Beyond Ads & SEO: Fixing the Hidden Barriers to Amazon Profitability – Episode 58 of The Agency Operators Podcast

Beyond Ads & SEO: Fixing the Hidden Barriers to Amazon Profitability – Episode 58 of The Agency Operators Podcast Speaker 2: Welcome, everybody, to the Agency Operators Podcast. Today, I'm joined by Matt Snyder of BrandsXL. How are you doing, Matt? Speaker 1: Hey, Pasha. Doing great. Excited to be here today and have this conversation with you. Speaker 2: Awesome. I'm excited to chat as well. So, you have a little bit of history in the Amazon space and Omnichannel, D2C, Ecom. You were a part of Prosper. I'm really curious. How that all unfolded. Why did you start BrandsXL? You know, are you feeling the pressure of all the other agencies in the space or you guys are kind of carving your own name? I'd love to hear and kind of get into more of that. Speaker 1: Yeah. Yeah. So I've been, I've been in the Samsung space for quite some time, about 15, little over 15 years now total. So I originally got started, actually of all things, my career started The jersey behind me is kind of a tribute to my first career. I actually started in sports, worked for the Dallas Mavericks. And, you know, Mark Cuban was talking about, he was advising all these, you know, before Shark Tanks, he was advising all these other local CEOs and founders in the Dallas Metroplex area. And one of the companies he was advising was the founder or CEO of an e-commerce site called Woot.com. So if you don't know Woot, Woot was like the original daily deal website. Back in the day, we literally sold one item a day. So for like 24 hours, it was like the lowest price you could buy that item anywhere on the internet. So we grew this cult following. We had at one point about a million people who come to our website a day. Got the attention of Amazon. So Amazon acquired the business in 2010. And that kind of was the launch of my Amazon journey and development from there. I spent about seven years with a brand called Verdesk. And so they were very successful D2C brand and looking to grow on Amazon. So I joined their company in 2017, where we led all marketplace development. We grew to mid eight figure business on Amazon and To talk with other brands, the problem I always kept hearing and I could totally relate with it was just this, a brand of where you have an Amazon, We're managing media, we're managing product pages, but then there's also running Amazon inside of a larger organization where there's other priorities, there's other strategies in play. And so it was having to kind of run a business inside of a larger business and getting that buy-in from those other department heads. This was just a recurring theme that I kept hearing from a lot of other people in my position. So we started BrandsXL. To kind of bridge that gap and provide a different business operations that I saw missing in the space. There's many great agencies in the space that can provide top-notch media and SEO and creatives and those are all like valuable services and key pieces to Amazon success. If you think about the Amazon Flywheel, we all hear the references to the Amazon Flywheel. Those are core pieces of the Flywheel. The Flywheel really is built around traffic conversion and then the third piece, fulfillment, which I say fits into the operations piece. And that's our kind of our value add. We do best of class media conversion optimizations. But when a brand needs additional support to help with things like API connections or ERP implementations, inventory forecasting, building out business models and so forth. What we have found is when those pieces are not in place, an agency can do an amazing job on those other pieces, the media and SEO, but those are all downstream from operations. Operations is not efficient. You really not set up for success as an agency or as a performance marketer when you're playing with, say, a hand tied behind your back. You don't have control or influence over these other pieces, and those other pieces directly impact those parts of the flywheel. So, yeah, so excited to have the conversation. It's kind of the thought today is, you know, for those agencies out there where you're You're media only or maybe you're doing media and some SEO support. I'm sure you felt the pain points of these operations and these pieces of the business. When we don't have direct ownership, how can you at least have some influence and some advisement into these pieces that really will later set you up for success? Improve your performance but also reduce that churn rate that we as agency owners are always fighting for is how do we reduce that churn rate? How do we up the performance level and keep our clients happy? So I'm excited to have this conversation to share a few ways of how we've approached this and some ways that some agency owners out there can walk away or implement some of these tactics into their solution and service offerings. Speaker 2: Amazing. Yeah, I love that and I always say exactly the same thing that operations is at the heart of it all because you can have that like that ads component is not that terribly difficult and it's so easy to find an ads person. I mean, I shouldn't say ads are very easy because there's ads and there's ads but there's different ways to manage it. In theory, it's easy. It's about the consistency and understanding the marketplace but there's lots of talent out there. To build creative and to build good SEO, a little bit more difficult because it's several components together where you have the textual and the technical part of it