Subscription Box Basics with Julie Ball

Sell Your Boxes on Amazon with Kathleen Kobel

March 21, 2022 Julie Ball
Subscription Box Basics with Julie Ball
Sell Your Boxes on Amazon with Kathleen Kobel
Show Notes Transcript

#118 - In this week's episode of Subscription Box Basics, you will meet Kathleen Kobel who is an Amazon expert seller and consultant who helps businesses in growing their brands. 

Kathleen will help us understand on how your subscription box business can grow by selling on Amazon. The Amazon marketplace is full of potential buyers that can help scale up your sales. Listen to learn the ins and outs of Amazon. 

SUMMARY:

  • Get to know more about Kathleen (1:33)
  • How to use the Amazon platform to sell products (5:27)
  • What are the fees involved (9:27)
  • How to access the customer information (12:38)
  • Is there a commitment when you sign up in Amazon? (17:55)
  • How long is the application process? (23:10)


LINKS AND RESOURCES


Julie (00:01):

So you wanna launch a subscription box and don't know where to start. Girl, you are in the right place. I'm Julie Ball, a subscription box coach, and your host here at subscription box basics, a podcast for new and aspiring subscription box entrepreneurs that want to avoid overwhelm, grab a coffee, some pen and paper, and let's have some,

Julie (00:22):

Hey everybody. Welcome back to subscription box basics. Thanks for joining me today. Our topic today is something that you probably are dealing with on a day to day basis. We're talking about Amazon, love it or hate it. It's part of modern day life. But today we're gonna talk about Amazon and how you can use that for your subscription box business. I have my friend Kathleen on with me. Kathleen is an Amazon expert seller consultant and teacher who helps small businesses grow their brands and scale their sales by selling on Amazon Kathleen welcome to the podcast,

Kathleen (01:03):

Julie, thank you so much for having me. I'm so excited to talk with you about Amazon today.

Julie (01:08):

Awesome. And you know, Amazon, like we don't like, you know, it inside and out and I feel like you're gonna just bring so much value to our listeners who are thinking about like what other platforms can I use to sell my subscription box. So why don't we start by telling everyone a little bit about yourself and your background?

Kathleen (01:32):

Sure. Yeah. So my name's Kathleen Kobel. My business is master in marketplace. And you know, like you said, in the intro, Julie, I've been teaching consulting and, um, I also have a full service agency where we help brands grow on Amazon. Um, I started selling on Amazon, gosh, over 10, 12 years ago now. Right outta grad school, way back when Amazon, you could only sell books on Amazon. That's how long I've been selling on Amazon. Nice. Um, so I started selling my old, uh, grad school textbooks because I needed some extra cash and I was broke because I went to grad school. So, uh,

Kathleen (02:11):

So I started that and like they just sold so easily. I was actually very surprised at how easy it was to list them. And then they sold. And like all of a sudden I had $500 that I didn't have before. And I'm like, wow, wow. This just, it seems like there's a lot of potential there. So at the time I was working for my uncle who is an entrepreneur who I'm just so grateful that I was able to get that position in the first place outta grad school. And, um, so, you know, he had a couple different businesses that I was helping him with and he had recently launched a supplement business. And so it mostly was direct mail. Um, and then we moved it online. So one of my ideas after seeing how successful, you know, my book selling on Amazon was, was I approached him and I said, Hey, can I just, can I sell your supplements on Amazon?

Kathleen (02:58):

Uh, you know, no risk to you, I'll set it up, I'll figure it out. So I took courses, I went to a conference, I figured out, you know, how to set up new product listings on Amazon. And so, uh, we launched his supplement brand and within like three months we were doing six figures a month. It just grew wow. Really, really fast. And so, you know, again, I was just surprise by the impact. And, you know, I don't wanna say how easy it was to sell on Amazon, cuz this was 12 years ago, right? It's not quite as easy, uh, anymore, but just the potential, right? The amount of customers that are on the platform that are already there searching for things to buy. Um, and Amazon is so trusted, you know, people know that they can return things if they don't like them and you know, all that good stuff.

