#404 - The Three Buckets Of Sellers On Amazon with Luba Ilyasova & Billy Pecor

#404 - The Three Buckets Of Sellers On Amazon with Luba Ilyasova & Billy Pecor Kevin King: Welcome to episode 404 of the AM PM podcast this week. I've got a double feature for you. That's right. I've got Billy and And Luba on the podcast. They've got a lot of management consulting experience, a lot of branding experience, and they're going to be sharing some insights on some of the big brands that are doing it right on Amazon and some that are doing it wrong, as well as talking about AI and Cosmo and how we all as sellers are going to need to change the way we're doing things. It's going to be an interesting episode for you, lots of good insights. Enjoy this episode with Billy and Luba. Unknown Speaker: Welcome to the AM-PM Podcast. Welcome to the AM-PM Podcast, where we explore opportunities in e-commerce. We dream big and we discover what's working right now. Plus, this is the podcast where money never sleeps. Working around the clock in the AM and the PM. Are you ready for today's episode? I said, are you ready? Let's do this. Let's do this. Here's your host, Kevin King. Kevin King: What's up? I've got a two for one today. That's right. We have a special edition for you today, the AM-PM Podcast. Two of the smartest, most tactical people probably in this space are joining me today. How are you guys doing? It's Billy and Luba. How are you doing? Speaker 2: Great. Speaker 3: You're doing great. Thanks, Kevin. Kevin King: Now, we were in Cancun, I think it was, at an event in Cancun and you guys were at this mixer and you're like, hey, we think we'd be a good guest for the AM-PM Podcast and we're sitting there talking. I was like, you know what? I think you actually would be. This is going to be fun today. So how do you guys actually know each other? Speaker 2: We met through Titan. Speaker 3: It's been about a year. Luba and I clicked on a lot of what we're probably going to talk about today and many more things. So we met through there. Kevin King: So Billy, what's your background? What have you been doing in this e-commerce space? Tell us a little bit about why we should listen to you, why you're even on here. Speaker 3: You know, I ask myself that every single day, right? When there's just so much going on and so many changes, but I kind of think I have a little bit of a different background than most. I've been in the Amazon space for going on five years now, but it started off actually in management consulting. So a lot of it really trying to understand current to future state process, no matter what the industry was. Kevin King: So you were doing that and then how'd you jump into the e-commerce, how'd you migrate over to the e-commerce space? Speaker 3: Yeah. Yeah. No, I was in that. I actually was coaching junior tennis in Houston for a few years and then COVID hit. And so if you can imagine, obviously, consulting was kind of being shut down everywhere. No one was traveling anymore. Tennis was kind of being put on the back burner. And I saw this opportunity to join Grazio at the beginning of 2020. So this was a month into COVID. Everything was shutting down. Everyone was kind of I was kind of, you know, not sure what was going to happen. So I joined Thrasian very early on into their kind of beginning stages of their growth and then obviously the scale. So that was kind of the start to the e-commerce journey. It was a lot of self-taught, self-learning, trial and errors at the very beginning because you have a small team and everyone wearing a lot of different hats. So I was there for two years and then left and joined as a director of operations for a private label brand and doing that ever since. Kevin King: What were you doing at Thrasio? What was your role? You said you wore many hats. What did that entail? Yeah. Speaker 3: So I spent my first half of my time at Grazio in what we would call core brand management, right? So just long-term brand management. You have a portfolio of brands. I managed about close to $25 million in revenue across five different brands there for the first half. Just really aligning a bunch of our product initiatives, managing the P&L, making sure that we are on track with just really focusing on the growth strategy targets that we'd set up at the beginning of the year. Kevin King: How did you know what you were doing though? You were doing tennis before that, so how did you go in there and know? You're in an Amazon business looking at the P&L. Did you go through some sort of training or was it a crash course or was it learning about a seat of your pants or how did you actually... Speaker 3: We did have some veterans in the CPG space come in and they're familiar with... Kevin King: They don't know anything about Amazon, basically. Speaker 3: Well, they might not know anything about Amazon. So a lot of us, we're relying as we go. But no, I think it's, you know, one of the things where it's more of a, I think this speaks to the Amazon game, right, of just understanding if you're an analytical person, being able to follow the numbers, follow the data. That's, you know, I was a civil engineer in college and translated that to, you know, a business master's and then a management consulting. So I'm not unfamiliar when it comes to data analytics, understanding trends and patterns. One of the things that I really made an emphasis when I joined e-commerce space was to truly dive into the learning piece of it, learn everything that I could, whether it was Seller Central, whether it was tools that we were using, to really understand the big picture at scale and where things can go wrong and run off the tracks. Learning that was, I think it was actually a relatively easy transition from the consulting mindset because you treat every brand at the time as an individual client, right? They're going to have their own nuances. They're going to have their own struggles. They have where they currently are and where they want to go based off of the teams, the directives that you set for it, but then also the teams that you have at your disposal and those levers that you can pull that maybe are more relevant for, you know, one brand than another. So, you know, it, yeah, I jumped, I think it, it kind of maybe doesn't translate to, you know, to, you know, I think it's a little hard to kind of explain. So how, how did you get into this space? Cause considering, you know, tennis is definitely on the other end of the spectrum from anything e-commerce related, but, um, but no, I think it really just comes down to knowing your strengths and knowing how to really understand and just be a true serial learner at the end of the day. Kevin King: And now today you said you're doing, you're consulting for a brand or you own a brand? Speaker 3: Yeah, no, I don't own a brand. I work with a private label seller and doing operations for his brand and kind of running similar kind of general process of