What you’ll learn:
CPG.IO is a one-stop-shop for eCommerce. The Amazon agency and eRetailer management firm does the distribution for direct to consumer shipping and product fulfillment. On today’s episode, CPG.IO founder and CEO John Holby gives us his best strategies for a ton of common brand issues online: omni-channel pricing, new product launches, digital marketing, and account management.
About our guest:
John Holby graduated Carthage collage majoring in MIS with a minor in Entrepreneurial Studies. Worked at the Mercantile Exchange before an 11-year career at CDW. Then, he started CPG.IO. Holby is a 39-year old Christian with two boys and a girl under the age of 10. He has a loving wonderful wife of 13 years. He loves to cook and spend time with friends and family.
Key takeaways from this episode:
- IO: the one-stop-shop for all thing’s eCommerce—2:45
- IO company stats (employee count, departments, etc.)—4:45
- Top 3 mistakes brands make on Amazon—7:17
- Amazon digital selling strategies for larger appliances and products—9:50
- Amazon’s internal strategies for staying competitive—10:40
- Step-by-step plan for a new product launch across eRetailers—12:55
- How to negotiate guaranteed minimal margin (GMM)—16:18
- How to negotiate fees and get the best terms—17:44
- How to sell overstock Amazon items—19:23
- Hacks to optimize Amazon product listings—22:20
- Should consumer product brands invest in ARA data?—24:10
- Top tools to improve Amazon sales—26:18
- How to manage Amazon Advertising Services (AMS), allowances, and other Amazon costs—27:17
- Omni-channel (Walmart, eBay, Target, Bed Bath & Beyond) pricing strategies—29:09
- The pros and cons of third-party advertising platforms to drive traffic to eRetailer product listings—32:20
- Holby’s biggest mistake and lesson as an entrepreneur—34:07
- Best tip for getting a shutdown account back online on Amazon—35:58
- Holby’s best habits as a successful businessowner—37:41
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 eCommerce sales with the big box retailers or what we call rCommerce. 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 consumer product sales and marketing strategies that will help you grow your business. I’m the CEO and founder of Newair Appliances where I cut my teeth selling products online and now I’ve started retail band where I help other brands succeed in product launches, influencer marketing, B2B online sales strategy, and so much more. And right now I’m offering a free evaluation of your online sales strategy. If you’re interested, find me on LinkedIn or email me at email@example.com. In case you’re curious what that might mean, we could look at your digital strategy, see if influencer marketing is an option for your product category, which it almost always is, and just take a look at a lot of other things that are happening on the digital side where you might need some help.
Luke Peters: In this episode, you’re going to learn from John Holby on how to win on Amazon, learn about new distribution option, product reviews. We’ll talk about maybe optimizing vendor central versus seller central and much more about Amazon from expert, John Holby. John graduated from Carthage College majoring in management of information systems with a minor in entrepreneurial studies. Worked at the Mercantile Exchange before an 11 year career at CDW and now is CEO and founder of CPG.IO. John is a 39 year old Christian with two boys and a girl under the age of 10. John, I’ve got you beat by the way. I’ll tell you more later. He’s got a loving, wonderful wife. He loves to cook and spend time with family and friends. John, thanks so much for joining me on the Page One Podcast.
John Holby: Thank you for having me, Luke.
Luke Peters: Cool. So you’ve got three under the age of 10, I’ve got six. Not all, only one under the age of 10 though. You have some busy years ahead of you.
John Holby: Yeah. You got your hands full.
Luke Peters: Yeah. Well, now they’re older so they’re more independent. But yeah, it’s a lot… The age of your kids, it’s a lot of fun. A lot of sports I’m sure and cool stuff like that.
John Holby: Definitely.
Luke Peters: Listen, thanks again, John, for joining. First off, why don’t you give the audience a quick introduction on your company. What do you guys do and how do you help brands?
John Holby: Great. Yeah, thank you. So company is CPG.IO. We’re based out here in Chicago, a little bit West of O’Hare Airport. We’ve been in business since 2012 and what we consider ourselves is a one-stop shop for eCommerce. We help brands with a CDC website and we help do the distribution for that, as well as work with Amazon and we work with brands, particularly in the CPG space, consumer packaged goods, and we help them with their one P strategy as well as their 3P strategy. So we work with Vendor Central, we work with Seller Fulfilled Prime, we work with, we call it Seller Central as well as we send a lot of their items to Amazon warehouses in FBA, which is on our dollar over to them.
