EP #286] [ENG] - Importance of scaling your brand beyond Amazon - Seth Hurd

EP #286] [ENG] - Importance of scaling your brand beyond Amazon - Seth Hurd Speaker 1: Welcome to The Ecommerce Lab By Ecomcy. This is the place for everything related to Amazon private label and e-commerce. Learn exactly what you need to start or scale your business. Get insights from the top industry experts who will discuss the latest trends and best practices in the world of Amazon. From choosing products and sourcing from a supplier to setting up your Amazon account and marketing your business, you will hear it here. Let's get started. Here is your host, Vincenzo Toscano. Speaker 2: Hello, guys, welcome to another episode of the E-Commerce Lab by E-Commerce, the place where everything is related to Amazon FBA product level and E-Commerce. My name is Vincenzo Toscano, Founder and CEO of E-Commerce, and today we bring another special guest. His name is Seth Hurd and he's the Founder and CEO of Brand Expand. Which is a top solution out there when it comes to really helping brands expand globally with an omnichannel approach. And that's going to be today's conversation. How we go beyond Amazon. We always focus on Amazon, but let's be honest, Amazon is getting more competitive, more expensive, and sometimes, you know, we need to open our horizon to new opportunities. And that's all about today's conversation with Seth. So, Seth, it's a pleasure to have you today on the show. How are you doing? Speaker 3: Thank you, Vincenzo. Appreciate it, man. I don't know if I pronounced that right. Speaker 2: Actually, it depends sometimes. It's funny because if I go to the States, people call me Vinny. If I go to Mexico, Vicente. If I go to Italy, Vincenzo. It's fine. Don't worry. Speaker 3: I love it. It's a great name. Speaker 2: Yeah, I love it. So tell me more about you, man. How's everything going for you? Speaker 3: Good, man. Yeah, everything's amazing. We, you know, BrandX fans doing amazing things. We're set to do some awesome things in 25. We do service, like just full disclosure, we service mostly Amazon sellers. So about 60% of all of our campaigns are Amazon, but Omni is getting bigger and bigger. When we first started, it was closer to, I would say 95% back in 2019, 2020, and that's changing pretty quickly. So we'll dive into more of that shortly, but yeah, man, everything's great. How about you? Speaker 2: Yeah, same. It's been, you know, a busy start of the year. I think this year is super interesting because, you know, usually when a new year comes, people is going around looking for opportunities, looking to, you know, expand their business, looking to make better than last year. So January is a shaky month, but at the same time, I'm very excited. You know, things such as the omnichannel approach is definitely, you know, conversations I'm having a lot lately. And that's, I think, something that I would like to use to start a conversation today because let's be honest, the days of feel of only relying on Amazon are getting tougher and tougher. And we need to sometimes understand why it's crucial to be beyond Amazon, you know, not only relying on Amazon when it comes to expanding your ecommerce brand. So tell us, you know, what are some of the benefits of going beyond Amazon lately that you're seeing? Speaker 3: Yeah, man. I know that when I started selling in 2014-2015 on Amazon, we had, I think it was 30% profit margin, like after Costco, after Opach, the good old days, right? Speaker 2: Like net, yeah, net. Speaker 3: My reviews, like that seems ridiculous now, but But now, I mean, over the years, and we've done surveys around this with third party sellers just to kind of see, you know, holistically what other sellers are, you know, what's happening with their profit margins. But I mean, we've seen that go to 20%, then 10%. And now I think, you know, anywhere between five and 10% is actually really good for a lot of sellers. So, you know, it's, it's kind of interesting to see Amazon's play because I don't know, I have a theory, but if you read Jeff's books about Amazon, really third-party sellers are kind of You know, counterintuitive to what they're trying to do, which is offer the lowest possible price to the consumer. And so, you know, they really leveraged third-party sellers in the beginning to create this network effect and explosive growth for Amazon. But now it's kind of getting to the point where it's like they want their own brands or direct to consumer, like from the manufacturer, direct to the customer to get the lowest price. And so third party sellers are kind of caught in the middle. And the way they do this without, you know, seeming to have this monopolistic plays is they just increase all their fees here and there, right? And slowly just chip away at profit margins until it's, you know, it's not