From Startup to Scale: How Amazon Selling Has Transformed – Episode 54 of the Agency Operators Podcast

From Startup to Scale: How Amazon Selling Has Transformed – Episode 54 of the Agency Operators Podcast Speaker 1: Hey, everybody. Welcome to the Agency Operators Podcast. Today, I'm joined by Phil Masiello of CrunchGrowth. How are you doing, Phil? Speaker 2: Great. Great, Pasha. How are you? Speaker 1: I'm doing very well. Really excited to chat with you. We spoke a couple of times and I mean, you've proven to me just, I was telling you right before we went live that clearly you're an OG in the space. You've been around longer than anybody that I know in the Amazon world and You've kind of expanded out into many different facets of marketing, of e-commerce, and then, you know, a lot on the DSB side, even outside of Amazon, which is amazing to me, TV ads and all of that. And I've been trying to figure out how a lot of that stuff works myself. So really excited to have this conversation with you and just chat a little bit about how Amazon has changed through the years. I've seen it change a number of different ways. And since you've been selling even longer than me, you know, the early, early days, There's a lot to talk about, but before that, if you could, you know, maybe take a step back and talk a little bit about your history, why you got into digital marketing, how you became an agency owner and kind of, you know, what you do now. Speaker 2: Oh, yeah, sure. Great. And thanks for having me. Well, I've been an entrepreneur all my life. I started my first business when I was 27 years old. It was a food retail store and it was just a disaster. It wasn't a good experience. I was a terrible leader and I was a terrible process manager and I exited that after five years. I wound up I was at least smart enough to buy the store, the physical store, so when I sold it, I actually got some money out of it and I took that money. I came down to Maryland. I was in New York. I came down to Maryland and I went to graduate school here and I did that not because I thought that going to school was going to help me, but I needed to reset my thinking. I wasn't thinking properly. And so while I was here, I made an investment in another specialty food chain and I wound up working for them and they were more mature management and they, you know, the stores were doing well and I got involved with, I put us online. I got, we did a lot of gift, food as a gift. I set up a whole gift basket business and did some entrepreneurial things with that chain. And then there was a time when we sold that. And then I founded my own small retail chain in Washington, D.C. called The Daily Market, which were grab and go meal stores. But with that, We decided to try and do meals online. So we set up what we believe to be the first meal store online back in the early 2000s called greatmeals.com. And it was what basically Blue Apron and all those guys were doing today. And then we got acquired by a supermarket chain and I went to work for them for a couple of years. And then I founded a brand, a skincare beauty brand with a woman named Carol Alt. She was a supermodel and she was in the raw lifestyle, raw food, et cetera. And she'd written some books on it. And we built a whole brand around this raw lifestyle. And we were on the shopping channels. That's how we launched here, Canada and around the world. And then we were on, we had our own e-commerce site. And then this was around 2006 and Bezos opened up the seller platform to everything other than books, CDs, music, et cetera, because that's, it was sort of restricted to that before. And so this was the first time that he let other sellers on and we were one of the beta brands. And so we went on there and I thought it was, you know, it was great because at that time Amazon was really, you know, I wouldn't say it's in its infancy because I think it was around for about 10 years, but it was really known for books and books and music and things, but it definitely had eyeballs. Definitely had consumers coming to it, but it was a lot easier then. The advertising platform was pretty rudimentary, but it was really focused on how you built your pages and making sure that you had the right content in the right places. And it was, there were no A plus pages back then. There was just basically, you know, you built your product, your description, and it was okay. It wasn't what it is today, but it was okay. Um, we found that people were, Happy to go there and buy even even back then if people heard about us they were happy to go to Amazon to make that purchase because again Amazon was was Was still all about customer service, you know was for the for the end-user and so We did we did quite. Well, we we worked on that platform for till we sold that business and We sold it about in 2012 Then I had this idea to do a shaving brand. It was originally going to be part of the beauty brand. It was going to be for women. But while we were developing that whole piece and while we were getting involved, we wound up selling the company. And so, but I still wanted to pursue it. So, our partner in that, who we were talking to was Energizer Corp at the time. They had two divisions. One was the battery division and the other one was personal care. They spun the personal care off. It's now called Edgewell. And so, they were spying a razor and I went to them after we sold and I said, I want to do it. I still want to do the shaving brand. I want to do it, men's and women's. And so we got an exclusive with them and we started in the shaving business and I put that on Amazon. And it was amazing because at that time it was just like it is today. It was all about ranking. And I was able to I was able to outrank Gillette women's razor with our razor for almost a year. I held that ranking as number one position for