Amazon Ecommerce Strategies | Dan Brownsher

Matt Edmundson [0:05 - 2:23]: Welcome to the Ecommerce Podcast with me, your host, Matt Edmundson. Now this is a podcast all about helping you deliver ecommerce. Wow. And to help us do just that, today I am chatting with a chap all the way from Las Vegas, Dan Brownsher from Channel Key, which is a full service Amazon agency. We are going to get into all kind of groovy things today, just chatting pre record with Dan, then we're gona have a laugh, then we're gonna have some fun. I think you're gonna grab your pens and your notebooks because I think we're gonna hit a lot of stuff today. So yeah, yeah, make sure you've got them. Of course, if you're subscribed to the newsletter, all of the notes will come straight to your inbox because that's the way we roll here. We send that out to you. If you're not subscribed to the newsletter, you can get [email protected] and all the links and sort of stuff are in there, aren't they? But of course, as I've been saying for a little while, they're also in the podcast app which you're probably listening to this on as well. Just scroll down, just click the links, go say how's it to Dan, Tell him you enjoyed the show. Excuse me while I clear the frog in my throat now. A warm welcome to you. If you are new to the podcast, it's great, great to have you. Great that you're joining us. Be great if you subscribe to the show and keep joining us. As we keep talking about all things ecommerce. Come find me on social media, Come find me on Instagram or on LinkedIn E. Edmundson and just connect with me. Let know what you're doing, let me know what your business is like. I would love to see your website if you've got an e commerce website. Always enjoy connecting with ecommerce commerces around the world. Now let's talk about Dan, who is the dynamic leader in Amazon retail strategy and ecommerce commerce trends. Known for his insightful commentary, he's been featured in Bloomberg, Forbes and Reuters, making waves with his expert opinions. As the President, CEO, CEO and co founder of Channel Key, Dan helps everyone from multimillion dollar corporations to scrappy startups conquer the ever evolving world of Amazon ecommerce commerce. Dan, it's great to have you on the show man. Thank you for joining us. How are we doing today?

Dan Brownsher [2:23 - 2:35]: Good Matt, thanks for having me. And that's the first time I've ever heard anybody in our I Don't know. World referred to as an E ecommerceE commercer. Is that what you said? ecommerce commerce.

Matt Edmundson [2:35 - 2:39]: Yeah, yeah, yeah. It's just a phrase that I use, fellow E commercers.

Dan Brownsher [2:39 - 2:40]: Yeah, yeah, I like that.

Matt Edmundson [2:40 - 2:52]: It looks really cool when you write it down. Right. So I've been using this for. I coined this phrase ecommerce a while ago and it looks really cool when you write it down. It's just a slightly odd when you say it.

Dan Brownsher [2:52 - 2:58]: It is odd but you do a good job. Not the first. So I'm going to steal that.

Matt Edmundson [2:58 - 3:18]: Matt, go for it. You know, go for it. It's. So Dan, tell us a little bit about your journey because we were saying before we hit the record button, you've got this Amazon agency, but you started off with a product based business and sort of found your way into Amazon, is that right?

Dan Brownsher [3:18 - 5:06]: Yeah, yeah. So as you mentioned, so ChannelKey is a full service agency focused on working with mid market enterprise level brands on the Amazon platform. Okay. So we're doing some very sophisticated work. We're an advanced partner with Amazon, we're doing full funnel ads, catalog work, graphic work analytics, demand planning, forecasting, really in the weeds, account management and ultimately building like really robust, sophisticated strategies for big brands on the platform. So we'll manage half billion in GMB this year. Right. To give you an idea of scale and context and our offering is I think unique. It's a full service offering and it was born and bred out of this previous business that we started to your point. Right. So I've been running the agency officially since January of 2017. We started really in beta in 2016 but spun out of a sister business that I co founded back in 2008. Ish. That was a product business that was started as a side hustle, started as a private label. You're literally like sourcing products on Alibaba and selling them through ebay and then a bunch of micro websites. And then the business kind of expanded and we got into selling on Amazon and became a distributor and reseller and exclusive reseller and then back to private label. And so in essence, I don't know, expanded our reach into a service based model based on all the learnings and time growing a product based business that primarily focused on the Amazon platform. So been in and around either as a seller or a service provider on Amazon since 2009, 2010.

Matt Edmundson [5:06 - 5:09]: Wow, that's a long old time, right Amazon?

Dan Brownsher [5:09 - 5:10]: It is man.

Matt Edmundson [5:10 - 5:35]: It really is. It really is. And I mean having sold stuff on Amazon, stole a few things a few quid's worth of stuff on Amazon over the years. I'm curious, have you found Amazon has become an easier place to sell? Has it become more complicated? If you were starting out again today, would you still do Amazon? I'm kind of curious on your thinking on all that.

