August 6, 2024 • 42 mins
Neil Twa, CEO and co-founder of Voltage Holdings joined us in this riveting episode of Planet Amazon. Discover how Neil transitioned from product flipping to mastering Amazon's demand capture, utilizing his expertise from prestigious roles at Sprint and IBM. Neil's journey offers invaluable lessons for aspiring and seasoned sellers alike, detailing how to build and scale profitable brands in the ever-evolving e-commerce landscape.
Neil discusses the major shift from the A9 algorithm engine to the new COSMO system and what it means for sellers. He explains why ensuring accurate product image interpretation by AI is more crucial than ever to avoid de-ranking, and get ahead of the curve with strategies to adapt to Amazon's continuous data collection and split testing efforts aimed at improving conversion rates.
In addition, Neil breaks down the essentials, from omni-channel capabilities to the importance of trademarks and patents. He provides strategic insights on maximizing growth, leveraging multi-channel selling, and even the powerful synergy between TikTok Shop and Amazon. Plus, he gives us a sneak peek into his latest book, "Almost Automated Income with FBA," which provides a comprehensive playbook for achieving success with minimal effort. Whether you're new to the game or a seasoned pro, this episode is packed with actionable strategies to elevate your Amazon business.
For more information about Voltage, please visit https://www.voltagedm.com/
Want to chat with us about this podcast? Send us a text message here
The Planet Amazon podcast, brought to you by Phelps United, addresses all things Amazon and other eCommerce marketplaces. In each episode, we talk with Brands, Agencies, and Sellers about Amazon news, new features, policies, brand policies, logistics, marketing, issues, and challenges, among other topics.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Announcement (00:00):
Welcome to the Planet Amazon podcast with Adam
Shaffer, where we explore theworld of Amazon and other
e-commerce marketplaces.
Join us as we delve into thelatest strategies and tactics
for successful selling on theworld's largest online
marketplace.
Adam Shaffer (00:18):
Hello everybody, I'm Adam Shaffer and welcome to
Planet Amazon, where we talkabout all things Amazon and
e-commerce.
Today, I want to welcome to thepodcast Neil Twa.
Neil Twa is the CEO co-founderof Voltage Holdings.
Voltage Holdings is a companyspecializing in launching,
consulting, selling andacquiring brands, with a focus
(00:40):
on e-commerce channels,especially Amazon, FBA and
multi-channel.
Neil has more than 15 years ofexperience selling private label
products on Amazon, which isawesome, and Neil, together with
Reed Larson I'm assuming that'shis partner recently published
a book and it's got a little bitof a long title, so I'm not
(01:00):
going to shorten it because it'san awesome title.
It's called Almost AutomatedIncome with FBA Build a
Profitable Lifestyle DrivenAmazon Business Exit for
Millions, even Without AnyE-Commerce Experience.
Now I definitely want to knowabout this, so welcome, neil.
Hello, how?
Neil Twa (01:19):
are you doing today, Al?
Adam Shaffer (01:20):
Love that title man.
Neil Twa (01:21):
It is a little bit of a long title now that you say
that.
Adam Shaffer (01:25):
I was going to shorten it, but I just couldn't
do it.
Neil Twa (01:27):
Almost automated income with FBA.
Adam Shaffer (01:29):
There you go, I'll shorten it for you there you go
, but great job in publishing agreat new book.
And before we get into the bookwe'll talk about it a little
bit.
But first and foremost we wantto know a little bit more about
(01:52):
you and how you got into 15years of experience on Amazon.
Neil Twa (01:54):
Tell us about Voltage Holdings, you and your journey.
Yeah Well, I mean, voltage is acombination of both need in the
market as well as intent, witha specific outcome for us, which
is the acquisition of companies.
The merging and buying ofbrands is kind of really the
intent of what's called VoltageHoldings.
We have a Voltage marketing andconsultancy that does Amazon
growth.
It's really focused at kind ofthe higher end, the top
percentage of sellers that wantto really grow and go fast.
