What you’ll learn:
Traditional selling and distribution will never be the same, thanks to Amazon. Our guest, Brian Beck, explains how brands have a huge opportunity to capitalize off this massive marketplace. You won’t want to miss it.
About our guest:
Brian is an eCommerce industry pioneer with 20+ years of experience, including more than a decade as a hands-on, C-level executive at companies like Harbor Freight Tools and Pasun. He has repeatedly driven annual revenue growth rates in excess of 100% per year and has built digital commerce operations to hundreds of millions in sales. He’s also the author of ‘Billion Dollar B2B eCommerce’. Today, Brian serves as a trusted advisor to dozens of mid-markets and global B2B firms on eCommerce and Amazon strategy and is a regular speaker at the top industry conferences.
Key takeaways from this episode:
- Why all brands can (and should) capitalize on Amazon – 4:50
- Dealing with margin decline and how to stay on top of search results in a competitive marketplace – 9:22
- What makes the most sense for your brand: Seller Central or Vendor Central – 17:20
- The future of Seller Fulfilled Prime – 20:00
- Amazon’s biggest priority as a business that you always need to keep in mind – 21:27
- Deep dive into Reviews: how to generate them quickly (the right way) – 22:22
- Three steps to take to successfully sell on Amazon – 29:27
- Counterfeit companies and Amazon White Labeled Products: the advice you need to hear – 33:56
- How to handle the fake, negative reviews that are killing your product – 39:35
Announcer: Welcome to the Page One Podcast, a weekly podcast featuring a variety of guests and thought leaders on topics ranging from channel strategies, to tariffs, influencer marketing, best in class product launches. And all the details about how to accelerate your e-commerce sales with the big box retailers, or what we call r-commerce. Now here’s your host, Luke Peters.
Luke Peters: Thanks for joining us on the Page One Podcast. I’m your host, Luke Peters, this is the podcast where I bring you the best and brightest leaders to share in their consumer product knowledge. I’m the CEO and founder of NewAir Appliances where I cut my teeth selling products, and right now have started a company called Retail Band. Where I hope to bring those marketing and sales expertise to brands that are interested in growing their reach on Home Depot, Lowe’s, Wal-Mart, WayFair, and all of those B2B, big box retailers that we focus on. Today, I have Brian Beck, Brian Beck’s an Amazon expert and just a quick bio on Brian. Brian has 20 years of e-commerce experience, MBA from Rutgers, and he’s a partner in Enceiba, which I guess I’ll let Brian explain that a little bit more. He’s also the author of Billion Dollar B2B E-commerce. So, thanks for joining me today, Brian and great to have you here.
Brian Beck: Yeah, thanks again, I’m excited to be here and talk about all those things.
Luke Peters: Awesome.
Brian Beck: Let’s dive in.
Luke Peters: Okay, cool. Why don’t we start out with Enceiba, and just let’s learn a little bit about it. If you want to give a quick background on what the company does.
Brian Beck: Yeah, sure. So, as you mentioned, I’ve been in e commerce 20 years, and during the course of 20 years I’ve run e-commerce, and many different companies. Brands, retailers, and some B2B and, over the course of my career, I have ran Amazon programs, since the late 1990s at every one of those companies. It’s really incredible to me to watch firsthand what Amazon has done in terms of really their dominance, US and increasingly global e-commerce. When I had the opportunity a couple of years ago, to get more involved and start a business in the area of e- commerce with some partners. We really wanted to help brands and manufacturers to take advantage of that growth for themselves, we see that as a real opportunity for folks like that.
Brian Beck: We’ve built a whole team of folks to help with both the strategic aspects and then the execution of Amazon programs for brands. Myself and the rest of the team brings quite a bit of experience in building Amazon programs, and also thinking about it not just in the context of Amazon. But also the broader context of how they’re going to market, how they’re using e-commerce, what other channels We’re selling through it et cetera. So, we’re blessed to have a nice group of not only a team now, but also a nice group of clients that we’re working with, that are largely mid market and some larger product manufacturers. So hopefully that gave us a little bit of an overview there, does it?
Luke Peters: Yeah, that’s super helpful, how about the total number of team members so people can get a scope for how big the company is?
Brian Beck: Yeah. So we’re about 20 people now. And we’re just two and a half years old now. It’s growing quickly, myself and there’s several partners in the business and all partners are 20 plus year veterans of this field. We’re bringing a lot of experience, during 20 years you’ll learn a lot, what to do or what not, right?
