How to Decide if Amazon is Right for Your Small Business | Adam Shaffer

ProductGrowth

10 Nov

Today’s Guest: Adam Shaffer

Adam Shaffer is a technology pioneer. He has found success helping Amazon sellers through his company’s proprietary technology, services, and distribution platform. Ultimately, this has helped clients navigate the most complex waters of the largest E-commerce site in the world. Adam is also a pioneer in direct marketing and digital ecommerce of technology products and solutions to both consumer and commercial markets.

When he’s not working, you’ll find him spending time with his wife and daughters.

Here’s a summary of the great stuff that we cover in this show:

Amazon is by far the biggest marketplace with $620 billion of merchandise getting sold in the US per year. For brands, in many cases, it's by far their number one channel. It's evolved quickly over the years and continues to. And so, you need to be really good at everything on Amazon, if you want to succeed, because the rules do change from time to time.

Another key aspect to success on Amazon is Inventory Management. You need to always be shifting product up to Amazon and don't run out of stock. You definitely don't want to be overstocked. Nobody wants to have too much inventory and not turning it enough. But if you work your heart out with competitors to get somewhere on the ranking, you don't want to be out of stock on your product and all of a sudden lose all that ground.
Phelps United is a third-party seller and an eCommerce brand accelerator. They help brands navigate and grow on the very complicated, but potentially lucrative channel, which is the Amazon channel and other marketplaces. They help brands with their Amazon strategy by doing a quick analysis of the marketplace and work on making sure that the content is just awesome and tells a great story.

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At the eCommerce Cohort, we're committed to helping you deliver eCommerce WOW through our lightweight, guided monthly Sprint that cycles through all the key areas of eCommerce.

What happens in a Sprint?

Just like this eCommerce Podcast episode, each Sprint is themed-based. So using this topic of How to Decide if Amazon is Right for your Small Business as an example - here's how it would work:

Sprint Theme: Growth.
Week One: Coaching Session -> Selling on Amazon .
Week Two: Expert Workshop -> How to Decide if Amazon is Right for your Small Business Perhaps Adam Shaffer would be the expert teaching this through a series of video presentations that show you how to apply the ideas and principles to your business.
Week Three: Live Q&A with our experts and coaches. This is a time to ask questions and contribute your thoughts and ideas so we can all learn together.
Week Four: Submit your work for feedback, support, and accountability. Yup, all of this is to provide you with clear, actionable items you can implement in your eCommerce business or department! It's not about learning for the sake of learning but about making those constant interactions that keep you moving forward and ahead of your competitors. Sharing your work helps cement your understanding, and accountability enables you to implement like nothing else!

Who can join the eCommerce Cohort?

Anyone with a passion for eCommerce. If you're an established eCommercer already, you'll get tremendous value as it will stop you from getting siloed (something that your podcast host, Matt Edmundson, can attest to!).

If you're just starting out in eCommerce, we have a series of Sprints (we call that a Cycle) that will help you get started quicker and easier.

Why Cohort

Founder and coach Matt Edmundson started the Cohort after years of being in the trenches with his eCommerce businesses and coaching other online empires worldwide. One of Matt's most potent lessons in eCommerce was the danger of getting siloed and only working on those areas of the business that excited him - it almost brought down his entire eCommerce empire. Working on all aspects of eCommerce is crucial if you want to thrive online, stay ahead of your competitors and deliver eCommerce WOW.

Are you thinking about starting an eCommerce business or looking to grow your existing online empire? Are you interested in learning more about the eCommerce Cohort?

Visit our website www.ecommercecohort.com now or email Matt directly with any questions at matt@ecommercepodcast.net.

Matt has been involved in eCommerce since 2002. His websites have generated over $50m in worldwide sales, and his coaching clients have a combined turnover of over $100m.

