When to Use Dynamic Bidding Up & Down on Amazon PPC with Brett Messieh

When to Use Dynamic Bidding Up & Down on Amazon PPC with Brett Messieh Speaker 2: Alexa, play That Amazon Ads Podcast. Unknown Speaker: Which one would you like to hear? Speaker 2: The best one. Unknown Speaker: Okay, now playing That Amazon Ads Podcast. These gentlemen are completely changing the game. Speaker 3: After listening to That Amazon Ads Podcast, my ads are finally profitable. Unknown Speaker: I also heard they're pretty cute. Speaker 3: What's up and welcome back to another episode of That Amazon Ads Podcast. Today we've got a special guest episode. It's our century mark for all the episodes we've ever done. Episode 100 and this guest was on episode 50 and he's been polite enough to come back And join us again today and give all of his knowledge, all of his wisdom about Amazon PPC to you. So without further ado, Brett Messieh, welcome back. How are you doing? Speaker 1: Thank you, brother. Doing great, man. Living the dream. We're expecting another baby 10 weeks out from now. So just bracing for that. But things are good, especially with all the chaos in the world right now. Yeah, stoked to be here, so thanks for the invite, guys. Speaker 2: And how many kids and pets total is the count now for you, Brett? Speaker 1: I can't count that high, but kids is gonna be three, so leave it at that. Speaker 2: I think you've got like 12 pets. Speaker 1: They're around there, yep. We like to stay busy. We actually just got some chickens as well, so I'll send you guys some pictures of those chickens after the episode here, but yeah, they're pretty crazy. They're golden Polish. They have big poofs on their head and yeah, they're fun. Speaker 2: Are they egg-laying? Speaker 1: Not yet. Right now, they're totally useless, but I think like two months from now, we're gonna start getting some eggs and yeah, it'll be good. Speaker 2: Awesome. Speaker 1: Especially with the egg prices lately. Speaker 2: I know. I was about to say, Brett is If you don't know Brett Messieh, he is the CMO of, I actually forget the company name, Brett. What's the company name? Speaker 1: Sven & Son. Speaker 2: Sven & Son, aka Sleep Geeks. Chief Marketing Officer. If this is your first time seeing Brett, me, Andrew, and Brett are all friends. We've been friends for a while. I first met Brett working at AdBadger back in 2019 and we were podcasting together then and we're now podcasting together. Together again. And Brett is also just a genius mind, really good when it comes to marketing, Amazon, omni-channel things. He's also really smart with survival tactics, hence the eggs. And right now, we're going to be discussing and diving into the topic of how to survive on Amazon PPC when time is limited because Brett is a very busy man with a lot of hats to wear as the CMO of the company. And so we're going to talk about all kinds of things, how Brett manages his time, managing his own PPC, working with a large brand, when it's time to outsource work, when to use software, etc. But also, We're going to talk about when to use dynamic bidding up and down. So let's kick things off talking about this dynamic bidding, Brett, and tell us your thoughts. Speaker 1: Dynamic bidding is an interesting concept to me. Basically, what it does is Amazon adjusts bids in real time based on different contexts, things like placement, what device they're using and past conversion behavior. So I think in certain instances and certain products, it makes sense to use dynamic up and down. There are definitely some drawbacks to it. Among those, you kind of have the lack of transparency. Amazon's algorithm is a black box ultimately. But I think with the right products and based on different conversion windows, dynamic up-down can make a good amount of sense. Especially in things that have a really short conversion window. For example, we have an alternate brand of ours, Celestial Sleep, that sells mattresses that are going after the lower end of the market, competing with Amazon Basics, that sort of thing. So we're in like the $100 to $200 range on mattresses and most of those are just quick impulse purchases. So I think dynamic up and down, at least what you see whenever you go through the campaign manager and are looking at your search terms, is you'll have search terms that have a 20 or 30% conversion rate with, you know, 20 impressions and two clicks in a conversion. So it's like really the problem there is that you get so wide with the amount of placements that you have because you allow that CPC to grow so much. So you'll have tons and tons of unconverted spend. And today I'm gonna be talking about how you can get conversions in these ad groups, which can sometimes drive up the appearance of your ACoS in that ad group specifically. But at the search term level, you get conversions that are 1% ACoS at ridiculous conversion rates that are pretty much unachievable with other campaign bidding strategies, at least in the tests that I've done. So I think if you're able to really weather the storm As you're getting all of those search terms, you're validating which ones are going to be repeat converters and everything. I think it can be a really powerful bidding strategy. The caveat there is you