Want to start your own e commerce business? That’s what we’re talking about today. Uh, you’re listening to Start, Scale, Exit, Repeat, Serial Entrepreneur Secrets Revealed, and if you’re listening to this in podcast, you might not know this, but it’s actually a live show. It’s a little bit of a different format than you might be used to in podcast, uh, where we have a live audience and people can come on stage, ask questions, And share their experience and what they’ve learned about that particular topic.

And if you ever wanted to join us on stage, we absolutely love it. When you come on stage. Wow. What a topic we’re going to tackle today. It’s all about e commerce businesses. And we have a very special guest, Mike Bregg, who really understands the formula. Mike He understands what it takes to succeed at e commerce businesses, and I am particularly excited today about this topic because we run a number of e commerce businesses in our incubator.

We have paw. com, paw. com. We have hip optical, which is a glasses company. And we have a company called Meowington. So we’ve got dogs, cats, and glasses. Mike, thank you for joining us. Uh, maybe you can give us a little bit of a teaser as we wait for people to join us here in the room. Hey, Colin, thank you for that great introduction.

And I have to say those are some of my favorite categories to work in. We love pet supplies. So. Uh, sounds like you’re on a similar track, but, uh, yeah, let me, uh, tell you a little bit about myself. Uh, I am the CEO and co founder of AMZ Advisors. Uh, we are an Amazon specific agency where we help brands scale on the Amazon platform.

Uh, the company has been around since 2015. At this point we have about 60 employees around the world. And we’ve worked with over 500 brands to help them generate more, uh, at this point, almost a billion dollars in sales on the Amazon platform. So that’s a little bit about me and my experience and what we do.

Yeah. It’s interesting that. You talk about you like those topics. You like to get into, um, into, uh, the pet space, et cetera. You know, talk a little bit about passion. You know, what is it that like, if, you know, everybody wants to make a quick buck, right, but the reality is entrepreneurship. Startups, they’re fricking roller coasters and unless you’ve got a passion for it, it can be very difficult to stick through it.

So can you talk a little bit about that? Because the companies that I’ve seen succeed are the ones where the owners really, really get into their brand. They really love what they sell. Yeah, I, I agree. I mean, I think you have to be invested. Otherwise, what’s the point of putting the time in? There’s been plenty of brands that we’ve worked with where, or companies, I should say that we’ve worked with where they just expect us to handle everything.

And I mean, to a certain extent we can when it comes to the platform, but when it comes to branding, when it comes to building an audience, when it comes to creating customer awareness, it’s a lot of the effort that you’re putting in outside of Amazon that’s helping other people discover your brand. And the only way to do that is to be invested in what you’re doing.

Okay. Uh, some of the best brands that we’ve worked with that have had really good success are brands that have a really solid content marketing strategy. And then they had their YouTube channel, they had documentaries, whatever it was. And then from there, what they did was they launched a product to market to the audience that was already in get that was already engaging with their content.

And the company took off from there. So yeah, you have to be deeply invested in what you’re selling, deeply invested in what you’re spending your time in, or it’s going to show at the end of the day, but the lack of marketing and the lack of branding that your products have. Yeah. And Michele, who’s our cohost here, they, uh, has just joined us.

And Michele, you run now, you’re actually running a dog company and a cat company. And you have dogs and cats and you’re passionate about both of them, but which do you like better, the dog, their dogs, or your cats? I’m teasing. Okay. Let’s talk about business. Let’s talk about business. Cause you’re a, you know, you are a real expert, uh, on e commerce.

Now you’ve been running, um, Meowingtons for, You’ve been running paw. com now for six, three, four months, and, uh, and both are substantial companies. And if someone were thinking about getting into the, so I’m going to treat you more like, um, an interviewee this time. Okay, Michele. So if someone were thinking about getting into the e commerce space, what are some first things they would think about?

And then, of course, we’ll jump back to Michael. Okay. Yeah, I mean i’m going to take the other side of what you were saying michael I’m not disagreeing with you, but i’m going to take the other side just because you love something On the other side of this doesn’t mean that you should jump into it, especially When it is e commerce Meaning that um, you’re spending a lot of money on inventory and awareness Like you really do need to You know, make sure that you can come to market with a product that makes sense and the product that has good margins and a product that you can really scale into and i’m going to tell you colin and michael my experience is easier said than done But it can be done And you really do have to like what is the you know problem?

Even if it’s just aspirational, right? Like, we make these beautifully, wonderfully ste aesthetic, um, stylish, um, pup rugs and pup blankets, but, um, YY you know, we were, you know, an innovator in that. I know it sounds weird, but from a design standpoint, like you really have to figure out what is a niche and not just me to it, and, um, how you’re gonna get supply and how you’re gonna maintain it and how you’re gonna scale and can you market it at, at a, a profit.

Cause it sure is expensive to market these, you know, direct to consumer products thoughts, Michael. Yeah. I mean, of course there’s always an expense. There’s always a variety of different things that go into it. I mean, I think when we’re talking about being passionate about something, I’m not just talking about passion for the sake of passion.

It’s passion for the sake of building something. And at the same time, will you, while you may not have all the skills. Right now to understand how to place POs, how to design a product, how to design branding, you can find the people that can help you along the way. And one of the great ways to do that is to partner with someone who actually does have the experience in the areas where you lack.

So yes, I mean, there’s a variety of different factors that go into it, not just passion alone, but passion is very important. I think in the long term when it comes to being invested in the growth of your company. Yeah. And I, I love, um, to your point, I love hiring people that are really part of that passionate demographic as well.

They, you know, At at meowing tens, for example, and everyone actually quite honestly on the paul. com team is like they are all super passionate And they are part of the demographic So they just get it and gosh, it makes it so much easier Especially like what you led with on the content side Definitely.

Yeah, when you have people that are invested and really understand What the consumer is looking for, what types of content they’re going to consume or digest. It makes it so much easier to actually reach them. And it all starts with the people that you’re recruiting for your business. For example, in our agency, we, everything we do essentially starts with the content that we’re creating for Amazon.