a women's five blade razor, which was the number one search term. And then, you know, men's we were up there. We were like in the top five constantly. And it was quite good. It was quite profitable. We weren't spending a tremendous amount on advertising, not like it is today. And we were FBA and the fees were manageable. And so we were doing quite well. And there were some things that you were able to do back then that you really can't do today as far as outreach to consumers. You could never put your website address, but you could definitely build a branded email that went out through like a third party app. And, you know, customers weren't stupid. They knew they could just take your brand and look for it online. And so we were able to track Because what I wanted to do was the flaw in the third-party model that I always saw on marketplaces was you don't own those customers. It's Amazon's customer or Target's customer or Walmart's customer. And so we were able to really go after trying to get those people to convert back to our brands. And we did that quite successfully for a while. And then we sold that business kind of prematurely. It just got a hot market, you know, Dollar Shave Club came in, Harris came in. And everybody wanted to be in the razor business, the shaving business. And so we wound up selling and Edgewell came to me and said, hey, we don't do anything in the direct to consumer space. Can you help us? We need websites built to consumer facing. We need to understand how to sell on Amazon. We already sell to Amazon. So all these things came together and I started helping them and I brought up, put a team together. And that was sort of the beginning of the agency. I never planned to build an agency. It just sort of happened. And then I sat back after we were doing business with them for about a year and I said, you know, I don't want to be tied to just one major customer because that's dangerous. So I started getting other customers. And today it's true. We work on the entire e-commerce ecosystem. I look at Amazon today as more of a, you know, more of a We're a customer generator as opposed to trying to build the brand on Amazon, but trying to use it as an acquisition vehicle to get people back. And so we do that healthily for a lot of our brands just because the costs and You know, and sometimes the aggravation just, it's really difficult today. I think it's a little bit more difficult than it's been in the past. But we're always been brand builders. We don't, I don't work with resellers. None of our, none of our clients are resellers. We're all, they're all, they're all brands. Some large, some small, some startups, some major brands and, you know, and everything in between. And so, yeah, it's, It's interesting. I mean, I still like Amazon. Don't get me wrong. It's just like everybody out there experiences. You have to manage it and it gets to be very sometimes time-consuming. Speaker 1: Absolutely. Yeah, that's an amazing story. Wow. So, I mean, that's a lot of experiences not just in the... It's a very organic process it seems, right? Everything was just kind of step by step. I have a couple questions. So I'll start with, you were mentioning that you're using Amazon as an acquisition channel. Is that new to brand customers or retention as like subscribe and save? I guess you can say both, but more so is it just like awareness and then hope that they're going to end up on the website? Speaker 2: Well, what we did about, I can't remember the exact year. I think it was 2017 or 2018. We got together with a mastermind group that we had because we were all in the consumer product space. And we put some attribution tags on ads and a lot of touch points. And we tagged about a hundred different websites, consumer products. And what we found was, That customers would see an ad or they would see an article about you, about your brand in a, in a, you know, online somewhere, anywhere, anywhere that they had a touch point. We had different attribution tags. And the first thing that they would do is they would go to your website. Which I thought was interesting. So they would look at your ad, they would go to your website, but they didn't buy. And they were trying to see if you were a scam or if you were really legitimate. And so how you build your website is really important to consumers because there are some scammy sites out there. And then they would go to your social media. And they would look at what you were doing on, you know, Facebook, Instagram, TikTok wasn't around back then. And then they would go to Amazon and they would convert. And so we figured, okay, they already know the brand. They've already been to the website. We have some systems that we could sort of capture their IP address and things like that. And so we said, look, if we do more advertising, you know, we're going to get people to buy on Amazon, but they already know who we are. Maybe they're going to come back the second or third time. And so how you structure your packaging, what you put in your packaging, how you structure your labels on your product, et cetera, you're trying to give them messages to come back to your website. And in a lot of cases, we're able to measure it and we measured, especially in the shaving side, we measured that we could get about 67% over time back to the website, at which point we would have a direct line of communication with them. So that's what I mean when I say we try and use it as a customer acquisition vehicle because the first purchase, maybe the second purchase, customers definitely feel more comfortable buying on Amazon for a lot of the obvious reasons, right? A to Z guarantee, you know, they know they're not going to get their credit information stolen. They know that any kind of problem they have, Amazon's going to take care of them. So it feels safer. And then, but it's