(02:16):
You know half a million or morea month, and so it's really
focused on what are thestrategies and tactics that
allow that to occur?
Personally, just, I've been inthe business for 17 plus years,
both offline and onlinebusinesses, developing companies
in the high tech, info,marketing and mobile space, and
then Amazon is technicallyaround 12 years, just to be
technical, but that's you know.
(02:41):
I feel like I'm an old goat inthe years of Amazon these days
because so much has changed sofast and so dramatic in the way
you do business and takeadvantage of the opportunity for
that channel.
But of course, we have expanded, as you said, into additional
channels and created holistice-commerce companies.
So I think it's important tomake sure we understand the
value of that opportunity,especially when it comes to
acquiring the companies or beingacquired and what that looks
like.
So I don't know if I'manswering your question or how
(03:03):
much more detail?
Adam Shaffer (03:04):
No, you're hitting it, man.
You're good, and so I guess thething is, you started out
selling.
Is that what you were doingbefore you were buying?
Neil Twa (03:13):
Yeah, flipping products for profit on Amazon.
It was actually an opportunityto go in and learn the ecosystem
initially because I wasn't evensure really what it was about.
I was doing mobile marketingonline and media marketing for
for companies doing Legion andCPI installs for mobile
applications all across theworld.
In fact we were doing it inspreadsheet uploads because
(03:34):
there was no systems yet to dothat.
There was no usable.
You know, people complain aboutFacebook ads and all the
complexities of that.
It's like we didn't have any ofthat.
We the complexities of that,it's like we didn't have any of
that.
We literally wrote it all outon a sheet and we gave it to the
media guy and he uploaded it tothe system.
Then we waited for two days tosee how close we got.
So it was a very different,different world, you know, in
that buying media space back inthe day.
but got very good at itunderstood the market,
(03:55):
understood the desire ofpeople's willingness to buy
certain things at certain timesand got very good at that.
On the demand creation side Idiscovered Amazon, which now I
know very much is demand captureand we can talk about kind of
the differences when people arethinking this through.
But I was just flipping someproducts just to see how the
system would work.
I knew about FBA.
Adam Shaffer (04:13):
Were these private label or were these?
Neil Twa (04:15):
These were actually just yeah, well, there was
somebody else's private label.
I was just arbitraginginitially, just to see how the
whole system worked.
I was trying to discover whatthe Amazon FBA was.
I knew they had bought theircompany around 2008, 2009.
The logistics company theyrebranded as FBA, which is a
wholly separate company.
It's the sixth largestlogistics company in the world
now.
But that was just how do youplay with that system?
(04:37):
So we would grab products downfrom sites we saw discounts and
we would pull off a hundredunits of that and send it over
to FBA and just kind of flip itand see how that system would
work.
And then we discovered and justin simple terms, I grew up in
the digital world.
I was actually part of the firstteam that launched the first
mobile phone at Sprint andwatched that entire company blow
up.
From the 5,000th employee itbecame 80,000 employees in five
(05:00):
years.
So I got to watch the mobileindustry from the inside out at
the top.
And then IBM picked me up and Iwent on an almost five-year
adventure with them, which wasabout knowledge management
systems, ai learning systems andartificial intelligence and
human machine language learning,and we built systems that a lot
of the interwebs use nowadaysand the frameworks that came out
(05:29):
of the Armonk Labs.
There they do 18,000 patents,so we were involved in a lot of
new creation.
Long story short, when Istarted playing on Amazon and
flipping products, I discoveredit was a large language learning
model, a system that we hadcontrolled in the IBM days, and
discovered that it was, you know, running very similar learning
systems and the way that it wasadapting titles and images and
bullet points and graphics andranking products within the
search engine of Amazon, andsuddenly realized this was very
familiar territory technology.
(05:50):
And so then I started to launchprivate label brands and
because I'd figured out overtime how the algorithmic system
of Amazon was working, becauseit was very similar to code that
we had written and programs wewere using in the IBM days they
borrowed some of that andcreated their A9 engine off of
it.
So at that point it was veryeasy to rank products on Amazon.
