181: Amazon: The Inside Track on eCommerce Super Selling

ABOUT THIS EPISODE

Contact info:

Ryan Flannagan

Email: RyanFlannagan@NuancedMedia.com

Website: https://www.NuancedMedia.com

LinkedIn: https://www.linkedin.com/in/RyanFlannagan

Facebook: https://www.facebook.com/NuancedMedia

Bio:

Ryan Flannagan - Founder & CEO at Nuanced Media, - as an Amazon partner, with a combined client base revenue of over $1.5 billion, the Nuanced Media team has sold 100s of millions in products online, including making one client $18.5 million in a five-week period, at a staggering 5200% ROI

This is Profit from the Inside with Joel Block Insights to give your business the inside track. And now here's your host, Joel Block. How is product marketing changing and in particular, how is e commerce marketing moving along? Is it too late for us to get involved in the game. Can we tap into some of the existing channels and how will that affect us positively assuming that we avoid the little known pitfalls? To answer those questions, Ryan Flannag and Ryan, welcome to the show. Thanks Shul, thanks for having me today this listen, this is gonna be cool because a lot of this, of course driven mostly by Amazon. Uh is something that a lot of the middle sized companies, the companies that we target you know for our show I have really stayed away from because they think it's kind of more entrepreneurial, which which could be. So what do you see and when are you seeing a lot of entrepreneurial companies go there? You see middle size companies, big ones who who uses Amazon for distribution? You know, Well, let's talk first about kind of the bigger picture and kind of how e commerce and the paradigm shift is happening in product marketing. Right, So, you know, particularly after COVID, everybody kind of switched to buying things on from home and doing it prettytty easily because you're cann't go to the storage for a while. And even before that, you saw a major retail chant trends going away from big box and really going online. And nowadays, when we look at Amazon compared to Google search, Amazon's about forty percent of product search in the United States named forty eight percent of people who have intent to buy a product or going to Amazon and searching first, compared to thirty five percent of people going to Google and searching around that. So they've really gotten a pretty big cornerstone on Amazon on the marketplace and what they're doing that area. We do work with a number of different I'm the CEO of Nuanced Media and we went around about twelve years, but we work with a lot of midsized brands really kind of figuring out how does all this work, how do I do product marketing, and really where's my best bet? Now, we work with a number of brands that already have big box retail and maybe they're already selling on Amazon, or maybe some resellers are already selling their products on Amazon right and that's a big shock for a lot of our companies that we work with. The go on there and see that somebody else has thrown up a listing. Well, that that what wastaing, and that that opens up a whole can of worms here, because let's say you're a company and you're busy selling your stuff, and then you can find out that somebody else now is selling your stuff. I mean, can you control that? I mean, can you tell Amazon don't let them sell your stuff because they're not They're not a primary or original seller. They're a reseller or a broker or whatever they are. No, you really can't. You can't and do um. Basically, you can do automated cease and desist orders and some types of things like that overall reputation management. But this is really akin to the kind of social media conversation we're having. Back in the two thousands when Facebook and all these other companies came up, and people are like, well, should I be on Facebook or should I be on social media? As a company, and we all decided eventually that's probably better for you to be on social media, controlling your brand, prepared to being up there and not having an active voice in the conversation. So we do a lot of brand reputation and management and those type of things when it comes to Amazon. But the best case in that situation is typically to go up there and claim the listings yourself, aggregate those, do the customer service and response rates, and build really quality listings that convey who your brand is, what your products are. And honestly, by implementing that strategy and being active in Amazon, even if you don't really want to even be there,...