And that takes people that really love design work that really take pride in the work they do. And it shows because the quality of the work we produce is so much higher than so, uh, that many other companies are putting out there. Yeah, I totally get it. Um, um, Paul, we led with, I would say we led with products.

We, you know, the founder is amazing product designer, and now we’re actually are trying to lean more into content. So it’s great to hear you talk about that. Definitely. Yeah. I mean, that’s, that’s what it comes down to is. Uh, obviously having a great product, that’s gonna be the key to success in the long term.

I mean, you can’t put lipstick on a pig. You need to have something that people actually want, that it works, that has good reviews. But then, once you find the way to actually get the product out there, is really where you start seeing the growth. But we do love pigs too, right? Yeah. But anyways, go ahead.

Well, so why don’t we break this down just a little bit, uh, for us? Uh, someone’s thinking about starting an e commerce business. Uh, what are the components? Like how do you, um, If you just break it down to like six or seven components, like, you know, you gotta get the, you gotta get your design done. Maybe do a patent trademark.

Then you got to find a manufacturer. And then you’ve got to contact Amazon. And how do you get on Amazon? How do you do your own site? Like, could you break it down for us, Michael, all the sort of components that someone who is new to the e commerce space might think about it? When they are starting to set up their business.

Well, yeah, I think we’re making a pretty big assumption here and that e commerce has to be you designing your own products and creating your own brands. And yes, that’s a huge part of it. And there’s definitely opportunities for that. But to get started in e commerce, there’s plenty of opportunities just from reselling products from retail arbitrage.

uh, arbitrage and product prices on different websites, buying stuff in wholesale at your target and your Walmart and then selling it on Amazon. Those opportunities exist everywhere. And they really don’t require as much knowledge of branding, product development, uh, and all of those aspects. It’s really by the product, put it online and sell it.

And that’s an e commerce business in theory. Now, when we’re talking about actually investing into building something, it all starts with product design. I would say, uh, To Michele’s point, you got to make sure that your product is designed well, that it is a high quality product, that there’s demand for it, that your manufacturing costs are not going to be crazy, uh, expensive or your margins are going to be sufficient enough for you to actually have an advertising budget based on that.

All of it starts with product development, making sure you have the right materials. You, you have a, usually a design engineer who’s actually figuring out how to make the product. And then from there, making sure you have the right manufacturer. So, There are typical, typically what you’re going to do when you’re starting out is you’re going to be manufacturing in China.

Usually it’s usually the lowest cost manufacturing. It’s usually where most people go because they don’t have experience dealing with manufacturers and other places. And it’s the easiest to do online with Alibaba. So to preface it, like you can design a product, you can find a manufacturer to produce it.

Uh, but generally if you’re going to build something for the longterm and you have The money to, uh, actually invest in it. I would highly recommend a design engineer for developing the products and then having a contract manufacturer, uh, actually work with a manufacturer to produce it, it’s going to save you a ton of headaches in the longterm.

Uh, but it does cost a little bit more money.

Yeah, I would say it costs, it did cost a lot more money, but you know, for us, we, we didn’t, you know, Colin, you mentioned patents, but we, we didn’t go that route at first, right? Like my suggestion is to people obviously try to protect yourself, but. Depends on what the product is, right? And you kind of need to test it.

We have a thing, and Colin talks about this a lot in the book, Start, Skill, Exit, Repeat, like, we’re really about test and fail. Like, we try to test more and lean into the winners. Like, we try to do it really fast with small quantities, quite oftentimes, like a hundred. Okay, before we start sinking money into it, because gosh, you know, inevitably you’re not going to hit it 100 percent of the time.

You’re lucky if you hit it 50 percent of the time. So we try not to invest too much capital, even though we put a lot of human resources into it so that we can test, figure out what works, figure out what we can get a good. Row as return on ad spend and what we can really market to.

Yeah, exactly. And you’ve touched upon a few things there, Michele, can you define row as and the importance of that? And then we want to flip back to Michael and understand more about how to get on Amazon and then maybe the row ads on Amazon advertising and whatnot. But Michele, could you just talk a little bit about that?

I’d be interested to hear Michael’s point of view. Feel free to share with us the definition of ROAS. Yeah, it’s return on ad spend. So basically, um, you know, generally, you know, it depends on the product. You want to be above a three. So you’re looking at how much you’re earning and then what the ad spend is.

And if you’re pricing correctly, you know, the metric will line up, right? I’m meaning you’re not pricing below cost, right? You’re generally pricing more than two extra costs. So if you’re like three ish, and then your return on ad spent. Um, you know, comes out to a 3 or above, then you’re on top, but you obviously have to watch the expenses because gosh, I’m sure Michael, you can attest to this.

They add up very quickly because there’s a lot of platform fees. You know, commissions, ads, storage, shipping, inbound, outbound, like you can eat your margins away so fast before you even know it. Yeah, definitely. And I mean, that’s, that’s a very common thing that happens. And I think just another way that’s helpful for maybe the listeners to visualize ROAS is, uh, actually the inverse, the average cost of sale.

So, uh, numerically, it’s just your. Uh, total ad spend divided by your total sales, uh, the ROAS would be the inverse of that. Total sales divided by total ad spend, uh, and it comes out as a percentage. So if you are at a 10 ROAS, you are at a 10 percent cost of sale. And that means you have, let’s say you have a 30 percent margin on your product and you have a 10 percent cost of sale, well you have a 20 percent profit margin.

That’s how you can essentially use those numbers to help you calculate your profit. Now with the platforms themselves, yes, Amazon is notorious for the fees they charge. You have a referral fee. If you’re using FBA, you’re going to have a fulfillment fee. You could have other processing fees, inbound fees, a variety of different things that can come up within the account.

