3 Unfair Advantages of the Top 1% of E-commerce Brands

3 Unfair Advantages of the Top 1% of E-commerce Brands Speaker 1: Sean Stone, welcome back to the show. How are you doing today? Speaker 2: Doing great. Happy to be here, as always. Speaker 1: You know, I heard you say something on our Mastermind yesterday. You said, I started my business to travel where I wanted, when I wanted to, and that really resonated with me. So that question I have for you at the start of the show, where's your next trip? Speaker 2: The only thing on the books, !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! A shockingly good skiing and snowboarding destination in Southern California. Most people think sandy beaches, great surfing, perfect weather, but you can drive into the mountains, go to a place called Big Bear Lake, California, and get excellent skiing and snowboarding. Speaker 1: My wife went to high school in Big Bear. So yes, I know, but she worked at a ski resort in high school. It's pretty, pretty cool. So yes, Big Bear seems like a really idyllic place. Nacula, you get to Julian, you get some apple pie in Julian. Most people don't know about these places. Great spots. Love San Diego and also New York City. Fourth of July, an amazing spot to be. !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! These are fantastic trips. I love our topic that we're about to jump into today. The Power Law. The 80-20. Put the slide up on screen. Speaker 2: !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! Speaker 1: And what to do with it. Why the top 20% of sellers get 80% of sales. And then what people don't realize often is that inside the top 20%, there's its own power law inside of that too. Like the top 20% of the 20% do 80% of the 80%. Like it is fractal in nature all the way down. So, this report came out why the top 1% of sellers get 50% of the sales, synthesizing what the most successful companies do. You often glean some good insight, can't we Sean? Speaker 2: Oh, absolutely. Well, yeah, the Marketplace Pulse. article dropped. And the one thing that I don't think this is marketplace false's forte, so I don't think this is really their fault. But I think what a lot of people kind of read that article and thought was, okay, great, what do I do about it? I saw this, I was like, this just kind of confirms what I've been preaching for the last year. I saw this and I was like, I thought those were the numbers. I didn't think 50% went to 1.6%. That was pretty crazy. But I knew the 8020 Pareto power law was just absolutely. Speaker 1: Let's check it out on slide two. Yeah, it actually pairs up amazingly with standard Pareto. We're here to talk about the top 20% of sellers versus what was reported in this report. So again, we all know 80-20. So top 20% of sellers would gather 80% of sales. It actually looks like it's even a little bit more extreme on Amazon that the top 20% of sellers are doing approximately 90% of sales. 20% of seller. The next thing, if you were just thinking of it in terms of normal standard Pareto principle, top 4% would do 64% of sales. On Amazon, it's a little bit more extreme. The top 4% of sellers are doing 75% of sales. And then top 1% doing 50% of sales. On Amazon, it's 1.6% of sellers doing 50% of sales. It actually pairs up really nicely. One of my favorite marketing books I ever read was 80-20 Sales and Marketing by Perry Marshall. And it talks about this concept in a digital marketing sense. And I thought it was a really fascinating book. That's the recommendation. But it talks about this. And I think we can learn a lot from what these top 1% of sellers are doing. Speaker 2: Yeah. Well, and I think one of the things that people don't necessarily think about much is the why behind this. And what is kind of unfortunate, but just a reality is digital environments really favor the Pareto principle or the power law method because So, it's easier to move things around and easier to optimize. So if Amazon notices one of the products is getting One of the products in the search results gets 50% of the sales or more. What they kind of see is like, okay, well, why don't we just push this thing up even further in the organic search results? Why don't we make their CPCs cheaper? That kind of thing. And so it's kind of like that. Speaker 1: Why would they put a product? Yeah. It's a positive feedback loop. Why would they put a product that doesn't convert well in the top organic ranking spot? Speaker 2: Exactly. There's no reason for them to, and because everything's so malleable and flexible, they can just do it. So that's the why. Speaker 1: The other thing too, this is really well studied on the Google side of things, which is like the top search result gets an overwhelming share of clicks. It usually is like they get 50% of traffic, 60, 70% of traffic. And then by the time you get to position five, you get a single, you know, three, four, five, six, it becomes a single digit percentage of clicks really fast. You can see the same thing on Amazon too. Brain Analytics will tell you like conversion share. It's the exact same thing where it's like the top The PPC Den is a company for a term. It doesn't just get a little bit more sales. They get 50% of sales, then position two, then position three, which is why like, I think to frame it for people who