#149 Unlocking Multi-Channel Success with Amazon MCF with Wain Yu

#149 Unlocking Multi-Channel Success with Amazon MCF with Wain Yu Unknown Speaker: Thank you. Speaker 2: Welcome back to the Fearless Sellers podcast. I'm your host, Joie Roberts. We are at Amazon Accelerate, and today's episode is all about moving faster, scaling smarter, and selling everywhere your customers shop. I am joined by Wain Yu, the General Manager of Amazon Multi-Channel Fulfillment to dive into how Amazon is helping brands win beyond the marketplace. From cutting out of stocks to offering Prime Day delivery to your DTC sites, Wain shares what's working right now for sellers and what's coming next. If you want to simplify your fulfillment strategy and supercharge your multi-channel sales, this episode is your game plan. So Wain, welcome to the Fearless Sellers podcast. Speaker 1: Joie, thank you for having me. Speaker 2: And you have a huge announcement that you have made right here at Amazon Accelerate. Can you share with us? Speaker 1: Yes, absolutely. So we are very excited to announce three things. And these are all in the realm of making multi-channel deployment even more multi-channel, if you can think of it that way. So the first announcement is that Amazon MCF is now part of the Shopify deployment network. And so for those not familiar with it, it just means that we are now part of a curated list of third-party logistics providers that brands can trust on the Shopify platform. Our second announcement is that later this year, we are launching an Amazon MCF machine application in partnership with Shein. And so, you know, our goal is to make it easier for merchants to discover Amazon MCF and easier for them to use it on these marketplaces and sales channels. And so that's our second announcement for today. And our third announcement, which honestly, I like all of my announcements, but this one particularly I feel strongly about is that Amazon MCF is now available for use on the Walmart marketplace. So, you know, for the first two announcements, We're just making it easier, but you could already use Amazon MCF on Shopify. But for Walmart, until recently, you couldn't actually use Amazon MCF. So this is the first time this year where this is now possible. Speaker 2: And I will tell you, as a longtime Amazon seller and I sell on Walmart, I am so thrilled to not have to use some third-party app that doesn't work and I can I use just MCF right into my store. So thank you from all of us who are selling on Amazon and Walmart for these updates. It really does show that Amazon cares about us as sellers and understands that we are going multi-channel. So very cool announcement and thrilled to share it with all of you first on the Fearless Sellers podcast. Most of us in our listeners may or may not be even using MCF, but as these updates come, it becomes easier to sell. And can we just talk a little bit about why it's so important right now for Amazon sellers to be diversifying on site? And I'll just let you know, full disclosure, all of my inventory is at Amazon, even though I sell on TikTok and I sell on Walmart and eBay and all these other sites. Speaker 1: I'll tell you that if you rewind the clock five years ago, multi-channel selling was probably more of a nice-to-have for most brands. Opportunistically, you might go there. I think over the past five years, that's really changed. And the reason why we're really happy about the value Amazon MCF provides is it allows you to really solve three problems that merchants or brands have. The first one is a problem of agility. And what I mean by that is you don't really know which channels work. Sometimes it's a bit of a guess. Will channel A work? Will channel B work? Let me go try it first. And number two, even if it does work, you don't know whether it'll work this month or this quarter or this holiday season. Sometimes those things change quite a bit. This quarter, channel A is your biggest, hottest channel. Next quarter, it might be something else. And so one of the benefits of Amazon MCF is keeping all of your inventory in a single pool. It doesn't really matter which channel takes off. You can just use that single inventory pool to support a business. The second reason why people love MCF is really about scale. Sellers range in size from I just started yesterday to I've been operating for a few decades. And so even those really, really large sellers, as their e-commerce business has grown, they're starting to think, should I build another building or should I look gross? And one of the benefits they get from using Amazon's fulfillment network is we already have the scale to help them grow. And the final reason I think is just about the shopper. Over the past five years, I think shopper expectations have really accelerated. In the past, I think shoppers were satisfied with a five-day delivery promise. I think nowadays, you know, three days is probably closer to your minimum. Speaker 2: I agree. What about a sneak peek of kind of the We're talking about Amazon brands that are now turning to Amazon fulfillment outside of the marketplace. Speaker 1: You mean other brands? Speaker 2: Yeah. Speaker 1: The first thing I would say is that Amazon MCF is a white-labeled solution, meaning there are many brands out there who use us and you never know. As a shopper, you never find out because you can use us. Speaker 2: Oh, really? I didn't know that. Speaker 1: We're just in the back end. We're supporting your business. It's your brand. It's your shopper. It's your customer. But we do have a few brands who have worked with us and allowed us to share some of their names. Probably the most popular one would be Adidas.com. We launched them earlier this year. We have a number of brands in the beauty category as well. Laura Mercier is an example of that. I think our top three categories, we have about 300,000 sellers worldwide in 11 workplaces. Our top three categories are beauty, Apparel and Shoes and Consumer Electronics. Speaker 2: That's awesome. And so when you say that it's white-labeled, so they're like for Adidas, like they're shipping it and it's not in an Amazon box? Speaker 1: Yeah. So let me answer two parts of the