...are we do see rising and sales for your website and your brick and mortar locations. The reason is that Amazon nowadays is basically the litnasy test for anybody shopping online. Um, I don't know how many times I've been shopping that I will look at my I'll look it up on Amazon before I buy it, and it doesn't have good reviews, that doesn't look like a good product, that I'm not going to buy it. Well wait, wait to say so, I do a lot of those things too, and I'm very bullishit Amazon. I really like it. I use it all the time. Um, But I'm just thinking back back to this issue about having third party selling my stuff. So a lot of companies you know, they kind of control their distribution, they call control their pricing. They have dealers, they kind of set the pricing. They're not supposed to exactly, but they sort of do. And however they do that all of a sudden on Amazon, it's free for all. I mean, so is what are companies doing that? You know, how do they retain control of their distribution, of their their quality, of their pricing, of all the things that matter to them when anybody can sell anything using this marketplace. Yeah, so you know, if there's MAP violations, and that's the real thing that you know, we're we're looking at here is you can go in and typically identify if there's resellers selling a product and they've violated MAP. We have a number of partners that we work with that set up automate and cease and assist orders and some other things like that. Not only monitoring what's happening on Amazon, but you're not even thinking about eBay or any of these other marketplaces that could be selling your products as well. So when you're a brand nowadays and you're doing the D two C market, not only do you have to be kind of present in all these markets and monitoring what's happening if not actively pursuing them so you have your best image and best brand out there. But you also need to be watching out for the resellers and what's the process on that. How do you get them from winning the buye box? How do you get brand registry so you can change the listing and they can't change the listing or hijack your brand. Um, there's a lot of things that you really have to be aware of, UM that you may not be if if you're not actively playing on Amazon. And then above and beyond that, what is your overall Amazon strategy? And then how are you going to drive sales through the Amazon channel if that's really your you know, I wonder how many companies are searching for their own products on Amazon because they might be sold there, whether they realize it or not. Now I normally think about Amazon more retail, but does it also kind of apply to you know, certain kinds of manufacturing, nuts, bolts, parts, manufacturing issues. I mean, they sell all sorts of stuff. I imagine. Yeah, you can pretty much buy the kitchen sink on Amazon. That that's what you can do. But Joel quickly on the point, you're just making before the other thing is, let's say you are established brand and even selling socks for years. Well, if you're not on Amazon, go search for your brand on socks, your brand name, and if other people are advertising on your brand and have a similar product, then you could be losing customers to that as well. So it's not only people coming up and selling your product on there, but it's you having you have a strong brand, even selling for years, and then people are coming to the platform to find your product and they can't find it, so then they're buying from the competiti Okay, so so talk So let's talk about the customer concept because these are sort of anonymous customers when you get them through Amazon, they're anonymous customers. What kinds of strategies or techniques are companies using that are working to create some customer relationship development once the product gets sold. I know that I've received like please go to our website and fill out this thing, or what are companies doing though that where they can actually know who I am and stay in touch with me? Because there's certain companies on Amazon I just...

...love their products and I do want to hear from them, and I do want to every time they come out of some new I want to know about it, right, So there's a few strategies when it comes to that. The first thing that you do identify is that brand Amazon has really identified that UM being enabling brands I mean more successful on Amazon is really in their bread and butter. They're coming out with some programs that you can start, uh theoretically emailing people who have purchased from you or followed you and done those type of things. You'll never get the customer information because Amazon is a black box. Right. Also, when we look at Amazon compared to your website, we see two different variations. Amazon typically has a lower customer acquisition cost. I mean it's easier to acquire customers because Amazon has a significantly higher conversion rate, But Amazon has a lower lifetime value because you can't reach out to those customers once they purchase right on your website. Higher customer acquisition rate, higher lifetime. So the real goal here is how do you leverage Amazon to acquire customers and then get their data and build things out that way. But typically we recommend if it works for our partner that we're working with, is a warranty of some sort UM particularly maybe a discount on the second item for one of those things. But for example, if you are selling a let's say a drill, and you have a ninety day warranty, your your warranty, you can send in your shipment a warranty offer to come fill out something on the website to get your warranty, and then you've captured that data off of Amazon. Uh, and then you can remarketed those email blast those people and those things because they claimed that warranty. Now, the key with that is the offer that you have to be giving has to be valuable enough that somebody is going to go claim that information or do that to fill out the information. So what would that be like, Uh, we give a ninety day warranty, but fill up this thing and extends it to a year. Mean, is that the kind of thing you're talking about. That's exactly why I'm talking about extend your warranty by nine months. Right. Oh, there's some value there. I get some extra level there, and then I can build that out or buy one get one free on something else. There's some other tactics that you have to do. I always do recommend that if you're thinking about implementing some of these that you are for the terms of service on Amazon, as Amazon is always kind of changing and updating their terms of service. How did how does Amazon work? Who does the fulfillment? Is? Is it literally done by Amazon or do some companies fulfill their own stuff? Yes? Is the answer. Both are the options. There is you're there are two different methods you're talking about, and that's fulfilled by Amazon FBA or fulfilled by merchant, which is fulfilled by the merchant. Well, we typically recommend for our customers is that they do FBA where they can UM. Honestly, Amazon shipping is typically less expensive than most merchants can get on their own, particularly because there's not like a pick and pack fee and some of these other things that you may get out of your three p L. But we also like having fulfilled by Merchant FBM UM and LOU as a redundancy so if you ever run out of in ventory and Amazon FBM can kick in so you don't lose inventory or sales on that. And Joel, I'll tell you there are companies that made millions and millions and millions of dollars because they had FBA set up during COVID and then what happened was Amazon said you had to be essential to send an inventory to Amazon because they're sitting in all the masks and all that type of stuff. But because they didn't have FBM set up, they could go in and you had companies that lost millions of dollars because they couldn't actually fulfill on Amazon. But the companies that had set up FBM redundancy just turned that on and kept so those guys made millions and millions of dollars because they had basically FB A and FBM set up compared to just FB alone. So if you're going to use to fulfilled by Amazon UM and you want to do this warranty extension program, you have to kind of package it into the...