John Holby: We help them across all that platform as well as we have a team of marketers here and we have a team of data people that go through each listing, make sure everything is optimized and then our company as itself is a platform. So when you work with CPGIO, we’re going to help you with all those things as well as introduce you to the omni-channel. We get our brands on other websites such as Walmart, Target, eBay. We also work with, just onboarded Macy’s, Bloomingdale’s, Bed Bath & Beyond. Help these brands whatever sites they want to be on, we’ll get them out there and we’ll do the right thing for them for their eCommerce strategy.
Luke Peters: Awesome. So why don’t we dive into a little bit about your company, John. How many total employees do you have?
John Holby: Right now we have a little bit over 70 employees, current time.
Luke Peters: That’s amazing growth since 2012. How does your sales team look? How many folks are on there and how are you guys doing? Is it outbound and inbound or how are you guys building the business so quickly?
John Holby: Yeah, so we’ve worked with some of the largest CPG brands in the industry. By blessing, there’s been a lot of word of mouth. I do have a sales team of two people and they’ve done a great job of going out and selling what we do when these brands hear about us, it’s a no brainer in the ways that we can help them. It doesn’t matter if they have what they would call an Amazon strategy. We can always take a look at their book of business and show them several different ways that we can help them grow sales.
Luke Peters: Before I move on about the company, tell me how that might look. Say a company is already doing good on Amazon, what are those additional ways that you’re able to help them?
John Holby: Yeah, very good. A typical company would most likely have a one P strategy with Amazon where they’re selling their top, let’s just say they have a catalog of 20 items. Amazon might be buying the top five items from them. The brand obviously wants to have their full catalog out there. So what we would do is we would say, Hey, you’re doing great with those five items. But one thing we can do with those items too is look, maybe that’s a one pack depending on the price and the item, not enough or not economical. So we’ll put together a three pack or we’ll put together a variety pack and that gives the consumer a better price point when you consider in shipping and whatnot.
John Holby: Then we will have there, let’s just say items six through 15 and those items they would sell quite a bit, but Amazon’s not buying them. So we’re going to take those and we’re going to do our FBA model and put their inventory in Amazon’s warehouse. And then we’re going to have an FBM strategy for their last five items where they might not be moving and we don’t want them sitting in Amazon’s warehouse. So we’ll keep them in our warehouse and when they’re ordered, we’ll ship them out of our warehouse.
Luke Peters: Great. That’s a helpful description right there. So back to the warehouse, how large is your warehouse? How big is the footprint?
John Holby: We actually, last month just closed on a seven year deal where we currently have 105,000 square feet. And in this deal, picked up another 44,000 square feet for 2020.
Luke Peters: Awesome. So about a hundred and…
John Holby: 50,000.
Luke Peters: That’s awesome. Very good. Congrats on that. Okay, cool. So for the audience in this episode, we’re going to focus on Amazon. John has a wide breadth of knowledge in all those categories that he talked about even with other retailers, but thought it would be helpful to dive deep into Amazon since obviously huge trend in monster in retail. So let’s start with Amazon or dig deeper into it here, John, and let’s start with what do you see as the top three mistakes that brands are making on Amazon?
John Holby: Some mistakes that I see is they’re just saying that we do business with Amazon and we’re happy with our one P strategy. They’re just happy with that and they don’t think that anyone can help them gain 3P strategy where there’s so many times brands come and they say, Hey, I’ve got these 3P sellers that are selling my product. I don’t know how they’re getting them, but I can see through my reports that they’re making up 100,000 up to, we’ve seen $17 million in 3P market that they’re not addressing. One way is we help them with that. Another way is that they don’t optimize their listing. One thing we do for brands, making sure the content is good, making sure the images are great. Adding things like enhanced brand content, adding multiple images. We can also put in videos.