All of these are going to eat away at your margin. So that’s why, like Michele said, you really have to have a handle on your pricing and making sure that you’re pricing at the right point. That your advertising performance is where it needs to be, or otherwise all these fees are going to eat away your profit.

And you’re probably gonna be paying money for each sale that you’re making on the platform. Mike, I’m trying to understand the numbers a little better here. Uh, especially on Amazon, right? So like a ROAS, if it’s your own website with Facebook, Michele saying, okay, we could do three, which would be 30, 30 percent or 33%.

And I think we run sub 30 on, on, um, But I’m curious, like, for Amazon, what is a good ROAS and maybe that’s different for every company. I don’t know. It is. It’s different for every company. It’s different for every category as well. Uh, where we see most of our clients is they typically fall between the three to four ROAS range, which is a really good number.

Uh, that is a pretty good performance. Now, I would say that other categories or other products or other brands that have more brand recognition tend to run at a better row as because customers are already coming to the platform, searching for their product, whether they’re clicking on their ads or whether they’re buying the product organically.

Uh, there’s people that are out there looking for it, which makes the conversion much easier, which makes the ad performance much better. So going back to kind of what we talked about initially with content, with being passionate, if you’ve built. a lot of great content engine and you build an audience that’s consuming the content, it’s going to help your ad performance and your sales performance on platforms like Amazon down the line.

So, uh, In general, like they, the ROAS will range by category, by company, like I said. Uh, but anything over three is usually a pretty good number. Okay. So we’ve got the idea. We found a manufacturer on Alibaba. We got our first a hundred units coming in. What’s our next step to get on Amazon? Uh, I mean, obviously you need to open an account, uh, to open an account.

You need a few different things. Uh, you need to provide. Uh, some documentation Amazon, I believe, uh, I haven’t personally done in a while, but I think you need to provide a business document. If you’re going to open up as a business, I think you need to provide a, uh, a proof of address. Uh, it’s usually like a bank statement or a utility bill.

Uh, and then from there you may need to look at category approvals depending on the product that you’re selling. So, uh, Since we were talking about pet supplies before, if you are selling a consumable pet products, you may need to provide some evidence that your products have safety approvals or, uh, cat or whatever the, the, the agency that manages the, uh, the compliance for pet products actually has that to sell the products.

Amazon’s going to look for those things. So when you’re launching for the first time, I generally recommend staying away from products that are consumables or products like cosmetics that are going to go on your skin. Um, Because you do need to, or food. That’s another good one. You do need to invest additional money into safety testing, into product compliance, and a lot of other things that are probably going to give you more headaches.

And discourage you from getting started. Got it. So now we’ve got our product on Amazon. Uh, you know, what’s the best way to get exposure on Amazon? And second question to that is how important are reviews? Uh, well, I’ll actually take the first one first. Uh, it was the second question first, excuse me. Uh, reviews are extremely important.

Social proof is really what helps your product stand out on Amazon. And I think we’ve seen this. In the past, uh, how it’s changed over time. So now Amazon tends to show, uh, the percentage of, uh, of top reviews instead of the average, uh, or they changed the way that they show the reviews, but no matter what, having reviews is important when you are launching a product in a category where the number one seller had 30, 000 reviews and your product has one review.

Well, it’s very difficult to compete because the customer is going to see 30, 000 and they’re going to be like, well, this must be a better product. Not necessarily the case. No. But it is generally how consumers think if people are buying this, well, it’s a good signal that I should probably buy it because if they bought it, it makes sense for me as well.

And that’s very difficult to kind of bridge, uh, that gap and get to the point where you have the reviews and you have the feedback, which again, it comes back to content and it comes back to having an audience that believes in your product. It really understands it. That can help a lot with that. Now, uh, when it comes to getting visibility, it comes down to two things.

It comes down to your SEO, how well you’ve optimized your listings with the keywords that are most relevant for your product. And then finally, from there, how you start. Deploying, uh, advertising dollars to put your products in front of the consumers when they’re searching for a specific keyword that is extremely relevant for your product.

Yeah. It’s interesting with the review strategy. I call that the king of the hill. Do you remember that game when you were a kid? So, you know, who’s the king of the hill? I am the king of the hill. You’re the king of the hill. Remember that Mike? Yeah, I do. Yeah, and so, like, when on Amazon, it’s like, if you have the most reviews, you pretty much hold the spot.

And if you don’t, you gotta fight for that to get to knock them off that spot, off that top, and, uh, you know, it’s interesting to, to think about it under, you know, with that game in mind, that little kid’s game in mind. But, um, yeah, it’s absolutely critical. Reviews. We know that, uh, you know, even in, um, the book starts kill, exit, repeat.

We talk about in 1979, how Joe Foster, the founder of Reebok, who we interviewed for the book actually got three five star reviews in runner’s worlds. And that helped his company get a distribution agreement, which led to a big break with Jane Fonda. And they moved from 9 million to 900 million in sales in four years.

Uh, the reality is reviews are absolutely critical. And, uh, if you are not, you know, whether it’s Airbnb, whether it’s Amazon, whether it doesn’t matter what the business is, we live in a black mirror world where reviews, I don’t know if you remember that episode, but we live in a black mirror world where reviews matter, they are your lifeblood.

They are everything. So we want to make certain that we deliver a product that’s going to excel or exceed the expectations of the customer and also ensure that, that, uh, that the service associated with that product is delivered very, very well as well. Because that’s it. Like, I mean, Mike, we can’t underestimate this, right?

If you’re anyone thinking about e commerce business, it’s, it’s the, it’s the key. Yes. I mean, you, and it takes time. It’s not, you’re not magically going to end up with all these reviews at once. It’s constant grind, it’s constantly finding ways to engage with clients and to try to provide the best customer service you can.

Try to encourage them to leave reviews in some way without violating terms of service on Amazon. Uh, and leveraging the programs that you have at your disposal. So, that’s a tough one. And it’s not to say that because someone has 30, 000 reviews in such a review moat that you won’t be able to pass them at some point.