saying, hey, here's where we currently are. Here's all the things that I now know after four years of diving into Seller Central and tools and trends and keeping up to speed with the changes that are happening on Amazon and just kind of Putting my foot down on the gas pedal and trying to go faster and implement more. So yeah, it's been a crazy four and a half, going on five years. Awesome. Kevin King: Well, Luba, your story is an interesting story too. You're originally from Russia, coming over. Now you're shaking up some Amazon businesses and doing a few things. Every time I talk to you, you're like, you got a very certain way, a very opinionated way, like this is the good way to do it. The rest of you guys are doing this wrong. This is what the data shows. I always like your approach and everything. So what's your story? What's your background in this e-commerce space? Speaker 2: First of all, have you ever met a Russian Brooklyn person who does not have the authority You can do everything wrong, I know how to do it right. Kevin King: No, I love it, I love it, because you're like, there's no doubt. When you talk to Luva, when we're sitting somewhere in an event, there's like, okay, Luva, all right. Speaker 2: But I think my strength is I'm not afraid to admit half an hour later that I was completely wrong when I was so certain and completely reboot. That I'm not afraid to do. I have an interesting journey in e-commerce. I just realized that I've been selling on Amazon for almost as long as Amazon has been selling. I got into Amazon game after the financial crash of 07. Oh, wow. Kevin King: What were you doing? Speaker 2: Before that, I was a reinsurance specialist. Kevin King: But when you got into Amazon, what was it, books and DVDs and stuff? Speaker 2: Well, it's more interesting, I stumbled into AVM convention in Vegas. Kevin King: Okay, the adult video convention? Okay, you stumbled into it? How did you stumble into the adult video convention? That's during CES, right? Speaker 2: Yes, exactly, yes. The freaks and the geeks, they had the CES and they had the AVM. And I got sold on all you need is a credit card and $100 and you can start dropshipping. Kevin King: Okay, all right. Speaker 2: And I started dropshipping products which later turned out to be medical grade 8, grade 2 device were not approved by FDA and were imported through some backdoor. So if there is a crash course and mistakes of what not to do on Amazon, I've got them covered. Kevin King: So you found a product at AVN and then you were drop shipping that product on Amazon. So I'm assuming that's in a category that's... Speaker 2: That was gated, that was approved. Kevin King: And so it turns out that product was not really the best product to be selling. So how did that migrate from the drop shipping? What happened after that? Speaker 2: After dropshipping I opened my private label. I sold it a couple years later before all the crazy stuff with aggregators started. We're talking circa maybe 13-14 years ago. Kevin King: So you sold it 13-14? Yeah. So after that you started in the sexual wellness space? Speaker 2: Yeah, in the sexual wellness space. Kevin King: You started a private label brand there and then you sold that like an early... Speaker 2: I sold it mainly because I couldn't support the growth. I couldn't support the growth. There was not enough cash flow. Sometimes in Amazon business when you grow too fast, you can't really support that growth. You have to know how to manage success and that's a learning process. So I sold it and I ended up doing what kind of Billy is doing right now, going in and out of business consultant, management consultant, growth hacking, strategy, problem solving, partnering with various brands. So over the years I was either partnering with a brand or doing consulting. Right now I manage e-commerce marketplaces for a national brand in a beauty space. Kevin King: So you've taken, but one of your skills, I think you told me, you've taken brands from, I don't know the exact numbers, I'm exaggerating here a little bit, but like hundreds of thousands of dollars to tens of millions of dollars. Speaker 2: Several brands I took from zero to meet 20 million dollars. Kevin King: That's awesome. As like the director of the whole Amazon marketplace channel for them. Speaker 2: Coming in, starting it from scratch and building it up to 8 digit business. Kevin King: So there's probably something to say about your background when you first started working in the sexual wellness space because when you're selling that type of product you're almost marketing and doing things with one hand tied behind your back. Speaker 2: Sometimes with both hands tied behind your back. Kevin King: Yeah, no pun intended on that, but it's difficult. And so it makes you become resourceful and really understand stuff. And I think a lot of people don't realize that some of the best marketers, I mean, some of the best marketing period comes from that space. It leads in a lot of different industries. It's look to what's happening in that space to see what's going to be happening in a couple of years in the mainstream. Technology wise or marketing wise and people that come from that space that come into the mainstream I think always have an advantage because of the way they have to cut their teeth selling those types of products. Speaker 2: You know what was the key to my success in that space? I had no idea it was the hardest space to be in. Kevin King: That's exactly almost what I'm saying. Speaker 2: I had no idea that I picked one of these. Kevin King: You just thought this is the way you have to do things. As a result, you're doing it the hardest way and you accomplish success there. Then when you come into the other industry, oh, I can advertise here. Oh, I can run this. I can do that. Holy cow. Just imagine what I can do now. I fully get that. Hey, what's up everybody? Kevin King here. You know, one of the number one questions I get is how can you connect to me? How can I, Kevin, get some advice or speak with you? Or learn more from you, the best way is with Helium 10 Elite. If you go to h10.me forward slash elite, you can get all the information and sign up for Helium 10 Elite. Every month, I lead advanced training where I do seven ninja hacks. We also have live masterminds and every single week, one of those weeks I jump on for a couple hours and we talk shop, we talk business, do in-person events. Helium 10 Elite is where you wanna be. It's only $99 extra. On your Helium 10 membership, it's h10h10.me.me forward slash elite. Go check it out and I hope to see you there. So what is it right now that you guys, I mean, you guys have seen a lot. You've seen a lot. Your brands are doing really well, Lupa. Billy, you got, you've been, you're on Thassio and saw some big stuff. What are you seeing that actually sets apart The big brands versus the brands that are doing it right, I guess you would say, versus