John Holby: The third probably would be, they’re going on a strategy of Amazon where their one P strategy is whatever Amazon buys from them. So if you have seasonal items, for example, Amazon’s not going to necessarily, depending on your brand, pre-buy for your surge and sale. So we help brands and we see that strategy and we’re going to pre-buy before the season starts and make sure that no FBA warehouses are stocked and ready to go. And when we see a spike in sales, we’re also ready to help get that inventory back in there if there was an item they didn’t expect. That keeps the ASIN ranking high. When you go out of stock, the ASIN ranking drops and the momentum is gone. That’s another mistake I see.
Luke Peters: Yeah. And that last point is really excellent about the ASIN ranking and keeping product in stock. It’s so hard to do. We have seasonal product too, and sometimes at the end of the year you don’t want to order it. You want to wait until the following season. So it’s a tough decision that a lot of brands have to make. Then the other two comments, just to summarize, was literally just bad content and you guys obviously can help there. And then companies that only focus on one strategy, like a one P strategy instead of say combining that with the FBA option like you talked about. John, talking about FBA, what do brands do with larger products? Like for example, our products are a little larger and sometimes a lot larger and so FBA doesn’t make sense. Then I guess you just have to do Seller Fulfilled Prime or one of the onsite options. Or is there something that brands are missing with larger products in that they still could work well via FBA?
John Holby: Well, I think you hit it on the head hard. Larger items aren’t exactly something that Amazon wants to get into. You can see that in their strategy for what they buy in Vendor Central as well as when you send them big items, how they charge you and they hit you with the fees. But I do think you’re right in saying that as long as you’re working with a partner that’s is a Seller Fulfilled Prime warehouse, you’re still offering that same service and the customers are getting that prime feeling and knowing that they’re going to get it in two days. So I think that is a good strategy.
Luke Peters: This is a tough one, but I see this happening with Amazon. So I wanted to ask you about this, John. And that is, is Amazon trying to kill brand in a sense? They’re bringing everything in unbranded and there’s no loyalty on their search. I’m not trying to say it in a negative way, just what it seems. It seems like the old days of when Google was updating the algorithm all the time on SEO SERPs when they would just change all the time and it’s becoming that way for a lot of Amazon terms. Any thoughts on that? Because they’re becoming, I mean, I know they have the top brands on there, but it seems like they’re trying to move away from it just by some of the other indicators that I see.
John Holby: Yeah. Well, they are the 800 pound gorilla and you have to play by their rules. That is true. I think that they are a business and they’re trying to do the best that they can to make money and sometimes that means that they’re going to create some competition. But I think for what they are, they’re also still providing brands with a marketplace where millions upon millions of people are seeing their products. There’s definitely strategies when a product might have competition against Amazon from marketing and maybe even negative matching that they can use to stay relevant as well as when you start to see that Amazon is into that place. Maybe more of an omni-channel idea might be successful, maybe getting us some other marketplaces to diversify those sales.
Luke Peters: It makes a lot of sense.
John Holby: Then you would also become into, let Google be your guide and now maybe when you’re typing in I want to buy batteries, let’s just say, Amazon might be on there, but still will Walmart. And if your product’s on Walmart, people might have loyalty to that as well and you’ll pick up that sale versus them hopping over to Amazon and their branded battery being chosen.
Luke Peters: Yeah. So basically be diversified. You got to be smart and not over leveraged with Amazon. That makes plenty of sense. Talking about launching a product on Amazon, AMS is taking over a larger share. It seems like the first way and only way to get a new product up with some exposure on Amazon. Well, not the only, I guess you could tie it to another skew that’s doing really well. But I would like to hear your thoughts. If you guys are launching a new skew for a client, what are three or four steps on a standard product launch strategy? The product comes in, they have other existing skews, some might already be winning. Now they launch a new skew that’s got zero traffic, zero visibility and even zero reviews. We’d love to hear how you guys work through that challenge.
John Holby: Yeah, you are right. That is challenging. New products have opportunities though. So you can work off your existing ASIN strategy and Amazon is starting to crack down on this quite a bit where you would want to take your best moving items and you would also want to put your new items on that list thing via if you had a different flavor, a different color, something like that. You’d want to continue to work with that best ranked ASIN that you have and create a variation to keep that both high ranking and all the reviews are left in one spot.