Dan Brownsher [5:36 - 7:38]: I believe that Amazon is more complicated than ever to sell through and to surveys, and that's for a multitude of reasons. So in my opinion, Amazon operates like a SaaS business. Okay, so it's very pro consumer. Right. Amazon's consumers are the customers, like the end user. And the brands that sell through the platform or the service providers like me, aren't necessarily their customers. Right. So we're dealing with the problems and you can't just pick up the phone and call Amazon and say, hey, fix this title or this is this bullet point. Is it making sense? Or why did it revert back to what I changed yesterday? It's always been that way ever since we started. And so managing it is very much an art in a lot of cases and how you communicate with them. So you've got that complexity and how they service and operate for their partners and service providers and vendors. And now it gets more complex because there's just far more competition, there's far more different ways you can advertise on the platform. There's so many more tools and opportunities and things that you can leverage as a brand owner to be successful on the platform. So it's, I think the root culture around Amazon has always been there and it's been the same and it's gotten so much bigger and so much more complex because what they're offering to their sellers has gotten far more advanced. So into the latter part of your question, what I still do today, absolutely. Like, I think there's so much opportunity on the platform, whether you're, whether you're a brand owner or a seller and, or just a straight advertiser working through their media business, there's so much opportunity still on the platform, so much consumption happening on Amazon. So I'm very long on, I'm very, I'm still very long on Amazon at this point.

Matt Edmundson [7:39 - 8:40]: Yeah, it's not going away, is it, Amazon and it seems to be getting more and more entrenched. And I think everyone sort of, it felt like with Amazon, there were arguments about it a few years ago. You know, certainly in the uk, the press weren't happy with them and, you know, it sort of swings around, but it all seems to have sort of settled down really, and everyone sort of accepted the status quo. Written Amazon still account for. I think it's worn into online purchases. So it's a hell of a marketplace. You know, it's a big old space. So if you were starting today, because we get a lot of people who listen to the show who are just starting out right, and we'll get into some more of the techniques and advanced stuff in a second. But if you were starting out today, would you do Amazon only? Would you do Amazon on a website? Where would your balance be on that? I think it's a question I get asked a lot.

Dan Brownsher [8:40 - 10:27]: It's a really good question. In the past when I for the product business we had, we did Amazon only. Okay. So we literally were finding through data white space in the marketplace where there was like high demand and low supply. We go to the go find a factory, create a brand, trademark the brand, get the product manufactured, source it and sell it like straight Amazon private label, Amazon only. So I have experience with that and I would say that if I was doing that today, you cannot just do it that way. It is hyper competitive. The barriers to entry are ridiculously low. The access to data is everywhere, it's ubiquitous. And so even if you happen to stumble upon a niche that is super hot and unpenetrated, it's going to get, it's going to. The gap is going to close super quick. So the net net for me on that is I like Amazon as a sales channel and a testing environment and a data and aggregation channel. But it can't be your only channel. Like you have to build a brand outside of the platform, in my opinion. And that's either through Shopify or through social channels or through TikTok. Like, you've got to create a way to drive branded search, branded traffic for your product, otherwise you're going to be trading a commodity. If there's no branded search, unless you've got an amazing quantity and quality of reviews, which takes time to build, it's hard to maintain position in search on Amazon if there's no brand equity.

Matt Edmundson [10:27 - 11:01]: Yeah, that's fair play. That's fair play I found actually. And maybe you can speak to this down a little bit if I wanted to. Whenever I've launched a new brand on Amazon or a new company, one is always taken two or three times longer than I expected it to actually get reasonably good traction in that. And two, it's always taken more money than I expected it to to get that traction. Yeah. So do you need, if you're going to start today on Amazon, do you need a chunk of resource behind you realistically to do that 100%.

Dan Brownsher [11:02 - 12:56]: And we've from an agency perspective, since we've started to where we're at today, the dynamic of our customer, our customer has changed. Right. So back in the older days we would, I don't know, we would work with a lot of startups and a lot of smaller brands and today we work with kind of more established businesses. Yeah, right. That have a brand, that have distribution outside of Amazon, etc. And so but every once in a while we'll find a re a really interesting opportunity for a net new brand or net new seller on the platform or maybe someone that has a really, they've got a decent sized business but with, you know, with minimal branded search or something like that. And so quite honestly, Matt, what we tell pretty much any smaller or net new opportunity is if you have no branded traffic or branded search, you are going to have to buy the business on Amazon. Like literally you're going to pay for it and expect to lose money because you're driving so much ad dollars and spend towards ad sales that you're, you're going to lose like there's a likelihood that you're going to lose money for at least the first 12 months of selling on the platform because nobody knows who you are. How are they going to find your product? Right. You're going to have to win on non branded keywords in the search bar. And the only way you're going to do that because you're not going to index in Amazon's algorithm is to buy it and have paid representation for your product. So yeah, you need to, you need to be resourced. A, you got to buy inventory. Okay. And B, you got to pay for, pay for your sales for an extended period of time unless you can do something, I don't know, go viral on TikTok or something that creates this large glut and external traffic driving into the platform. If you're going to do it just on Amazon, you're going to have to pay for it for a long period of time.

Matt Edmundson [12:57 - 13:53]: Yeah. So it's a hard road, isn't it? I think in some respects in the early days Amazon was almost like the wild west. You could put it on there and there'd be a whole bunch of people, but if you had a list, little bit of mouse about you, you could do okay. Whereas now it's like you say, the competition is so fierce. There are now Amazon agencies. I didn't hear of an Amazon agency for years. You know, it was all like, well, I'LL just figure this out. I suppose it's a Google search, but there's people like you now that really I find that you need an agency when things get too complicated and you really need specialists to really think something through and they can spend a lot of time thinking about it. Because I think as an ecommerce entrepreneur, you have to be a really good generalist, don't you? You have to think about all kinds of different things and pull all kinds of different levers. Which is why I see the need now for Amazon Agency.

