Scaling Successfully On Amazon with Jason Magee

Protect your brand, product or invention from the hazards of consumer product launching and go from idea to product to big brand. With guidance from retail product design and development experts Tracy and Tom Hazard, get the insider secrets to put the right things in the right order with the right resources so you can out design, outsource and out profit your way to retail success.

Hey, product launchers, welcome back. I have got a really cool interview for you today. I've got Jason McGee from Take a Metrics. And if you haven't heard about Take a Metrics, we're going to get a whole earful today. Because you know what, this is the thing a lot of you keep expressing to me that, you know, you're doing stuff on Amazon. You're doing all, you're using all this data, you're doing ads, and you have no understanding of, like, is it good? Am I doing well? When should I change it out? So they've got tons of metrics built in here and this is big data use. So you know how I love about AI Big data. There's a lot of science here. So we're gonna get into a lot of cool, interesting technology and details. But this is really the whole point of this is really to help brands scale, right? Like, that's what we want for you. We want you to grow. I mean, you've got great products, right? That's what we've been working on and now we want it to scale. So I'm bringing on Jason McGee. He's the director of seller partnership and he is obsessed with helping you guys scale successfully on Amazon. That is what he's doing. He's working in building an ecosystem of best in class partners to help you as well, to bring people in. And so I am so excited to have him here and have us get to pick his brain together. So. Hey, Jason, thanks for joining us.

Tracy, thank you so much. I appreciate the intro and I love the enthusiasm. You're matching me on the enthusiasm perspective.

I know you're excited about this because I've talked to you before and I was like, wow, I kind of wish I was on Amazon doing this stuff right now.

Yeah, well, it's so funny because, like, that's the whole complimentary. I remember when you and I first chatted and I reached out to you and it was just light bulbs, right? I was like, oh, Tracy, that's right. You got to do this. And what do you do about that? And we were just throwing ideas back and forth and this is just a hot topic, right? I mean, Amazon in and of Itself is. But look, it's massive shift, right? It's. Everybody wants to not only grow a brand properly, they want to add new products, which is why you're in business. And on the advertising side, it's a pay to play marketplace now, so you need to advertise in order to be found, right? So you and I, we're just like, you know, two different, like, stepping stones to help brands scale properly. So it just makes logical sense that we talk and dive in before we really get into.

Because I want to get to know you better and I want everyone else to get to know you too. But before we get into that, it's like, I think that you've really hit on something. You said pay to play Marketplace. And the thing is, is that for quite a while here, we were really lucky that Amazon was not the full pay to play marketplace, because retail has always been pay to play. It's always been, how much will you pay for your shelf space? Will you clear out the previous person and help previous product that was there and help make the retailer whole? Like, there was always a pay to play aspect. I was going to be in the cat and the flyer that goes out at the every week in the weekly. So there was always that aspect before. And then digital marketing comes in and it got. Amazon was trying to grow their platform and they weren't really dialing in on that. But it's changed now and bigger brands are coming in and there's getting more competitive and now it really is what it used to be in retail before.

Yeah, it's interesting. So there's a few things, I mean, one, I'm an eternal optimist, so I'll talk about the bright side of that. But yeah, I mean, look, we are in Amazon and we're a good partner of theirs. They're probably going to not like me for saying this, but Amazon advertising is where Google was 15, 20 years ago. So I think that the difference though is obviously when it comes to the scale that the Internet gives you, and that in and of itself is great, but it's a little bit different and more niche than just getting an end cap and paying for the end cap in like a traditional retail here, it's like. Actually I was reading a really cool article in the Economist and it was the biggest resource is no longer oil. It's data.

It's data. Yes, absolutely.

And so what I love about it is like, if you can. One, it's two things. You have access to data, but that's only half of it. Right. You need to understand and then actually action it if you do it the right way and forget about us helping you, whatever. Like the folks who do it the right way, whether they do it manually or automatically, they're able to be in front of the end caps of the Internet and make sure it's in front of the folks that actually want to buy their solution, not just happen to be walking by. So the whole idea about targeting, obviously it's scary in a way. But at the same time too, as a consumer in a way, I want to make sure that things are in front of me that I want to buy. Advertising is just a very darn good way to do it. So whether we like it or not, it's here.

That's right. So have you ever been a seller before?

I have. So my previous role was a company called World first running partnerships in North America for them. Again, not like we actually World first that has provided like local bank account solutions for sellers. I bring that up because I was trying to create an ecosystem like look, we help international sellers but I need to understand every component of it. So I actually created and marketed and started my freeze dried probiotic dog treats on Amazon. So I went through the full process, I found a supplier. I didn't want to go, I wanted to stay in the US for the goods because it was freeze dried chicken for instance and probiotics. So I sourced here, I sourced my bags, did a whole process. So I've done end to end. I like to think when I talk about what we're doing, like I've done it, I've ran ads before, I get it. So yeah, short answer is yes, which.

Is really good because I think when you have knowledge of that. So like, I mean I always feel that that's my shortcoming is that while I have had products that are selling on Amazon and actually some that are there today, I've never personally managed my own account on Amazon. So I don't have that in depth knowledge which is why I bring all of you experts in. That's why I bring in Brenda Cremmy, Jenna and Jeff Lieber. And like I have these people who come in and help us out because I don't have that kind of experience. I want to make sure because I drop off after the first run of production and so it just, we have.

To pick it up, Somebody has to.

Pick it up from there.