John Holby: That even strengthens that ASIN quite a bit more. Then just again, going to your AMS strategy and trying to get that product launch, there’s other ways of even sampling or getting that item into customer’s hands so that they can leave reviews. Rebate key might be an option for that, but it is a challenge to get these items going, especially when there’s so many items in these marketplaces that. But yeah, we find that our brands are doing huge marketing pushes to get those items launched.
Luke Peters: Got it. So they’re spending dollars and they’re getting them ranked and then there may be dialing back the AMS later on?
John Holby: Yeah, definitely. We’ve got a marketing team here that’s going to take a look and take your strategy. What do you want to do upfront? It might cost you quite a bit for every sale that you work with. For example, we work with the Hershey’s Corporation and we work with, they call their garage, and we take brand new items that are just launching and we create a D to C site for them to drive traffic as well as put them on Amazon. They’re spending a ton of money up front and then we’re constantly monitoring how are the dollars being spent and let’s put them in the right place. We take a look at that and we start removing words that aren’t converting and we throw more money at places where it is converting.
Luke Peters: Cool. Makes sense. Interesting to hear that you said they’re cracking down on variations. Then the other thing is you mentioned, did you mention a review service there in your comments? What was the name of that and how does that work?
John Holby: It’s rebate key.
Luke Peters: Rebate key.
John Holby: Yeah, rebate key. It’s just a service that I personally use. And what it is, is a site that you can put products on and you’re going to offer a discount. And in that discount, you’re going to get a product, you’re going to put your order number into rebate key, you’re going to spend full price for the item as it is on Amazon. Once you get it, try it out, you then leave a review, you write back to rebate key. They’ve got an interface that you say, I left a review, and then at the end of the month they cut the check for the amount of money that the brand was willing to help PayPal.
Luke Peters: Wow. It sounds amazing. Okay, cool. We’ll put that in the show notes for the listeners out there, it’s called rebate key.
John Holby: Yes.
Luke Peters: I know there’s been a bunch of tools like that, but Amazon has gotten more and more difficult on reviews. So I completely understand what you just said. This is a great work around it, it sounds like. So thanks for that. So John, Amazon has been pushing GMM into their contracts a lot recently. Guaranteed minimum margin. Have you experienced that? And if so, what are your thoughts on this and how do you navigate or negotiate away from that?
John Holby: Yeah, great question. We actually had Nestle in here today and they were going over their Gerber line and we’re explaining some frustrations that they had with some of their lower price items and condemn crapping out. But the great part of having a partner like us is we can take that from a 3P perspective and we can put their items on Amazon any way that we want with our inventory and the prices that they want. And then Amazon’s going to get their 15% clip so they’re happy too.
Luke Peters: Got you. So you’re selling it actually under your account and under their account?
John Holby: That is correct. Yes, we have a store CPGIO and as well as we can manage your Amazon accounts as well.
Luke Peters: Okay, cool. So do you frequently manage other folks’ accounts more often? Is that more often the way it works or are you actually, is the bulk of the business you guys selling other people’s products through your own Amazon account?
John Holby: Several strategic reasons. We are managing many stores, but most of our sales is driven through our CPGIO store.
Luke Peters: Oh, got you. Okay, cool. That’s awesome. That’s a little bit different than actually what I thought at the beginning. So thanks for that. You’re still sticking with negotiating, and I understand that this is a sticky one and we can’t get into it, but if we can, Amazon’s always trying to increase their allowances every single year. Obviously it’s not totally sustainable, so it’s a back and forth and brands have to push back. Is there any negotiating tactics you can share with the audience on that, on how to work and get the best terms? Because at the end of the day, if we all just accepted some of these terms, companies just wouldn’t have enough margin. I’m just curious your thoughts on that because I think that’s coming up for everybody. Like in Q1, you get that we’re all looking forward to that email that we end up getting. And then anything else around that with GMM? I’m curious your feelings, thoughts and experience on that.
John Holby: Yeah, that’s another great question. We hear that from our customers that the fees are just going up and up. As we just came out of the Christmas season, they up fees on all items that are stored at Amazon. But as far as negotiating those terms, I feel you can get a little bit of wiggle room there to reduce those fees, but it is quite challenging. We’ve had our rates for several years and again, they try to crank them up and we try to do our best to negotiate those down. We’ve also had some companies that have come to us just due to the fact that their rates are just too high and they can’t sell on Amazon anymore and it’s not worth their time and effort.