really had to be on top of your game with negating search terms that aren't working for you and that sort of thing. And you also have to be able to pitch to the rest of the company Hey, I know we just launched this product. I know it's starting off at 30% or 40% ACoS at the ad group level and at the campaign level, maybe 80%. And even with a target ACoS of 5% like ours, with time, you kind of build more and more of those conversions. And in my opinion, over time, the total ACoS of an ad group or of a campaign will trend down to the average of the search term level ACoS. So as long as you're willing to kind of weather that storm initially as you're launching a product, And I'm here to talk to you about Dynamic Up and Down and really build data confidence around what works and what doesn't. I think it can be a really powerful tool. Speaker 3: So Brett, it sounds like there's different times to use different bidding strategies. So would you say that, you know, whenever you're launching a product, it's usually best to do Dynamic Up and Down just because you can be more competitive versus maybe like, in your case, you're using Dynamic Up and Down on a lot of higher AOV products longer sales cycle timelines or whatever you want to call it. Do you find that it works best for those or is there a time and place for using down only or even fixed bids? When you have a more established product, if you're trying to dial things in, what's your take on that in terms of like when you would use it versus when you wouldn't and why? Speaker 1: My personal recommendation would be to kind of optimize around where your product market fit is relative to the competition. So if you have a product that exceeds the rest of the category in terms of reviews, your price point is dialed in and your listing optimization is on point, I think dynamic up and down can really be beneficial in that regard. I think, you know, I guess the core philosophy behind dynamic up and down is that in the test that we ran prior to switching over to dynamic up down, we were running a lot of fixed and then Amazon released dynamic down only. And we migrated over to that and we saw pretty good results. So I guess, you know, the philosophy then was, hey, if we're trusting Amazon with dynamic down only, then they probably have like a very elaborate data set full of metrics that aren't available to us. But it's in Amazon's best interest to kind of And today we're gonna talk about how to maximize their own revenue per click in their model. And a big part of that is the referral fee whenever they make a conversion. So in our category, that's 15% of the first $200 and then 10% of the subsequent dollars. So it comes out to about 11, 12%. So to Amazon, especially for a high AOV product like ours, that is a massive referral fee. And they're incentivized to not just waste all of our spend. And they're actually trying to go out and get that conversion and close the deal. So if you believe in dynamic down only, and that is more effective than fixed bids for you, then I think that justifies at least testing dynamic up and down and leaning into the same metrics and the same data set that Amazon uses for down only. And I think that also opens up a bunch of submetrics like what is that specific shopper's price range that they're gonna be in? What is that specific shopper's conversion windows? And what micro KPIs does Amazon have around that? And what's the average clicks to conversion for this specific product? And how many of those clicks has that specific shopper taken so far? All of this as advertisers, we have no visibility into, but Amazon certainly does. I think there's a lot of benefit to leaning on it in that regard. And then, you know, for our business specifically, we've been doing a whole lot of testing around promotions. In the adjustable bed and mattress industry, promotions are really huge. You know, our AOV on Shopify is $1,900. On Amazon, it's around $1,200. So that's a lot for the average consumer and discretionary spending to be pumping out because people only replace their mattress once every seven years. So they're really waiting for a specific moment to pull the trigger. So for us, we've been really leaning into promotions more and specifically best deals and lightning deals. And I'm sure you guys are aware a couple of weeks ago, Amazon just changed it so that you can run best deals much more frequently, pretty much monthly at this point. And you can also layer in lightning deals at the same time. And for us, we have seven different parent ASINs that have a whole handful of all the different size variants under them. And all of those are in the adjustable bed and mattress bundle category. So that kind of makes it very difficult as certain parents are qualifying for best deals and others are not and constantly coming in and out of a promotion cycle. That makes it extremely difficult to do any sort of bid management using Today we're going to talk about using fixed or dynamic down only. We've noticed that in the toggle to dynamic up and down, it kind of takes over. You really only have to have your bid in like a ballpark range that allows you to consistently fall within your target ACoS and you kind of just optimize more around your macro numbers in