the brands that aren't doing it right. What are you seeing out there that like, man, these people are just screwing this up, but on the flip side of that, these people are doing it right. Speaker 2: We identified what I call the three buckets on Amazon. And I think a lot of sellers, especially beginning sellers, make a mistake of not putting themselves in the right bucket. You got the big sellers like Procter Gamble of the world. You got the Chinese private labels, the guys who use every possible black hatting technique in the universe. And you got the other private label sellers. So what I think the majority of people who are listening to this podcast is that third bucket of sellers. The private label sellers who don't have the big company operating budget, but also cannot and do not want to resort to the black hatting techniques. So they have to be a lot more strategic. And we looked at a couple of brands when we were preparing for this, and two brands stood out. One is an example of don't, and one is an example of do. Speaker 3: Luba's got this covered for sure, but I think when we look at those kind of buckets of our competition, right? A lot of times, depending on what phase of the business you are or what strategy you're trying to understand or trying to deploy and execute, I think it really comes down to knowing which of the competitors to pay attention to. If you need to watch out for a certain thing, let's say, you know, we'll talk more about this with maybe the examples. But just really, just again, understanding, hey, is this someone that I should mimic? Should I pay attention to? Do I need to worry about when it comes to pricing, when it comes to packaging, when it comes to digital shelf space, right? You know, the imagery and the creative assets, right? When it comes to messaging or copy. And so I think we see some kind of that initial understanding of our research and development when it comes to whether it's a product ideation or even the optimization of a product. I think that many sellers can go off the rails a little bit and actually be paying attention to the wrong things to look at. It's not just a matter of knowing what are those buckets out there and the attributes of those buckets. It's a matter of knowing how to figure out, is the brand that you see on Amazon, is it part of one of those buckets? And then are they doing this right or doing these things wrong? And is that something I need to be paying attention to for the changes? Or how can I leverage what they're not doing right to my advantage and capitalize on that? Kevin King: So you're saying if you emulate the wrong people, you're saying that a lot of people that are in this third bucket, this private label bucket, that aren't doing Black Cat, that aren't the big CBG brands, they're actually maybe trying to be something they're not. And they're emulating the wrong, they're like, well, if all the guys are doing Black Cat, I need to do Black Cat. Or if the big brands are doing their advertising a certain way, they're like, man, I can't compete if I can't advertise like this. That's what you're saying is they Maybe you're paying attention to the wrong markers in the space. Speaker 2: Yeah, and not only paying attention to the wrong markers in the space, but also missing an opportunity. Because if you see the big brand, and you automatically assume, oh, these guys have 10-digit advertising budget, I cannot possibly compete with them. But you go and you look at what they're doing, then you realize they're sitting exclusively on the brand equity. And I like to use Kims and Hers as an example of the don't. It's a brand that's on track to make a billion dollars in gross revenue this year. The close last year was at $820 million in total operating sales. Take a guess what their sales are on Amazon. Kevin King: I have no clue what they're doing, probably not much. Speaker 2: Barely a million dollars a month. So out of the $820 million, 12, let's be generous, let's say 20 million come from Amazon. But it's less than that. So what does it tell me? It tells me they're not the guys to follow, that's number one. They're leaving a lot on the table that a smart private label brand can come in and take from them. By learning what it is that they're not doing right. Number one is they're treating Amazon purely as a distribution channel. And that is something that you're going to find if you look at a lot of big brands. They're not treating Amazon as a consumer acquisition channel. They're focusing on acquisition on D2C. And in today's environment where the private equity money dried up, And nobody can afford to run thousands and thousands of ads on Facebook with low conversion. You have to be more mindful is where and how you're acquiring the customers. And the conversion rates on Amazon are better than in any other direct-to-consumer channel. So you're going to see more and more brands going to Amazon's acquisition channel. I think that's a big strategic change that we're going to see. And that requires talent. And when we look at him and hers, the first thing that jumped at me was, it is not a packaging for digital shelf. Kevin King: What's the difference in digital shelf packaging and retail packaging? Speaker 3: Yeah, so what we see with the digital packaging is an understanding of how your customer is going to first be able to, how they see that packaging, right? What are they able to see on that image that resonates with them? When you're in retail stores, a lot like Luba was saying with Pimms and Hurst, they're heavily reliant on brand equity, right? So their focal point for these particular products on the packaging is that brand name. They're trying to allow that customer to see and recognize, hey, there's a brand name. We're already in the shampoo aisle. For instance, we're already in the, you know, the topicals, you know, the bath and body works kind of aisles, right? And so they already know they're searching for that, you know, particular type of products. Now they're looking for maybe that brand, right? In, you know, more specifically than just a shampoo or a conditioner. When you're on Amazon though, when you're in the digital kind of listing space, now all of a sudden, you know, the customer, they might be in that shampoo category, but brand equity maybe isn't the only, you know, the brand itself maybe isn't the only thing that customers are looking for, right? Maybe they're really looking for pricing, maybe they're looking for features and benefits more easily because it's more readily accessible to them, right? To get that information and digest that info. They're looking, obviously, for the two-day shipping, right? Because they're not in the store that they can just take it right off the shelf and leave. Now they have to work on the shipping channels. And those big players might not have some of those issues. The digital shelf packaging though is now changing the way you relate with the customer, right? And