So yeah, that's it. I mean obviously we'll get into who we are and what I specifically do at Take a Metrics, but that's it, it's like, I mean, maybe that's a good time to transition. I don't want to, you know.

No, no, no, that's absolutely it. But you have great deep knowledge of having done it hands on and you know how difficult it is. And I think that's what so many sellers are struggling with. It's like, where am I on the scope of things? And this is what I think I found really interesting about you guys at Take a Metric is that there is a way to play and you have what you call a flywheel, which I'll have you explain in a minute. But it's like it's not too soon to be playing with the data and I think that that's really like what I see as a big difference is when we're talking about the flyers and the end caps and doing all of those things. When we were doing this in retail, we had no data to work on.

No, no, that's. At least you can calculate a true roi, right? It's black and white, best as it can be. I mean it's definitely not like doing a radio ad. You can't really measure re. Right.

You guys have provide a lot more information and just being in the Amazon world and having digital marketing, I mean we have a lot more data than we used to when we used to recommend products to go onto the flyer that would. It's a circular. That's what they called it. The old Sunday circular, like was a big deal but you still didn't know was were people going to respond to that? Is this a good ad? You had no way to test it out. No AB testing, none of this stuff we could do. You do it, you pay all the money to be in it. It goes out and then sales boost. Like that's all you know. And so it's.

Yeah. You can't attribute it. It's hard to run a test because you don't have sort of any sort of no test group. Right. And like an intrigue. So. No, I get it. And like we always talk about. I mean, yeah, I mean I love talking to you too. And I was joking with you about like there's a shirt I should get you. It's called Data is my bacon. But yeah, I mean that's it. And I think for us, I love to obviously tell our CTO Tish Salvi, he always talks about, look, it's very complex in order to the mathematical computation it takes it to bid and do things right. And recognize this is one thing but the other thing too is you need to make a thousand or hundreds of thousands of tiny changes very quickly to know which one works, to keep doing those. And if you realize that something's not doing right, be able to pull it back really quickly. That's also important as well. It's like a billion tiny steps get you to where you want to go. But if you take one giant leap, I mean, you're risking it all because you may hit a point of no return.

Yeah. I mean, and this is the thing, especially when we're playing early on, we want to see returns really quickly. There's not a lot of time to get your launch out, to get things turning, to make these decisions and to know which ones to make. And so this is an astounding statistic. So I'm going to have you talk about the whole flywheel and all of that, but 34% improvement in revenue, you can achieve what you've achieved on average with your clients over the first 60 days of working with you. Yeah, that 34% is a big deal. And it'll be more. That's your average.

So that's it. I mean, and the other thing too is like that actually that statistic was ran from a recent cohort analysis of our clients, but that's also at a same consistent acos level. So the advertising cost of sale, meaning the dollars you're willing to give up for advertising sale, that means we're keeping those. You're not having to spend, you're spending more money necessarily because you're returning more, but you're not. Like, it's a profitable revenue growth. That's a thing too.

Yeah. You're not just throwing money in it and just getting the sales, which, when you go on that higher, as you put it, acos. Yeah. When you go on that higher sometimes, then you're overbidding it. That's what you know now.

That's exactly right. And I think for us too, it's like, that's also the context of that too, is those folks who are looking, they're like, hey, look, I like our acos where it's at. Let's just ramp up our sales in our organic revenue. Not just ad revenue, but organic revenue.

Yeah.

Some folks want to just lower their cost or make their ACOs and make it more profitable. That's a separate topic. But I think the one thing that's really important is people often lose sight within Amazon. Amazon touts acos, which is advertising cost of sale. The problem with that is that just your ad spend versus how much you're Spending on your ad revenue. The whole point of advertising isn't to increase ad revenue, it's to increase your organic revenue. So that kind of is what we talk about with Flywheel. It's like, look, the things that you're doing now, having a good product, sourcing it correctly, making sure that it's something that people want, and then you advertise appropriately. All these small things that you're doing or large things are helping you grow your brand and your total revenue, not just one specific component like ad revenue.

Right. So for those of you who are listening this and are not, in the blog post for this episode, in the blog post for this episode, we'll have a picture of what the Flywheel looks like. But we'll talk it through right now because, I mean, you guys kind of know what a Flywheel is, especially if you've been on Amazon because they're famous for their Flywheel. I love that you tied the two things together. Because you know what? Hey, we might as well talk just like our platform, right?

Yeah, that's exactly right. Yeah. So I guess just real quick, just about us, for those who don't know Teikametrics, we use big data to help sellers and brands optimize their business for profitability, predominantly on Amazon. So what we do is center on a few things before we even look at advertising, which we're very good at, automation and helping to increase your return there. We look at brands large or small. So I know for you, Tracy Francis, you talk to folks who are nascent or nascent, and they're Amazon only you have folks who are just massive brands. But Amazon only you have folks that are retailers that are now coming into Amazon late. I mean, it doesn't matter where you're coming from, whether you're an agency running this for clients or large brand or small brand. Everybody. I actually put a LinkedIn post about this. I think I tagged you in it. That my grandmother always told me we put our underwear on the same way. There is no difference between being a small brand and a large brand when it comes to the metrics.

Right?