the account. You know, some months, one parent is going to oscillate maybe from 10 to 15% ACoS. But the other parent is going to at the same time, if that one's rising from 10 to 15%, is going to go from 15% down to 10%. And we found that dynamic up and down is a great way to kind of balance bids for us in that sense, without having to manually go in every time a promotion starts and dial up bids or dial down bids and just hope to God that we're not screwing up our inventory balancing. And you know, there's so many variables involved that it kind of just takes a lot of the guesswork out for us and just off sources that to Amazon to make that decision. So I think it's good in our business context. But again, There are a lot of downfalls in that and that you lose a lot of transparency and don't have as much control as you would running fixed or dynamic down only. Speaker 2: So I'm going to read Amazon's description of dynamic up and down. I will also throw up a screenshot here just for the viewers to read along as well. But dynamic up and down, Amazon says that Amazon will increase your bids if they think it's more likely to convert to a sale. This is interesting to me. I didn't know this before. We won't increase your bids by more than 100% for placements at top of search and not more than 50% for other placements, meaning rest of search and product pages. And so I'm just going to keep reading. I don't read the rest of it yet, but take this into account when selecting since the strategy adjusts your bids for proportion of likelihood of conversion. It may deliver more conversions for ad spend compared to other two strategies. So I thought that's kind of interesting that in their definitions, they seem to be saying it's only goes up to 100% on top of search and then up to 50% on the other two placements, which I would argue you don't want to increase on all three placements simultaneously. One placement should always be set to zero because That's just the same effect of just increasing all the bids in the campaign, which I mean, I guess maybe that's the goal. But on another page, Amazon says that in the United States, up and down campaigns have delivered 119% more attributed sales per campaign at a 5% lower return on ad spend, ROAS, compared to down only campaigns. So they're saying ROAS only slightly declined or the inverse of that would be ACoS only slightly went up, but it contributed to 100% growth in ad sales. So just some additional context here. Do you believe those numbers, Brett, that ad sales basically doubled with minimal impact to ROAS when they switched to up-and-down compared to down-only on Amazon? Speaker 1: That's exactly what I would say if I was the marketer in charge of pushing dynamic up-and-down, so kudos whoever at Amazon did that one. I think a lot of that is probably because it's over-indexed to top of search. And branded keywords. Speaker 2: Right. Speaker 1: That makes total sense. Yeah. Speaker 2: That's why like on the podcast for the past like 99 episodes, I think a recurring theme for me and Andrew has been when we're talking about bidding strategies, we're talking about how to calculate bids, lower the base bids on your keywords to downbid, effectively downbid product pages where performance is the worst. And then top of search is sometimes going to get up to like 200, 300% increases depending on like how much better. It is then than product pages, but I don't think, or do you think that it's, I don't think you think that it's only the placements that are at play here, right? There's other variables involved that Amazon's looking at. Speaker 1: I think there are. And again, it's kind of anecdotal, but whenever we did the toggle from dynamic down to dynamic up and down, We did see like a big jump in efficiency in our account and not only on the Amazon side, but it bled over to the Shopify side as well. Speaker 2: Interesting. Speaker 1: Yeah, just the total number of eyeballs in our funnel dramatically increased at the same cost. Speaker 2: And do you have it on all your campaigns or like pretty much 100% of your campaigns? Speaker 1: I'd say probably 80% of them. We have all sorts of other products like headboards and toppers and pillows and yeah. We're testing a lot of different bidding strategies across that. Currently one test we're running right now is just single keyword campaigns and pretty much trying to optimize around our search term impression share report. Wherever we're falling short, we're just launching single keyword campaigns and we're doing it, not just one campaign, but we're launching three of them. So one of them is for fixed, one is for dynamic up and down, and one is for dynamic down only. And that's kind of giving us an idea as to which one is going to win the majority of the impressions. Spoiler, it was fixed bids for us, which makes sense from like an Amazon ad inventory perspective because you're not going to want to like serve as many impressions for something that's dynamic down only because obviously those clicks have the potential to be down bid. For most customers, whereas if you're pushing out all towards fixed, then you know exactly what revenue per click you're going to get on the Amazon side. And I think their revenue per click is