Brand Fortress HQ: Amazon FBA Success Strategies

069: Tactics Tuesdays: The 5 Deadly Sins of Amazon

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Ever feel like your Amazon business is walking a tightrope without a safety net? You're not alone. In this eye-opening episode of Brand Fortress HQ, we pull back the curtain on the five most devastating mistakes that can silently kill your Amazon brand—mistakes we've painfully witnessed both with our clients and in our own businesses.

The first deadly sin might surprise you: changing your brand name on Amazon. We share horror stories of brands forced to choose between keeping misaligned brand identities or losing years of hard-earned reviews and rankings. One particularly painful case involved a client unable to use their actual brand name in product titles because they'd registered under a different name, thinking trademark issues prevented them from using their real one. The solution came too late, leaving them with an agonizing choice.

When it comes to reviews, we reveal why preventing one negative review is worth far more than gaining multiple five-star ratings. Amazon's algorithm now weighs negative reviews more heavily, making reputation management crucial to your success. We share practical strategies for preventing negative reviews through better product design, clearer instructions, and thoughtful post-purchase communication—without violating Amazon's terms of service.

The remaining sins—going out of stock, not knowing your numbers, and lacking an after-purchase program—can be equally devastating. We share a sobering account of watching a seller's sales chart resemble a "ski slope" after inventory problems, and why maintaining at least 90 days of inventory in the U.S. is essential for business continuity. We also explain which metrics matter most (hint: it's more than just ACOS) and why building your own customer list is your ultimate insurance policy against Amazon account suspension.

Each of these mistakes represents a potential business killer, but they're all avoidable with the right knowledge and systems. Tune in to discover how to protect your brand from these common but devastating Amazon selling mistakes. Your brand's survival may depend on it. Have you encountered any of these challenges? Join us live most Tuesdays at 2:15 PM Central on LinkedIn to get your specific questions answered!

🚀 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 another episode of Brand Fortress HQ and our Tactics Tuesday. We're excited to be back live again on LinkedIn. So, if you're listening out there, this is one of the things that we've done in the past and we're getting in the habit of doing is being live on LinkedIn. So if you have questions every Tuesday at about 2.15 Central Time, we're working on being live on LinkedIn so that way we can answer those questions live as we talk about different topics.

Speaker 1:

Today, what we're going to be talking about are the five deadly sins for brands on Amazon, and this is something that, off mic, we've been talking quite a bit about as far as kind of those mistakes that, both short-term and long-term, that we've seen brands making that we're working with, and then also in our own brands, that type of stuff over the history of, you know, really growing both on and off Amazon.

Speaker 1:

So you know, with that, I think, the first one I want to start out with because I think Matt and I have actually gone through quite a bit of pain with a couple of clients around this is, you know, changing your brand name on Amazon. You know we've run into a couple of different situations where, for various reasons, people have needed to change their brand name, and I wanted to talk real quick about this because I think this is one of those things where it really pays off in order to get that brand name right up front and talk today a little bit about what why it's such a big deal and why it is so painful in order to change your brand name later on. So with that, actually, I'm going to hand it over to you, matt, if you kind of walk through kind of your perspective on this.

Speaker 2:

Yeah, I mean I think there's a couple of different reasons that someone, a seller, would have to go and change their brand name after the fact and I can think of a couple of reasons that I've helped brands with that were unavoidable. There were some, and actually I was a victim actually a self-created victim of one that caused lots of pain down the road. So the first one that I didn't really think through and I think it was my either first or second brand is I had an LLC name, that it was a previous LLC that was tangentially relevant to the brand that we were launching on Amazon. But I just used the LLC name just for ease of use when creating the account, which caused a lot of problems later on. The other thing, the other best practice that I didn't follow back then, was that I was actually using my actual personal Amazon login when I created that account, so I used that same email address, which again caused all kinds of issues down the road. So that I did it didn't make sense how having the LLC as my seller name on the listing and it became a blinking red light. That really annoyed me forever and ever, and that was the first time that I went through a brand changeover. So I think really the point of this being one of the deadly sins and alerting and putting it top of mind for people is, when you create your seller account, think of it like what we teach our new students.

Speaker 2:

Coming through the program is think with the end in mind.

Speaker 2:

So, even if your plan isn't to sell the business anytime soon, going through the process of setting things up like as if you were and one of those is is your brand name and making sure that it matches the LLC and bank account and all that kind of good stuff and for us it didn't. And, like John said at the beginning, you know changing the brand name is such a painful process. On, on Amazon, we're walking through the process with the brand that we work with and I don't know it's about two and a half month long process. I mean they do have a lot of skews, a lot of different variations, so I think that certainly adds to the complexity and actually the reason why that brand is changing the brand name is one of those unavoidable reasons. So it wasn't something that could have been thought of in the beginning, but it certainly highlights the complexity of what it looks like to change your brand name on Amazon, so so yeah, that's the kind of recent experience that we've been dealing with here.