Luke Peters: 100% and, we share a lot of similarities in the background, just because I’ve been working with Amazon along the way for many of those years, selling products into it. Definitely thrilled to have you on the show. And for the audience, one thing I just wanted to bring up is, a lot of the podcasts are going to be focused on those big box retailers. And that’s where retail band is able to help you guys grow your businesses on Home Depot and Wafer and all that. And I thought this episode was really, really interesting because Brian… Obviously everybody has to start with Amazon, or is focused on Amazon. And that’s why Brian’s going to bring a lot of his knowledge and can answer a lot of those questions and whatever your strategy might be as a consumer brand.
Luke Peters: Whether it’s reviews, a lot of those things you’re going to be putting those across all of your channels. I got some great questions here that’ll hopefully dive into the strategies and give the listeners some valuable insights.
Brian Beck: Yeah.
Luke Peters: That’s great, we have a background on the company, and it’s incredible. In a couple years, you’ve grown it to 20 heads, that’s great. And why don’t we start at the very beginning because pre call we were talking about what you guys do, and start first with Amazon strategy. And I thought, that’s an interesting question because I think one of the things you said is, “Hey, does a brand want to sell on Amazon to start with?” Right. So, why don’t you kind of walk me through that strategy and what brands should be thinking?
Brian Beck: Great question, look I do a lot of speaking at conferences and these types of things, webinars and podcasts about Amazon. And, one of the reasons we started the business. One of the most incredible facts regarding Amazon is the amount of search volume, it’s now starting there. And if you think about where we were even five years ago, where Google and retail sites were a primary place people went to search for products when they had product. Amazon is now responsible for close to 70% of product search, and I know that varies a bit by category and home furnishings in a Wayfair for example, it’s a lot of search. But overall, when you look industry wide, Amazon has just really taking in control of a lot of product searches, and as a result that challenges traditional notions and brand. And how you build a brand, how you retain loyalty, how people are finding product, and even your very relevancy.
Brian Beck: So, as you think about having a presence in places where the consumer is, right, it’s important for you to have some form of Amazon presence and strategy. And, for a brand or a branded product manufacturer our point of view, is that those companies really do need to have an Amazon presence. And frankly, what you’re doing with an Amazon presence is you are meeting the customer where they are. The consumer has more power than really ever before. In my book, I call it the age of commerce transparency, and the power shifted really away from marketers, and really to the hands of the buyer, whether you’re B2C or B2B, whatever you’re selling. As a brand to stay relevant, it’s important for you to have that presence.
Brian Beck: And I also argue that it if you’re differentiating, based on your product itself, right. Your product is what you’re best in the world at, as a product manufacturer, you really ought to be on Amazon. Because frankly, it’s just a shift of purchase preference, it’s search engine and purchasing transaction channel, right? So, if your product stands on its own, and the buyer understands that, “Hey, I got this product, this is a Newair product, and I recognize it as such.” Amazon is really facilitating transaction. Now, there’s some categories or products, are more commoditized, and the argument doesn’t hold up quite as much. But, if you’re a product manufacturer, we believe that you ought to be on Amazon and really controlling your destiny there, because of that search volume.
Brian Beck: And, if you’re in a different form of business, if you’re a retailer or distributor, or reseller, some type, you still have to be paying attention to Amazon. And I’d argue that you still need a presence there, at least with your private label products to understand and learn from what Amazon’s doing. And to retain your brand presence for your own company and what you do. There’s a mix of arguments for being on Amazon, and it kind of depends, what kind of business you are. But, certainly for branded product manufacturers in most categories, we believe there’s a very strong argument to the all in on Amazon. That makes sense Luke?
Luke Peters: It makes 100% sense, and I agree with those points there. And even just, I mean, a lot of times people will say Amazon, you have to think of it almost as like from an SEO perspective. They’re kind of the new Google, and if you’re not there, you’re going to lose a lot of eyeballs I think, that’s-
Brian Beck: Exactly.
Luke Peters: You I read into the lines. But, let me kind of pepper you with a couple of questions here.
Brian Beck: Sure.
Luke Peters: And I’m curious about these myself, by the way because we’re actively doing this, we’re selling our brands into these sites. So, one thing that I’ve noticed with Amazon… I mean, there’s a lot of things we can get into some of the counterfeits and some of those challenges. But let’s start with this one, because this is one where the margins with some of the things with AMS, it seems like they’re chipping into the retailer, or to the brand margins. I’ll ask that question, but also kind of before I get there, another challenge… And everything about Amazon, their size and the volume, it’s all there. So it’s all great, but the challenge is also, it’s really hard to stay at the top sometimes in any of the competitive categories.
Luke Peters: Because there’s so many different ways that people can come in from behind whether they want to overspend or dump on price, or Chinese factories themselves come in there. So, kind of retaining that top position has become harder and harder and harder. And so curious to your thoughts on those two questions about margin decline, and also retaining the top positions and how brands should think about that?