Amazon's, that's like their golden KPI that they're after. Speaker 2: You think so? Speaker 1: I think they're just arbitraging clicks from, you know, they spend a ton on Google and Meta and other places. And I think that they're just trying to arbitrage revenue per click. Speaker 2: On another page, Amazon has a whole page dedicated specifically Welcome to Dynamic Bidding Up and Down, where they say that we will increase your bids in real time to help win impressions that may be more likely to convert to a sale. And then it gives an example, such as when your ad appears for a highly relevant shopping query. So this has always kind of been my thought is that especially for like an auto campaign or a broad match or phrase match keyword, that if there is a keyword or a search term that comes through, that's like longer tail and more relevant to what your product is, right? If I'm selling Above my head is a five blade white matte ceiling fan with lights and pull chain. So I might have just ceiling fan phrase match with a $1 bid. But then if someone types in white matte ceiling fan with lights and pull chain, it's going to increase that bid up to $2. Because it's so relevant and make it more likely that I actually win that click and win that sale. And that's actually now that I'm thinking about this for the first time, that actually makes a lot of sense because that keywords not probably doesn't have enough volume for me to harvest it over into an exact match keyword and bid $2 there. So that's a good example for at least for broad phrase, maybe some autos, where the levels of conversions coming through are going to be more relevant, less relevant. So for you, Brett, would you say this is More for just those types of more shotgun target types, like Broad and Fraser, would you say even with exact match, because maybe you're tapping into like the shopping behaviors of the clicking audience? Speaker 1: Most of the campaigns we're running dynamic up down on are phrase match. So that does give you more of that shotgun approach. And what I was alluding to earlier, you get a lot of those search terms that are converting at, you know, 1% ACoS, 2% ACoS. And most of the search terms are converting at that level. The problem is you have so much unconverted spend in there. Which I think you can treat as like an item on the balance sheet almost, like an asset almost. But I think if you add too much of that together, you start impacting cash flow, your ACoS starts being driven up and the numbers can get out of control quickly. My big concerns with dynamic up-down is that lack of visibility, the lack of transparency. Even when you're looking at your analytics, you'll see your CPC and maybe there's 80 clicks in there and you're like, what is my baseline in this? I really have no clue. There's down only in there, there's up bids in there, and then there's whatever your baseline is, but the numbers aren't necessarily clear. All I would say in terms of recommendations here is just test it. Allocate a small portion of your budget to dynamic up-down. Give it a month and then go into search terms and analyze what you're seeing. I think you'll have a lot of fluff in there. I think a lot of it will be incredible performance. But I do worry about over-indexation towards bottom of the funnel with dynamic up-down. I think that's something that you need to be aware of because, you know, sponsored products is Seven day attribution, sponsored brands and display is 14 day last click attribution. So all of the conversions that they are potentially optimizing around in there, you know, you're putting a lot of faith in Amazon's engineers and they do have the brightest minds. But at the same time, it may not necessarily work well for your specific product. And it's just worth the test. Speaker 2: I think that's the concern from a lot of people is that they don't really think Amazon's aligned with necessarily like their brand because you're paying it, like Amazon's making money off of those clicks. So yes, they make more money off the referral, but they're also just getting paid for the clicks. And Amazon doesn't necessarily know like your margins or your target ACoS and those types of things. So I think that's what causes a lot of just fear for people around flipping to that. At least for myself, the philosophy I've always had is, I'm going to push my bids and my CPCs to as high as they can possibly go. And then if Amazon wants to decrease them because they know something I don't know, I'll let that happen. But I'm hesitant to give Amazon permission to more than double my bids, which makes me wonder for you, how do you even handle those bids? Because to your point, If you're bidding $1 and your CPC is $1, you don't know how many of those times you were paying $2 CPCs and $0.25 CPCs. You just average out at the end of the day. Sure, you could look through the search term reports and try to piece it all together, but I don't think anyone has time to figure all that out. So yeah, how do you think through optimizing those bids? We're gonna talk a little bit about what's going on with that setting. Speaker 1: So once you have data confidence and you get through the first two months and you pretty much have the last 65 days to look back at and there's a