#421 – Secrets of Scaling: Jennifer Young’s Journey of Leading a $20 Million Toy Empire

#422 - Under The Hood of Amazon Agencies: Choosing the Right Partner with Pasha Knish Kevin King: Welcome to episode 422 of the AM PM Podcast. My guest this week is Pasha Knish. Pasha runs an Amazon agency that does everything from PPC to complete account management to you name it. They do it. Been doing it for many, many years. In this episode, we talk about the agency business. We go inside what it's like to run an agency, how you should actually properly choose an agency so that you don't have to bounce around from agency to agency to agency. How they hire their people and just a whole lot more interesting, fascinating stuff about the agency world. So you're gonna get to go under the hood here and learn how this booming industry of Amazon agencies work. Enjoy this episode with Pasha. 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: Pasha Kanish, welcome to the AM PM podcast. How are you, man? Pasha Knish: I'm doing well, Kevin. Thanks for having me on. How are you doing? Kevin King: I'm good. It's great to have you on. And we got, who knows what we're going to talk about today. Like we were just talking about, what are we going to talk about? It's like, I never know on these podcasts. This is just two people talking shop. You know, some people, you have a podcast yourself. You know, some people out there, they're like, They're like super anal. Sometimes when I'm a guest and I go on a podcast, they're like, here's the 20 questions I'm going to ask you in advance. And they want all kinds of bio information, all this kind of stuff. And then other people are just like, you know, just show up in five minutes before and here's the link and let's just do this. Pasha Knish: When it's two stage, I mean, you're kind of nervous before studying the questions and you know, you're starting to contact people on your team who are better than you at making presentations and slideshows, right? It just becomes like a whole thing, but it's so much better and so much easier when you can just kind of show up. And you're just being authentic. You're just like, you don't have that mind clutter, right? You're just kind of showing up and saying, this is who I am. This is my true experience. And I feel like that authenticity really shows when people are listening. And I think just so much of human nature is about storytelling. It's just in our DNA from ancestral, you know, thousands of years. That's how it is. That's how information was always passed down. So there's something just inherently valuable about being able to just share what's inside without having to kind of prepare too much. Not saying presentations are valuable too. They have their merit, but I love these types of convos. Kevin King: Yeah, so do I. So speaking of conversations back and forth, I mean, that's basically what you do with Amazon sellers, right? You have lots of conversations back and forth helping them manage their accounts. Pasha Knish: Yeah, so we run an agency, full service at this point. It's been kind of, I think we're at six years now. Prior to that, I've been an Amazon seller forever, since 2011, back in the days where you just shoot Google ads to your listing and cross your fingers and see the traffic go up and it's really hard to measure. But did that for a couple of years and then I said, man, sometimes it gets a little lonely as an e-comm seller. I mean, I think we all experience that. You're sitting at home or if you have a couple of partners, that's good. You can have some conversations there, but you're mostly just kind of sitting at your desk and working the thing. So I said, it's kind of nice to see what else is out there. I started doing a little freelancing. And then I said, man, I'm kind of good as an operator, project manager, team organizer, you know, and great talking to people from different categories, different backgrounds, different parts of the world. So I said, you know, maybe I'm going to see how this thing works out. Started taking projects and growing the team and starting taking bigger projects. And yeah, now we're Full service agency, we do all the ads and the content and have the whole software stack solution. And then I decided actually this year, we're coming up on the end of 2024, I said, you know, I think it was at the beginning of this year, I said, you know, I want to try to do the podcasting, because that's just more of getting out there. But now speaking to instead of spending all my time speaking to sellers, now I'm getting the opportunity to speak with service providers as well. So it's like the other side of the playing field and that's been huge. I kind of call my podcast in a way it's like a fractionalized mentorship. I didn't expect that to be the case but I'm having conversations with people who have more experience than me, who have been in it longer and everybody has that nugget of gold that they can offer the audience and I'm there asking questions and we're having that natural conversation and I just really feel like those nuggets of gold can come out and I learn from it, right? And I try to take immediate action on it. Sometimes I get off a podcast and I'm just like, Slack, you know, start messaging people on the team. Hey, we got to implement. Let's try this out. You know, you get inspired by people because you feel their charisma. You feel that drive that they had in order to get where they're at and you hear their story in real time. You're like, wow, you know, maybe, maybe let me try that thing. And you know, it doesn't always work out for you, but that's how you get inspired. So it's been a fun journey, Kevin. I'm really enjoying this. Kevin King: Doing a podcast, sometimes I feel like me and the editor are the only ones that ever listen to the whole thing and every single episode. We're there for every single episode and we listen to everyone. The audience, sometimes they'll miss an episode or whatever. You always have your diehard loyals that are there for everyone, but I think we're the only ones that catch everything. You're right. A lot of people, they start a podcast for publicity. One reason is I'm going to start a podcast and I'm going to get the word out about my agency or about my business or about my consultancy or whatever. A lot of times when you get into it, it's a great way to actually have an excuse to meet people, to meet other people and to get the questions answered that you want to have answered on behalf of your audience as well with other people and you create relationships out of it as well. So a podcast can be a really good networking and relationship building tool. Pasha Knish: I agree. And I think that's something that a lot of people are starting to recognize. And it's great because there seems to be demand on the other side asking for people love to consume podcasts because it's just like, you know, you can choose what you want to listen to in whatever time and format that you like. We got video and audio. And I'm even starting to see people starting agencies and services around doing podcasts for business people, whether it's a CEO or just a consultant, or you want to get out there and network. It's great. And there's a lot of steps. You need to have your tool stack. And I have a team behind me that helps me and supports me with cutting up the clips and finding the best pieces and putting subtitles on it and sharing the folder with the speakers and organizing all the calendars. And there's a lot that goes into it and being able to publish on all these different streaming sites. So it's something that I think if somebody had a couple extra thousand, they can build out a team or they can hire an agency to do that. I think there is a long term ROI. That sometimes is not as clear as like some of