even profitable. I mean, a lot of sellers have to do, you know, a lot of volume just to have minimal profit. So yeah, the question, it's really just to mitigate the risk of relying on one marketplace. All profits aside, just having one marketplace, everybody I'm sure, every Amazon seller knows what it's like to have a listing suspended, or God forbid, your account suspended. And then, you know, panic mode because you don't have any other stream of income. So that's the biggest point is to diversify risk. Speaker 2: Yes. And I will say that brings me to another question because at the same time, when you start diversifying risk and you start going, you know, in into other marketplaces. At the same time, that gives you the opportunity to, you know, maximize potentially, you know, unique features that each of these marketplaces is going to bring to your brand. Because let's be honest, each marketplace is going to allow you to tap into audiences in a different way, given that it's not the same that you do advertising in TikTok compared to Walmart, compared to Amazon, your website. So, you know, what do you recommend to brands when it comes to, like, how do they maximize all these different features to make sure that they all work in symphony to some extent, you know? Speaker 3: Yeah, man, like, it's really important to look at each marketplace and see what the advantages are. You know, aside from features, different categories do really well in certain marketplaces. So just looking at that and seeing opportunity, for example, Etsy is really great with craft items. My wife has a beautiful purse brand where it's, you know, handmade in Colombia. She would never sell it on Amazon because she's not looking to just do, you know, massive volumes and scale. But if you're selling, you know, home goods, maybe Target is a good option. If it's sports and outdoors or food and beverage, Walmart, you know, has really a big market share in those categories. So it really just depends. There's definitely opportunity for each marketplace. And some marketplaces don't make sense. When I was selling health and wellness products, we tried to launch on eBay, which is basically a giant garage sale, right? Supplement garage sale. So it never really did well. So I would say that's the most important thing to consider is which marketplace is best for your category. Speaker 2: Yes, for sure, for sure. Which actually brings me to my next thing, you know, is The thing that happened with TikTok this week, like that was very scary. Let's be honest, like a lot of brands, a lot of people rely purely on TikTok at the same time, like influencers and small brands. And some people started to think like, it's actually social commerce not going to happen. It's actually going to happen. What is the situation? How do I actually protect myself for this? Like, what is your take on marketplaces such as like TikTok? Speaker 3: Yeah, man, I had a webinar like a few days before that Sunday, which was like, what, just last Sunday. And we all said, we were all talking about Omni and we all had the same stance. We're like, I don't think it's going to even go down. And if it does, it's going to be pretty brief because of the administration. And I think it went down for a while, like. Speaker 2: Like three, four hours. Speaker 3: Yeah, yeah. Just a few hours, like not a big deal. But I mean, yeah, I mean, there's sellers that were doing massive volumes, you know, going viral on TikTok and just stupid volumes, you know, and that kind of like, I guess, reiterates the point of why it's important to be omni because if those sales are just cut off because something were to happen, especially with a company like TikTok that's majority Chinese owned, You know, all of a sudden you have no income coming in. So yeah, I would say, I mean, as far as TikTok, I think they're good. I mean, they're gonna have a few months to figure it out. I never thought they were gonna go down. I mean, it's just too big. And social commerce is the new norm. So, yeah, I just didn't see that really holding out, but we'll see what happens in the subsequent months. Speaker 2: Yeah, for sure, for sure. I think it's interesting. At the same time, the reason why I think it created a lot of surprise across the social media and sort of things like LinkedIn and all of that is because we actually found out how TikTok was impactful to a lot of people's life and business. And some people didn't really see the scale until it went down and people saw all the people complaining about it and said, wow, TikTok is bigger than what I thought. So it opened eyes to a lot of people. Speaker 3: It's like 140 million Americans. Unknown Speaker: Yeah, it's crazy. Speaker 2: Yeah, I know. It's a lot. It's a lot. Yeah. Now I would say another challenge that comes with Omnichannel is The complexity regarding, you