The Blueprint for Amazon Growth with Ari Zecher – Episode 48 of the Agency Operators Podcast

The Blueprint for Amazon Growth with Ari Zecher – Episode 48 of the Agency Operators Podcast Speaker 2: Hi, everybody. Welcome to the Agency Operators Podcast. Today, I'm joined by Ari Zecher of Deepsee Commerce. How are you doing, Ari? Speaker 1: Wonderful. Happy to be here. Thanks, Pasha. Speaker 2: Awesome, Ari. I'm really happy to have this convo as we were speaking just a minute ago. Not often you have two agency owners sitting in a room that focus on the same niche. We're both Amazon agencies. So we finally experienced the same hurdles, experienced probably the same setbacks, successes. We're very similar, but we'll also have our differences. So that's what I'm excited to talk to you about today. Before we dive into any kind of particular topic in the Amazon space, always I'm curious to hear how people became Who they are and you know kind of the path that led you to become an personal agency owner second of all Amazon agency owner, so please if you know you can go as far back as you like Yeah, for sure Pasha. Speaker 1: I mean like Answering the question of who I am is a big one, right? but but specifically in the context of business and and Amazon happy to so as we talked about briefly, I'm like this American Israeli kind of back-and-forth person so I I grew up primarily in Israel and moved back a couple of times. In about 2016, I moved to Seattle with my wife where my wife took a job at Amazon.com. I was studying finance And basically, she was in charge of kind of taking Amazon FBA sellers in the early days and convincing them to sell in other marketplaces. And specifically, it was Amazon China. And so basically, she got the list from Amazon, the Z to A sellers, right? Who's the biggest seller, go after the big fish first, and then go down to the small fish. And there's a lot of sellers, a lot of fish. And I was studying finance, you know, not really loving school. My background was in the military special forces and I was like very antsy, not great at sitting on my ass and, you know, and she was like, this is a crazy opportunity. It's a marketplace. People are selling things and they're doing like 60, 20, a hundred million dollars. You're interested in business. Why don't you take a look? And I just finished my last exam and I kind of went head over heels And so the Amazon YouTube world, this was the early days, 2016, 17. And it was, you know, Jungle Scout million dollar case study and the early days of Brandon Young and just like a whole kind of wide, like a almost like cultish like Facebook groups where like people would ask questions and then there would be thousands of comments and it was like, do things fast so you can get rich kind of a thing. And I was very curious, very patient and I was like, I can invest, you know, a couple thousand dollars into a private label brand. And I kind of went head over heels into this world and launched my first private label. It was a terrible private label, not a passion project whatsoever. My, my, my go-to advice for people is like, do something that you want to tell your entire network about. Like be proud of your product, use your product, be your product because You know, people can smell. Yeah, just smell if you're not really in it and behind it. And I launched another brand, I was doing wholesale, I got to the seven figure mark in terms of wholesale. I had a relatively smallish team, all VA based. And I was very pedantic about thinking about how does this scale? And how can I think about the long term vision? And long story short, I kind of was doing that while studying and having kids and juggling like a million things up in the air. And around COVID, If you guys all remember the deprioritization phase where your product went from having a two-day prime shipping to a three-month prime day shipping because it was not toilet paper, right, in the U.S. market. And my conversion rate just went down, down the toilet. And I was approached by an individual who was leading an e-commerce arm of a private equity firm. And they called me up and they said, we don't know about Amazon. You do Amazon, right, quote unquote, you do Amazon. And we want to sell PPE. We want to sell face masks, wipes, and COVID tests. And I was like, guys, like, it's March of 2020. The wave is literally, it's already curled, right? It's already like the massive, you know, explosion of water. You can't get on this wave. And they're like, we have millions and millions and millions of dollars at our disposal. Do it. And, you know, it was my first kind of doorway into the like consulting world of not selling my own things. And I kind of took the leap and it was an absolutely wild ride. We were competing with Lysol and Clorox and we launched a baby wipes brand, antibacterial wipes brand. It was a very exciting time and we basically had no budget which meant that we did the entire, we were being as aggressive as humanly possible. And I learned Virtually, what to do and what not to do from those experiences. I was exposed to like, you know, Amazon retail orders of, you know, $70 million for a single order. And, you know, Fauci tweeting something about face masks and, you know, inventory went through like just everything that could go wrong in a marketplace and go well, I learned. And that kind of gave me this like moonshot into Systems and people and marketplace and also thinking about and this is I think a very important piece about like my journey is thinking about Amazon not as this like quote-unquote cultish mom-and-pop you know side gig but rather it's a business. There needs to be a good P&L. There's white collars who are funding things