the other things they might be doing. But I think it has opened the doors for me in many ways like because of my podcast. I mean, just looking back at the year, I mean, I went to Accelerate. I don't think I would have went if it wasn't for the podcast and the relationships I made. I've been invited to speak at other podcasts and get publicity and attention through those conversations. And so, you know, you do grow your company and grow your business and you just don't get it as, not as much of that instant gratification that we're used to with like closing a deal. You know, it's just like, let's have conversations with real people and see what happens. And that just kind of opens us up to magic, you know, in a way, right? When you're just like, Doing something without expectation just for the sake of doing it and being in it, right? Kevin King: There's several conventions that focus on the podcasting industry. You talk about Accelerate for Amazon. That's Amazon's big conference in Seattle. For Amazon sellers, but there's also in the podcasting industry, there's, I went to a show in August in Washington DC called Podcast Movement. And it's an entire show just for podcasters. And there's, you know, all the latest equipment, all the latest marketing techniques for getting your podcast out there, for getting viewers, for, for everything across the board at this show. And it's, it was really good. I mean, I've been doing this podcasting for several years, but to go to that and just find out some of the stuff I just didn't know, some of the tools and some of the resources. And like, I didn't know There's a software tool that's like a Helium 10 for podcasting. Helium 10, we go in, you look for keywords, you look for what people are searching for and you look for the gaps and try to fill those. There's the same thing for podcasting. SEO for podcasting is very similar to what we already know in the Amazon space. I was there with my buddy Norm. We do another podcast called Marketing Misfits together. It also comes out every week. We just looked at each other like, holy cow, that is a French-based company. It starts with an A. I'm drawing a complete blank right now on Aura. I think it is. And they have a tool that's basically like Helium 10. And you can go in there and you can say, these are the topics people are searching for. These are the opportunities. And he and I just looked at each other like, shoot, man, we can crush with this. We know exactly how to use this. But all the other podcasters, they don't come from that world. They don't really come from a marketing world or from a selling world. So they're just looking at, oh, OK, that's kind of cool. Like, no, you guys don't understand that this is like how to rank on Spotify, how to rank on Apple Podcasts, how to actually do it properly on YouTube to get those views. We're just now starting to implement some of that stuff and we're starting to see really good results. And so it's, it's, there's a whole thing there, but the thing like you said, podcasts, like you told me you started off doing it twice a week and you cut it back to once a week. That's a, I think I saw a stat at the show that the average podcast only lasts seven episodes because people don't realize how much work it actually is. You gotta, you gotta be in it and you gotta commit because if you're just sporadically putting out podcasts, it's just not gonna, it's not gonna work. If you're like here and there, Your chances of success, unless you're a big name or extremely well-known, are not good. You've got to have that consistency that every week on the same day, same time, there's a new one coming out. People start to expect that and it becomes part of their habit, part of their daily routine, part of their jog or their train ride to work or whatever it is. Pasha Knish: Yeah, even like the social media platforms, that's how they operate, right? What do they value more? Is it just like one-off video that goes viral? No, they I mean probably yes some but I see videos on YouTube where there's almost no subscribers on a channel and they have like a hundred thousand views because it's something that just took off for whatever reason. But what those algorithms really love is consistency because that means that you're showing up, you're doing the thing all the time. And I mean, you're doing this podcast, another one, and you're releasing weekly. And I know you mentioned you're battling a cold right now, but you're here, right? You're making this recording. So I can definitely see why people quit after seven episodes. It makes a lot of sense. I think on my podcast, we just did episode 34. So I'm still early on compared to some of the other ones out there, but I'm happy that I'm I'm ahead of the average and I don't plan on quitting anytime soon just because like I said, it's not something I'm doing because I'm looking for some type of direct ROI. I have the team that's supporting and helping me to just keep everything afloat. So for me, it's just about showing up every day like I show up to work every day and just have conversations with people and I'm booked for months ahead of only doing one recording a week. We're doing it live. So, I mean, I have no problem. I have, you know, groups on WhatsApp. I just say, hey, anybody want to chat, you know, and always somebody's like, yeah, book me, book me. You know, everyone loves to talk and it is a spotlight. Like you get exposure. We have a network and we have an email list. You know, there's definitely some value to it. We chop up the clips after and put it in a folder with subtitles and then you can use that on your social platforms, whatever you want to post it on. So it's free content and it's also just fun, right? It's something different to break your daily routine of responding to emails and getting on Zoom meetings where you just kind of do this and it's probably different than what a normal working day looks like. Kevin King: 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 7 Ninja Hacks. We also have live masterminds 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 want to be. It's only $99 extra on your Helium 10 membership. It's h10.me.me forward slash elite. Go check it out and I hope to see you there. Let's talk about this. So your podcast is primarily for agency operators and owners, right? So people in the agency industry, is that correct? Pasha Knish: That's right. Yeah. Sometimes we talk with software providers as well. It's not exactly an agency. It's a different model. But most of the time it's service providers if they're backed by a SaaS solution, but they're a service provider just working with clients and we'll talk to them. As well as consultants, but I love people who operate teams, who have VAs and you know, they're not just like a solopreneur, although some solopreneurs have really great backgrounds and interesting work history and a lot of knowledge. So, you know, I'm pretty open in that regard. Kevin King: Now, you said you started selling in 2011. So you've seen this completely change. For 2011, there was no software tools, unless you made something yourself. There's Excel. And then started around 2013, 2014, a few tools started kind of emerging. And then probably about 2017, 2018, somewhere around in there, it just started exploding with tools. And now it seems like every day there's another I think Nick Peneve is the guy that introduced us to each other. He has this whole Facebook, WhatsApp group of all the agencies and software people and that there's something new constantly coming out. I think I did a count. I was doing a little research recently on agencies and I think there's 3,600 that I can find that I know of, agencies in the Amazon space. And there's 3,600 of them that I know of. And I'm sure there's more that are just out there