Speaker 1:

Yeah, and I just so a couple of things that I want to make sure that we cover here, cause I think it's really important for our brands that are listening. So a couple of things to keep in mind here. The first one is is that again not legal advice, that said, when we're looking at just the requirements for brand registry is to either have a name, trademark or an image mark. So in this case, or one of the cases with the brands that we worked with, you know they had told us like, hey, basically you know, our, their product is fairly popular off of Amazon, but nobody can find it on Amazon because they're not ranking for their brand name and they're struggling for the brand name to be put into their title. And the reason was because they had opened their store or they had registered under a different brand name because they didn't think they could get A trademark. Lawyer had told them like, hey, this is too similar to another brand name. What they didn't realize was that they could actually use an image mark to at least meet the requirements for Amazon. Well, they kind of worked out with the lawyers as far as what the trademark implications were there, and so solving that problem helped kind of realign their brand, but then, as Matt was talking about, having to change their SKUs for one brand or another essentially meant that we had to recreate those SKUs and lose a lot of the history that they had for selling over a couple of years on those SKUs. So that means losing your reviews, that means losing your sales momentum, that means losing your keyword rank.

Speaker 1:

So, especially if you've been on Amazon for a few years and you've built up a pretty good sales volume with the products that you have, you're kind of stuck with either having to do something where you've got to choose between hey, my brand name is not in my title, or I have to pick a different brand name that is harder for people to find or may not even index for my own brand, which is not ideal or essentially restarting with those listings on Amazon, and both of those options really suck, which is why this is one of the first things that I know that it may not apply to 80% of the people that are listening, but for that 20% that are in that boat, really the faster you can make that switch, the better.

Speaker 1:

When you start looking at a long-term investment and then for the other brands out there, if you're looking at launching another brand or you're looking at buying another brand, this is definitely one of the things that I would look into as far as making sure that that brand name is brand registered and you have that aligned with everything both on and off Amazon, in order to get all the benefits that we talk about on the podcast all the time about being a brand for long-term success.

Speaker 3:

Yeah, honestly, in a lot of ways, it's all about avoiding pain. There's a lot of other benefits to making sure that you flesh this out early on, but there's a lot of painful results if you don't and I guess I would say, but there's a lot of painful results if you don't, and I guess I would say definitely dial in on the trademark, making sure that you can effectively trademark the name and that you're not going to be in a position where that's problematic. Also, I think, in that conversation, if what we're saying is make sure that you solidify that brand early on and that you can get it trademarked, and that you can get it trademarked and that you can get it brand registered, and that you can, you know, do all these things, well then the question becomes well, okay, what do I need to pay attention to in order to actually decide what that brand name is going to be? You know how do I make that determination, and I don't know that there's one set answer for every company, like every product line, it's different. However, I would say this I think it will help if you take a step back, like if you already know, like there's a lot of things in play here, right, like do you already know what the product is that you're selling? Do you already know, like, do you have some of those things lined up? If you do and I assume if you're watching this podcast, there's a decent chance you kind of already know what you might want to sell or you're already selling it.

Speaker 3:

Then the question becomes who is your ideal avatar? And then from there you know and really nailing that down right, like not just I sell to men, or not just I sell to people who hike, or you know, like really, you know we've talked about this before but making sure that you nail down the details of who that avatar is that you're going to sell to, and then use that to determine what that brand name should be, because it should be a brand name that's going to resonate with that customer, and I also believe that it should resonate in a way that taps into whatever your primary USP is going to be within your business. Like, what is your brand going to be about? And although, like, let's say, you sell hiking gear, like you could do something that's hiking related. But you could also step back out of that a little bit and I'll give you an example like for our company, you know Proto Products not that that's like an amazing brand name, but I made that decision kind of early on with the thought that we might break out of the pool category at some point.

Speaker 3:

Now the reality is that we haven't. We've stayed in that pool category because it was where we were comfortable and you know we're trying to kind of break out of that at this point. But the good news is, with that brand name I can sell in pretty much any category I want. Protel products does not limit me in terms of what category, but what it does dial in on is the durability of the product and because we offer this kind of unlimited, unconditional, you know, lifetime replacement warranty, it all kind of ties together in that and so the brand name makes sense.