Luke Peters: Wow.
John Holby: So you one option is, I don’t want to just keep plugging CPGIO, but work with a company like us that has better rates and we can get you your profits.
Luke Peters: Cool. Okay. Well, good to hear that. Tell me, so what do companies do when they have overstocked products? Listen, all of us product brands are going to be in that situation from one time or another. Is the Amazon in your experience a good place to move out? Overstocked inventory and just a little bit more detail on my end, it seems like it’s challenging because especially if that product, I mean, the product is going to be overstock for a reason probably because it’s not ranking.
Luke Peters: So if it’s not ranking, in order to move it out, you’re going to have to throw a bunch of AMS at it and it’s probably already going to be difficult to run a lightning deal or something because the price has probably already been compromised down in the past or compressed down. Amazon probably won’t buy it at a lightning deal. I know this is going to be a common thread and a common challenge that all product brands are going to have as far as moving out excess inventory and curious your thoughts on, is Amazon a good place or have you had success on any of the other channels that you work on?
John Holby: Yeah. Amazon does make it a little bit difficult to move out that inventory. As you can imagine, you’re not selling it because you’re probably not seeing it or you’re not… There’s other people a lot of times that we run into that somehow depending on the brand, depending on their strategy, somehow some of their product got out in the market at a discount. Some 3P sellers picked it up and now their price is cheaper than even they can sell it for. So that’s very frustrating for them. But when we start to get, like we work with consumer packaged good companies, items become short coated and sometimes it is hard to move it on Amazon. In our omni-channel platform, we have other spots like eBay and Groupon and we have a strategy and a partnership with a company called Slickdeals to where we create a rock bottom price, the lowest on the internet. And we have this community that drives sales to that listing and liquidate those items.
Luke Peters: Cool. Okay, that’s great. So eBay, Groupon, Slickdeals, but I know Slickdeals doesn’t always work that great, but it sounds like you’ve got the added benefit of having a community and pushing it up to the top of the page I’m sure. So that’s where it’s been beneficial. With those strategies, have you guys been able to move out large quantities of inventory? Has that worked for you or do usually these CPG companies have to go find an in-store partner for that?
John Holby: We’ve had very good success with moving products like that. We also have health companies like Optimum Nutrition and they’ve had a warehouse full of product that Walmart or Costco I believe, had a one and a half inch change in packaging. So they had some product that they originally built, Costco didn’t want it, so we helped them move that out and we did a combination of all of those things I’d mentioned before and helped them optimize their losses, I guess you would say.
Luke Peters: Yeah. That’s awesome. That’s awesome. Okay, cool. Moving on to listing hacks, I call it listing hacks, but I guess optimizing listings. At the very beginning you talked about poor content is one of the major things you see some brands missing on. At the same time, I’ve seen a big improvement in content on Amazon overall just because brands get it and they’re losing money if they don’t have good content and good titles and good images, but obviously still there’s room to move. That’s why you have these clients probably because you guys can offer better listings and images and strategy on SEO and ranking. But what are three listing hacks that are common that you guys have found success in? So when you take over a product, you do a couple of things to that product listing. What are the top three things that move the needle the most?
John Holby: One strategy on that is to take the best listing and continue to work on that listing. Add all your variations to that listing, that’s going to make it so that you’re merging your ASINs to that a ASIN, the ones that have a little bit less traffic, and that’s all going to collect on that one main ASIN. That’s one way to really, really promote it. On the backend, there’s a strategy of making sure that the terms that you have for that item are relevant and that are going to supplement your AMS strategy. Making sure that the words that you have on the back end, you can even put them negatively matching words for your items that it’s going to help in the search. Those would be two that I could think of offhand. They are going to help just drive the rank down.
Luke Peters: So on the last one, did you mean to make sure that the listing has the best keywords in the title? Or what specifically do you mean on that second comment there?
John Holby: Yes, the title is important, but there’s a way on the backend to add keywords.
