Case Study: Oliver James Group
Oliver James Group (OJG) was founded in London in 2016 by Oliver Stevens. The company sold a range of consumer products in the health and wellness categories, primarily through Amazon FBA via their third party seller marketplace.
- Challenge: Stalled growth, wasted time
- Solution: Build foundations, develop growth strategy
- Result: 5x increase in revenue & profit, company acquired
Overwhelmed & struggling to grow
After a strong start, growth began to slow down and eventually plateaued. Oliver was struggling to make inroads against well-entrenched competitors, and spending too much of his time on the day-to-day running of the business.
Oliver was beginning to feel overwhelmed. He didn’t feel ready to hire a team, but he also knew he would remain stuck at this “busy, stressed and not growing” stage unless changes could be made.
I first met Oliver when he was preparing to launch his company and had remained in contact over the years that followed. I started working with him on a consulting basis in 2019, and was invited to join the business as a partner a short time later.
Foundations, strategy & growth
The first step in the process was ensuring OJG had solid foundations for growth. I reviewed all of the existing workflows, processes, systems, goals, strategies and tools, looking for issues and prioritizing the areas that needed most attention.
Oliver was spending hours each day managing inventory, so that became my first area of focus. His existing process was largely manual – downloading reports from Amazon, copying them to Excel spreadsheets and so on.
Freeing up time through automation
Existing software options were expensive and didn’t map well to Oliver’s preferred process. I created a set of custom spreadsheets tailored to Oliver’s preferred workflow, and found an Amazon to Google Sheets connector to populate the spreadsheets with real-time inventory data.
This simple solution reduced Oliver’s daily inventory management workflow from around 3 hours to 30 min, and allowed him to feel more confident with his decisions since he was working with up-to-date data.
With Oliver now free to work on more high-leverage activities, I turned my focus to growth.
I learned that Amazon had slowly started to prioritize paid advertising units on their search results pages. I understood that that provided us with an opportunity, so I made paid acquisition the focus of our growth strategy (more on this below) and outlined a roadmap for the months that lay ahead.
OJG had a limited budget, so we needed to strengthen our position before we pouring money into ads. I led complete overhauls of the marketing for each product, including branding, packaging, product pages, images and videos. This made the products more appealing to our target customers, which increased our product page conversion rates, and crucially, lowered our acquisition costs, allowing us to outbid competitors.
It also provided the foundations for a growth loop – increased conversion rates lead to increased sales, which leads to more people experiencing your product, which leads to more reviews, which leads to more sales and so on.
A new strategy
OJGs main competitors were relying heavily on their high organic rankings to bring them sales. Any advertising spend was targeted at keywords that weren’t performing well organically.
I applied a different strategy. We allocated the entire budget towards a small list of valuable keywords for each product. If we already had a high organic ranking for a specific keyword, we would increase the bid price for that keyword even higher.
Paying for clicks that we could have received for free led to a short term hit on margins, but the mid to long term reasoning was straightforward. Amazon’s search results pages place paid ad units among the organic listings. If your product has a high organic ranking and you are prepared to pay high bid prices, you can advertise your product next to itself on the page.
Only a small number of products are visible above the fold on the search results page. If we could get our product to be shown twice (the organic listing and the paid ad unit) then we would increase the likelihood of getting the click that leads to a sale. And this would lead to a positive feedback loop – each sale improved our product’s sales velocity, further boosting it up the organic sales rankings and increasing the likelihood that Amazon would display our paid ad unit Each new sale further improved (and eventually entrenched) our organic and paid positions for a valuable keyword, giving us two prime placements at the top of the page.
Making a profitable exit
Oliver James Group’s main products quickly started rising up the sales rankings, eventually solidifying the #1 organic and paid positions across our key markets.
As Amazon continued to increase the number of paid ad units on search results pages the positions became even more valuable. Competitors attempted to drop prices to compete, but this simply cut into their margins and made it more difficult for them to bid on the most valuable keywords.
The strategy ultimately led to revenue and profit growth of more than 5x within 18 months. This placed the business in a much stronger financial position, and also brought it to the attention of potential acquirers.
Oliver and I decided to sell the business to a leading aggregator in 2021, and left when the transaction was complete.