Brand Fortress HQ: Amazon FBA Success Strategies

063: Tactic Tuesdays: Lessons Learned From 2024

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Merry Christmas from BFHQ! Welcome to our Christmas Tactics Tuesday Episode and our Final  episode of 2024! We explore the increasingly complex world of Amazon sales with fresh perspectives. Join me and Matt as we tackle the pressing challenges of inbound placement fees and growing competition from direct-selling manufacturers. Uncover how these changes impact profit margins and why expanding beyond Amazon could be your next game-changing move.

We dissect the art of boosting conversion rates on Amazon versus personal websites, sharing practical advice for using Amazon as a testing hub for product-market fit. Learn the secrets of optimizing sales strategies to enhance net profit margins and the power of the 80-20 rule in product listing updates. These insights will not only increase your brand's visibility but also streamline ad costs and outmaneuver competitors within the Amazon marketplace.

Harness the transformative potential of AI in Amazon optimization and explore how platforms like Temu and Shein are reshaping the e-commerce landscape, especially for premium brands. We dive into effective marketing through Creator Connections and influencer partnerships, and the importance of diverse customer avatars to maximize sales. As we prepare for growth in 2025, this episode is your roadmap to mastering Amazon's evolving ecosystem and achieving greater success across multiple sales channels.

🚀 Transform your brand on Amazon by building a powerful customer list with the After Purchase Funnel Blueprint course. Click here to get the full course for free.

➡️ Ready to go deeper into your Amazon FBA journey to accelerate your success? Get your hands on ALL of the Brand Fortress HQ resources, mentorship, and knowledge base by visiting us at BrandFortressHQ.com

⭐️ Want to help our show grow so we can continue bringing you the very best of guests and actionable content for your Amazon FBA business? We'd greatly appreciate if you took two minutes to give us a five star rating and review. Thank you!

Speaker 1:

Welcome everyone to the Brand Fortress HQ Tactics Tuesday. This is going to be our last Tactics Tuesday for 2024. And, as a result, what we want to look at is some of the lessons learned, what things at the beginning of the year that we talked about, that a lot of Amazon sellers and a lot of Amazon brands thought were going to have a big impact, what did really have a big impact and everything that we've kind of encountered in 2024, kind of the highlights of that as we record this last Tactics Tuesday for the year. So I know we talked a little bit before we hit record on this. Matt, you know, as you think about 2024, maybe you want to kick us off and you know anything that comes to your mind. As far as you know, what prediction really fizzled this year or what came true, or what you see when you think about lessons for 2024?

Speaker 2:

or what came true, or what you see when you think about lessons for 2024? I think one of them that has been the case for the last couple of years now is our margins keep getting compressed by different types of things. I think the biggest theme, or what was a big part of 2024 for me, with my brands and the brands that we work with, are like the new fees. Inbound placement fee is one that we've struggled with a lot. That added a lot of complexity. It added a lot of cost where there wasn't. So I mean, that's really the biggest thing for us is figuring out, you know, how to be competitive in these categories where you have especially when you have Chinese manufacturers that are selling direct and bringing the price points down. Just protecting margins really is the biggest thing for me in 2024. Of things that happened that you know, you, you, you expect that to happen on Amazon and at this stage of the game. But something that rang true for for me is this fees and and how to, how to approach them.

Speaker 3:

I think it's interesting on the fee front, because so we've been seeing I mean, everybody's been seeing a squeeze, you know, over the last few years on that front for sure. But I think it's one of those areas where if you are, if you consider yourself to be, an Amazon brand, then those fees become obviously massively significant and you should, of course, try and minimize those fees, try to manage things. One of the things that Matt was talking about was the inventory placement and then, of course, we've got fees for too little inventory, fees for too much inventory, you know, fees for too little inventory, fees for too much inventory, you know, like. So the one thing that became clear there and I'm fortunate that we already had brought somebody on to manage that but if you are the owner of the business and you also are basically the one managing all of the different aspects of the business, I think one thing that's true of Amazon now is, because it's so much more complex than it used to be, that being a one man or one woman show is very difficult to really grow a brand in any significant way.

Speaker 3:

Because even just being expert enough on and having enough time to manage the logistics side, you know, and in terms of making sure that you're addressing all of those fees that Amazon is charging and shipping in properly and at the right time, and all of that sort of thing.

Speaker 3:

Like you can't just be willy nilly about it, it has to be very you know, regiment, let's say, and it's difficult to do as an individual person.

Speaker 3:

So if you don't have people managing some of those different aspects of your business, you're probably going to have issues with it. But the other thing for us was it just made it crystal clear that we couldn't any longer really continue to be an Amazon business, even though we've always focused on trying to build the brand so that technically we weren't just an Amazon business. By the same token, virtually all of our sales have still been Amazon-based. We really haven't done a whole lot off of Amazon in terms of sales channels, and now we're looking at it and seeing that moving into the commercial market for us is going to be a much more profitable market for us, with much better margins than selling on Amazon is at this point, and also all of that work that we're doing off Amazon, I believe, based on everything that I've seen, should have a positive and direct impact on our Amazon sales and improve our sales there as a result of that off channel stuff.

Speaker 1:

So I'm curious how do you guys feel about this? You know I see a lot of brands. You guys talk to a number of brands along with you know running your own brands. How much do you feel like?