and then also the visual, graphic and video. But then the operations is so dynamic and understanding, just like under the hood of the Amazon account, understanding truly fees, understanding truly cases, account health, performance ratings and all of the options that Amazon gives us. And then the business beyond that. So that's what I'm curious to hear, kind of some of the levers that you guys pull on the operational side that give you that, first of all, visibility into the account to see where you can be of service and to just help your customers or your clients know what they're potentially missing out on. Because that's the biggest thing is like when you're hiring somebody, you're hoping that they know things that you don't even know that you don't know, right? So that's always the goal and then obviously the things that you know, you need help with but that's where like I find just in my life even outside of agency, right? Like you hire a contractor to help you with your house or whatever, you know, they start telling you stuff that you weren't even aware of that's when you're like, oh man, this guy's saving me. So I'm curious. Yeah. Speaker 1: It's like a contract. You get your quote, you get a project and you get in the project like, well, we found this and now it's right. So is those hidden costs. And so that's not what we want to do here. We don't want it to cost. But you're right. That's. You know, it's funny. I have a saying where it's oftentimes brands, their ability to scale profitably or continue to scale isn't due to poor marketing or advertising. It's really to poor business operations. And, you know, as a performance marketer, that's we see this all the time. We'll go in and we'll do an audit for a brand. And, you know, they come to us with these frustrations of, You know, the agency's not doing this or we feel like we're lacking this in our marketing and performance and we're seeing high ACoS. And it's easy to point the fingers back at the agency or the marketer. But when we go in and we do our audits, oftentimes what we're finding is, sure, there's some structural things, whether it's campaign structures or some bid strategies. But oftentimes it's not that there's a Big issue that we see in the performance of the advertising or the strategy or the approach that an agency was taking. It's related to these underlying challenges behind the business that the brands themselves are not addressing or are aware of. But I'd also place that fault back on the agency of not having those signal indicators themselves. You may not be responsible for things such as inventory or catalog management, variation, pricing, these type of things. If you don't have at least an insight into that to give you those signals as this is an issue that the brand needs to address, you're exposing yourself to that risk and the impact that can have on that. A few ways that we do this is we use various different tools and happy to share some of those if you'd like. There's also some in-house tools and things that we've approached this. So one way we've done that is our ad partner for our ad tech is IntentWise. And so with IntentWise, one of the things that we take advantage of is they have the analytic API connections. All right, so with the API connection, we have the ability to kind of build out our own reports, dashboards to use in Looker Studio or even tie those into worksheets, Google worksheets. And so when we do our inventory forecasting, you know, for some of our brands, they want us to own it all. So we, in some cases, we do. We own all the forecasting. We put in all those variables of lead times and inbound receiving times and days on hands and everything else. For other times, they just, They have something in-house that they're managing that, but we still keep track of that. We still want to know, help us understand your reorder rates and all that, and we will keep an eye on that just so that when I see an item starting to come out of stock a little bit, we can ask the question, hey, we noticed one of your top sellers is at risk. It's great. Media is doing its job. It's growing in BSR rank. We're growing in sales. It's fantastic. But how do we make sure that the brand is also taking that account? So we can get ahead of that with creating those. Another great one we've used is called KPOC and KPOC has a fantastic inventory dashboard. So we've used both of those to help us keep that forward-looking eye on inventory so we can get ahead of that for our partners. The other key one here, and this is a fairly easy one to kind of look at it, but looking at variations. And obviously this is one of those areas where brands and sellers in the past have definitely abused variation. And Amazon has definitely taken action on that. So I don't want to advise anybody here to Do some of that outside the TOA with Amazon. But with that, there are oftentimes when we do our audits, we'll find opportunities where we can bring product listings together to make it a better discoverable option for our customers. But also just kind of with that as basic SEO, and we talked about the SEO is kind of what we mentioned here in terms of going beyond that. But at least having visualization into where are we ranking internally and how does that feed into our media campaign. Datadive is what we use for our tool research there and they've been a great partner for us. Lastly is the price. So Buybox. Off Amazon Pricing. So that is something we have kind of tied in through our API. Now using, again, back to intent-wise. So we just built out a buy box alert. Now if you have that