I set up a launch process thathad been used and standardized.
(06:13):
I started to teach people thatin around 2014.
It kind of got out.
A lot of companies sort ofdecided to use that algorithmic
process to turn into rankingengines and all kinds of stuff
that many people have heard oftoday.
Search and buy came out of thatand all those initial
implementations of that in theearly days and, you know,
discovered it was a giantranking search engine that
needed certain triggers atcertain times, it needed to
(06:35):
learn certain things.
It wanted to know the power ofthe.
You know, this particular setof features on the page, from
the image to the title et ceteraall had different ranking
criteria and over years I kindof studied and analyzed and
documented that process until alaunch and then we basically
would hit page one for everyproduct we launched.
Adam Shaffer (06:51):
That's awesome man we were going to actually
possibly handle it.
Neil Twa (06:55):
We were pulling capital from everywhere.
Adam Shaffer (06:57):
That's awesome.
So you know the secret sauce ofthe algorithm.
Neil Twa (07:00):
It hasn't changed my man and it is about to right.
We'll talk about that maybe ina minute, with Cosmo coming,
which I've studied a lot becauseit is moving into the large
language model side, and theartificial intelligence piece
which is going to dramaticallychange from a nine to what will
become Cosmo's Amazon.
Adam Shaffer (07:16):
So stay with that, because I want to know more
about that.
So tell me more about that.
Neil Twa (07:20):
Yeah, cosmo basically is their answer to the AI
question in regards to searchengines and in regards to
Amazon's way that it rankskeywords, looks at keyword and
semantics, the way it works atlatent semantics within the
actual keywords themselves.
At this point it has beenprogrammed and looked at in the
(07:40):
A9 engine to be keyword drivenbased on volumes of searches and
demand of volumes, which is inmany ways kind of simplistic.
But Cosmo has now basically beensucking down all of Amazon's
data and you can imagine it's alot of data for so many years
that it has now just beenunleashed about three months ago
and they actually published awhite paper and I put this on my
(08:02):
sub stack for anybody who wantsto check it out.
But basically they publishedtheir white paper and the
findings of that white paperwere that they had changed the
way that the engine was lookingat keyword relevant data to the
listings and using all thesignals of things from the
social, the web, the television,twitch and prime media and all
this stuff that didn't determinethe intent of the buyer, but
(08:24):
not on their keywords but basedon their intent.
And because it had so much data, it was able to basically
increase the conversions 0.7%,which doesn't sound like a lot,
but that translated into like$4.9 billion in additional
revenue on only a 10% test ofthe data.
So they tested it on about 10%of Amazon's daily sales and it
generated about 4.9 billion inadditional revenue.
(08:45):
So they proved that on about10% of Amazon's daily sales and
it generated about $4.9 billionin additional revenue.
Adam Shaffer (08:47):
So they proved that it was incremental.
Neil Twa (08:49):
They proved that it was hugely incremental and they
had enough data to statisticallyjustify what's coming next.
So, as they're rolling, certainchanges are occurring right now
with AI constructing thesummary sections above the
reviews.
They're changing the listingsand giving you 14 days to agree
(09:09):
to the AI changing and if youdon't, they will automatically
change it.
So you got to be payingattention to this, because
they'll notify you in yourdashboard.
Hey, we made these changes.
You need to approve ordisapprove them.
If you don't, you're going toget screwed.
What are they telling you?
What's the important part ofthat?
They're basically saying you'renot optimized for the coming AI
change.
You need to pay attention tothat.
Don't just carte blanche accepttheir changes.
Go understand why are theyrequesting it?
(09:31):
One thing you should know isthey're reading the images with
AI and if your image OK, no,photoshopped image you've been
getting away with for a whilethat has elements inside of it
because somebody compiled it andit's not a real photo, the AI
can't read all of that notcorrectly, and if it dissects
that image incorrectly, that ishow it's going to rank you.
(09:53):
So if your images today do notproperly get described by AI,
then what's going to happen isyou're going to get deranked
when this Cosmo goes livebecause it's going to not just
look at your listing and itsintent.