are like doing digital marketing, you experience this when you're ranking position 10 and then you go to position two, you don't just get a little bit more sales or like the difference between five and one or seven and three. Like it, it goes up fracture, fracturally, like you end up getting a significant more, not just a little bit more. Speaker 2: Yeah. Speaker 1: And it's worth understanding. So yeah, fractal nature. We can actually get a screen cap of the Marketplace Pulse screen cap here. Speaker 2: Yeah. And well, I mean, there's so much of it right here. Speaker 1: It's crazy. So it's wild. Top 111 sellers generate $30 billion in sales. To put that into perspective, that's an average of $270 million per seller. Speaker 2: Crazy. Absolutely crazy. But I mean, that's exactly how this shakes out. It's just bonkers. Speaker 1: And it's true to the things that we're going to talk about of what these top companies have in common. They could be extrapolated at any level too. You don't have to be We all have access to the same tools. Speaker 2: A lot of this is either publicly available data or very easy to find data if you just have the right sets of tools. That was the thing that really struck me. Marketplace Pulse reporting on this, there was a lot of rumors and theories about this, but for them to put it out and to kind of declare this publicly, to me just screamed, hey, the Amazon game that we all got into in the past, you know, like I started selling on Amazon back in 2017, the game has changed and there are a few things that people are doing that really makes all the difference. Speaker 1: Truly. Let's do it. What are the three things? Speaker 2: So, we call them the three advantages you can manufacture. Because again, these are not things that are not possible to do. So, you can get a conversion rate advantage. You can get a margin advantage. And then the final thing is you can get an external traffic advantage. And each of these things can have a gigantic impact on your Amazon brand. But instead of calling it external traffic advantage, what we kind of landed on was thinking bigger and being an e-commerce brand, not just an Amazon brand. Because I think that's one thing that the Marketplace Pulse data kind of extrapolated away is they didn't necessarily explain some of the mechanisms behind why these brands were, or why these companies were selling so much on Amazon. But these were the three commonalities, the three things that are largely in your control. It may not be directly in your control today or tomorrow, but they're things you can influence over a longer period of time. Does that kind of make sense? Speaker 1: When these three reasons, when you were mentioning these before we hit record, it It's so obvious, meaning like all the companies that I talk to are doing these things and they're either doing it explicitly like they know that they're doing it or they're just doing it as a result of their total activities. But it's like you optimize for conversion rate. And if I were to even make this zoom out even more, it's like optimizing for conversion rate means optimizing for product market fit. It's like, are you thinking of your customer? Are you serving things that they want? I like it because It almost is like top down. Like, hey, we're going to optimize. We as an organization need to think about conversion rate and optimize for it. One of my favorite quotes to put in like a PPC context, or even just an overall marketing context, it was like, in a marketing game, he who can spend the most to acquire a customer wins. And it's like, what's the easiest way to be able to do that? It's like, we have a really strong conversion rate. And that is So valuable. Speaker 2: Yeah. Well, and each of these kind of trickles down to the next one or spills over onto the next one, like a strong conversion rate spills over to a good margin, which then spills over to the having the ability to think bigger. Like so each of them feeds the next. And so that's kind of why we ordered them the way we did. Speaker 1: I'll also say another sort of insight from the Marketplace Pulse, and I think this is a known thing, was that over the last year, people have become a lot more sophisticated at Amazon, meaning we know a lot more today than we did a year ago. It's also become trickier to run an Amazon company. Where it's like all of a sudden now, oh, there's tariffs over here. The company that's more nimbly able to navigate that is going to succeed. They're going to be able to have more margin in their situation and then thus spend more on marketing, have more resources and bandwidth to improve their conversion rate, be able to acquire customers who aren't even on Amazon at the moment. Those kinds of things Rising complexity is like a forcing function for the 80-20. And what's also probably extra crazy, too, It's like the 80-20 thing is not a new thing. It's probably always been this way. I think one of the most startling things is that Amazon just continues to grow its share of e-commerce sales. The numbers are bigger. But I think these things were always valuable, right? These are perpetually evergreen components to do, except now it's been happening more and more. Meaning like The top 20% of sellers are doing different things today than they were five years ago. And like