Meta Ads or Amazon PPC for eCommerce? [with @TheProductBoss ]

Summary

The speaker discusses the decision-making process for launching simple products like candles and soaps, weighing the pros and cons of Amazon FBA versus Instagram and Facebook ads. They emphasize the importance of budget, understanding e-commerce, and the ability to scale production to meet demand. For handmade businesses or those with limited capacity, they suggest focusing on organic customer acquisition rather than paid ads. The summary also touches on the challenges of managing inventory on Amazon and the benefits of a passive approach for those with a scalable business model.

Takeaways

• 💡 For simple products like candles and soaps, Amazon FBA might be considered before Instagram and Facebook ads if you have the budget and knowledge for advertising.
• 📈 E-commerce advertising is specific and more expensive due to the costs of goods, shipping, and customer acquisition.
• 💼 Hiring an agency that understands e-commerce is crucial for successful ad campaigns.
• 🏭 Scaling business and having manufacturers ready is important for handling large volumes of sales, especially when running ads.
• 📊 The success of ads depends on whether the end part value outweighs the cost to acquire the customer.
• 🚫 For small-scale, handmade businesses, running ads might not be feasible if they can't keep up with the production capacity required by a successful ad campaign.
• 🛒 Amazon FBA requires manufactured products that are shelf stable and can be fulfilled by Amazon, making it more suitable for larger-scale operations.
• 📈 Amazon can be a more passive sales channel if you focus on manufacturing and let Amazon handle the selling and fulfilling.
• 🌐 For businesses with a smaller online presence, focusing on organic customer acquisition methods rather than paid ads might be more effective.
• 🔄 The approach to marketing and sales channels depends on the business size, production capacity, and the entrepreneur's readiness to scale.

Q & A

What factors determine whether Amazon FBA or social media ads like Instagram and Facebook should be used for launching simple products like candles and soaps?

The decision depends on the budget for ads, knowledge of ad operations, and the ability to scale production. Amazon FBA is suitable for manufactured products that can be shelf-stored and fulfilled by Amazon, while social media ads are more appropriate for those who can manage ad spends and have the inventory to support a successful ad campaign.

Why is it important to consider the cost of goods and shipping when running ads for physical products?

The cost of goods and shipping are significant expenses that can affect the profitability of a product. Ads for physical products are more expensive due to the need to manufacture and ship the goods, which can lead to no profit if the customer acquisition cost is higher than the product's end value.

What is the significance of having a scalable business model when starting with ads for physical products?

A scalable business model is crucial because it allows for the production of large quantities of products to meet demand, which is essential for successful ad campaigns. Without scalability, a business may struggle to fulfill orders generated by ads, leading to lost sales and customer dissatisfaction.

How can Amazon FBA be a more passive approach for some businesses?

Amazon FBA can be more passive for businesses that focus on manufacturing and let Amazon handle the selling and fulfillment. This allows the business owner to monitor ads and create content without directly managing sales and shipping.

What are the challenges faced by small-scale handmade businesses when considering running ads for their products?

Small-scale handmade businesses face challenges in running ads due to limited production capacity. They may not be able to keep up with the demand generated by successful ad campaigns, which can lead to delays and negative customer experiences.

Why might solopreneurs who make their products by hand lean more towards organic customer acquisition methods rather than ads?

Solopreneurs who create handmade products may lean towards organic methods because they often have limited production capacity and may not have the resources to invest in ads or manage the increased demand that ads can generate.

What is the role of an agency in helping e-commerce businesses with ad campaigns?

An agency can provide expertise in e-commerce and ad operations, helping businesses understand the nuances of selling physical products online. They can assist in managing ad spends and ensuring that the customer acquisition cost is less than the product's end value.

How does the production capacity of a business impact its ability to use Amazon FBA effectively?

A business must have a production capacity that can consistently supply products to Amazon's inventory to use FBA effectively. Inability to maintain a steady supply can lead to stockouts and negatively impact the business's presence on Amazon.

What are the key considerations for a business to make a profit from selling physical products online?

Key considerations include the cost of goods, shipping, customer acquisition cost, and the end value of the product. A business must ensure that the cost to acquire a customer is less than the profit margin after accounting for all expenses.

How can a business ensure that its products are shelf-stable and suitable for Amazon FBA?

A business can ensure shelf-stability by manufacturing products with long shelf lives and proper packaging that can withstand storage and shipping. This is crucial for products to remain in good condition until they are sold and fulfilled by Amazon.

What is the importance of having a strong online presence, like on Instagram, for businesses selling physical products?

A strong online presence helps in organic customer acquisition and brand building. It can complement paid ads by providing a platform for content creation and direct engagement with customers, which is particularly important for businesses that may not rely heavily on Amazon for sales.