under the rocks that are just chipping away and doing their thing. But it seems to me like a lot of people, I mean, let's talk about the agency model right now a little bit. A lot of people get into the agency business because Some people are really good at it. Like you said, you sold for a while. I realized, hey, I'm really good at this. Some people, they really get in, start selling. I really like this PPC stuff. I can really crush it on this PPC stuff. So I think I'm just, like Leron Horshkorn. He was a seller and then he got really good at the PPC. So I'm just gonna focus on the PPC. It doesn't take inventory. It doesn't take, I don't have to put all these big, huge investments like I have to. I can just make money from my knowledge and my time and I'm good at it. So let me focus on that. And he's built a company that way. Then there's other people that they try to sell because they watch some YouTube video and they fail. And they're like, well, I know a thing or two about Amazon. I know a little bit more than my neighbor, so I'll just be an agency and actually help them out. And there's tons of VAs like in Pakistan and the Philippines that start agencies that don't know what the hell they're doing. And they're trying to do this. And then there's legitimate agencies going after Fortune 500 companies that actually are making a difference. What are you seeing in the agency business that That is really happening out there. Do you see that there's a few that are rising to the top and there's just a lot of trash? Or what are you seeing? Pasha Knish: Yeah, definitely. I mean, I can't imagine what percent of that 3,600 are people going into chat GPT and saying, give me the instructions on how to start an agency. Kevin King: Well, there's someone in our space that teaches that. He has a whole course on how to start an agency. And here's all your SOPs and here's how much money you can make, make $100,000 a year. I'm not sure what his exact promise is, but as an agency. Pasha Knish: Yeah, I had him on the podcast actually. He was one of the first guests. But that's right. He has the, after my Amazon guy, my agency guy. So anybody out there who wants the SOPs and the blueprints for how to do it. I mean, what I can say is good luck because It's tough out there. I mean, at this point, because we're, okay, we're almost 2025. Maybe if you're in 2017, no problem. Start an agency. You can close leads like nothing, right? Now, all the conversations I'm having with real serious sellers are, hey, I have an agency right now, and they're not doing a great job or I had an agency in the past and I've been burned really badly because they over promise and under deliver. And how do I know that you are not going to be the same? So what I'm seeing is I now have to be like selling on Amazon. In the beginning, it was super easy. You know, you just throw up a product, you slap a label on it, undercut the whatever company you want to undercut and run some basic ads or even no ads. And then you're just starting to rank. Now, you need all these tools to get really specific and very granular on the data in order to get ahead on Amazon. It's the same thing in the service space. It's the same thing with Amazon agencies. You really have to show your expertise. Getting on calls like this and just speaking about things and getting into the details shows that. Most people don't do that, but how do you do that on a call when you're with a client and they're saying, hey, I've been burned? Here's a bunch of forecasts that we can make based on the data that we've seen in your account. So we'll do an audit and we'll do that forecast. And just having those conversations with people, I mean, it's already pretty clear that if you're looking at the data from this type of perspective, you probably know what you're talking about. You probably have the know how to actually execute on these strategies. I mean, if you're just throwing numbers out there without really backing it up, It's one thing. But if you're saying, hey, based on the last six months, these are your conversion rate details, you know, your cost per clicks on average. And these are the keywords that we see are not really doing well or they're not getting any impressions. And then we're able to basically implement X, Y and Z in order to take market share on your top five keywords that you're currently taking whatever small amount of market share on. We see the opportunity. So you're making all these highlights. And even in that conversation, people are like, oh, And I think that's the thing that makes us really stand out as true experts because there's so much noise out there. I mean, you can get approached by agencies all day long saying, hey, I can help your Amazon sales grow. Anybody can take out a cheap subscription, get all the data on all of the sellers that fit their ICP. Set up one of those cheap lead gen systems, even using AI, and then just bombard the heck out of all these sellers and say, hey, let me sell you my service. Some of them might do it, but if you're not good, people will drop, right? It's the retention. It's not even the closing at this point. It's the retention of clients that really shows how good an agency is. I'm proud to say that I've had certain clients which have stayed with me for years and years. And I have a track record to show that this year we did this, this year we did that. And why do they stay on? Like you have to basically convince your client every single month not to drop. That's the reality of being an agency owner. And the way that you do that is not by, you know, from a fearful place. It's from a place of knowledge and from a place of wanting to continuously grow. So I'm constantly adding new things to the service. I'm constantly educating myself, getting out there and speaking with people. So I have my finger on the pulse. And then when I speak with my clients, they feel that. And so they say, you know what? I am continuously feeling reinforced that this decision to have this partner is the best partner. I have no reason to switch. My business is growing. I'm fine. Kevin King: It's good. But how do you close those guys? When you do this audit, you're spending some time and resources on that. And then a lot of times, sometimes people will just take that. Oh, thanks for pointing that out. I'll just fix that myself. And then other times, You do that whole thing and then they just start price comparing. And they're like, well, I talked to this other agency over here and they're not going to take $1,000 a month plus 3%. They're going to take $500 a month plus 2%. I'm just going to go with them. So how do you counter, how do you fight that aspect of the people are just looking for the cheapest price? Pasha Knish: Well, you get what you pay for. If you want to hire an agency, which is going to, you know, the guy's great on the call, the sales guy, he might be the CEO. And then all of a sudden, next thing you know, there's poor communication. You're getting service that is mostly based out of places like India or Pakistan, which there's nothing wrong with that. But, I mean, if you have a mostly Western-based strategy team, it's fine. I have some overseas support. They're great people and they're very intelligent. But always, the strategy needs to come from people who really understand the U.S. consumer mindset. And that's something that you can't teach somebody overseas. So if you have a team of VAs that's just managing the account, The Agency's probably taken a huge margin on that because it's all outsourced work. And you'll feel it in the communication once you actually start to do a deep dive three months in. You're like, why is all this stuff not being implemented? You know, because you hired a bunch of people who basically have a year or two of experience. They just