...box. But you don't necessarily want that to go into all your boxes. If you're selling to a regular channel, maybe you do. I don't know, but but you know, I mean, if you want to have who the Amazon customers are versus who the X y Z customers are, you have to have a different piece of papers somehow. Well, and what you probably want to think about, Amazon is not the only channel out there. But if you're selling on eBay or selling in some other channels too. You probably want to have a multi channel strategy for your product amastarts and what you do. And that's not just for um, you know, the warranty offer as we were talking about before, but review requests and things like that, because reviews are a big thing. You can't enquire for positive reviews on Amazon, but you can say, hey, please let's know what you think and review us on Amazon, right, And that's something that you can do underneath that area if you're shipping with Amazon. How many of these companies are are doing a good job of you know, like I'm talking about the middle size companies are doing a good job of using Amazon. Do you think companies generally do a good job or do you think that they leave a lot of meat on the table. Leave a lot of meat on the table. Um. We work with a lot of established sellers that are you know, in a number of box retail stores across the board, and we typically can three four x revenue on Amazon just by coming on doing the product family reviews, um, aggregating them appropriately. So let me kind of walk through this be more specific, like what are the things that companies don't do to maximize or optimize our opportunity. So one of the reasons that Amazon has been so successful and entrepreneur has been flocking to it is if you come in and you have a large catalog, right, and typically you've been selling and the big box, Well, your typical listings have one picture, a little bit of content, just kind of like how it used to be, right, But what happened with other sellers coming in is they'll get a product, they'll do the listing, they'll have five or six pictures that will have the copy to have a video about it. They do all these type of things, and then as an end user when I come and say, well, I know, uh, Jules Brand, I'll just use you. Your you is having a brand here right for something you're selling online and you've been manufacturing this, and you have one image up there in a little bit of copy compared to serious Sarah Sue who has full images copy all those type of things. Well, I'm going to go to the one that I can actually see more details about, has its messaging done, because for me, I need to be able to almost digitally smell it. Compared to historically you go into a store, you pick it up, you feel it. You would then make a purchasing decision. So one major play is updating your catalog to make sure it's retail ready. On that left, but another major thing that we see with established brands that could be doing well on sales and all these type of things is taking a really good look at your catalog and putting your products that are similar into a product family. Now, the reason that that is interesting is because if you have let's say three different products that are not a product family, but they all have a hundred reviews, well, then when they show up in search, they all show up as having a hundred reviews. People may or may not purchase those. If you aggregate those and put those into a product family on Amazon, those reviews aggregate as well, so then you would have three hundred reviews, thus more people purchasing because at least those three products are together, and you can cross selling upset with that and j Well, I'll tell you like, for one of our clients, they had six sixty thod reviews on one other products and about two hundred and about two thousand another one. We aggregate them in their product family. So now that product family has sixty three thousand reviews right around there or whatnot, And there are other products are going gangbusters because now they've aggregated all those reviews, you have instant credibility with people purchasing on Amazon and doing those levels. So there's a lot of strategy...