The actual average lifespan of a number one seller on Amazon is only seven years. So just cause you got there doesn’t mean you’re going to stay there. And I think that’s the important thing that a lot of people need to keep in mind. Seven years. That’s pretty good to me, Michele. I know, but I’m, I’m curious.

Yeah. Like Mike, I’ve heard, you know, we’ve used agencies before to help with Amazon listings and ads. Um, are there any, you know, apps or methods that you would suggest to help us get reviews, good reviews, and I’m not talking about made up ones. On amazon because i’ve i’ve heard there are some where you can individually reach out and i really would love to hear your thoughts on that since we know it’s so it’s so critical to amazon’s algorithm as well as conversions yeah and this is where things get very tough with it obviously you don’t want to do anything that’s going to violate amazon’s terms of service i’m going to preface that first uh but getting reviews through off platform services There’s certain companies, uh, that you might be able to leverage if you have your own DTC website, like a Shopify store.

Uh, I think one of them is called Snag Shell. I’m, I’m blanking on some of the names of the other ones, but, uh, essentially what they’ll do is they’ll reach out to your consumers and encourage them to leave reviews or ask them to consider leaving reviews. Uh, another great way to do this would also be, if you have your own DTC website, leverage your existing, uh, customer base of people that have bought products and encourage them to leave a review on Amazon.

Now, if you’re encouraging people that did not buy the product on Amazon to leave a review on Amazon, you’re technically not violating terms of service. So those are the ways that I would recommend trying to get it done when it comes to others. Yeah. Back up a bit. You said, I just want to make sure I’m clear here.

What would be in violation of Amazon’s terms in terms of soliciting reviews? I think I missed that part. Yep. If a customer purchases the product from you on Amazon, you cannot encourage them, uh, with an incentive. So you can’t provide a discount. You can’t provide a coupon, a free product, a refund, whatever it may be, uh, to leave a review.

But if a customer did not purchase the product from you on Amazon, if they purchased it from you on your own website, you could offer them a coupon under the next purchase on their website. If they leave a review on your Amazon product. So there. It is the way around the TOS, and that’s kind of where, again, the review generation game is where things get a little sticky, but that is something that does not violate the terms of service.

But I thought you had to have a verified purchase. No, uh, no, you don’t know. Okay. That’s interesting. Yeah. Okay, but they know they know and they might flag that not in a negative way But that’s okay Yeah, I mean you’re not gonna get as much visibility as you get with like a verified purchase Those do tend to get more visibility, but when we’re talking about the numbers of ratings and the number of reviews I mean in reality most customers aren’t actually reading all the reviews They’re looking at the numbers that they see and wow, 30, 000 ratings.

Well, that’s phenomenal. I’m going to buy that product because it has, because this other one only has 200. So, uh, it doesn’t matter, uh, as it doesn’t matter if they’re all, uh, verified, it just matters basically the number that you have. Right. Okay. I didn’t realize that. I thought it was more verified. Like, yeah.

But like you said, it might, it weighs heavier, we believe in the algorithm, but it’s, it’s still allowed. Yeah, exactly. Exactly. And again, it’s just. It’s just a conversion tactic at the end of the day. The number is all that makes the difference. Obviously having more verified reviews would be better, but if you don’t have any reviews to start with, having something is better than nothing.

Yeah. So when I’m doing a speech on Starscale Exit Repeat, and we hand out books, the audience, I’m doing one in Hawaii, 150 people, uh, I could still ask them to do a review, it sounds like. And it’s not going to be an issue, correct? No, that’s not an issue. All right, we’ll do that. We’ll, uh, we’ll have, we’ll change my, uh.

I’ll change my spiel around a little bit. Let me ask you a question about, so you’re on Amazon, you’re getting the reviews. How do you, um, are you able to use AI in any way to help you out here? Whether it’s the advertising, the descriptions, the, you know, have you played with that at all, Mike? So there’s a variety of different ways that I think you can leverage AI when it comes to the content on your, on your Amazon listings, and it’s something that we’ve been experimenting with and testing, uh, when it comes to advertising optimization.

I don’t think there’s any tool that’s really nailed that yet. Uh, at the end of the day, most advertising tools are really just using machine learning, uh, to actually make the bid optimizations. They’re not using true AI, uh, although they may claim that it’s AI. Uh, when it comes to content though, there’s a variety of different ways.

So the first way would be, uh, actually having, uh, a good example of this would be, you need to create new content, new copy for your product. Well, let me go out there and see what other competitors have on their products. Let me get all of their reviews and put it into an AI tool like chat, GPT, for example, and then say, Hey, you’ve seen all these competitor reviews.

What are the things that customers don’t like about their product the most? And then using that information to feature what, how your product is the opposite of that, uh, on your product content. So, uh, there’s also other ways to use the, to use AI to actually write the copy. Uh, you can train a GPT to actually follow the rules that you want for the optimization.

Uh, so there’s a variety of different ways when it comes to the content side. I don’t think it’s as possible to do it on the advertising side, right?

Okay. Um, and then Mike, it seems like you really focus a lot on Amazon. Uh, you know, can you talk about multi channel for a minute here and how important Amazon is as part of that channel? And the reason why I’m asking this question at paw. com, we do about 95 percent of our business comes directly to paw.

com and about 5 percent goes to Amazon. And I’m just curious. Uh, what your thoughts are on that? Well, uh, I mean, uh, we’re talking about the e commerce ecosystem. Essentially every platform is going to relate to another platform in some way. Uh, it really depends on the preferences of the brand. So, uh, an example I use frequently is the mineral water brand, liquid death.

Uh, liquid death has their own website. They push a lot of traffic to their website, but everyone that comes to their website is pushed to Amazon to actually purchase the product. Now, the way they’re leveraging it is that they’re generating more sales on Amazon to try to maximize their visibility and generate more organic sales, more reach for their products within the Amazon platform.