Matt Edmundson: Well, hello and welcome to the eCommerce podcast with me, your host, Matt Edmundson. This show is all about helping you deliver eCommerce wow. Yes, it is. Now I'm super excited with today's guest, who is Adam Shaffer. who's from Phelps United LLC uh, and we are gonna be chatting about how to decide
if Amazon is right for you and your business. Yes, we are. We're gonna get into Amazon and all of those things to do with Amazon. But before we do that, Adam, one of the things I love to do is give a shout out to, uh, past guests and episodes on the show. And given that we're talking about Amazon today, I thought it would be great to mention John Tilly's podcast, uh, asking if Amazon is right for your business and
also Chelsea Cohen on inventory management, 1 0 1. How to leverage the power of Amazon. And I dunno how you pronounce inventory or inventory, whatever it is. It's totally fine. And it's all acceptable here. Uh, now this episode is brought to you by the eCommerce cohort, which helps you deliver eCommerce well to your customers.
Uh, the eCommerce cohort is a monthly, uh, membership. It's like a lightweight membership group with guided monthly sprints, that cycle through all the key areas of eCommerce, the sole purpose of which. Is to give you some clear and actionable jobs to be done. So you'll know what to work on and have the support to get it done.
So whether you're starting out an eCommerce or whether like me, you've been around a little while, uh, I encourage you to check out eCommercecohort.com or email me at matt@ecommercepodcast.net with any questions. Because we are super proud of it. And then finally, the last thing to say is, make sure you stick around to the end is I will let you know what the insider's question's gonna be and how you can get free access.
if you don't already have it. Whew. That's the intro done. Uh, let's talk about our guest. Adam is, uh, well, it's an absolute legend to be here. Uh, is great actually, Adam, that you are here, but you are a technology pioneer. Uh, you have it says here you have found success helping Amazon sellers through your company's proprietary technology services and distribution platform.
Ultimately this has helped clients navigate the most complex waters of the largest eCommerce. In the world I E Amazon, uh, Adam is also a pioneer in direct marketing and digital eCommerce technology products and solutions to both consumer and commercial markets. And if that's not enough, if he actually gets any free time, uh, he, you will find it spending it with his wife and beautiful daughters.
So, Adam, thank you for joining me. It's great to have you great to have you on the show. Uh, you look like you're in very sunny climates there, sir
Adam Shaffer: well, yes, I am Matt. First of all, thank you for having that on your show. I love your show and I love what you do for the community. So thank you for making this happen.
We really
Matt Edmundson: oh, thank you, sir. This, this is best to share the love. Let's just share that love out.
Adam Shaffer: uh, share that love. Right. And, and I am in, I am in sunny, Miami, Florida. So the weather is super hot. I'm in the shade. Thank God. Yeah, but, uh, it's pretty warm down here, but I love being outside. I love being with nature.
So when I'm home and I'm not travel. I kind of set up the office out here. And if there's a hurricane, I do go inside, but I also have children and it makes it a little more difficult. Yeah. Yeah.
Matt Edmundson: So that's your only criteria. Is there a hurricane? No. Well, I'm outside then. It's just the way it's gonna
Adam Shaffer: be. No, that's not.
Well, there are some giant AIS that make you think twice about being out here, but.
Matt Edmundson: Yeah, I can imagine. I can absolutely imagine it's um, I mean, I'd be the same way to be fair. I lived in a sunny climate. I'd be out a lot more than I am, uh, when I'm in the UK, that's for sure. Uh, Adam Phelps United the company that you're involved with, what it does it do.
Let's let's start there. How, what, what is Phelps United?
Adam Shaffer: Well, well, Deep down. We're a third party seller, but big picture is we are an eCommerce brand accelerator. So we are an agency that helps brand brands navigate and grow on a very complicated, but potentially lucrative channel, which is the Amazon channel and also the other marketplaces.
But Amazon is really by far the biggest we're talking. Of 620 billion dollars of merchandise gets sold through Amazon, uh, in the US for a year. Wow. And you know, that's just monstrous. Yeah. And when you talk to brands, in many cases, it's by far their number one channel, it used to not be that way. It's evolved quickly over the years, but it continues to.
And it's a place where you could make it, or you could really tarnish your brand after all the years that you've been developing your brand to come to Amazon, to find others selling your products, maybe counterfeits in your products, products, uh, that you've been trying to sell through other channels appear now mysteriously on Amazon at prices that are unheard of.
And so it could be a great channel or it could really. Be scary. So we're here to help take the scariness out for brands and help them grow and protect their brand on.
Matt Edmundson: Amazon. Uh, it sounds like a bit of a task on its own. Right. Just doing that. Right. And so, I mean, we were talking before we hit the record button, um, you said Amazon, it, it can be your best friend and it can be your worst nightmare.
Do you know what I mean? Your, your, your worst enemy. Um, and so, I mean, let's deal with that first Amazon, is it a friend or is it a foe? Is it both? And, and, and what have, I guess, what have you learned from dealing with Amazon on that basis?
Adam Shaffer: Well, it takes a while to. Be able to understand how Amazon works.
If you're your first time trying to sell on Amazon. So many things can happen that you'd say how in the world could that happen? How could my products that have just shipped to Amazon and put in their warehouse for them to ship to the customers have vanished their gone. Or how could my listing have been taken off of Amazon?
I have my products up at Amazon. I spent money to have it there and I can't even sell it now. So, so many things could happen. Because you might not have set something upright or you might not have packaged something right. Mm-hmm . And so you need to be really good at everything on Amazon, if you want to succeed, because a, the rules do change from time to time.
And it's not like these big announcements come out, you kind of have to walk your way and figure it out and you have to be on the platform every day to figure it out. Yeah. And, and the other is it's incredibly competitive. So there are so many sellers. Let's try to put that aside. So I said, there's say 620 million dollars of merchandise that get sold through Amazon of that 610, about 35% of that is Amazon buying from a manufacturer or the brand and selling it on the Amazon marketplace.
Okay. So they're like, Retailer in that sense, they buy from a, a brand and they send them POs and they buy the stuff and sell it, make a markup, and they charge you some other fees along the way. But then the other 65%, which is really where people don't get it, they're like 65% of the merchandise they get sold on Amazon
isn't from Amazon? No, it's not. It's from third parties. There's about two and a half million third parties on Amazon selling wow either their own brands or they're selling other people's brands. We sell other people's brands in conjunction, in cooperation with the brand itself. So instead of them selling it to Amazon, we have two models.