Speaker 1:

Because I think about like, okay, if you look at selling off your website, you know I think what gets lost in the calculation there that a lot of brands don't calculate in is is, you know your marketing costs there. So what's my customer acquisition cost if I'm driving, you know, somebody via a Facebook ad or a Google ad or something like that, understanding that my website probably is going to have a lot lower conversion rates? And then we've had some guests on here earlier this year that have talked about going really the wholesale route, getting into actual brick and mortar retail stores and some uneven success there. So I'm curious from your guys' perspective is the increases in fees and kind of the squeezing of margins on Amazon, because brands that were mainly focused on Amazon probably had it better than other channels and now we're starting to see kind of an equalization or is it that Amazon is truly becoming a less profitable channel than you know kind of the standard channels that are out there?

Speaker 3:

I think part of it depends on how well you know what you're doing. Trying to generate traffic to a website and trying to manage you know conversion rates and whatnot, so that your customer acquisition costs are reasonable is not easy, but it's doable, and I think part of the issue, I guess, in your question lies an answer, that is, amazon for a long time in many ways, was an easy enough platform to sell on effectively that you didn't have to really understand marketing. You didn't have to understand a lot of those things. You could literally jump on Amazon, throw up a product and make money for a lot of years, and I think in that sense, I would say that it is probably true to some degree that it's really more of a balancing and an equalization of what is required and necessary to be able to sell effectively and profitably on Amazon versus what's required to sell off of Amazon as profitably, because to do it off of Amazon requires a lot of expertise to do it right and be profitable in it, and so if you don't have that, then yeah, you're in a tough spot.

Speaker 3:

I'm fortunate that Amazon wasn't my first game. You know like I was in e-commerce. You know I've been there for nearly 30 years. So I had a lot of e-commerce experience previous to Amazon, which made Amazon a breeze because you know it was nothing. Now margins are squeezed. We can still be profitable, we're still doing fine, but moving off of that channel and taking advantage of what I know about off Amazon marketing and whatnot is, I think, going to be a big benefit to us.

Speaker 2:

I think the biggest thing that you said there, mike, that I think not a lot of other Amazon brands. When they're thinking about off of Amazon, like it doesn't always have to be Facebook ads, like there's things that ProTuff, for example let's talk about a couple of the recent things that we're doing at ProTuff Like we hired an SEO agency. When's the last time you heard an Amazon like, not Amazon SEO or website SEO, and that's not something that a lot of Amazon sellers even think about investing in. But so like, that's just it's traditional advertising, traditional marketing. That that were that, yes, and actually the agency is helping. That we found is helping a lot because they're a paper performance agency and that that was new to me.

Speaker 2:

So the initial outlay isn't, you know, you're not paying three, four or five grand retainer for hoping to get better keyword ranks. Like they don't get paid unless they actually increase your keyword rank, so like. But then also like a social media agency, like all of these things that we're doing, we haven't really paid any. We're not increasing any ad spend right now. We're just making more content so that we'll be attractive to influencers and affiliates that we then can use, utilize to, to kind of stroke the fire a little bit, so to speak. So it's not really just dumping a whole bunch of money out of a helicopter and Facebook ads. It's investing in SEO on the website and investing in content for social media so that we can make a push, but an organic push in kind of some sort of ways.

Speaker 3:

I think the other thing too and I was thinking this a moment ago and then kind of forgot about it as I was talking but that is the conversion rates on Amazon are terrific. I mean, if you even know a little bit about what you're doing on Amazon, your conversion rates will be significantly better than they will likely be on your website. That being said, even if you really know what you're doing on Amazon the conversion of a prospect to a customer, but then also to a person who is now on your list, which makes them yours and not Amazon's that conversion, if you're following the whole chain, to where do I get how many of them? Am I actually getting to the point where, if Amazon shuts me down, I still have a business? That's way different, because we've been doing post-purchase for a long time and I think we're probably way better at it than most Amazon sellers are and still we probably only get I don't know 25% ish of our Amazon customers to actually end up on our list. So even though our conversion rate to sale is pretty good on Amazon, that conversion rate to actual subscriber is not On your website. You have a much better opportunity there because you have all of their information.

Speaker 3:

Now, of course, you probably want to put a tick box Do you want to subscribe Whatever? But you're still going to get a much, much higher rate of return on that in terms of people who end up on your list that you can remarket to and whatnot. So even though on the front end maybe you're only getting a 4% conversion rate on your website or something, if you're good maybe you get a little bit more than that. Some people are only getting two to three if you're not very good, and and Amazon might be 10 or 15 or 20 or 30%, depending on what kind of product you have your conversion to list is much better and that ability to remarket to people is much better. So you have to weigh those things. It's important to pay attention to the whole chain.

Speaker 1:

Yeah, and I mean I think you know, I would say over this year, one thing that I've been thinking about a lot in the brands that we're working with is the right lever to pull at the right time. So brands out there that are listening, if you're struggling with top line revenue, then Amazon is probably a pretty good place for you to be, because if you can't make top line sales, profit is a different story, but if you can't make top line sales on Amazon, you're going to really struggle off of Amazon because there's something that needs to be tuned with your product market fit. Yeah, that said, if you're like, hey, you know we're I mean, of course, we always want more revenue, but at the same time, if you're like, hey, we'd really like to increase our you know our net profit margin, how many dollars we have in our pocket at the end of the day, and you've built up enough revenue to have a, you know, a decent business where you're doing, you know, at least a few hundred thousand dollars a year, if not more, on Amazon, then, looking at, you know things like what you're talking about, mike, which is, hey, let's figure out how to drive some traffic to our own sites, make some sales there and I mean that's a great opportunity to have, you know, complimentary products. I think you know it doesn't have to be the same products necessarily. And then, at the same time, thinking about, I think still one of the least sexy opportunities that sits out there is increasing your conversion rates.