So that is kind of, that’s a good example of how you can integrate both your DTC website and Amazon to really get a bigger benefit. And what the benefit for them is maximizing product visibility on the platform, uh, where people are going to search for products. 70 percent of all product searches start on Amazon.

So that’s the first thing to consider. The other thing to consider is when you’re looking at your brand funnel overall, Amazon is essentially a customer acquisition tool. Your goal as a brand owner needs to be, how do I get these customers from purchasing my product on Amazon where I don’t control the customer data to eventually come to my website to purchase the product.

And there’s a variety of different ways you can do that with product insert cards. Again, you don’t want to incentivize them in any way because that would, uh, violate terms of service. But if your product has, for example, a product warranty that they need to claim on your website, if it has a free book that they need to download from your website, these are all different ways that you can get people to visit your website and start collecting that customer data from Amazon.

And that’s another example of how the two platforms, uh, can interrelate.

Um, we’ve also, uh, been told that PR, like doing press releases, can actually help boost your Amazon listing. Is that something that, that you’ve heard of before? Or is that just, um, again, we’re basing this stuff on very little, you know, evidence, you know, evidence, but just theories that people have told us about.

No, that 100 percent works. And that’s actually something we do for our clients. PR and getting publications on, uh, product review sites on blogs, uh, product comparisons, um, even social media. Uh, for example, we have plenty of clients where their product has gone viral on tick tock and their tick tock shops exploded, but Amazon also exploded because everybody came to Amazon looking for the product.

So, uh, yes, I mean, visibility, PR, uh, affiliate marketing, whatever you want to call it, all that type of stuff. Yeah. Can help give you a sales lift on the organic side, or sorry, on, yeah, the organic side, people searching for your brand on Amazon. What we typically see is that, uh, in about three to four months, we typically see between a 15 to 20 percent lift in sales from all the PR efforts that we’re doing.

So it’s interesting that, um, like you talk about like really That’s this company liquid death, uh, which we pretty much all pretty know about. Um, although I don’t know how shipping could be efficient with that company, but let’s, you talked about that. They would push the traffic over to Amazon, boost their Amazon rankings, which I like that idea.

But one of the issues is if you have to pay Google, um, or Facebook 30 percent row as, or three, you know, three X row as, or 30. 30 percent of your, um, costs in advertising. Then how do you, how can you afford to do that and push them to Amazon? Well, I mean, the first thing is you got to consider what your conversion rates are.

So typically on a Shopify store on a DDC website, your conversion rates can be between one to 3%. The average conversion rate on Amazon is about 8%. So you’re looking at least two and a half times improvement on the conversion rates that you’re going to get by pushing traffic down. That is one way you can justify it.

Uh, another way to justify it is the actual sales lift we’re going to get from the organic visibility. So if you’re in certain categories that are not dominated by a certain brand right now, uh, there’s a good opportunity to actually launch yourself to the top by pushing this traffic to Amazon, generating the additional sales and then moving up the search ranks.

Uh, so again, it’s a long game and there’s definitely an investment to it. There’s other ways that some sellers do this. Uh, for example, uh, my friend, uh, Chad Rubin, uh, has a good case study on this with a brand and I’m blanking on the name of the brand right now. Uh, they essentially sold literally a garlic press at a loss for, I think it was like 12 months.

And once they got through those 12 months, their product was number one for garlic press on Amazon. They set their price back to normal. They had built up this massive review moat from all of these cheap reviews that came in. And they started turning about a million, I think it was like a million and a half in profit a month from doing that.

So that’s how powerful it is to be number one on Amazon. And that’s why using additional traffic sources outside of Amazon to push traffic to Amazon can benefit you in the longterm. Oh, I like that. I see what you’re saying is it’s basically you’re subsidizing. You’re taking a loss to gain market share.

And then once you’ve, once you, uh, are king of the hill, then you can start to monetize. I, and hopefully, you know, somebody doesn’t come right behind you trying to take that position as well. But, uh, that’s very interesting. Yeah. So, um, this is a great, um, point, great conversation. Cause we’ve actually, we’re having this conversation internally.

So if I’m understanding you, Mike, you would advocate, let’s just say we’re doing a bunch of social media, et cetera. You would advocate putting that people could buy this on Amazon, not just trying to drive them to your own DTC website. Are we understanding this all correctly? Yeah. I mean, every consumer is going to have their own buying preferences and most consumers prefer buying from Amazon.

So yeah, it’s kind of the comment I made about Tik TOK shops as well. Like, uh, our client had a massive explosion on Tik TOK. They went viral. Their products started doing great there. And what we saw on Amazon was their Amazon sales seven next, and it didn’t make sense because we didn’t change anything from day to day.

It was just. Right. And yeah, look, people want to go to, um, at least me, I can speak for myself. Right. I always go and look at Amazon. Right. Cause I know, okay, it’s easy to return it. I’m going to get it on prime. Like there’s like a whole list for me personally. So yeah. Um, I think that’s good insight. Yeah. I mean, and you’re not alone, Michele.

I mean, that’s how most, most of the world shops at this point, uh, is just going to Amazon cause it’s generally more convenient, it’s more trustworthy. I mean, I personally haven’t bought anything from Tik TOK. I don’t have a Tik TOK account, so I don’t know what the experience is like, but I know it’s much easier for me to go to Amazon and get the product.

within two days shipping if it’s FBA. So that’s a good point. How do you get this prime checkmark on your, on your product? Yeah, there’s two ways. One is FBA. The other is seller fulfilled prime, uh, which was closed for a while, but they’re fine. I think they’re opening it back up. Uh, either way you have to be able to, uh, to get the product to the consumer in two days.

Yeah, um, let’s, let’s talk about that a little bit more because actually, um, our, our 3PL actually, they just opened up again, um, SFP, Seller Fulfilled Prime. So, and I’m hearing different opinions on this, Mike. Um, some people are telling me, FPL. But it’s, it’s better than FBM fulfilled by merchant. Like is SFP seller fulfilled prime.