took a couple of courses, like they're just pumping them out at this point. It's in the Philippines, like they have these entire academies for creating Amazon VAs. And all it is, is just a couple of weeks course. And it's just, you know, they're doing churn and burn, those VAs, you know, they're just picking up agencies to work for. And then they eventually they get dropped and they find another one. I can't tell you how many stories I have. Finding Filipino VAs that took me on and started working for me and then I noticed a couple months in like something's not right here and then they go, oh yeah, I've had two other full-time jobs while working with you. And I'm like, of course. What's stopping you? If I'm not doing a time tracker or a screen tracker, if I'm not taking screenshots of your screen, which I don't believe is the right way to manage. I mean, different people have different management styles. I don't like it. I don't want to do that. So I try to trust people. And I mean, eventually, you just start seeing it's not getting done. Oh, yeah. And so you can take on a million. And then I start seeing pictures of his extravagant wedding and everything. I'm like, that makes sense. So it's about being fair. But it's the internet, and that's the Wild West. I guess quality really speaks for itself and you get what you pay for as a short answer. Kevin King: And be sure if you haven't signed up for my newsletter, BillionDollarSellers. It's BillionDollarSellers.com. And coming up on December 12th, in just a couple of weeks, I have a free webinar. So if you are a newsletter subscriber at BillionDollarSellers.com, You'll get notice about how to sign up for this free webinar. You do not want to miss it. It's on the psychology of marketing on Amazon and why you should actually probably create your advertising before you actually even choose your product. I'm going to show you some fascinating cool stuff so hopefully you can join me for this free webinar on December 12th. You can find more information at BillionDollarSellers.com by signing up to the newsletter and then you'll automatically get notified of how to sign up for that. One of the things that people come to me a lot of times and they say, Kevin, I need to hire an agency for my PPC or for my Amazon management or whatever. Who should I go with? I'm like, dude, I can't make a recommendation. I've used agencies myself and I've had good and bad experiences. One of the best ones was I used Clear Ads one time to handle my PPC for a while for one of my projects. I have four different Amazon selling accounts. We were doing a lot of stuff back in 2020, 2021 on one of these. I didn't get assigned just some random person at the agency. It was George, the CEO of the company that I talked to, and he was on every weekly call, whether he's in his car driving into the office or wherever or not. This was 2 a.m. in the morning, my time in Texas, 8 a.m. in the U.K. because they're U.K.-based, and we'd have a call every Tuesday. He'd be on every call, but most people aren't getting that, but it's because it was me. He's like, we can't eff this up with Kevin because he can say a couple things and it could hurt us if we mess this up. So I had that advantage. So it's hard for me to judge sometimes, but a lot of times it's all based on, it's not the agency, it's the people, the account manager you get assigned to. And so you may have There may be a weak link in any agency and they do great work for one client and then someone else has a totally different experience. How do you fight that or how do you counter that? Is it in training? Is it in getting rid of those bad apples? Is it in monitoring them? Because inevitably, you can't please everybody. There's always going to be somebody pretty much for every agency that just says, that didn't work for me and they're going to bounce. Others, like you said, they've been with you for years, they're having a good experience. And then you have a person that's handling that account and they're like, you know what? I'm sitting here in the Philippines making six bucks an hour. He's charging $30 an hour for this. I'm going to go out and start my own thing and take some of these clients with me. So what do you do to balance that and counter that? Pasha Knish: I'll say first of all, when it comes to hiring, I offer a great rate for people when I see quality and I promote very quickly. That's the first thing. The second thing is we are not the cheapest agency. Like we get told that. I had a call last week and they were like, Well, you're pricing more than double what our current agency is pricing, but we understand why because of all the things that I said earlier. So I'm not the cheapest, but you pay for quality. So if I'm able to charge more, I'm able to pay more. And we're also not taking a million clients. I don't have a huge agency. I have a boutique agency, but I'm happy with that because I have less relationships that I have to manage because the biggest part of being an agency is managing relationships. It's not necessarily the management of the things because you can build processes for that. You can keep hiring. That's not a problem. That part of the scale is not the problem. It's proper communication and proper, like you said, that level of service and that quality has to stay consistent throughout. You can't have those dips. So that's one thing. And then, yeah, I mean, we're not It's about staying consistent with the way that the team structure is set up. So you can't have these sort of like too many disconnects between the different departments and you have to be able to see who are the players or like you said the bad apples. And the bad apple might not necessarily be somebody that doesn't have the right experience or It can be even just they don't fit into the company culture. That's something that I've actually learned now and just in this year is like what is the true meaning of company culture. I used to think it's somebody that needs to get along with everybody on the team. And although that's true, it's just you have to kind of resonate in your mindset with the rest of the team and how the team thinks about things, the perspectives. And so, yeah, getting along and being polite is important, but really being there with what are we doing here? What is the ethos of, like I'm saying, my ethos is quality over quantity. And do you fit in with that model? And what does that mean for you? Like showing up and just doing enough so you can check a box and leave? Or really being there, whatever, two in the morning, eight in the morning, you know, if there's a problem, you're there to fix it and feel like, okay, I'm a reliable person in this company. And I will respond as the CEO, I will respond to that and say, you know what, maybe when we're at this size, I can even give you some equity as like a higher person in the company, because I see that you're with me right there. And that's not something that I have to put on paper. It's something that I'm incentivized to do because you're great. And so that's the sort of thing that I think is really important to building a long-lasting company and team. And yeah, just kind of in summary to your question, I think it's about staying really, really consistent. And what you're doing for one client has to be exactly the same thing that you're doing for another client in terms of processes and attention. And then the content of the work can be different. But I don't want to manage 1,000 relationships. That's not kind of my goal. My goal is to have a handful of great relationships that last for many years. And they might pay a little bit extra, but that pays for me not taking other clients that are going to take attention away from their account, or me trying to grow too fast and then just burning things along the