Luke Peters: Okay, got it. How do you guys use ARA data, should brands buy it? Is it worth it? Some brands do get this for free, most don’t that I’m aware of at least. It can be quite expensive. And then the thing is, it’s a ton of data and sometimes you know what happens with data overload. It’s really hard to actually implement something from the data overload. But I know ARA provides a really amazing backend data on Amazon and for those that are buying it, sometimes they might be wondering, Hey, am I getting the most out of this and is my team getting the most out of it? Just curious your thoughts on ARA data.
John Holby: Yeah. It’s not something that I feel strongly that it is important. I think we here do not use it. We very rarely use that data. We have a, I guess, a methodology of just going through listing and making them the best that they could be by going back to what we were saying before, optimizing your title for the A9 search algorithms, increasing enhanced brand content. You got your A plus content and so for us, we’ve got this 40, like a 40 point review of every single ASIN and we’re going to go through that and making sure that that listing is the best. You might have some competition out there, but most importantly, make sure that the things that you can control, you’ve made the dots. You’re adding videos, you’re adding the best images, you’re making sure that you’re driving your reviews up. All these ways are, I guess you would say, the most important to drive sales versus just the data that’s just going to tell you how big the market is and who your competition is. It’s the optimization, as we call it, of your ASIN.
Luke Peters: Yeah. Thanks for that answer. That puts a question mark and I really appreciate you being candid there on that, Hey, maybe ARA data may not be needed and that’s great. So those that are paying for that data can take a second look and ask the team and make sure the team is utilizing it. Because like as you mentioned, there’s a lot of data available for about Amazon for third party tools that are pennies on the dollar compared to what we’re paying for ARA and they automate a lot of the thinking as well. On that point actually, what are the top two or three Amazon tools that come to mind that you guys find useful?
John Holby: Tools that we use for Amazon, one would be Price Checker Two. Let’s see, another one that we use is Helium.
Luke Peters: Yep. That’s a good one.
John Holby: And Brand Registry, I feel it is also important. I know it’s not a tool, but making sure that you have brand registry, it’s helping you protect your listing as well as map enforcement if you want to go that route.
Luke Peters: Yep, for sure. Over the years, so AMS, we’ve seen AMS just get more and more competitive. It’s like how AdWords was, ROI was a lot bigger and easier at the beginning then it gets more competitive. Then the same thing with AMS is at least on my end. Do you see a continued narrowing of margins on Amazon in the future? Just overall brand net margins because of competition and increased AMS cost and increased allowances or is there a way that you guys are navigating around that, with more product development or some other way?
John Holby: Right. One way to address that is to make sure if you a brand that you know where your product is going. So if you’re in a situation where you don’t have problems with your pricing because you haven’t sold a bunch of out in the brick and mortar world and people are coming back and selling your items on Amazon and lowering your own prices, that’s good for you. But if you have a business that has close outs and those go out in the world and they drop and you’re buying at close out prices, you’re creating your own competition and as they see prices dropping, Amazon’s going to want to keep those lower prices. Then again, with the brand registry, you’re really helping yourself protect your items and the people that are selling on your ASIN. Those are two strong ways to keep your margins up. Amazon’s always going to ask for you to bring your prices down, they’re going to get recommended prices. I would just say, when they ask for those types of things, you just say no.
Luke Peters: Great answer. Just say no. We’re going back to Nancy Reagan here. But that’s the best answer. I think when Amazon started sending those things out, I remember that a couple of years ago, maybe more than a couple of years ago, but people were like, they didn’t know they could say no sometimes. And yeah, Amazon’s just going to ask. So they’re smart about that. But-
John Holby: Yeah, they play some other dirty tricks like scouting the internet for the lowest price and they will not put a buy box on that listing if there is a lower price on the internet.
Luke Peters: Yep. Even on skews that aren’t the same by the way. They’re looking at it and saying, Hey it’s probably the same skew even if you have the same channel strategy. So they’re getting pretty smart around that. John, speaking of channel strategy, you guys are working with these other channels and do you sometimes, would it be a good strategy for brands to create unique skews where not everybody is getting every skew? Amazon might get some and then some of the other partners might get other skews and so that there’s not this kind of competition to the bottom or do you feel that’s too difficult to do and cost too much inventory and it’s easier just everybody gets everything but then manage channel strategy a different way?
