got our products at a reasonable price - where they'd make a lucrative profit by simply re-selling them.

It helped us clear up a lot of inventory quickly and it helped them make a good chunk of money.

A Win-Win, it seemed like …

But - this is where we made a BIG mistake.

Because - we did it at a time when we had no MAP (Minimum Advertised Price) policy in place, AND we also just wanted to make the deal as attractive as possible for the Amazon sellers.

So we didn't want to enforce a MAP policy either.

If you don't know what a MAP policy is, it’s simply a policy that tells the Amazon sellers what the minimum price of the product they’re selling should be

And what happens when everybody can set their own prices on Amazon…

You guessed it: It becomes a race to the bottom where everyone is cutting each other's price until nobody makes money anymore.

Not only that, but it also devalues our brand, makes it harder for us to sell DTC, and makes the investment of our Amazon partners worse (because the price point is driven down).

So overall, just one big 💩-show.

Lesson learned: If you overstock and choose to use this strategy - consider having a MAP policy in place from the get-go.

Cleaning up the 💩-show. The MAP-POLICE

At this point.

We know we've fckd up.

Multiple times.

But we have no other choice than to clean up our own mess.

And even though it did take some time to clean it up - we did it by implementing what we call "The MAP Police"

The MAP Police is one of our extraordinary employees (shoutout to Raj) who solved this entire 💩-show of a problem by picking up the phone and started dialling…

He called EVERY single Amazon seller that we've sold to and convinced them that they should RAISE their prices to the MAP (Minimum Advertised Price)

Now, mind you… This may sound easy - but it sure as hell isn't.

Why?

1) We have sold to over 100 Amazon countries in more or less every time zone you can imagine…

2) A MAP-Policy is a policy and not a law, so convincing people to follow it is NOT a piece of cake.

3) The people we're selling to weren't seasoned business professionals. It was young people in their 20-30s who were trying to make a few bucks on Amazon. Telling them to increase their prices and become less competitive is not easy.

But you know what?

We did it.

With every one of the 100 Amazon sellers - and now EVERYBODY is following MAP.

… and if for some reason they choose not to - the MAP police call them up within the day and get them to take their prices up again.

So the 3rd lesson learned here is: Sometimes - you need to do the unsexy, boring, and non-scaleable stuff to solve the problems.

Pick up the phone and start dialling.

Open your email and start sending (Cold emails, partnerships, affiliates, investors, etc.).

Pick up the camera and start making ads. It doesn't always have to be fancy and scalable. Sometimes - the "ugly" work is what saves your business.

If you skipped to the TL;DR - Here it is…

 

1) Do everything in your power to master the skill of properly forecasting sales. Both over-forecasting and under-forecasting can leave you in one hell of a problem

2) In case you use the Amazon-Fire-Sale Strategy that we used - then consider having a MAP-policy in place from the get-go

3) Sometimes - you don’t need fancy and scalable solutions. You just need to do the unsexy, boring, and unscaleable work that gets the problems solved