Behind the Curtain of the Amazon Agency World I Part 2

Behind the Curtain of the Amazon Agency World I Part 2 Speaker 1: You're going to have you on that stage. Like I don't do corporate events, right? Seller Sessions is not corporate. Yeah. People can be who they want to be. If they got up there and started selling initiatives on my stage, which it wouldn't happen if they did, they will get smoked by my crowd. Speaker 2: Yeah. Speaker 1: Because they go, what the fuck are you doing? You're trying to sell us more shit to tickle more money out of our pockets. We're being hit with tariffs. Do you understand what I mean? So I'm digressing. But basically, going back on point, Last week, I was able, in a four-hour window, because I'm including the time it took to put in to ClickUp, find a new venue, rerun all the numbers and analysis for it, restreamline the model and how we do it. So one venue, two events in the same venue, but one ticket. Took care of all the issues on the back end. We've had a nightmare with the website. That four-hour window would have took three people four to five weeks to resolve. So now, That's what AI has done. When we talk about research, I was able to use Manus and now I've got a route forward that allows me to pick and choose. Do you know what I mean? I'm not saying I won't have sponsors. That's not the argument. The argument would always be It's always been the tickets being subsidized from the sponsorship money in order to give the end, you know, like the seller, the delegate, a low price ticket because it's the same price since 2019. We've seen how everything inflates, right? Just a small example is that I have to take my venue's food, right? So this year I'm going to pay twice the amount of money for exactly the same food and beverages my supply chain gives me. It's just going to cost me twice as much. So it's a bit like I tell you, Dorian, do you want to buy my car? And you go, how much? 10 grand. Cool. You turn up and I go, nah, it's 20. Take it or leave it. You'll go, well, why would I want to pay? Do you understand the mentality of it? But that's where you talk about research. That's where, you know, a lot of people burning up their free tokens on knocking out listings for Mannis. Right now, a lot of people are having it hard. And I've solved, in a four-day window, the bank holiday, Friday, Saturday, Sunday, there were four things that were a big concern for me. One of them was Seller Sessions. I'll be clear on the podcast as well. I've had to lay off half the agency, but I've been getting them placed in jobs. So hopefully they'll be employed because that ended the industry change. We're still an agency, nothing changes. I had two options. Build shit that adds on to what we're doing that no one else has got or jump on Clown World on LinkedIn and do the magical sales stuff and I'd rather die than do that, go on there selling magical strategies. Because I know that people are having it hard and it's not just sellers having it hard and people won't admit it. I'm always straight. But it's across the industry. Do you know what I mean? And this happened to me rapidly. Me and Ellis were pretty much unaffected. Reason being is that, well, because we've been going seven years. In 2018, how many agency built all their own technology? Most of the agencies back then, which is ten times bigger, the community of agencies now, to 2018, what you've got is you've got a technology company, us, a world-class engineer who used to work at Jungle Scout, building our own tech. Back then, software was just coming through, so it was either exclusively manually managed, and what was good about us, we could Because of our technology, we were the agency that everyone goes, how many SKUs? 1,500. I haven't got the labor. Do you understand? We could eat that and munch it. And that was one of our key positions. So you got two things. We had a flat rate that never really went up. Very rarely it went up. You were able to add SKUs, whereas everyone else would either have to manually manage it. Otherwise, if they use the software 99% of the time, it's a percentage of spend, which means what? That goes off your bottom line as a customer, as a seller. So we had all of those advantages. Not only that, our pricing is fair. So if you left us, the chances are you'll go to an agency of our level and our skill set, you would have to pay twice as much, but you won't have a Dr. Ellis Whitehead spearheading your campaign management and our team. Do you understand? Because you'll go somewhere. Speaker 2: And I think what you just said is a really good explanation and direction. In my opinion, what agencies should be heading, and this is what we are doing also, is where's the future of agency? It's still there, but automation is a big part of it. And you have to ask yourself, who should benefit from the automation? Everyone's saying, you know, we had this discussion earlier also, Brand owner, every agency owner is thinking, okay, now I can lay off people and I'm going to save money and I'll make more. But what we are doing, and I think hopefully this is This is where he also agrees. You have to also think in terms of, okay, I need to pass on these benefits to the client, to the brands also. Speaker 1: Absolutely. Speaker 2: And, you know, we charge roughly 30, 40% less than what we used to four years ago, these days, and it's taken us roughly the same amount of time, maybe even a bit less. But look at this. Who's benefited from this? Everyone is. And I think if you understand this and use AI tools to make your life better and the life of everyone around you, you'll be in a good spot. Speaker 1: Absolutely. Because I said I had a chat with Kevin on his pod the other day and I was saying the same thing. Look, at the end of the day you could say, oh yeah, Dan's a bit bitter, you know. But look, the reality is I ain't bitter. I understand