Inside the Most Unusual Amazon Seller Call: Can PPC Software Scale Luxury Tiny Homes?

Inside the Most Unusual Amazon Seller Call: Can PPC Software Scale Luxury Tiny Homes? Speaker 1: Hi, Mike. So I did something either really brave or really questionable. I left my CFO job at **** to sell luxury tiny homes on Amazon. I've invested $750,000 over the past year. I have 25 gorgeous prefab homes ready to ship and now I need to figure out if your Amazon PPC software can handle helping me sell actual houses on the everything store. I made a bold move and I need a partner who gets it. Speaker 2: Wow. Well, thanks so much for the call Caroline. I've seen a lot of things over the last You know, 10, 15 years of doing Amazon PPC. And I might say that selling a, you know, because I'm looking at the Amazon site here, I'm looking at your brand, you know, selling a tiny home in the ballpark of 20,000, 40,000 is probably one of the larger cart values I've ever worked with. So this is really exciting. I always love new frontiers and new challenges. So let's talk about the size and scale of your account where you are currently. Like who's managing your ads? What's your target cost to acquire a customer? Let's talk about that. Speaker 1: We spent $75,000 last month on Amazon ads and we sold one house for $40,000. So that's an ACOS of about 180%. The agency... Has been running my ads and they say we need to spend a lot on visibility to try and rank for keywords. But I checked my rankings recently and I rank for things like containers for home instead of container home. For a $40,000 house, our margins are about 30%. So our breakeven ACOS is 30% or spend 12,000 to sell a house. Speaker 2: Okay, so those are pretty good margins with a large cart value, so there's room to advertise for sure. So, I mean, for the $75,000 that you spent last month on Amazon ads, what were you hoping to get from that? How many new customers? How many homes sold? Speaker 1: To sell five houses and we only sold one. So this agency isn't working out. And I paid this agency 10 grand on top of that. So I'm in the hole on this whole thing. They have a $5,000 early termination fee and I just paid it. I need some help on what to do next. Speaker 2: All righty. So yeah, about $10,000 to $15,000 per sale to acquire a customer to sell the about $40,000 tiny home. Makes sense. I've got one more question before I start sort of digging in here a little bit deeper, which is what does your team structure look like? I know that you've just cut ties with But who's gonna be your PPC manager? Speaker 1: A week ago, I hired a full-time marketing person to be an in-house Amazon manager. His name is and he said he already used your tool in the past and wants to use it for our account. But what do you guys actually do? Speaker 2: Okay, that's awesome. Yeah, I know he's great. I've talked to him a couple times over the years. So I think for a brand like yours, one of the trickiest things to nail down is going to be how long it can take in terms of ad spend, in terms of days between an order, you know, with about a $75,000 a month budget aiming for, you know, five orders to be a good month. That means we could end up spending around $10,000 to $15,000 for a single purchase. And actually, let me explain how our software can handle this for you. So the first thing that we do that's really foundational is we have very long historical lookback windows. What that allows you to do is it allows you to circumvent Amazon's default window for a search to report, which is about 60 days. So by combining these search term reports, you know, month after month, quarter after quarter for you, you're able to essentially get the benefit If you told you to log in, download your search and report every month and combine it, and then you'd be working in a spreadsheet, not even in an actionable platform. So what that means is that the foundation of data is going to be much stronger inside Ad Badger than the default Amazon ads interface. So you'll be able to see for a keyword, if it's been a week or a month without a sale, you'll be able to very simply see In the last 12 months, in the last 24 months, how did this particular keyword or search term perform? And that's going to be really helpful to feed information into any automation step that you build and vitally important for the next step. Speaker 1: Yeah, the agency said the time between orders makes it hard. Speaker 2: And you know what? They're right. You don't want to use that as an excuse for poor performance. This happens a lot. You see this a lot sometimes too. We have a client on our platform. They sell Hundreds of different types of screws, different material, different head type, all these different variables. And it makes each individual screw sometimes go a long time between a sale. And when you multiply that by the cart value that you have, it gets a little bit more complicated. So what we can say is that, you know, burning $63,000 last month over your breakeven ACOS It's not just so much old data, like getting that old data is a piece of it, but the other piece of it is being sure that your account has really good guardrails. So one thing that we've built into Ad Badger is a bit health report card, and it basically describes how likely it will be for you to hit your target ACoS. And one of the things that it looks at is how much non-converting spend you have over the last year plus. So what that allows you to do, and it'll allow you to be able to have a dashboard, how much do we spend on search terms, keywords, products that have never resulted in a sale? And then we have automated ways to trim that non-converting spend. So you'll be able to really quickly find something that just hasn't converted in the last 30 days, which might be irrelevant for your brand, but something that hasn't converted in the last three years plus. And we can automate a lot of this. And you capture a lot of non-converting spend this way. So there's lots of search terms that have one, two, three clicks a month. Never get a sale. You span that out over the course of three years, and you end up with thousands of terms that have hundreds of clicks each that never generated a sale. So it keeps your top-performing, high-value keywords active, competitive for the full life cycle of their conversion. And that long look-back window helps you find that long life cycle of conversion. So just having a sort of a 30-day look-back or seven or 60 days, definitely not enough for most brands, especially true with your massive ticket item, for sure. Speaker 1: So you're saying your software prevents that overspend on bad keywords, but keeps the good ones spending until the purchase actually happens. Speaker 2: That's absolutely right. You know, a tiny house is going to be much different than, you know, a $20 kitchen gadget or something like that. If you think about it in terms of a six-month sales cycle, our search term automations, our bid algorithm will be picking up when a conversion happens, whether it be a daily, weekly, or semi-annual basis, and be sure that the spend is going towards those high-value terms. Speaker 1: Well, that's good because people rarely impulse buy a $40,000 tiny house, and I didn't leave my executive job to babysit keywords, and I don't want to pay my guy to babysit keywords either. We need to start selling 50 tiny homes a month within the next year. I need to be the top-selling company selling tiny homes in e-commerce. I want to sell the company within five years for $25 million and I've got the money to spend, so let's dominate this market. Speaker 2: Awesome. Well, that's really good context because, you know, sometimes a similar company selling a similar product to a similar niche may have different goals for the overall company. So looking to be acquired at some point within the next five years. For 25 million, the things that I would mention are going to be really valuable, especially for a niche like yours on Amazon. It's going to be sure that we set up good rank tracking for all these keywords related to your brand with you versus the competition. We can also display something called search query data in a really meaningful way. So what you'll be able to see is actually your share of purchases for a lot of relevant keywords related to your products. And what you can do with this information, both from a sell my company for maximum profitability, as well as ...management is going to be actually seeing your purchase share for really high valuable terms. You'll be able to see things not just like container home, tiny home for sale, but also, you know, off-grid luxury cabin, portable home office, and we'll be able to rank that versus the competition. So you'll be able to tell potential acquirers what your share of sales, what your share of voices for a lot of these high-intent keywords, building up the case that you are the dominant brand on Amazon for these terms. Speaker 1: I like the sound of that. Speaker 2: Yeah. And then from there, your Amazon brand manager can see things like top-line sales, ad sales, organic sales, profitability for each product. And this is really important because you look at these high-level values and then you can take that information, go into the PPC campaigns. And if he identifies a keyword where The share of sales is low or the organic ranking needs a boost. He can then go into our bidding platform and then give those particular keywords like a target A-cost boost to maintain or gain a strong position. He'll even be able to do things like top-of-search placement adjustments for your entire campaign based off certain parameters. As he sees fit, really rapidly, like in under a minute, he'll be able to dial that in. In conclusion, I would say if you want to sell your company for $25 million, Based on Amazon dominance, we'll be able to give you that quantifiable evidence that you sort of own the space on Amazon and give you the tools that he needs to make the PPC campaigns focus in that direction so that you can eventually prove it to a private equity buyer. Speaker 1: All right. I do like the sound of this and you came recommended. I'm feeling ready to get started, but how much will this cost me? Like 2% of ad spend? Speaker 2: Cool. So yeah, you said you spend $75,000 a month. So our software, we have simple flat pricing. You'd be on our professional badger plan and you would pay a simple $660 a month or $6120 for the year. Speaker 1: Done. Wow. Your price is amazing. I was quoted $1,500 a month by someone else. This will give me an extra grand for ad spend. Speaker 2: There you go. Speaker 1: How are you able to charge such a great price? Speaker 2: Well, we've been working on Ad Badger since 2017 and over the last few years and even the last few months, we've spent a lot of time optimizing our internal infrastructure, bringing down our service cost, server cost, being sure that we're able to run our code efficiently. We thought it was a great thing in the spirit of Ad Badger to sort of pass some of those savings on to our customers so that we can service even more great businesses. Speaker 1: Well, you should charge more. Speaker 2: Thank you. I appreciate that feedback. But, you know, we really did design it to be this way intentionally. I get a lot of joy out of, like, applying some of this technical magic to keep our server costs low. And I like the business model that we have, too. You know, for a PPC software, when you're paying, you know, sort of a percentage of spend, you know, sometimes the tool might not be incentivized to sort of help you spend very profitably as opposed to maybe take some actions to get you to Potentially spend more. So we don't want to collect a commission if you overspend, right? Speaker 1: Well, yeah, that makes perfect sense to me. Speaker 2: Cool. So I'll send you a sign-up email. It'll be a secure link. The email that I have on file is ******. The platform is ready. Your account just got created. So pass this over to ****** and he can get started. Very easy to onboard. I have to ask, you mentioned earlier that you're ranking for something like Containers for home, like ranking for the wrong keyword instead of container home. Do you have any more ridiculous keywords that maybe you noticed you were ranking for, maybe wasting some ad spend on? Speaker 1: Easy. They had me bidding top of search on tiny house furniture kit because they thought we'd upsell them after they bought the house. We spent $5,000 and all we got were clicks from people selling Ikea hacks. Speaker 2: All right. Wow. What I'll do is I'll be able to set up your account with a lot of those keywords baked in there already. So like I'll add some IKEA terms in there so that you can identify them and be sure you're not spending money on them. And I'll also say during that onboarding call, I'll walk Jimmy through the Ngram analyzer, which will help him eliminate a lot of these irrelevant terms dragging down the performance of the account. So let's get your account focused on selling five or more tiny homes a month. Speaker 1: Amazing. Thank you so much, Mike. I'm so excited. Speaker 2: Thanks, Caroline. See you on your onboarding call. Speaker 1: Thank you. Unknown Speaker: I've had my share of rocky roads, but I've come through. We are the PPC Den, my friends. And we'll keep on the blazing. We are the BBC, and we're talking about Amazon. No time for Medicoms, because we've fixed the game.