in Amazon, you can go in and kind of see the price alerts if it's off Amazon Pricing. But that's something we have that gives us an alert right away when we lose buy box from either another seller or off Amazon Pricing. But the faster we can get that awareness, The sooner we can alert the brand and hopefully get some type of resolution. But all those are directly impacts to our ability to spend efficiently. If there's one on this list where I'd say like focus on this as an agency, I'd almost point back to inventory. This is what we see having the greatest impact on media performance. Because we can, again, have a great strategy, amazing execution, meet the client performance expectations. But if it goes out of stock and that rank drops down, we not only have to spin it back up, but oftentimes what we see is it costs more the second time to get back to that same level of performance. And then you're just... Dollars you could be using to continue to scale and grow, you're now spending to recapture that position that you had previously. If your commission is based on performance or any of those measurables that's costing you as an agency money, where you could be, again, with not too much effort, at least getting some type of visibility and be able to give an advisement on that to your brand partners. Speaker 2: Absolutely. Yeah, that's a very good point. I mean, I think Amazon is almost entirely about momentum. So it's like you hurt their trust by being out of stock. Are they going to trust you right away again? You're just going to get out of stock again. Amazon is always playing that game of how can we make this incrementally better. That is their motive for everything that they do. Even a 0.0001% increase is significant because they're dealing in billions. They factor the rank based on so many different things that they use to score it. And everything has different weight. And I think that consistency is the most important piece of that, which is comprised of multiple different factors. But I'm fully in agreement with you that inventory is the most important thing. It's the thing that will kill your profit. If you're not getting priced correctly and your fees aren't set up right or you know, your yeah Inventory is everything it's a lot. Speaker 1: It's it's it's it's the consistency. I think you're spot-on there like you can go out of stock The first time and maybe your recovery rate is a week or so and then maybe it happens again a month later and it's a little bit slower, but the more frequent that that's happening, the more signals you're giving to the algorithm that there's lower trust here. We're going to favor somebody who has a higher in-stock rate. Oftentimes, agency partners and friends that have the space, they don't touch that part at all. That's not part of their service offering. And it doesn't have to be a addition to your team, but I think this can be at least a signal, an insight, a report that at least you're sharing and making sure that you have visibility as well. Even if you don't report it back to your brand, making sure that you have the visibility. So if you do see an issue, bring that to the attention of your brand partner. Because it, yeah, oftentimes that's where it starts that customer experience flywheel of, okay, we're missing our top line performers. Now we're missing our bottom line performance. It's got to be the agency's fault. It's always easier to blame the agency. And so do what you can to put these alerts and these risk mitigators in place to ensure that your top line performance really is sustainable and I'm not at risk to things that are outside of your control. Speaker 2: Yeah, absolutely. I mean, I think there's so many technological solutions for most of these markers. So whatever we can't fit technology into to solve, we just have a VA that's assigned. And to go through all the accounts, all the listings, and look for certain things. So that way, and we have an internal alerts channel. And so that way, every single morning, when everybody gets to their desk, it's like we we know what's going on on all the accounts, anything that we need to pay attention to any urgent cases, and we can jump right on it. Making sure that stock is coming in, listings are all healthy, no buy box problems, no unwanted competitors, like everything's running smoothly. And there's days when things are great and there's days when things are not great. So at least we know about it and we can move on it. But to me sometimes it's just like surprising how these things are really like simple and so critical to the heart of the business. Um, yeah, like one thing we use is called a tool called prophecy. I'm here to talk to you about a new tool, which is an AI repricing tool. That one's really great. I highly recommend looking at price as a way to really move the needle in business. And it's not necessarily change the price once in a while. Having a dynamic price shift mechanism is a very powerful tool to adjust volumes. I'm the co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co-founder and co And it's not something that I was using up until more recently. And I've actually really seen the impact of that before. We were just, you know, kind of, oh, let's drop the price for a time and see what happens. But this is a lot more advanced. And it's with the advancement of AI technology that this could even exist. Speaker 1: We've looked at proxy as well to definitely echo everything you said. And, you know, all those reactions to pricing, whether it's, hey, we're slower, it's moving slow, let's price it down or price