Dan Brownsher [13:53 - 15:57]: Right, Absolutely. I mean, Matt, if you, I don't know, Amazon is not like any other channel that exists. Okay. Ecom channels or just a retail channel. And it's hard to manage. And the larger you get, the more sophisticated your strategies have to become and the larger impact a problem on your account might have on your business. Right. Like it's not, we, it's not uncommon for Amazon accounts to get shut down or for listings on Amazon to get shut down. And if that happens, like what are you going to do about it? Or if you want to build a two year plan on doubling the size of your already $100 million Amazon account, how are you going to do that? That's hard. Right? And it requires skew rationalization. It requires understanding unit economics at the ASIN level. It requires different promo and strategic ad spend strategies at the product level and product category level. Yes, Matt, like the larger you become and the more sophisticated your business becomes, it is hard to understand how the environment works in total. And the beauty about us is we've got a bunch of different clients in a bunch of different categories that are dealing with a bunch of different types of issues. And so we can flatten learning curve for our clients because we say, hey, yeah, we dealt with that issue two years ago on this product category or product type. This is what you need to do about that. It might be completely unrelated to your business, it might be a completely unrelated product type, product category, type of customer, but it's all relevant. And that's one of the beauties about working with an agency is we can aggregate our knowledge over time with a multitude of people as well as technology and people and relationships and all these things and package it in a way that creates a good experience for brands that want to be successful.

Matt Edmundson [15:57 - 16:48]: Yeah, no, I listen, agent, we have quite a, we're talking before we hit the record about what we do in terms of our E commerce service agency and all that sort of stuff. There is still one area that I, even in our agency, I Don't get involved with. We always outsource Amazon to agency because I think you need that specialism if you want to do well on Amazon as well as have deep pockets. I'm kind of curious, Dan, if I was, If I came to you and said, Dan, listen, I've got a lot of money. I just, I, I'm quite happy to invest it into building a business on Amazon. You know, the dream client. What kind of products should I look at? What sort of products sell well? What sort of price range do I need to think about? Is there an ideal or is it, is it not really like that anymore on Amazon?

Dan Brownsher [16:50 - 18:42]: That's a good question and super loaded question and there's a bunch of different ways I can answer it. Okay, so what I would say to you is, one way to answer it is, are we building a brand or are we not building a brand? Like, what do you care about? Do we just care about transactions and volume or do we, Is there some bigger play here or is there some competitive advantage that you have that we can lean into? Some access to manufacturing or a patent or something that's unique or interesting that we can lean on? And if the answer is yes, cool, let's blow it out of the water and let's figure this thing out. And it doesn't matter what the product type is. Right. Or the category, the price point. Assuming you can make money and there's margin, there's demand for the product type, great. If you got a competitive advantage, let's seize on that competitive advantage and we can run the margin analysis and tell you how much money you're going to make and all those things. That's one way to look at it. I think from my experience, what is super interesting to me and my company right now from a client set perspective is, and I'll say this, and I'll caveat this, we're generally category agnostic. We look for good products and good brands that have you right. That are successful and that are resource. Well, but there's a dynamic that I really am keen on right now and that is in the, I would say consumable space. But even going down a notch in supplements, like supplements is a really interesting category right now and revised with it. The reasons I like it are a, the margins can be really high for brands.

Matt Edmundson [18:42 - 18:43]: Okay.

Dan Brownsher [18:43 - 18:55]: You make a $3 pill jar of some supplement and sell it for 40 bucks. High margin, small packaging, easy to ship, right?

Matt Edmundson [18:55 - 18:56]: Yep.

Dan Brownsher [18:57 - 19:51]: But the really cool dynamic in my opinion, given that margin profile, is getting consumers onto a continuity program. Okay. So if I sell a supplement, I take a magnesium supplement or whatever it is, well, guess what, I'm going to buy a 30 day supply and I need to deliver to my house every 30 days. And so the name of the game and the really cool thing about Amazon's ad business and the visibility that you can get through some really sophisticated tools is you can see how these consumers are engaging with your product type throughout the entire ad funnel. And if you know that, if you know the LTV of that type of consumer and you can get a net new customer through Amazon and get them onto a continuity program through Amazon through like subscribe and Save, the LTV equation gets super interesting.

Matt Edmundson [19:51 - 19:51]: Okay.

Dan Brownsher [19:51 - 20:20]: And the business kind of starts snowballing on it on top of itself. And so I like that dynamic. That's a really fun dynamic. High margin op, high product type demand category. It can be hard, right, because it's regulated by Amazon. But if you've got a good product that people want to take on a repeated basis and you can just focus on net new customer acquisition. And remarket. And remarket. And remarket. That's a fun environment to play in.

Matt Edmundson [20:20 - 20:26]: Yeah, it is. I mean, full disclosure, I have a supplement company and we sell on Amazon.com and dot com.

Dan Brownsher [20:28 - 20:29]: I didn't know that, Matt.