what you do. It's how you structure your page. It's how you make your videos. It's how you make your images. All that is designed to make people feel comfortable with you and communicate to the end user about your credibility. That's really what it's all about. If you can communicate that, you have a good chance of getting them to come back to the site. Speaker 1: What is the best time for an exit? Because it sounds like you've exited different businesses at different times but it was always at a time when there was something else kind of around the corner or there was an opportunity starting to emerge as a result of that. So, how does one know when it's time to exit because, you know, these brands are like your babies, right? You take care of them, you nurture them, you grow them for years and there does come a point where you might want to pass it on to somebody that can do something more with it than you can. So, how do you know when that time comes? Speaker 2: Yeah. I'll tell you. There's a book you should read called Scaling Up. It's by a guy named Vern Harnish. He also wrote The Rockefeller Habits. He's a really smart guy. He'll say in those books that right from the start, you should always set your business up to be either acquired or something, you know, and it could be 10 years from now, 20 years from now, but your business should always be in a state where it shouldn't be difficult for you to hand it off somewhere, sell it or whatever. For us, The things that always happened to us were that we had other parties involved. We had investors with the beauty brand, we had investors with the shaving brand, we had investors. And so, you know, when you get forays, you know, people saying, hey, I like your brand, I want to buy it. You have no choice but to explain that to everybody who's involved in the company. As far as a perfect time, You know, I don't know if there is ever a perfect time, but you're 100% right. The brands that you build become almost your baby. Another thing that I've heard many, many founders say, don't get emotionally attached to what you build. You're going to have to at some point, something is going to happen and it's going to trigger you to want to exit it, sell it, you know. So, don't get emotionally attached. So, I don't know if there's an excellent time or a better time or a greater time. Sometimes people exit, like we have a lot of clients who exited because they just got tired of the struggle. They got tired of the work, which to me is never the right thing to do because that just means that you're, that means you're tired, right? That's, that's just, that means you're, You know, you're working too hard and you're not working on the right things and we try and coach them through that. But, you know, there's, I'll tell you this, and this is the truth. You may have experienced it in your past. When you sell something that you've built, I don't care if it's just a brand that you're selling on Amazon, I don't care what it is, you actually get a little depressed when you're done. You sell it and you walk away feeling like, man, I don't know if I should have done that. I'm sort of depressed about it. It's happened to me and it's happened to a lot of people that I know. And it's a whole phenomenon. So, you know, you have to it's really up to you as to what you feel is the right time. And if there's something you want to do, you know, that's that's making you more excited. Speaker 1: It's funny, I've heard so many of these exit stories where the person who exits They say, oh, I laid on the couch for six months and now I'm just doing the same thing. You know, that's usually how it goes. And it doesn't even matter what the actual payout was. Like for some businesses, people get enough to retire, but they still want to keep working. And I think that the routine and the process and the brand, it becomes a part of your identity. And so when it's sold, it's just like, well, who am I now? What do I do now? What is this? So as you either have to go through a process of rediscovering something new, but I think most people by the time that they've exited, they already kind of know who they are, what they like. So I can totally see that. Yeah, very interesting. I think a big part of it for me also is like, okay, there are some problems or some obstacles that you're facing. But all of them can be solvable, right? Like you said, one person might be tired. Take a nap. You're focusing on the wrong things, right? Okay, so maybe the next day I wake up, I'm not so tired anymore. I want to keep going. So that's like an emotional decision or it's a structural decision. Then you have a cash flow problem, right? Oh, I can't grow the business because there's not enough money. Okay, you can find investors. You can probably go down the list. And so there's all these reasons why you should keep it and continue to grow it. And you can find solutions if you really want to pursue it. But then there's also just like the feeling of, well, maybe I just want to focus my time on something that's going to be more beneficial to me or that I'm going to enjoy more. Maybe you don't love the business that you're in. You don't love the partners that you have. You don't whatever. So there's there's a lot of reasons. And I think that it does seem that there is probably just like a point where you're like, I've had enough. Maybe there is some upside that I'm leaving on the table, but you're, I guess, aiming for the opportunity that there's something better around the corner. So you'll say, all right, I'll pass this up to open the space for the other thing, right? Speaker 2: No question. I've spoken to probably, I don't know, five, six hundred entrepreneurs in my life and interviewed them for my show and different things and I will tell you that they all say the same thing. It's not about the money. It's