know, especially things such as inventory, because now you go from having the complexity times one, which is Amazon, times three, times four, etc. Like, how do you make sure you stay efficient with that? Because it's very easy to start dropping the ball, like you don't know which marketplace to prioritize based on profitability, based on momentum of sales, like how actually sales can, you know, properly figure out and optimize that. Speaker 3: Yeah, I mean, it's definitely, you know, you got to do a lot of research for each marketplace. If you go into a different country, you know, regardless of how you expand, whether it's a different marketplace, different country or both, you know, it's important to do a lot of research and be pretty certain in order to mitigate as much risk as possible. But yeah, I mean, when you start talking about third party logistics and how to handle inventory can get super complex. And so you also have to have sufficient free cash flow in order to justify it. And so weighing both of those, looking at the risks, the different taxes and compliance across different countries and marketplaces, the opportunity, which one makes the most sense, and then weighing that with a good solution for third party logistics. It's really, that's really going to determine whether or not you expand. And I always say if you're not at seven figures, you know, doing a hundred K a month roughly in sales volume, specifically on Amazon, it doesn't really make sense to expand because you just don't have the resources necessary in my experience. But yeah, if you're doing, you know, $30,000, $40,000, $50,000 in revenue on Amazon. You've still got a long way to go before it would make sense to diversify and really spread your resources out more. Speaker 2: I agree, I agree. Yeah, that's a good point. I think sometimes people think that international expansion is going to save their business because they haven't mastered USA and they think Europe is going to save them or vice versa. And sometimes if your home country is not working, sometimes the issue might be the offering in the first place, the product. Don't think that expanding beyond each other is sometimes the solution. You need to have the right, you know, kind of position going forward to make sure you can maximize what you can get out of it. Speaker 3: Yeah. Speaker 2: Yeah. I would say the other thing that people ask me is how you define success when it comes to that because There are some brands that might see it only as a strategic play or people might focus on specific APIs. Is there something that you look at when you do omni-channel and expansion that you say this is the metric I want to look for to make sure I'm profitable for example? Speaker 3: I think it just depends on, you know, what your overall goal is, like some, you know, and of course, just looking at the volume and your overall profit margin, you know, some some sellers might just want large profit margins. So maybe they just want to sell on Etsy, whereas after, you know, cost of goods and OPEX, some sellers just want to, you know, volume, like maybe, you know, they're doing wholesale or some sort of arbitrage, and they just want to dial up the volume. So it really just depends, I think, you know, on your objective, whether you're trying to do something that's going to scale quickly, and do the volume play, or whether you're trying to do something unique, get more profit margins, and you can plug that back into your inventory and your product. I would say, yeah, those are the most important. Speaker 2: Cool. Now another thing I would also like to bring to the table is, you know, we already talked about inventory, for example, when it comes to international expansion being omnichannel. But for example, what is the other key things that people should kind of figure out before doing the expansion? Because I know Sometimes it goes beyond the fact of fully understanding if your product is the right fit. Sometimes it has to do with taxes. Sometimes it has to do with things that go beyond, you know, the KPI kind of surface. So what is your experience with that and maybe what are some of your recommendations, you know, in terms of preparation? Yes. Speaker 3: Sorry, man, it froze, so I didn't get the first part of the question, but I came back, so I don't know if you want to repeat the first part. Speaker 2: Yeah, yeah, don't worry, don't worry, don't worry. So, effectively, what I was saying is when it comes to international expansion, some of the things that usually people encounter is, yes, we already mentioned, for example, complexity of inventory management, and we also discussed, for example, things regarding KPIs, that have to be aligned with your goals. But what are some of the other things that Seth has really struggled to figure out, to actually see if expansion