decent amount of spend per search term that you're looking at, I think it becomes a lot more stomachable and a lot more consistent in the CPCs that you're seeing. We don't see nearly as wild oscillations as we did the first couple of weeks of rolling it out and that was definitely nerve-wracking. And not as impactful for us, I think, because we are such a high ticket item. That revenue per click model for Amazon becomes much more attractive for them to actually convert and get us the sale relative to something that's $15. So if you're in the sub $30 price point, I'd be much more wary about rolling out Dynamic up and down. You can probably still do it on targeted long tail keywords and be just fine. But doing that across phrase matches like a broad shotgun strategy is probably not going to be nearly as effective. But we have a very long conversion window. Half of our customers buy within the first month and half buy between months one and six or so. There are some that are a super long tail, but the majority of them fall in there. So I think giving Amazon the ability to downbid when they're early in that conversion cycle and the ability to upbid when their metrics align and they believe they're at the end of that conversion cycle works well for really high AOV products. So I can attest to that. And if you're high AOV, I would definitely test this as soon as you can, because it can be transformational in the account. Or it may blow up and you learn something and cross something off the list, so. Speaker 2: And last question from me and then I'll let Andrew jump in, but do you, placements, you touch those or do you leave them flat? Speaker 1: Yeah, so my placement philosophy is pretty much just trying to balance the three placements against each other. So for instance, pretty much the targeting inside of a campaign is going to apply to all those three placements. So you want that to apply apples to apples, in my opinion. So if Top of Search is performing it, 20% ACoS and product pages at 15% and rest of search at 10%, then you'd want to buff up the rest of search placements to try to reach that 20%. And you try to buff up the product pages to get from 15 to 20%. And in keeping those placements balanced, the targeting applies to those equally, and you're not kind of favoring one placement over another. I think that's one methodology you can use for placement settings, but there's also the idea that you could pretty much optimize around a specific placement that's performing better than the others. And do so in a way that kind of minimizes your impression share for those other placements. And that may work well for some companies as well. But the way we do it is basically just trying to balance those placements against each other so the targeting applies equally to all three buckets. Speaker 3: You're certainly convincing me to at least test this out on a couple categories and products that we have a lot more margin, a lot more flexibility, we're willing to be aggressive in. And it's not something I've necessarily Let's talk a little bit about branding. I know that you do a lot of brand defense for the companies that you work with. Do you also use dynamic up and down for brand defense? Do you see brand defense as like a viable tactic and kind of closing the loop at the end of that funnel for people who kind of have already made it through that purchase journey? And just any thoughts you have around brand defense as a whole? Speaker 1: I think that probably as a brand, we're overpaying for brand defense, especially with how long our conversion window is and our impression share is Way up there, usually, you know, first or second for most of our relevant most of our relevant search terms. So I we pretty much ran a test a couple months ago to remove branded keywords altogether on the Google side of things and noticed that we really didn't lose too much. Like those branded keywords are just not all that incremental for us. And if people get to the point of searching Spend & Ton, they're very likely to convert and buy a Spend & Ton at that point. I know maybe you're losing 5 or 6% of those away, but the amount that we were spending was way more than that 5 or 6% would represent. We're planning on testing that on the Amazon side here soon. The caveat there is that I think we get a lot of benefit from the product pages side of it for appearing on our own products. And I think our ad quality score against our own products is significantly better than competitors. So the amount of impressions and clicks we're getting at that CPC is really attractive when you look at the rest of the market as a whole and what we can buy clicks for. So in that sense, I think appearing as much as possible is nice. And I always say, I think a big benefit and what a lot of brands should go for on Amazon is digital real estate. You want to maximize the eyeballs that are out there in the ecosystem. That's why we probably spend more than most companies in sponsored display as well, close to 30% of our budget. Some of that is because the CPCs are so much lower. And the amount of impressions we can get is incredible. And the impressions are free, technically. So until that click happens, which is a sign that there is some level of interest from