What we do is we go look before we advertise, let's understand the actual metrics of your business. What's your gross profit as a company? We created that metric called tacos, which is total advertising cost of sale, which I only say this because it's so important, regardless if you're using extra in general, calculating it is how much are you spending on ads and what is it doing for your organic revenue so that that's it. So number one is, let's look at business metric. Number two is let's understand your product level profitability and then let's use that data to understand how you should be advertising as well. So that's why we're really obsessed with data here. I mean, that's why you and I, you know, got on so well.

Right, exactly.

Well.

And you know, because let's talk a little bit about product level profitability because, I mean, in a sense, a lot of people who are on this platform listening to us right now are in the development process of their product. And so I think that this is very deep understanding that needs to happen. So if you've never done this before, this may be new to you guys, but if you've done this before, you're going to hear and you're going to go, oh my gosh, that's what I did, that's what I should have done. So the thing happens is when we launch a product and we're new to a factory, they don't trust us yet. And so they don't always give us the very best pricing that it could be. Now I have an inside track. Most of the factories know me by reputation if they haven't worked with me before. And so typically I get a little bit of an edge, better for my clients. Like that's what we try to do. That's why we have a team on the ground, because. And so this just happened actually. So I have this, we have this big digital seller, like they probably sell more over their own website than they do on Amazon, but they sell on Amazon as well. And it is not, it's not memory cards, but it's basically like, you know, the ones you put in your phone.

I mean, you put in SIM card.

Or SIM cards and like that kind of thing. So they're basically like that storage devices, but they're the mini small ones. And I'm sourcing one for a new product. We're launching a new microphone that will have one built into it so you could just record straight into your microphone.

Oh wow.

And you'll just take out your SIM card and plug it in somewhere else and. Or download straight to your computer, right? So like it's going to be really easy. And so they were like. And so we benchmark them and said, what are you getting? Because you buy these things in bulk and you're doing this. What's your benchmark for this? And they gave us a number. And I said, oh wow, that's a lot higher than I expected it to be. This might change our cost of goods. Like you know, really let me think about should we bring in, should we have this native to it or not? Like it made me reconsider it. Then I get my factory price back and it is like half the price they told me they're buying. And so that's the benefit of having this like team because inland within China, when you're buying it from one factory is buying it and putting it in another product. Totally different prices than when you're buying it yourself from the US and they're jacking it up, to be honest with you. So yeah, there's a in China benefit where a lot of Chinese sellers are doing a lot better on pricing than you are because of that. And so but you can leverage that once you start selling, when you have throughput, when you have volume.

That's exactly right.

Now you can get there because now they want to just do more business with you.

Yeah, well it's so funny because you apply that not just a business in general but like even within advertising, like the goal of selling a few product. I think when I look at launching it and I did this with my brand initially it was like, alright, I know that I'm gonna order like very, very low MOQs just to like get a few products and just to test it.

Right.

I just had in the back of my mind at scale, if I'm running thousands or hundreds of thousands, what will my price point be? The goal right now isn't to be profitable, it's a product market fit and to prove that I can sell this thing. And if so, I already know. I'm already calculating my cost of goods at scale.

Did you hear the language product market fit? Do we not talk about that all the time here in product launch hazards? Right? Like those are exactly our words.

Yeah, well exactly. That's why you and I get on so well.

That's right, exactly.

So that's it. The important thing to think and I think it's really good. Like if you ask a lot of folks what their gross margin is or gross profit and how they even calculate it, they're probably going to give you a different answer. I think it's worth at least defining it as we see it and you might have a little bit of a different. Like I look at it, I look at gross profit on a product on Amazon and I think two things. You have two sets of costs. You have landed costs which is ordering your widgets, adding on whether how you shipped it and you get a per widget price on what that is to at least get it to the FBA Amazon center, for instance, then if you're shipping fba, you have Amazon's fees. So you have their commissions. They take their storage and fulfillment fees that pick back and ship. The other one that people don't include and it's actually taken out ahead of time as well, is their ad spend. So if you then take out all the Amazon fees and you have your Atlanta cost, you have your gross margin and your gross profit, then obviously you need to keep your lights on and run your business and put food on the table, et cetera. That's sort of a separate thing too. But like, that's the wiggle room you probably teach is like, hey, look, you need to make sure that you have enough to keep the lights on and wiggle room to run promos to actually scale this thing properly. I don't know if you see it that way, if you'd add anything in.

I do. And see, here's where I think I run into some controversy. The way I talk about it with direct sellers who they're like, oh, those Amazon fees are so high and the advertising fees. And they start talking about that and I look at them and I say, well, what about the people that you've had to bring on to be able to build this? What about the warehouse that you had to fund? I was like, I don't think that you really understand actually how cheap this is for you to be testing this out. It sounds like a lot of money because it's a percentage is big and it's a chunk going to them and not to you. But at the end of the day, I have people who are running direct sales model and they have a 1% profitable business. Why do that? Right?

I don't know if you run in this too, but we have a lot of sellers, large and small. They don't even know whether, like Alistair McLean Foreman, CEO of our company, he loves to tell this story, which is he was one of the first sellers on Amazon and he was you know, actually like a lot of, you know, very good companies that come from. He started this from his Harvard dorm room. He was selling like sunglasses. He was like one of the very large seller and one of the very first ones to sell on Amazon. He would walk around and be like, I'm a million dollar seller, I'm a million dollar. And then I know he sold his first company. He always goes, well, they really took it to me because they actually were asking me, like, how much money are you really taking home what is your profit? And he goes, light bulb went off because I don't know. And that's the thing is you can be like, what do they call them? Like the Amazon refresh button jockeys, where you're refreshing, seeing how big your sales are. But all really matters is whether you're making money or not, right?