Speaker 1:

It shocks me every single time the number of smart brand owners that I talk to and I say, hey, when was the last time you updated your listing or tried a different main image, a different title, something to increase your conversion rate?

Speaker 1:

And most of the time, something to increase your conversion rate, and most of the time it's six to 12 months. Very few brand owners. And again, I understand that it may not be possible to do on every single one of your products, but just take the 80-20 rule and find that top 20% of your products and you really should, on a regular basis and I would say just as a rule of thumb and I would say you know, just as a rule of thumb, probably quarterly be testing main image or title or some part of your listing in order to increase your conversion rates. Because even if you go from you know a 12% conversion rate to a 13% conversion rate, not only does that increase your visibility, because Amazon gives you more visibility, but then think about the impact that that has on ad costs. I know you know we all talk about how CPCs and that type of stuff are going up, which is very frustrating. That's one of the easiest ways in order to get more efficient with your ad spend is by increasing your conversion rate.

Speaker 3:

Well and we talked about this in a previous episode One of the things that Brian Johnson's been working on with what is the company called that he's?

Speaker 2:

DeepM.

Speaker 3:

Yeah, deepm.

Speaker 3:

One of the things that he talked about when he was with us was this idea of shelves in Amazon, seo, and that you might have 10 products that are essentially sitting on a shelf and you're below that shelf and maybe you're sitting at this 12% conversion rate and if you hit 13, all of a sudden you don't jump one slot, you jump 12 slots because you jumped the entire shelf and you don't know just how much effect that little increase in conversion rate can be.

Speaker 3:

And so it's easy to look at it and say, well, we've tried before and we've never really gotten a decent change. Maybe we got 1%, or 1% can be a lot, and if you don't build that in and you're not testing that, you don't know. And the other thing is, just because the changes that you made before only gave you a 1% increase, it doesn't mean that the next change that you do might not give you a 5% increase. You're going to try something new, you're going to try something different, and you never know from one test to the next just how much of a change it could be. But if you're not doing it at all, then you know what the change is going to be and that's nothing. You're muted, I think, matt.

Speaker 2:

In the spirit of the things that were hit or bust in 2024, one of the things that is all the rage and everyone talks about is AI.

Speaker 2:

Everyone's talking about is AI.

Speaker 2:

But what's true about Amazon recently, in the past year, is that they've given us tools where there's really no excuse now to not have like videos on your listing, for example, like there's built in tools in just on on the, in the backend, that you can make videos in on in campaign manager, just with static photos of your product.

Speaker 2:

So anything is better than not having a video at all, and now you can make one for free inside of inside of campaign manager. So AI is making it easier. It's leveling the field, so to speak, in terms of being able to change out your imagery and then split test your main, your hero images and split test your titles. You don't have to spend as much time as you used to because of the prevalence of AI, and Amazon's now kind of starting to weave it into the backend of Seller Central to where it makes it easy for you to make things like that now too. So I think that's something that in 2024 kind of changed the game for Amazon sellers, both on Amazon and off of Amazon in terms of the tools that you can use.

Speaker 1:

Yeah, I'll steel man that a little bit, matt, in the sense of I think that you know, obviously, ai, a lot of the off platform tools you know, when you start looking at how do you write better listings and that type of stuff. I think there's a lot of great tools out there now for those types of things that can kind of get you 80% there and then you know, spend again. It makes it. It's not perfect, but it makes it a lot easier for a human to bring it all the way 100% home, to get those increases in conversion or create a new asset, whether it be an image or a video. So I think those things are great.

Speaker 1:

That said, I am still woefully disappointed in Amazon's AI listing tool. It is amazing at how not good that tool is. Now. Does that mean that you shouldn't use it under any circumstances? Absolutely not. I would say. One of the most interesting things that we like to use it for and I think we've talked about a couple of times on the podcast is hey, if you have a title or an image for your product, especially if it's a new product, I really encourage people to put it into that listing builder because it tells you what based on the image, especially what Amazon thinks that product is, which is really valuable data. When we talk about one of the other trends in 2024, which is introduction of Rufus, that has now been, you know, much more rolled out. I think it's to everybody in the U? S now and I think they're starting to expand that as well, and I don't know if either one of you guys have tried that as a shopping experience, but it is significantly different from kind of the current standard of, you know, searching for products based on keywords.

Speaker 3:

I haven't used Rufus, to be honest, and honestly to my detriment, because, even if I didn't care about it from an actual shopping perspective, I think that one of the things that sellers should be doing, including myself, is using it so that you understand how it operates and how it thinks and what it's doing, so that you can craft your Amazon presence a little better to line up with the way that Rufus actually operates.

Speaker 3:

And I would say, john, that in my opinion, that listing tool that Amazon provides, I am completely in agreement with you that its most valuable use right now is to let Amazon tell you what they think your product is, and I will tell you there are a lot of products out there that Amazon thinks it is something very different than you think Amazon thinks it is.