that customer, they're somewhere. In your funnel, whether it's consideration, awareness, intent, or purchase, they're somewhere along that funnel. And if you're getting CPCs at $1.15 and there's a ton of volume there for you to capture, that may not be the worst bet when you're paying $3.50 top of search CPCs. I definitely think maximizing digital real estate and capturing as much free impressions as possible on the marketplace where 60% of online searches start is a great way to maximize your search term impression share and really grow your brand. Speaker 2: Now, Brett, what about the rule-based bidding? Have you tested that where you just tell Amazon what your target ROAS is and then They've got full brain. Speaker 1: I haven't played with that just yet on Amazon. We're just now experimenting with the new business placements and business-only placements. That's been really interesting for the Celestial mattresses. Speaker 2: Business-only placements? I'm not sure. Speaker 1: Yeah, those were just rolled out I think last day or two. Speaker 2: I've seen Amazon business placements, but are you saying on the business tab you see two things, business and business only, or what do you mean business only? Speaker 1: Yes, so previously there were business placements that you could buff, but now they just released the ability to do business only. So that's definitely going to be interesting for us. Speaker 2: I love that you're using the gamer terminology buff. Speaker 1: That's a good word. Speaker 2: Yeah, it is. It's a great word. And then what about, there's also audiences. You can increase bids for audiences. Andrew and I should probably do a full other episode on this after we test it. We haven't tested it yet, but I'm looking at like one of my accounts. You can build custom audiences in AMC and then mess around with them. But Amazon has some prebuilt audiences. The one that to me looks most interesting is high likelihood to purchase based on shopping activity. And there's a little note there. That says, this includes people whose recent product interactions indicate a high likelihood to purchase your advertised product. To me, that sounds pretty good. Speaker 1: Sounds like dynamic up and down. Speaker 2: Yeah, so you do dynamic up and down and then switch on for high likelihood to convert. And then you're just going to And we're here to talk to you about how you can double your sales, triple your sales there, right? Cause then you have both of those working together. Speaker 1: That or a triple spend. Yeah. But we have been, yeah, we use Target ROAS on the Google side of things and our performance max campaigns and our shopping campaigns and those are performing pretty well. So I think Google's got that dialed in pretty well. That works much better than manual CPC on that side of things for us. And then, yeah, And that's something else I just wanted quickly to mention to people. I think some of the lowest hanging fruit is just make sure that every ASIN that you have gets over to Google Merchant Center and create a performance max campaign for it. And then also on the meta side of it, make sure there's an advanced plus shopping campaign running for that thing. It's not called advanced plus sales campaign. It just changed it a couple of weeks ago. But do that and try Target ROAS and just allocate a small amount of budget to that. I think you'll find some awesome incremental gains from doing that and it won't take you long at all. Unknown Speaker: It's eight o'clock. What was that? Speaker 1: That was my, it's eight o'clock, uh, British lady telling me it's time for pushups. We've been doing hourly pushups at work. Uh, it's, it's been good. Speaker 2: You're still doing that? We'll watch you. Speaker 3: Nice dude. You've been keeping that up for like, what, a year now? Your chest is probably swole. Speaker 1: No, I stopped for a little bit in there, but you know, I've been, uh, been picking it back up. I'm going to try to get back out to the jujitsu mat soon here. Speaker 3: Come on up to Nashville. I'll strangle you. Oh, goodness. Yeah, you guys touched on audiences. That's a really good I've been testing that a little just recently got access to it on one of my bigger accounts. And, you know, for us, we're really focused on just going after net new customers. And some of those audiences were building an AMC just trying to, you get a lot longer look back windows to negate past purchasers and things like that. I'm curious, Brett, have you have you used anything within AMC currently to kind of map that longer attribution or that longer sales cycle and, you know, And if so, what types of insights and stuff have you messed around with within AMC? I think last time we talked, you hadn't really had a chance to dig into it yet, but have you gotten into that yet? Speaker 1: Still there. AMC and DSP are on the roadmap, but we have not started it yet. Honestly, we've been trying to optimize on the off Amazon side. And I think we're at a point now where we've offloaded a lot of that work to VAs and are ready to kind of get back to the strategic implementation of things like AMC and DSP and lean into that more. So the only audience targeting we're doing really is just on the sponsored display side of things. So