How I Created A $5K/Month Amazon FBA Reimbursement Solution
Hello! Who are you and what business did you start?
Hi, everyone! My name is Robin McCartney and I’m an amazon seller and entrepreneur. I’m also the CEO and founder of Seller Repay, a software-as-a-service (SaaS) tool that helps Amazon sellers easily file FBA reimbursements. Our software identifies refund opportunities in a seller central account, which usually comes from inaccurate FBA fees and missing or lost inventories in Amazon fulfillment centers.
Seller Repay was first launched as an FBA auditor in 2018. We were one of the pioneers in offering this type of service to Amazon sellers and we enjoyed tremendous success during the first year. But we needed to pivot due to changes in Amazon policies for third-party access to seller data.
We didn’t lose hope, however, and we rebranded this year to Seller Repay with a new logo and website to emphasize the company’s commitment to innovation and providing a better experience for our customers. We felt that the new name also accurately reflects our core service, which is getting sellers their FBA repayments in a hassle-free manner.
What's your backstory and how did you come up with the idea?
The idea for Seller Repay was born from my own experience as a seller on Amazon FBA.
Like most sellers, I love FBA for the convenience and perks of a global marketplace. But when you’ve been selling as long as I have on Amazon, you ultimately accept that there will be issues like inaccurate charges and inventory management mishaps. And these issues cause you to lose potential revenue and can affect profitability. It may not seem a lot when you don’t have a lot of inventory, but it’s a different story for established sellers who are getting a serious profit leak.
So there I was, spending a lot of time digging into my Seller Central account to see how much of my inventory was lost or damaged and then reconciling the numbers on a spreadsheet to find out how much that cost. Then I had to manually file a claim to Amazon for cases that they failed to automatically reimburse.
I was frustrated, to say the least, at how much time I was losing by having to do these things. Time is very valuable for me, and that time could have been better spent on more important things, like my kids.
That gave me the idea for Seller Repay. The software was initially designed as an ‘in-house’ solution for detecting reimbursable cases in my seller account so I can get rid of the tedious and time-consuming reimbursement process. I quickly realized that a lot of sellers who were in the same situation would also benefit from the software. That is when I decided to build a business around software as a service.
Take us through the process of designing, prototyping, and manufacturing your first product.
I’m not a tech person. But as an Amazon seller, I was already using some tools which had similar functionalities like the ability to sync a seller account with software or app. Back then, I didn’t have the slightest idea how that worked, only that it would be possible to use the same process for the basic features I wanted which included:
- The ability to pull seller account data from Amazon
- Automatically download inventory data for lost, damaged, and missing items
- Automatically detect cases that were eligible for refunds
Early on I knew that the software needed to be on the Amazon Web Services (AWS) platform since it was going to deal with sensitive data. It needed to have a high level of security and I think AWS was the best for that.
You should really make the effort to get to know your market. I’ve made a lot of assumptions about other sellers out of my own experiences.
Next came the challenge of hiring developers who were experts in AWS. Fortunately enough, I found an agency based offshore that could deliver the functionalities I wanted and were willing to take on the project as a long-term internal developer team. So we started to build the prototype of the software as an AWS app. The time frame was that we would have usable software in 3-4 months.
I wouldn’t bore you with the details on this, but suffice it to say that the team was finally able to deliver the initial iteration after a year. We then spent countless hours testing the app on my own seller account. As I’ve said, I’m not a techie so I wanted dashboards that were simple enough for me and my store manager to use.
Overall, I was pleased with the result: the app worked well and made claiming reimbursements simpler for my FBA business. It had some bugs, for sure, but it was able to recover $7000 of refunds for my own account during the first run.
We’ve since gone through many iterations of the software for bug fixes and to keep it compliant with Amazon Terms of Service but the core functionalities of the app are still the same.
Describe the process of launching the business.
When we launched our software as FBA Auditor, one of our biggest challenges was that a lot of our potential customers weren’t aware of FBA issues. It’s quite difficult to sell a solution when your prospects don’t realize they have a problem.
Our first order was to educate Amazon sellers about FBA reimbursement through our website content. We did this by putting a video on the homepage of our original website.
We also established ourselves early on social media and were able to gain a decent following. We managed to get hundreds of customers by combining both social media and referral marketing with other tools for Amazon sellers. Since the service was quite new and unheard of in those days, we actively sought out reviews from existing customers to address the doubts of potential customers.
I financed the business mostly from the reimbursements that the software generated for my own seller account and partly from the software earnings. We have a very straightforward business model. Customers only pay us a 20% commission when they successfully claim reimbursement and are paid by Amazon.
A lot of Amazon sellers ask why they have to pay for this kind of service when they can just as well do the claims process on Seller Central. What they don’t realize is that software like Seller Repay entails costs - you pay for hosting, software maintenance, and keeping the entire process up to date with Amazon Terms of Service (ToS). That’s actually another challenge we’re always up against. We constantly have to dispel customer objections by making them realize the value that our service provides in terms of saving them time and effort.