One is that we'll buy it and sell it for them, but we don't want to compete with Amazon. So we don't want to be buying and selling the same stuff Amazon is um, you'll lose every, every time or we, we do it, we do it as a service where it's purely an agency. So in some cases we'll build a 3P store for a brand
and then start helping them sell on Amazon from the product set up and the creative, which you gotta be really good at because you gotta tell your a brand story, your product story. You have to understand the intricacies of the category and the subcategory. So you could differentiate your product from the other products that are in your subcategory.
And what you're trying to do is get people to notice you find you buy you and leave a great review and leaving a great review is not the same as in your Shopify world, where you send out a bunch of emails, you might incent them with some incentives to leave a better review on Amazon. You have to be very compliant.
You cannot offer them anything. You cannot beg them to leave a great review. You have to say, you know, please leave a review. Whatever you choose to put is great with us. Something like that. So there's compliant words that you use and Amazon allows you use or not use. And if you use the wrong words, Amazon could easily just take you off the platform.
So we help these brands with their Amazon strategy first and foremost, should they be selling it through their own 3P store through our 3P store? Should we be having an agency model for them? Is that better or is it better for us to buy and sell it? One thing is we do a quick analysis of the marketplace
and find out is somebody already selling their stuff on the marketplace. And so many times the manufacturer is shocked to find tens or twenties or thirties sellers selling their products on Amazon, putting up their own content, having the wrong content up there, not telling the right story about the product, not helping it get good reviews and selling it well below what they prefer the street to be selling it for.
So it winds up hurting their relationships with their regular retailers. And so we help clean that marketplace up for them. We try to help them call these non-authorized sellers off. We have a brand protection practice that helps identify sellers and work with the manufacturer wholesalers and the sellers to get them to either comply or get off the market.
And we work on making sure that that content is just awesome and tells a great story, but then there's the logistics part of it. It's how many do I need at Amazon? Because you wanna ship your stuff to Amazon. Most of the time, because the freight rates from Amazon to the consumer is so much cheaper and it's usually faster.
So when your products are sitting at Amazon you're in prime status. So your products will say prime on it, and you're supposed to get it in two days, sometimes one day, um, when you ship it from your own warehouse, uh, it could take a while and the dating is further out. And you'll see that when you ship something prime, you get sell probably 30 to 70% more depending on the category you're in and what the other sellers are doing.
Wow. So you really do wanna be Prime.. The one benefit that we also bring to the table as a seller, is that because we've been doing this for a long time and we have a very good reputation on Amazon. We have a medallion called seller fulfilled prime and seller fulfilled prime allows us to sell things from our warehouse, which we have one in California, but it could be listed as prime on Amazon.
So even though it's not shipping from Amazon we could still have a brand's product listed as prime and shipping in two days. Now we have to be spot on and make sure that we ship that product and it gets there in two days. It costs a little bit more, but it's a great backup strategy to have because it's not always the fastest and easiest thing to get your products to Amazon
and in stock at Amazon, it could take two weeks, four weeks. I've seen eight weeks. I've seen when you ship a hundred up only 50, make it and 50 vanished and you have to put in a case, but you need to wait three months before you put in your case. So you need a backup strategy and we are kind of a hybrid in what we, you know, we, we kind of recommend to our partners and that is we'll ship a bunch of stuff to Amazon for you
but we're gonna keep some here as a backup because if we run out or if it doesn't get up there fast enough, we're always shipping from a warehouse. So the second it's in stock in our warehouse, it's prime from there, we're shipping stuff up to Amazon and getting it there and benefiting from their freight.
Matt Edmundson: Wow, there's a lot there, Adam. Uh, so let's dig into some of those things. Uh, if we can, um, let's start, uh, where you ended actually with the fulfillment and this seller fulfillment prime, which I've noticed actually here in the UK as well. I've seen it, uh, where you order things on, uh, with prime and actually doesn't come from Amazon.
It comes direct from the, the manufacturer.
Adam Shaffer: Yeah, you'll see. You'll see, Matt, Matt, it's gonna grow. It's gonna grow in the UK because the UK is, logistics is much more predictable because you could ship things very easily there. One in two days, it it's just the, the, the beast of UK. Most logistics that you use can get to places in two days where in the US, it's not like that at all.
You're talking California, New York could take seven days.
Matt Edmundson: Yeah, it's interesting. I mean, America's obviously a much bigger, uh, land mass isn't it than the UK. And so, uh, I've I think I've been slightly spoiled. Uh, Adam, if I'm honest with you, you living in the UK, you order stuff, it usually arrives the next day.
And when it doesn't, you kinda like a little bit miffed now. Yeah. Um, and so do you think, right, because there seems to have been this pattern, doesn't it, where you sell stuff on Amazon and Amazon encouraged you to use prime, then they had, it seemed like a whole bunch of issues during lockdown with their warehouse.
I dunno if this is why they've come up with, um, what was it seller fulfilled prime, uh, to kind of mitigate some of these problems they were having with their warehouses. But do you see in the states, the shipping companies like UPS, FedEx, uh, US postal service, are they catching up with Amazon who seemed to have shot ahead in terms of the speed and accuracy of deliveries?
Adam Shaffer: Um, I think they all have warts. I think even Amazon was busting at the scenes, um, because the logistics in general, uh, in the US and, and, and the world, uh, you know, really, really hit its high point and didn't have the people and the transport to make it all happen. I, I think it's gotten a little bit better, but I still see
you know, when you order things from FBA, you'll get a delay message from Amazon. It's gonna take an extra day to get to you. we're really sorry. I think that FedEx doesn't make, you know, the grade all the time. I think ups, I think they all have their issues. And the beauty of shipping it through Amazon is that if you ship it through Amazon, Amazon takes the responsibility for it.
And also their rates are just cheaper. I don't care what your volume is as a, solo using FedEx or UPS, you cannot get Amazon rates. So even though we moan and cry at every penny, we have to pay them their rates are still better and they'll take the responsibility. If that product for somehow, for some reason, one of the Amazon trucks don't make it to your house in time
and it goes to the next day, the burden goes on to Amazon. It doesn't affect your ratings. And that's what we're all always worried about is will it affect our score ratings? Will it affect our product to review rating? Sometimes you get a product review rating because the UPS guy dropped it in the mud.