these are some of those things. Speaker 2: Yeah. I mean, I could not agree more. And I think there's just there are so many things you can do. But, you know, there is I've heard an analogy. It's like there there were a lot of different things people tried in order to get the plane to like first work. But once they got Planes to work, they realized which principles were the key ones to consistently achieve liftoff. And I feel like these are the equivalent of those principles, you know, because they're there. They've always been true and they've never been more true today. Speaker 1: There's also a lot less competition five years ago, too, where it's just like anyone, you know, you could win just by being there. You know, you just showed up. You showed up. You just simply showed up sometimes. These are all really good points. Let's get into it. You have some examples here too. Speaker 2: Yes. So I decided to focus on examples. And before I show you the examples, I actually had a bunch of other examples. So like, these are not the only ones, but some of the feedback I've been getting is like, you keep showing us examples of like products that are like, have some unique advantage that lends itself well to being different than everyone else. And so what I purposely came up with today were two companies that are selling commodities, products that have very minimal variance in them. And so this is like, these are examples of how companies are using these principles while selling products that are not different than their competitors. Speaker 1: Do you have any connection to these companies or you just plucked them? Got them? Speaker 2: Yeah, I just plucked these. I don't manage them. I don't manage their competitors. I just look at these brands and I mean, I'm always looking, but I'm always looking at these different brands to see what they're doing. But the more I look at them, I end up looking in the same three spots and can tell you exactly what they're doing. Speaker 1: I find that true too, meaning like a successful e-commerce brand, you can learn something from them, even if you're not in that industry. In fact, I feel like a lot of the good marketers I know I understand that. And you're always looking at what is a successful e-commerce brand and how can I apply that to dog food or some batteries, so on and so forth. Speaker 2: The first one we're going with is Bedsure. Now, I specifically thought of this company because we have their products in our house. And we did a screenshot instead of me screen sharing because that can kind of get messy. But Bedsure, of my last count, either has seven or eight Amazon bestseller padges. They are consistently manufacturing bestseller. And we think My agency, Spillover Commerce, that they are just, the first thing they've done is they've got an incredible conversion rate advantage. And we're going to show you that in a second, but Bed Sure is the first one. We chose just one of their products, the comforter set or the comforter duvet insert, but they have like example after example of them doing this. It's, it's quite impressive. Make sense? Speaker 1: So actually, on a later slide, we actually have some conversion rate examples. Can we actually look at that really quick? Yeah. So like duvet insert, right? So through various means, you can sort of extrapolate approximate conversion rates based on four keywords, right? Using brand analytics and You can see it like ASIN 1, ASIN 2, ASIN 3. By the time you get to the third ASIN there in the bottom right, that's like a 1.7% conversion rate compared to there's 5.5. And I guess the question is like, yeah, what is your takeaway when you see something like this? Speaker 2: Well, it seems like for everyone, this was a bad week because their average conversion rate is actually higher. But and just so you know, the one and two are both like, so it's both Bedshire and then this is their primary competitor. And then this is this kind of fluctuates between different competitors who's in third place. My primary takeaway is, okay, they clearly have a very dominant keyword strategy and they have a very dominant conversion rate that's consistent over time. If you look here, they're either matching or, oh, there's one time they lost, but they're always matching or beating the competition on conversion rate, but they're doing that at ale. Like, look at the clicks compared to their competitors. And what that tells me, They've put together a winning offer that they can afford to spend a lot of money on so that they can continue to just beat up on the competition and be one of those top 1.6% sellers. Speaker 1: I'm curious to perhaps what I'm pulling up there. I actually want to pull up that ASIN and see if we can learn anything to B07YK. I wonder what they had on there. product pages that would give, and then I want to punch in like the third one, B00S1TC3V6. Like I'm curious what the difference is. Um, and maybe I'll take over screen sharing too. And we can look at these side by side. Speaker 2: Let's do it. Speaker 1: Let's do it. Let's see. Well, let's see if we can learn anything here. Cool. I think this might be interesting. Speaker 2: Yeah. Speaker 1: So on the left side of the screen, we've got, the bed shore and on the right side of the screen, we've got The third one, which is a 