about the challenge and it's about the process and that's what drives them more than anything and sometimes every entrepreneur I've ever talked to in my lifetime at some point has hit a wall. They've hit a wall and they've lost. They feel like they can't go any further, that they need some sort of regeneration. They're not thinking clearly. Even Bill Gates has said it. He got to a point where it was just sort of repetitive. And so Those guys, some of those guys are the ones that exit too soon. They sell because they're tired. They have nothing left and they feel like they have nothing left. When they would probably be better off hiring a CEO for a period of time, taking off for six months, going and doing something a little bit different to come back and be regenerated because every one of them who sold what I consider prematurely, myself included, has looked back on it a year later and said, Oh, you know, man, I should do, I should have done this with this brand. I should have done this. And not because, Oh, it would have given me, you know, I would have gotten 20 more million or 10 more million or five more million, whatever it is, half a million dollars. It doesn't matter. It's, it was all because why I could have done something a little bit different and a little bit better. So, , but every one of them, yeah, every, everybody goes through that little bit of depression where you sit around and, and you go, What am I going to do now? You know, I just did this and it was fun because to me, It's fun. I enjoy what I do now. I get up every day. I don't think it's a chore. I have fun with it. And I think that it's a great time because every day something new is happening, whether it's happening on Amazon or whether it's happening in e-commerce or whether it's happening with AI, something new is happening. And I spend about an hour and a half, maybe two hours every morning just reading or watching a video about something new. And to me, that's the most exciting thing about what we do. Just like you, you know, you had talked about with Rufus, right? So it's something new on Amazon. It's intent based search. Well, that brings a whole different perspective into We're going to talk about how you think about structuring everything, structuring the page, structuring the backend, structuring everything. It's not just there. It's e-commerce as well. To me, I look at Amazon and I like Amazon, don't get me wrong. We do business on Walmart.com and Target.com and all these other places. Obviously, none of them do what Amazon does. To me, staying on top of it just energizes me. I don't know if I could ever stop. Speaker 1: What we're experiencing right now is unlike any other time. It's like, you know, it's been a pretty steady progression. But right now things are exploding. And also younger generations have access to tools that were not available previously. So the competition has increased along with the ability to do more. And so That level of scale on all sides is just fascinating to watch. Because now, if everybody has the same tools, then how are you supposed to compete? Well, it's maybe some experience, but how relevant will that experience be in 10 years? Now, there needs to be some other types of differentiating factors which wasn't the case previously. Previously, it was who you knew, which still will always be the case for the most part. But on top of it, it was how much did you learn, the experiences that you had. How much money do you have? Now, there seems to be SaaS solutions for almost everything. You don't need to be a genius and you don't need to have connections. You have AI, which is $20 a month for the pro-subscription of GPT, and you have a professional copywriter, graphics designer, strategist, lawyer, and everything. You can be somebody living in some part of the world anywhere, right? You can be living in the jungles of Thailand, right? And you can have access to something that somebody in Manhattan would have access to in theory, right? So I'm just so amazed at that type of dynamic to say, all right, what does the next 10 years look like? And what is stopping me from being completely out-competed by the rest of the world? Like, what do I have to do in order to stay ahead? Bringing it back to what you said about the whole conversation around intent-based search and semantic-based search, that is not just for Amazon. That's definitely for everything. It's for all types of searches for the whole internet. In some ways, it can make things a little bit more biased. You open social media, you're going to see the things that you agree with only pretty much. The algorithm works in that type of way. Yeah, I don't know. I mean Amazon has been a pretty steady progression but now how it's changing, how e-commerce is changing is like everyone's scratching their head. Nobody really knows. Speaker 2: Well, one thing that I do know. And the reason that we only focus on consumer products primarily is because we understand consumers. I understand consumers. I've been studying consumers for 35 years of my life. And so I know that consumers aren't going to change. Consumers are still going to be consumers. They're still looking for value. They're still looking for uniqueness. And so, and I never, I'm, I always want to be aware of competitors, but I never want to focus on competitors because if you, if you spend too much time focusing on your competitors, then you start to try and act like them and you lose your personal identity or you lose your brand's identity, you know, so that doesn't bother me. And the other piece about it is like, I, I look, you know, I'm on LinkedIn just like everybody else's and you get bombarded with, Everybody's got something new, some new bright shiny thing that's going to change the world. 