Brian Beck: Great questions Luke, it’s funny I like to say Amazon has the perfect business model.
Luke Peters: Yap.
Brian Beck: You think about it, I mean, gosh they’ve got the transaction, the search engine, they make profit on a variety of services around it. And now advertising they are the, I believe third largest advertising channel behind Google and Facebook now digitally in the US at least. And so, you list your product there amongst 600 million others close to that number though. And gosh, and you got to pay to make it visible, wow. So, margin erosion, hundred percent. This is something that we work with all the time, and it requires a level of management on the advertising side. That is approaching what Google is in terms of, it’s complexity and tightness of management is all about the data.
Brian Beck: And what you’re seeing is, to be effective in Amazon, you need more and more expertise more so than you are used to. And managing campaigns within Amazon, has become very much a science, and a skill set. And it’s one that, you know, we obviously know, because we hire people that have it and will develop it, and train people into doing it. And so retaining your visibility, in someways it’s like Google. I mean, it is you alluded to SEO earlier, which is Search Engine Optimization. You’ve got the same concepts in Amazon and that existed in Google for years, which is you know you’ve got paid marketing, you’ve got SEO or Search Engine Optimization, which is showing up in the searches naturally.
Brian Beck: And there’s a whole series of things that you would pull and push in order to do this and when you’re a new brand, what we’re seeing is the sandbox is longer. It takes longer to get yourself into a position where you are becoming visible on Amazon. You have to establish your foundation correctly, make sure your content is excellent, generate product reviews, and then use paid search as a way to get there. Sometimes we’ll work with our clients to… A lot of our clients will have multiple channels they sell through. So we’ll work with them to use some of those other channels to help drive up the initial visibility on Amazon. Including, using email outside of Amazon, to send people to Amazon to buy. Letting people know that the product is available on Amazon.
Brian Beck: Again, if folks know they’re more likely to purchase it, you need to really start that volume of reviews coming to your products is one of the most critical things you can get on Amazon, to help you with visibility. So there’s a variety of tactics, and it’s looking even beyond what Amazon offers you, in and of itself. Because, what we find is as you build volume and brand recognition across all of your channels, your Amazon sales will lift. I have a client for example, that lists products with QVC, they go on air with QVC. Whenever they go on air with QVC their Amazon sales spike. Why, because even though QVC is helping them obtain the sale, Amazon as a preferred transactional method for many people. And so, they go on Amazon and make the purchase, even though QVC aired the product. QVC doesn’t like that too much.
Luke Peters: I can see that.
Brian Beck: Yeah, but it speaks to the consumer preference, and in terms of transaction. Amazon’s at 100 million Prime members, 110 I think million prime members. So, it is a vehicle for that. We think about it inside of Amazon, but also outside of Amazon, does that makes sense?
Luke Peters: Total, it makes perfect sense. And, I guess just directly because… I mean, this could be a hard question to answer, but I guess in general, do you think that brands now are going to have to settle for less margin or let’s say compared to three, four years ago? are brands going to just have to reset things? And they’re going to have to say, “Okay, we’re going to have to kind of raise our selling price, and Bill.” I mean, I know they have to do this to an extent, but are they able to raise their selling price, build in the AMS and in the different cost to sell on the platform. And still end up with an equivalent margin to a couple years ago? Or do you think the overall trend is that the margin is going to continue to be squeezed to the end?
Brian Beck: Well, a couple of things, I think AMS and amazon, marketing, advertising, is going to continue to become more expensive. We saw that with Google 15 years ago, we could advertise on Google for the brands that I was running e-commerce for and we would get a nice return, a 10 to one return. In Amazon, some categories you can still do that, but in some it’s becoming increasingly difficult to get those kinds of returns. Many cases, in three to one sometimes less, it depends on the strength of your brand. I think to some degree margin erosion is somewhat inevitable. But I would tell you that, and this is the reason that we believe that many product manufacturers, really ultimately will manage their own sort of Amazon presence. Through what’s called a third party program, versus selling wholesale to Amazon.
Brian Beck: If you’re a product manufacturer, you maintain it by selling to the end buyer and the consumer, you maintain a tremendous amount of margin. And, typically in categories like apparel or footwear, where we do some work and even others in the B2B sides. Margins can be 60, 70, 80%, from retail down to your wholesale costs. There’s room to move there, and what’s what’s called a Third Party Marketplace Program, where you own the Amazon account, you’re getting the entire retail price. Minus of course of Amazon fees, but you’re getting the entire retail price. And, you also control the pricing, and so we see a lot of companies shifting their approach to selling on Amazon versus selling to Amazon as a wholesaler, which is called First Party or Vendor Central Selling.