Kathleen (03:40):

So, um, so I did that for quite a few years until I branched out and I eventually left, um, working for that company after I had my first baby, you know, your time becomes so much more valuable after you have a child. And so about a year after I had my daughter, I decided to leave and start doing it on my own. So that was about six or seven years ago now. And you know, ever since then, I've really been helping small businesses, um, grow and scale their brands on Amazon. You know, everything from doing consulting to, we manage quite a few different brands, full service, you know, setting up the listings, managing the account, the advertising, all that good stuff. So, you know, I'm, I really see, I see how Amazon works. I'm, you know, pretty good at looking at people's businesses and figuring out, okay, what's the best way for you to monetize your business on Amazon and nine times outta 10, it's selling your physical products on the marketplace because that is what Amazon is primarily known for and where customers are going to shop.

Julie (04:41):

They make it so dang, easy to press that, add to card button,

Kathleen (04:44):

They do one button, one button and you can buy anything

Julie (04:48):

I know. Right. Well, and that was a great introduction. Um, I think that you were the first person I ever met in the entrepreneur space that focused in on that Amazon niche. And we met years and years ago through the boss mom circles. And you know, ever since then you were top of mind, anytime anyone asked about Amazon, cuz I was like, you have to be, you have to have like someone mentor you through that. I feel like. And so I'm really, really excited to have you in our corner and to have you on the podcast. So tell us about like how are people using the Amazon platform to sell their subscription boxes?

Kathleen (05:26):

Yeah. So there's a few different ways that people are using it. I think the, the biggest in the primary way right now is that Amazon actually has their own category just for subscription boxes. So you can go and, you know, submit your business and say, I have a subscription box. You know, if you look around Amazon, doesn't make it easy to find. But if you put subscription boxes in their search bar, even in Google, you know, you can find the category itself and kind of browse around and see, you know, everything from subscription boxes, for t-shirts to food, to pets, to clothing, uh, candles, underwear, like you name it, it's on there now. And so I see a lot of small businesses and large brands too, um, that have set up subscription boxes specifically on Amazon, um, you know, to sell the boxes and to grow their business. The other way to you that you can use it is to sell your products separately. So then you, you would just go into a different category, um, and sell, you know, like I have one client who she has soaps in her subscription box, but she also sells the soaps separately. So, you know, there's kind of a couple different ways you can get creative with selling the boxes, but then also the contents that in the box, uh, separately,

Julie (06:39):

That makes sense. So how does it work if you have the recurring subscription model? So for example, sparkle hustle grow. I renew everyone on the 15th and then we ship the boxes at the end of the month. So they arrive at the beginning of month. How does that work with the Amazon set up?

Kathleen (06:57):

So it's, it's very similar. Um, once you are a seller of subscription boxes on Amazon, you can either create a model just like yours, to where you have. Everything comes in, gets processed on the same day. And then you ship out all of the boxes on the same day. Amazon will let your customers know that, um, that's option one. The other option is that you could have like that rolling subscription and you can still ship out, you know, and say, you know, your timeframe is between December 15th and January 15th. And anyone who buys then gets the first box, gets it shipped out. And then the next one is 30 days later. So depending on what works best for your business model, you can either do that set day for every monthly subscription, or you can do it on a rolling basis, which is kind of nice that Amazon gives you that option. Yeah,

Julie (07:44):

For sure. Cuz the first thing I thought of was like, Ugh, I can't ship out within two days cuz everyone thinks like immediately prime shipping. So that is that that's not a requirement then.

Kathleen (07:53):

No, it's not. Um, but that's, that's specifically for subscription boxes. So, you know, Amazon, it is um, sometimes they really accommodate sellers and sometimes they make it very difficult for sellers. And I was actually very impressed with how easy Amazon made it for when they opened the subscription box category. Cause it's only been open for like three or four years. Okay. Um, so they initially didn't do it that way. And I think they got a lot of pushback from of people being like, no, this is how a subscription box model works. We ship once a month, you know, so make it more complicated. So then Amazon adopted it. So now you can choose. So I thought that was, that was innovative ish on Amazon to actually accommodate uh, small brands like that. Uh, but you know, they're always two changing. So if you get into the program and start selling, you know, it's always best to give them feedback and um, and let them know when you're happy or not, because I really do think they listen and they'll adjust based on, you know, what their sellers are telling them.