so instead of maybe focusing so much on the brand name as an example, being kind of a focal point or being recognizable on the main image, now we're looking at trying to highlight that this is a shampoo or the quantity size of that shampoo, right? Or maybe a feature or benefit of it. So, you have a limited space, that 4x5, that 5x5 type size image for that main image that you're now trying to convey, hey, it's not just the brand we're talking about, it's a feature, a benefit, an attribute of that product in relation to the title, in relation to the price, in relation to the discount, in relation to the ratings and reviews. So, it's just a different way now that you have to pay attention to how you're relating to the customer. Relaying to the customer what your product is. Kevin King: But if I'm in a store, if I'm going into the shampoo aisle, yeah, I might be actually looking for a brand that's my favorite brand, but at some point I had to be convinced to get that brand. So that was either through traditional advertising or some other way. But even on a store shelf, you got to stand out. You gotta stand out. If I'm looking for Golden Graham cereal, there's a huge aisle of cereal and I know that box is yellow and golden looking. All I'm doing is looking for that golden and yellow box somewhere to try to find it. And it's usually up high because there's like three boxes or something because it's not a very popular cereal. The same thing happens on Amazon. So how is that? I guess I don't quite understand. You gotta stand out on the retail shelf even if you are a big brand. And if people are going to retail and they're looking for him and hers, they're also going to Amazon and looking for him and hers. So what's, I don't quite understand what you're saying is how to actually make these different. I understand that on Amazon people buy, they buy pictures, they buy photos, they don't buy products. In the store they can pick up the package, they can hold it, they can turn it around, they can read the ingredients, they can read what are the call outs are on it. Maybe there's a little display next to it, you know, with some sort of promotional thing. It's a different experience, but from a packaging point of view, you've got to stand out on both. Speaker 2: You've got to stand out on both, but what happens with a lot of these brands, especially in a beauty segment, every single product that they sell looks absolutely identical. You cannot tell the difference between three or four different products because they're designed for the retail shelf where they stand nicely and the customer can come over and look and read what it is that they buy. Whereas on a digital shelf, all the customer sees is 10 different bottles that look absolutely identical with the tiny title specifying what the bottle contains. Kevin King: So you're saying on the digital shelf you need to be more, what I think you and Billy are saying to people listening, they need to be more, you need to have the call outs more like emphasize this has got a certain ingredient in it or this is a certain percentage of something or it's a certain number of grams or whatever it may be. That needs to be, those call outs need to be much more prominent and the benefit of the product needs to be much more prominent in the imagery and in the packaging. Speaker 2: Exactly. In other words, what they put out on the digital space does not stop the scroll. You want to stop the scroll and you have to remember that the consumer on Amazon, on any marketplace for that matter, shops by intent. They come in and there's a problem that consumer has that they're trying to solve. And a pretty bottle is not going to solve that problem. Kevin King: Yeah, I just saw something. It was a few months ago a guy posted on LinkedIn. I can't remember the exact stats, but they analyzed several thousand shopping carts. They kind of watched these people and then the data showed, or maybe this is coming from Amazon, showed that the average person put something in their cart on Amazon within like 21 seconds. Or something like that. I was doing the search. So they search, type in the keyword. I forget the exact number. It may not be 21 seconds. It was really fast. And they actually add it to the cart. And so they're not even, and then they also broke down how many people actually look at the bullet points before they actually add it to the cart, or how many people scroll through the photo before they actually look for it. And it was interesting numbers. I wish I had that in front of me right now. It was in my newsletter, but I wish I had that in front of me. Make sure you're also subscribing to my newsletter, BillionDollarSellers.com. BillionDollarSellers.com, totally free every Monday and Thursday, a brand new issue. It's like a $25,000 mastermind, totally for free. So what do you do, Luba, for your, like, you're in the beauty space, when you pull up one of the keywords for one of the products that you, your products, what do you guys do to stand out? Do you turn the product a different way? Do you put it on a certain angle? Do you change the colors from what everybody else is doing? Do you put a big call out? Do you put some of the ingredients spilling out? What do you do to actually stand out? Speaker 2: Well, another brand that I was going to use, we were going to use an example of due today is Olay. Olay is actually doing an incredible job on Amazon. About 35-40% of their annual revenue comes from Amazon today. And they are over $200 million in revenue. They are part of Procter & Gamble. So they have the same problems as Humes and Hearst. They're retail packaging. So what they're doing is they came out with a new line and it was fascinating when we were looking at it yesterday. So their new line is designed for Amazon. That is not the packaging that you can buy in a retail store. Kevin King: Same product, just different packaging. Speaker 2: Just different packaging, more simplified. They're going for this whole bus with recyclable packaging. But for the main image, they rendered the main image with the product benefits spelled out on a mock-up box. And then they use the actual image of the product as the second image. Kevin King: So the box that they were showing might not have been the actual box that was shipped in? Speaker 2: Yeah, it's definitely not the actual box that was shipped in. Kevin King: Okay, so they did like a 3D render of a box and instead of making the box look all like they're trying to win some art design award or something like that. Speaker 2: No, it's a very simple brown box with a big letter spelling out what the benefit of the product is. So you know what it is that you're buying immediately when you're scrolling for the main image. Kevin King: And you're saying they're doing 35% of their gross, they're doing $200 million a year on Amazon or $200 million a year? Speaker 2: No, they're doing about $200 million in total. On