Do you get the same status? Are you ranking as high in the search and the algorithm as FBA? What is, what is your understanding your experience with that? Yeah. So my experience with it is that yes, if you are doing a seller fulfilled prime, you have the prime badge, just like you would have an FBA. Right.

It ranks the same and the results are the same. I personally don’t recommend it because operationally I think it’s a nightmare to manage. Uh, you know, I’m not a warehouse manager. I’m not a logistics manager, but if I had to sift between which orders had a two day shipping, which orders didn’t, uh, how I’m buying the shipping, uh, all of those different things, it just kind of sounds like a nightmare for me, which is why I typically recommend FBA over a seller fulfilled prime for most of our clients.

However, we do have some clients that have. Really good warehouse operations and they prefer, uh, select for field prime. Yeah. Our, our warehouse is, um, ship Bob. So we’re, we’re kind of sorting through it as well. We’re, we’re trying to make sure operationally it makes sense, but also trying to figure out what the actual cost is, because, you know, You know, it, it costs money, right?

To be FBA. They don’t want too much at the Amazon warehouse. And then they, you’re constantly like shipping, whatever it, depending on your sales velocity, you know, 20 here, 50 here. So we’re trying to get our arms around it. Um, as such. Yeah. I mean, you’re not alone. I mean, it’s, it’s one of the most complicated things to figure out is the logistical piece.

I mean, from a simplicity standpoint, working with FBA, uh, allows the product to be closer. From a last mile fulfillment standpoint to the end consumer, because they distributed everywhere. Obviously, if you’re working with a 3PL, a 3PL is not going to have as many warehouses as Amazon. So the last mile fulfillment is going to be a little bit longer.

So your costs may be a little bit more variable, but there’s a lot of costs to also send the product into Amazon and split it into, I don’t know, sometimes I see seven, eight different warehouses you need to send inventory to. So it’s, it really is kind of a math exercise and really diving into what makes the most sense.

I know, and on top of it all, like for us, and this is a good thing, actually, our 3PL has introduced something that actually, in addition to, um, You know sfp is they actually have amazon now this just happened recently as a carrier So amazon is becoming They may even be bigger than most an actual carrier as a separate option as well So their fulfillment and logistics is uh par non from what I can see Yeah, and I i’m pretty sure that’s that’s correct.

I think i’ve actually heard that Their fulfillment capabilities are actually bigger than FedEx at this point. Um, I may be, I may be getting that wrong, but yeah, their fulfillment capabilities are pretty good. I think it’s safe to say they’re, they’re on par, right? And if not, they’re getting there. Yeah, definitely.

So we’re the question hogs today, Michele and I. We’re loving this. If you are If you’re in the audience, I have one more question too for you, Mike, uh, but if you’re in the audience and you want to ask Mike a question or Michele a question, feel free to just raise your hand and come on stage. Uh, I’m certain, certain he’d be happy to answer any questions you have, Mike, we are, uh, uh, struggling at paw.

com to expand globally, uh, right now in Canada, we did expand to Canada, but we got FBA. I get the terminology wrong, probably Michele, but maybe that’s right. And we have a separate 3 PL, but, um, yeah, I mean, we’re doing both, but actually for us, we’re going through an exercise now, which we’ve. You know, it’s not much of an exercise because we know where we want to go.

Just based on what we’ve seen is we’re thinking, you know, for our international strategy is that we fully leverage Amazon warehouses, even if they cost a little bit more for all the many reasons of the exposure and the platform, um, It’s really hard, you know, trying to manage international warehouses.

And, you know, we’re curious about your thoughts on international expansion, uh, with or without Amazon. Like, you know, what, what are you seeing? So, uh, yeah, this is a very good question. Uh, and it’s something that we actually handle for a lot of our clients for a variety of different reasons. Uh, and the recommendations we would make would be dependent on the marketplace.

So for example, if you’re expanding to the European marketplaces or Canada, uh, for example. I would 100 percent recommend FBA. Uh, it’s the most simple, uh, the European FBA pan fulfillment network, uh, is great in the way it distributes inventory around. And it just allows you to, to be able to ship into one country and not have to deal with all the other headaches that come with it.

Uh, now for another good example, and I haven’t spoken about this yet, but I actually live in Mexico. I’m originally from Connecticut, but I live in Mexico. Uh, and I run another e commerce business down here in Mexico. Now. FBA as is not as important in Mexico as it is in the U S because, uh, there’s other platforms that a lot of consumers are going to like Mercado Libre here is a very big platform that consumers are on.

And depending on the warehousing, uh, 3PL partners you have, you can actually offer faster shipping than Amazon can in Mexico. So we actually have problems sometimes because. Our product is being shipped out within 20 minutes of being ordered and it’s arriving at the customer’s doorstep within two hours and Amazon’s system is not set up to handle that.

So it really depends. Like I would say again, European marketplaces, FBA all day, other marketplaces, you may just want to take a look and see what the other options are and really see where consumers are buying products because Amazon is not the only marketplace. It just happens to be the biggest one.

Right. Where would you get those metrics? That’s yeah, I get what you’re saying. Like I know in Philippine, uh, Philippines, it’s, uh, Shopee and Lazada. Like, like what is it in Australia? Like, we’re just like trying to look at like top markets here. Where would you get data? Yeah, there’s a really good tool. It is called, uh, uh, Merchant Spring.

Uh, my friend James, uh, Nijardo runs that company. Merchants spring has really good insight into what platforms, uh, and what market, uh, sorry, what platforms in each market are performing the best for certain product categories. They can give you some really valuable insight into that. And there was another company I spoke to a while ago.

Uh, I’m not sure if they’re still doing the same thing. I believe it was called. Uh, I’ll go picks. Uh, I I believe they had some pretty good insight into what the marketplaces look like in, uh, each individual country.