is the right fit? Maybe it has to do with also the taxes side of things. It also has to do with the compliance side of things, or sometimes the language. Have you seen that also being something that people skip? And if so, what are some of your recommendations? Speaker 3: Yeah, that's a super good question. You know, every country and expanding internationally is, it's different. So you have to do a lot of, a lot of research beforehand, again, to mitigate risk. You know, every country has taxes, regulations, different compliance, you know, shipping logistics is, you know, complex enough. If you're trying to ship to Latin America, for example, it can become very costly because of their lack of infrastructure. Does that make sense? You're in the UK and in London, so you know with that tax, it's really hard to factor that in. When we had our health and wellness brand, Not only do we have that, but we also had to redo all of our labels to be compliant with regulations over in Europe. So, you know, there's always things that you need to factor in and then decide, you know, is it worth expanding? Speaker 2: Yeah. So I would say for this expansion, is there maybe some way of automating these things? Because, you know, let's be honest, a lot of these things trying to do them manually is difficult. Is there some kind of process that maybe you have figured out or software solutions like what you guys do in-house as well? What are some of the things maybe sales could consider to essentially transition a lot of this manual process that we've been discussing more into an automated approach that can help us avoid these costly mistakes? Speaker 3: Yeah, 100%. Our solution helps with marketplace expansion within the US specifically, but other agencies like, you know, Ecomcy will help, you know, I assume you guys help, you know, not only Amazon Target or, sorry, Amazon Walmart, but also, you know, getting into the UK and whatnot. So, yeah, it's just, there's plenty of agencies out there for whoever's listening, you know, go to Vincenzo, ask him, I'm sure he's got a lot of connections through our marketing manager. You're looking for, you know, marketplace expansion. Our software is designed to assist with that, to drive sales and traffic to different marketplaces. We even do review requests on certain marketplaces to get sales approved. So yeah, so we really help, you know, if you're selling specifically on Amazon, you want to go to another marketplace. We have a massive customer network. We've had over a million views of our customer network, our deal site in November alone. And so we have all those eyeballs that we can send to your listing and then help basically get better exposure for organic customers to find you. Speaker 2: Yes, I think that's a good point. I would say when it comes to expanding internationally, guys, and this is something I have seen many times, I know sometimes you might consider that you could figure out these things on your own, but the reason why people like, you know, Seth and myself exist is because we've done those costly mistakes ourselves and that's how the idea of doing this business in the first place came to mind. So be mindful of that and make sure you work with professionals that really can help you You know, save on those things because one costly mistake, especially when it comes to international things like, you know, not doing the compliance correctly or, for example, even if within the US you don't synchronize your market correctly and you put the wrong prices or things like that can be such a costly thing. Now, another thing I would like to bring to the conversation, which I was thinking from the perspective of a seller, is sometimes when you go into many marketplaces, You may fall into the trap of sometimes being cheaper than one compared to another, and then that could affect the perception of the brand and could affect, you know, in the long term, like why would people pay for retail price or the original price if you're always very cheap on this specific channel for whatever reason. So how do you keep a baseline and a minimum that you respect regardless of the dynamics of each market? You see what I mean? Speaker 3: Yeah, for sure. So really quick on the previous question, you know, When I created BrandXBand, the whole reason was I was a consulting agency back in 2018-2019. We were called Ecomconsulting. And we saw how hard, because I had my private label brand at the time, we saw how hard it was to do product launches, to drive sales. And there were a few solutions weren't very, you know, very good. All of our sellers that we were, you know, doing consulting with had the same problem, right? So we knew that there was product market fit. We knew there's an opportunity. So to your point, you know, you and I specifically and other agencies, it's like we've gone