Making $4,000 Monthly Printing Labels

What is the business and who’s behind it?

AZ Labels is a product to take the frustration out of printing labels on thermal printers, primarily targeted at Amazon Sellers.

It is a software that send your labels straight to your thermal printer, without having to go to any dedicated website or use any other software.

It was created by Eric Turner, who was a selling products on Amazon and had this frustration of printing labels for his then business.

How was the business started?

Keith Brink's motivation to start AZLabels stemmed from his personal experience as an Amazon seller. Faced with the inefficiency of spending up to an hour daily to print labels accurately, Keith recognized a common pain point among Amazon FBA sellers.

The process of converting label data into a format compatible with thermal printers was cumbersome, and existing solutions were either manual and time-consuming or unreliable with zero customer service.

AZLabels was not an instant success during its early stages. Keith initially gauged interest by creating a basic landing page, which yielded around 20 sign-ups in a month—lower than his expectations. Despite the modest response, Keith chose to release the product, recognizing that even if it generated a modest income, it would be better than nothing.

The initial version was primarily a side project, developed during Keith's spare time and evenings while working on other endeavors. The project's budget was minimal, with Keith spending a couple of hundred dollars on essentials like a domain name, a Google Chrome Developer account, and a few Digital Ocean servers.

The decision to release a minimum viable product (MVP) quickly, combined with a focus on ensuring the product was worth paying for, marked Keith's approach. According to Keith, he adopted a pragmatic strategy of informing potential users about the intended pricing before the official launch and waiting until the product achieved stability before charging them.

What are some of the marketing strategies used?

Keith Brink employed a multifaceted approach to attract users and grow AZLabels from its early stages as a Chrome extension to a fully-fledged SaaS product. Despite acknowledging that marketing wasn't his core strength, Keith experimented with various tactics, demonstrating a willingness to explore different avenues for user acquisition. Here are some key elements of his marketing strategies:

1. Leveraging Online Communities:

   • Keith recognized the potential of online communities and forums to reach his target audience. A Reddit post proved to be successful, bringing in 10-20 new customers. Engagement on Reddit was crucial, and Keith actively responded to comments, leveraging critiques to maintain the post's visibility and interest.

2. Utilizing Amazon Seller Forums:

   • While attempting to tap into the Amazon Seller community, Keith faced challenges due to forum rules restricting external links and stringent policies against self-promotion. Despite limitations, he made efforts to mention AZLabels in relevant discussions.

3. Lists of Amazon Seller Tools:

   • Keith strategically added AZLabels to lists of Amazon Seller tools. This approach aimed to enhance the product's visibility within the context of tools frequently used by Amazon Sellers.

4. Engaging in Content Marketing:

   • Keith engaged in content marketing by commenting on relevant blog posts about AZLabels. This tactic contributed to the product's visibility and potentially attracted users interested in the content.

5. Interviews and Networking:

   • Participating in an interview with Indie Hackers showcased AZLabels and allowed Keith to share his entrepreneurial journey. This not only contributed to the product's visibility but also served as a networking opportunity within the Indie Hackers community.

6. Google Ads on Competitor Brands:

   • Keith ran Google Ads targeting competitor brands that offered subpar products. The ad headlines emphasized AZLabels as a reliable alternative, leveraging the competitors' weaknesses. While the traffic from these ads might have been relatively low, the conversion rate was significant when users clicked on them.

7. Video Explainer on YouTube:

   • Despite receiving minimal traffic, Keith created a video explainer on how to use AZLabels and posted it on YouTube. While not a major source of traffic, visual content can serve as a supplementary tool for user education and engagement.

     

8. Influencer Outreach and Affiliate Program:

   • Keith's most consistently successful channel involved reaching out to influencers in the Amazon Seller space and proposing an affiliate program. Approximately one-third of AZLabels' sales were driven through this channel, highlighting the effectiveness of influencer partnerships.

9. Continuous Experimentation:

   • Keith acknowledged that finding a truly successful marketing strategy was an ongoing challenge. However, he embraced the importance of experimentation, recognizing that minor successes across various channels contributed to the overall growth of AZLabels.

10. Creative Problem-Solving:

    • Embracing a bootstrap mindset, Keith emphasized the importance of creative problem-solving. Whether through interviews, outreach, or various marketing tactics, he aimed to move AZLabels forward incrementally, searching for innovative ways to enhance visibility and attract users.

Keith acknowledged that marketing wasn't his strongest suit, but he recognized the importance of experimenting with various tactics to discover what resonated with users.

The goal was to find a successful marketing strategy, even if it meant uncovering minor successes in different places.

How does the business make money?

AZLabels began with a simple pricing model: $5 per month for unlimited label printing. As the product evolved and the customer base grew, the pricing structure transitioned to a tiered system. This system included a free tier allowing 100 labels per month, a $5/month plan for 1,000 labels, and a $20/month plan for unlimited labels.

In a recent shift, AZLabels removed the unlimited plan and now charges customers based on the number of labels they use. This change was motivated by a desire to ensure fair pricing, considering the diverse usage patterns among customers. Several customers are now paying $100/month based on their label printing needs.

Keith emphasized the importance of avoiding a price war with competitors and differentiating AZLabels by focusing on superior execution. The recent pricing adjustment also aimed to position AZLabels as a high-quality choice, confident in its speed, workflow integration, and bug-free operation.

The main revenue challenge has been differentiation from competitors, and Keith's strategy involves continuous improvement in usability, speed, integration, customer service, and bug-free operation. Higher pricing has positively impacted customer retention, with a decrease in monthly churn from 4% to 2.5% after implementing the new pricing structure. This shift significantly increased the Lifetime Value (LTV) of customers.

In terms of expenses, Keith has adopted a strategy of outsourcing day-to-day tasks, including customer service, marketing, bookkeeping, accounting, content creation, and sales tasks. These contractors incur costs of approximately $1,000/month. Additional expenses include $1,000/month for marketing, covering ads and affiliate payments, and $500/month for software/hardware costs.

Keith's approach involves consistently seeking the next 10X growth opportunity and identifying leading metrics that predict revenue growth. By focusing on controllable leading metrics, such as marketing spend, he aims to achieve business goals. Despite cash flow limitations from bootstrapping, Keith emphasizes finding creative solutions and experimenting with various strategies to incrementally move AZLabels forward. He also highlights the importance of eliminating day-to-day work to stay focused on core business aspects.

Where can we go to learn more about this business?

Here are some links you can learn more about:

Official Website