Yeah, we have. Right. That’s really good information, I think Mimi, for our blog, and I don’t wanna lose sight of that. Thanks for, you know, giving us that information. But Colin, why don’t you No, no, that’s great. I mean, we, we, we wanna expand PAW internationally and, and it sounds like Amazon is the way to do it, Australia, and we’re worried, we’re a little bit worried about the, all the taxes involved and the jurisdictions.

Does it, does that app or is the company sort of deal with that too or no? Uh, there is, there are companies that help with that. So again, this is where the European expansion becomes really easy. Uh, you can have a single, uh, VAT number in one country and you can sell in any country with that VAT number.

So, uh, the way we typically recommend this, uh, is usually getting your VAT in the Netherlands because. It, you can get your VAT very quickly and then you can use that VAT to sell on all the other European marketplaces. UK, uh, is maybe the one that I’m, I’m not positive on that, but Germany, Italy, Spain, France, uh, and all the other marketplaces that are starting to come online, you can use a single VAT number from any other country, uh, in the European Union.

Um, so that is a massive advantage. Uh, when it comes to other countries, uh, like for example, in Australia, I think it’s called the GST tax. You’re going to have to apply on an individual basis. Here in Mexico, we have an RFC ID to pay VAT tax. So, uh, each country is more difficult, and there are people that can help with that.

But Europe in general is the easiest for dealing with, uh, value add tax. Wow. Okay. Well, we have a question in the back chat and I don’t know, I quite understand it, but hopefully you do. It’s from Dr. Bab D. Uh, what’s the fastest way to increase your Amazon inventory performance index score? Uh, first cookies to find the question.

Yeah. Translate it for us. Yeah, of course. So, uh, when you’re using FBA, uh, Amazon essentially is grading how efficient you are at using, uh, their fulfillment, and that is partially going to affect the amount of space that you have available for storing inventory in. Uh, so Amazon’s system is entirely variable.

If you have a really good performance score, uh, your Storage space is essentially gonna be unlimited. If you have a perform a poor performance score, Amazon is gonna reduce the amount of storage, uh, space that you can have. And it depends on, it is also dependent on each product in a way. So higher performing products may have some, uh, may have more storage, uh, but typically I think they take it across the entire account.

Uh, that being said, the fastest way is to have Amazon destroy the inventory, but that’s not practical for most people. Uh, obviously it would, it’s just kind of flushing money down the toilet. Uh, the next most practical way is to have a removal order placed and remove the inventory from Amazon. That’s another way to improve your inventory performance score.

After that, the next easiest way is to discount your product and push some advertising dollars into it. That’s another way that you can sell through units and improve your sell through rate. Which is also going to improve your score. Uh, and you know, the longer term play is just improving SEO until your product shows up better.

But, uh, when we’re talking about fastest, it’s usually just for moving in. Hey doctor, did you want to follow up with that? Since you just, it was your question. Uh, yeah, yeah. Sorry. I’m a, I have a lot of background noise. That’s why I typed. Uh, Mike. Can you expand on the PPC? Like, how do you do that? Like you, you just run more campaigns and then you sell more.

So. What’s, what’s the relationship exactly between the PPC and then increasing the index score? Well, it wouldn’t be running P, uh, PPC by itself. It would be decreasing the product, uh, the selling point of your product to try to increase the number of sales you’re driving through PPC. So, uh, part of it is discounting your product.

Part of it is putting more dollars into, uh, your advertising spend. So the idea being here is that if we start turning the inventory over quickly. Uh, quicker. We’re gonna burn through all the excess inventory we have. It’s gonna cost us a little bit of money, but we’re not gonna have to remove it from Amazon.

Alright, I have a couple more questions. My gosh, we could just, I could go on about this all day. Mike, this has, you know, been a amazing session. Alright, so what do you do? We had this happen to us. One person complained. And said it was a defective product. Okay. I think it was just, you know, like, you know, we all know Amazon makes it painstakingly easy to return products and people can just hit whatever reason they want.

We had just like one person say defective and my God, it like started tanking one of our scores. Like what is a person to do? And I don’t believe it was true. So what are we to do when this kind of thing happens? We know it’s a much higher return rate as compared to our retail DTC sites and other channels.

So I’m interested on tactics to like kind of avoid getting in the doghouse here. Literally. No, I mean, unfortunately there’s not much you can do. I mean, Amazon really protects the consumers in these types of situations. They don’t really protect the sellers as much. And we’ve seen all types of claims that make absolutely no sense come through.

Yeah. Uh, at the end of the day, if a consumer is filing an A to Z claim, it’s going to affect your inventory score. Uh, so for example, if in a consumer, uh, if you would have to be selling FBM, but if a consumer purchased your product, wanted a refund, and you didn’t authorize the refund based on the refund request reason, they could file an A to Z claim, which is going to have an even worse impact on your account health score.

So, At the end of the day, it’s almost better just giving in to what the consumer wants because there’s, it’s not really a battle you’re going to win in the long term. Right. It’s going to hurt you more than help you. Yeah, exactly. Yeah. Yeah, Michele, we have Shawnee on the stage. Shawnee, uh, do you have a question or a story to talk about with respect to your e commerce business?

Shawnee? Um, we can’t hear you. Your mic is off, Shawnee, on the bottom right hand corner.

Welcome to the stage.

All right. Still can’t hear you, but maybe you could do the back channel. Uh, we’re having audio issues with your, uh, account. Maybe you could ask the question in the back channel. Doctor, you were flashing your, uh, Mike there. Do you have another question? Uh, yeah, I’ll just ask that. Um, so just about a PPC actually, uh, Is there a company name, uh, Mike, you recommend that manages, uh, PPC for, for about six queues, you know, the, when, uh, the A plus content to Brandon also, um, and how efficient they are.

Do you have any company suggests that you’ve experienced before? Uh, sorry, you were breaking up a little bit for me, uh, there, but I think I heard you. Uh, I mean, that’s something my company does not to just throw that out there, but, uh, there are a variety of other companies out there. I think any search, uh, online for Amazon agency is probably going to turn some people over.