I mean, that's not fair. The product's fine guy dropped it in the mud. So then you gotta work, you gotta set it, you know, file a case to get that sorted out. Cause you don't want any blemish on any of your stores or on your product. So Amazon, um, is good about it, least, um, being, being the main culprit when there is an issue.
So we kind of like that. Again, we'd like it, if they would ship everything, but it's impossible to get everything to them in stock all the time, because mm-hmm, , there's the logistics issues of products coming into the us, because so much of this stuff, whether it's British product or it's American product is being made in China or offshore somewhere, and it's gotta come in and be assembled, or maybe it's assembled already.
And then it's gotta go up to Amazon. So you got the time in time off time to your facility where you. Organize it, and then you gotta get it up to Amazon. And depending on your store and your velocity in certain sizes, Amazon doesn't allow you the space that they used to. So they get to cull your space down.
And so if you're selling very large products, which, you know, shipping large things is never a lot of fun, but there's definitely some demand for large products. Yeah. Yeah. You know, you, you ship it up to Amazon and Amazon will say, well, you can only have 200 of those, but. It's gonna be holiday. I'm gonna sell a thousand of them.
I, I, I don't wanna send you a hundred or 200. Well, you know, we're only allowing you this much, man. And then when you grow, we'll start itching it up a little bit more. And, and so Amazon is very careful about the space they provide and it for small things too, you you're selling high velocity products and they're not gonna give you enough for tens of thousands that give you for a thousand.
Matt Edmundson: Yeah, it's an interesting one. Isn't it? Because again, this is something that I've noticed over lockdown is Amazon's sort of closing in on the amount of space you can take in their warehouse. Um, maybe it happened before COVID maybe it was just part of the thing that I noticed during that time. Uh, well,
Adam Shaffer: during closing for sure.
It, it happened
Matt Edmundson: for sure. Yeah. Yeah. Which is fascinating, isn't it? And so I think the lock lockdown changed a lot of the rules for a lot of people and Amazon included, and we're all sort of playing catch up still, even though I feel like we're through the other side of it, maybe now, um, so that's sort of, I mean, so logistics wise, if I'm selling on Amazon, I need to think about FBA.
I need to think about prime. I need to get stuff into Amazon, but I need a solution which says actually be aware that this is not gonna be the ideal solution all of the time. You're not gonna be able to make that work. So you need a plan B to work alongside absolutely. Your plan a, is that what I'm hearing?
Adam Shaffer: Absolutely positively. You should always have a plan B. Things happen along the way, and you might make that timing to Amazon, but they might misplace your product and it happens and you put a case in, and it, it could take a while for them to solve it or they just don't solve it. And then they'll reimburse you for the products that they lose.
But what do you do during that three month period?
Matt Edmundson: Yeah. Yeah, exactly. Exactly. Do you think, um, do you think the demands then from third party seller. Uh, so let's say I, you know, I, I have a brand, I, I sell supplements, um, and I decide to sell them on. Amazon are more and more people now trying to get on the Amazon platform.
Um, and is that why it kind of feels like Amazon are tightening up all these sort of rules all over the place?
Adam Shaffer: Well, I think the space rules are. People round up when they started, it was give us all your stuff. We wanna be your 3PL, we wanna be your, you know, your partner where you, you, you know, keep all your products because if we have your products, then you can't sell 'em under the channels and that's changed radically.
So now they're send us what you, you know, what you're gonna sell. We want turn this a bit faster because. We have limited space. They over, they overbuilt space, believe it or not, but they're gonna cull that back down. They don't need all the space they built. They don't even have enough employees for that.
So they're basically, you know, I think they, they, they built 13 extra humungo warehouses in the US that they're not gonna open and, uh, they don't have the people for it and right. They don't need that space. So they're trying to live within a more rational amount of space, which is still huge by any aspect. And they just are being very careful by how much you're allowed to put in there, because if you put stuff that doesn't sell and they can't get in other products itself, then they lose.
And, and so it, it is just something that has to be measured on a daily, weekly basis. And you need to always be shifting product up to Amazon and don't run out of stock. You definitely don't wanna be overstocked. Right. You know, nobody wants to have too much inventory and not turning it enough. But if you work your heart out with all these competitors to get somewhere on the ranking that you know, the BSR to say, you're in the top 50 or the top hundred or the top 20, you don't wanna be out of stock on your product.
And all of a sudden lose all that ground. You spent X dollars of advertising X dollars on your creative, and you've been making a great name for your brand. And all of a sudden you're gone because if it's not in stock, they can't sell it on Amazon. Um, to a, to a certain aspect they're starting to show some products that are on their way to Amazon as available to buy with far outputs.
Okay. That's a fairly new concept. Yeah. You gotta sell it for the most part.
Matt Edmundson: Yeah. Now it's a top tip actually. And inventory management or stock management becomes actually one of the crucial factors, doesn't it to long-term success on, on the Amazon platform.
Adam Shaffer: Yes, for sure. And I think you mentioned somebody's name earlier that does the inventory
um, has an inventory software program. Uh, Chelsea is that that's right. Chelsea Cohen. Yeah. Yeah, yeah. She, she, she has a great program. I mean, so she she's so focused on Amazon and she knows all the nits and, and her, her software really does address all this. So I do, I, we don't use it, but I'm a fan of them.
I've looked at it a lot and it's only for, for internal reasons. We haven't adopted it, but we love it.
Matt Edmundson: Sure. Nice. Great. Well, I'm sure Chelsea would love that little plug, um,
Adam Shaffer: whatever. .
Matt Edmundson: So back to your formula, uh, I dunno if you realized you gave me a formula, but I wrote it down as a formula, Adam, and, uh, basically it was this you've gotta be, uh, found then you've gotta be noticed,
people have then gotta buy from. And then they're gonna leave a review. Right? These are sort of the key things that you kind of have to think about. And it's very clear journey in my head. And obviously we've talked about shipping and logistics and getting the product to them. Um, how do you get found on Amazon?
Because if there are 2.3 million, third party sellers all competing for the same rankings, you know, Amazon feels more and more like its own search engine, uh, it's more and more taking the principles. It seems to me to be like, I've got to think about paid media on Amazon. It can't just be a case of I put it up and they come anymore.
How do we, is that right? How do we get found? What are some of the strategies that we need to think about there?