Speaker 3:

So just kind of look at it from that perspective what do you want to be as a brand? Not just what are you going to sell, but what are you going to be, and then what aspect of that is going to resonate most with your customer avatar, and lean into that as you decide on a brand name. Also, these days don't be afraid to use ChatGPT, because it is really helpful in this kind of an area where you're trying to be creative about something, but there's certain aspects you want to be consistent with. It can be really helpful in that and giving you some ideas as to what direction to go.

Speaker 1:

Yeah, absolutely. I think, transitioning into our second deadliest, and then I want to make sure that we cover here, which is mismanaging reviews. So I think a part of this that you know kind of I see a lot and I think is really misunderstood by brands on Amazon is how important it is. Yes, we all want five-star reviews, but actually it's 10 times more important to look at how you can prevent one-star reviews really seeing your product and your brand from your customer's perspective and eliminating any of those roadblocks that they have around using your product in order to get the result that they want. And so if you sell enough on Amazon, you're going to get one-star reviews. It's just going to happen.

Speaker 1:

That said, I think, rather than Because I've talked to We've had a number of clients where they get a one-star review and they're angry and upset, and I can understand that initial response and in some of them it just sucks.

Speaker 1:

The feedback that they give is not accurate.

Speaker 1:

That said, I have seen some of those where, if you take a half step back, the customer has at least a semi-legitimate point, and in those cases, what I would strongly encourage people to do is you know, sometimes it's a product issue and sometimes it's a messaging issue, and see what you can do in order to, you know, make either your messaging or your product better based on those negative reviews, and then also just communicating with customers and do anything you can within terms of service in order to prevent those one-star reviews.

Speaker 1:

Because, especially, I think, what a lot of brands don't realize now is that Amazon no longer has a straight formula for how they calculate ratings for products. So those one-star reviews actually from at least what I've seen, is that they actually wait more on pulling down a product's rating than five-star reviews. So it's not a straight. Hey, if you have 100 reviews and X number of percent are five-star and Y percent are one-star, that whatever that you know mathematically works out to that's the rating Amazon gets, it gives you doesn't work like that anymore. Amazon kind of puts their thumb on the scale and, at least from what I've seen, anecdotally is is that you know they tend to give more weight to negative reviews than they do to positive reviews.

Speaker 3:

Yeah, I think that's probably a fair assessment. That seems to be my also anecdotal evidence would suggest that One of the things that I think is important to point out is to kind of take a step back from that and to really dial in on. Yes, negative reviews are definitely more disadvantageous to your brand than five-star reviews are advantageous. So it is one obvious reason to focus in on dealing with those negative reviews and I agree with you, john, that you know one of the best ways to do that is to really think through the entire process, your entire sales process and also your post-purchase process, which hopefully you have, you know from start to finish. So, in other words, like your images and your title and your you know your listing your A-plus content, like your FAQs within your A-plus content, the information that you're feeding Rufus about your product, so that people are receiving that information on the front end when they're asking questions about the product to head off those one-star reviews and give customers the information that they need to make an informed decision, first of all, whether your product is the right product to buy, because a lot of times you end up with a one-star review because the customer bought your product thinking it was one thing, when in reality it's something not quite that, and then they're upset because they feel like they were deceived when in reality maybe they just didn't read it quite close enough or whatever.

Speaker 3:

But if you had been more conscious about making that statement known early on, maybe you could have avoided that. You know, making sure in your product packaging that you've got the information that needs to be there and also that customers actually see it and interact with it. You know, just because you've got an instructional pamphlet in your product does not mean that the customer actually engages with that instructional pamphlet or even notices that it's there. So you know, don't assume that you've checked the box because you put instructions in there. Make sure that you've done it in such a way that it's nearly impossible for the customer to interact with the product without interacting with the instructions. But backing up from that, I also want to point out and this is a very psychological thing but just to pay attention to and that is just because Amazon now lists like it is good that they do this, but it still isn't the whole thing Like it used to be.

Speaker 3:

You know, you had the, you had the star rating visual but, until you actually clicked in to see the reviews, you couldn't see like it was 4.7 or 4.3 or whatever, like you wouldn't know that. Now Amazon does show that, at least in some categories I think maybe it's all categories now but they actually do list that on the, even in the search results. It'll say 4.7 versus 4.8 or something which helps, but still that visual is there. And if you're at a 4.8, so you've got a five-star visual and you get one negative review you could easily move to a 4.7, which now has you at a 4.5 visual. That's very different, especially if you're in a category where many products are sitting in that 4.5 visual. Right, if you also are a 4.5 visual, then you don't look any better than them, even if technically, because they can have a 4.3 and be a 4.5 star visual and you're a 4.7 and have a 4.5 star visual, well, there's a big difference between those two products. But visually customers don't see that necessarily. So really paying attention to those negative reviews and just how big that differential can be is very important. So don't ignore that. But on the flip side of that, as much as you need to deal with those negative reviews, I also think that in your post-purchase process.