white-labeled question and then the customer experience on adidas.com. So yes, it would be shipped in an unbranded box if that is what you would like as a seller and most sellers do choose that option. It may arrive at your doorstep in one of many last-mile modalities. It could be an Amazon-branded van, it could be UBS, it could be USCIS, and we would just make that determination based on what's hitting the objectives of speed and cost. And so, on your customer experience on your website, the Amazon brand does not show up. It's really just your brand as a seller. I'll say on adidas.com, they also use a product we have called MyWidthBrand. So that product is a branded product, which basically positions It positions your website as a place where Prime members can get their investments. That also sits on top of our multi-channel development capability for Google on the site, but it has other added capabilities as well. Speaker 2: And it builds in the trust of shopping with Amazon. Speaker 1: Absolutely. Speaker 2: Right, so you can pay through Amazon. I mean, that's really important for sellers whose brands aren't known really well. You get that backing by Amazon that people trust and your credit card's already tied to it. It's really easy for them to make a purchase as well. Speaker 1: Absolutely. We have found that when Prime is on the site that we see an increase in both first-time purchase rates and then also repeaters. So they're more willing to make the first purchase and they're also more likely to come back. Speaker 2: Yes. Yeah, that's true. And they have the trust factor and then you build your brand from there. And speaking of that, while you're building your brand in the storefront, things get really messy when you're shipping to all different places. And that's where MCF comes in. And I'm assuming you guys analyze that, what's happening and this is why you decided to open it up even further to help sellers. So sellers like me and everybody listening can just focus. On the part of our business that we want to be growing in our products and not be so messy. Speaker 1: Yeah, you know what's interesting? Fulfillment at the end of the day is really just about Positioning a piece of inventory in the right place and then when the customer order comes in, knowing who they are and where they are and getting into them, it actually doesn't really matter whether that order is an Amazon order or a Walmart order or a Shopee order. It's just fulfillment. And so I think we bring that level of simplicity to sell. Speaker 2: And Amazon customers want it fast. Speaker 1: We have seen, I'll share something interesting with you in terms of what we've noticed with shoppers and merchants. They want it fast, but they also want to know that it's really fast. So when we've been working with brands, we've noticed this situation where a lot of brands actually under-promise and over-deliver. Because they can't quite tell in advance. And so the benefit of using MCF is not only are you fast, you can also be pretty sure you're going to be fast and so sure that you can present that message to your shopper in the shopping center. That's a product we call a MCF asset. So we allow you to show a buy by X hours, get an X day message on your screen. Speaker 2: I've seen that. Yes, okay. That's how and that's all tied in to the whole FBA program. Speaker 1: Yeah, it's tied into the same Amazon fulfillment network. It's all the same technologies to use for on Amazon but available on your own site. You actually also make it available on your TikTok ads as well as Google ads as well. Speaker 2: Let's talk about out of stock, right? Like you've said sellers use MCF and then we were just talking about like FBA and that can improve brand experience. But can you walk us through what it looks like in practice for a growing brand? Speaker 1: Yeah, I'll frame this in sort of a very simplistic way. What it basically just means is if you have all of your inventory in a single pool, then when an order comes in, it doesn't matter where that order's coming from, which channel it's coming from. It's just all first in, first out. Whichever order comes in first, it's the first to get it. Now, if you have to split your inventory pool by channel, then you will then need to do Really scary thing, you need to forecast. Because you need to guess how much is going to be sold here and how much is going to be sold there. And as we all know, forecasting is an error-prone process. And so the more inventory pools you have, the more forecasting error you have. And typically what that means is just higher sales. You just need to add more stock in each inventory pool to prevent out-of-stock situations. So, what we found is that when an FBA seller who's selling on Amazon using Amazon Deployment As Amazon MCF, for the first time, we've seen that their out-of-stock rates decreased by 19% and then their inventory turnover improved by 12%. And let's talk about the inventory turnover part next. It just basically means how fast is your inventory selling. And the reason why having a single Google helps do that is all of your channels are pulling from the same. Speaker 2: All right, Wain, I'm going to make a confession to you. My first year of selling, I was doing partial FBA and then partial fulfilled by merchant and I oversold my product by 50 units, okay, and now I'm out of stock. And it is because of that chaos and what you're talking about because the forecasting was off, the inventory was turning too quickly, and this completely solves all of that. But the biggest thing you just touched on is that cost my business in that week of chaos and out of stock, $80,000 in one week because of that. And it was leading up to my biggest event, which at that point was Father's Day. And I did not have those sales for seven days and it really hurt my business. So like I can feel this as a seller, like how important it is and simplifying this process. If I had these programs in place then, it wouldn't have happened. Speaker 1: I think you're touching on an important point that we're realizing, which is that excellence in supply chain isn't just about the cost. It's about growth and revenue. And that's a big deal. Speaker 