Uh, I would just recommend looking for, uh, agencies that probably have, uh, I would say at least, you know, 10 to 20 employees on their website or even on LinkedIn, employees. They’re usually more established, usually have more experience, and it’s not just some freelancer working out of their house claiming that they’re, uh, this massive agency.

I think typically that’s, that’s a good spot to look, or you can just come to AMC advisors and work with us. Okay. That was the question. Mike, you’ve been so generous to lend your expertise here to all the members of Startup Club. How do we get in contact with you? What is your website address? And what is the best way should somebody want to get in contact with you directly?

Yeah. Uh, and, and thank you for that, Michele. I’m really glad I was able to provide a lot of value. Uh, the best way to get in touch with me directly is my email. Mike at amzadvisors. com. You can also reach out to us at our website, amzadvisors. com and schedule we’ll call there with a member of our team and we can learn more how we can help you.

Um, and is there, are there any, um, like shows you would recommend that people could go to, to learn this stuff? Cause it’s, it’s, it’s not easy. I mean, obviously today we learned a lot. You really helped us get through a lot of questions, but is there any particular shows you would recommend or masterclasses that you have or anything like that?

Yeah, I mean, I’m not a huge fan of going to the shows. I think a lot of it’s, uh, I forgot, I forgot the term for it, but I think a lot of it’s just a little pompous, in my opinion, uh, there’s a ton of great free resources online. I mean, I think, uh, I think podcasts like this and clubhouse chats like this are a great example of it.

There’s a ton of webinars. YouTube is full of content. Uh, I really think there’s a lot of great resources you can leverage first before doing that. Um, Uh, there’s also a variety of courses. We have our own course, uh, which you can learn about more on our website, but there’s also a lot of other courses out there that can provide more actionable steps on how to do this, uh, and how to get started in selling on Amazon.

Yeah, I know there’s one that, um, a friend of mine runs a lunch with Norm, uh, Rise of the Microbrands and it’s absolutely free and he seems to have some very interesting guests on there as well. I’ve been on the show with Norm before. Uh, he’s a really good guy. Yeah, I know him and his son as well. Yeah, he’s a great guy.

And, uh, we’re actually going, I’m speaking at the Billion Dollar Summit with Kevin King, um, in Hawaii. Yeah, I found out about that yesterday. So, I don’t think I’m going to be there, but maybe, we’ll see. Yeah, well, Michele? Yeah, I’ve just been a fantastic show. Um, We wanna have you back. I think you know, Mike, we should have you back, right?

Colin, this has been like, so informative. Absolutely. Like I, I, it’s, you know, in our book start scale, exit repeat, uh, we talk about four different business types and e-commerce is one of them. Uh, it’s probably one of the fastest ways you can build a business. But if, if, if there, if you were to. You know, if you were to apply the rollercoaster analogy to e commerce, I’m telling you, it is the most extreme rollercoaster.

I mean, paw. com shot up three years in a row on the Inc. 5000 39 million in revenue and then post pandemic hangover. And now we’re coming back again. In a very different way, by the way. So we were originally were really heavily Facebook marketing oriented. Michele is now the CEO of paw, and she’s taking it into a multi distribution model where we’re no longer just relying on Facebook or Google ads.

We’re also expanding Amazon and going into wayfair and. And bark and other distribution channels, and she’s having a lot of success and QVC and Good Morning America, those kind of those kind of channels, and she’s having a lot of success on multi channel. So that’s something to think about. If you’re in the e commerce space, you know, there is there are other channels other than Amazon.

Believe it or not, there are other channels and you can succeed and being multi channel we think is the best strategy. Any last thoughts on that? We have to close. Mhm. We sort of a hard stop today, uh, because we have a show on on tray on trial on tray. We’re doing our free master class on catching the wave and that we’re doing in 2 minutes on on tray.

But I wanted to make any last thoughts about that topic, multi channel or anything else. Before we close that, uh, well, first of all, I appreciate the invitation to come back. Uh, I would love to, uh, so anytime we can always, uh, talk about doing that. And yeah, I agree. Amazon is just one platform of many that are out there.

Uh, there are stories every day popping up. Uh, 15 year olds out of their basement selling a million dollars a month on TikTok. So, uh, don’t think that Amazon’s the only one. There’s plenty of other ways to find, uh, sales online or even in retail distribution or other platform distribution. Uh, so, uh, Don’t don’t get so siloed into one channel that you don’t think about how you can grow your brand across everything very good And you’ve been listening to start scale exit repeat serial entrepreneur secrets revealed Yeah, if you listening to this on YouTube or on podcast, it’s actually a live show.

We do it every Friday 2 o’clock Eastern Thank you very much Michael beg who runs am am Z advisors And it’s also a friend of norms. So he’s, he’s a real cool guy. So we’d love to, uh, keep, keep, keep in touch. And, uh, we will, uh, keep moving our, keep starting scaling, exiting and repeating our e commerce businesses over and over again, because that’s what the game, that’s what the name of the game is making a lot of money, but we are switching over to entree right now.

It’s another app. It’s a very user friendly app. It’s geared towards only, uh, founders and entrepreneurs. And we do a live PowerPoint presentation, which we’ve been working on. This is the first time. Thank you, Mimi for posting the link on the top of the page here. Uh, catching the AI wave. This comes right from the book, you know, fortunately, we were able to interview Jeffrey Moore, who wrote Crossing the Chasm Inside the Tornado for the book, Start, Scale, Exit, Repeat, and, uh, we have to capture a lot of concepts and we’re going to go into.

In depth into those concepts. If you ever wanted to try to catch a wave. And by the way, an e commerce, that’s it’s trends are your friend. And, uh, you want to know how to identify them and catch them. So we’re jumping over to entree right now. Thank you very much. We’ll see you next week on the complete entrepreneur or which we do on Thursdays or serial entrepreneur secrets revealed on Fridays at two o’clock.