Speaker 3:

And you know, like even our product, you know, like Full Tools, amazon, there's a lot of confusion over a lot of different keywords in our category in terms of what it actually represents, and so it's interesting, you know, depending on the title that you put on or depending on the image that you give it, it's very interesting to see what Amazon comes back with in terms of, you know, bullet points and things like that, because oftentimes it is nothing related to the product that we're actually trying to sell, and it does help you get a better understanding of just where the fault lines are and how you might be able to you know sidestep some of those and make sure that you're actually getting the placement you want.

Speaker 1:

Well, I think to that point, you know I would also and again, I know we've talked about this a couple of times this year on the podcast and I think you know we also have Vanessa hung on that if you want to listen to a in-depth episode on this, talking about all those different, you know, frankly little items within your listing that got the most of them got ignored for a long time, yeah, and now they're. You know, product specifications and all those little nitpicky things are becoming more and more important. As you know, rufus is using those in order to decide what to show to shoppers, because it it, and again, I, you know I just started using it a couple times, probably about a month ago, as we are into the holiday season, looking for gifts and that type of stuff, and what I noticed about it is is that it essentially bypasses a lot of the ads that we rely on in Amazon at this point. So there's no video ads.

Speaker 3:

Amazon did just send me a message just the other day talking about how they're going to begin injecting ads into Rufus.

Speaker 1:

Oh, I'm sure they are. I mean, I'm sure it's coming, but there will be no place that Amazon does not inject an ad.

Speaker 1:

Yes, I'm sure.

Speaker 1:

That said, I think that just being aware of how those ads display in there for example, you know, are they going to have video ads Is it going to be that, you know, or sponsor brand ads, at least from what, what it is right now and again it's going to probably, you know, evolve over the next couple of years is my guess is that ad will probably look more like a sponsor product ad.

Speaker 1:

So it may not have. You know, you're, frankly, most of our listeners out there and our brands that we like to work with are premium level brands that have a brand story to tell as to why their product is significantly more than some product that's made at the lowest possible price from an overseas seller, and so when you start looking at those brands, then it's okay making sure that you have all the pieces that you need within that what would typically be a sponsored product ad, in order to give those buying signals in a way that can be hard to do compared to or sponsored brand placement, where you can tell a much more detailed and in-depth story.

Speaker 3:

Well, I think too, what's interesting about Rufus is that it will give some of that nuance, right. Because if anybody who's looked at the reviews, their review profile, lately, you notice that at the top of that it lists a lot of the things that customers said this about the product and it's kind of these little. It lists a lot of the things that you know customers said this about the product and it's kind of these little bullets that are positive or negative or whatever, which is also part of that. You know, rufus AI kind of a system, and so what's interesting about Rufus is that it takes all that into account.

Speaker 3:

So if somebody, let's say somebody was searching for let's just go back to ProTel, they're searching for commercial grade, you know, pool cleaning tools or a commercial grade pool poll, let's say you could put in your listing commercial grade and in the past that keyword, then I mean, if you were doing your job right, you should be showing up fairly prominently for commercial grade pool poll, right. But if the reviews for your product all say this product sucks, it's not, you know, it lasted a week, you know whatever, then in the past you wouldn't know that until you got to the listing and actually went through the reviews to discover they say it's commercial grade, but clearly it's not. The reviews say it's not Rufus. If I search for commercial grade pool pool, it isn't going to show me the pool pool that says it's commercial grade, but all of the reviews tell Rufus, this is the cheapest pool on the planet. It is clearly not commercial grade. That customer won't even see that product in Rufus.

Speaker 1:

Yeah, and again, I'm sure the experience is going to change, but based on my experience with Rufus is you only see a maximum of like two to three products at a time. So it's very different also from, again, that search experience where there's 15 to 20 products if you count the ads on the search results page. So there's even less real estate and, like you said, Mike, getting you know, getting Rufus to essentially recommend your product, is going to be a very different game than the search results that we're used to.

Speaker 3:

So one of the things we were talking about before we jumped on here too so while we're maybe somewhat on the topic of the things where people were like, oh, the sky is falling, you know, this is going to happen, this is going to happen. So you know, we talked AI a little bit, we talked about Amazon fees and kind of getting squeezed on the profit margin side. But another one that was really big early on in 2024 was this whole idea that Temu or Timu or however it is that you say it I still don't know was going to be the thing that kind of knocked Amazon off their pedestal, so to speak. Matt, what do you think about that in terms of whether it's actually had an impact, whether it's been significant or not, whether it's changed how Amazon is doing things. What do you think about that situation?

Speaker 2:

I'm just not a Timu shopper. It's very similar to buying things off of a Facebook ad where you're pretty confident that it's going to come from overseas and you're not going to get it. For four weeks I did make a purchase on Temu I'm pretty sure the Super Bowl commercial got me and it was some incredible promotion and I ended up with like 30 products. It was addicting the way that the platform was to actually shop and add all these things that were like 32 cents to your basket, like I mean it was. It was. It got me to buy more than I would have, most of it's junk that I ended up throwing away. Like I got one thing out of it that I still use. I just thought that kind of a shopper so like and for me, I sell and I'm involved with categories where I'm the top end of the price point as opposed to the bottom end of the price point, which is more kind of what Temu.

Speaker 2:

Now, amazon definitely took them serious, that's for sure, because they have their own I don't remember what Amazon's is called, but that I think will have an effect on sellers who sell at the opposite end of the price, the ones that are trying to get into that race to the bottom with the Chinese sellers.