quote-unquote and I realized that a lot of the agencies in the space We're really good at kind of singular things. They were good at PPC. They were good at creative. They were like flat file specialists, but the cohesive gray matter of, you know, inventory speaking with creative, right? Why would they do that? Right? Creative speaking with advertising, advertising, like speaking with client success, client success, speaking with the client, understanding what the goals are like those, all of the gray surrounding kind of running an actual business. I was not experiencing with the service providers that I was working with. As a consultant, and I met my now business partner, Matt Brown, running up on three years now. And we were like, let's build an ultimate operator for an Amazon eCommerce brand, an Amazon focused eCommerce brand. And that's my origin story. And so basically, our deep eCommerce three years later, and yeah, we're a small boutique. Yes, small boutique first full service agency, but with a creative specialty as well. Speaker 2: Amazing. Speaker 1: Yeah. Speaker 2: Yeah. I mean that kind of hits on what we're doing and our specialty as well. That's what I've identified myself as. You have a lot of agencies that specialize in certain things and then also like the way that they price is like very like a la carte for the content. We price it, content is included. But the most important part is the fact that all of the departments are communicating with each other because it's one big ecosystem. So how could you not have all those parts communicating and what people would end up doing, they'll say, hey, you know, I don't need an agency, I have an in-house team. You know, and it's like, well, what is an in-house team, like one or two VAs that you're trying to get them to do everything or be everything? And maybe that works, but it's not as efficient in my experience, or you end up doing a lot of handholding or things are slipping through the cracks and you don't even know it. So it takes a lot of experience being successful and failing, like you said. Hearing that you went through that experience during the height of COVID, I mean, like that was literally the wildest time to be in e-commerce. I mean, it made people, it broke people, businesses, right? But if you were really there and paying attention, it was an opportunity of a lifetime for many. And it sounded like that was really like the silver lining of the whole COVID situation for you, right? Speaker 1: Yeah, I mean definitely it was a like defining moment of well, and this is also I think oftentimes people question like why do you own an agency and not sell? Like that is the criticism of most kind of like group-minded think right like why why why would if you if you're so good at Amazon selling Amazon? And I think that like, you know for me The passion is about the process is about the system about being very good at At something and bringing like-minded people to the room who are excellent at what they do. And you mentioned a couple minutes ago or a couple seconds ago about you know, people the in-house team concept. I think that there are brands out there and we can name a few who are doing an amazing job with an in-house team, which you know, you you you definitely outgrow an agency at a certain level. Yeah, but I think what most brands don't understand and they really need to understand is that the obsession needs to be about the product. Not necessarily the marketplace, right? If you focus on the product, if you focus on the customer and you obsess the hell out of that, you know everything there is to know about that. Handing off quote unquote, you know, the actual marketing, the marketplace management is not a, it's not a step back, but it's rather giving you focus to actually focus on what's good. But yeah, the height of COVID, crisis management, high stress. That's my background pre all this stuff with just military things. And it's a lot easier to kind of upload flat files and dodge bullets, but you get the point. Speaker 2: Yeah. Yeah. Yeah, that's very interesting. So, you guys are servicing all kinds of clients right now? Are you focusing on launch brads to seven, eight figure sellers? I get asked that a lot like, is there a certain category that you want to focus on? Do you guys have your kind of like sub niche? Yeah. Speaker 1: Yeah, yeah, totally. I mean, so so for us, again, like there's legacy brands and legacy clients that we've had. And we've also gone through so many, so many learning curves of like, right client, wrong client, and there is no wrong client. It's just it's not right for us. What we've learned is, is, is that there's a certain kind of revenue mark That marks the potential for profitability with an agency managing them like us. What that means is that we're very boutique. We're very select. We're not a catch-all. We don't have hundreds of clients. We really don't have that. And the objective is to be aligned with brands that want growth, but understand the business, if that makes sense. And so we go after brands that usually are in the either are launching and have the cash flow slash their product is just visionary. It's epic. And we want to kind of be along for that ride. And we believe in it. That's the exception to the rule. But usually it's when a brand reaches You know, three to five million dollars, our fees and the way that we align kind of on growth makes sense as a line item, as opposed to this like heavy hole that they need to pay, which either we don't make enough money covering the awesome team that we have with the tools, or they are just in the red for too long and just cash flow doesn't make sense for them. And that's for the brand management side