Speaker 3:

Doing everything that you can to take advantage of opportunities to encourage your customers to actually give you five-star reviews is, I think, also critical. Also, take advantage of opportunities to where you know, psychologically you can create advantages that encourage your customers to decide to leave you that five star review, even if you don't ask for it. Right, like when you do things that they don't expect you to do. Like that you wow them with. Right when you correct mistakes that they didn't even know that you made.

Speaker 3:

You know, I don't know if anybody's seen these videos, but where the husband walks around the house and like unscrews light bulbs and, just, you know, disconnects things. She's like, hey, I need this fixed. And the husband walks in and like two seconds later he's got fixed, right, so there is, there are ways that you can kind of build that into your process where there are mistakes that happen that you get to correct that maybe the customer didn't even notice was a mistake, but you get to send them an email and say, hey, you know, by the way, we missed this thing. You know, don't, don't ignore opportunities like that where you can create good feelings in your customers. You know that that will result in those five-star reviews because they are important.

Speaker 2:

I realized that right out of the gate. One of the things that you mentioned, john, was that you're going to get five-star reviews, and I definitely, or one-star reviews, and I definitely sympathize with the pain that the brand owners that we're currently working with. Every time a one-star review, whether or not it's useful or even warranted, they hurt, but every one of them is an opportunity and, for an example, I have one of the products that I sold is. It was a meat injector that was much better than the meat injectors that are currently on the market, but I kept getting one-star reviews and I couldn't figure out what it was. But because we had an audience, because I could actually talk to people, it was actually because they were putting it together incorrectly after cleaning it.

Speaker 2:

It wasn't an issue with the product, although the negative reviews came through. As it's, the product is crap. I had used it once and I had to throw it away, but it was actually. They didn't know how to put it back together properly after they cleaned it, so it actually became our secondary image. It became the reason why we had a QR code on the packaging to kind of walk them through in a video. So not only did we figure out a way to reverse or go around, get them before they received a one-star or they received a one-star experience by letting them know how to do it. But it also increased our opt-in rate because they saw like, oh, now I have to watch this video in order to see how to do it correctly. So it made more people interested in scanning the QR codes that they could watch that video. But not only did it halt one-star reviews, but I think it helped our five-star review profile too, just getting it out in front of them with the answers to questions that they didn't even know that they should have yet.

Speaker 1:

So I think paying attention to the one-star reviews, no matter how ridiculous you think that they are, and figuring out creative solutions to minimize them out of the gate before they happen and in our case it was a secondary image and a QR code with the video that had other effects besides just skirting around one-star reviews- yeah, and I want to make sure that we touch on something that you know we talked about before we hit record here, which is and I think you know kind of finding that you know that that Goldilocks zone, if you will of, on one hand, you want to make sure that you're following Amazon's terms of service, especially when it comes around, you know, to incentivizing reviews, and that really means that Amazon doesn't allow incentivizing reviews anymore.

Speaker 1:

So you know that's something that you want to pay attention to.

Speaker 1:

But on the other end, you know and, mike, I know you brought this up is that making sure that you have a process in place that works for your brand of, you know, reaching out and asking for reviews.

Speaker 1:

And there's, you know it can be something as simple as Amazon now has a built in to where, after you know a certain number of days I think helium 10, and I'm sure there's a bunch of other plugins that do this as well where you literally can push a button and it sends out a review request to somebody and it just shows them one through five stars and then they click on it and then it takes them over to Amazon for their order and then they can write what that review looks like, and correct me if I'm wrong on this, but I still think Amazon also allows either that or you to send out kind of you know one customer message around reviews, and of course you have to there's you know rules around what you can say in that message and that type of stuff.

Speaker 1:

That I don't think we need to dive deep into for this particular episode, but just to have you know some sort of system in place that you're using on a regular basis to ask for those reviews. Because even when you're asking reviews, I think the average review rate is somewhere between 1% to 2%, and I imagine it's a lot less if you don't have any sort of system in place in order to ask for reviews.

Speaker 3:

Yeah, I think that's really the biggest thing is just if you're not asking, you're not getting.

Speaker 3:

People are not going to leave a review if you don't ask. The vast majority of people are only leaving a review because they had a negative experience. If you want the people who had a positive experience to leave a review, then you need to ask. But also, you know, just going back to that point, don't expect a five-star review if you didn't give them a five-star experience. Right, a four-star experience probably isn't going to generate any review at all. Like, yeah, you'll get some, you know, but it's that five-star experience that really gives that. It puts it over the top.