that I knew this was coming. It's just our plans have been now accelerated. It just happened like that. Because, and I'll be straight, it's a commodity industry now. There's so many agencies out there. You either got rid of something different or you got the magical strategy sales team and you do the churn. Because what's happening is sellers are panicking, right? So what they'll do is they will get to a stage and they'll look at it and then when they start to panic, suddenly the magical strategies that don't exist, where they've been gaslit, actually sound appealing. Because like, what the fuck else am I going to do? It's worth a punt. And then they burn through the three months and that account manager's got to pull. I'm not saying that about every agency. Let me be absolutely clear. You know, we've got very good agencies and then you've got sweatshops out there that are running things, you know, with low-waged team members because that's how they had to scale. Let me give you an example going back. The advantage that we had a few years ago as well is that we were able to build our technology And other agencies couldn't. Why? Because more money would have been spent on account managers. If you've got decent account managers, they cost money. And you can't afford a Dr. Ellis Whitehead. Ellis would go out, I'm guessing, anywhere between a bigger company, right? He owns Data Brill with me. We're both founders. But if we don't pay Ellis $175 to $250k a year, But if you're an agency wanting to attract that level of talent, because engineers, what people don't realize is engineers can be good and exceptional, but you're not going to be able to know that yourself unless you can validate their code and understand their skill to see if they're good or not good or what level that they're at. Right. So if you're an agency, you're going to hire people. They're going to be more technical than you and it might blow you away and you think they're good, but they could not be the level is what you think they are because you have none of them skill sets and nor should you, you're not a programmer. So the problem going back into that cycle is that we had the advantage of there's no percentage of ad spend. We had flat rates. Our fees are reasonable. We only worked with seven figure sellers. So most of our sellers were less than a quarter point two percent of We're monthly turnover. So if you think if we imagine it, let's say roughly 25 to say 35 percent of their sales PPC. Yeah. But we cost on your monthly burn less than one percent. So we're not a threat to that at all. Right. Because we're a small amount generating a chunk of your sales, which is whatever percentage that would be. And then you add in, you haven't got to pay a percentage of ad spend. And then you add in, you can just add SKUs. I don't think I ever put anyone's price up. You just carried on going. Do you know what I mean? And then the other agencies would add two things. It's like, to get good people costs money, account managers, you're not going to have anything left in your budget to pay a good engineer. It's just not doable. The numbers don't rack up. Yeah. But now you've got AI and all these different things change. The markets change. Margins get squeezed. The world's changed out there. And we've been going seven years and most things work in a cycle. So this is our cycle. Do you know what I mean? At first it was like, fuck, what do we do here? So I had to make a decision. We are good with having cash on hand, right? So if me and Ellis had to, and we didn't have any, let's pretend, nothing changed with the agency. Let's say I had no customers tomorrow. Me and Ellis is all right for a couple of years on our wages. We had the choice of going into the red And then trying to work our way out and burning through some of that cash or all of it over a period of time because you just dig your heels in or you reassess everything and then help your team members that go in, help with their CVs, make phone calls around the industry and get them placed in jobs. Do you understand? And then it gives us more time to develop that side of what we have been developing. So we are working on stuff. But you're not going to be, you know, like, what's the word for it? We're not going to say, oh, yeah, we're going to become a full service agency. Oh, yeah. Now we do main images in terms of as a service or we're doing A-plus content. Because there's nothing original about that. I sat down with a couple of the younger lads in our industry who are concerned. We sit down and they go, Dan, look, it's fucking bloodbath out there and we're having conversations. And I said the same thing to them. I said, look, You gotta accept for what it is because how big it's got. It's become a commodity business and everything goes through cycles. Let me give an example. Right now, and rightly so in a lot of cases, we go through the shit-kicking cycles. So, the last few cycles that I'll give you, one of them was the aggregators. Yeah? Forgetting that the aggregators has been the single most defining thing for this industry because it helped a lot of people exit. But then when it start coming tumbling down, the shit stick comes out and everyone hates aggregators. When the laws changed about doing giveaways, which a lot of people are still doing sneakily under their breath. The giveaways got the shit kicked out of them. Right now it's the agencies and there is some valid reason but I'm just saying but then next time there's something else is going to have the shit kicked out of them. Do you know what I mean? So when you add all of those things up, you add the fact that margins are going down, you've got more and more agencies and what happens is those that are going to panic have got a day job to keep. And then the people that are keeping them in jobs are setting them targets. So I'm not saying it's guaranteed