of things. We also have a creative Only kind of path and that's for brands that you know want to solve for content for creative and that can be you know 3d renders I saw that you guys you do that that as well That's a really fundamental like baseline starting point 3d renders all the way to professional videography modeling photography Etc Yeah, yeah, yeah 3d modeling. Speaker 2: I mean I've used the same guy It's like the only thing right that's like made it through all these years because I started selling 13 years ago 14 years ago and I had a guy doing renders back then and I still contact him for our agency to do renders. And it's like the only person that I've worked with since the beginning pretty much of my entire career. One guy, he lives in India and his name is Rajesh. He is the best 3D renderer I've ever seen, like making things so HD that it's like, you know, so that was like one of the early hacks that not many people knew about back in the day where it's like, you can just take some photos on your cell phone and send it to somebody and they're going to make it look better than a photo shoot. I mean, they can't do lifestyle photos, of course. There's a place for everything. For brands that are looking to get started and they don't have all this photo shoot assets and everything that's been so helpful for us. Speaker 1: Yeah. Speaker 2: Yeah, for sure. Yeah. So how do you guys see yourself growing? Like, you know, there's a lot of decisions that us as the owners kind of have to make in terms of like where to focus, where to pivot. And I, you know, to be honest, I've dabbled a little bit in doing some social media management only out of necessity where you have a client and they're just like, Hey, you know, you're running my ads and, you know, we have content made already. So maybe let's put those assets together and run some, you know, Google ads or Facebook ads. And I'm doing it for my personal brand in-house as well. So, you know, we're kind of, we have that exposure, that experience, but it's not like our main focus and it's a totally different beast. So once we started adding all that on, it became this kind of, on my side at least, it became a little too messy and a little bit too unfocused for me where I started to feel like now I'm kind of getting out of my Amazon lane and it's not really working for me. So then it helped me to just kind of get back on and say, you know what, I'm just going to focus. But some brands and some agencies, they decide that they want to make that pivot and expand if they have the capability. So I'm curious, what do you guys see as the next step? Speaker 1: To give you a direct but a little bit of a roundabout answer, the way that we see growth for our brands is a very similar mindset for how we see growth for us. What I mean by that is that we break down the KPIs, the building blocks of revenue and profit. Very simply, conversion rate and traffic equals units ordered or ordered. You multiply that by your average order value and you get revenue, right? And then you have the contribution margin one, two and three and you get profit. So if we think about that in the same mindset, how we market, how we get more brands is question number two. Question number one is understanding what is our AOV? And the way that we've structured pricing is, we have a baseline kind of number that makes sense for us. And then we always add a stipulation for some sort of sharing model. I'm not gonna specify it because it's very complicated and very detailed, but essentially it's a direct alignment with growth of the brand that we're working with. And our growth. And so instead of saying we need, you know, 10, 20, 30, 50 clients, we say we need an average order value of X. And we set very simple, obtainable tranches for how do we, how do we get to this amount of clients and then that amount of clients with the average order value of that clientele being X. How we actually do that. I mean, that's the biggest question, right? I'm sure that you get a LinkedIn DM or 10 or 20 every single day. And I mean, literally it's like LinkedIn marketing and email marketing. It's like somehow there was some sort of like a, there was a social media conference and someone said, guys like scrape LinkedIn, find their emails and just blast. Yeah, or write a post on LinkedIn and say comment like blah blah blah and I'll send you something Yeah, and I feel like I mean, it's it's it's amazing to see you know Just like sheet mentality. Not that there's anything wrong with that. You get a gem here and there, like granted. But I feel like standing out, like true marketing is being epic, is being truly epic, truly just like truly solving something that no one else is solving in your own unique way. And that doesn't mean like agency versus agency. It means this agency does this in a very specific way versus that agency, right? We all have an ICP. And so how we market that, I mean, honestly, to date, it's been word of mouth primarily. And, you know, we have a very strong referral system where brands that work with us want to bring other brands. We're very transparent with this is the cap of how many brands we want we want to work with. But up until now, we've been in kind of ultra growth mode and reinvesting everything into tools, technology, people, process, systems, all that kind of stuff. And we've not done, you know, we've not done the whole one LinkedIn post for every single day of the year with, you know, a book at the end of it, like we haven't gone into that. And I'm very, I'm very cautious of kind of going down the rabbit hole of what everyone else is doing, because I feel like there's a certain numbness that obviously us as service providers get, but