Julie (08:56):

That's that's good advice. So you could actually speak with someone or work with their customer service and provide them feedback. Um, I would think that a platform as large as Amazon, that that would go unheard, but it's so glad. I'm so glad to hear that they've listened to the subscription box industry and kind of tweaked that so that it fits our model rather than us having to fit their model. So what do we need to know if we wanna list, like obviously there's gonna be some fees involved in like a setup involved and stuff like, so what do we need to know?

Kathleen (09:27):

So I think the biggest thing to know are fees. I think a lot of people are scared of Amazon fees and rightfully so because they take a lot of your money. They just do. That's why they're one of the biggest companies in the world now. Um, so you know, your main selling fee every month is gonna be $40 a month. You have, every seller has to have that, whether you're doing subscription boxes or selling your one off products, it's $40 a month for a professional seller account. And then after that, um, really, uh, especially for this is the subscription box category, um, it's a little bit different because Amazon actually does not allow you to use prime fulfillment. Um, they very much, they need you to be able to ship from your location or from your warehouse directly to the customer. So you're actually bypassing that prime option, um, which, you know, again is different for other business models, but for the subscription box, I kind of love that they do that because then you're not competing with, oh, you know, this other company, who's getting their boxes to Amazon to get that prime badge.

Kathleen (10:28):

Amazon just doesn't offer that for subscription boxes. Cool. Um, so I kind of like that. So that means that, you know, you're shipping and handling fees and your pick pack fees, those already internal to whatever you're doing. So then outside of that $40 a month fee, um, Amazon is gonna take 15% of any revenue that you generate. Whether you sell one box a month or a thousand boxes a month, they're gonna take 15% of whatever your selling price is. Um, and then after that, that's about it again, it's a little bit different if you're storing inventory at an Amazon warehouse, if you're using their fulfillment services, but it's really that $40 a month fee to have the account. And then you have to factor in 15%, really just off the top. Um, and Amazon, they require you to give a small discount for that first subscription.

Kathleen (11:15):

So if you go to any listing on Amazon know, if the subscription is 39 95, they'll say, okay, for the first month, we'll give you 34 95 or 29 95. And then every month after that is higher. So, um, you know, I think they're still kind of playing around with how does that work for a customer experience? Right. I think a lot of people probably sign up for the first one and then maybe canceled be the second one because it's more expensive. Right. Unless they really love the box. Um, but it's definitely something you wanna factor in when you're pricing your subscription box on Amazon, because they're gonna be taking that 15% and you have to have that reduced cost for month one.

Julie (11:52):

Yeah. That's, that's really good information to know. And you can adjust that because you're the business owner. So you get to call that shot, which is a beautiful place to be. Right.

Kathleen (12:02):

Absolutely.

Julie (12:03):

Okay. So I'm trying to think of like going through the, my, my, my workflow of like I get a new subscriber and I do my batch shipment. So how does that in the platform in the Amazon platform, like, are we able to, as the subscription box business owner access, obviously we have to access their address because we need to ship it. But what about like their email address? Um, uh, for us, we do a lot of email communication with our subscribers because we have digital assets, we have a fake group, we wanna be able to invite them into those things. So how does that work with Amazon?