Speaker 2:

I think they're going to have a more difficult time. You know, yes, the Chinese manufacturers and the other sellers playing that game are going to steal market share from the ones that are higher price point. But I think that, like, take again, take ProTuff, that we always use as an example, like, instead of racing to the bottom in terms of price point, well, there is a another skew that we're launching that is going to allow us to compete a little bit better on price. But like we're going other places, like into the commercial market, where they're paying more for tools than they are on Amazon. So, you know, like I think that Temu and Sheen and I don't know how to say that, one Sheen but like there are people that shop on it, but like I, for me and the brands that I'm involved in, it's it's the opposite of where we're headed as a brand, as opposed to some of the other ones who have to because they sell the lower price point.

Speaker 3:

It. It's interesting to me that I think you know, as you mentioned it and again I don't remember what Amazon is calling it either but as far as I understand it, they are rolling out, or maybe have rolled out to some degree, this kind of competitor to Tem products, because a lot of those low end, super low price products depending on how Amazon actually does this may filter out of the results that we're competing against. Like you've got two different shoppers essentially one in this store and one in this store and maybe we're no longer having to sift through all of these shoppers that probably never would have bought our product anyways and are looking for these low price products and what's left is the shopper that we really want anyway. You know, I don't know what Amazon's going to do with that, but for me I looked at it from the beginning as maybe it's an opportunity, you know, for for higher price products to actually have somewhat of a comeback on Amazon as many of those products maybe filter out of those listings, I don't know.

Speaker 2:

Well, yeah, I don't know Amazon haul. It's called by the way Amazon haul. Actually, people commenting Mir has told us in the comments Amazon haul and he said it's already out, there's already, you can already purchase. So I'm going to go check it out. I want to go look.

Speaker 1:

Yeah, I think it'd be well and what's interesting to me and I don't want to make, you know, too aggressive prediction for 2025, but you know, understand that you know Temu and Sheen and these types of companies, and probably even Amazon haul, is really dependent on kind of this weird loophole in you know customs law within the United States, combined with subsidies from the Chinese government for shipping, that allows these companies to exist, and so, again, it's no idea what's going to happen in 2025 as far as that scene is concerned. There's a lot of talks, so we'll see. Wait until there's some action there. However, I think you do have to take into account of. You know it's a pretty easy what if, if you know that loophole gets closed, that means a lot of these lower end products essentially no longer become viable in the current process that Temu and Sheen and these companies are using, and probably Amazon haul as well.

Speaker 3:

Yeah, agreed, it's. In fact, it's one of those I've had a number of conversations with people about. You know, concerns over potential tariffs and you know what. What is, you know, trump and his administration going to do when they get in? And okay, you know like I mean.

Speaker 3:

We manufacture in China. We've we've tried on a number of occasions to to onshore our manufacturing and just couldn't do it. You know, maybe we end up in a scenario where we end up having to, but at the moment the biggest thing is because we are a premium price product. Even if those tariffs go into effect, they affect us far less on a profit margin perspective than those products that are at the low end of that pricing point, that have very slim margins and especially, as you said, many of those actual Chinese sellers who have a lot of these breaks.

Speaker 3:

Let's say that allow them to pull that off as soon as that rug gets pulled out from under them and I'm not so sure that it won't be, we'll see. But if it does, again, same thing, just like I was talking about with the differentiation of the two platforms, maybe on Amazon, is that there's a lot of products that end up overnight, potentially not even being in the listings and all of a sudden a product that was number 30, because there were all these other cheap products ahead of them, now becomes number five. Who knows exactly what might happen with that, but I see it far more as an opportunity than I do as a possible problem for our company.

Speaker 1:

Yeah. So I'd like to pivot a little bit towards speaking of premium brands, since I know that's most of our listeners and one of the topics that we were talking about before we hit record here, and we've talked about it a few times this year on the podcast which is Amazon Creators Connections and Mike, if Mike, if you want to share kind of high level your experience with it this year, and then you know, we want to give credit where credit is due, and I think it was Josh Hadley who kind of talked about how to go kind of beyond the basics of it in order to get a lot more value out of it. If you can give kind of a quick version of that, since I know we've talked about it on previous episodes.

Speaker 3:

Yeah, for sure. I mean looking at it from the standpoint of, you know, benefit or bust, you know, did it happen or didn't happen? Creator Connections is it's been a good opportunity for our company. I think there is maybe an argument to be made for, you know, the smaller your company is, maybe the less potential opportunity there is maybe an argument to be made for the smaller your company is, maybe the less potential opportunity there is there. So take that into account. But we did through.

Speaker 3:

Well, let me look at the dates on it so I can give you more of a timeframe of how long it took. We have so far we did one campaign. Well, I take that back. We've done two campaigns. The first campaign that we did was horrible. It produced virtually no result. The second campaign, after we implemented Josh Hadley's strategy and, to be clear, his strategy not only helps you with the actual performance of the campaign itself in terms of the number of creators that sign up and actually sell product on Amazon, so it increases the number of sales that you get. It also helps you on the back end of that you know, to create kind of this list of creators that you can work with off platform. So it's incredibly useful, but we did a total of $115,000 in sales from this one campaign. Now it's a long-term campaign.

Speaker 3:

We started the campaign in mid-April, so basically it's been eight months and it essentially ends at the end of this month. So we're almost done with the campaign and we will absolutely rerun it. Without question, we will rerun it, and the nice thing about the rerun is everything's already set up. We already know the template. We don't have to change it. We already know it works.