way. So I'd rather grow steadily and really create something that's meaningful and impactful. And I mean, my heart is in it. I'm an immigrant in this country. My family is. And I was here since I was three years old, but you know, my family, they came much later in their life. So I watched my family work really hard and I became an Amazon seller and pretty much I dropped out of my last semester of college. I don't even have a college degree. And I did that so I can pursue Amazon. At that point, I was a young guy. I was making pretty good money on Amazon. And I said, I want to pursue this. And so I come from those kind of humble beginnings. And I'm happy to see other people who have small businesses thrive and grow. And being able to see that the work that my team is doing is actually impacting people's lives. I'm happy to get on calls with these VAs. That just happened yesterday. I got on a call with one of my best VAs who's been with me for years. And he's like, oh, I just bought a house. And it's, you know, he's only been working for me all these years. So through that relationship, he's been able to buy a house. He's getting married next year. When we met, he didn't have anybody, no partner. So just looking around and seeing that, wow, this is actually making real impact in people's lives in a good way. And that's really what it's about. So it's not about making, you know, we can become millionaires or whatever, but at the end of the day, those are the things that are really valuable to me. Kevin King: What's the end game in this? Is it to keep running it or, you know, as most Amazon sellers are hoping to sell their account, their private label account one day and actually have a big payday. And there's a movement right now in the agency world of roll-ups, just like there was aggregators buying all the SaaS companies. There's a similar movement starting right now in the agency space where there's companies, I know of three that are actually going out there and they're trying to roll up. And basically they're coming in, it's basically instant clients. And then they're going through and they're weeding out what they call the riffraff of laying off some of the weaker employees and keeping the good ones and putting those onto the accounts. So where is this for you? Is this an exit play at some point or is this like, I'm just going to keep my head down and keep doing this? I enjoy making a difference in people's lives, like you just said, or what's the strategy for you? Pasha Knish: That's a good point. I mean, to be honest, Kevin, there's an exit plan for every person, right? We all have an exit plan one way or another. Kevin King: You're going to die at one point. Pasha Knish: That's right. You know, so we're here temporarily. So what can I say? Definitely at some point, if I'm able to sell this thing to the right person who's going to continue working the same way that I work with that same level of quality, I feel good about that transaction. It's the right time in my life financially and just With what else I'm doing, then I will say, yeah, I'm willing to sell at some point. It's not going to be now. It might take a couple of years. I don't know. I think that model of those roll-ups is actually quite brilliant. And the reason why is because with agencies, probably with e-com brands as well, it's the same type of setup. But with agencies in particular, the larger your agency is, the multiplier goes up by a lot. So if you're backed by a great acquisitions company, you're backed by a great equity partner or capital group, Then you are able to basically go and acquire a couple agencies and put them together and then just sell that whole thing for more than you bought it for just by nature of you were able to create a larger agency with a more solid looking foundation and you get a better multiple for it. So you just have to make those partners and so you don't even need the capital yourself. You don't even need to go and source those agencies yourself. You just partner with good partners like that, the M&A and the equity partners. I've seen that model. I've been approached by those people. I have conversations with them and I don't think it's necessarily a bad thing. I just think it's a different way of going about it and I'm sure they're successful. That's one way to grow your agency very quickly. Like you said, you can subsidize by eliminating team members, thus eliminating expenses, bringing more margin into the equation. The question mark for me is, will those clients really love that transition or they can just walk, right? So what those people who are acquiring, what they want to see is, do you have longstanding contracts with your clients? And I don't have longstanding contracts with any of my clients. I mean, I have agreements in place, but everyone's free to walk at any time. I don't believe in, I'm doing a poor service for you, but I locked you into a year. You just finished the second month and you want to walk away. Why am I going to force you to pay for 10 more months and then go after you with attorneys? I don't want to play that game. So I'm doing something where people want to stay. And so is that going to be a make or break type of thing for the acquirer? I don't know. So yeah, with agencies, there's just different types of risks. It's not like an e-com brand that has just, you know, you have the demand coming from Amazon. It's really diversified. If you have like a list of clients, your business is your clients and how great your team is at retaining those clients and what are the agreements between. So what you're really buying is a bunch of agreements. So, I don't know. I'm still exploring that. Kevin King: Why should someone use an agency? Why should I? I'm an Amazon seller. I kind of know what I'm doing. Why should I actually use an agency versus either learning it myself or hiring someone internally? Pasha Knish: That's a great question and I feel like that's sort of the value proposition for us. We have a fully built out team, which I will say that I have hired and fired many in order to build. It's taken me years. We have internal processes that work and most importantly, all of our teams communicate with each other effectively. And that also was not the case some years back. It's been hard to do that where everything that's going on on the content side gets reflected on the PPC side, gets reflected in the inventory levels, gets reflected on the reporting and there's that entire chain that's created. So take that and also add our software stack, which again, hired and fired many software providers in order to get to a point where we have a stack that we're really happy with for our ads, for our inventory management, for our reporting, for our profit monitoring and all of that. What you're getting is a fully built out system that you can try to replicate, but you'll just spend a tremendous amount of time and probably a tremendous amount of money. And also not to mention how many nerves that you're going to spend trying to build that and replicate that. And if you don't like it, you can walk away at any time. So you try it out and you say, it's not for me. I want to try to build in-house. Fine. But from what I've seen, when people go with it, they say, yeah, this is, it's like, I can focus on other parts of my business. Amazon is just one tentacle on the octopus. It's not like that's your, I mean, for some people it's their whole thing, but especially if you're like a seven, eight figure seller, you shouldn't just be on Amazon. I mean, you should probably focus on DTC and social and all the other platforms and maybe brick and mortar and retail and wholesale, you know. So there's all these other parts of your business that you really want to just focus on. Let me find a content guy. Let me find an ads guy. Let