Amazon, they're doing about 30. So last year, yep, they're doing about $200 million and about 35% of it comes from Amazon. I mean, the exact numbers may be different. I mean, we're looking at the backend software trying to estimate stuff. Kevin King: So what are they doing beyond that first image? What are they doing in the rest of the images? Something totally different there too, or is it more just standard stuff? Speaker 2: They're using color labels to highlight different formulas. They're going really, really heavily into highlighting the eco-friendly and recyclable. And another thing what they're doing is they're using this product specific inserts. when they ship you their products. So each product has a specific product insert, not a generic insert, but the QR code is the same for everything. And a QR code, and that is different than any other big brand is doing, they're not taking consumer to their DTC site, they're taking consumer to Amazon store page. And they're not even taking it to a generic store page, they're taking it to build your skincare routine page. They're using their product display page, they're using their packaging, they're using the QR codes with one main purpose, to cross-sell you other products by Olight. Kevin King: So the packaging insert is specific to that product, so it has like some tips and tricks for that particular... Speaker 2: Yeah, what the ingredients are, how to use it... Kevin King: The QR codes are the same across all of them and they take them to A page within their storefront where you actually build your own or customize your own formulation or whatever or answer some questions and it recommends this is the best one for you. Speaker 2: Yeah, on Amazon. So they're taking consumer back to Amazon and basically they're giving consumer an option. Here, you bought this one cream but we have 20 different things that you get that you didn't know that you need. I have to double check but I'm pretty sure if they're smart about it, they're using attribution to get 10%. Kevin King: Yeah, that's true. Yeah, so they should be running that through something that's actually going to lay down a pixel for Facebook and Google and whatever, and then also redirect over with an attribution link on the way back. That's interesting. I'd be curious to see how that's converting for them, what that's doing. That would be really interesting information. Speaker 2: But Luba also pointed out that they're essentially brand gating themselves with the title thing. You pointed out yesterday that they're essentially gating their brand from resellers. Speaker 3: It's an interesting strategy. So what Luba is saying that this, like, if you go look at this Olay listing, right, you'll see a difference between what their retail packaging is, and then this brown box packaging that's rendered. But what you see with listings that haven't been digitally rendered, so let's call it the old format, right? Those listings will have tons of resellers on those listings, right? It might be a vendor central account or a seller central, it doesn't matter what the brand is. In this case, Olay is a vendor central, so it's sold by Amazon, ships by Amazon. But you see all of these resellers on those accounts because they can go and pick up this product in stores, maybe at discount, right? And try to resell on Amazon. But what Olay is doing with this Amazon focused packaging, right, where they're really honing in on that differentiation on that search result, right, of calling out that benefit, keeping the packaging standard across the board. Luba and I talked about this, where they're using the same box across all of their, let's say 20, you know, formulations, right? Same jar, right? Same QR code insert with the recyclable callout. And the only difference they have is they slap a different label on it, they slap a new, you know, change that insert card with the ingredients, and then they're slapping the other You know, the barcode on it. And so, they're standardizing their ops here, but what they do then is that because that's not purchasable in retail stores, it's now a new listing, right, as a variation on that same formulation before, but it now has this packaging where a reseller can't pop up on that listing and steal the buy box from you, right, because they don't have that visible packaging. They don't have that visible product. It's only designed and intended for Amazon. The only way they would get that is if you managed to run, let's say, you know, they purchased it and tried to resell it themselves off of the Amazon platform. But at that point, you know, it kind of doesn't make sense. So it's actually serves that second purpose, I think, of inadvertently brand gating your own brand from other resellers, you know, without having to use, you know, a program, maybe like transparency or something else, you know, if stuff really goes south for you. Definitely an interesting strategy and I'm curious to see how this plays out for these brands moving forward if this digital rendering concept is truly going to be deployed across these brands in the coming months and next, let's say, 6 to 12 months with some of the AI search changes that we're seeing as well. Kevin King: Do you know if when you order the product, do you get the same product that you would get in the retail store or is it – you said the box is digitally rendered, but that's not the actual box they're shipping in. So, they're shipping in the same box as what you would buy in the retail store. So, are there two listings then? One is the digitally rendered one that's optimized for e-com and the second listing that maybe some reseller or somebody that bought some is listing up. So, does that confuse the customer? Speaker 2: They have one parent with two children. One child says new style and another child says old style. And the new style is only... because I ordered it and the jar itself doesn't have a UPC code. There is no UPC code on the jar. So to me that says you will never find that particular version of the product in a retail store. Now the UPC code is on a brown box. But also think how it streamlines your operations. Now you have to buy, you don't have to buy 20 different, your MOQ on packaging goes down, like you can afford to buy one packaging across 20 different SKUs. You do not need to hold inventory of packaging. It's really interesting what they're doing. And I think going back to what we were talking about in the beginning, it's important for a seller to identify the forward thinkers. In industry and not to follow those who don't like going back to him and hers. One thing that jumped at me and it's going to lead to a bigger conversation. They do not use any single back end field on their listings. Kevin King: Him and hers doesn't. Speaker 2: They don't. And when we looked at it, that kind of went into the whole Cosmo aspect. Kevin King: So they have some intern running their Amazon basically, or they just don't, they