Speaker 3:

We are still, even to this day, eight months later after we started the campaign, we still have creators that are signing up to promote our product, and not just signing up through Amazon as a creator on the campaign, but also they are following the link to our Google form, signing up to our spreadsheet, which is just a list of creators for us to work with, and then we get to vet them, because we get a whole lot more information about them on what other platforms they're on, how many followers they have, how many video views they've got, and so there's been a massive benefit to us of that campaign, because I probably only invested about two hours in setting up that campaign and now that I have done it, it will literally take me two minutes.

Speaker 3:

The next time I set it up because I'm going to use the exact same template, I'm going to send them to the exact same Google form. All of it's already set up. So whatever benefit we get out of the next campaign is all based on what's going to be literally a few minutes worth of effort to produce. Whatever we get out of it and I can almost guarantee at a minimum, we're going to continue to sign up creators and add them to that list that we can use off platform for getting content.

Speaker 2:

So you're offering a 15% commission and you've generated 115K in sales. You said, or 105K in sales 115.

Speaker 3:

$113,408.

Speaker 2:

So I mean, let's compare that to your ACOS on Amazon advertising. What do you like? 25% to 30%, 28% to 30% ACOS.

Speaker 3:

Yeah, our ACOS right now is up in the 30% range. We feel like we're doing relatively decent if we can keep it under 30%. Fortunately, our tacos is better than that, but ACOS is about 30% at the moment and so, yeah, it's a much better performance track record for Creator Connections in terms of our profit, let's say per sale, but then also we get the creator on the back end that we can work with our platform.

Speaker 3:

So it's difficult, quite frankly, to quantify just how much benefit that is, but certainly we're getting a lot of sales at less cost than if we were actually just advertising.

Speaker 1:

Yeah, and that's the piece that I really want to just double click on, because I we've done this with a number of brands and, quite frankly, had mixed success, and I think a lot of it has to do with what category that brand is in and kind of some seasonality and some other things, and so it also size.

Speaker 1:

You know, typically what we see kind of depending on the brand is, you know, this can be an additional, you know, 5% bump or so in revenue from based on what they're already doing.

Speaker 1:

So if you're only doing, you know, 10 grand a month, it's probably not going to be move the needle in a huge way for your brand. But I would say you know, what you mentioned there, which is connecting with those creators, is really where 80% of that value is in this process, because that allows you to really work on building a relationship with them, getting them involved in your community and having them as, essentially, an ambassador for your brand long-term, creating content and doing all those other things that we want influencers and creators to do, and this is a great way for them to discover you without having to pay a ton of money, because there is plenty of brands out there that they'll pay hundreds, if not thousands, of dollars to find good creators like this, and essentially, they're coming to you and working for you. Like you said, matt, what boils down to a 15% ACoS for you.

Speaker 3:

Yeah, no, it's, it's been, it's been terrific, and I would say that the even for a smaller brand. Well, let me ask you a question, John, because I'm curious because, like I said, we ran a. We ran a campaign previous to this one and it was dismal. I mean it literally was. I wrote creator connections completely off. I was like this is worthless.

Speaker 3:

You know, in that there is a big lesson, because I think all too often as sellers, we test something, we try some new methods, some new advertising opportunity, whatever, and if it doesn't work, our answer to that is well, this method sucks, or this new service sucks or whatever sucks, you know, or this new service sucks or whatever, instead of taking a step back and, at least briefly, being a little bit introspective about it and saying what might have gone wrong, what maybe did I do wrong that made this not work and maybe how could I make it work better? You know, doing a quick search on, you know on Google or YouTube, or you know through ChatGPT or something, perplexity and say, hey, this is what I did. The results were horrible. What did I do wrong? And see if anybody's out there that has information for you to help you correct it better yet look for that information before you do it the first time. But but but I think you know in that, just try to learn a lesson out of it. That isn't just this method or this service or whatever sucks because I didn't get a good result from it and I think oftentimes we lose opportunities because we do that.

Speaker 3:

But to get back to Creator Connections, I want to say three or four months after we tried the initial campaign is when I saw Josh Hadley's presentation on how to properly use Creator Connections. I saw Josh Hadley's presentation on how to properly use creator connections, right away implemented it and it was a spectacular success for us. And so one of the things I'm curious about because there were two things there's a lot of things that Josh recommended and I don't want to give it all away. I want to send people his direction. But one of the things that he was very keen on making sure that people understood was if I'm a creator, if I'm an affiliate, you know, or of some sort, and I'm looking at multiple potential campaigns that I could contribute to different brands that I could connect myself with, if I see a brand that has set up a campaign and they're going to pay me 5% commission and they have devoted a thousand dollars to the campaign. From my perspective, that is not a serious brand that I want to deal with. I'm going to go find some other brand because, one, they're paying me squat and two, the campaign is capped at a thousand dollars. So even if I'm the only affiliate that know affiliate that signs up for this thing right which is likely not true, but let's say I am then I do all this work to create all this content and all this stuff.

Speaker 3:

I maybe buy the product because technically, creator connections is not a, you know, we'll give it to you for free, right? And that's part of the thing is like go fill out our form and we'll. We'll let you know whether you qualify for a free sample, right? If you give us some information. So that's how we give you a little form.

Speaker 3:

But that's not the way that it works in Creator Connections.

Speaker 3:

They have to buy the product.