And that's the way we try to look at it. We try to set you up for success in the future. Now sometimes, yes, when we're launching, we have to take a hit because we really have to make sure the product market fit is right. Because if it's not, we should just dump out of it now and not move forward. That's the most critical thing to do. And I don't mind breaking even. I don't want to lose money. I don't want my clients to lose money, but I want to break even in that stage, test it out. But I want to also know when I go in that my product can be priced successfully in the future. So I plan out those percentages and, and I plan them out for my clients so that they can either get bought out or get on the retail shelf. The metrics should be very similar. And that's how I look at it because there are a lot of metrics on, on the shelf where there's a lot of added costs that you have no idea about. The landing costs are higher because they charge you. Because when they look at landing, even though they might ship from China for you, like they'll pick it up at the port, but from there, they're going to take it from there, but they're already going to have factored in the landing costs that they have and their warehouse allocation. So they're already going to have an allocation on there. And if you think there's no ad costs, you've got to be kidding yourself because you have to pay share of shelf space and all the other stuff that you're right.

But I think one other thing too is like when we talk about, like, it's funny because you and I were talking about this soon when somebody comes to us and this is how we've evolved to our full flywheel solutions. Opposed to just being focused on ads only is like they come to us and the first question we ask is, hey, well, about your products is where are they in the life cycle? So are in like, if you look at like the. Wish I could show, I know this is going to be in a podcast. You can't see me doing the hand.

He's Moving his hand around.

Right. I'm going like a curve. So it's like you obviously have like launch phase, then you have like growth phase, then you have profitability phase and you have liquidation phase, like the life cycle of the product.

It's an S curve, basically.

Yeah, yeah. And so I think, like when you think about when you set your advertising budget and what you're willing to spend, you have to consider two things. What is your margin now and what growth phase are you. What phase are you in? So if you're at a launch phase, it's very realistic that you may lose money on advertising just because you're gaining market share. And if you know the product market fit there, it's like you just do a big push to actually get as much real estate as possible and start. That's how you get the flywheel started. Right. You just get the flywheel started and start spinning it faster. So a lot of hand gestures here. Yeah, but that's right.

So like watch the video.

Yeah, right. So once you know, you. It's worth it and like the product's doing well, you know, all right. Now people like, I don't have to. It's not launch phase anymore. We're now we're in growth, we're optimizing profitability. That's when you start dialing back your two things. You either dial like you refine how you advertise and then you start taking advantages of at scale, you're getting better margins, which allows you to change your price if you want. There's so many things that happen once you just get to that first. Right. Airplane taken off.

Yeah. Really setting yourselves up for an acquisition is a lot harder today. And that's what I'm all about here is let's build ourselves great product ip. Let's get it profitable, let's get it really ranking. Because when you're really ranking, you're churning. You're really doing all of those good things. That psychometric numbers and information that they're going to give you keeps you up there on that sales wheel. Right. So it's keeping you up in that positioning. So position is important, but margin and profitability is extremely important as well. And it's going to keep giving you indicators of am I getting the best price possible? Am I getting. Am I at the volume I need? You know, it's always going to be giving you back these numbers and information that's going to tell you whether or not you have a future acquirable brand.

Well, that's it. Like I talked To a lot of either brokers who buy and sell businesses, a lot of folks who sold businesses or bought every end of it. And you asked them, it's like, hey, how do you value a business? And they go, well, we look at a few things. Number one, is there true IP there? Am I actually buying ip? That's obviously what you're talking about here is creating good ip, Is it scalable? That's the other thing as well. And then another thing, there's obviously copious amounts of things to look at is are you profitable because they base evaluation based on your profitability run rate and your return, not your total revenue.

No.

So that's what they look at so well.

And most people, because their profitability rate is actually so low, they end up with a division of revenue rather than a multiplier of revenue. And that just sounds awful, right? Like who wants to close out your business like that? It just doesn't seem like, oh, all that effort was worth it.

Yeah, that's exactly right. You hit the nail on the head. But yeah, I mean, look, I think the beauty that we're talking about here is like there's something regardless how big or small, there's something you can do about it. And like that's the thing. It's like, look, it is what it is. We can obviously be upset about it and moan about the times and days of old or you can just evolve and just make it work. And that's, that's exactly what you do in your own business too, which I respect.

Let's have a process, let's have a team, let's have tools. And so let's talk a little bit more about how you guys develop this tool. So you alluded to your founder who is a Harvard grad and you have a team of science. I mean you've got a lot of tech people there. I mean, so tell me a little bit about the team.

Well, it's great and I'm so glad you mentioned that. Like, the reason why I was so attracted to join, I've known Alistair for years too is like when I asked him, hey, what are you guys really doing there? It was not about, hey, here's the solutions, like here, here are the people. So if you look at the people, one, a lot of folks from X, Google X, like Boston Consulting Group, ex, IBM, Watson, our chief data scientist is one of the world leading professors of econometrics at mit. These are the folks who are active in our business on a daily basis building it. That being said, I was attracted to the caliber of folks here as well. And then that just translates right into the product. I mean, you see just the presentation of it and you see how we carry ourselves as a brand. It's funny, I thought when I saw Telemetrics and the content they put in, I was like, this has to be like a 500 person company. I mean, we're growing. We're now by the time we, we're probably like mid-70s now, probably by the time this airs, will probably be 80 plus. I mean, but that's the thing is like we're managing over 5 billion of dollars of GMV of Amazon revenue. That's like 2 or 3% of Amazon's GMV. So that's it. It's like you have very smart people and access to a very rich data set that we're using for good. We're able to look at an individual seller and be like, hey, here's what you can do to perform better. Matter of fact, we're going to do it on your behalf. So you don't have to.