1% conversion rate versus a 7 or 5% conversion rate on the left side. What jumps out at you? Let's take a look here. What's jumping out at you here? Speaker 2: Well, the Utopia betting, which is the third place one. First of all, they have... Well, we should... We should actually consider comparing both of them because Bedshire's duvet is a queen insert, so let's see what their queen insert price is. Or utopia betting, because right now we're not comparing like for like. Queen, pack of two. Speaker 1: Yeah, we just want queen. Speaker 2: So, um, first thing I noticed is that Bed Sure is beating Utopia betting, even though they have a better price, which I'm sure is infuriating. Generally, when I see that, I know that the, like the one with the higher price has an external traffic engine. So that's one of the first things I always take away. The next thing that I think is fair to say is that Badger has a cleaner listing, in my opinion, than the Utopia one. It just looks better on the screen. The main image is more compliant and looks better. The titles, I would say the titles are similar, but I think that Badger wins slightly because they've got the actual size of the product in the title, which is really useful if you have like 100 tabs open. Which is the way that my wife shops as a side note. So you're optimizing for like glance views and like somebody kind of playing a game of like ruling out all the different competitors. Hmm. I think Badger also wins on that front. Speaker 1: A major difference in about this item, the bullet points here, a major difference. Speaker 2: Yeah. Wow. Speaker 1: It almost seems hyper obvious here to be able to use all the characters. I mean, this is like a really basic point. Just use all the characters that are available to you. The title looks longer in both cases. The material matches Again, using all the characters, special feature, breathable, comfort, extra soft, machine wash, doesn't say it over here. And then just the about this item is a little bit more detailed as well. It looks like they wasted a bullet point here just saying imported. I think it's like an indicator that just says like, Bedshore thought about each bullet point and these guys wrote imported. You know what I mean? It's just like thinking of like, is that valuable to a customer? Like probably not. We got some interesting points there. A plus content components. Yeah, is this is this image cropped. Okay, no, it's okay. Um, so, yeah, they're both they both have some social proof here. Uh, almost mirroring each other on. Speaker 2: Do you think bed bed sure looks better though, because they. Went with single color titles like I don't like utopia is multi tile thing. Although utopia bedding does have bigger text, which I think is actually smart on their behalf. Speaker 1: Okay, then we go into comparison, tabs, then we go into some lifestyle stuff, kid jumping on bed. Speaker 2: Yeah, Utopia wins on the, yeah. Speaker 1: I also want to say that, I don't know if this matters, but like, The Utopia one does look like this looks a lot more like a real image. This one could be AI on the right side, which maybe that like sends like some kind of negative signal here. Speaker 2: Yeah. Okay. That's a fair point. Speaker 1: Potentially. I'm getting to sizing. So there's a lot of similarities here. I'll also say I mean, Bedshore has a 4.7 review. Utopia has got a 4.5. Yeah. Which is very respectable. 4.5 and they have a lot more reviews as well. They also have some Amazon Choice badges too. So some interesting things here. I think there's some probably nuance here too. And probably like third point too, I wonder what roll price Has to do with it to just based off like potentially understanding the market like maybe $26 could be potentially like a negative signal for some people like, oh, this might be cheaper. It's kind of interesting. Um. So, yeah, some interesting things there, I think, like, this little analysis is just like, use all the characters that I have available to you. It's like the most obvious one, maybe some price testing too. And yeah, if I was Utopia, like coming down to $26 and still not having a better conversion rate, although it is possible that Utopia maybe is in position six normally, right? So I thought that was an interesting exercise. Speaker 2: There was one thing you didn't call out that I thought actually was very interesting. On our friend's adventure, they had the color above the size, and on Utopia Betting, they had the size I think that the color above the size is probably a contributing factor. I know it might seem kind of nitpicky, but that's something that I think is also contributing to their success. Speaker 1: There's also some good, I'll also say to like the third position still very respectable. I'll also say they both have like really good shipping times for almost all their colors. Yeah, they're they're both doing some really good things here. Don't get me wrong. Speaker 2: The next one we're going to talk about is Gym Reapers. I thought this was really interesting because this is a company that's selling lifting straps for $14.99. That's a commodity. Aside from branding, what are you really making that's different about a strap you wrap around your wrist to do deadlifts? I can't really think of a lot. And yeah, this is maybe a little bit of a bro-y example, but it's just one that came across. Speaker 1: Let's bro down. Speaker 2: So if we look here, the conversion rate advantage is even more substantial. Jim Reapers has a 21.8% conversion rate on the term lifting straps. And then this company and this company are both 4.3 and 4.5%. And the other thing that's quite interesting... Speaker 1: Look at the sales difference. 