Declining OEM Profits? The Path to Breaking Through with $6.5M Annual Amazon Sales for a Hardware Factory

Customer Background

• Industry: Bathroom hardware (bathtub stoppers, sink stoppers, etc.)
• Identity: A foreign trade OEM factory in Zhejiang, which has long been an original equipment manufacturer (OEM) for international brands.
• Pain Points: OEM profits continue to be squeezed; lacks end-user channels and pricing power.

Agency Operation Strategies

1. Category Differentiation to Break Through:
   • Dig deep into niche demands such as “odor-proof silicone stoppers” and “custom-size stoppers”.
   • Focus on promoting bathroom scenario solutions (accessory sets).
2. B2B to B2C Transition Strategy:
   • Leverage the factory’s supply chain advantages to build the label of “cost-effective and durable products”.
   • Utilize the Amazon Vine Program to quickly accumulate early product reviews.
3. Cost Reduction & Efficiency Enhancement in Operations:
   • Optimize FBA logistics to reduce warehousing and fulfillment costs by 30%.
   • Control ad ACOS (Advertising Cost of Sale) within 12%.

Key Achievements

Enhanced risk resistance: During the 2023 foreign trade fluctuation period, Amazon contributed 60% of the company’s cash flow.

First-year sales reached $6.5 million, with stable monthly sales of over $500,000.

Profit margin improvement: Profits from independent retail are 40% higher than those from the OEM model.

Established an end-user pool: Repurchase rate exceeds 25%, accumulating over 50,000 users for sustainable operation.