Yeah, so you don't have to. I'm all about the done for you systems here.

So that's the power of delegation and a team.

Right. Because you know what this is, the thing is, it's so hard to keep up. It is so hard to keep up on all the things we need to do. What's happening on Facebook, what's happening on Instagram and I mean, where we're marketing and where we're doing all of these things to begin with, it's hard. But to keep up with the what's going on on Amazon and what's working there, that's next to impossible to keep up and balance. All of the things that you have to have your hands in as running a product business. Right. I mean, there's a lot of balls in the air.

Yeah, it's. Right. It's like the whole difference between like working in your business instead of on your business, that's it. Like, that's why. That's the thing is as somebody who's done it myself, it's possible to do it yourself. And there are folks who do it very well and there's obviously folks who outsourced it to teams of people who want to do that. But I think for us, it's like we have such good relationship with Amazon. We're part of the developer council. Let us figure out what the latest and greatest is and what you should be doing about it. And that's why we're gonna keep evolving and doing what we're doing and the proof is in the pudding. Like the way we price what we do too is a percentage of advertising that we're managing for you. So at the end of the day, it's like, if we're doing a good job, you're gonna see it. If we're not, that's it. It's come and go as you please.

Well, and this is what I like. If your clients succeed, then you guys succeed. Like, it's not a, it's a win win for you.

It shares success. And that's what it comes down to. And yeah, I mean, and that's it. Like, people just want access to info. That's why they obviously come to you is like, we just want to know what's going on and we need to know the folks who, we need to be able to build trust. And that's it. It's like we call it human assisted SaaS. There's an opponent which is automation and doing it for you, but there's this human element. It's like, all right, well, you can never replace, like a lot of the intuition that comes from you and things. Like, it's just, you have to blend it together well.

And yeah, let's talk about that. Because there's a lot of fear around AI and big data and all of this stuff. And you know, the thing is, is that I am afraid that the US is actually a little behind. Like, I see a lot of AI stuff going around in the world that I'm, I'm impressed by. And I was like. And we're still having the debate about it where I think that there is human controls here. That's what you guys have going on. It's human inputs that is the most critical part. And it is the part that I criticize a lot in my column because I think there are a lot of companies that don't have the right diversity in terms of information on informing the AI. So where I think the opposite of what comes off of Amazon, because in retail we have a large portion, I say this about every single episode. About 86% of what we do at mass market retail is bought or influenced by women. So when we don't have women on our team or we don't have women's information in the data, we're getting false results. Right? We're not going to get good results. So that's where the sales itself, though, is indicative of the data. Right. It's the right demographic already. You're getting the input you need. So when we're Basing our decisions on pulling that and not on our gut reaction to that, we're actually going to be doing better because, hey, let's face it, and I'm going to say this as a woman, we don't know what they think. Right.

So.

But we can see the pattern of what they do. And if our machine is interpreting that and we're not going counter to that, we're not going to mess it up.

That's exactly right. And I think the beauty here is like Amazon does a good job to a certain extent of giving data. What they're really bad at, admittedly it's themselves, is making it easily digestible. So I think for us. Yeah, yeah. And they're in different places. So I think when we look at it like there's sort of two main sources of data that comes from Amazon. You have the Advertising API, then you have MWS API which includes a sales history conversion, all the historics on everything that you sell, inventory, et cetera.

So mws, we gotta define stuff here for those who are new. So we're talking merchants, something or other.

Yeah, I actually don't. This is gonna be embarrassing. I probably should know what that acronym is.

I don't. So I think it's probably like Merchant web services or something like that.

But I. Yeah, I'm sure, yeah. Mws, yeah, the Marketplace Web Services there.

Marketplace. Okay, so was that a merchant or marketplace? I knew it was gonna be.

So if you look at it. So that will allow you to have access to all the products you have listing all the parent child SKUs, how the inventory you're listing the impressions that clicks, all of your, your historic sales data is there. Then you have the Advertising API which pulls in anything related to advertising like your campaigns, your keywords, your sales, your impressions, etc. So the thing is, those systems don't really talk to each other. What a lot of people don't realize is that if you want to affect how you advertise, you can't do so without the context of understanding. If you adjust a price on your actual organic listed item or your conversion changes, that it actually should impact how you advertise. So what we do is we pull in both data sets. So we pull in all, both data sets, I think cross references, like 10 to 14 reports. And then we go, okay, well look like advertising, if you change or adjust your price, your cost of goods is the same. You adjust your price, your margin changes. That means if it goes up, you can afford more per click, or if it goes down, you can't you're going to pay for clicks you can't afford. You need to understand how that impacts it and a tool like ours actually does it for you. And again, I'm not trying to make this us as well. It's more just about like the data and like if you were doing this on your own, you can do it, but you need to be making hundreds of thousands of keyword changes. If you have hundreds of products, it's just ridiculous. Like you won't have time to do anything else.