Since launch, what has worked to attract and retain customers?
It was much easier to get customers back then when we only had a couple of competitors. Now we’re up against almost a dozen other players in the market. All of these competitors offer almost similar features and have the same pricing structure that we have.
So what we’ve done is differentiate Seller Repay by providing exceptional customer service. If you check our customer reviews, you’d find that most of our customers appreciate this. And that’s also what earns us repeat customers considering that we have a no-commitment, pay-for-performance arrangement.
Another thing that we do is build and maintain strong relationships with other people in the industry. We’re currently busy establishing collaboration and partnerships with industry leaders and influencers.
Don’t wait too long to scale or you will lose opportunity and momentum. Don’t be afraid to make mistakes or to fail at your first attempt, focus on learning how to create a better version of your product and your business.
Since we’ve rebranded, we’ve actually had to start all over again to get new customers. Right now we’re testing both paid social ads and Google ads to drive traffic to the new site. We also launched an affiliate program to reward our existing customers and partners for their referrals.
How are you doing today and what does the future look like?
If you want to know if we think we’re already successful right now, I’d tell you honestly that we’re not. We’re still trying to regain our foothold in our niche after having to revamp the tool due to changes in how Amazon grants third-party access to developers. With this pivot, we’ve had to basically start all over again.
That means we’ve yet to achieve the level of profitability we did 2 years ago. We’re back to the investment phase in marketing and software development. It might be a while before we see a positive ROI given that we’re technically in the B2B segment with a relatively long sales cycle.
But we’re very optimistic about the future. We see a great opportunity for growth with the explosion of eCommerce and the growing number of Amazon sellers. Granted, our software may not be the best option right now for beginning FBA sellers with just a couple or a dozen inventory on their hands. But soon they will see the need for Seller Repay once they become established with a lot of inventory and high turnover and have less patience for inventory losses and mistakes and even less time to manually file for refunds on Seller Central.
Also, I have great faith in the potential of our software. You might say I’m biased but we currently have the best FBA reimbursement tool in terms of functionality and features. It’s the tool I myself use to recover the money when things go awry with my inventory in Amazon fulfillment centers. It has saved me a lot of time and headache, and I’m confident that other sellers will say the same thing once they’ve tried it.
Through starting the business, have you learned anything particularly helpful or advantageous?
There are a couple of hard lessons that I’ve learned with Seller Repay:
- Things change quickly so you need to be very nimble and quick to adapt, and
- You should really make the effort to get to know your market
In hindsight, we should have been more proactive with our marketing back in the early days. That would have helped us grow our customer base early on. While word-of-mouth and referrals are great, it would be better to cast a wide net so your business has a constant source of new customers.
Most importantly, you should go the extra mile by really knowing your customers. I’m an Amazon seller so technically I should know my market because these are other sellers like me, right? Not quite.
It turns out that I’ve made a lot of assumptions about other sellers out of my own experiences. For instance, I thought that most sellers would jump right in when it comes to using Seller Repay given that it absolutely has very little risk to them since they only pay when they get results. I severely underestimated the impact of trends such as the increased apprehension with data security on Amazon sellers.
Compared to before, Amazon sellers are now more cautious. So we have to dismantle their fears that using our software would actually put their seller account at risk. This was an eye-opener for us and we’re working hard to reassure our potential customers about the safety of our reimbursement tool.
What platform/tools do you use for your business?
I personally use a lot of tools as an Amazon seller. But here are a few that I’ve found really necessary for running Seller Repay:
- JungleScout - product and inventory management on Amazon
- Shopkeeper - for keeping tabs on the profitability of my Amazon business
- AWS - hosts the Seller Repay app
- WordPress - website hosting
- Skype - communication with team members
- Google Workspace - emails
- Zendesk - customer support
What have been the most influential books, podcasts, or other resources?
I’m not what you’d call a voracious reader. But I’m fortunate to have had a longstanding relationship with Paulina Masson who founded Shopkeeper and whom I look up to as a mentor. She has since moved on to other things but I’m grateful that she’s always available to hop on a call when I need guidance with my businesses.
Advice for other entrepreneurs who want to get started or are just starting?
As someone who has spent most of my life as an entrepreneur, the best advice I can give is to surround yourself with honest people who will support you but will also make you accountable. It’s not easy being an entrepreneur and you need people you can bounce off ideas with and at the same time give you critical feedback.
Also, you need to have the patience and persistence to go through multiple iterations of your product and business model. You have to accept that your product and business will sometimes need to be overhauled to achieve a better fit with customer and market needs. This doesn’t mean that you should wait for your product or service to become perfect before you launch. I don’t believe there is such a thing.
In fact, if there’s a takeaway you should have gotten from our story is that don’t wait too long to scale or you will lose opportunity and momentum. Don’t be afraid to make mistakes or to fail at your first attempt, focus on learning how to create a better version of your product and your business.
Where can we go to learn more?
If you have any questions or comments, drop a comment below!
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