...that we recommend doing in fact that nuanced before we engage with anybody. UM, we'll do an Amazon action plan and lay out the strategy and make sure there's an opportunity for you before we'll even work with anybody, because you need to kind of do the structure or see what the size is, see what the investment is. UM. And it's really dependent on where you are and your customer journey and your brand journey to see where those opportunities. You know, there's a lot of probably a lot of details many of us probably uh wonder about maybe you could dish a few of these things here. Um, if somebody you know is gonna say, uh, you know, I want to make a pretty good commitment to sell it on Amazon. I want to sell a bunch of our stuff. Let's say it's a retail product, doesn't matter what it is. How much inventory do you have to commit and and does that inventory go to one warehouse or do they spread it did they spread it across for you? Do you have to ship it to many warehouses? I mean, because they get it to you pretty fast. I mean, so how does this work? So it depends on where you are again in your brand journey, right, That's why I kind of lude to it before. If you're a new seller, any new seller gets a thousand pieces of inventory that they can send an initially, right, that depends if you have one product or five hundred products, you get a thousand until you establish a sales trajectory and those things, and then Amazon will continue to enable you to sell more on online and send it more inventory. So wait a second, So Amazon will accept a thousand pieces of merchandise as inventory. They'll they'll inventory a thousand units, yes, spread across different skews or or what. Initially when you're a new brand, just a thousand. That's why you get for all your skews. Now algorithms, the algorithms watching the sales, and then they'll send you notice this Okay, Now we'll take you up to it's almost like a credit limit. Now we'll take you up to three thousand, five thousand, and and how do they spread it across warehouses? Across the country. So they basically, based on their algorithms and where they're seeing kind of story purchases, they allocate where they go to right now, something else that happens on here until I think you'll find this interesting. About a year and a half ago or so, Amazon launched a multi channel Fulfillment by Amazon. So basically, if you have a website, you can send in all your inventory to Amazon now and they'll fulfill for your website as well. Mhm, right, Because Amazon's really getting a logistics game more than anything. So the more quality they have, the more volume they have, the lower their shipment rates are. They've been building warehouses everywhere. So if you're in the multi channel fulfillment program through Amazon, you can actually get around some of those minimum inventory numbers because you can say, hey, here are my sales projections. I need twenty thousand units to be able to ship in. So you can actually outsource. You can outsource the distribution to Amazon. Is it sort of a private label arrangement? Yeah. They basically they'll do it all for you. Are you You just treat them like a three P L That's essentially the same thing that you do with the three P L. They have introduced a white box things, so it doesn't come into Amazon uh fulfilled like Amazon box, if it's come from your website. That's pretty pretty fascinating that you know that it's just another option that companies have and they really you know, I mean, I wonder how many companies really know about this, and it probably is a pretty cost effective option, especially when you think about being able to close down certain kinds of resources that are expensive and like think about internally if you have a full staff doing that, right, what is that costing you? Why is that costing you? And shipping I can't tell you how many times we've done the analysis for a client and say, hey, we can save you uh two to three bucks per shipment if you're using Amazon compare to using your three p L. Particularly if you look at like a pick and pack, that's significantly higher from a three pl Right, So there's a lot...

...of opportunities with that. I mean, even at this level. Amazon's launched Global Logistics, which they will basically take directly from China and shipp into your warehouses in the United States or in Europe or wherever. So Amazon's playing very hard in the logistical game. So that's the thing when we're looking at where Amazon plays and you know this kind of product marketing and brand awareness and where it plays in your overall formula as a brand, As a dt C brand, you really have to not only be looking at sales on Amazon, but what new programs are rolling out and how much does that change everything else. So let's talk about a couple of specific strategies that companies can use to augment their existing distribution program. And I'm not talking about outsource distribution. I'm talking about selling the sales part. And you know, how can they use Amazon to aug in some of their existing uh channel marketing. Yeah, So the first thing that we look at with this is we always recommend before we do big brand awareness campaigns or anything like that, is that you get your listing is up and optimized and looking good on Amazon. We don't say do your full catalog, take your your your best sellers right on Amazon. What we typically see is even with large catalogs, it's kind of the Parado principle, which is of your products are making percent of the revenue on Amazon, because the more you sell, the higher you rank, and then the more sales you get. We typically see that two percent of your catalogs making like right, Like, we just analysis for a company and they had three products that were making up of their revenue and that was for a catalog of about a hundred and twenty different products. Right, So you start out with the best ones, the ones that are people are producing now. By having an optimized listing that has good reviews and all those type of things, what we do see is that your sales in store at your brick and mortar locations will actually increase, and then your website sales will increase. To the reason that that's happening is that people are using Amazon as a litnacy test. You know that you go in there, you look at the reviews on Amazon before you buy, and then you typically purchase. You'll also see it the other way because you're doing your marketing um and these type of things that people will come for whatever reason not want to buy in the store and then they'll just directly purchase from Amazon because maybe they're on vacation and they don't want to take it home. So by doing the optimization on those, you'll actually see that all tides rise between all of your different channels. By being what we like to call retail ready and presenting yourself in a different you know, if you're collecting all these reviews on Amazon, our company is doing a good job of repositioning those reviews into other channels. Are they allowed to use those reviews and other channels? Yeah, so Amazon does have copyright on any of the reviews that they do in those things. But what we've and we're not atturney, but what we've been vised on is that as long as you put a link, will export those reviews and will actually put those on the website. So the concept with going and gain retail ready and spending these times to do good images and videos and good copy and a plus content, all these type of things, because that's a costly matter. You know, it just doesn't happen overnight. But when we do that per product family that we're working on, then we go recommend implement all that on the website because that will increase your conversions on the websites and so on and so forth. That includes importing those reviews off of Amazon and putting that on your website as well. When you put those on the website, do highly recommend that you put a reference back to Amazon, saying some of these reviews may have been pulled off of Amazon just to avoid a legal issues that you have whatsoever, without reference. But then you can go from a web page or product page on your website that maybe had three or four reviews to product cage on your website that now has eight hundred...