me find, and you're not going to find one person that does all those things really great. You think your ads guy, who's really good at ads, knows how to make graphics as well. As good as he can do the PPC and he can also do a copy as good as he can do the graph. So it's like you're going to have to build out a team of multiple people. Now find all those people at the right price and get them to work with each other so they're not just like missing things and breaking things. I don't know. So I think it's always advantageous, especially when you're at a certain size to have an agency. I mean, if you are like a nine figure seller, And you have an entire department that can build out another entire department and it's not so resource intensive and you can kind of do what I have done with the agency. You're basically creating a little mini agency within your company. If you could do that effectively, then maybe that makes sense. But I would say for the majority of sellers, for 95% of sellers, I think an agency makes more sense. Kevin King: What are your thoughts on agencies that charge a flat fee versus charge a percent of revenue or percent of PPC spend or a combination of the two? What's your philosophy on that? Pasha Knish: The PPC spend thing is a little weird for me to be honest with you. Kevin King: That comes from the advertising world because in Madison Avenue for years, decades actually, it was based on if I went to, if I'm Hershey's and I hired one of the top agencies on Madison Avenue to run all my national ads, the agency charged 15% of the ad cost. So if I ran a Super Bowl ad for $5 million, the agency charged me $750,000 for helping coordinate that. That's the way that model works and still works that way to a large extent today. I mean, there's a few tweaks to it, but that's where that comes from, of the PPC spend. But I agree, a lot of people don't like that. But anyway, that's starting to interject there, but I just wanted to. Pasha Knish: No, that makes a lot of sense. Yeah, that puts some perspective in it. So if you're doing a large advertising campaign and your goal is to broadcast, that makes sense, to charge a percent on the spend. But Amazon accounts are all about growing steadily, in my opinion. I mean, some people there just want to churn out revenue because they want Amazon to be a billboard for their brand, right? They don't really care about the money they make on Amazon. But for, again, 95% of Amazon sellers, they're there to make profit. So what does that mean? If you spend more, do you make more profit? Not necessarily. I can put all the bids to 50 bucks, right? And just max out all the spend on your account and say, Oh, great. I'm making a great percent over here. But your guys, the account is going to leave. I mean, they're going to hate that, right? So that's exactly I'm painting a very extreme picture of it. But that's sort of the, you know, the way I look at it. So the way that we charge typically, depending on the situation, I mean, if it's a smaller account, we usually do a base fee. And a small percent on revenue. And then usually once the account gets to a certain size, or we can charge this from the very beginning, we'll do a small base retainer. And then a percent on incremental. So I don't want to come in and take a percent of the spend that you're already doing or the revenue that you're already doing. I'd rather say, Hey, pay for the team. So that's the base fee. Let's, you know, kind of set up a number of SKUs that we're going to manage or if we're going to manage the whole catalog, that's what the quote is going to be. The base fee always changes. And then usually we'll do a six month or 12 month average and then keep that rolling and do a percent on the incremental that we, And so if we're doing a rolling average, that baseline is always growing too. As we're growing the account, the baseline is always growing. So we're always chasing the baseline and trying to go above it. So that is an incentive model that both parties feel like, all right, we're in it for the same goal. The base fee I would have to pay anyway, whether I'm bringing an agency in or an employee in, there's no way to avoid that. Then you have people who are like, can you just work on a percent? Like a launch brand that's like, work on a percent. So that doesn't work. For me, there always needs to be some kind of base retainer because the agency can't lose money. I mean, I can't take on a client if day one we're already in a negative because there's many people out there that are willing to pay the base retainer. So at least I'm fine to break even to build a relationship, but I definitely can't be in the negative. Kevin King: That's one of the advantages of the agency business too, unlike selling where you're putting the cash out up front and then waiting 90 days, 120 days or more to actually get a return, get it back and get a return. In agency business, it's pretty much cash up front. I mean, the percentage may come later, but you're covered your cost on that monthly fee up front. So that helps quite a bit. Pasha Knish: It does. Yeah. It's a good business model for people who don't want to put that cash up. But like I said, it comes with other caveats. If you find a great winning product, I mean, today it's kind of hard. Maybe some years ago it was a lot easier, especially before Alibaba went public. It was kind of easy to find products in China. Now it's a different story. But if you're able to find a winning product and you have the right formula or the right people, then you can really see that thing take off. But with an agency, I mean, to grow an agency and really get clients that are going to trust you, I feel like that's a bit harder. Kevin King: Do you take any equity? If you grow a brand, you take out a new client and let's say they're at 500,000 and your agency comes in and takes them on, you helped them grow to 10 million over the course of a couple of years and then they exit somewhere. Are you getting rewarded in that exit or are you just like, they're like, thank you very much. That was nice of you. We're moving on. Pasha Knish: Well, that's a good point. I currently don't have anything set up for that. And I've heard of that type of scenario. That might be something that we can bake into some of our larger contracts. So that's a good takeaway. I wonder, how do you structure that? Kevin King: It's all negotiation. It's all negotiation. You can put targets, like in this example, if they're at half a million, you're like, okay, when you sign them on, like, okay, we're going to help you grow. If we do our job and you stay with us and you like working with us and we grow you to 2.5 million and you decide to exit at some point after that, we get 1% or equity or whatever it may be. Then if we grow you to 5 million, we get 2.5%. If we grow you to 20 million, we get 5% of the value when you exit. I would actually do something where as long as we were the agency for X period of time during that growth. So they may say, maybe you're their agency for two years, and then they decide for whatever reason to go to someone else for the next year, and then they exit on year three. So at the time that they exit, you're not their agency, but you help them get to that initial stage. So you should be rewarded for that as well. So you build that in. So there's ways to structure that where you build that in and there's attorneys out there that specialize in actually doing that kind of stuff and writing those kinds of agreements. There's one in Austin. I just went to a show in Nashville in September called DEALCON, D-E-A-L-C-O-N. I think there's another one in February in Nashville again. And the guy that runs it, it's set up for people that are buying, that are aggregating agencies. So it's the whole idea and they have