for sure on the other end of it, the brand owners are like, what is all this noise? So yeah, hopefully that answers your question. Speaker 2: Yeah, that does. I mean, I love that answer. And the reason why is Most agencies, they want to expand because people think that you need to expand your potential ICP or how many customers you can speak to, or if I'm offering more services, then I'll get more revenue, right? So that's how you increase your AOV. I see, because of the amount of competition in our space and I again I use that word, not to say like you and I, in theory you can look at it as competitors but I feel like like you said, we have our strengths and weaknesses and, you know, we can differentiate, but still there's just a lot out there. And so I feel like narrowing down is really the path that I think most, first of all, brands too, consumer goods too, like you can't be another Walmart. You want to solve a very specific problem and be the best at it. And that's how you really start to shine. And then when people need to have that problem solved, then they'll come to you. So really by narrowing down, you are expanding in this kind of different way of looking at it, right? Speaker 1: Yeah, 100%. And just to add on to that, this is something that I've learned just in the past couple of months really. Our space, like you and I, is Amazon Marketplace Agency, right? And there's a certain kind of personality to Amazon native brands, right? If you look outside the box to an e-commerce brand doing D2C or doing Walmart or doing Chewy or whatever it is, thinking about brands that do not have presence on Amazon or who have presence but are trying to kind of expand to that, those are usually the easiest clients because you don't have clashes of, I launched a brand, got it to $5 million. I'm an Amazon guru expert. Now I'm going to hire you to do exactly what I say, which there's value to that, but there's also obviously problematic issues with that. As opposed to, I am growing my $50 million D2C brand and I need an Amazon channel marketplace management system. Can you sell for that? And that usually, you're solving a problem for a brand that did not know that this existed in the way that we know that it exists, which is a really, I think, like unique way to kind of approach your ICP. Speaker 2: Yeah, I've had that where, you know, somebody is looking to bring an agency on exactly like you said. And we're having a conversation and they know just as much as I know, like to the point where they know all the service providers by their first name, like they've been to all the industry events. They just love the vibe of the community, it seems, because they have been in it long enough or that's their second business or whatever. And exactly, it's just sort of like, why are you, it seems like you can probably at this point build out your own team and get them to do exactly what you want versus trying to get us to adjust to your expectation of what like, you know, everybody has their own way of doing things. Speaker 1: Yeah, I agree. Speaker 2: Bringing an agency on as a partner Really like a partner, like you're looking at them not just to get the work done, but strategy. That's how you set yourself up for something very long term. Otherwise, it becomes like a clash. Speaker 1: And there needs to be that mutual understanding of you're not in this business as an agency owner because you could not make it on Amazon. You're in this business because of X, Y, and Z. And unless they can name what the X, Y, and Z is, And they won't see your value, right? How many times have you been doing content production and the brand owner is like, why does it look like this? It should look like that. And there's room for feedback and criticism and strong brand guidelines. But the point is, is that are they designers or is your team the design team? And way too often there's this like, the CEO does not know everything. That's why they need people who are in seats. And an agency is a seat. It's a large seat, but it is a seat. And the focus and what makes agencies good or bad is being really good at what you do. And the really good at what you do needs to be understood. And I would approach, you know, the overall space, the Amazon space, people have these, you know, these posting schedules of, you know, and common KPI and common system and get pieces. That to me is like, you're going head on with each other as opposed to being smart about it. It's like football players just like, like bocking heads. It's like, don't do that. Play soccer and like do a good kick. You know what I mean? It's like, it just, it does not feel efficient to me and I'm not going to fight that fight. Speaker 2: Absolutely. I wanted to pivot and ask another question. Yeah. Um, and this is something that I think about a lot. This is something that I think everybody's sort of trying to figure out. Semantic based search and all this talk about Cosmo and their new algorithm changes. I'm curious what your opinion is on that. How fast are they rolling it out, do you think? And how are you guys sort of gearing up for that change, if it's significant enough to do anything that requires gearing up? Speaker 1: Yeah, so I think that broadly speaking, it's very significant. And if there is as much noise as there is about this topic, then it's a serious topic. Be that coming from Kevin King or Vanessa or Amazon themselves. It's a topic that we need to take very seriously. It's kind of like sponsored brand videos, right? I remember when that rolled out and people were like, Do we need to like now produce real videos? I'm like, yeah, you need to do that and you need to do that before you had this. So yeah, I mean like from when