Adam Shaffer: Well, you know, you hit a bunch. I mean, it's not a freebie that's for sure. Um, you know, unless you have a brand that's offline, you know, off Amazon that everybody wants and they go to Amazon because they're shopping for it.
And one day you appear, that's a different story. But if you are a, you know, a fairly new brand or new to Amazon and not everybody knows you, who you are, you gotta figure out how to get people, to find you and trust you enough so that they buy the product. Now they trust buying on Amazon they know they can return it, but do they wanna spend the time investing in your product?
And then maybe it doesn't work for them and they have to return it. And we. Basically start with the content. And the content is you have a limited amount of real estate on Amazon to tell your story and you gotta tell a great story and you have to make sure that you answer and address as many potential questions that you're gonna get.
So the first thing I would do is study everybody else in my category that's selling similar products and find out, Hey, what are they talking about? But what are the reviews that they're getting. And what are the complaints or the attaboys that they're getting for their products. And I would make sure that I'm incorporating that in my explanation, because if something doesn't work, when you do X, Y, or Z, let's say I'm gonna go to the UK
and I need the thing that takes the power and steps it down from two 20 to one 10. So I don't blow up my hair dryer. Well, you could buy these things on Amazon and they're really important, but they don't work with every product and what I found is that the really good guys that are selling this on Amazon know, they put a big ax, although that sounds counterintuitive to marketing, but they say does not work with these things.
Don't plug that air dryer in this, or you will have no air dryer. And that's cool. Like it's, it's not scary. It's preventing me from buying it, but if I bought it and I blew up my hair dryer, they're gonna get a horrible review. Exactly. So you gotta be really truthful and you gotta tell the story that people wanna hear.
Does it work with this or does it not work? What does this work with? What is this gonna be good for? How does it work? How easy is it to. And the, the picture gallery and then the video you're not allowed. Just one video. You could put a couple of videos in there and tell a great story. So if you're not prepared to put a video about your product, say it's a networking product and maybe it's not just how great it is and how much bandwidth you're gonna get in your house
but how easy is it for me to set up? Show me something that shows it's 1, 2, 3, because if it's beyond 1, 2, 3, and I need to get an installer, then I wanna know that. And so you need to show these things in video, in words, in content. And there's plenty of space to provide this content. And you'll see that if you are shopping for something and there are several competitors, you definitely look at the pictures
you look at the call outs, you look at the words, you look at what it doesn't doesn't do. And that's important. So start with your content. And that's the first and most important thing. The, the other is making sure you understand the keywords that people are gonna be looking for when they're looking for your kind of product.
Now you might instinctively know what a bunch of them are, but you need to go take a look at what your competitors are doing and what they're spending their money on and what keywords they're using in their description of their products, so that they get found in the Amazon search engine and there's plenty of software, you know, like Helium 10 and Jungle Scout and others that go out there and they help you figure this out.
And, um, it, I, I, you don't really need to be a rocket scientist to use the software. I mean, I used it and I'm definitely not a rocket scientist I figured it out. And, and so I think the common person figured out, but if not, there's places you can go to help you and where one place that would. But it's something that you need to know.
You need to know. How do I organize the words to tell the story and use the right keywords so when people look me up, they find it and then there's the advertising and you can set these automated campaigns, or you can work with a company like ours or other ad agencies out there that can help create a, you know, a campaign for you.
There's, you know, products, very product. Brand specific. It it's funny. I always go back to technology because I know it, the vast, because I grew up there, but you know, there's a brand called Epson. They make, they make, uh, a bunch of things printers and yeah, yeah. projectors, but they make, they make a label printer that, you know, you print, you go to somebody's store and you buy something and the receipt comes out.
So like a receipt printer. And if the number one printer in the category, um, Breon Epson receipt printer, And five brands come out before you ever get to absence listing because Epsom's not spending any time thinking about Amazon, that way they're off somewhere else. And they're, they don't have really a solid Amazon strategy, but all these brands, brands you've never heard of, uh, are there using their keywords and they're using the words and it's the same, you know, you would do this on Google too, but people are doing it on Amazon and really getting to display their products well ahead.
Um, so in, in addition to. brand and product there's videos that you do on Amazon. So when somebody punches in the search term on the results page, there's a cool little video in the middle of the page, and it's not like blaring, it's just movement and you could turn it on and listen to it, but it's not loud at the beginning, but it definitely catches your eye.
And I always look at those because it's teaching me about the product and anything that's gonna show me how the product works or how it gets used. I want to know this, I wanna make sure I'm buying the right thing. So that video advertising has become high conversion rate and very important. But for new products, you also should be doing off Amazon advertising, which is not the highest conversion mm-hmm , but it's definitely important
so I would still go back to Google and Yahoo my affiliates and I'd be advertising and pointing them to my, um, products on Amazon piece, outside traffic gets a benefit from Amazon. Amazon loves anybody that brings new traffic to their website. And you also get a discount these days, too. So Amazon will give you some money back or a discount off the advertising.
Um, if you advertise offsite. So although the conversion's at is high, it's a bit more affordable than it used to be. Although nothing. Not affordable anymore. Yeah. Nothing stays the same. Yeah. Yeah, no. Right. And, and then, then there's social media. You gotta be in it, man. Like if you have a consumer product, You gotta go find a bunch of micro influencers.
That's a lot of fun. That's new hard work. You gotta go find people to talk about your product and post your product. You need to get viral, even if you're not gonna get viral, you need to have your product seen. So when people search for it, whether it's on Amazon or on Google, something shows up and that's very important.
So it's not super expensive, but it's another thing. If you're new in the BI. Or even if you've been in the eCommerce business, you might not be doing some of this stuff. Maybe you are, but it's really important on Amazon. And so you gotta be good at all this because the others are good at all this, some aren't, but the best of the best are good at all this.