Speaker 3:

And that's, I think, the thing you know. Make it over the top, make sure that the experience is way better than they expected it to be. And then don't forget to ask, because too many sellers forget to ask, because too many sellers remember that asking is not the same as incentivizing. Those two things are different. And if you're too afraid to ask because you're afraid Amazon's going to see that, think that you're incentivizing, then you are not going to get those reviews and you're never going to get the sales that you want to get. And so being too afraid of Amazon is going to hurt your sales. And there's a lot of categories in which that's true. You know you can't be so timid and so afraid that you don't implement some of the things that are truly just good business and good brand building.

Speaker 1:

Yeah, so I do want to move on to our third deadliest in here, which is, I think, very timely for everything that's happening right now tariffs and all that type of stuff. But also really applies, I think, for a lot of brands when they hit their high season stuff. But also really applies, I think, for a lot of brands when they hit their high season, which is going out of stock. And this one seems.

Speaker 1:

It always surprises me that I feel like this is one that, whether it's because of manufacturers or a variety of issues that I see more than I would anticipate that I would see, and just to understand how painful this is.

Speaker 1:

I mean we were just on an office hours with a newer seller that we were helping out and I mean his account looks like a ski slope because you know he had good inventory and he was using ads and optimize listing and doing all those things right, and you know sales were all moving in the right direction, where you know he doubled and tripled sales in a couple of months and then he wasn't paying attention to his stock and all of a sudden his product is close to out of stock.

Speaker 1:

So then he pauses ads for three, four weeks because he's like well, it doesn't make sense to advertise so that way I can go out of stock faster, which there's a whole discussion about. What should you do if you know you're going to go out of stock? That I think we'll probably have to save for another episode. But just how painful that is and you know, and and I would also say you know there's long-term damage that can be done from that too and just how much time and money and effort it takes to get back to where you were from a momentum standpoint because at the end of the day, amazon is very much momentum platform and we start looking at that sales velocity. It can be very expensive, if not impossible, to get back to that sales velocity where you were before. So, mike, I know you've had some experience with this as well.

Speaker 3:

Yeah, way too much, quite frankly, over the last 10 years. And every season we think that we've kind of got it nailed, and then there's some new thing you know COVID, or you know. It's just been very strange.

Speaker 3:

But the one thing that I can say is that you know, if there is one thing in our business that has hampered us the most, it's probably out of stocks quite frankly, Now it's definitely harder for a seasonal item, especially if you're a seasonal item and a brand that is on an upward trajectory, as overall, but you're seeing these kind of seasonal transitions, forecasting can be really tough, and so that's one thing. So if you have a seasonal product, just know, look, even experienced sellers have trouble with forecasting that. So, but I would say that one of the things that I guess I'm learning as much as it hurts to have extra inventory that you're paying for storage on but you can't sell yet there is there is a line that you should cross, let's say, in having that extra inventory at warehouses that are not Amazon, because Amazon is going to charge you a fortune to store that inventory, even just on a daily basis, but absolutely if you go over and you get long-term storage fees or things like that. So too much inventory at Amazon is a problem, but if you don't have some sort of a staging warehouse someplace, then that's problematic, because then you don't have a way to address those issues when products start selling faster than you expected or whatever, and you don't have any backup.

Speaker 3:

It's got to come from China, because if it's coming from China, well, even if it's coming from a US manufacturer. But let's face it, most of us, even with the tariffs, we're still going to be shipping from China for a while. So if you're coming from China, you've got production time, maybe even lead time before production time. Then, once the production time is finished, then you got to wait for a ship, then you got to get on the ship, Then you got at least two weeks to get over to the US. You got to get through the port. You might have two, three, four weeks to get into Amazon, because sometimes it's not that fast. So just imagine how much time, how much leeway you've got there that you could be out of stock for. You need to have that extra inventory in the States.

Speaker 3:

And I guess that's where I would come back to the thing that I've always said and it's probably the only thing that has kept our business afloat as a result of the mistake that happened for us with the agency that we hired and they messed up our inventory and then the tariffs hit and so it just became this massive snowball.

Speaker 3:

We would for sure be out of business if our margins weren't relatively good.

Speaker 3:

Now our margins aren't nearly as good as they used to be, you know, with Chinese sellers coming in and Amazon ads, fees going up and all that sort of thing, but they're still decent and so that's the only thing that kept us, you know, in a position where we're going to be able to weather the storm.