you think about the different types of search, right? I don't think that search is going away in the way of, you know, intent based search, right? I'm searching for a search term, exact phrase, broad, et cetera, and that being a major kind of origin story of the buyer experience. Like that absolutely is not going away and it'd be foolish to think that that will be rolled out or that will be kind of eliminated. If the iPhone still exists and there is a keyboard, then we should be safe, right, quote unquote. As it relates to kind of how Amazon's algorithm understands the listing, I think that's much more of a focal point. And, you know, with Deepsee, we do Deepsee creative, right? So we do content, we do videos, we do the whole stack for an e-commerce brand specifically for Amazon. And I think like the simplest way to kind of answer the question is, Does AI understand your content? Does it understand your copy? And that's a really simplistic way of kind of yes or no. Obviously the details and the complexities of does it understand it, is ChatGPT or whatever the system that you're using similar to Amazon system, the answer is no, but it's as close as you're going to get to the beast. And so I would say, understanding that, you know, search and SEO on Amazon is not going away, that being a core focus still until it isn't, in which case pivot, but at the same time, ensuring that your images, your videos, everything is optimized for artificial intelligence, understanding what you're doing. So with Deepsee, we've built custom tools that help kind of test that. So, you know, we'll create a very robust content brief. We'll create amazing content, but that's to the eyes of the designers, right? How do we now get feedback not from the buyer? That's important too, but we want feedback from a natural language model. And so we have a feedback loop that ensures that we are in line with how they would understand it. And oftentimes it's shocking to see, you know, the disparities of the actual cognition. But that's, you know, that's the game that we're playing. And then, yeah, and then like, a foundational layer on all of this is, you know, the basic kind of routine upkeep. And so we have things There are AI suggestions that Amazon pushes on us and we'll have the ops team kind of go through and make sure that we're not letting them do something without our permission. Because Amazon is trying to kind of suck us into the AI world of everything is being pushed by them and we know that they're not there yet. And so I would say to approach this question fully, it's like, SEO is not going away. AI needs to be communicating with your content and vice versa. And foundationally, you need to make sure that you are controlling, you are the last point of approval before things happen. Speaker 2: Yeah, absolutely. And there's something that I saw that was interesting because there's some sponsored placements in Rufus. Have you seen that? Speaker 1: I have. Speaker 2: Does that make any sense to you? Like, you're asking a robot to give you a suggestion, but then somebody else on the other side is paying off the robot, so they're more likely to give you their suggestion. Speaker 1: Yeah, the short answer is I don't know and I doubt that there's a good answer on the other side except for it's another ad placement and they need data. They need conversions to either happen or not to understand is this model functional or not. Speaker 2: Yeah, absolutely. I think we're just going to see how it rolls out. I've witnessed many programs and initiatives that Amazon has started and they've just redacted them or reverted them and closed them down. There's several of them that I've even used myself and I was just like, this sucks. And then like a year later, it's like, no more. So they have to try. But I mean, I think this one is a big one. And from what I understand, the whole Cosmo thing is working. Even if it's a point one percent increase of accuracy to get somebody something that they're looking for faster. Speaker 1: Yeah. Speaker 2: That that results in hundreds of millions of dollars. That point one percent. Speaker 1: Yes. Yeah. And I think also like like aside from the search piece. Right. Like. From a brand owner perspective, Cosmo is or not not Cosmo, but Rufus as your like aid is going to basically, it's going to air out the dirty laundry. And so if your product is good, and social proof is standing behind that, and your listing and your images clearly explain to the robot what it is, then you will stand out. If you're hiding things with, you know, merging an ASIN to an old ASIN that has 10,000 reviews, that's not going to work anymore. Because systemically, they're able to read that as opposed to see there's 10,001 reviews. That doesn't hold anymore. Speaker 2: Yeah, there's no more trickery. It's just systemic, like you said, and I love that. Speaker 1: Yeah. Have a good product. Focus on your product. Focus on your buyer and let people who are really good, and if you're really good at it, keep on doing it. But if you're not really good at it, Then hire an agency. Not for that, yeah. Speaker 2: Awesome. So Ari, what's the best place for people to reach you? Speaker 1: I mean, honestly, email or LinkedIn. It's Ari at deepseecommerce.com. That's two E's, so S-E-E, commerce. And LinkedIn, I'm sure that you'll post my LinkedIn profile. But yeah, feel free to DM me and I will promise to read the DMs and ignore the clickbait ones. But definitely, yeah, feel free to reach out. Speaker 2: Sounds good. Thanks for joining. I appreciate the chat today, man. Speaker 1: Thank you, Pasha. Great to meet you. Speaker 2: All right. Take care, everybody. See you in the next one. Thanks for watching.