just don't care. And I think that's something that more brands are going to wake up to, is that they're actually going to start paying closer attention because they're going to start realizing how much they're leaving on the table, like you said. And so there's an opportunity there for consultants or for people that actually know what they're doing to come in. Because a lot of these brands, and you probably saw this at Thrasio some too, is you get someone that comes in, you know, you said earlier you are hiring all these CPG people and that they were coming in. A lot of them, they might know CPG, but they don't know Amazon. They're two different things. I mean, there's some crossover and some ways that you can learn from each other, but they're two different animals. And so a lot of these big brands, they try to hire someone and train them up on Amazon, or they hire an intern or somebody. And they don't know what they're doing at all. And so for people that actually know what they're doing, I think the opportunity is pretty immense to run some of these Fortune 500 companies that are dropping the ball to go in there either as a consultant or to get hired by them or as an agency and say, let us fix this for you. We can show you really quick where you're messing up. Speaker 2: And really, you had some great observations about Cosmo and the whole, like I said, when we looked at Hims and Hers, they don't utilize SEO on Amazon. They simply took their graphics from direct-to-consumer website. They don't use any add-on accessory, cross-selling. And what jumped there is the whole, we're not going to fill out any back-end fields, which today is a criminal offense on Amazon. Kevin King: And it's gonna become even more because now with Amazon's moving towards AI stuff and we don't know exactly where this is gonna go and there's a lot of different opinions out there. Some of the big software companies say, we're not worried, this is no big deal. But you look at some of the other people that are on the cutting edge and look at what's happening with flat files, look at some of what Amazon's doing with testing with Ruthless, which initially was kind of a mess from what the people that are testing it, but they'll get that down. Then you look at what Cosmo, where were they tested? I think there's a big change coming on Amazon when it comes to the way AI is going to be fully integrated. Right now, we're just dabbling. It's helping you with your listings. It's helping here and there, but I think there's going to be a big shift. What are you guys' opinion on how the AI landscape is going to affect sellers on Amazon and what we might need to do to start preparing for that? Speaker 3: Yeah, I think it's definitely... I mean, when we talk about Why it's so hard to operate on Amazon, right? We talked about a lot of the operational things, but now we're talking about having an understanding of historically how Amazons run and combine that with what we're seeing and be able to try to predict and have some of our own thoughts on where this is truly going and then try to formulate the strategies on how do we prepare for that and then mitigate and plan along the way as things unfold. Cosmo is really interesting because Amazon has historically been a lexical search-based platform, right? Where it's, as we all probably have heard in the past, keyword stuffing, right? So you'll see if the keyword, if a customer searches a term and our product title or our bullets has that exact keyword, that's the lexical match. It's a literal exact match of the keyword or that search query. And so what has been designed to do is it's Amazon's using AI to. Almost upgrade that lexical match to bring in what we now call that semantic match. Meaning that it's trying to use consumer behaviors, consumer insights, and learnings and patterns. And it's understanding of what they call common sense knowledge, right? So, the sky is blue, the cows go moo kind of situation, right? Within your products and within that search, right? Blankets, right? They keep you warm. They might be cozy. They're pretty, you know, they're bigger than a human, right? Like those kinds of, you know, general common sense knowledge for that particular product type. Cosmo is designed to bring in the intent of the user, what they're actually searching for, and fill in the gaps where we're not, where they can't really understand exactly the match between that customer search and what you have as your product in terms of the actual product information set. So your attributes, your title, your bullets, your copy, The things that you're providing to Amazon to tell it that, hey, this is what my product is. And so when a customer searches for blanket, that's a broad search. We can use blanket as a great example because blanket itself as a search is very broad, right? Amazon still doesn't really know, okay, well, there's a billion different types of blankets probably, right? So if it's a cotton blanket, right? Let's say the color is white and it's a cotton blanket, right? Now we're starting to get into a more specific And so if my search and so if my product itself, if the attributes that I have on my product is truly a cotton, a white-colored, you know, large-sized blanket, right? Now my relevancy in relation to that query as it's always been is improved. But there still might be gaps in terms of the users' intents. Why do they want to buy a large white cotton blanket, right? And so if we don't have that information filled out of our listing, which is what Luba is kind of calling out with him and hers, they're not filling out that information. It's kind of a big missed opportunity to tell Amazon exactly what your product is to improve your relevance on that search. I think that's where we're really going to see Cosmo being used to fill in those gaps and then to improve the overall performance, or rather, to direct the customer to a more relevant product that they'll be more likely to convert. And so I think that's where we're going to see this shift. It's not just search relevance. How we're ranked on Amazon is going to change because instead of just, hey, here's a search term and then here's our product title and it matches, now it's factoring in all of this user intent, common sense knowledge that is generated on that category, on that product type, and filling in those gaps and saying, maybe this is more relevant for that customer. It's factoring in the customer buying habits, right? If you have purchased shampoo, I'm probably more likely to purchase conditioner. Then I am, you know, I don't know, WD-40 for like, you know, a car, right? And so, you know, it's got, it's understanding that buying habits of that particular consumer as well to say, Hey, maybe this is more relevant for me. So it's, it's definitely, I mean, we're already seeing this right. Kevin King: Amazon's been using semantics for a while. I mean, that's nothing new. We were talking about that