Brian Beck: We believe that a lot of folks will want a branded product, manufacturers will end up there. Now if you’re a retailer, or reseller with 20 or 30 points of margin, it becomes much harder and in some cases, you’re not making anything. That’s why it’s more of an assortment question if you’re in that situation where you’re reselling products. What assortment is right for Amazon and it won’t be the entire catalog most likely, that makes sense?
Luke Peters: Yeah, and that’s helpful that you threw the margin percentages out there, because you’re absolutely right. If you have really, really thick margins, and you’re in 60 70%, then, because Seller Central via FBA can be pretty expensive. But if you’re starting with that amount of margin, then you’re going to be just fine. Let’s talk about a specific case, a lot of the listeners, I mean, my brand included they’re larger products. So, compact appliances, in this case we can do Seller Central, storage becomes very expensive. Vendor Central can make a lot more sense because they’re taken on the inventory but then of course, they can disrupt the market. Any thoughts on that, or how people should kind of weigh the two different sides?
Brian Beck: Great question, I talk about third party and of course there’s cases where using Fulfill by Amazon FBA, becomes untenable because of the shipping costs. And I think you’re describing it, right. So, what appliances are compact appliances, and I imagine your shipping costs are enormously high. There’s a couple of methods to look at there, one is of course Fulfill by Merchant, in which case you fulfill the product yourself, from your own stock and inventory. You control the retails if you’re doing the third party program and CPA or Seller Central, is all the same thing. You’re able to manage your retails, you don’t have the markdown risk that you have if Amazon takes ownership.
Brian Beck: But from a shipping perspective, you manage it on your own account, and you can charge for shipping on Amazon as well. But, we do see that the issue there is you’re not prime eligible, if you’re shipping in your own account in most cases, or sorry, from your facility. You’ll need to account for that and you might charge for shipping or you can potentially offer free shipping. The issue we see is that non prime eligible products, do not convert nearly as well as prime eligible products do. So, three to four times less than a prime eligible product as the equivalent.
Brian Beck: And so, one way to solve that is by looking at third party logistics providers that participate in Amazon. There’s a program called Seller Fulfilled Prime, which prime certifies warehouses, either your warehouse or third parties warehouse, to ship products with the prime badge. And there’s certain criteria that have to be met. In fact, that program is in a bit of flux right now. And it may not continue in it’s current state but there are third party warehouses available to do that sort of thing. We actually have clients that have certified their own warehouses as third party as a Seller Fulfilled Prime distribution centers. That’s another way to kind of get around that issue.
Luke Peters: Yeah, and tell me more. What do you know about that? Because that’s, near and dear to us in some of our listeners. What could going away with Seller Fulfilled Prime, is there something that they’ve announced?
Brian Beck: Well, not really, they’ve announced that it’s not currently accepting new application, right?
Luke Peters: Got it.
Brian Beck: But, under the covers what we believe is going on there, is that they’ve had some issues with sellers not meeting their customers expectations. On dropping the ball basically on prime, and one of the things that makes Amazon, characters really remains core to the business. Am amazed they’ve been able to stay this focused but honest, but it’s the focus on the customer and the customer experience and making sure that delivering for the customer. I raised that because when a program doesn’t meet the customers expectations, Amazon looks at other alternatives. They’re not afraid to fail, but they’re but they do react to what’s happening and reality.
Brian Beck: Our belief is that there’ll be a significant shift in the way that program is approached, and it may not continue in it’s current form. In fact, it’s likely that we’ll see something that’s more similar to Amazon deploying it’s own physical assets into warehouses, of third party sellers. To get closer to what’s happening, to mitigate the risk of that, if the program does continue in it’s current… It’ll probably in a different form, again Amazon will prioritize that customer experience above just about anything else at the company, because that’s what’s made them so successful.
Luke Peters: Yep. Makes a lot of sense, and thanks for the insights there. Because for the larger products, there’s a number of ways one can work with the 3PL that’s certified is seller fulfilled prime. They can convert their own warehouse and like you said, I guess maybe they’re not accepting new applications for that right now. Or there’s other partners that, I don’t even know the right way to describe them. But other companies that kind of have a reseller model with multiple warehouses throughout the country, kind of like a distributor I guess. Where you would get your product in, and then they would run the equivalent. They wouldn’t be FBA but your product would be prime, because they’d be in multiple locations. So, those are the options I guess for the larger products.
Brian Beck: That’s right, yeah.
Luke Peters: Cool. Okay. Let’s talk about reviews. Reviews is super important across all platforms, across the Wayfairs.
Brian Beck: Mm-hmm (affirmative).