John Holby: I think you made a good point. It is a little tough for brands to do depending on their size. There’s obviously always what we call the club packs that the manufacturers make. But working with a company like us, that is what we call omni-channel across all these channels, we on all the major dotcoms. So we can take your strategy and implement that. Our software for example, would make sure that we have price parody and so all the channels that you’re on the same price and that helps people sleep at night. Again, knowing that they are giving Amazon the best price, but at the same time they’re also trying to protect their brick and mortar strategy by now making it so that Amazon can continue to lower their prices from you and ruin their brick and mortar strategy.
Luke Peters: Now, how are you doing that if Amazon’s got vendor inventory? I mean, that’s more in a 3P world where you’re controlling price. Because unless companies have a map policy, which most don’t, the prices are going to fluctuate around the internet. Or do you guys have a way of keeping the prices in line?
John Holby: I guess you would say every brand has a different strategy. Our software, for example, reprices every five minutes across 100,000 listings, but that’s not what everybody necessarily wants to be doing. Again, I feel that there’s a strong need for this 3P play because Amazon does have the ability to make whatever price they want go match Walmart’s price at a loss. Walmart sees that Amazon comes down and they drop again. And then it’s a race to the bottom sometimes. But we have a 3P strategy where we can work with a product that was at one time a one P listing. We set the price again, then price goes up and once the price goes up then they sometimes sell back to Amazon at the one P and we see that Amazon raises the price back up.
Luke Peters: Yep. Makes a lot of sense. I guess the major theme there is if you can, if your products of that size, control it with FBA or 3P, which as you mentioned and that’s part of your business model, a lot of companies are doing. Because they’re catching on to that and they’re getting a little bit more control over prices, harder to do when you have larger appliances like us. But anyways, that’s good answer. Thanks for that. We were talking about product launches earlier in Amazon and we’ve been talking about AMS a lot and I think Amazon has now launched, I think they had that for seller but now they have it for vendor, where you can track and they give attribution to third party advertising like for example Facebook and Google.
Luke Peters: I was just going to ask if you guys have utilized other third party ad platforms driving traffic to Amazon listings as a way of just simply gaining sales or maybe for product launches. And if so, if that’s been more successful than AMS, I did speak to a friend in the past and he had a lot of success with Facebook because he could hyper target and really drill down to certain cohort of audience and was more successful on Facebook targeting and driving that traffic to his listings than he was on his AMS for his Amazon account. So curious your thoughts and feelings.
John Holby: Yeah. I think that those, for example, Facebook and Instagram, Google, are all additional tools that you have at your disposal. We feel that it is productive and it be cheaper but it can be more expensive. Typically looking at a Facebook ad, you’ve got to create that ad, you’ve got some collateral that you’ve made with be it a video or whatnot that you had to spend money on. Then you got to put your money into that as well as the ad spend. Instagram the same, but it is a good way to additionally drive traffic. And I’m a big fan of diversity, so any way that you can get out there in this digital world is just, in our world, just another billboard to be on or another newspaper to be in and it’s all important but different brands use different strategies to do so.
Luke Peters: Great. John, thanks for all these answers. I think we got a wealth of knowledge there during this podcast specifically on Amazon. Hopefully it’s useful to you the audience who are listening. I’m trying to get really actionable items and I think you really hit a home run there. So thanks again for being so candid. I wanted to ask, what has been maybe your biggest mistake or biggest regret that you’ve had here in business? Maybe something that you learn from or something that the listeners can learn from?
John Holby: I would say in looking at our portal inside of Amazon, we had a few violations. We are one of the top sellers on Amazon. So we have an account manager and our account manager just told us, “Hey, any violations that you have in there, just answer them and don’t worry about it. As long as you’ve answered them and the cases are closed, you’re going to be just fine.” Well, this year we always do that and we do them in a timely matter. This year we got shut down for 11 days and we had a very hard time understanding why and we were putting together our action plans. They didn’t exactly hit what they would call their root causes. Even though I have an account manager helping me write these things and they just kept getting denied over and over leading to millions of dollars in lost sales.