Wow. Wow. So, yeah, that's. I mean, the idea of it is. And so this is the thing. So you're talking to designer here who actually has a spreadsheet mind, which is very rare. And so, like I have a data mine and I love data, but it's impossible for me to make the amount of decisions that I need to make on cost of goods and can we lower the price and can we get where we need to be and is this more profitable without pulling all that data together and thinking about that, you've got 14 to 15 different reports that you would have to run. Yeah, it would mire me down in being able to make decisions. At least when I work with Walmart or something like that, I'm going to get one report and I'm actually going to be able to see, see most of what I need. But if that's not coming from Amazon that way. Wow, you guys are. You're flying blind. And you.

Oh my God, I can't believe you said that. Like, Alistair, whenever we talk about, like presenting what flywheel is, we literally show a picture of a guy holding the steering wheel like this with, with a blindfold on. And it's. The sellers are flying blind.

They really are, and most people are. And they're also flying blind because they aren't experienced pilots. Right. So, like, they also don't even know what instruments they should be looking at even if they had the blindfold off. And that's what you're pointing out through this, you've got 14, 15 different instruments, different spreadsheets. Right. Different reports that you can run, but you don't know which ones affect each other and which ones to do. Then how are you going. You're going to spend all your time educating yourself in that and not being core product expert or brand expert and serving your customers and coming up with what's next. And that's the visionaries that we serve here at product launch houses, right? They care about their products, they care about the brand, they're growing and You've got to stay in that element and stay out of the things that you can't fix yourself. And that's where we call the right things in the right order with the right resources is what we're all about here. To try to try to bring that together for you.

That's incredible. That's so true. It's just like, do what you're good at, know what you're very good at, and make sure you focus on that. And then you hire a team around you, whether it be people or tools or a combination of both, to get the job done.

Right, Right. So the other thing that I think that I would love to see come out of the data is as you start to see this, though, you're going to start to understand what new products you should be developing, but also what you should be getting rid of, which I think people make this, we talked about this before, that people don't make a decision to get out of a product soon enough, their profitability starts to decline, there's more competition. You really can't improve your advertising and get that organic sales going anymore. You're at a plateau.

Well, let me ask you this. So that's really interesting. I know it's always contextual, but, like, what are some indicators that show you. Oh, no, like this might not be. I mean, is that it? Like the declining revenue declining and then I guess it's seeing what happens and understand why it's happening. Right. Are you declining because of entrance in the market or.

Yeah, I mean, usually it's a competitive flood that I see that happens most often. And it. And what happens is that when you don't have something extremely original, so like.

You'Re not true ip.

Yeah, it's true ip, but true ip, that matters to the market. Like you've got the feature that no one else can really have that really sets you apart and is the reason people are buying in your category and buying from you. Right. So that, you know, you must know that. And so when people are coming in with what is knockoffs, cheaper prices and all of those things, but they're not hitting that feature, I don't worry as much as long as you haven't seen a decline in your sales because of it. Right. And so that means you have to work a little harder at it. So that's the very first indicator for me in a marketplace is, wow, you've got a lot of competition and your features not standing out enough. I either pick that up, it's time to do something really original for you. Or move on.

Let me ask you. Sorry, I just have another question for you. So I know you typically stop at first run like you get the first run you stop. But obviously we always talk about the power of monitoring your reviews and your competitors reviews to do one of two things. Either optimize your listing because they are misusing your product or they're misrepresented in some house you can alter that or two, you find product features that you should be altering. So do you see that quite a bit. I don't know if you're necessarily reviewing.

I actually personally have two programs that I do. So I do. There's a brand strategy program that I do for someone who has a bigger, more cohesive brand. So it's different. When somebody launches a product, I'm going to stand, I'm going to hold hands all the way through the first run of the product because I want to make sure there is nothing goes wrong. And I also want to identify the cost reductions that could go from that point forward for them so that they can keep getting their cost down and keep getting the efficiency and volume as the volume goes up. So we identify that and we put a team in. I just don't personally follow it from that point forward.

Yeah, I mean that's just so powerful.

Yeah. On the brand strategy side, that's what you're right. Like those that have data make it a lot easier. But for those that have data, they think that they'll just go, okay, here I'm going to draw the line and I'm drawing a line for those that are listening, drawing a line and everything below this I'm just going to get rid of.

Yeah.

Actually the biggest mistake that I see being made because some products help you sell other products.

That's exactly right.

It's a comparison situation and it also a companion situation. So sometimes you have what we call lost leaders. They're making no money if you drew that line. But they're the reason people are coming into your brand and checking you out and then they're buying something better and more expensive. And that is really what's driving your business to profitability. So if you take out your loss later, now all of a sudden you lose the leading edge.

Yeah. And I guess a very, very basic example of it would be I worked with this brand, it's actually sweet. They sell a wine sopper for very cheap. But they actually, I think it's argon. They actually sell the argon. So it keeps your wine fresh.

Yep.

So this, they don't do this but that's an example where you could actually lose on selling on the cork because you're going to get renewing purchases of the Argon, for instance.

Right? Yeah. So this is where you have to really look at a brand as a whole. And. But not having enough data about the profitability of the brand, that's actually where it matters more, is this being profitable? Where is volume and sales driving, and where are products being sold together? And so when we take a look at the program and take a look at a brand as a whole, we look at that synergy between all the products, and then we look at the ones that need to. Definitely, because they're either they're draining you, they're costing you money. So we try to cut those. Of course, then we look at the ones that they might be on the edge of costing you money. But, hey, maybe if we got you a new source or we cleaned them up and made them fresh in terms of style, like, maybe we give them a new color or material or something like that, and now they'll be refreshing. People be more excited that it's new again. So we do that. So we call that cut clean. And then create. You have to create some original pieces, because if your goal is to sell your brand, you don't have to have every single product in your line be an original, but you've got to have some good core IP that's driving people to your brand. And that's where we point to.