every time, but there's going to come a play for some people will start having to bend their ethics in terms of, oh, yeah, we can do this. Just to get them in that cycle for the three months. Speaker 2: Yeah. And, you know, I'm glad that you brought this point up because that was something that Made me stop for that one year. I literally left the agency for one year. My agency, the previous one, was acquired by an aggregator. I was meant to be with them for quite some time, but I left. And that was the main reason is because it was becoming a commodity. And when I saw the first LLM, that was like the cherry on the top, like, you know, let's go because there's a revolution coming. And I spend a lot of time thinking, okay, so what do I have to do from an agency perspective to not just survive but thrive? Speaker 1: Yes. Speaker 2: And the answer is actually pretty simple. So whoever is watching this and has an agency, here it is. You sell results. Speaker 1: Yes. Speaker 2: And you focus on those results. So we focus on conversions. I don't care how we deliver this, whether this is through AI images, LLMs, or I have to shoot images. I do not care. Speaker 1: Yeah. Speaker 2: Our job, my job is to come to work with a brand and increase the conversions and click the rates. So I'm no longer, I don't want to, hopefully even in the future, I won't be called a creative agency because there might be nothing creative about it. It might be just simple prompting. Speaker 1: You become the conversion agency, right? In theory. Speaker 2: It might be simple prompting or simple tools that we automate. So as long as you sell results and you focus on delivering those results at a good ROI to the brand or the client, you have nothing to worry about. And these tools that we have these days make it possible to deliver those results at a much faster pace and a much lower cost. And the creativity is becoming automated. It's becoming commodity and commodity, as you said. So creative agencies have to think in terms of, okay, what is it that we're actually providing to our customers, to our clients? What is it that we're providing? Are we still providing any type of creative input? There's probably a lot of them that still do, you know, like ads, all of that, you know, video production. There's still a lot of creativity around it. But certain things like still images or copy and things like that. Is this really what we're providing? So our whole strategy these days is to really step away from being a creative agency and that's why I've introduced the technology aspect when we actually develop in softwares and MVPs internally spend a huge amount of money failing constantly is because we're trying to figure out, okay, what's the next step? Because it's not a creative agency. Speaker 1: No, but you know what? Part of what you do, because I'm going to give you the flip side of that, I like that idea of, you know, guarantees, right? What you do depends on what it is, right? But you don't do the same main image monthly, right? Every single month for the same client. And one of the biggest needle movers, as we know, is customers eat with their eyes. So this is why a lot of 7-8 figure sellers spend a lot of time optimizing the shit out of their main image. Because out of everything, it's not, you know, fucking alt tags and Spanish keywords. It's your main image. That's the real driver. One of your jobs is to turn water to wine. I've seen firsthand that you've even re-shot images and they look world-class. I mean, they look amazing, right? And then you look at the original image and you're like, how the fuck did you... like water to wine, yeah? Because you've managed to do that skill. Now, in other areas, let me give you an example. PPC, right? Any clown can get you to the top, right? If you've got half a brain, you start bidding. Within reason, I'm using broad stroke here, but the whole point of PPC is visibility, right? Speaker 2: Yeah. Speaker 1: So basically, you're paying your way to the top to get visible so that customers can buy your product. True? Speaker 2: Yeah. Speaker 1: So if you've got all the visibility in the world, you've got all the visibility in the world, and the customer doesn't buy it, what's happening? Speaker 2: You're not profitable. You can't scale your business. Speaker 1: Exactly. But the point I'm making, you know, like you, imagine you doing that just on PPC. There are performance companies out there on PPC. I see the churn. The front end looks attractive, but then it doesn't look as attractive on the back end because the person switch thinking, oh yeah, this is great. I'm not going to pay for it. And then when a lot of the companies that are bringing these on, because everyone looks at free, So basically, they're getting into a... because remember, you've got to migrate over, yeah? And then you've got that switch over. So imagine that someone, everyone's saying for free, let's say you're the one who does performance only and go, yeah, yeah, yeah, we'll bring you on board. You still got to onboard them in a way and you may need to move from one software to another and doing cold start campaigns, you'd be a clown to do that. So then you have to take care about it. Once you look at that, You could be a list of 40, 50 people they're waiting to work with, but they can't because they're flooded with the front end. And what happens is hunger games. They say to that person, do you know what really happens? They can say in a month, two months time, you know what? We did it for free. We tried our best. Didn't cost you any money. But what it did cost you is that that agency on the front end, the great thing about doing a model like that one, you're not going to be held accountable. Why? Because you haven't paid. Great. Yeah. And then what happens is every so often out of that batch is a winner and you stay with the winner. So