Speaker 3:

So, but if you keep your margins high enough, you have room to store extra inventory to be ready, like if you have a product that's selling well and you know that it's going well and there's no reason to assume that, as long as you keep doing the things the right way, that your sales aren't going to continue on that trajectory, then make sure you've got inventory ahead. You know, I would say make sure you have at least 90 days of inventory in the States. You know, you may not keep 90 days at Amazon, but I would keep 90 days of inventory in the States, maybe even a little more than that, you know. So you've got some extra leeway there to where you, when you order more product, you've got time, you know, before, before it gets there and gets in the Amazon.

Speaker 1:

Yeah, and I think that segues really well into you know, knowing your numbers. I know that's one thing that we talked about in kind of the fourth kind of deadly mistake that we see brands. See, Matt, I'm really curious you know, from your perspective, what are a couple of the biggest numbers that you feel like Amazon sellers should know on a regular basis?

Speaker 2:

Well, one of them I think that is a sneaky one If you're not paying a lot of attention to is our Amazon fees. I think there's a lot of ways. I mean, I have another example of a product that we did an analysis on and we're able to reduce fees by a couple of dollars just by folding the product and putting it into a vacuum sealed bag. So I think, paying attention to the tier that you're in, the size tier that you're in, and constantly keeping up to date on that, it was actually an Amazon remeasurement that increased our fees and it was the way that they remeasured. That was the reason for the increased fees. So I think paying attention to your Amazon fees is one of them that can be sneaky, but also just it's again, it's surprising to me as we talk to new brand owners and even seasoned brand owners that that don't really understand the their profitability on Amazon. You know it's easy to calculate your ACOS and it's easy to calculate fees onceOS and it's easy to calculate fees once they're set in stone, but there's so many other fees involved that I think that most Amazon brand owners don't take into account or at least aren't looking at them on a regular basis.

Speaker 2:

As we went through the process with tariffs and that kind of stuff.

Speaker 2:

I think one of the things that I marked down on my task list to do on a more regular basis was have conversations with our manufacturers and, whether it be can we get better terms or we found another manufacturer as we were trying to find a backup that had a little bit better pricing.

Speaker 2:

I think constantly looking at and optimizing your supply chain and asking manufacturers I mean a lot of sellers that we talked to haven't negotiated with their manufacturers since they found them on Alibaba two and a half years ago and there's just a lot of money that's being left on the table. But I think, overall, really understanding all of the fees that go into selling on Amazon the new inbound placement fees and things like that that happen all the time I mean Amazon's changing things so frequently that paying attention to your numbers on a very regular basis like you know most other types of businesses, you know six every six months or once a year, but I think on Amazon, I think it's important to to be calculating your contribution margin and your profitability on even a monthly basis to make sure that things are in line. It's just you have to pay attention to them more frequently because of how frequently Amazon changes.

Speaker 3:

In my opinion, yeah, I think that's a fair point is that the Amazon business is very different in that regard, because you are at Amazon's mercy on a lot of fronts. You're advertising the fulfillment fees you know. I mean storage fees, placement fees, all of those various areas where Amazon is making, you know, money. In fact, I was calculating it today and I just it didn't occur to me previously, which amazes me, but I'm pretty sure Amazon's making more money per sale than I'm making per sale. So that's, that was actually a little bit demoralizing, but but but you, you know, you need to know the numbers, like, for instance, I know, before we started the call, you know the the one that that, john, you were mentioning was was your, your cogs and keeping tabs on that, because obviously tariffs come into play. That's part of your cogs, landed cogs. What are the fees of sea containers? Because running a 40-foot container, even just in a normal year, those numbers can run from $2,500 for a 40-foot up to $5,000 or $6,000 for a 40-foot, depending on what time of year you're trying to ship, and that obviously is part of your landed COGS. And for some products the freight might be one of the largest expenses. Maybe the product itself is fairly inexpensive to produce, but maybe it's large in volume, say, so it takes up a lot of space in a container on a per unit basis, and so in that case your international shipping costs and maybe even your domestic inbound shipping costs can be one of the larger expenses. So if you're not paying attention to the fluctuations in that, if you calculated your costs in, say, january and then you don't even look at those again until June, there's a good chance that those costs are way different now than they were in January. And if you're not accounting for that, you could technically be selling your product at a loss and not even know, especially if your margins are tight, and in some markets it's hard to have a wide margin. So just really knowing those numbers and calculating them regularly, actually taking the time to better understand what those numbers are and how they should be calculated. I think it's not uncommon for sellers to have a misunderstanding about what an actual say what your COGS is. They'd be like oh yeah, well, my manufacturing costs right. Well, yeah, but okay, but you still got to pay to get it here and you got to pay the tariff and you got to pay domestic, you know, to get it in and maybe you got to pay inbound placement fees to get into Amazon and all of those things add up to where maybe you got a $3 item, but by the time you get it to Amazon it's a $5 item.