477 versus 40. Yeah. Speaker 2: It's true dominance. And you know, Jim Reapers is number one and they're consistently number one. But the second and third place is just like different ASINs every week jumping around So it kind of seems like they've got the number one spot locked in and then some other people are kind of just stuck competing for second place. I think that this is another example of a brand. Well, they've got two things going on. They definitely have external traffic going because if you look at their clicks and sales, like they definitely I'm competing with these other guys who I think have lower prices than them as well. But the other thing is when people do eventually show up to their page, they're converting and they're converting at quite substantial levels. So what could be happening here is people could be running deals on different ASINs. But DM Reapers, even when they don't run a deal, is week after week absolutely crushing it on Amazon. Speaker 1: So, I think it just brings up another thing that I think when I talk to dominant players in the space, they never think of conversion rate as an afterthought. It's always a leading thing for them, meaning they know their conversion rate and they're tracking their unit session percentage. They know what it is. And they are proactively doing activities to curate a better conversion rate. I see a lot where people never optimize their product images, like years. They don't touch their A-plus content. They don't touch their Product images. They don't think of video iteration. They don't think of like changing and iterating titles. Like there's actually a lot of companies that are doing like, you know, fairly successful and never touch any of these things for years and years and years, but they do a lot of marketing. They think about marketing a lot. They think about their PPC a lot. They think about what they're spending, their total A cost, so on and so forth. They spend a lot of energy thinking about marketing, but it seems like a lot of companies consider conversion rate as an afterthought. Meaning, oh, our sales are down. Let me think of conversion rate. Or, oh, I'm having trouble. Let me go think of conversion rate. And I think that the most successful companies have a Iterative game plan that they use all the time to look at their listing and be like, Oh, we only have one bullet point that says imported. You know what I mean? Like how, like, how did that get missed? Right. So it's like having this iterative... And the thing there, that Utopia Betting probably isn't updating it because they're position three respectable. They probably have good other metrics. Maybe their ACoS is good, their total ACoS is good. They're happy with that. But I think people don't prioritize conversion rate, understanding their customers. Product page optimization enough, but it's not like they're not doing marketing. So I think all of those things like quick shipping times, thinking of that, trust, pricing, reviews, images, titles. I meet a lot of people where I'm just like, Hey, have you thought about changing your images? And I'm like, They get a conversion rate boost. They're like, ah, like you could have done that months ago. So yeah, the most successful brands don't think of that as an afterthought, straight up. Bake it into your SOPs. I see it way too often where people are only thinking of their PPC, like success. Yes, you need to do a lot of PPC stuff. But in addition, all of your success isn't locked in there. Speaker 2: Well, and to make that more concrete, right? Like my business changed when we started looking at Our competitors' conversion rates every week and comparing it to our PPC. Even if you're like, what's a key takeaway that I could just take and run? Look at your PPC conversion rate, especially for your single keywords next to your competitors' conversion rates on those same keywords. There's a bunch of different ways to get it. To get your competitor's conversion rates, we're not going to get into that on this episode, but this is something that's really, really useful. Once you start comparing your conversion rate to your competition, you start to realize, do I have a traffic problem or do I have a conversion problem? If I were to come in here and try to launch a lifting strap tomorrow, if I have the hubris to do that, the first thing I would do is Try to figure out a way to have a 23 plus percent conversion rate on the term lifting straps, because if I had that, then I would know that I would have an advantage that I could press. So I would try to manufacture an advantage in that circumstance. Speaker 1: And you would spend a lot of time thinking of like, how do I get that conversion rate? Like, what do I have to do? What do I have to manufacture? Like, what activities am I going to be doing on a regular basis to try to improve my conversion rate over time? Speaker 2: So, we've talked about conversion