basically you filter out the ones that don't work, but equally at the same time, You can't buy away with AI migrating campaigns over, and if you're moving on to another software, because you've got to rotate the campaigns, right? So you show the older ones, then the new ones, the old ones, and then the impression share starts to come over. It doesn't work just like that. That is a time AI can't get rid of, right? So if you're doing that and it's performance only, The client up front thinks it's great because one, they're not paying for it. So they either take it out of the house or they give notice to their agency. They go to the new place. They wait in the queue, right? And then by the time they get served, you don't know how long. I can't tell you where they are in the queue. And then what will happen is The emphasis is, well, even if it doesn't work, it's not a problem. You've got it for free and the customer has to accept that. It's true, right? You've got it for free. Look, mate, try the best because they'll see the single screen grabs, the one in 1,000 moonshots. Yeah, look, this is what we've done to the client and we're performance only. People come rushing in thinking free. I've got to pay for anything. All that stuff underneath is what they miss. So let's say you were doing quite well somewhere, not my agent, anywhere it could be. It could be anywhere or you could be managing your own PPC and you're doing well and it's good, but you want a bit more, right? And then you realize, well, I ain't got to manage that. It's free. I'll go there. And then you migrate over and then you wait. And then if you don't win, what happens if they can't focus on that because they've got too many people In front of them. And then that agency, whilst there's going to be stress levels, they're able to pick off the best. So let's say one in 10 of them do okay. Then they can show that screen grab to the next batch. And there goes the cycle. You didn't understand it. Do you understand it? Speaker 2: It's a strategy that I see all the time. The worst thing is working, but I think reputation is really important in our industry where the word travels far. Speaker 1: The thing is that there, if you're a performance agency, you don't get paid unless they get paid. But in the The client's head is like, well, it's great. They're motivated because they ain't getting any money unless they move the needle, right? But what they don't realize is that they've got so many needles to move, and then they just, they go, oh, that one worked, pop, right? So for everyone that wins, you've then got to then migrate off to yourself or to another agency. So you might have been stable, but you're looking for growth, and you thought, this is free. They're incentivized because they're not going to make money if I make money. So they think that this is a carrot and stick, and it's not. They'll be able to pick the winners. Speaker 2: Yeah, it's problematic. And there's a couple of reasons why we shifted to also, in a way, performance, but we're doing it slightly different. Two reasons for that. The first one is obviously to move from commodity to result-driven agency. And the second one is we also wanted to completely lower the amount, to lower the amount of clients we onboard. Actually, there's three reasons. The second was we wanted to lower and really focus on the client, so we actually removed that issue that you were describing, whereas we, at the moment, we work maybe with five to six clients, where before we had 30. And we've been working with these clients for the past two years, and we see we're actually growing with them. And the third reason is I introduced the conversion guarantee to push myself and push my entire team I make sure that they clearly understand what the deliverable is and every single designer, every single copywriter on the team that we have is no longer thinking in terms of we just need to, deadline is here, we just need to deliver, bam, next project, next client. Okay, let's do this one. Here's an Asana, here's a ClickUp task, done. Now, every single employee at my company, at my agency is actually in touch with the client. A lot of times, I can go away for five days and they work with the client and they work on the new launches, on the conversion optimization, and they do not focus on the output, but they look at data. So they have access to the seller's central accounts. We have weekly data reports. So whatever they're doing, they're always at the back of their mind. Have we actually moved the needle for the client? I have the two designers that we've been working with on one client for over a year. So that's how I removed that. It makes us more profitable as well and makes my life easier. I used to have, Danny, I'm not joking, about 20 sales calls a week. My wife was hating me on this. I live in Warsaw, Poland, and I work mostly with US-based companies, so the calls would be like 8, 9 p.m. every single day. So I couldn't spend time there. Right now, the last sales call I took, maybe it was one, two, three weeks ago, it was one. And I don't have to do that anymore. And five clients, they grow in the business. I have a smaller team. We focus on the results. And yes, if someone comes in and it's an interesting project, and I know that I can do something, yes, I will take on this project. I no longer have the need, the urgency, and the hunger to feed the will that you're describing. The will is gone. Speaker 1: Yeah, no, agreed. And you know what? I'm going to share the screen now because I wrote a 10,000 word article on both sides of the table of the agency and the client. I broke down every single type of model that I could think of and look at the plus and minuses because I want people to look at it from an open point of view. Right. So let me just I'll share my screen. So this is agency red flags on both sides of the table. I wrote