a system, they have a mastermind that they will help you do this. They're pitching something as well. But they have a pretty good experienced team that knows how to do this and they can come in and actually get agencies for no dollars down. So they may have a way to maybe... I know this is not your case, but let's say in your case you're struggling a little bit, you know, robbing Peter to pay Paul to keep the payroll going, struggling a little bit, but you had some good clients and had some good momentum. They would come in instead of actually writing, cutting you a check for a million bucks and say, we're going to take your agency over, roll it into ours, and we're going to give you a percentage. We're going to, we're going to pay you out over time. So they have no money up front and they get your clients and your employees and your reputation, and then they can grow that. And then you make money. More money than what you would have been making and less headaches. You can sleep at night now because you're not worried about how am I going to make payroll on Friday. They're able to do that. So they have very creative ways to actually structure deals. And sometimes there's cash up front and it just depends. But I know there's an agency owner there that's built a $500 million agency and he just recently sold it. I don't know what the figure was that he sold it for, but his buildings are $500 million a year. And there's another guy I know that is a Google Ads agency and he just sold for like $30 million. He had a partner so they had to split that. But there's massive opportunity in the agency business beyond just if you can grow it and you have a legitimate agency with legitimate clients and you have a good track record. And even for the guys that are listening that maybe have failed, there's opportunity to get out of it and someone might take that over and roll it into one of these bigger ones. There's a whole movement of that going on right now. Pasha Knish: What you're saying is that that's a great thing because it's a win-win for everybody, right? If you're struggling, you're burnt out, you're like, man, I don't know how to grow this thing efficiently without me going crazy and pulling my hair out. There's a solution out there for you, which will help you to actually make money and get rid of your headache. Kevin King: It's kind of fascinating when you get into it and you see what some of these, because there's a lot of people that are running agencies that really, they're not good business people. They might know the PPC or they might know TikTok shop and they might know something, but they're not good business people. And when you need that good business people, and that's what these guys can come in and provide, is like, we'll provide the underlying structure in a good business sense. And you just keep doing what you're doing, what you know best, and let us take care of all this other daily operation stuff and the growth and the cash flow and all that kind of thing. Pasha Knish: But the risk from the company that's doing the acquiring, there has to be a certain minimum that that agency has to meet. Maybe not even in profit, but in just client size or client quantity. Kevin King: Yeah, there is something. I'm not going to take somebody that's got two clients or something. I don't know what the number is. But yeah, each one is just like the aggregators in the Amazon space. Some are like, we only want businesses doing $500,000 to $2 million. And others are like, no, we only want the ones doing eight figures. Or we only want beauty brands. So yeah, there's criteria. There's things that happen in there. But I know someone that had Five clients, I believe it was. And during COVID, he was putting six figures a month in his pocket off of those five clients after he paid all his expenses. And four of them ended up selling to aggregators. And his business completely tanked because the aggregators took it all in-house because they had their teams and stuff. So that was a big hit in the nuts for him. It sucks, but that's part of audit too. You just never know one day when you're going to wake up and you get an email from your top client going, we're moving on. Pasha Knish: That's the risk. That's what it's all about. Kevin King: It may not be because you did a bad job. Pasha Knish: No, it's just things that are just not in your hands. Kevin King: Yeah. And you're like, damn it, there went 50 grand a month or whatever. There went a bunch of miles on my points on my credit card that I've been earning off of this client. Pasha Knish: And then you start thinking, all right, well, I lost my big one. Do I have to start firing people, right? And that's like, that can create a really big ripple effect. So there's this need to continuously bring in more work, not necessarily because you need more revenue, but even just to cover the potential risk of losing somebody. And so that's always kind of like driving you in the back. To keep, you know, figuring out the… There's natural churn. Kevin King: Yeah. And the agency business, I just spoke to another agency, a PPC agency owner last week at Amazon Innovate. I think he said he has 36 clients and he's pretty much steady at 36 clients. I said, well, how many are you losing in a month? He said like two. So how many are you gaining in a month? He said like two. But I'm not good at marketing. They're just kind of word of mouth and just coming to me. So I'm not growing. But at least I'm not declining. It's a challenge because you've got to constantly be riding that horse to try to replace what you're losing or what you're potentially going to be losing so you don't have to lay off people and you don't have to freak out. That's a challenge in that business. Pasha Knish: It's highly competitive. It's referral based, a lot of it. And, you know, it's not something you can control that much, right? Kevin King: It's reputation based. I mean, it's reputation. Some of the best agencies are by people who are well known in the space. You know, someone like, say, Leron with Incremental. He was well known as a seller speaking already before he started his agency. So that helped him get that leg up where people would at least initially trust him. And versus someone else that's just been a seller and they're like, okay, you know, screw this. I'm tired of a cashflow and all this stuff and I'm making money on paper, but I never have money in my pocket because I'm constantly reinvesting it. So I'm just going to do an agency where I get paid up front and I'm just selling digital air. I just do that selling physical products and they make that switch but they may not have the reputation. People may not know who they are so they go out and they call their agency AMZ Hotshots or whatever it may be and they have trouble. They can't get clients and they're like, come with me. I know what I'm doing. I've been selling. Who are you? And so I think that's a major challenge for a lot of people too. And that's where it becomes, you got to get a couple of clients and then it's referrals. It's like, oh, hey, these guys did a really good job for me. You should check them out. Pasha Knish: Yeah. And that's that word of mouth. Kevin King: And that's that relationship stuff you said at the beginning where most of your time goes into client relationships and keeping them happy and informed. Pasha Knish: Yeah. That client relationship is everything. It's the retention. And like you said, it's the, hey, I know a friend who's starting an Amazon business. Check out this guy. And then even the service provider thing, like speaking to other service providers, whether it's agencies or software or whatever, there's consultants and different adjacent type of service providers that don't do what I do. And so sometimes somebody is asking me and I