Matt Edmundson: It sounds like Adam, the way you're talking. I'm I'm listening to talking and you've gotta have great content. You've gotta think about the journey, the customer story, you know, the questions that they're asking, you've gotta think about paid media. You've gotta think about social media. You've gotta, this is all stuff you've got to think about for eCommerce anyway.
Right. So the Amazon platform, I think, has been a bit kind of, um, uh, it's kind of had the, uh, what's the word I'm looking for? The, the sort of the, the black hole reputation. It's like, we, we don't get Amazon. We don't understand it. It's complex, but it sounds like the principles aren't too dissimilar from general ecommerce.
Anyway, the same sort of things you have to think about here. You've gotta think about for Amazon, right?
Adam Shaffer: AB absolutely. I think, I think it's a good discipl. If you're in the Google, you know, doing Google PPC and you're doing Facebook and, and, you know, paid, paid social to bring that discipline to Amazon because it's, it is the same principles, but it's in their machine using their tools.
And some of the tools aren't as sophisticated as you'd find out in the Google world. And, and so you have to interpret some of this stuff, some tools that are out there to help you, but. It's still evolving. It's evolving quickly. And it's the fastest part of Amazon's growth is your advertising. And so where you used to be able to just go on and have great content, you gotta go on and spend some money now.
And you know, if, if you wanna be at 8% of sales or 10% of sales, when you're launching a product, you're gonna be at 50, 60, 70% of sales, maybe more at the beginning. And when you're using micro influencers, you gotta give them product so they could review it. And you know, that's another cost. So you gotta invest if you're not gonna invest and you might not want to do it, but I do think that having your own Shopify site, um, or your own, I don't wanna say just Shopify in general.
Uh, but your, your own, um, direct to consumer website is important because I might not wanna put all my products on Amazon. I might wanna have an assortment of my products on Amazon and then have some of the more complicated or interesting or harder to get stuff on my own site. And I do think that although Amazon would frown on it, I think that there's definitely spillover from Amazon to your site.
So where people are afraid, oh, Amazon's gonna kill my direct to consumer business. I think that there's so much traffic on Amazon, people are gonna, if they like the brand, they're gonna wanna learn more about the brand. They're gonna wanna learn more about the brand by going to the brand's website. And the brand's website should have so much more and better content and the company story and what the company cares about.
And. All the things that consumers think about on their side. So I think that this is a compliment and can help your direct consumer. I think there's so many who say, oh man, it's gonna kill my direct consumer. But I think not. I think that as long as you can control your pricing and make sure that there's not a bunch of other sellers lowering your price of the ground and you have fair pricing on both, it might say fair, consistent pricing with both.
You're gonna wind up getting huge leak.
Matt Edmundson: That's interesting. It's an interesting idea where you talk about, um, uh, selling stuff on Amazon. That's not on your website or selling stuff on your website. That's not on Amazon to create this cross. You need
Adam Shaffer: to not be able to do that. There was a rule that Amazon said is you had to be in parity with your, your consumer website and that that rule is gone.
Since that rule's gone. I see many brands that have a full assortment, some of the harder to get stuff, odd, lot stuff, specialty stuff on theirs. And they have the standard fair on Amazon. That's you know, if you're in fast fashion, you might not want it to be on Amazon. You might want it to be here's my 15 or 20 core skews.
And then I have my 70 or a hundred skews on my site. And you know, if something becomes a core skew, I put it on Amazon. Yeah. If something is old and I wanna move it through, maybe I put it on Amazon, but there there's like a, um, oh, what's the name of this company? They it's called SPEKS. I wish we sold it, but SPEKS.
Um, they make these fidget toys and you say what's a fidget toy, like kids, adults play with them in their hands, their magnets, their little balls mm-hmm . And we saw this and my kids wanted it. Like, I gotta have this thing. And I go to Amazon and they don't have the one that they want. The one that they want's on the SPEKS site only they, you know, Amazon has the assortment, but not the cool one that the kids want that's really on.
Right, right. And obviously a strategy that they didn't want it on Amazon maybe next year will be on Amazon, but not the first year. that's really, and I'm not saying that works for everything, but that, that's an interesting concept for these people that want major distribution, but don't also wanna over distribute new.
Matt Edmundson: Yeah. Yeah. You know, it's something to test, isn't it, it's something to go actually, it doesn't have to be this straightforward. Everything has to be on Amazon. There's things that we can test here. Um, what works for Amazon, what works for our website and let's make that work. Um, one of the things that you mentioned which
I was fascinated by, is this idea of using say Google ads or Facebook ads to send traffic to your Amazon page versus sending it to your Shopify site or whatever eCommerce platform you use. Um, why would I at first glance, Adam? Uh I'm and I'm just playing sort of the crazy advocate here in one sense. At first glance, if I'm gonna send someone who's ready to buy.
I'm surely gonna want them to go to my website versus Amazon cause my margin is greater over here or, or is there other stuff here that I
Adam Shaffer: need to think? There's there's there's other stuff. So, so with Google and I shouldn't say Google, but I think it's with most advertising off Amazon, Amazon will give you eight or 10% back.
So you're gonna get a, you're gonna get a rebate. So you think about it. You're probably paying Amazon a commission of at the lowest eight at the highest. I think it's over 20, but let's say on average, it's 15 to 17. So you're gonna pay them a commission you're going to, and that's where you lose the margin that you would've gotten on your traffic file, your direct consumer site.
So it's like, why would I want to give it to them when I could get it? And I own the customer by the way, where they own the customer when it goes to them. Mm-hmm . But I, I think when you have a new product on Amazon, you need to get traffic to that product. And anything you could do to get that traffic to the product
at at the beginning, it's a huge help because the relevance that Amazon will give it will be based on the traffic and the conversion. So you wanna get traffic any way you can to that page on Amazon mm-hmm you might cut that Google out later, put it back to your side, but at the beginning I would push it on Amazon a bit.
And you could, so, you know, you could still see what the diversions are from your Google analytics. I, I think it's definitely worth, um, doing launching or getting new skews.
Matt Edmundson: That's interesting. And you could split test it as well. I guess the, the deeper you go down the line, it's like I'll spend a thousand books on Google ads and I can see on Amazon, it generates me two grand in sales.
And if I spend a grand over here, it generates me to, and a bit grand in and I can change and I can test that and see what's working for different products at different times
Adam Shaffer: of the season. What's interesting is think about the convenience level. So say is my conversion read on Amazon? 20 times is good.