this nearly a year ago and it comes in 10 parts. So it explains everything I just mentioned there. Say like we're going over it. If they go to SellerSessions.com agency-red-flags, right? How many accounts are they managing? Is it 5, 10, 15, 20? Then you're looking at the communication, you know, and talent as diminishing returns. So when I was interviewing a couple of years back, I must have spoken to about a hundred people and I worked with three different employment agencies because we needed the people to be of a certain level. And then you realize that once you start looking at the talent, like, so for you, you're at the top of your company, yeah? And there are going to be you and other talented people there. But let's say that you had a thousand clients. Under you and the other, what happens, you get diminishing returns on talent because they're limited in the marketplace, so it makes them scarce, right? And if they're scarce, what does that do? The costs go up. So I interviewed a shit ton of people and I was really underwhelmed with the quality. And because it was a few years ago, what I did notice is some of the people that come in, It was driving up the wage cost for PPC managers. It was uplifted by about 30% because the aggregators were snatching them up, right? So they promised them big money to get them away from other places. So then you had a talent pool that was increased. I won't go into it, but you've got Crystal Balls, Case Studies and Magical Strategies, Overselling Software, Sales Teams and Churn Rate. Then you've got Full Service Agency, Performance Only Agencies, Types of Sellers, Agencies, Look to Avoid. So there are type of sellers that most people they may not tell you but If you speak to someone and say you ask them what happened previously, OK, now it could be that there was an issue. It comes up, you know, when you look at a job. Look at a CV and if someone moves every three to six months, naturally, you're going to go, I'm going to spend a lot of time investing someone to hire. Am I looking for someone who seems to be moving around? And why are they moving around? Right? Generally, the story is, you know, that company did this and they're playing the victim, but they've moved, moved, moved, moved. But there's also the fact that you've got levels of expectations. So let's say you speak to someone and you kind of understand. They go, yeah, they're shit. I've been there about two months, not happy. Where were you before? I was at such and such for about four and a half months, but they couldn't do it. They just didn't understand the product. Okay, so who's managing it before that? And then you start to see the pattern. Right. And that's a red flag. Why would you take on a client? Look, let's be honest. There's two sides to it. That client statistically could have been unhappy four times and had really shit, shitty bad luck. True? Speaker 2: Yeah. Speaker 1: Really bad luck. What do you learn through pain? Because it's the painful experience, the switching costs. If you're switching every four months, there comes a point that you have to take part of this responsibility in filtering out the right people. True? Because what you do, you learn from that one and you take it to the next one. You learn from that one to the next. But there's going to be an element that agencies are not good, but there's also shitty sellers who are abusive to agencies, rude, obnoxious. Do you know what I mean? And bad behave. You know, there's hit lists out there that agencies say avoid these people because they don't pay, you know. Speaker 2: I had a good chunk of those. So from the agency perspective, I think it's also really important to take on the right clients. Yes. Because one client can really take you to the next level and you know, it's a good story of me working with Ash. If you invest in one client and you truly help them and you truly move the needle for them, they will take you on a journey you can't imagine. So being very strategic around taking on the right clients instead of just, you know, let's just, you know, we have an agency of 100 people, 200 clients. For me, that's not a flex. It's not a flex at all. I had an agency of 10 people, and I was working with three brands in 2018, and my profit was probably 40 to 50% of the revenue. And it's simply because we just focused. And I had less work, more money, and then a time came when I had I had 50 clients and 40 people and I was, you know what my job was? Sales, one, and two, managing people. The two worst things, the things that I absolutely hate. Absolutely hate. Speaker 1: Yeah, I think, look, I'm not ragging on sellers. I love this community. People see what I do. My work's in place, right? I've got a body of work for 10 years. What I'm talking about is that we all have to take accountability if we're wrong. There are shitty agencies and there are shitty sellers that you do not want to work with a barge pole and then you avoid them. I've fired clients before because I won't have my teams abused. I'm not having abuse, right? That money isn't worth it. If I can't serve you and you're not happy, I need help you find somewhere else to make you happy. It's the same with taking on clients. One of the things we have to do is filter because if we know it's not going to move the needle, I don't want my account managers being under pressure for two months because we know that it won't work. Because there was a period a lot of people coming to us for the Hail Mary. So we had the Hail Mary period last year. And now you go through cycles where people take it in-house as they should because they've got to save money if they need to do that. And if they've got the skills to do it, you've got to do what's best for your business. But the last thing you'd want to touch is the Hail Mary because you've just got on the tail end of someone else's rescue mission, right?