I mean, I think about when I first got started, like, four or five years ago in the industry is like, anybody can just grab. It was all the rage about grabbing a spatula and just remaking or a silicone mat or whatever, or, like, gloves. And then I think the whole point was like, look, that's not a true brand. That's like what we call private label. So, like, when you actually look at a true brand, it's like, okay, well, like, the brand represents something, and you have multiple products underneath that brand that are very cohesive and frequently bought with, you know, or something like that. That's where I think people are really winning. Yes. And it's tough because, like, I don't want to be the Debbie Downer, which I'm an optimist, which is like, you know, I just get worried that, like, my challenge, I was like, if you're not really building a brand, I can understand why you're no longer getting the sales that you are, because you're just have a bunch of siloed products that have no relation to each Other. And that's just not sustainable.

Yeah. So this is where I see a lot of people cycling on their products. Another thing is, because you have so many products, if you're starting to look at the data that you're providing them on what's really turning, what ads are working, what keywords are working, you can dive into them with determining, wow, I'd love to do more products here. I'd love to do other things now, not direct competing, but using those keywords. They have companions to them. Right. They have other things that can go along with them. This can be a key indicator for where you should develop next. That's the question. I get the most from Amazon sellers. It's like, well, how do I decide what product? I was like, well, what's your brand? And they were like, well, I don't have one. I just have hundreds of products and they're all over the place.

Oh, man, that's tough to do. Wow.

I really don't know how to help you. Like, that's gonna stress me out because I don't know how to help you because I'm just gonna suggest a bunch of things and you're gonna go, I don't know. Yeah, don't know. It is. A shotgun approach is really what it is. And I'm not saying that it doesn't work, because it absolutely does. I see companies doing it left and right and making a ton of money on it. So it does work. But you have to know that when you look at it overall, you got. I met a guy who had 800 products and he was only 10% profitable. So I was like, wow, why are you still carrying all these products? So? Because they're already up there and they're already ranking like, well, why? Like, it's too much to manage.

Like, yeah, too much. And you're just spending money for no return. Even if you're breaking even, you're losing your time, you know, probably sleep, Right?

And so to me, if that's your approach, nobody cares that you have all these products. Like, they don't care that you have 800 in your store. So you might as well get rid of them and just keep them, the ones that are on the growth and the ones that are profitable and use the data to your advantage in that standpoint, because it just doesn't make sense. And then figure out, you bring in a bunch of new ones and then you decide which ones out of those you're going to call and move them up into the core program and be on a constant churn like that. When you're intentional about your brand, that's what we do. When you're intentional creating for a brand, it's a little bit different because you're making something that you know the market need is there and now you're going to test out. Am I right about that need?

Yeah. It's funny you mentioned that, because one of the things that we do on the product level section of what we do is we look at what's all the revenue you're making on these products and then what's your margin on these products? And you can quickly see, look, you're driving a lot of revenue, but it's not a profitable product. So immediately don't advertise that product, number one. Number two, you find these hidden gems, like, look, you have a great profit margin here, but you're not really generating sales. Why aren't you pushing this product? This is a much, much better one. And like, this could be the genesis of a brand because it has very good margins and it's something that's unique, folks. Like, I mean, that's. I bet that's probably the most fun part of your job, is when you get in there and you recognize these, like, aha.

Ooh, there's something here, right?

Yeah.

I mean, to me, actually, the easiest part is they're like, I've got a great product. It's really selling now. How can I make this really original and stand out? Like, that's easy, actually, for me to go look at it and go, here's how we can make it. Like, because of all the reviews, because most people don't understand how to interpret that into, I can build a feature on that, right? Yeah, that's the experience that I have in that. So I look at that and I'll go, yes, we can make this. It would improve the functionality. It's also going to be something that looks really cool, so you'll be able to highlight it. So it's going to stand out and be an easy feature to sell. This is where we should put your dollars in development. And now you're going to have something that stands out that nobody else is. There's a barrier to entry for them to create it, because you've got to have tooling or you've got to do something like that that creates that level where the sellers who don't want to work that hard won't work that hard to develop a product. Right?

Yeah, that's right, too. And I think that's the other thing is, like, and I know It's a sore subject, but, like, one, like, I've spent a lot of time in China, as you have too, and everybody, like, often complains like, yeah, there are folks everywhere in the world who may, like, hijack lessons, whatever. Like, I think there are a lot of folks who just bust their tail ends that work so hard. And that's a big thing, too. I don't want to, like, hard work is a foundation for anything. I just see a lot of folks going above and beyond doing things that a lot of other Amazon sellers won't do. Yeah, like, there's also like a pride component too. Is like, I have 800 SKUs. It's like, okay, like, it's not about how many SKUs you have. It's really about, like, let's look at.

The details here, right? Let's build a really profitable business and brand for yourself so you can go on and do something else with that money, right? Like, do something else with that. Whether it's something you want to do personally or get yourself acquired, whatever that might be. Like, that you should be making life better. And of course, you're improving lives by having great products out there. So, like, that's also a goal for me is to make sure that you're putting in really good products and really great quality product. And sales volume is usually a good indicator of that. I mean, people don't keep buying if something's not good.