Kathleen (12:38):

Yeah. You know, I think Julie, that is one of the biggest downfalls of selling on Amazon is that, you know, so yeah, you get their address of course, cuz you have to ship it there, but you are very limited in how you're able to use customer information and their data because Amazon wants to keep their customer on Amazon. So, um, you know, again, even if you're not selling in the subscription box category, very restricted on what you get, uh, with email, you don't actually get their email. What you get is an Amazon generated email address, which then only sends messages directly to their on account. And that customer has to have basically messages allowed from sellers in order to receive them then to like, as an email notification, you know, to their email, which again is through their Amazon account. So you don't get the, you know, their name, their business at Gmail, whatever you get a bunch of go go de go at amazon.com. So you can still communicate with them, but it's just through Amazon and they may or may not actually get the email,

Julie (13:44):

But we know they're gonna get the box. So there's an opportunity inside the box to communicate. Absolutely. So we did creative with our inserts. For example, there can be an insert on the top of that says as a membership perk, you get access to this private Facebook community and then you provide either a link or a QR code, get them in there and that's where you can then communicate directly with them. So I think, you know, we have where there's a Willer, there's a way we are entrepreneurs. We figured it out. Right. So when there's, so that feels like a downfall, um, or a limitation of the platform, it's just, we gotta get creative, you know, how are we going to have that? Um, how are we able to get that one-on-one communication established outside of the Amazon platform. So yeah, I, I can see it as a, as a challenge, but nothing that we can't overcome. Right.

Kathleen (14:38):

Absolutely. Julie, I totally agree with you. And that's what we recommend for, you know, anyone who, even if you're shipping inventory to Amazon fulfillment, right? You still gotta put that insert in, let them know about your business. Especially if you're a small business, like shop that from the roof rooftops, cuz people love to get that in their box when they receive it from Amazon. You know, they wanna know like even though I'm buying things on Amazon, I'm still supporting small businesses because there's so many small businesses that sell on Amazon. So using that insert to write direct them to your Facebook group, have a QR code on there, even say, Hey, I go register on the website at this page so that you can then collect their actual email address and market to them via email, you know, outside of Amazon. So, you know, like you said, there's so many different ways around that you wanna be careful of course, in how you kind of promote that outside of Amazon.

Kathleen (15:29):

And again, Amazon doesn't want you to take customers away, but they're also not dumb. And they know that people have inserts in just about every single product. I'm sure you've gotten inserts in most products that you receive on Amazon that you buy, you know? And so yeah, like you said, where there's a will, there's a way and we just get creative and we figure out the best way to make it work for us. And you know, I don't want that to be a reason why people say, oh well I'm, I don't wanna sell my subscription boxes on Amazon because I won't get customer data. You just gotta get a little creative and then you can still get it.

Julie (16:02):

Yeah. And there's a lot of other platforms that are the same way where they're going to channel that customer communication. But if there's membership perks beyond that product, that's okay to create. Maybe you create a special video for that QR code and says, I know you found me on Amazon and I'm so glad for that. Um, beyond the product, you get some membership perks and here's how to access them. So I think it having some, um, some very customized action items, some very customized videos or links or whatever. I think that it'll be a great way to reach new people, cuz there's gonna be people that are using the Amazon platform that they might not be using Creek joy marketplace, or they might not find you just, you know, regularly through organic search or your Facebook ad. So it's just another opportunity to reach new people and on a new platform.

Kathleen (16:55):

Definitely. And I think that's one of the biggest selling points of Amazon is just how many customers are already on there. Hundreds of mil over a hundred million customers, you know, plus then you have your prime people who are just at Amazon diehards and they just say, well, I need to buy, you know, some new socks today. So I'm gonna go on Amazon on and search around for socks cuz I know I'm gonna buy 'em there. I just dunno which socks I'm gonna buy today. So, you know, not having your products or your box on there could, um, you know, limit that exposure right. To people that are searching around for your product that are just not gonna buy it anywhere else than Amazon. Yeah,

Julie (17:30):

Definitely. So as a subscription box business center, how do we just side, if this is a good fit for us and um, the other thing as a follow up to that is is there a commitment to make like, can we just jump on, give it a try for 30, 60, 90 days if it's not working out for us, then we just cancel that, that monthly membership or that monthly seller's fee. Um, tell us what that looks like.