in Masterminds in 2017 of semantic search and how, I think the example that was given back then was that Empire State Building equals big building in New York, you know, that was a semantic thing. And the guy that was teaching this, this was at, I think it's 2016 actually, he's like, you need to make sure in your listings, because this is where Amazon's going, that you need to say, you know, The Empire State Building is a great building, it's perfect for tourists and then the next sentence, don't put them next to each other, the next sentence, it's one of the tallest skyscrapers in New York or something. And then what he was saying is that Amazon, the semantic logic would then take those two and put it together, just like what you're saying with the blanket example, and would correlate those together and use that to deliver better responses. So that was starting back then, but now AI, It's taken this to a whole new level because it's combining that plus a lot of other intent, a lot of other signals from reviews, your own reviews and the way you answer reviews to the way you've added additional fields, like you're saying that the Hillman Hearst didn't have a lot of the backend fields, what you have in all those other fields, previous buyer history, previous buyer avatar, a whole bunch of big data that's out there. I don't know if you guys have played with Amazon Comprehend or not, Have you played with Comprehend? Speaker 2: We met with them last week. We scheduled another meeting in a couple of weeks. We're talking to Amazon. Kevin King: Yeah, Amazon Comprehend for those that aren't listening. I did a Hacks webinar back in March. End of March, you can find it on YouTube if you look at Billion Dollar Sellers Hack Contest and we talk about Amazon Comprehend and it was Matt Altman and actually if you go back to the episode that came out May 23rd on AM PM Podcast, you can listen to him explain how to do this but you can actually take Amazon Comprehend, you can take your listing And you can dump it into Amazon Comprehend. It's totally free. It's not hard to use. You don't need an API or be some whiz-bang guy. It's part of AWS. And you dump your entire listing basically in there just as text, your bullet points, your title, your everything. It analyzes it. And then it comes back and gives you a score between zero and one. And you want to get as close to one as possible. And what it will tell you is that based on your category, we're classifying you as this. And based on your category, these are the phrases and words that you might be missing. See if these are relevant to your product. Then you go in and you add some of those in, some of it's phrases, some of it's words, some of it's intent statements. And you go and add those in and you play with it, then you run it again and it gives you another score. And the score either goes up or goes down or stays the same. And through 20, 30 minutes of experimentation by adjusting these, you actually can oftentimes end up with a higher score. And then you put that, you refresh your listing with this new format listing and according to Matt, Here within 24 to 48 hours, they're seeing, you know, significant increases in conversion and sales and ranking for keywords that they were never ranking for before. That they just couldn't, no matter what they did on PPC, it just wouldn't show their product for that. And now it's showing it for them. So that's where it's going. And that's where there's major opportunity, I think, not only for Him and hers who's doing nothing, but for all of us sellers, and I think we're going to have to start straddling a line between the old way of like what you said, Billy, of keyword stuffing and the new way until it probably is going to progress at some point in the next six months to two years, I would say, to a fully AI functioning thing where a lot of the keyword stuffing is going to be irrelevant. Speaker 3: One thing to add to that is to know what is working from Comprehend potentially. We have the ability to see, Amazon's giving us the data, Category Insights, right? And you know, IntelliCentral gives us the data on our category to show what Amazon consumers are deeming as high, you know, what's hired in demand by consumers versus not on your attributes, right? And so that itself, I mean, when it comes to how it's changing for the customers, when we see now the filters, the high demand filters, the most in demand filters from a search result, let's say on mobile, or it's always been on desktop on the On the left side, you can click all the toggles. But particularly on mobile now, we're seeing that they're featuring the top two lines under the search bar as the high-demand type attributes for that product search. That's really where the semantic is upgrading the customer's experience on finding your product, refining their search results if they're maybe not sure where to start or if they don't have a very specific search result in mind. If their intent is more generic at the beginning, that shoppable intent rather than the true buying intent, those filters at the top are now allowing You know, allowing the customer to hone down and refine and refine until they find that more relevant product they're more likely to buy, right? Because that now intent has switched to more of that true, okay, hey, this is what I'm looking for, this matches what I'm exactly looking for. So it'll be fascinating to see how that changes, but it's important to follow the data, right? Search query performance is one of those kind of north stars we'll see, I think, change as more of these filters are used, as Cosmo is more kind of robust and built out and is changing. And it's truly changing the product catalog in addition to the relevance that we see. And so I think it's important to just make sure that we know where to get data and how to read that data to know what changes are actually making or changes are having the biggest impact on our organic rank and then in turn our PPC strategies as well. Kevin King: Even something as simple as a search bar at the top, It kind of gives you some indication of the way Amazon is working. If you open up a new search on Amazon, even an incognito window or something, so there's no history, and you type in NIK, the auto-suggest is going to start suggesting things. But one of those is probably not a Nikon camera. But if I go and I actually look at a Nikon camera or I've done some other search and the results included Nikon cameras and I happen to click on one of those, the next time I go up and I type NIK, it's not just going to show me random stuff anymore, it's going to show me everything that starts with Nikon. So Amazon's actually paying attention and the results that you're getting back are heavily dependent on what actions have happened before in that same session. And so that's just going to go get put on steroids with Cosmo and Copyhand and this whole AI thing where we're going to, you know, as