2: It is a big deal. And especially when you go to sell your business, People are analyzing your Amazon business and said, well, it would have been $80,000 more this week. It may have gone out of stock for other reasons, but forecasting, you're right, is scary. It does become easier when your inventory is all in one place because mine was not. My inventory was all different places because I thought I could handle it. It's a learning lesson and hey, you win and you learn. So we're doing that. So speaking of, let's talk about holiday strategy. How can Amazon MCF give sellers an edge during peak seasons? Speaker 1: Yeah, I have a few ideas. The first idea is if you would like to use our fast badges product, we found that the merchants have found that they can extend their holiday selling period by using fast badges. And the logic is very simple, which is a shopper may decide not to buy from your site if they think they can't get it in time. And so if you have the delivery promise clearly stated on your site, they're more likely to just buy from you. They feel like, yeah, I can get this in time. No worries. Speaker 2: And pair it with buy with Prime. Speaker 1: Yeah. So that's one. And obviously, if it's an unbranded promise, you might debate whether or not customers will trust the promise. But if it's a Prime branded promise, obviously, they're more likely to trust. The second idea I know a lot of brands are experimenting with new channels because like I said, you never know which channel is going to be the place where it's going to be driving sales this year. And so if you're just starting to experiment with new channels, it's a great idea to just use your FBA, AFN inventory and then start testing. I have seen merchants do this in literally Of course, it's not the automated solution. It might just place an order on Seller Central, but it's pretty easy to set up. Speaker 2: Okay. That makes sense. And so people can experiment across Walmart, TikTok, like everywhere, including their site. But yeah, you're right. Because in holiday season, everybody wants to go. Try the new, let's try TikTok, let's allocate some funds here. I mean, we're all guilty of it and it's fine. You know, it is, but I lean on MCF to get my products to where they need to go. That's really what matters is your customer getting your product. Speaker 1: We are all pursuing growth, right? Like looking for the next growth opportunity and it should be a nice way to support. Speaker 2: So let's talk about what the big brands are doing. I'm thinking about holidays and I always think, all right, you know, the big brands are doing what works during the holiday season. So what are you seeing with enterprise level? Speaker 1: That's a great question. You know what? I would say that the big brands are doing the same thing that small brands are doing. The funny thing is the dimension that I like to think about is less the big versus small. I was born on e-commerce versus new to e-commerce and I think there's a lot of differences driven by that. And what I'd say is many of the emerging brands were born in e-commerce and in some aspects are actually ahead in terms of their e-commerce strategies. But some of the same strategies apply. Expanding new channels is definitely something that both big and small brands are doing. Wanting to make sure that they capture every sale that's possible in the holidays. Everybody's doing that. Speaker 2: And what about globally? Where is MCF stand with that? Speaker 1: Yeah, so we are available in 12 marketplaces. So that would include US, Canada, Mexico, sort of in North America. Speaker 2: Okay. Speaker 1: Five countries in the EU, which are UK, Germany, France, Italy, Spain. We're available in India as well as Japan. And when we talk about Europe, those are basically just the locations where our women's centres are located. You can export into the rest of the EU as well. I actually don't remember exactly how many countries are in the EU nowadays. Speaker 2: No, but that's great. Yeah, so you can go global. I mean, Amazon takes you global, but you have it backed by MCF now. I am so impressed. So looking ahead, what's your boldest prediction for the future of multi-channel fulfillment? Speaker 1: Oh, you know, I would say that, you know, looking at how things have evolved, I think shoppers are definitely discovering and buying multi-channel, which is the reality of things. And merchants are going where the shoppers are. And I think a lot of brands are also doing this globally. So we are excited to be able to support shoppers and brands in the long term. Speaker 2: Yeah, and how can sellers stay competitive? Speaker 1: I would say that this is true for any business. I think for any business, you have to figure out what is the one thing or two things or a small number of things that you can do really, really well. And then look for great partners to help you with the other parts of your business. So one of the things that I'm excited about for how Amazon can partner with brands is that we feel excited about the strength that we bring from a fulfillment capabilities perspective. And we feel excited about sharing that. And I would use three adjectives to describe what's differentiating about our fulfillment capabilities. It would be speed, Reliability, agility, and scale. Speaker 2: Everything you need. Speaker 1: Yeah. Speaker 2: All right there. Awesome. Well, this has been such an insightful conversation and very, very excited for what you're doing for Amazon sellers and e-commerce sellers now, right? With Shopify, Shein, and this Walmart announcement. Do you have anything to add to our fearless sellers who are listening before we say goodbye? Speaker 1: I would say that, you know, thank you for bringing innovation into the world. I think, you know, I love the name Fearless Sellers because it takes a lot of courage and bravery to start any new business. And I think what's powerful about the seller community is the innovation that you bring, like all the new products and all the customer problems you're solving. And I would be grateful if we can help you along that journey. Speaker 2: Well, Wain, until next time, stay fearless. Speaker 1: Thank you, Joie.