Kathleen (17:55):

Yeah, no, you're you're right on exactly. With Amazon, once you sign up and start selling, there's no contract or commitment to say like I have to be on here for a year or six months or anything like that. It is literally just exactly what you said. Do you sign up, you start selling UC, does this work for me? Uh, if it does you keep going, if it doesn't, you can very much get off the platform. You can cancel your, um, account, you can delete your listings off of Amazon. No problem at all. I've, you know, we've had clients who started and it didn't work out. We've had clients who, and you know, sky's the limit now they're doing amazingly. Um, so yeah, that's, that's the great thing about Amazon is it's not like you're committing to this long extended time. You're also not committing to, um, you know, a really big investment.

Kathleen (18:42):

So, you know, if, if you wanna decide, is this a good fit for you? I think really the biggest thing is, are you able, who accommodate the orders from Amazon? You know, the biggest thing is that you can't use their fulfillment. So as a subscription box business, you already have, or should, I'm assuming, you know, you, most people listening already have the fulfillment aspect figured out and that's just really the biggest thing that Amazon is not gonna help you with. So I think as long as you have that figured out and you wanna try a new marketplace and your pricing works with the Amazon fees, right. If you have that 15% margin, um, which you can also adjust your pricing, um, right. Which is, you know, a different strategy. And I do recommend this, you know, with people that I work with, it's like, well, I'm not getting this 15%, you know, kinda shaved off the top on my website.

Kathleen (19:34):

So of course, of course you want people to sign up on your, on your website first and foremost, that should always be your, you know, number one goal to acquire a customer, but with Amazon either raise your prices a little bit, um, to accommodate that 15% or not, and see, you know, and see how it goes, you know, maybe even break even that first time is fine. And then you start making profit, you know, 1, 2, 3, 4, 5, right. Um, but I think really to figure out if it's a good fit, it's like, do you have, do you have the time and the bandwidth to get started? Do you have somebody, you know, on your team that can help you manage the store because you do have to then update your product list every month, every month. Right? So there is some backend maintenance it's like having, you know, a whole, whole nother channel open.

Kathleen (20:18):

So I think those are really the biggest things are, you know, the fees just to make sure that that works with your margins, but then also making sure you have the time to devote, to updating the listing and marketing on Amazon. Um, because you know, you can also set it and forget it. It's like anything. Yeah. The more time and energy you put into it, the more returns you're gonna get, you're gonna get more customers if you're in there every day and doing marketing and things like that. But you could also set it up and forget it and just kind of see how it goes, right. Because right. You're paying $40 a month, but then you don't pay anything extra until you actually start selling. So could be a good thing to test if it's something that you have the bandwidth for internally. Yeah. Definitely. Or the finances to, to outsource.

Julie (21:01):

Yeah. I feel like there's the huge opportunity to, to reach new people. And that's one of my biggest challenges at, as a box owner is like getting beyond my network and my customer's network. Like how do we get new people in that pipeline? So I think it's a big opportunity. So if someone is listening and they're like, yes, yes, yes. I wanna try Amazon. What are the first steps to get started?

Kathleen (21:23):

So the first steps to get started are you wanna go and apply, go apply on Amazon. Cause there is an application process. So, um, Julie, I can give you the link so that you can post it in the, in the notes, but it's, it's, it's a complicated link. So if everyone just either clicks in the show notes, after you're listening to this, um, or just searching Google, right. Amazon subscription box and it should come up with the application and the application is, is very basic. They're just asking you about your business. What is your box? What are the contents? You pick a category, you give 'em some of your, you know, some of your information about your business and then they'll get back to you in, you know, about a week or so to let you know, if, you know, you're approved to selling the category, cuz it is a separate category.

Kathleen (22:05):

Okay. Um, then just signing up for a professional seller count. So that would be the first step is to, you know, go apply because if you, I mean you're, you're almost definitely gonna get approved. It's just Amazon, you know, being like we vet all of our bosses and you know, um, but yeah, that's really the first step go apply, um, get into the program and that doesn't, that doesn't make you obligated it to actually start so you can apply right now. And even if you get approved, you don't have to actually start right away. Um, but if you're curious, you know, why not? That's really the first step. And then once you get approval, they'll send you instructions on how to get started. Um, but then it's really setting up your seller account, getting your listing up there, um, and making for sale, publish that. And I know I'm glossing over and making it sound very easy because this is something that I do every day, but, you know yeah. Apply, get approved, get your listing up and you know, see how it does.