rate quite a bit. I think building a conversion rate advantage is the key piece of the pie to ranking on Amazon. One of the things that makes that sustainable is getting yourself some kind of margin advantage. And that's, this is the kind of like unsexy truth when it comes to selling on Amazon and kind of becoming one of the parade-a-lop people. But these are some of the things that really intelligent brands are doing that I would at least try to kind of describe on this call because it is something that I think is really interesting. And some of these are not the standard menu of brand management. So first one is obviously like, how healthy are your margins? For Amazon PPC, after your Amazon fees, after your storage fees, all that kind of stuff, are you above a 15% net margin? Something that's great about AdBadger is you can actually measure a lot of that inside of the tool. So that is a shout out to AdBadger. They do have the profit dashboards that are quite handy. That's definitely something that you should be measuring all the time because it's something that really does add up and a lot of sellers aren't paying attention to the fact that Amazon started nickeling and diming them on fees they'd never even heard of six months ago. I don't know if you've got an insight there but I think that's something that's really worth bringing up. Speaker 1: Because I get to talk to so many people and see so many things I sometimes meet companies that have Huge long-term storage fees, but they're successful anyway. And sometimes I meet ones that, and it's just like how much more successful could they be if they had insight into these things? And I also think too, I will talk to enterprise level e-commerce brands. And it's almost like flipped in the way that they often navigate these things. Meaning they have really good logistics going into it and they learn PPC instead of the other way around. It's like, oh, I'm going to like learn how to do digital marketing. Oh, what are these like logistics and margins and terms negotiations and all those things? I can almost be like a foreign concept to a lot of companies. So I think it's just another way to be a well-rounded The PPC Den is an e-commerce brand to be able to negotiate and get better terms and have more ammunition to market more aggressively. The company that can spend the most to acquire a customer is going to run laps around you and do it profitably. And this is a huge way to be able to do it. Speaker 2: There are so many different things. Gonzalo, or Gonza, from our networking group, he talks a lot about finding ways to really be more profitable as a business and getting terms is one of those things. Another thing is just making sure you're managing, you're doing the blocking and tackling. Are your tacos healthy? Are you spending money in a way that is really well thought out? And then an advanced one that I want to shine some light on. So a company I work with does this and what they actually do is they manage their ad spend on rotating credit cards. The reason they do that is because then they can push out the date that they have to pay a credit card down by, you know, seven plus days because of the credit card terms. And so I think what they end up doing Because they end up getting a huge amount of cash back into the business because they're on better payment terms on top of having terms with their suppliers. They have better terms on their credit cards. Those are some of the things that I'm seeing brands do to get a margin advantage. And I think those are You know, the unsexy things that a lot of people are doing to win on Amazon. Speaker 1: Agreed. Speaker 2: Yeah. Okay. So we kind of got through the boring one. Sorry, everyone. Let's get into the sexy stuff again. So the next thing is external traffic. Are you manufacturing an external traffic advantage? And so we're going to start with Jim Reapers. And Jim Reapers, they are Not really doing that much on TikTok Shop. They're doing a little bit on TikTok and a little bit on TikTok Shop. I know that 1.8 thousand units of a pair of shorts being sold seems big, but in a couple of minutes you're going to see that and think it's actually kind of small. But that's because they are doing another thing that I think is quite powerful, which is they are absolutely going crazy on meta ads. We have 180 different ad creators running on Meta right now. And they are spending lots and lots and lots of money on meta to get people to their website and then experiencing a big spillover effect from their Shopify website onto Amazon. So that is what Jim Reapers is doing to consistently be in the top 1.6% of sellers on Amazon. They're just doing everything they can to maximize their sales on other platforms. They're acting like a true brand and using that to displace a lot of long-term sellers who have a review advantage over them, or at least had a review advantage over them when they launched on Amazon. Speaker 1: I was listening to some sales guy one time talk about when you're talking to a small business and you're trying to sign them, One thing to ask them is like, do you have a cleaning services who comes in and cleans the bathrooms in your office? And if the business owner says like, no, I do it myself. It's like a huge negative signal for like the health of the company