No, that's exactly right. It's well said. No, it's true. But it's a lot of fun. At the end of the day, we get it right and like, yeah, it's just all about helping people. That's the biggest thing is, like, are we helping these folks scale? And like, for us, Amazon in and of itself is a high, relatively high churn business because you have a lot of sellers that come on and don't make it. So I think a churn is a big metric for us. It is like, yeah, when we have such a low rate, that shows us, like, look, it's a competitive industry. We're helping these sellers be successful and grow and scale. Like, that is the measure of, like, look, when we come down here, like, three, four, five years from now, like, when we look back, like, how many folks are still with us because it means they've been successful.

Well, I think that's really one last thing that I want to touch on before we go today, and that is that a lot of companies, especially the big data companies that are working on things and others, they're heading into working with the big brands that are emerging on the market because there's dollars there, right? Like I can charge them a bunch of money. And I just was interviewed the CEO of Indiegogo and they're doing that, they're working with Bose and GE and doing campaigns with them. And I was looking at that going, that's way more profitable for them. That's why they're going into that. And they just turned a profit. And so I started thinking about that it was, is it going to start harming the smaller campaigns?

Yeah.

So I asked him that question and he was very straightforward about it. And he said that they put in metrics and they put in things so that it can't balance out. And at the end of the day, GE's product isn't any good. It won't outrank someone who has done everything in the grassroots and didn't spend the dollars. And so that's really where I. You guys have really built your system so that it doesn't matter how big your brand is to do it.

No, you're right. And I think for us is like, we give brands and like we work with very large brands as well, but we give every brand, large or small, the opportunity to be on the same level and be profit. And the beauty here is like with Amazon becoming so much more sophisticated in how they advertise and you can like, in pulling in, like we obviously compete with everybody else, but we're also competing against your own self too. It's like, okay, well let's look at your own metrics and figure out what looks good for you because your methodology and your targets are going to be different than somebody else's. The challenge is yes, money does sort of reign supreme and folks with big budgets can obviously come in, but it's different. Like you can go in the old days, you can go and buy up every newspaper and buy up every ad base. But like now we have brands that are competing with Folgers Coffee and they're a small brand because they just done it the right way and they've created a sort of cult following there. Like we're helping those brands win. Like, yes, we have some of them. But if you look at the meat and potatoes are what makes up our company. It is these mid market SMB sellers who do have good brands. Because obviously typically folks with brands are more likely to advertise just because you're owning your own real estate. But that's it. I mean, we're just giving people, every company, large or small, the chance to be Successful in their own right.

And you know, early on in Amazon, the big brands were at a disadvantage because their organizations couldn't get with it to figure out they treated it as small time. They didn't look at that like a.

Wholesale channel instead of like.

That's right. So they like dumped product there. Like I can tell you the reason I was on Amazon so early because it was the products that they, they didn't want. Yeah. They didn't want on the shelf anymore.

They thought it was like a liquidation channel and. Absolutely not.

Exactly. And so I was like, my products are on Amazon. And I think it was like 2006, seven, like they were already running through there in their early test days. It was like closeout stuff from big brands. And so. But now they're starting to look at it as a sales channel and as important and as the place to be. And as they do that though, you still have the advantage here as small to mid sized brand.

I agree.

Their data, the way that they analyze things, their numbers don't mesh with what works today on Amazon.

They're not as nimble. If you grew up in Amazon as a company and like that's what you lived and breathed and that's been predominantly your biggest channel, which a lot of these growing brands are, you are in the driver's seat because you understand things that these, all these folks are gonna try and catch up with as well. Yeah, that's the other thing too is like you living your business, you're gonna get into the weeds and work at times that others won't and understand things at a deeper level than a lot of other just employees working out at a company would do. You know what I mean? That's just the way I look at it.

Yeah, yeah, absolutely. Well, and I really thank you guys for leveling the playing field as much as you can on the data side because it gets really overwhelming, especially for the creatives who are making great products, adding inventions into the world and bringing them out. But yet we don't always have that capability of being able to crunch those numbers and have visibility.

And that's what we're here for, is like, look, we have extremely powerful data pack and a very, very easy to use tool that anybody could rock and be successful with.

So product launchers. I have got links to everything right on the blog post@productlaunchhazards.com and that's hazards with two z's. And Jason has a direct link into their team there so that you can get all the information.

Yeah, yeah, we're also giving you guys, we're giving anybody productizers a free trial for 30 days as well. So I wanted to make sure you know that.

Yeah. So very cool, guys. So you can go in and check that out and sort of test it and see what you're seeing here, because.

I can tell you the proofs in the pudding.

For those of you who've been spreadsheeting it, you're gonna go, wow, this is not a spreadsheet. This is pretty. It's showing me metrics.

Yeah, yeah, yeah, absolutely. We like those aha moments. And you know what? We like to see what these folks are selling too. And we're like, man, this is awesome.

Yeah, exactly. Exactly. Thank you so much for coming on today, Jason.

Yeah, seriously, thank you. I really, really appreciate it. This has been awesome. I can't wait to chat with you again.

So, product launchers productlaunchhazards.com that's where the blog post will be. That's where the video will be if you want to watch that. And that's where we'll have some extra images from this episode. Until next time, thanks so much for joining us.

Thanks. Appreciate it.

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