refer them, vice versa. And there's a network there where we're just helping each other out, but also helping the client out. And there's a win-win situation. Or even larger agencies, where they have a minimum of, they're only taking clients that are a certain size. And so some of the smaller clients that maybe we might work with, that their base retainer would be 4K, 5K. That's way too small for some big guys, right? And if I have relationships with those agencies, then they say, Here's so and so agency and they can probably help you out and then maybe they'll grow you to the point where you can work with us. We're not right. So there's all those types of opportunities. And so I think that's what you can kind of lean on. But at the same time, you can't lean on it because there's no way to predict when you have lead gen systems that say, on average, we're bringing this many leads in and we can just scale it up by hiring more VAs and repeating that process. And that's a process that you can control. But when you're waiting around for referrals to come in one week, you might be hungry. The next week, you might be too full because you have too many conversations. Trying to juggle all the forecasts or whatever that you're doing. So I guess with agencies, it's feast or famine, right? Kevin King: What's the number one thing, correct me if I'm wrong, but is it PPC, the number one thing that people are seeking when they are seeking out an agency? And then what would it be, if that's correct, what would be beyond that? Is it full service management? Is it TikTok shop? Is it Walmart? Is it listing optimization? So if you had to rank it, here's what people are really looking for when they come to an agency. They want this number one. That's their biggest concern. How would that stair step down? Pasha Knish: Content is one of those things where you kind of just do it once, right? You definitely want to come back and look at reviews and say, all right, let's modify the listing. Let's do some split testing. But for the most part, I mean, your listing is there. And you're not messing with it that much. I mean, at least we are not. Like I said, A, B test, fine. But you're not reinventing your listing. But your ads are very much alive. So for sure, the ads. But it's really the full service management. Kevin King: But shouldn't you actually reinvent the listing? Because that can be where a lot of the authorization comes in. You could be really good at the PPC and driving eyeballs to it, but if it's not converting, Shouldn't that be a major focus? I would think that actually taking their listing and doing some A.B. testing, like you said, but I think a lot of times you probably need a total overhaul. Pasha Knish: When we come into a new account, we are doing that. So we're looking at what's already there. But I'm saying if we've already done that listing, we're not going to do it again. So that's more of like a one time per SKU type of job. But the ads are something that per SKU is a daily thing, not a one time thing. And so but yeah, you're definitely right. I mean, we're doing an overhaul pretty much every single time we take go into an account. There might be some things where we're like, Oh, that's pretty good. But we can always find something. And then we split test it to the point where we're like, our split tests are coming out 5050. I mean, at this point, we're good. Like we've kind of maxed out what we think is really there. Let's look at this in six months. That's usually our approach. And then also just having all the back end filled out. I'm actually having two webinars this month where I'm talking about the ways to optimize the backend using AI. That's been pretty fun just filling out all those little details that people don't want to fill out like other attributes and intended use and all this fun stuff. But I would say PPC for sure. There's ad tech that we use. We use Packview. All the ad tools are pretty much doing the same thing. They're all good. DSP and AMC and all that stuff. But the thing that people don't expect are the amount of cases and time that you might have to spend on cases. Then it's inventory levels. If you're ramping up your PPC and you're getting more sales, then You need more inventory sent in, but you don't want to go over the top and you have all these storage limits and you have inbound placement fees and you have overstock fees. So you want to navigate the fees because you actually might be growing and then all of a sudden your margin starts going down and you're like, what's going on? And so really it's kind of all the things. Like what we offer is we're paying attention to all these things and helping you to have a symphony, right? To have the entire orchestra working together to make something beautiful versus let me just focus on your ads because we've done that before where it's just like someone wants us. Can you just do my ads? I got everything else. And then they're inefficient at solving cases in a timely manner. So they have products that are just down, especially their best sellers. Then they have out of stock or overstock. And they're losing tons of money on being charged these long-term storage fees. And they have to remove it. And it's all. So there becomes, like, in the background, there's a mess. And I'm just like, why am I running your PPC if you can't take care of the other things? It's like, I'm a guitarist. And you're drumming all over the place, messing me up, right? And so it doesn't work. I think you really need to have all of the boxes checked. Kevin King: This is cool stuff, but it's been great. We've been chatting here for an hour already. I feel like we're just getting warmed up. But if people, Pasha, wanted to find out more about your agency and learn more about you guys or maybe even explore working with you or something, how would they do that? Pasha Knish: AMZOptimized.com. You can book a call with me. It goes to my calendar. You can reach out to me, Pasha at AMZOptimized.com. Also, you can check out that mini course and get those five-minute nuggets of gold for my podcast recordings. That's just minicourse.AMZOptimized.com. So, all those ways that you can check out the Agency Operators. Kevin King: What was that domain again for the mini course? Pasha Knish: It's minicourse.amzoptimized.com. And then you can also DM me on LinkedIn, Pasha Knish. You can check out all of our social profiles. I mean, if you want to get in touch, I'll definitely see you. Kevin King: Awesome, man. Well, I appreciate you coming on and sharing today. This has been good. Always mixing it up here on the AM-PM Podcast with different topics and subjects, keeping it interesting, different side of the business than a lot of people really ever hear much about. So, I appreciate it, man. Pasha Knish: Yeah. Thank you for having me on, Kevin. I really appreciate it. It's been fun. Kevin King: I hope you enjoyed this episode with Pasha talking about the agency business. Fascinating stuff and a different side than what you get to hear on most podcasts. Be sure to check out his podcast, The Agency Operator, if that's something that you want to learn more about or if you want to get into the agency business or maybe you own an agency or just want to learn how it works. Some great information on that podcast, so check that out. We'll be back again next week with another episode of the AM-PM Podcast. Don't forget that webinar on December 12th, BillionDollarSellers.com to get on the newsletter so you get notified about that. Before we leave today, I've got some words of wisdom for you. You know, the aim of the game is identifying what people need and then selling it back to them as what they want. Identify what people need and then sell it back to them as what they want. Have a great week. We'll see you next Thursday.