Luke Peters: And the Walmart’s, but obviously it starts on Amazon. And a lot of folks have used say Vine or they’ll just drive reviews maybe when they launch a product. It might be friends and family, or it might just be driving volume on that product so that you get a lot of velocity on it. But, Amazon has kind of pulled back on ability to solicit reviews, right?
Brian Beck: Yeah.
Luke Peters: There’s been a lot of changes there.
Brian Beck: Yeah.
Luke Peters: Let’s do deep dive in reviews it would be curious to hear the different strategies, and how people should think about generating reviews quickly on products.
Brian Beck: So first and foremost, we believe that you need to be quote unquote, white hat with reviews with what is happening. It means that, you need to authentically generate reviews for real business buyers, and not try to gain the system. We see sometimes sellers will opportunistically try to generate reviews and you’ve even seen bad actors writing bad reviews on competing products. I mean, there’s some nasty stuff that happens on Amazon and it happened on some folks we’ve worked with. So there’s no reviews and the reason of that is there’s incentive, right. I mean, with reviews comes volume, comes rank, comes volume and so, you get bad actors in their, hiring people to write bad reviews on competitive products, write positive reviews on their products, and they shoot up for a while.
Brian Beck: Amazon, of course hates it, but they also make it very hard for companies to remove reviews from products or there’s a report abuse button, but that only does so much. Now, Amazon’s aware of this, this is a big PR issue for them. So, they do take action and they have taken action for some of our clients in the past, when there has been clear evidence to the effect. So all that said, let’s put the bad actors aside for now, the Amazon really has reduced the ability for you as a seller to solicit reviews from customers. Like recently they’ve turned off the ability to email customers to ask them for reviews.
Brian Beck: There’s a whole variety of things that… What they’re trying to do is really make sure that the review content is authentic, that it’s not gamed. It’s like the Google the old days where people used the game, the search engine algorithms to get higher rank. It’s the same idea. And people have taken advantage of it, and Amazon is very sensitive to it. So, what’s our advice? Well, take advantage of Amazon’s programs and we do this for our clients. We are going to take advantage of Vine and take advantage of the early reviewer program, which will get you your first five reviews and we pay a fee for it. Those are things that you want to be doing as a seller. But really these days we find it is about driving volume on your products, and driving authentic review from verified purchasers on Amazon.
Brian Beck: And the way to do that is kind of the things you’ve been talking about. I mean, great content to start, it’s about using Amazon’s marketing tools to drive volume on your product, but also looking outside of Amazon. And it maybe counterintuitive to a seller, but sending volumes on Amazon, if you have other selling channels. I was on the phone earlier today with a seller saying, “Gosh, I’ve got this big email list and I’ve got an e-commerce site, but I can’t get my Amazon review content up. I say what, why don’t you think about sending some of your customers hundreds of thousands of emails, let them know you are selling on Amazon.” And it may be something you do for a while to it help you drive up the review challenge and get the sales up.
Brian Beck: It’ll cost you more than it cost you to sell it on your own website, but guess what, once you’re there with Amazon, you’re going to start seeing some more volume come from not that email list but from other places the native organic traffic. It’s on Amazon looking for your product category. The challenge of product reviews today on Amazon, you have to think out of the box, in terms of generating it and don’t think black box, but big white, and target that way. Particularly if you’re a real brand and a real company, and not trying to short change the system. Don’t try to cheat it, it’ll end up biting you.
Luke Peters: Yeah, you don’t want to get your Amazon account turned off, and then-
Brian Beck: No, you don’t, that’s right.
Luke Peters: I’m with you a 100%. It’s interesting, I think they’ve made a couple changes recently and I just talked to two guys about this. One of them is successfully using Facebook ads, and driving sales on Amazon. Another one I talked to said that Amazon, maybe they’re in Beta or maybe they approved it for sure I guess on the seller side. Where you can now track the ROI, I’m not sure how this works, but you’re able to, I guess, drop the pixel somewhere in the backend of your Amazon account. Or just whatever marketing platform you’re using, but in this case Facebook, you’re able to now measure the ROI. And in some cases, I’m not kidding they were saying, they were getting higher ROI from some of that targeted Facebook advertising than they were from AMS, I thought that was really interesting.
Brian Beck: Well, I mean here’s the big difference, right? I advertised on Facebook and Google and now Amazon for years. I was in Google in social media advertising 10, 15 years ago, Facebook wasn’t around that long ago. But the point is that I’ve done a lot of advertising in those channels. And I will tell you that the structure, and the tools that Google and Facebook give you to as in advertise you to be effective go beyond what Amazon provides. So I’m not surprised hear that, look Amazon converts at an extremely high rate. A Prime member converts 70% of the time when they go to Amazon. 70%.
Luke Peters: That’s amazing.