Speaker 3:

You know CM2, cm3 to get an idea for how healthy your business is. Like Matt mentioned early on in this conversation that you know you should really be, even if you're not thinking about an exit, right, you know within the next year or two, right, you should be building your business in such a way that if that opportunity arises, you're ready for it. Right, or if at some point you decide that it's time, you're ready for it. And one of those things is you know the health of your business and anybody who's purchasing your business. They're not just going to be looking at EBITDA Like. They're going to pay attention to what's your CM1, what's your CM2, what's your CM3. You know, are you hitting the targets that you probably should be hitting? You know in terms of benchmarks.

Speaker 3:

So if you don't know what those are, what those contribution margins are, first look up the definition of those and what expenses are calculated in each one of those and then kind of ask you know Chad, gbt or something like okay, what are some good benchmark numbers that I should be shooting for? Because one of the things that it does for you is it gives you a better target for where to start trying to save money. Because if your CM1 looks good but your CM2 looks bad, well then your CM3 is probably going to look bad too. But if the only thing you look at it is that end you know CM3 number, you might think, well, I've got to rein in my ad spend because that's where that's calculated is in your CM3. But maybe it's actually CM2. That's the problem. You know, and you've got room to move there, but you don't even know it because you're not looking at that number. So just be careful that you understand at each level of your business. You know what those numbers are and how you're comparing against good benchmarks.

Speaker 1:

Well, I think that's, you know, a good reason why this. Also, you know you need to take some time to think. Look at it at a SKU level as well and think about so this is something that we like to think about, especially for brands that have a number of SKUs is looking at, okay, what is the mission of that product? Some products are essentially what we call tripwire products or entry-level products, where it's just it's something that gets somebody in the brain, and I think probably the easiest example I can use this is you know, one of our clients has a, has a one pack, a three pack and a 10 pack of you know these. You know decorative post caps that they use for decks.

Speaker 1:

Well, okay, somebody, you know, obviously they get a lot more clicks and you know a lot more sales on a one pack because the price is a lot lower. But usually somebody comes in they're not going to. You know, it's pretty rare that somebody is like, oh, I just need one of these. They usually need, you know, somewhere between five to 15 of them. And so you know, if you start looking at that kind of tripwire product, you may break even on that tripwire product.

Speaker 1:

But then when you start looking at hey, I'm making really good margins on my 10 pack because I have an optimized you know that bigger size for a much higher profit margin, then you know you really have to look at what's the mission of each one of those products and advertise accordingly.

Speaker 1:

Because we might look at you know success for that tripwire product of being breakeven, whereas you know for your more expensive products where you really want to drive margin with them, you may want to see. You know for your more expensive products, where you really want to drive margin with them, you may want to see. You know 20, 30, 40 percent margin on that product and you're very selective about what that ad strategy would look like. So I think that's why it's really important to look at, to know your numbers, not only from you know big picture, company wise, but then also looking at that even at the skew level. Let's say, you know what is the mission of the SKU in my business. Sometimes that also means you look at it and say, hmm, the SKU is not doing its job or it's upside down and it might be time for us to retire that SKU.

Speaker 3:

Or it might be time to just change the mission of the SKU. But I think that's a really important point though is recognizing what is the mission of the SKU, you know. But I think that's a really important point though is recognizing what is the mission of the SKU. I think it's easy, especially for sellers early on, to assume that the that the mission, and I did that, you know. I'm like, just being honest, you know, like I did that for a long time, you know, not really recognizing that each product in my line had a different mission and could have a different mission other than it should have a big profit, you know. And if it doesn't have a big profit, well then maybe I need to stop selling it. Well, not necessarily, you know, like maybe it just needs a different mission and maybe it would really perform extremely well, you know, as a as a loss leader kind of a product or a tripwire product. You know it's not performing well as a profitability driver, but it may serve another purpose and maybe maybe you can repurpose it in that way.

Speaker 1:

Yeah. So, moving on to our last of the five kind of deadly mistakes on Amazon is not having an after-purchase program, and I think this is one that we've talked about quite a bit. In fact, we even put effort into and we built a free course that we offer for this because we think it's so important. When you look at, yes, there's a lot of things that I like about Amazon in the sense of I think, if you're under $10 million a year in revenue as a brand, I think Amazon is still a great place to be in the sense of over half the e-commerce transactions happen there. When you look at Amazon, 10% to 20% conversion rates are very common and possible, whereas if you look at a website, they might be 1% to 2%, and so there's a lot of traffic and Amazon has done a lot of good things in order to obviously make those transactions as easy as possible and to help brands At the same time.