Julie (23:04):

So big picture. How long on, uh, average does it take to get set up on this?

Kathleen (23:09):

So, you know, I think, you know, the, the application process is less than 10 minutes. Um okay. Once they, once they approve. Yeah. It's a, it's just a one, a one pager, very easy. Um, if, if people are clicking in right now, you could probably be done by the time we're, we're done with this episode, but uh, Amazon makes it very easy to get started. Right. And then, you know, you kind of hit roadblocks on what category you wanna sell in some require a little bit more information than others. They may wanna see pay some, yeah. Some like supplier information, you know, where are you sourcing your products from? Sometimes they wanna see that sometimes they wanna know which, um, warehouse or which three PL you're using, you know, things like that, just to kind of make sure that they can rely on you, you know, for subscriptions and that you're not a business that's just gonna sell a box and then, you know, run away two months later. Um, which I know no one listening here is in that business, but just

Julie (24:00):

Right

Kathleen (24:00):

With Amazon sellers, I can say this because Amazon sellers are not quite as reliable as, um, probably subscription block business owners. So the Amazon's seen a lot of sellers come and go. Um, so yeah, they really are just gonna vet your, your business to make sure that, you know, you've got all of your tees crossed your da, your eyes dotted. And um, and then really after that, it's, it's kind of up to you. I, on how long it takes to create the listing, that's really then the biggest thing is once you have the account creating the listing, you know, getting your images in place, um, getting a nice title and some bullet points and things like that. And, um, and throw it up there. So this is something you can do. This is something you can outsource. My agency does this, but it's also, like I said, you can, you can come gonna throw up the information you have and see how it goes.

Kathleen (24:48):

And also, you know, I really recommend looking at what your competition is doing and what other people are doing in the subscription box category, because you'll be able to see things, you know, like people's titles, right? Like what keywords are they using? What should I include in my titles? How should my images look? You know, so really look at your competition and see who's on there. Um, and then kind of model, you know, model what they're doing, but then make it your own. You know, that's what, what I really recommend to people like you wanna get started quickly on Amazon, um, and not have to, you know, invest thousands of dollars in inventory and, you know, hiring people to do all this. You really don't have to, you can do this pretty simply on your own. And then as you start me and start making money, then expand it, you know, then take better pictures and, you know, get infographics and, you know, outsource managements and things like that. So I love Amazon cause you can start small and kind of scale up as you see things are working.

Julie (25:41):

Nice. Nice. I love that. Thank you so much for sharing all this about Amazon as a platform to sell your subscription boxes. Um, I imagine that there's gonna be some people that are really interested in doing this. So where can they maybe follow you or find more information about this or even start conversations with you, maybe, you know, on social media, where can they find you?

Kathleen (26:05):

Yeah, absolutely. So my website is masters of marketplace.com on there. You will find blog posts, you will find podcasts, episodes LA um, there's a YouTube channel, so there's a ton of free information. Um, there's an opt-in right in there. That'll kind of go through the steps of like, is your business right for Amazon and goes through just some of those qualifiers of that. You just wanna go through those to make sure that, you know, you're setting yourself up for success on Amazon. Um, and then, like you said, we're on YouTube, Instagram, Facebook, you can follow me either at Kathleen Kobel or at masters of marketplace. Uh, I've got both handles for, I think every platform right now. Um, but I'd love to hear from you, you know, if, if anyone is interested in getting started on Amazon, like I said, just tons of free resources that I have. And then we also do offer done for you services as well. If it's something you're looking to outsource.

Julie (26:59):

Nice, thank you for sharing those. We'll make sure to put those in the shown at, and guys, I wanna know if you are already using Amazon or if you're thinking about it. So you can always DM me and have these conversations as well. I'm at subscription box bootcamp, Kathleen, thank you so much for sharing your knowledge and your advice on the Amazon platform. I really appreciate it. And thanks everyone for listening and we'll see you in the next episode.