through all of this. Speaker 2: The pain. Speaker 3: Yeah, the pain, right? We've taken the pain and we can get you there a lot quicker with more certainty. Unknown Speaker: So yeah, that's important. Speaker 3: And as far as margins across different marketplaces or what's the price rather, I always say, you know, you got to kind of work backwards and say, you know, what's the lowest profit margin I'm willing to accept? This is what we did when we were across different marketplaces with 140 SKUs. You kind of have to work backwards and say, maybe 5% or 10% profit margins, the bare minimum you're willing to accept. And then every marketplace, of course, can have different fees. And then your cost of goods is different because it costs more to ship to a 3PL for Walmart versus Amazon or wherever. Speaker 2: Sometimes you figure out the marketplace is not right fit. Let's be honest. Sometimes the marketplace is so full of cheap products and the perception can significantly affect your brand in a negative way that you just don't go there, you know. Speaker 3: Yeah, a hundred percent. And you know that, you know, if you just do the preparation, brand, leverage agencies like Ecomcy and BrandXpan and others, you do all that beforehand. You're going to know whether it makes sense to go into it. I mean, that's one of the biggest things, you know, being an entrepreneur is just risk mitigation and balancing that with, you know, taking risks, smart risks. Yeah, exactly. Speaker 2: Of course. Of course. So I think to start coming to a conclusion, like what are some maybe, you know, other predictions or some advice you want to give to people for 2025? Is there something else you think, I really want to make sure people are aware of this and they leverage this piece of knowledge? Speaker 3: Yeah, for sure. So we've always been bullish on Omni since we started in 2019. We position BrandExpand to be omni from day one. So we import products, automatically import across Amazon, Walmart, Target, and Etsy. We're going to swap eBay with TikTok now that we know that they're going to hopefully be around for the long term. And what I would say is You know, back in 2018, 2019, there wasn't a lot of certainty. A lot of, you know, people were like, no way Walmart's going to take out. I mean, now I'm looking at this chart. I mean, right back in 2018 had 36.4% market share. And now they have 39.7. But here's the thing, Walmart had 4.4% market share in 2018. And now they have 10.6. So if you look at the ratio, Between, you know, ecommerce market share for Walmart and Amazon. Yes, Amazon still has, you know, roughly 3.5x the market share, but that gap is closing. And Shopify is similar with Walmart in terms of market share. So I would say it is like Omni to me is inevitable. And so, you know, if you can position yourself now to get on Walmart, for example, ahead of your competition, like you were back, you know, on Amazon in 2012, 2013, it reviews because it, you know, Walmart has like 10% of the reviews Amazon does for similar products, then you're really going to be positioned. If they do continue chipping out market share, which I'm pretty certain they will, you're going to be positioned to capitalize on that. Speaker 2: Awesome, Seth. So that's a pretty good advice. Thank you for that. Awesome. So I guess, you know, if people want to reach out to you and discuss this in more depth and, you know, also work with you guys, I know you add a lot of value when it comes to how people can find you. Speaker 3: Yeah, I appreciate that. If you go to brandexpand.io, you can click request a demo, fill out the form, and then that will go to a certain team to get a hold of you. And we'd love to help with omni-channel expansion or just drive traffic to your preferred marketplace. Ecomcy will go ahead and drop up to $1,000 in your wallet to do a product launch. 50% of your first month subscription will drop in your wallet, and you can use that towards first product launch. Speaker 2: Love, Seth. Thank you so much for that. That's a very generous offer. I'm going to make sure to put it down in the description for you guys. Other than that, it's been a pleasure to have you on the show, Seth. Thank you so much, and hopefully see you soon at upcoming events. Thank you so much for your time. Speaker 3: Thank you, Vinny. Speaker 2: Appreciate you, man. Cheers. Speaker 1: Thanks for listening to The Ecommerce Lab By Ecomcy. Be sure to subscribe so you don't miss an episode. While you are at it, we would appreciate it if you could leave an honest rating and review on Apple Podcasts, Spotify, or wherever you listen. That will make it easier for others to find out about the show and benefit from it. Want more? Visit our website at www.ecomc.com where you can get your first consultation for free. Or find us on Instagram, Facebook, and LinkedIn at ecomc.