You know, is it 20% better than on my own site? When they come to my site, maybe they haven't bought from me yet before. So maybe they're brand new. Now they gotta set up an account. Maybe they don't wanna, of course, there's probably a quick guest. Checkout. Do you have all the different pay methods that they want or they have their Amazon system set up.
They click the button, they have their addresses in there already. You know, maybe they have the affirm going where they can pay monthly. But they have their Amazon cards, their Amazon account. It's so much easier. That's why pay, you know, pay with Amazon is a payment method you see on other sites because how many people are set up on Amazon?
Like, you know, the majority of the universe. So maybe the US it is, but in England, I'm sure plenty of people have, but in, but in the US It's like most people do. So is it, is it gonna be that much easier? They trust Amazon. They know they can return it to Amazon, either set up there. Boom, I'm gonna have a higher conversion rate.
I gotta go with these new guys. Now, there are plenty of new Shopify sites that I've been going to that I'm like, oh man, I wish I could just buy from Amazon, this press button, you know, and then, and then sometimes they're like, okay, you could get it in two days, but you do have to pay a lot more. Sometimes you'll get it in two days, but they take three days to ship it.
And, and so with Amazon, it's kind of a known quantity. So I'm not saying you shouldn't wanna build your own site cuz you want those customers, you wanna own the customers. You want the relationship with the customers, but if you want to crank up a new skew, I, I would push it to Amazon and get it going.
Matt Edmundson: That's top advice, top tip right there. What, um, what products do you think sell quickly on Amazon? Is there, are there some trends or is, is it a case of just saying every product.
Adam Shaffer: I mean, it's, it's crazy because we look at all these sub sub sub sub subcategories, because it's really getting into the minutia to find out what sells because to be a top, top 25 on the BSR, it's, it's huge volume, but we, we sell, we, we sell replacement fingernail glue.
Now, I don't know if you use it and I don't use it and my kids better not use it, but kids and, and, and. They, they have, uh, fake fingernails and they glue the fingernail, onto their finger, and we sell a two pack of glue that we probably sell 10,000 a month, 10,000 a month at, you know, $5 and 99 cents. So selling things for 5.99 is not a lot of last because Amazon gets there 15%, then you gotta ship it to Amazon.
First, we gotta packet with the label on, get it up to Amazon. and then thank God it's in the small and light program. So the freight's a little bit cheaper, but you're talking, you know, you still gotta pay 2, 2.75 for shipping mm-hmm so, so how much is it? So we make a pop 30, right? So thank God we make a dollar 30.
If you sell one or two a month, not a lot of funding. So 20,000, not bad, 10,000, you make some, you know, decent, gross market for the month. Mm-hmm so that's a, you know, that's in a, such an odd. But you name it. Like we sell files that you, you clip your fingernails with like, um, it's called trim. You clip your toenails, your fingernails 3, 4, 5.99 again, and sells like hotcakes.
Uh, but what I, I would recommend is anything that is something you need to replace or need to add something to. What's a very big seller. That's not one of these little $5 AKIs would be. Air filters. We, we aren't selling them, but there's a, a breadth of different brands they're selling them. And they're cool because you're selling this piece of hardware.
Maybe it's a hundred, 200, $300 depending on the size. But once every three months you gotta replace the filter, which is another 50 bucks. And, you know, most people replace a filter when the light comes on because they don't wanna have that horrible air in their house. So that's a pretty cool idea.
Anything that is that you need to replace like batteries or, you know, food, although we don't do food, but it's a little complicated, especially if it's like something needs cold storage, but you know, food obviously is a pretty big thing. Things like toothpaste that people are using over and over again, if you can get into those categories, um, you know, people need it.
It's not like you can sell one and done. You're gonna sell one every week or every month or every, you know, two months. And so the subscription business is a big deal.
Matt Edmundson: That's a really interesting, I mean, we've had a couple of guests on recently talking about subscription models and, um, and it, and Amazon, again, seemed to have pioneered the way in this, the whole subscribe and save, you know, get it, get 5% off or whatever it is, you know, and you, and we'll send it to you on autopilot.
Um, do a lot of people use that feature on Amazon.
Adam Shaffer: They, they do because you save money from it, but then there's 60% or 70% that don't press the subscribe, but they still buy it off in anyway, thinking, oh, I'll never do it again. And I'll never do it again. And they press it and they buy it. I'm one of those guys, but I so many subscriptions, I can't figure out where they all are and record I have, and they're hitting everything all the time.
And so I'll just buy it. I'll just buy it. And then Amazon will say, you bought this 14 times already. You should really say it. You should really save money. Yeah. And put it on a. Yeah. So, you know, I think they're great if you're gonna use it, think about coffee, we buy, I don't know what kind of coffee you use.
I maybe you use tea there, but I think that's a big deal, but I do know Brits started drinking coffee when they put Starbucks there. Yeah. So, you know, coffee, coffee, beans, people buy, they have the grinder that grinds up makes the coffee. It's great. How much of it? You probably use a bag a month. And so that is like off the charts.
Go to Amazon, look for coffee beans. And they have all local, you know, kind of beam and foreign beans and hub up. They're all subscription. Yeah,
Matt Edmundson: no, it's just listen, Adam. I, I feel like we're just getting started, bud, uh, so many questions on, on how to do Amazon, but I'm aware of time and, uh,
Adam Shaffer: well, I, I think, I think the big picture message is that it's awesome.
Like, so Amazon friend of foe? You go back to your question you asked it. They're my friend, because who in the world could have created this platform that you can go and create your own business. Like you used to have to go down to some strip mall and rent a store and put all this money up and pile this inventory and hope people come to your store to advertise on the local papers and do all this crazy stuff.
Now, the traffic's there. If you wanna create your own brand, the platform is there for you to go, go make it happen. I'm excited. Like if, if this was around, when I was first getting into the biz, I would've been all over this. We had to create our own customer base customer base. Is there now we just gotta figure how to stand out, not easy, but it's definitely a head start.
The traffic is there. So, you know, you could fail all your on your own, but you can't say it's because the people aren't there. Mm-hmm , uh, you, you, you got the, you know, you got the best store and the best block with the best amount of people trafficking, you just gotta be found. So I think that they're, they, they give everybody a huge opportunity..
And think for, you know, the entrepreneurs 2.5 million, 3PL stores. Many of them have their own brands and invented their own stuff. And most of them just need a little help because they can't do it all. They're small mom and pops, or even if they're bigger than that, it's hard to scale in this business and we help the smaller brands scale and we help the bigger brands protect and preserve their brand and grow their brand.