we see good results there. I think our path to purchase, you know, we're highly indexed on the display side and through audiences. So I think our natural next progression is to get AMC and DSP to test. I'll get back to you on that one. Speaker 3: Yeah, for sure. And I mean, I've talked to Amazon reps about this because they announced that anybody, even just running sponsored products could create an AMC instance. But I've tried with a couple of different accounts and Amazon's making it very difficult to actually get that set up without having DSP running. So, yeah, I imagine having DSP set up would be advantageous for getting access. Speaker 2: Well, I think we're kind of running up on time here, so we're going to have to rapid-fire through these last few questions, Brett, so you're just going to have to talk really fast and drop us all the alpha. What's your favorite Sponsored Display audience to target? Speaker 1: Probably just in market for your exact category. So in market adjustable basis. Speaker 2: Nice. What do you think about overseas VAs? Speaker 1: Absolutely incredible. This is something we've been leaning into recently. So we go through onlinejobs.ph as a website that you can go and check out all sorts of VAs. It's crazy. They have like They have all sorts of characters traits on there and then they even have their IQ listed and then their hourly rate. It's actually insane. There's really, really smart people working for us now that are on $5 an hour and armed with chat. Speaker 2: You have to hire the highest IQ and the lowest IQ and then see if the IQs are accurate. Speaker 1: These are the split tests, yeah. Speaker 2: Yeah. Speaker 1: You know, a lot of the manual TVS work that we were having, you know, people in house do, we've just been radically off sourcing it. And it really just, it's recording a limb video really quick and walking them through everything. And when they're armed with ChatGPT, I mean, these people have perfect English out of the Philippines. And their attitudes are awesome. And they're also, the time zones are flip-flop. So while we're sleeping, they're working and your business turns into a 24-7 business. And the cost is just crazy. So I think right now you have to be able to be really nimble as a business and able to pivot quickly. And there's a lot of risk in onboarding people over here and putting in a lot of time and effort and trying to get them up to speed. And you can just offload that work with one link video and $5 an hour and they're more than happy to be paid that and then it's like a respectable salary over there. I think it's a win-win situation for both. So, you know, not being too heavy on the SG&A side of things over here, staying nimble, staying conservative with your costs. I think this all ties together and is a really good idea in the environment that we're in right now. It's a crazy macro environment. I definitely lean into those and we're doing it more and more and we've been really happy with that. Speaker 3: What do you think of Amazon agencies as a whole? Speaker 1: I think they can be really good as long as you don't get what a lot of agencies do, which is upfront attention for the first few months and then they pretty much just hop on the call with you every two weeks or every month and just say, hey, here are your numbers, which you already know. So if you're like working closely with them and constantly getting feedback and you're leaning into their expertise and the main value that they provide, which is deploying tactics across a multitude of accounts and basically, you know, seeing all these different AOVs, seeing these different categories and hey, this strategy is working across these categories, across these price points. Like this is probably something that you should test in your account and ship. That can be dramatically helpful. So I think that's the benefit of agencies is they see a lot and they see a huge volume of spend that they're deploying. And leaning into that expertise can be really good. You just had to find the right one. And, you know, we've been through all sorts of agencies all the time. And, you know, I think The big thing is just make sure that you're constantly learning and iterating and that they're invested in your success as well. And maybe coming up with a comp structure in which they're aligned is probably a good thing to do as well. Speaker 2: Amazon PPC AI software, like bidding AI stuff. Speaker 1: I think it can be good. I mean, I don't know. Anything Rufus related or Amazon AI I'm kind of tentative on. I was watching your guys episode talking about like the AI image generation stuff. And yeah, I think Amazon is like falling dramatically short of other LLMs. Speaker 2: What about third party AIs? Speaker 1: Is it really AI or is it just some algorithm that some dude wrote up? I think that trying to use a generalized algo pitched as machine learning can be really dangerous if it's applied to a bunch of accounts en masse. That's kind of like what I love about what you guys are doing is you have a lot more controls and weights that you can kind of input and your look back period is something you can optimize around. I think you need to be very careful if it's just pure, hey, turn this on in your