sellers, we like to have a little bit of control by gaming the system and keyword stuffing and figuring out where the competition's not. You know, oh, these guys haven't filled out their back end. Oh, we can crush them by just adding stuff in there. It's going to change and that's going to be a whole different way of actually trying to compete. Speaker 2: Billy and I actually were talking about it yesterday and we both feel that Cosmo, as scary as it is and as painful as it was for the last 12 months, where every single one of us had variation broken up, had product move the browse nodes. I mean, it's been a complete massacre over the last 12 months. For anybody selling on Amazon with legacy listings. But as painful as it was, I think Cosmo represents a huge potential for that third category, for the third bucket that we were talking about earlier, for the private label sellers who know what it is that they are doing on Amazon. Because I suspect, and that is a speculation on our part, that this oldest trick in a book where the Chinese seller comes in, takes an old listing with 20,000 reviews and recycles it and launches a new product, I think that's going to go away. Because how are you going to sell a Nikon camera with a yogurt reviews? That's probably not why Amazon did it, but I view it as a positive, unintended consequence for the white hat sellers. Kevin King: I agree. It's going to be harder to game the system because you're going up against big data that Amazon has. On you, Lupe, they got 20-something years, you said, of data, of everything that you've ever searched for, everything that you've ever done on Amazon. Prime video you've ever watched, everything you've ever added to your cart, took it back out, they know it all. You can actually go and you can download, you can request this from Amazon. Mine was 740 megabytes of Everything I've ever done on Amazon, I'll show you. Everything you've ever listened to, how many times you listened to Taylor Swift songs, everything. They know all this stuff and that's going to be combined in to what's going to be displayed as a result of what you're searching for using AI. And that's something that is going to be much more difficult for us as sellers to actually gain. But it comes back to, I think you said in the beginning, you're going to have to be a real brand and know your avatar and know your customer and know What are the things that these type of people usually do and that's where in Build Your Listing aim at that and make sure those words and those phrases and those intent uses are actually in your listing and in your images versus just which keywords do I need. Speaker 2: It will make it easier for brands to compete with black hatters because the black hatters are going to lose a lot of competitive advantage that they have today. The big brands, most of them, unfortunately, or fortunately for us, leave a lot on the table by not utilizing everything that Amazon offers. So the thoughtful private label sellers, in my opinion, are going to have bigger opportunities. And be more competitive. And one thing I wanted to mention is that you always have to listen to Amazon. Amazon is telling you what it is that it plans on doing. They work on three-year plans. So, like you said, we're not going to feel the full impact till about, I would say, two years from now, because they started about a year ago, like breaking everything down. But I remember at the first Amazon Accelerate conference, somebody told me, we're moving the platform from being PDP-centric to brand-centric. Because in the past, you can do one hit wonder with one product and grow it into $20 million a year and not have a brand. But four years ago, Amazon started changing it. And every single tool that's been released in the last four years was aimed at building a brand. They're conditioning the consumer into using filters. And though you search a lot on mobile, you do a lot more on mobile than I do. Which I probably should start doing. Speaker 3: It's just, yeah, they're conditioning the user base. And I think that we're going to see, you know, the brands that adapt and learn how to play the Cosmo game and better rather, are going to be the ones that, you know, that are going to succeed. I think the big brands, I think to the degree that they choose to adapt and complete their product information set or the clarity of their information on their listings, I think to the degree they choose to do that will be kind of How they can try to potentially close that gap that they're leaving on the table. And then I think, yeah, the players that aren't adapting to it or maybe struggle with the semantic language in general, whether it's, you know, the creative assets, right? And having clarity in those imaging, in the imagery of English language and the intent behind the product. You know, I think that those sellers are probably going to take a hit on it. So I agree. I think Luba, you know, and I talked about this, but I think that the biggest opportunity is for those Those private label sellers who are staying, who are actually not afraid to look at the competition if they bucketed it correctly and know where they should be paying attention to and then how to capitalize on those opportunities. But it really just is staying true to following the data that Amazon gives you. Yeah, it's a big opportunity. I'm excited to see what's changed. I think as complex as it can be to try to understand Cosmo, I think that it's going to benefit us in many ways. Kevin King: Well, guys, this has been great. Luba, Billy, I really appreciate you coming on and sharing your thoughts and some ideas and strategies today. This has been cool. If people want to reach out or learn more about you, Luba, how would they do that? Speaker 2: LinkedIn. Kevin King: LinkedIn, all right. LinkedIn, what would they search for on LinkedIn? Speaker 2: Luba, L-U-B-A, and the last name starts with I-L-Y-S. Well, you saw it. It's one of those hard to spell Russian names. Kevin King: And what about you, Billy? Speaker 3: The same. LinkedIn, just B-I-L-L-Y, so you'll find me there. Pecor, P-E-C-O-R. I think I might be the only one. Kevin King: Yeah, probably lots of Billys, but not too many Billy Pecors. Awesome. Well, I really appreciate you guys coming on and sharing today. This has been fun. Thanks again for coming on the AM-PM Podcast. Good stuff from Billy and Luba there about setting yourself apart and what some of the big brands are doing wrong on their listing, what some of them are doing right. Some interesting tactics there on that QR code and the way they're driving stuff back to Amazon with a product insert using the referral bonus and customized page. That's pretty smart. We'll be back again next week with another awesome episode. Before I go though, I've got some words of wisdom for you. Go out there and make every day your masterpiece. Go out there and make every day your masterpiece. See you again next week.