Brian Beck: When I was running e-commerce at Pacific Sunwear or Harbor Freight Tools, or these different companies where we had conversion rates of two and three percent on our websites, not 70. Gosh, if I could target the traffic the way Facebook lets me or even Google to some degree, but then send them to a page that converts at 70%, that’s a recipe for success. I’m actually not surprised to hear you say that, and Amazon’s introducing tools that will allow the marketer to more effectively use data, as you were describing to make those marketing decisions. They’re still more closed and some of the other networks are as it relates to AMS transparency, but if you combine those things, gosh, you can really be effective. I think it’s on the marketer now to start using those tools and, using Amazon together with some of these other digital channels to really drive results. You got to think beyond Amazon.
Luke Peters: Yeah, and thanks for getting so deep on that Brian because this is the most interesting stuff to talk about, and I think the most useful. So, kind of on that, we’ve gone through the reviews and talked about different ways to utilize Amazon in different trends and diverse seller, all of those things. Let’s try to kind of narrow it down something really helpful for the listeners, here.
Brian Beck: Mm-hmm (affirmative).
Luke Peters: What are three specific areas or things they could do right away or big takeaways, if we just had to narrow it down to three items, you want to kind of point the listeners to, on Amazon to sell their products where would you go?
Brian Beck: Well, I would first make sure… I always like to remind people that the foundation is really important. So first and foremost, I would recommend that there are… This assumes you’re selling on Amazon, but they take a hard look at, is the foundation really, truly Solid? What’s your conversion rate on Amazon, if you’re a third party seller, you can see that. And depending on your price points, if you’re not in that kind of 10 15% range, and you’re at a modest price point, you guys might be a little differently place given your price points. But, you need to take a look at are you presenting your content in a way that really connects with the customer? Merchandise in the old days in Amazon you could put up products with very limited description and not compelling images, and not compelling titles, and get away with it versions.
Brian Beck: But the marketplace has gotten so competitive, it’s really agreeing those merchandising approaches, and really making sure your content is foundational there. You have to now stand out and be competitive. So first and foremost is looking at the foundation of how you’re speaking about your product and the content. And in the way you sort of print out your pages and just look at them on your screen against the competitors, against the top sellers. There’s tools you can implement to see how good your content is. Just take a look at those things and look at the foundation first. Number one is that, number two, I would suggest that you’ve got to be looking at all the new tools that Amazon provides you to sell. For example, Amazon Business, if you are selling products that a business might buy, Amazon Business is one of the best kept secrets in Amazon. In the sense that a lot of sellers don’t know it’s available to them, and it’s over 10 billion in sales now.
Brian Beck: If your products have a business purpose at all, you ought to be making sure you’re listing your product on Amazon Business. I think that’s an example of a tool that you want to make sure you’re using. Amazon does not shy about sharing these things once they’re out of Beta, and so making sure that you’re looking for those tools. And then third, I think you’ve got to be looking outside of Amazon as we’ve been talking about. I think you’ve got to be thinking about, how Amazon not just as Amazon but how does it fit into your overall marketing program your other marketplaces. To describe some of the ones that you guys work on.
Brian Beck: And how does it fit into that overall program and then really making sure you’re using your learnings across those different tools as well. I think it’s a broader context, I don’t think you can think about Amazon in a silo anymore. It’s got to be like my QVC example, or like we talked about with social media. It can be a transactional channel that’s spread by other methods. Even if it feels a bit not intuitive to use Amazon versus your own site so hopefully that makes sense.
Luke Peters: Yeah, those are great points, just because they’re not the typical ones that everybody talks about, so you gave something… All of the content, and getting reviews and all those things are table stakes, and those are important but I think, thinking about the overall strategy. And then talking about Amazon Business is a huge one. All the other retailers are trying to do the same thing, I mean, they’re not at the scale of Amazon. Wayfair for example has the same thing with the Wayfair Business and then Home Depot has their professional side and they’re trying to compete with people like Grainger. It’s a huge segment out there for all of them and kind of like you mentioned, a lot of people aren’t aware of it. It could be low hanging fruit for a lot of folks who are not currently participating there.
Brian Beck: Yep, absolutely.
Luke Peters: And then, I guess, just really quick and I’m always… You always have to come into these things with an optimistic viewpoint in the sense that, listen businesses there’s always going to be challenges. And like right now a lot of the challenges with Amazon or two of the big ones there’s so many with the reviews you brought up, that we could have done a whole episode on fake negative reviews.
Brian Beck: For sure.
Luke Peters: It’s a huge pain point. But let’s talk about Chinese companies coming directly, selling on Amazon and then the second part is Amazon white labeling or just Amazon just serving their own brand, and then placing that obviously at the top of the listing. So those are two challenging areas for certain product categories, I don’t know if you’ve run across that or if you have any thoughts on those?