Speaker 1:

We've talked about a little bit already in this episode and I think, just overall, part of our mission of Brand Fortress is, yes, amazon is a great place for growth. It still is in 2025. That said, you never want to have all your eggs in one basket and, at the end of the day, you want to be the person that has control over your brand, and that really means having a way to contact your customers outside of Amazon if they decide to shut down your account for any reason in the future. So that's the one that I think is really important, that I know we've all kind of talked offline about Anything else that, matt, that you want to add to that.

Speaker 2:

We just got off a phone call just a couple of days ago with a very high level seller very successful. He's in a high level mastermind with me. He has a product that is consumable and people repurchase on a regular basis and we offered him a partnership to where we would offer his product to the audience of a different brand and then at the end of it, give him the emails from the partnership every email that opted in and got his product for free. We would give him the email address. And I was so surprised to hear that he didn't even really have any sort of post-purchase program for his products. I mean, his brand is the exact type of brand that you would want this type of an audience for in order to leverage. It's one that people have to go back and repurchase and it's the type of brand and the type of category that people want to be loyal to a brand.

Speaker 2:

And he didn't have any sort of process in place and it was very surprising and it re-solidified in my mind how important of a topic this is. Even though in this podcast we harp on it over and over again, there are still a lot of sellers out there who aren't putting an effort into it and it really doesn't require that much work. It does require some upfront work, but the benefits I mean I feel like I'd be beating a dead horse and when we talk about the benefits of having this audience, but we just experienced a guy who needs one desperately, who is experienced of enough of a seller to know that he needs one, but didn't really have anything in place.

Speaker 3:

Well, and I think again, a lot of it comes back to you know, there's very much a fear factor around that. A lot of sellers are afraid of what Amazon might do if they have some sort of post-purchase process. Are they going to find?

Speaker 1:

out about it. Are they going to like?

Speaker 3:

it, and, in fairness, if you're a fairly large brand that's making some really good money on Amazon, then you have a lot to lose, right? I mean, if Amazon decides that they don't like your post-purchase. I think the key there, though, is what you should be more afraid of is the possibility that Amazon finds something else in your business that they don't like, or some competitor files some claim against you. That may be completely bogus, but all of a sudden turns your account off at the drop of a hat, and we have all heard horror stories of companies that were $5, $10, $20 million plus, companies that got shut down overnight, and it took months for them to reopen that account and get it running again. What do you do in that situation if you don't have a post-purchase process and you don't have a list?

Speaker 3:

When this mistake happened with this agency over our inventory and the tariff thing came in, and I was looking at our numbers and realizing there was a very real possibility, and, I'll be frank, that possibility hasn't completely been resolved. It's still possible. This goes sideways, but I think we're in a much better position, but I was really nervous that our brand might fall, that we might go bankrupt, but here's the thing. I have 45,000 people on an email list that trust me and I can email them anytime I want and sell them anything I want, reasonably, and if they can use it, they would buy it because they trust me. So I could literally start a new brand overnight and it wouldn't take a massive amount of capital because I already have an audience to sell to.

Speaker 3:

Now maybe I'm not going to immediately build a business that is the same size as what I have now, you know, in the same volume of sale, but it would certainly be enough that I can make a good living on it, and that honestly, gave me a lot of comfort knowing that okay, yeah, this thing could go belly up, but I have the skills that I have and I also have this list that I could go back to and I know they would buy from me, you know, and, and so that's. There's just a lot of comfort in that. And if you don't have that, I'm telling you, man, like you're, you're in a space where the waters are rough and you might not even know it.

Speaker 1:

Yeah Well, I think again for listeners out there, kind of these five deadly sins. Just going through them again on Amazon is changing your brand name and all the pain that's involved in that mismanaging reviews, going out of stock, not knowing your numbers and then not having an after-purchase program. The nice thing and I'll put a shameless plug in here is that we offer an after-purchase program completely for free. So if you don't have one and you're like, hey, I don't know how to start one, I mean we really run through everything from how to create that offer without violating Amazon's terms of service to how do I start building that email list? And I think a lot of brands when they start out.

Speaker 1:

Yeah, you may only get 5% of your customers to opt into your email list, but that's infinitely better than what you have if you don't have an after purchase program, which is zero. So I would just really encourage listeners out there, whether you're using our free course or you find something else out there. This is one of the ones that I feel like a lot of brands have slept on for way too long and I really would encourage you. Out of these five things, if one in particular speaks to you, that's probably the biggest one that would encourage listeners to take action on All right Well guys, fantastic episode and thank you everybody for listening and we'll see you next time.

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Jon Stojan

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Matt Atkins

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Mike Kaufman

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