Speaker 3:

So if you create a campaign and they have to buy the product, they have to create all the content, they have to get it all listed on Amazon and then you're only going to pay out X amount of dollars total for the campaign and they don't know if maybe you might run another one or whatever, then that's a lot of time, effort and money that they've wasted on that, so they're not going to do it.

Speaker 3:

So one of the big things that Josh was talking about was give them a reasonable commission rate. You're not paying for Amazon advertising, so at least give them something close to what you might reasonably spend on Amazon advertising that you think would be profitable for you. Give that percentage so it's reasonably high, and then set the campaign limit in terms of how much you're willing to spend really, really high. You'll never spend it all. We set our campaign limit as $50,000,. I think Well, we only sold $100,000 worth of product. At 15%, that means we spent $15,000,. I think right, well, we only sold $100,000 worth of product at 15%, that means we spent $15,000, which isn't pocket change, but it's well worth it. It's way less than we would have spent if we paid for Amazon advertising dollars.

Speaker 2:

But even if you did spend it all, the most that you will ever spend is 15%.

Speaker 3:

Exactly, why not?

Speaker 2:

I'll spend a million dollars.

Speaker 3:

Yeah exactly. So I'm curious on the campaigns that you guys ran that ended up being kind of a flop, Was your commission percentage a reasonable percentage and was the cap that you placed on it in terms of the amount of money that you were willing to put into that campaign? How high was that relative to the frame?

Speaker 1:

Yeah, I think those are great questions. So I'd have to look to see, you know, each one of the campaigns, but kind of a ballpark like the lowest we'll go is 10% and, again, based on Josh's recommendations, we generally stick between a 10 to 20% commission. That again, you got to put yourself in the creator shoes. It's not worth their time. And I mean to be quite frank. I mean we've done a lot of testing with, you know, creator and influencer sales and that type of stuff outside of Amazon as well, and you know, one of the things that we've ran into is is that in understandably so, is that a lot of these influencers, they don't want a percentage of sales for a lot of the micro influencers, they just want to get paid 50 or a hundred bucks a video because they just they don't know what's going to sell Right. So for them it's just, you know, they'd rather have the guaranteed cash. So you're already kind of at a little bit of a disadvantage there.

Speaker 1:

Now I will say the one thing that we were very aggressive about is is is the budget piece of it.

Speaker 1:

I don't think we launched one of those with less than a budget of 10 grand and I think most of them were about $50,000.

Speaker 1:

Now, the hypothesis based on you know kind of actually our conversation today that I didn't think about as much, as if I think about it, looking at some of those campaigns, I think the ones that struggled and I'd have to go back and look at the data were generally products that were, let's say, less than $30, which could make a lot of sense if you think about it, like, okay, let's say, you have a 15% commission If it's a $20 product, well, you know that's not a whole lot of meat on the bone for that influencer and you know, honestly, for them it's probably just as much work to try and sell a $20 or $30 product as it is to sell a $50, $70, $100 product.

Speaker 1:

So if they're looking at it and at least the influencers that came through that we saw a lot of them were fairly savvy at how these processes work and if they're looking at their ROI, those higher price products make a lot more sense. So I think that's another thing to keep in mind as far as and I think this is again kind of comes full circle to what we talked about at the beginning of this, of lessons learned in 2024, of man, if you're playing in that you know, kind of $20 product space. Everything is hard if you're trying to do it profitably, whereas if you've got higher price products that have higher margins, it just allows you to do a lot more things.

Speaker 3:

For sure. I remember what other topics did we say we wanted to cover? Was there anything else that we've not gotten to?

Speaker 1:

I think you know, before we wrap up, the one that I would consider a bust for 2024 that has had a lot of kind of buzz around it that I don't feel like ever really lived up to its potential is Amazon posts.

Speaker 1:

You know, I feel like if you've got a massive brand you know say they're 10 million or something like that, you might get a 1% bump from you know million or something like that. You might get a 1% bump from having somebody on your team put up Amazon posts every day. But I really think that, especially once they started running ads, what we saw for some brands that we were helping put up posts on a regular basis was a lot of that traffic. Once there became an ad component to it, a lot of the unpaid traffic essentially fell off, which is, you know, frankly, what we see with a lot of social media sites. So I would say at this point it might make sense to put up 10 or 20 posts just so that way you've got some posts if anybody ever looks there. But beyond that I don't think that there's a lot of value in doing. For most brands that are, you know, up to probably 10 million, it probably doesn't make a lot of sense in order to do Amazon posts on a regular basis.

Speaker 2:

I mean, you can automate a good portion of it, but even then, even automating it, now that organic visibility isn't really what it used to be, you're right. I mean, I think, mike, you've put together a process where you create images and the copy for them in the span of a couple of clicks of your mouse, so then you know if you have the resources internally to put something like that together and then implement it. I mean, you're you're talking maybe 20 seconds of actual work to get that up at that point. So not not really a whole lot of work, but still with the decrease in visibility, like does that even make sense? Does even 20 seconds per post make sense anymore? You know?

Speaker 3:

Well, I think I mean you can do it quickly, and for a while we were pushing on that lever, trying to see what we could do with it.

Speaker 3:

Briefly it looked like it was going to be something and then and then it really wasn't. But I would say I would look at it from more of an opportunity cost perspective. I would not take somebody on your team and have them do that if there's other things that they could be doing with their time. There's way more things that I think would have a much better result for the time investment. If, on the other hand, you wanted to bring on some you know a Filipino at three bucks an hour, you know, and you and you give them your automated process and you're just like hey, go to town. Like the cost to you is going to be negligible. There's no opportunity loss because you don't have, you're not soaking up time of one of your you know other employees or something. Maybe it's worth giving it a shot, but I really don't think there's a whole lot of meat on the bone there to really worry about.