Brian Beck: No, absolutely sure. So well take the second one first. Amazon has somewhere around 400… It might be more than that now, private label brands that they are either sourcing exclusively or have brought under their own brand name. For example, in the apparel category, they’ve got about 30 brand at this point, walk and roll bunch of others, we got Amazon Basics. And in the furniture category of course they’ve got several too, I think Stone and Beam I think is one of them something like that. What does that what does that mean? Well, you got to remember where Amazon is. I mean, they’re after making sure they’re delivering the best product to their customers and so for a seller, it gets back to from our point of view. What are you best in the world at? Are you truly investing in your product?
Brian Beck: And it’s amazing that if you look at Bezos, I studied the guy and I really admire what he’s built there. And he has quotes about A, the power has shifted, right, now it’s no longer about shouting about your product. It’s about marketing, it’s about the product or the service itself. So get down to the fact that… What differentiates your product, and focus on your product and if you’re doing a good job focusing on your product. And bringing value to the customer through your product, you’re going to be okay if your product is a commodity it becomes much more difficult. So, batteries or iPhone cable, there’s ways to differentiate those categories as well but it’s harder, right? Amazon, we believe will continue to invest in products where they can feel like they bring a better value to the customer than the market currently does.
Brian Beck: Again I would challenge it, I throw it back to the seller to say, “Are you looking at your product? Is that where your differentiation is? And if it then it better be something else.” whether that’s the service level behind it or something else but before that the product is going to need to stand out. I think you’re going to continue to see that, Amazon will position its products if it believes it’s products with the best value of the customer. They’re going to continue to promote their products in ways that may be uncomfortable for sellers on Amazon. And unfortunately, for the seller if they’re not focused on their product, Amazon may win that business. That’s kind of our point of view, we see that when the product is differentiated, like a lot of our clients products are, they stand on their own. And if we’re doing a good job with the foundations of blocking and tackling marketing and content, it will show up and people buy it, and then they’ll write great reviews about it.
Brian Beck: The second part of your question loop was around Chinese sellers selling directly on the Channel. Yes, this is an issue in the sense that, sometimes those products are fake or they’re counterfeits. There’s not an easy solve to this in the sense that if they are in fact fake or counterfeit products, Amazon’s aware of it. They know it’s an issue, in fact, you may have seen the recent Wall Street Journal story about it. I think it was the Wall Street Journal, they found something like 4,000 counterfeit products on Amazon.
Luke Peters: I remember hearing about that.
Brian Beck: Yeah, it’s an incredible story and look Amazon, they don’t want that, not that they don’t want Chinese sellers, that’s not the point, they don’t want counterfeit or dangerous products on their site. They’ve taken some steps to try to eliminate it, but it’s a gargantuan task, think about it 600 million products almost on Amazon. They’re taking steps, and we don’t know what all the steps are, but they’re taking steps to, address that. I would say that if there’s some recourse you have Amazon has reinforced it. Amazon Brand Registry program with some additional tools to allow brands to recourse if they in fact, feel like there’s some counterfeit happening on their product. So there’s some avenues in Amazon’s, there’s a lot of process attached to that.
Brian Beck: It sometimes can be frustrating but absolutely, it’s something that I think one estimate I saw, was something like 10% goods and items are Chinese sellers, selling directly. Again, nothing against China or the way that those products are, the rights to selling them et cetera. It’s more just the… And a lot of those products are not counterfeit, but there are destined to be a trend there. It’s something that I think we’re going to see a lot of additional noise about in the coming couple of years. And Amazon trying to address it more aggressively, that’s my point of view on it.
Luke Peters: Yeah, and that makes sense, and it’s important to talk about it here because it’s a huge conversation. And like you said, there’s no easy solve for it but, in any CEO groups or meetings and folks start talking about this. And there’s two parts to it, it could be someone’s factory and selling directly, and in that case, maybe that brand helped develop a product, or brought a product to life. And all of a sudden the factory just kind of goes right to it, and in that case, you just got to have a strong factory relationship. And there’s a few other things that a brands going to have to do. But I mean, I think it starts with really partnering and having that relationship with the factory.
Luke Peters: But, to the other point with the counterfeit product and I agree, I don’t know an easy fix there. I do know that, just back to the reviews when negative reviews are put in their Amazon isn’t always helpful. And because sometimes there’s not a way for them to know I guess.
Brian Beck: That’s right.
Luke Peters: Yeah. Sometimes products can be killed that way because not only is a negative review come in, but then these people that do it will find ways to up vote it. And sometimes it’s so obvious from a brand’s perspective that it’s a negative one.