So they don't destroy a brand that's been around for a long. And get their, you know, their loyal base, angry at them. So, you know, on both sides of the coin, there's so much opportunity. And for small businesses, shoot, I mean, like you're, you're doing something, it sounds like on Amazon with supplements. I mean it's or maybe not on Amazon yet, you're doing it on your own, right?
I, I think that if, if I could do it again, I would've come up with three or four different brands and I would've been all over the stuff. And you know, now, thank God we're helping these brands, as I grew up selling and working with brands all my life. And this is a great way of continuing that journey with helping brands not get caught in the, uh, the, the rabbit hole.
Mm,
Matt Edmundson: no, it's it's I, I mean, yes. Uh, we, uh, it's just worth being, I'm totally honest with people. We do sell supplements on our website and we sell them on, or we are starting to sell them on Amazon. Uh, and we made the decision when we were gonna sell on Amazon that we needed help. Uh, because you know, we knew eCommerce.
We knew the principles of Amazon, but we did need some help. And. Um, I think, I think that's a fair comment and, uh, just reaching out to people that can help you saves you so much pain and heartache, uh, in the long run is my, uh, my experience here. Um, Adam. Right. As you know, this show is sponsored by the eCommerce cohort, which is all about coaching and peer mentoring to deliver eCommerce.
Well, so I want you to imagine, right. You're stood in a room full of the cohort, and you've just done your, you know, your presentation, how to decide if Amazon's right for your business. And I think we probably have. The Crowd is going wild and you get a minute to thank those folks that have had a big impact on your life.
You know, family mentors, author, software podcasts, the list can be endless, who is on your list? Who are you thanking and why?
Adam Shaffer: Oh my God, there's one person. His name is Peter Godfrey. He's a Brit former Brit. Okay. Uh, American citizen these days. And you know, he was the real true pioneer of direct marketing.
He was one of original Columbia records and tapes. Uh, folks, he, he, there was a, a series called part works in the, in the UK where they would create these magazines that was sold in newsstand. And it was a series that went off a while. He was the king of that in, in the UK, you know, back in the seventies mm-hmm and, um, he and a partner created a, a magazine called Mac user magazine, which, um be got our business in the us, but they also then created a magazine called max magazine, which was a big magazine in the UK and then came over to the us of mm-hmm , you know, I'm sure you've heard of Maxim.
Yeah. Um, you know, it's still around. So, you know, a true, true entrepreneur that taught me everything about direct marketing, just magazines was new stand in subscriptions and, and, and understanding how that game worked was a big deal, but understanding how just catalogs work and sending catalogs and understanding direct response marketing.
Um, it changed my world. Plus he was probably, you know, the, the most moral, upstanding ethical guy I ever met. So in a, in a world of, oh wow, just pure lunacy. This guy was, uh, A plus. He still is. So I, I still talk to him once a week. You know, he, he is my, my guy and I thank him every day for giving me, you know, all the tools I needed to.
Matt Edmundson: Oh, wow. It, he sounds like a great guy to have on this show. I mean, that's, that's a big glowing
Adam Shaffer: review. This guy's done it all. He'd be great on your
Matt Edmundson: show. He'd be great. Oh, fantastic. So Peter Godfrey and I'll direct you to him. That sounds fantastic. Yeah. Yeah, no, I'd love to talk to him. Maybe get him on the show.
That'd be amazing. Oh,
Adam Shaffer: you know, his partner, Felix, Dennis was Dennis publishing in the UK. I don't know if you followed that stuff, but they did all the computer shopper Mac user, and then they had some car magazines, gaming magazines, but Maxim was the big head mm-hmm they also, it was a book called stuff, magazine called stuff.
And in the US, they had that magazine also and ultimately sold it. But you know what arrived, that was by far the most. It was like Cosmo for guys. If you remember this
Matt Edmundson: Cosmo for guys, it's such a phenomenal way to describe it. Yeah. Yeah. I remember. Uh, I remember. Yeah, yeah, no. Fantastic. Uh, Adam, listen, how do people reach you?
How do they connect with you? If they would like to?
Adam Shaffer: Well, you could reach me at adam.shafer. Hopefully you can see this. If you don't. It's adam.Shaffer@phelpsunited.com. Um, always on email. So Adam dot Schaeffer, Phelps united.com. You could hit me at LinkedIn. You just look up Adam Shaffer and you'll be able to find me.
I'm the only Adam with the spelling Shaffer, and you could go to our website anytime. Phelps united.com. It's PhelpsUnited.com
Matt Edmundson: That's awesome. And we will of course, link to Adam's, uh, information in the show notes as well. His LinkedIn, his email will be there. Uh, no problem at all. So, uh, let talk about insiders.
So yes, insiders. That's a good point. So the insiders question that I'm gonna ask Adam, uh, if you don't know, insiders is a sort of like a bonus piece of content we put on our website, it's free to access. It's free to get a hold of, uh, just head over to eCommercepodcast.net to find out how to do that. But I, I, I like my little insider's questions now, Adam, and you've been talking and.
I, I, I had one, I'm not gonna lie. I had one question which was to do with what we talked about earlier, but I I'm curious with this whole Peter Godfrey thing, I, I want to know what your top three lessons are that you've learned from Peter Godfrey. We are gonna get into that, uh, in insiders, which gives you a few minutes to think about the answer.
okay, good. Before we get there. Um, so yes, we are gonna get into that, but for now, uh, Start the music. There we go. Um, Adam, it's been great having you on the eCommerce podcast really appreciate you being here, uh, and sharing with your wisdom on Amazon. If you are thinking about selling on Amazon and you would like to know more, do connect with Adam, I'm sure he would love, love, love to help you.
Uh, so huge thanks Mr. Adam for being here. Uh, don't forget to subscribe to the show wherever you get your podcast from. We have great conversations like this with Adam every week. Yes we do. And I really don't want you to miss any of them. So do come and join them. And in case no one has told you yet today you, my friend are awesome.
So thank you for being with us. Uh, the thank you very much. Just love it. Love it, love it. Love it. Uh, the eCommerce podcast is produced by Aurion Media. You can find our entire archive of episodes on your favorite podcast app. The team that makes this show possible is Sadaf Beynon, Josh Catchpole, Estella Robin, and Tim Johnson. Our theme song is written by me and my son, Josh. So say nice things about it. if you would like to read
Adam Shaffer: I
Matt Edmundson: on my playlist, man. Yeah, yeah, absolutely do man. uh, if you would like to read the transcript or the show notes, head on over to our website, ecommercepodcast.net, where you can also sign up for our newsletter.
Uh, and we can also be reached at email@ecommercepodcast.net, uh, from myself from Adam. Thank you so much for joining. Uh, it's been great to be with you this week, uh, until next time. Bye For now.