Speaker 1:

There's far more things that you probably could put your emphasis on and do much better with. So I guess, guys, as we kind of wrap here and think about 2024, what is, maybe you know, one piece of advice that you guys would have for listeners as we think about lessons learned from 2024?

Speaker 2:

I think, social selling platforms like TikTok. Who knows what's going to happen to TikTok in a couple of weeks, but I think that it's been proven now that people will buy in those types of environments. Amazon tried to launch it. It didn't work, but I remember what theirs was called, spotlight or whatever. Whenever they tried to call their Spark, what did they call theirs? What was it called? Do you remember? Amazon had one?

Speaker 3:

Either way either way, it didn't do it.

Speaker 2:

Yeah, it lasted that long, but I, you know, I think that I think for where. I think that focus in 2025 is like if you before it was like figure out a way to get people on your list and your audience and we're still doing those things and that's important. But I also think that finding content creators and influencers like you know, I still see now where brands find that one influencer who, for whatever reason, made a video that looked really ridiculous when she sent it to us but then popped off and went viral and sold hundreds and hundreds of units Like that's happening on those types of platforms. So I think, building out your and Mike, you have a really good system in place now to take those creator connection applicants and put them on a spreadsheet that then you know like you can reach out to them later on and use their content on other platforms. I think that's important Going forward.

Speaker 2:

You know, back five years ago, when you said influencer, you would see like Kim Kardashian in your head, but it's not like that anymore. I mean micro-influencers. Having an army of micro-influencers could really do really good things for your brand and they're not really hard to find. There's one on every street corner nowadays. So I think putting effort into building out your kind of brand ambassador program, I think is is, you know, is gold, no matter what platform rolls out tomorrow or which platform gets banned.

Speaker 3:

Yeah, I think probably the thing that I would say is to come back to the comment that I made earlier, which was be a little bit more introspective about your failures and try to determine whether that failure was was something that you could. You could iterate on and turn it into a success, rather than just writing it off. Social is one of those. There are a lot of sellers who have tried social and it didn't really do anything for them and so they've written it off and said that's not for me, my product doesn't work there, whatever. I would say that at this point, social, if it's proven anything, it's that there is no product out there for which social could not be a channel that you could do well with. The question is how creative can you be about it and how much effort are you willing to put into it, to make it produce and to use it in a way that's best for your product? So don't write things off just because you weren't successful with them before.

Speaker 3:

Do some more research. Look to the people who have had success and hopefully maybe have had success with a product that at least in some ways is similar to yours same category, same whatever. How were they successful? How could you be more successful with it and pay very close attention to how you can use those things to affect your Amazon presence? Because, again, I mean mostly we're speaking to Amazon sellers here. Obviously, we've got other people who are just e-commerce and whatnot, but many of our listeners are Amazon sellers and so if you're not looking off platform and paying attention to the things that you can do to build your brand off platform, I promise you there are not enough levers that you can pull on Amazon that the other sellers in your category can't pull just as well as you for you to succeed there the way that you want to. If you're not pulling those off platform levers, you are failing already, even if you don't see it.

Speaker 1:

Yeah, and I'll just kind of wrap up with this, which is to build off what you said, mike. I mean, I think that in order to be a successful brand coming up in 2025 and beyond, I think you have to. It's not a Amazon or somewhere else, I think it's an and, and so you did a good job of summing up. Hey, if you've tried other channels social, whatever it happens to be and it wasn't successful for you, be introspective about why that didn't work and what you could do differently in order to be successful next time. And then what I would add to that is, especially if you've already got traction on Amazon, is the and there is. What do you need to be testing on Amazon? Is that conversion rate on your listings? Is that a different approach to your ads? And thinking about how you can optimize your revenue and your profits from the business that you're already doing on Amazon even more than you are right now. I think you need to do both of those things in order to continue to be successful in 2025 and beyond.

Speaker 3:

One of the things that I would add to that, too, is don't be afraid to consider whether the avatar that you're chasing is no longer the avatar you should be chasing, or whether the avatar that you're currently chasing is still good.

Speaker 3:

But there's another avatar out there, or multiple avatars out there, that you could be chasing, with different listings, with different content, for even the same product you know to, to increase your chances of success there.

Speaker 3:

I can't tell you the number of times I have heard the story of a seller who took a product and started selling it under, you know, a different kind of a name or a different keyword that was in a somewhat slightly different category or something that was now to a different customer avatar, and doubled their money or more, sometimes sold more in that category into that avatar than they were currently selling to the one that they've been selling to for five years avatar than they were currently selling to the one that they've been selling to for five years. So really take stock of at least the hero products in your list, and maybe even some of those that aren't hero products, and decide is there maybe another avatar that I could attempt to sell this to without a whole lot of extra effort and at least test it and see whether there's another channel of opportunity there for us, even on Amazon, to sell that product in higher quantities, absolutely.

Speaker 1:

Well, I think those are some great action items for our listeners. I would just encourage anybody who's listening pick out the one that makes the most sense to you as you think about growing in 2025, run with it. We'd love to hear what your results are from it, and thank you everybody so much for listening.

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Jon Stojan

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Matt Atkins

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Mike Kaufman

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