10x my business, 5x my profits, blah, blah, blah. It always turns out to be crap. It's the same old shit in a different package. I stay very focused on what I'm trying to achieve with my brand because even CrunchGrowth is a brand. We try and focus on that. But then, you know, our clients, we try and keep them steady and focused on how to move this forward. Because if you, in my opinion, if you keep focused on your consumer, on your customer, and you understand your customer really well, Then you have a million different ways to get to that. And in my opinion, the one thing that's beautiful about the market today is the use of social media as a selling tool, which did not exist five years ago. It did not exist 10 years ago. Social has been out there and they've been talking about social selling for since, since, you know, Facebook first came on, but it never really gelled. And now it is gelling. And so our experiences in the past, you know, we were in, we did direct response TV, we did shopping channels. And all that is, is video selling. So the tools that we learned there, the processes we learned there on how to structure the messaging is so applicable today. And it works for us for helping our consumers or our clients on connected TV and demand-side platforms and programmatic advertising, things like that. To me, it's just getting better. So we stay very focused. I will tell you that I try and test everything. People send us tools that we test and some are garbage and some have application, but I don't try and get hung up on like, oh, this person has this or this brand has this or this company did this. I try and stay very focused on who we're going after because to me, all the people I look at it like a herd mentality, man. Something new comes around. All these people, I see it on LinkedIn, they all go chasing after it. Well, that's fine because you just abandoned this. I'm going straight down the path that you just abandoned. Because you're going to come back, right? So, anyway. Speaker 1: I love it. Yeah, I think that's the answer that I always come to when talking about AI, when talking about where everything is going. Authenticity. It's always been important, but now it's becoming the most important. Speaker 2: Absolutely. Speaker 1: Because everything else is like what you're saying. It's a lot of noise out there. And with more, you know, so-called competitors or people coming into the space, There's just going to be more noise and more noise. So the only thing that could really shine bright is authenticity because people feel that. Like you can always tell when somebody had like an AI written piece of content and something that they've, you know, they're just sharing from their heart. There's like spelling mistakes or they have their, you know, little way that they, you know, their twang with the way they write. It's very different and you can tell more and more we're becoming more refined in our sense of that. And then the other part that you said, which is basically consistency, persistence and focus, right? So if you're authentic and you're persistent, you will eventually come out on the other side. It's just a matter of time. Speaker 2: Yeah, absolutely. Absolutely. I remember two years ago or three years ago, you know, AI first really started to hit, you know, primarily with content, with written content. And all these guys came out with these platforms that you could plug into your website and it would just generate content and it would generate blog posts and help your SEO. And we looked at it. We tested a couple of them and we walked away because I said, People are going to read this. It's just garbage. You know, it's garbage. Speaker 1: And Google is going to catch on, which they did very quickly. Speaker 2: So, to us, do we use AI? Absolutely. We use it every day. We use AI to analyze data, which I find it to be phenomenal at analyzing. You could take 10 years worth of advertising data, pop it in there and come up with a conclusion in a couple of minutes, which I think is phenomenal. We use it to enhance We create written content. We use it to edit videos, things like that. But do we use it to create start to finish? No, because like you said, it's not authentic and people see it and they don't want it. They don't want it that way. There are all these plug and play products out there that will run your ad. You just plug us into your Shopify site and we'll run your ad. All it does is take my product photos and put different backgrounds on it. That's not running an ad. That's not anything. People buy it. They try it. They use it for three months. It's garbage. Then they stop the contract. It doesn't work. Speaker 1: Phil, if somebody wanted to reach out to you guys and talk about more multi-channel, full funnel approach, what's the best way to get in touch with you? Speaker 2: Go to CrunchGrowth.com and you can contact us there. You can contact me directly, Phil at CrunchGrowth.com. Yeah, those are primarily the two ways. You can hit me up on LinkedIn. I'm on LinkedIn, Phil Masiello. Speaker 1: Nice and easy. And you also have a weekly TV show, is that right? Speaker 2: I do. Tuesday nights, 6 p.m. on E360 TV and we do an announcement. It's called Crunching Your Growth and we talk to people like you, entrepreneurs, people who have scaled businesses, built businesses and what we're trying to do is give Young entrepreneurs, starting out entrepreneurs, you know, anybody who wants to be an entrepreneur or is an entrepreneur, practical advice on what they're going to face, not just the great, hey, you know, this is Bob. He took $1,000 and turned it into a million. It's not like that. We talk about the struggle. We talk about, you know, the scars that we have left. Speaker 1: Cool. Well, thanks, Phil, for coming on and sharing these nuggets of gold. I really appreciate it. And thanks everyone for watching. Yep. Catch you on the next one. Speaker 2: Alrighty.