Matt Edmundson [20:29 - 21:53]: Yeah, yeah. So it's, it's, it's interesting listening to you talk because I'm going, oh yeah, do that. That's great, that's wonderful. That's wonderful. And we found it. I tell you what we found, Dan, is we found it very competitive. And because of the reasons you talk about, supplements are easy to manufacture, they're cheap to manufacture, low cost to ship, and they're repeatable. It's like the dream thing, you know, when I need to buy it every month. Right? Yeah. And so we're growing on Amazon, which is great. What I've noticed is as Amazon grows, our website grows. As a website grows, Amazon grows is sort of, you know, that both rise together. I'm not robbing Peter to pay Paul for want of better expression. What I have noticed more and more is, and I'd love your thoughts on this, so let's take a supplement. Right? The magnesium that you mentioned, you can sell a magnesium for say 5 bucks, you could sell it for 20 bucks and you could sell it for 40 bucks, all depending on the quality, the ingredients and the brand you're kind of trying to build. Yeah. Is it still a case of you go to Amazon and the typical user is going to look down the list and See that One there is five bucks, it's got 10,000 reviews. I'm going to get that. Or are people getting a bit more savvy now? And they're going to go, well, I'm going to look at the five dollar one, I'm going to look at the twenty dollars one and I'm going to look at the forty dollars. Understand the difference.

Dan Brownsher [21:54 - 21:58]: I think it's product, a product category dependent.

Matt Edmundson [21:58 - 21:59]: Right.

Dan Brownsher [21:59 - 22:31]: Okay. So if I'm talking about me as a consumer or something, I'm going to put in my body. Okay. That's going to affect my health. I have a higher propensity to really understand what the product is and not just shop on price. Okay. But if it's a, I don't know, something, a product category that is prone to brand switching, like less product loyalty. It's like, I don't know, like a pair of like socks or something. No show socks or something random. I might just take the cheapest.

Matt Edmundson [22:31 - 22:32]: Yeah.

Dan Brownsher [22:32 - 22:59]: It might not matter to me. So I think that it's product type dependent. Okay. Is this a big purchase? Is this a small purchase? Do I care like if it's perfect or not? That determines the, I think sophistication and how the consumer is going to be searching and browsing for product types. So supplements, I think there's a lot of loyalty if.

Matt Edmundson [22:59 - 23:18]: Yeah, there is. Yeah, there is definitely brand and we've definitely, our pricing structure is we're not the cheapest by any stretch of the imagination, but we've gone for the better quality ingredients, which means we get much better reviews ultimately because people go, oh, we see this works. We were talking like a chew toy.

Dan Brownsher [23:18 - 23:36]: For your dog, you know, and the chew toy that you've bought is out of stock. Like, and it's a, it's an $8 chew toy. You're gonna go buy another $8 chew toy. Right? Yeah. It's not, it's not a loyal category, whereas supplements absolutely is because of the inherent nature of it.

Matt Edmundson [23:37 - 25:06]: Yeah. One of the things that we mentioned before recording that, you know, one of the things that I'm doing at the moment is building an ecommerce group into mergers and acquisitions and all that sort of stuff. One day soon, dear listener, I'll talk a little bit more about it on the show because I'm sure you what some of you might be interested, but one of the, one of the companies that we looked at was an Amazon business that sold. They, they wanted to sell their business. They had a fair bit of stock they were selling, they were selling Like a plastic food, let's say it was a food container. I wouldn't say exactly what it was, but let's call it a food container. A plastic food container. And they'd done quite well. They got 30, 40,000 reviews. The margins were so tight because they got 40,000 reviews that everybody looked at that and gone, oh, I think I can source those. And so, you know, like 40 more people were now selling the same product. So competitions come in, there's then a race to the bottom on the, on the pricing. Yeah. How would you, how would you advise, I mean it's not a business that we ended up investing in, but how would you advise people like that where there's, they've done well for a season, there's more and more competitors coming into the market. How do they, how do they maintain their je ne sais quoi, as the French would say?

Dan Brownsher [25:06 - 26:13]: Build a brand. Yeah, build a brand. Otherwise if, if you've got no brand equity, brand loyalty, you, you've got no moat around your business, right. You're subject to commoditization, you're subject to competition. Whereas if you can build a brand with a proper brand voice and you can get people that might be willing to pay a premium or might be willing to search for you directly because they, they trust you, they like your vibe, they like your, like whatever, that's the way you avoid that trap. And it wasn't always like that. Right? It was not always like that. But if you are simply a no name brand, that's trading on review and price, be prepared for competition and be prepared for margin degradation not only from competition but from Amazon. Like Amazon is going to keep raising prices, you know, for you to ship product or fill product or advertise on the platform. So it's just like any business, Matt. Like you've got to have some sort of protective moat around what you're doing or you're subject to some sort of future competition issue.

Matt Edmundson [26:13 - 26:14]: Yeah.

Dan Brownsher [26:14 - 26:19]: From what we've seen on Amazon, the way you hedge against that is either channel expansion or building a brand.

Matt Edmundson [26:19 - 26:38]: I love this phrase, build a moat. It's a very English castle. You know, you need to build a moat. So you need to in fact, moat agency. How do you, how do you do that then? Right, so how do you build a brand on Amazon?