...reviews, and your diversion rate on your website going to increase. You know what what strikes me about about this is that it's really pretty scientific. I mean, there's no guesswork here. I mean, this isn't you know, you don't just define an intern and say, listen, would you run our our Amazon program? You know, and and I imagine a lot of companies that's kind of what they're doing. Is they just find some person they say, hey, would you run our Amazon program? You're near now in charge. And I just have to imagine listening to the complexity of this, that this is very scientific, and there's a right way and and there's all the other ways. Well. And we've seen companies like in covid, because we recommend that fb A and FBM redundancy our clients did very well. They made millions of dollars people who didn't have that set up lost millions of dollars, and yes, I have to be very clear, like a nuanced media. What we probably do better than anybody else is apply the formula to make money bbjail ready ready, and then scale from that. And if you're established brand that are a has products up there that you're making sales, that you have reviews, then you're pretty much a gang buster to two three extra revenue on the platform if you really haven't been doing anything. Just give us an example of a company that just had a bust of an experience. Yeah, so yeah, I got a number of them. So let me just talk about you know, this one company that we recently started engage with or a direct response company. They sell millions through Facebook and do a ton of things like that, and they had a good Amazon listing set up. But we came in, we took over, we did optimization on that, and then we started doing testing on the main image, um and what image shows up in search, and we actually increased their click through rate by six eight seven by doing that, and their sales up month over monthly. One product. Now, because you go in, you're doing it well. And again it's very important to get out of the catalog mentality of I need to do my full cat You can have a smaller set of products on Amazon and do those better than anybody else and make more money by spending the time in the effort to do it, because Amazon's about quality not quantity. Well, the other thing is that Amazon will punish you if you fail. Oh yeah, I mean if you if you put the whole catalog in the products do badly, then the whole company probably is punished. They don't just pick the two that they like and then well so they will pick the two that they like. Like Amazon goes brand agnossm with that. But your sales will go down if you have a whole bunch of products on Amazon, if they go to your store and go there and say, oh this brands all its other products or two three stars. I'm not going by from these guys because I don't believe right. So, there is a lot of refuge ation management. There's structure, there's organization. When you just focus on Amazon, when do you bring that over to your website, When do you do social media around that? There's all these different plays and all these different factors. Not only to even have the conversation about logistics that we're just happening when going in and implementing these days. So so in a certain way, companies need to pick what they want to lead with and and then maybe draw people to their store to look at other stuff. Secondarily, not bring them all in and and bombard them over or overwhelmed them all at one time. Correct or what you do with that is you go in a kind of tiared faction, like, what are top sellers. Let's focus on those guys first, Like, let's get those up and optimize over the next three months, and then we'll go to the second ones. And we'll go second ones. But when you're looking at ad spend any of these products that you're looking at, you're looking at you know, we have products that we spend a hundred thousand dollars a month on for one skew for one listing right, and then we have other ones that we're spending two thousand dollars. It really depends on the growth and the capability of that.

But where you monetize as an end brand is by taking one product that's a winner and building that up to just rens and rope and selling as much as you can of that. You know, this is this has been been really really thought provoking, and this opens up a lot of new doors and probably generates more questions and answers. But I will tell you that the theme of this show, the promise of this show is to deliver the inside track the best, smartest or fastest way to get something done. And uh, and you've done that. And when somebody does that, we call those people advantage players. And you have lived up to the promise of the show, and that makes you an advantaged player. And I appreciate you sharing what you know and delivering the inside track to our listenership. And thank you for being a friend of the show. I appreciate you sharing with us and being part of the program, and you know, being on profit for the Inside Well, thank you, j Olds. It's been so much fun and joining and hopping on today and I'm always around. If you ever want to talk shop again, well, well we'll put all your contact info of the show notes. Okay, wonderful, Thank you mann listen be well, thanks for being with us. You've been listening to Profit from the Inside with Joe Block. For more insights and to learn more, visit Joel Block dot com. How about a shout out and a huge thanks to our podcast show producer David Wolf and the team at Autovita Studios. Profit from the inside wouldn't be possible without these wonderful professionals. To learn more or to find out how you can launch and produce your own podcast show, reach out to www dot auto vita dot com. That's a U d I v I t a dot com.

In-Stream Audio Search

NEW

Search across all episodes within this podcast

Episodes (184)