Brian Beck: That’s right.
Luke Peters: I don’t know, in that case is there no other option but maybe to relaunch that product? Or are you guys able to kind of work your way around it?
Brian Beck: Yeah, well, we’ve had some cases where we’ve been able to help companies, with Amazon address some of that. And Amazon will protect the customer reviews, in almost all cases unless it’s something that can be very fully documented, as abuse. They, they have a pro review steps. In other words, they start with the assumption that reviews is good, we want reviews even if they’re negative we want reviews. In some cases, we’ve had some success in talking, if we can document a very good case with some folks in Amazon, if they sense some occasionally some removal. But it’s very, very hard to do so, you may be better off restarting the product with a new listing and watching what your competitors are doing? It takes a bit of detective work, to be quite honest with you, some of these bad actors are really quite sophisticated in how they do it and it’s a battle. There’s no easy solve for it, I wish there was there isn’t. They don’t even necessarily tie to how big a brand you are, they’re talking to some sizable companies that we worked with giving a resolution to those can be difficult.
Luke Peters: Okay, great. Yeah. I mean, that’s part of the challenge. I guess, there’s challenges and all business, but they’re just new ones. These are ones that people haven’t seen in the past and so, it’s just finding new ways to get through it.
Brian Beck: And, listen, I do think Amazon is aware of this. And they are taking steps that we although don’t know about to try to address these issues. And Amazon doesn’t want bad actors on the site. Ultimately, consumer trust is an inordinately important to them, and so anything that threatens that is something they’re paying attention to.
Luke Peters: Yeah. And I think… I forget who it was. It was target that posted this, that somebody, one of the big retailers, it might have been, I can’t remember if it was Target or Walmart. But, they made a post about the danger of Amazon’s Endless Aisle. It’s Amazon strength and a lot of these other retailers that kind of like what I mentioned earlier, they have a lot of gates up actually. It’s hard to get all the products up. And there’s a few more filters on the front end before product gets listed on the site. And I mean, it was just kind of a jab at Amazon, I think because some counterfeit products got found, it’s so easy to get stuff up.
Brian Beck: Yeah, I mean, there’s there’s pros and cons for Amazon’s business model because, the pro is the 600 million products, the 600 million products.
Luke Peters: Yeah, exactly. It goes both ways, I guess, listen.
Brian Beck: It’s right, yap.
Luke Peters: Thanks, Brian. This has been a really, really informative deep dive in Amazon. I know there’s a ton of useful, actionable items here. I just wanted to thank you for coming on the podcast today, and sharing all these details. And I guess before I let you go, you just want to let people know how they can get ahold of you if you want to share that information. And also anything about when your book launch?
Brian Beck: Oh, sure. Yeah. Thanks for that Luke. Right, if you’re interested in finding out more about Enceiba, you can go to Enceiba that’s E-N as in Nancy C-E-I-B as in boy A.com, Enceiba.com. You can also reach out to me at Brian@Enceiba.com I’ll be happy to talk to you, we offer a free 30 minute consultation on your Amazon presence, if you’re on Amazon today. Be happy to extend that to any of your podcast listeners. And the book boy, two and a half years of work man it’s been a labor of love. But it’s all about B2B e-commerce, including Amazon I’ve a whole chapter on Amazon in the book. Amazon Business and all the things they’re doing and then just how to optimize e-commerce for your business if you to sell to other businesses. And you can go to the website for the book. It’s called Billion Dollar B2B E-commerce, forwards Billion Dollar B2B E-commerce, you put a.com at the end. And you can sign up for registration of, it’s release, it’ll be out soon. Maybe by the time this podcast airs, you’ll be able to order it on Amazon.
Luke Peters: And there you go, your first point.
Brian Beck: Yap.
Luke Peters: Awesome. Well listen, I think I’m sure the books can be really successful because I can tell you have a ton of knowledge. I want to thank you again for joining me on the Page One Podcast. And also just want to thank everybody for listening. The podcast is obviously sponsored by Retail Band. And if you guys want to grow your Wayfair or Home Depot presence and alternatively or in addition if you want to work with us on influencer marketing. And help products launch quicker, get reviews, get collateral, YouTube videos. And all of those things are going to grow the brand, grow your products reach to the consumer, and they’re going to help on every channel, they’re going to help on your website. They’re going to help on Amazon, they’re going to help on all these other channels we’re talking about. And at the same time, we can help with the review strategy and so that’s what we do, at retail band. You can run over to RetailBand.com and learn more there. Thanks, Brian. It was a pleasure interviewing you and learning about all these things about Amazon and hope to stay in contact.
Brian Beck: Thank you Luke. Great being here.
Luke Peters: Okay, all right. Take care.
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