Dan Brownsher [26:39 - 28:27]: It's hard, okay? It's hard and it, let's see, Amazon over the years has become, it's, it was very, very, very transactional in the past and over the years they've changed and become, I think More brand friendly, whether you're a vendor on Amazon or you're a seller on Amazon. So you can do all these cool things. You can build a brand store. Right. You can actually talk to your consumers. You can build all these really cool, like robust A plus pages and convey the product value and the brand story and all of these things. Like that's a, that's a. Amazon is very much leaning into that. Okay. But building awareness, like brand awareness, from what we're seeing, at least on Amazon, a lot of, a lot of it comes through upper funnel activities. So running dsp, running sponsored TV ads, like doing more traditional awareness play, is one way to build a brand. Another way is through social media and through social channels, whether that's Meta or Instagram or TikTok. If you can speak to the consumer and tell your brand story via social media channels, what we're finding is that's required. Almost like it's hard to build a net new brand just on Amazon. It's really hard. It's one channel, it's a sales channel, it's a great sales channel. But you have to have activities outside of that platform to actually build a brand. And so the best ones we're seeing are doing it through Shopify or Meadow or Instagram or they have a TikTok strategy or something like that where they're building awareness.

Matt Edmundson [28:29 - 29:14]: And you said actually the building the brand is outside of Amazon, isn't it? It's going back to old school, old school methodology, isn't it? Which means actually if I think about the food container company, they've not really got a brand, if I'm honest with you. And the company they bought the products from in China is quite happy to sell those same products to everybody else. So you can't distinguish really on anything. Even the imagery is quite similar. Yeah. And so at which point you then got to go, I need to go into different categories and take my knowledge of Amazon and go into different sectors and different areas.

Dan Brownsher [29:15 - 29:27]: Yeah, yeah. So, so, so you could do product expansion. Like you could get into different product categories or you can lean into different channels. Right. Depending upon what you are and who you want to be.

Matt Edmundson [29:27 - 29:28]: Okay.

Dan Brownsher [29:28 - 29:43]: Like there was a whole aggregator craze and I don't know when you were buying Amazon business, we actually sold our Amazon business. Our product business was a Amazon private label product business that was Amazon only. Like that was the only channel. And we sold that in what, 2021.

Matt Edmundson [29:43 - 29:44]: Yeah.

Dan Brownsher [29:44 - 29:54]: And there was this whole kind of craze of aggregators trying to aggregate these brands These Amazon only brands and package them up and become the next like P and G or whatever and have this house of brands.

Matt Edmundson [29:54 - 29:55]: Yeah.

Dan Brownsher [29:55 - 30:30]: And I think that the challenge in a lot of cases was there was the story, the brand story was I am the, I'm on page one of these primary search terms in results. I've got 10,000 reviews at four and a half stars. Like, that's the asset, right. It's your, it's your indexing in their search algorithm. But outside of that there's nothing. And so if Amazon changes their algorithm or, you know, we've seen them running tests recently where they're not even showing reviews in this product. Search results like, oh, shit, like, what are you going to do then?

Matt Edmundson [30:30 - 30:30]: Yeah.

Dan Brownsher [30:30 - 30:39]: Right, so you've, you don't own it. Like it's not an owned entity. You own the product detail page and you own the account but you don't own the customer.

Matt Edmundson [30:39 - 30:39]: Yeah.

Dan Brownsher [30:40 - 31:15]: So it's very transactional in nature. Unless people are searching for your brand directly. Yeah, that's the key. Because they know who you are, they know what you stand for. They like the product. They have tried this product type in your line and now they're going to try this one. Because you've expanded and you're offering more. That is what you have to do to build longevity. If you're just selling a widget and the widgets got a price and even if you got a bunch of reviews, but nobody cares who you are and nobody knows who you are, you've got exposure.

Matt Edmundson [31:15 - 32:33]: Yeah, well, you've got a very limited time, haven't you? It's a very short run in my head. It seems to be quite a short run. Business model. Yeah, do that. It's interesting you talk about how Amazon have been testing, taking away reviews on the search page because I, like many people, I think, who shop on Amazon and I'm not looking for, to be fair, if I look for a specific brand, I don't buy usually on Amazon because I know I can get it cheaper from some other place. Usually. Not always the case, but usually. And plus, I'm much happier to give all my money to a, to an online retailer rather than giving Amazon, you know, 30% of the fee because I think, you know, Jeff Bezos got enough my money. But if I'm, if I'm on Amazon, I'll put something in. Like the other day I was searching for a shoe stretcher. So I've got these new shoes and yeah, they're very uncomfortable when they're my winter boots and I'm like, well, I'm going to get a shoe stretcher so that, you know, I don't destroy my feet. Well, I'm going to get that from Amazon because I just. I don't know a brand. I don't care enough to go searching on the web and all I do is I put in shoestretcher and I scroll down the results. What's got the most reviews, the highest reviews, and is a price that I think is reasonable. But it's interesting that they're playing around with no reviews on that listing.

Dan Brownsher [32:34 - 32:53]: Yeah, it was a quick test they ran, I think, earlier in the summer. And yeah, it was, it's. It's. I don't know why they tested it or what the intent was, but I think they reverted back. But you never know. It's their platform and they make the rules. And you'll never control it.

Matt Edmundson [32:53 - 32:54]: Nope.

