Hacking Amazon Algo in Latam
No code or images, just good ol' text.

There are 4 steps to hacking Amazon's algorithm and I'll summarize them here.

Step 1: finding products that can lead their categories.

There are two tools to do this, either JungleScout or Helium10, I personally like H10 better (both are paid for).

Look up a particular subcategory (e.g. bed sheets) and download the Excel containing the sellers and the sales amounts for the last 30 days.

The key to identifying good products and categories is: price point above US $20, last 30 days revenue for top 3 players above US $10,000, local rather than global players, big sales difference between top players and bottom players

When you identify products that have a good ticket size and few, local competitors, add up what the sum of all product sales is worth and you get your total addressable market. Quantify the % for the player #3 (best case), #10 (base case) and #25 (worst case). Do this exercise for 25 products and select the 3 you deem best.

Step 2: sourcing.

Easiest way to source is from Alibaba, otherwise try to find local suppliers (can be trickier). Always ask for samples!

Make sure you have a brand name and register it with the local authorities. For some products you'll need a certificate. This takes time.

Create a logo. Send that logo to the suppliers.

Send production order for the amount of units the base case says you could sell. Bring 20% of units by plane, 80% by sea. Make sure you comply with the accounting and import laws (you'll need an agente aduanal to help and make the payment for you)

In the production meantime prepare the images and set up marketplace accounts (Amazon + MELI).

Look up keywords to use on JungleScout.

Have everything set up.

Receive the goods in a warehouse until you get access to FBA.

Step 3: Sell (the hack!)

Assign a 50% ACOS at first to get high inorganic ranking, costly but worth it

Ask friends & family to buy your product and rate it with 5 stars (not all reviews are shown by Amazon).. you can use coupon codes for this

Price high initially and set a 25% discount for the first 20 units

First weeks will be painful, but after the first 10 reviews on your product you will begin to see some traction, make sure 100% of deliveries are on time

Check your ranking vs competitors and measure your organic ranking (non-paid Ads)

The point of this game is to spend excessive money on Advertising so you rank higher inorganically to then rank higher organically.

Once you rank on page one organically you can lower ACOS to 40%, and once you are among top 20 to 30% and then to 20%, until you reach 15%, that's what you should have once you stabilize.

Step 4: Next order

When you in fact see your sales adding up you need to order another batch. Be aggressive. Order enough inventory to be #3 in your category the next 6 months. Running out of stock screws your ranking.

The more you order the lower your COGS

Track your organic ranking everytime

Step 5: Win profitably

After a few months of doing this your P&L should be EBITDA positive. 15% Ad spend, 30-40% COGS, 25% FBA + Amazon fee, 20-30% profit.

That's how you hack it. By being more aggressive in Ad spend with a mid-term strategy than competitors.

The initial setup takes a lot of time, but this is a super scalable model. In 6 months I burnt $250k without income. By month 9 I had $420,000 in revenue with profit. It works!