account. Tell us your target ACoS and we're going to magically hit this every time. I mean, that sort of thing has hurt in the past for sure. But I think if you have a much more targeted approach that's, you know, you kind of are publishing your algorithm and it's completely transparent and you're able to input your weights and kind of input your context of your own business into those changes and then review it before it actually happens like you can with AdLabs. I think that's much safer than just hitting the go button. Speaker 2: Final topic, tariffs. Your thoughts. Speaker 3: Oof. Speaker 2: Also, if you're able to share with some people some of the specifics, like you guys I think got hit kind of the worst, if you're able to share vaguely kind of why. Speaker 1: Yeah, we actually were really lucky on the adjustable bedside of things. So, you know, Trump in his first term implemented Section 232, which was 25% tariff and I think Biden removed that. And then back earlier this year, it was in early February, I believe, reinstated. So Section 232 is a 25% tariff on steel and aluminum products because adjustable beds, ours are made of steel. Just the steel component of our adjustable beds was tariffed. And that actually, you know, initially we were like, oh shit, this sucks. But fortunately the reciprocal tariffs, which, you know, have really been hitting the headlines and at a 10% baseline for most countries. And then, you know, as much as like 145% for China, that did not apply to our products at all because the section 232 ones were, were exempt. So if you're hit by that 25% steel and aluminum tariff, you don't have to pay the, the reciprocal ones that are live now. So, I think it's an insane amount of opportunity, especially for smaller sellers to capture a lot of market share. It's much more difficult for these huge companies with massive catalogs to pivot and work their way around these tariffs. So I think this is a huge moment of opportunity. These latest reciprocal tariffs, I think April 9th, anything on the water after April 9th, is now subject to those. And they basically have to pay within two weeks of it arriving at the port. So for most people, this is just a cash flow disaster if you were sourcing out of China. And even that 10% for other countries is huge. That's not necessarily something that anybody budgeted for in the beginning of this year. Believe it or not ocean freight out of china since april ninth is down sixty percent. Well you know consumers are really gonna be feeling that until. You know probably second week of May. We're recording this on May 7th so I assume a week from now or two weeks from now you're gonna actually start seeing this hitting the shelves and you know price points going up and the amount of available goods it's probably gonna decrease dramatically. I assume this is gonna be Kind of like a COVID 2.0 supply shock. So I think this is a crazy, crazy amount of volatility to introduce into the e-commerce markets. But if you're a nimble team and you can pivot quickly and you can think on your toes, I think this is massive opportunity. And when you couple that with what AI and robotics is about to bring to the markets, I mean, we're about to experience in the coming decades more human progress than I think we've experienced in the past 100,000 years. That's crazy to say, but it is going to just compound and hockey stick and we're going to enter an exponential age. And I think, you know, being nimble, staying light and being able to make decisions extremely quickly as a company is imperative. And if you can't do that, I think you're going to be disrupted and you're going to die very quickly. So best of luck. Speaker 2: So you need AI robotics, adjustable bed frames. Speaker 1: It'll happen eventually. Speaker 2: It knows when you want to get out of bed and it sits you up. It's connected to your brain chip. Speaker 1: Coming soon. I think a lot of people are bearish and nervous about this, but I think American Ingenuity will We'll come through and as the great Warren Buffett says, never bet against America. And I think that rings true now and will continue to ring true. I think you have the brightest tech minds here. Really what I think we need to fix is the raw material supply chain. Because even with all these tariffs and everything, you still can't source raw materials here at, you know, anywhere near overseas pricing. So I expect that to dramatically shift as robotics takes hold. And I think proximity to the end consumer and one day shipping is going to become the new norm. But really, the raw materials need to be sorted out for us to see a true American manufacturing boom, and then maybe some additional incentives from the government. We're early. There's so much opportunity and a really exciting time. Speaker 3: Boom. Speaker 2: Well, thanks again, Brett, for coming on. It's always good to see you. And we'll see you again at episode 150. So we'll catch you in a year. Speaker 1: Yes, sir. I do want to say super proud of you guys for hitting 100 and the growth your company is experiencing. You guys are awesome and you deserve it and keep working hard. See you at 150. All right. See you there. Speaker 2: Peace out guys. We'll see you next time on That Amazon Ads Podcast.