Dan Brownsher [32:54 - 33:11]: And so you've got to hedge against concentration risk. Just like any business, you've got concentration in a single channel and you've got an issue with brand loyalty or brand equity, you've got concentration risk. And so how do you solve for that?

Matt Edmundson [33:12 - 34:53]: I remember when we were doing the beauty, we had a beauty website before I sold it, and one of the brands, we had an agreement that we could sell it on. We were the sole supplier of that brand on Amazon. Amazon actually bought the product from us directly and sold it themselves. So they marketed the product, they sold the product. And I remember one day we were on the platform and we're like, well, we need to put. The manufacturing costs have gone up, so we need to put the base prices up, which will put the retail price up. Could we change the cost to Amazon on that platform? No, for love. No money. We tried for about six months to put the price up and couldn't do it. And eventually we just. It just got to the point where it's like, well, actually, we'll just take all the stock, we'll just, you know, stop selling. And then we actually had someone give us a ring because they're like, oh, this is. This is not quite right, is it? But until that point, we couldn't get in. Like you say, it's their platform, it's their rules, you're playing on their turf, they're all their customers, they're not mine. That's right. And it's like, it's still a great place to play. But I think. How do you. How do you. Because what. This is one of the intriguing things that I'm like, I talked with a Team about, you know, we've got the products that we sell on Amazon, we sell the products on the website. We're toying around with ideas like doing Amazon only products and website only products. So what does that look like? How do I get people who buy on Amazon to actually come to our website and either buy from us or at least give me their email address so I know who they are. Have you got any thoughts around this?

Dan Brownsher [34:55 - 36:14]: Yeah, let's see to your earlier point about the pricing. Sometimes you can control the pricing and sometimes you can't, right? There's a bunch of different distribution models in the platform, right? You can either sell yourself, right? You go 3P, like sell D2C on Amazon or you can sell to Amazon as a wholesaler, right? You negotiate costing and all of that, which is really hard to change. And they set the retail price, you can't change the retail price or you go through a reseller or something like that. So how you distribute dictates a lot of your strategy on the platform, right? And, and it affects distribution outside of Amazon as well. Because if you've got a pricing issue and one's high and one's low, like that matters, right? So that's an interesting topic you brought up earlier. And with regards to like you're talking about assortment, segmentation, right? Or curating a specific type of assortment for Amazon versus not. I would ask why, like what's the, what's the end goal? And we can talk about how you activate your Amazon customers on your website. That's a different topic. I'd be curious to know what's the purpose of trying to create an Amazon only assortment versus a, I don't know, a Shopify assortment. What are you trying to accomplish?

Matt Edmundson [36:16 - 37:18]: It's an interesting question you asked. It was a thought exercise and it was the, if I'm honest, the question was more around if we did products which we, you could only buy on our website and not on Amazon. So you'd sell your popular products on Amazon, which you know, we do well with. If we put certain products just on our website, would that draw people from Amazon to ourselves? I don't know. And then the conversation was, well, what would happen if we just did something that was like a bundle on Amazon that you could only get on Amazon, like an Amazon offer, would that grow our Amazon offering in itself? Because my understanding, and correct me if I'm wrong here, Dan, is the more you play Amazon's game, the more successful you're on their platform, the more successful you become because you're playing that game. Right. And so success almost begets success. And that was kind of the thinking behind it.

Dan Brownsher [37:19 - 38:03]: Yeah. So, yes, if you drive a high conversion rate on Amazon and you get good product reviews, you're playing the Amazon game. Right? That's assuming you're using their fulfillment, you're using ads and flywheel spins and you're indexing and search. So yes, if you play by the rules and you do well and you have a high conversion rate and a good customer response, yeah, you're going to do well. I think what we. So basically, I think what you're saying is I want to use Amazon as a customer acquisition channel and then I want to get them into my funnel, have them transact and then get them to your website because you're going to offer other products that they can't get on Amazon. Is that what you're saying?

Matt Edmundson [38:04 - 38:35]: The dream is you get the new customer on Amazon and then ultimately that customer transitions to you because you always make more money if they, if you've got, once you've got through your initial acquisition costs. Yes, I'm. There's obviously 30% of that sales fee I'm not paying to Amazon. Right. So you go, just buy more on our website. That'd be awesome. Obviously, Amazon make this, it seems to me they make that very complicated to do and there's all kinds of restrictions around doing that. So. But yeah, that was the thinking. It's like, ultimately, how do I get their email?

Dan Brownsher [38:35 - 40:27]: So. Understood. So Amazon is a great customer acquisition channel. It's a great channel for that. And like, what, 60 plus percent of product searches on the Internet start on Amazon at this point. And I think for us, what we typically see is from our clients is there's continuity and consistency between what they're offering on their website and what they're offering on Amazon. And ideally the unit economics are understood enough to where even if you get the sale on Amazon versus your website, you're okay. You might prefer it on your website. Okay. And there's ways to incentivize consumers to come to your website. So even on an Amazon transaction, you can offer, you have a warranty card in there and have them sign up on your website and give, give, give the email address. Like there's, there's ways that you can do that. I think from experience, we've had this conversation so many times and ideally what happens is you don't confuse the consumer. Right. And what you sell on Amazon and what you sell on your website are very much the same. The pricing is the same and you let them choose why and where they want to buy. Now maybe on your website you offer a gift with package or some other thing to incentivize that purchase. But ultimately at the end of the day, like consumers are sophisticated and they want to shop where they want to shop. Maybe they're loyal to prime and they like their prime membership and they don't want to sign up for your website because it's a new, it's a net new sign up and they don't want to deal with that. They want to give you their credit card information. So I would focus on the why and understand how you're using Amazon as a platform and a channel and what you're trying to accomplish and ultimately try to not confuse the consumer and just make it as easy as possible for them.