John Holby: At the end of the day when we came up and got back on, we looked back and we’re like, how did this happen? We were told, don’t even worry about it. It’s just something that Amazon’s not really paying attention to. Come to find Amazon terms somewhere between 10,000 and 20,000 stores off for their violations and as we did take them seriously, apparently not serious enough. That would be one thing I would say next time, anytime these come in, we’re answering any violations with a clear action plan to stay on.
Luke Peters: Yeah. Wow, that’s amazing. So thanks for that lesson to all of us, I guess. And shut down for 11 days, that’s got to be a terrible feeling. I remember we actually got shut down right before Christmas, but this is like eight or nine years ago and I can’t even remember the reason. But we got back up in a day or two. It was a while ago. But yeah, that’s a tough situation. What did you find was most helpful for getting your account back up?
John Holby: Good question. First of all, my team here really understanding what we had been in violation and it took a few iterations of that. And how we did that is when your account is shut down, and I don’t have maybe the exact terminology or what it’s called, but when you’re shut down, there’s a little button there that says, click this button and someone from Amazon will call you. Those people from Amazon will call you, type in a pin or whatever, and then they get to look at your case. You get to send them your plan of action and then they read it. Then they give you feedback and they help in the best way they know how, what they see for you to write the best plan of action. Then you wrote a plan of action together and then resubmitted it, but under their watchful eye. And I think that every time that we put an Amazon set of eyes on it, they thought differently than we did, which was important so that we were running it how they want it, not how we feel it should be run.
Luke Peters: Great feedback. That’s great. Start to finish, now you guys the audience, listeners, we all have a little bit more information there that could come in helpful if an account gets shut down. I guess the lesson there is don’t get shut down. So really be strict on violations, but if you do, make sure you’ve got someone you’re talking to who’s inside Amazon and that’ll help you get back on. So thanks for that, John. Appreciate it.
Luke Peters: Moving on, what is something obviously super successful individual because you’re only 39, you launched this thing in 2012 and you grown to 70 employees, which is, that’s a big size agency to grow that quickly and producing amazing work. What is something like a habit, a ritual, a practice that you’ve learned or done that has made you a better person either at work or at home?
John Holby: Some habits that I try to stick to, the best that I can is I try to spend some time in the Bible and I try to get my reading done every day and reflect on that. That’s very helpful to me and getting the weight of all of this stress and pressure off my shoulders and onto God. Another thing that I do is I meditate. I use apps like Calm, for example. I try to lay down, relax, get some breathing in, maybe do a little bit of stretching. But just when you come out of both of those scenarios, your buckets are empty. You’ve got the ability to take in life stresses as well as when people bring their stresses on you, the ability to help them out and do it with a smile because you as a person are good. So you have time for others.
Luke Peters: That’s great. I know there’s a lot of productivity tips that people have, but when you’re running a business there’s a lot of stress and spending time in the Bible and meditating and just leading to a more relaxed state of mind, it sounds like has been really beneficial to you. Cool. Thanks for sharing that. How can listeners find more about you? How can they get in touch with you? LinkedIn, website? What’s the best way?
John Holby: Yeah, so LinkedIn is a great way. Also our site, cpg.io. Go out there, see what we do. You’d mentioned we are an agency, but also a one stop shop eCommerce. So as I have that big warehouse, that’s to put your products in because I do the distribution. That’s what separates us or what makes us unique, is that we’re helping so much from the agency but at the same time we’re going to help you do your distribution and do all the direct to the consumer shipping. So that makes us unique as well as a partner of a lot of these brands that we work with.
Luke Peters: Cool. Well, thanks for that and John, thanks again for being on the podcast, Page One Podcast. You really provided a lot of information right to the point, super candid and truly appreciate your time that you put into this and all of your knowledge and wisdom.
John Holby: Thanks. This was a bunch of fun
Luke Peters: Also want to just thank you the listeners for listening to this episode of the Page One Podcast sponsored by Retail Band. Quick reminder that I’m offering a free evaluation of your online sales strategy. You can take a look at your HD or Wayfair sales, understand your strategy there, talk about influencer marketing and so many more things. I’ll present the findings directly to you. If you’re interested, find me on LinkedIn or email me at firstname.lastname@example.org. And again, I just want to thank everybody for listening to this episode. Truly appreciate all of your comments, suggestions, and of course your reviews on iTunes. They mean a lot, and we’ll see on the next episode.
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