up. Again, all of these back to your inventory because all those have impact of lead times and replenishment times as well, too. You know, kind of, there's another piece of this that I wanted to I call attention to because you have a great example. As you begin a partnership with a brand of doing an audit, oftentimes, as an agency, we're limiting our audit or our scope to, is it just media or maybe we're, as I shared earlier, maybe we're touching a little bit into SEO and to inventory. But we like to really do a full audit of what are all the capabilities within this brand and company. And one example is we, large brand, I can't name it, but they're a large nine-figure brand on Amazon and DTC. And as we were doing their audit, we were seeing all these knockouts. And so as we started asking some questions like, well, what's going on here? And they were 100% FBA at the time. And they were explaining to us that these items are just moving so fast and we haven't been able to get ahead of the production timeline so that as they comes in, I don't have. I don't want to put that inventory into Amazon because it takes the time to inbound ship, receiving, when I know I can just put it on my DDC page and it's going to sell instantly. So we brought the question to them like, well, what if you just did fulfilled by margin? So then it's still in your warehouse. You can flip it on instantly on Amazon as well as your DDC page. It's not going to be prime. That's okay. We understand that there's a conversion impact to that. But on something like this where there's such a high velocity demand, You're still gonna get sales. So we work with their technology team. We help them set up their FBM through NetSuite within about a 14 day period. We turned it on right before the October Prime Day, a big best deals event, whatever they decided to call it that year. And between then to end of Q4 peak season, they did an additional 2.5 million. Now, again, this is a $100 million brand, but that's still $2.5 million. One, the agency got to put those ad dollars. They got to increase ad dollars towards those products. It improved the top line, improved the bottom line. It was a win-win. That wasn't something that if we hadn't gone deeper and asked some questions and understood the full capabilities of the brands and its operations, that's not something that we would have been able to advise or help them implement. But again, it's just going on, asking us questions, dive a little deeper than our current scope to help us find those opportunities that can be big game changers for brands. Speaker 2: So you opened up FBM and just to understand, they have limited inventory. They would have sold through all that inventory on their website. You're saying you opened up the FBM listing and they sold instead of on their website on Amazon or is that just in addition to? Speaker 1: So their approach was that It was more about they didn't want to have inventory that was unsellable while it was getting shipped into Amazon. They were fine selling it on Amazon. They just didn't want to have a dead time of that when the inventory was not sellable. Speaker 2: That time is money right there. That kind of locked in period. Speaker 1: Exactly. So they were fine making it available on DTC. Like, yeah, they're giving up some margin, but they're also the mindset of we want to provide the best customer experience. I've let them choose where they prefer to purchase. And if that's Amazon, great. We want to make it available. We also want to type inventory that is moving so fast that we want that cash to run faster. So that was what FDM allowed is the improvement of cash. Pasha will return back to them versus that dead time of having it going into FBA. Speaker 2: Got it. Love it. Yeah, you know, it's amazing. Like, you know, simple things like just it's simple, but to the brand, they're not thinking of it that way. And so it's like, that's that eureka moment. And it's like, boom, right, take advantage of that opportunity. Speaker 1: Yeah, and huge win for not just us, but for our brand director where, you know, he can come to the executive team and like, here's what we just did, helps them hit their goals and makes them look like a winner, which again, going back to, we want to reduce friction, turn opportunities, the more that we can help our brand leadership achieve those goals and wins, the better it is for us as agency owners. Speaker 2: Nice. Okay. And Matt, if somebody wanted to reach out, chat with you guys, what's the best place to find you? Speaker 1: Yeah. So also you can always find me on LinkedIn, you know, pretty easy to find there. I don't know if you have Matthew Snyder. BrandsExcel is our website. You can always reach me at Matt at BrandsExcel.com as well. Speaker 2: Awesome. And you guys do some free audits? Speaker 1: Yeah, absolutely. One of the things we like to offer as well is we're big believers in just getting market insights as to how are brands performing relative to their category competitors. We work with SmartScout. We use their tools and services to do those researches. So yeah, if a brand is interested in just seeing how's the category performing compared to themselves or if they're not selling on Amazon yet and they want to get some insight into what does the market opportunity look like on Amazon, we'd be glad to offer one of those reports. Speaker 2: Very nice. Check it out, everybody. Matt Snyder, thank you so much. I appreciate your time. Speaker 1: Absolutely. Thanks for the time. I really enjoyed it. Speaker 2: All right. Catch everybody on the next one.