Matt Edmundson [40:28 - 40:38]: Yeah, very good. Keep Amazon. Amazon in the sense of look after your Amazon customer as well, look after your website customer as well. And life's good in many ways.

Dan Brownsher [40:39 - 41:06]: And ultimately if you build a brand and you make a choice and you say, hey, listen, there's so much demand for my brand that I don't care if I sell it on Amazon, great. More power to you. There's a bunch of products that I buy that I can't buy on Amazon. Maybe it frustrates me, but I still buy it because I like the brand. So I think that the channel strategy is important and you've got to play the channel strategy which speaks to your brand. But what's more important is the product and the quality of the brand.

Matt Edmundson [41:06 - 42:11]: Yeah, no, definitely, definitely. And that's another interesting thing actually. One of the things that we've noticed certainly in the supplement space is obviously you get access to a lot of data and you go, well, man, they're shifting a load of that product. But that product wouldn't necessarily fit the brand ethos that we have currently. Yeah, and so you, and you, but you look at it and go, there's a lot of, there's a lot of sex. I know how much it costs to manufacture. We can do our own manufacturing. So I know how much it would cost to manufacture that product. So it's kind of like that's a little bit tempting. But then I think I'm going back to the original. I then have to build a new brand because or I'm going down the. I'm selling this on Amazon. But I don't really think it will sell on our website. And in fact I think some of our customers will get hacked off if I sell that on our Website because it kind of goes a little bit against some of the things that they're thinking. Yeah, but if I do it on Amazon as a separate brand, I've then got to go into the whole brand building thing. So then the costs, although the opportunity, there's, there's, you know, there's some interesting costs with it as well. So swings and roundabouts.

Dan Brownsher [42:11 - 42:56]: Yeah, I mean, that's an interesting play though, right? Good, better, best, maybe your competitive advantages, you've got this whole other business, this whole other brand, this whole other supplement business, and your competitive advantages is I can manufacture, given that business, I can piggyback off of it and manufacture cheaper than anybody else. Therefore I can create a sub brand that's at a cheaper price point that can be successful or brand might be a little bit less important. So you're leveraging your competitive advantage that you're already a manufacturer already producing supplements, piggyback off that demand and that volume, get a lower cost per unit and launch that way. Like that's, that's a good strategy. I like that.

Matt Edmundson [42:56 - 44:21]: Yeah, very good, Dan. Listen, I'm aware of time and it has just flown by at a gazillion miles an hour. I really, really enjoyed it. One of the, if, if I don't mind, one of the questions I would like to know if has always intrigued me, right. Is the relationship to review numbers and sales. So if I go to a product and let's say it's got a thousand reviews. Yeah. And now I know what it's like, I can see how many reviews we've got on our products and I can see how many products we have consequently sold. So I can say, right, for every view that we've had, we've sold, say, 100 products. Because it's easy maths, right? So I get one review, that means there's a hundred products. So when I'm scanning down, looking for product opportunities and I see a product with a thousand reviews in my head, I'm going, well, if they're in a similar industry, that means they've done 100,000 unit sales at that sort of price. Yeah. Thinking about product research, because one of the things I do like to say to clients, to people when they're doing product research, just look at Amazon, look at the reviews, see what's going on, see, you know, how popular it is there. Is that still a valid thing to do? Is it a case of, I don't know what the. I assume the ratio between reviews to product sales is going to be very category dependent, but have you noticed some sort of correlations between reviews and end sales?

Dan Brownsher [44:24 - 44:57]: Yes, and I wouldn't necessarily use reviews to quantify opportunity size. I wouldn't use that particular metric. There's tools you can get off the shelf that'll tell you how much volume estimated that a product type is doing or a brand is doing or a product category is doing. Like go get Jungle Scout or go get helium 10 or go get one of those things. They're extrapolating volume based on product category and rank within the category.

Matt Edmundson [44:57 - 44:58]: Right.

Dan Brownsher [44:58 - 45:58]: Reviews to me is a little more dirty because there's, let's see, for a number of reasons. One is there has been so many black hat, gray hat tactics over the years by various sellers to generate and solicit reviews. Right, okay. And Amazon is super keyed in on that. And because that is the ultimate trust of the consumer, the consumer doesn't trust the reviews. That's a big problem. Okay, so. And furthermore, the way the categories are organized and like sometimes reviews are at the, at the, let's see, I don't want to get too technical. Like there's a parent sku and a child skew. Right. So you might have a, I don't know, refrigerator. Right. And then There might be 10 different versions of that refrigerator.

Matt Edmundson [45:58 - 45:58]: Yeah.

Dan Brownsher [45:58 - 46:02]: Right. And the reviews are kind of aggregate, aggregated up.

