How I Almost Lost A $600K/yr Amazon FBA Business | Quality Control Issues
In 2020, while living in Bali, Indonesia, I faced a daunting challenge in my Amazon business. With over half a million in revenue and three years into the venture, our products were repeatedly suspended, raising the risk of being permanently banned off the marketplace. In this story, I'll take you through the pivotal moment when my business stood on the brink of collapse.
The Problem Unveiled:
Our recurring problem was product suspension, triggering alarming emails from Amazon. The imminent threat of a permanent ban loomed large, driven by the rising NCX rate. Prior to this crisis, unresolved issues persisted, primarily related to product material strength, leading to frequent breakages.
Supplier Skepticism and Uncharted Territory:
Bringing the issues to our supplier proved futile initially. They dismissed our concerns, believing they knew the product better. The situation became precarious, as Amazon kept disabling our products, and we faced the risk of substantial revenue loss.
Drawing from the insights in the previous video about the Feedback Tracker, we compiled extensive data over six to nine months. We tracked monthly defect percentages, analyzed VOTC data, collated direct emails, and considered seller feedback. This data became crucial in understanding the gravity of our situation.
A Desperate Situation:
With the threat of failure due to quality control issues, I built a data bank to showcase the severity of our challenges. The next steps involved arranging a presentation for multiple suppliers, presenting them with our data, and seeking their cooperation in resolving the underlying material issues.
Battling Food Poisoning and Presentation Day:
On the day of the crucial presentation, fate threw another challenge my way – severe food poisoning. Despite the discomfort and numerous stops along the way, canceling the meeting was not an option. The urgency of the situation demanded that I press on.
Warehouse Presentation and Supplier Acknowledgment:
Arriving at the warehouse, I somehow summoned the strength to present the data. The suppliers, realizing the authenticity of our concerns, were convinced of the need for change. This marked a turning point as we collectively agreed to upgrade the material used in our products.
Success and Defect Reduction:
Post-material upgrade, the subsequent order went smoothly, and defects significantly decreased. Tackling the root causes of our issues demonstrated that 80 percent of defects could often be attributed to one or two critical issues. This transformative step ensured the survival and success of our business.
The story underscores the importance of data-driven decision-making, perseverance in the face of adversity, and the critical role of supplier collaboration in product improvement. By leveraging insights from customer feedback and tracking defects, we were able to evolve our products and overcome a potentially devastating situation.
Surviving and thriving in the competitive landscape of Amazon requires not just business acumen but resilience and strategic problem-solving. This experience in Bali taught me valuable lessons that continue to shape my approach to e-commerce. I hope this story inspires others facing challenges on their entrepreneurial journey.
Check Out The Template for our Feedback Tracker that ultimately saved Shane's business HERE.