because it's like this owner is so unorganized and doesn't prioritize that they're cleaning their bathrooms. So it's like a really simple thing that tells you a lot about the company. And I think running meta ads, having a Shopify store, doing all this, it's one of these insights that's like, oh, this company has the infrastructure and the bandwidth to do something like this. They're thinking of the full e-commerce spectrum than just being like, I'm just going to find a product and sell it on Amazon. That person who says just that is going to have a major, major disadvantage between someone who's like, I'm going to build an e-commerce brand, Amazon will be one of my channels, and I'm going to also do these other things too because this is where my customers hang out and this is part of my funnel. And just the act of doing that will force a company to begin to have more success Factors stacked in their favor. A lot of these things are positive feedback loops because if you're running meta ads, you're going to learn really quick. You're going to do rapid creative optimization. Then you're going to think about what products do I have in my Shopify store versus Amazon? Are they different? You're going to be forcing yourself to have these good conversations, which will make you a more refined company, which is the whole point of the Marketplace Pulse thing is that you need to be a more refined company that thinks of more factors. If you were to challenge someone who's just on Amazon, like, yo, you have to get money out of your account and spend 10 grand on meta ads over the next three months. They would then have to sit up straight and be like, how am I going to do this successfully? And I think that would force a lot of activities that would make the Amazon sales even better. Because they're just going to become a more well-oiled machine, just from a pure operational standpoint, a business intelligence standpoint, an ability to get in front of your customers standpoint. If I'm just selling it on Amazon, I'm not considering a lot of these branding factors. I'm not considering a lot of the full flow of my customers. And that compounds a lot over time. There's a lot of success factors here. Speaker 2: And the other thing too, right, is I'm kind of showing two different examples, TikTok and Meta. They're both demand generation platforms. And really, that's what we're hoping That's not what I'm hoping. That is the key to success here. If you look at why Jim Reapers is outselling everybody else, because they have a much better demand generation engine installed on top of a high converting Amazon listing. They basically took their advantage of a better conversion rate and they put it on steroids by having A ton of traffic going to their own website, which then naturally leads intelligent shoppers to curiously spill over onto Amazon and see, you know, are they on Amazon, that website that already has my credit card, that already has, you know, really, really solid two-day shipping and really seamless returns that I'm already used to doing. You know, if this product is already on meta, Sorry, it's already on Amazon. I might just go buy it there even though I found it through the meta ads or through Instagram ads or something like that. That's the kind of thing that shoppers are doing. And what smart brands, just a pro tip, what smart brands are doing is having different product offerings on different platforms so that people can't directly compare them. You give people an option on your website that maybe is more We're here. Speaker 1: This was a case study into some of those most successful ones, right? So these are commonalities of success, and I think that's always interesting to study. Thank you so much, Sean, for coming on the show and sharing these insights. Speaker 2: Yeah, of course. Just to wrap this up, Badger is doing the same thing, but they're going crazy on TikTok and doing a lot less on meta. But just in general, the same things apply over and over and over again. To wrap it up, you're in control here. These are things you can influence directly. It may not be today or tomorrow, but I would highly encourage you to think about this. Think about ways that you can influence this in your own business. Speaker 1: Is that another way? A bad conversion rate is a choice at this point, right? Speaker 2: Yeah. Speaker 1: Come on now. Speaker 2: You can't outrun a bad diet and you can't outspend a bad conversion rate. Speaker 1: It's true. Yeah. So thank you so much, Sean. Good reminder. I think these are like evergreen Considerations. This is a PPC show, but what influences PPC a lot are these other factors as well. Great branding, both on Amazon and outside of Amazon, having good margins, and always thinking of your conversion rate to try to improve it. Well said. You've got links to Spillover Commerce. In the show notes. Always a pleasure, Sean. Have a good one. And everyone else, I'll see you next week here on the PBCN podcast. Unknown Speaker: I've launched campaigns and picked keywords. I've got my bids, set placements too. I've made mistakes, I've made a few. I've had my share of rocky words, but I've come through. We are The PPC Den, my friends. And we'll keep on damaging. You are the PPC Den. We talk about Amazon. No time for Medicoms, cause we fix the game.