Matt Edmundson [46:02 - 46:02]: Right.

Dan Brownsher [46:02 - 46:22]: Big number. But if you parse through it and you look at the reviews, the reviews aren't actually for the fridge you want to buy, they're for fridge. Right. And so like the review count and aggregation and how it's organized and quantified based on how the product detail pages organized, I think can skew that story a bunch.

Matt Edmundson [46:22 - 46:23]: Fair enough.

Dan Brownsher [46:23 - 46:45]: So between that and. Which is different. Every product category is different. By the way, how they organize is different. Between that and some of the ways that reviews have been generated over the years, I wouldn't quantify that as the way to figure out what the best opportunities are. I would go to a software data source that indexes volume on the platform.

Matt Edmundson [46:45 - 46:47]: And like Helium 10, Jungle Scout.

Dan Brownsher [46:47 - 47:12]: Yeah, those are more like. Those are good, good, you know, trying and true products that are good for sellers. Right. And there's really sophisticated ones that like big brands will purchase for hundreds of thousands of dollars that are more direct, more sophisticated might pull in other channels as well. So that's where I would. If I was into product research, reviews are great, but I wouldn't use it to quantify upside or opportunity.

Matt Edmundson [47:12 - 47:36]: Fair play. Very good. Well, thank you for that. Very, very helpful. And we've Got to the phase now where I'm just gonna, I'm gonna say to you, can I have a question, please? So this is where I ask you for a question. You're gonna give me a question for me. I'm gonna answer this on my social media channels as my little ploy to try and get people to connect with me on social media. So what would that question be?

Dan Brownsher [47:38 - 47:47]: So thank you for the opportunity to ask this question. Matt, reviewing you and reviewing your background, I'm going to ask a question that's unrelated to ecommerce.

Matt Edmundson [47:47 - 47:48]: Okay.

Dan Brownsher [47:48 - 48:13]: Okay. And more so related to customer acquisition. Specifically for a B2B company today or a service business today. How do you go about doing B2B lead gen with all of these new sexy cool AI tools?

Matt Edmundson [48:14 - 48:52]: Very good. I know exactly how I would answer that question too. So a great question. So thank you for that, Dan. If you want to know how I'm going to answer Dan's question, come follow me Mat Edmundson on Instagram or LinkedIn and I will post the answer there at some point in the non too distant future. But Dan, listen. Thoroughly enjoyed the conversation, man. Thanks for being so candid. Thanks for being so helpful. Helpful. A lot of value, a lot of notes. I found it super helpful. If people want to reach out, if they want to connect with you, connect with the agency, maybe get your help in their Amazon business. What's the best way to do just that?

Dan Brownsher [48:52 - 49:25]: Yeah, so go to channelkey.com is one way. We're super active in producing content. So sign up for our blog, sign up for our newsletters, and then we are also very active on LinkedIn. I'm particularly active on LinkedIn posting two to three times per week. So follow me on LinkedIn. Find me on LinkedIn. Follow Channel Key. Find Channel Key on LinkedIn. You can also find our YouTube channel. Those would be the best ways to track us down. So do a Google search for channel key, go to our website, go to LinkedIn, go to YouTube and you'll be able to quickly find us.

Matt Edmundson [49:25 - 49:48]: Fantastic. We will of course put all of those links in the show notes which will be in your inbox. If you're already subscribed to the newsletter, they'll be on the website ecommercepodcast.net and of course they'll also be in the podcast player as well. Before we go, Dan, I have one final question, if I may. Please. Behind you is a record with a yellow label. What's the record? It looks like it's been signed.

Dan Brownsher [49:49 - 50:10]: This one right here. This one that is a Outkast hip hop group, outkast. And this is their At Aliens album, which is an old album and it's a double record. And I've got. Actually, there's two of them. There's two records, both signed by Big Boy and Andre 3000. About cast.

Matt Edmundson [50:10 - 50:32]: Well, there you go. There you go. I would never have guessed that in a month of Sundays, but it's pretty cool. Wall decorations behind you. And I thought, I'm just really intrigued. Really intrigued. Listen, Dan, thanks for coming on the show, man. Genuinely, really, really appreciated it. It's been an absolute blast. So thank you.

Dan Brownsher [50:32 - 50:35]: Thank you for having me, Matt. I had a lot of fun. Appreciate it.

Matt Edmundson [50:36 - 51:28]: Well, there you have it. What a great conversation. Huge thanks again to Dan for joining me today. So be sure to follow the Ecommerce Podcast wherever you get your podcasts from, because we've got yet more great conversations lined up and I don't want you to miss any of them. And in case no one has told you yet today, let me clear my throat and be the first. You are awesome. Yes, you are created awesome. It's just a burden you have to bear. Dan's got to bear it. I've got to bear it. You've got to bear it as well. Now, the Ecommerce Podcast is produced by podjunction. You can find our entire archive of episodes on your favorite podcast app. A theme music was written by Josh Edmondson. And as I said, you can find out more about us and all the stuff that we do@e commercepodcast.net but that's it from me. That's it from Dan. Thank you so much for joining us. Have a fantastic week wherever you are in the world. I'll see you next time.

Dan Brownsher [51:28 - 51:29]: Bye for now.