It's no longer going to look atthe value of the keyword
structure that's in the currentlisting.
It's going to look at otherelements and one of them is the
images, so the image.
Adam Shaffer (10:13):
it's not like a tag.
Neil Twa (10:14):
They're actually looking at the image, they're
literally like you could goright now and go to say, claude,
upload a photo and ask it todescribe what it sees.
If its output is not describingyour product correctly, cosmo
is not going to describe yourproduct correctly, okay.
So if you have a guy fishing ona dock and your fishing pole is
your product, but it describesthe boat, you just missed it.
Adam Shaffer (10:38):
What's awesome is like.
I play in the Amazon worldevery day and I had no idea that
it was this close.
I thought it was years away.
Neil Twa (10:49):
No, you're saying, they're actually.
Adam Shaffer (10:51):
So you're saying they're actually been in 10%.
Maybe they've been using it.
Oh yeah, they're going to rollthis out and it's going to
happen.
Neil Twa (10:59):
They're not going to announce it.
They're not going to do it.
It's on a Monday.
Cosmo rolls out.
It's not how Amazon ever doesany of their changes.
They constantly test anditerate.
There are times of year we knowit's occurring like any
pre-holiday set for the firsttwo months prior to Black Friday
.
They will be doing all thesesplit tests and changes.
You'll see it across the board.
It happens every year.
Some are more dramatic thanothers.
(11:21):
Last year was a little bit moredramatic with some of the
changes they were looking tomake prior to going into the
holiday season.
Some people were positively andsome people were negatively
impacted by those changes asthey split test different things
, including, you know, how manyunits were being sold or not
being sold and a number of otherfactors.
They were just, you know,displaying as they did those
tests and then they locked it inbefore the holiday period and,
(11:41):
of course, people who werealigned to that did very well
last year in the holiday.
So this is going to occur again.
It's going to slowly.
It's already rolling outcomponents of the system itself
as you see them appearing in theautomations and the corrections
of the listings and summariesthat are occurring, as they're
slowly rolling components ofthis whole thing into place.
When Cosmo goes fully live,it's going to be pretty dramatic
(12:02):
for some people.
Adam Shaffer (12:03):
From my perspective.
I mean, it's obviously you gotto stay current and you got to
understand that it's going down,like you said, but Amazon
wouldn't be doing it if it's notgoing to increase conversion
rate, because that's good forthem.
So they just want more sales.
I mean, how could they not?
And if you could benefit fromthem, that's what you should be
doing.
Neil Twa (12:20):
You should be preparing yourself to benefit
from it, because it literally isgoing to change from A9.
You know, everybody talks aboutA10.
There's no A10.
There's only A9.
Adam Shaffer (12:30):
A9 and Cosmo.
Neil Twa (12:32):
There's A9 and all the little bots of compliance
they've put in around the A9engine to deal with fake reviews
and all the nonsense that'soccurring, but the core engine
itself has always been the sameIf it ain't broke, don't fix it
right.
But they haven't had enoughdata to do that.
And now that they've got enoughdata right, they are making,
you know, assertions with thedata that are becoming more and
(12:56):
more specific as they refine howthey're going to change this
data right.
It's looking at feedback.
It's looking at other sources.
It's looking at yourprogramming from your prime and
Twitch streams and your freebievideos and looking and saying,
okay, if your intent is to watcha lot of outdoor movies, then
you must be interested inoutdoors, so we're going to
present you with a lot ofoutdoor commercials.
Adam Shaffer (13:14):
It's awesome and scary Yep.
Neil Twa (13:16):
It's awesome and scary .
Think minority report right,it's going to go to a level at
some point here soon where youknow it's tracking you around
the internet because it nowknows that you are, you know, a
person who lives in the countryand loves to hunt, and so
everything it's showing you ishunting equipment.
So this is where it's goingright and the intent to buy is,
of course I'm watching a showabout hunting on freebie.
(13:38):
And then the commercials areall aligned.
Right now they are not.
Right now they're displayadvertising.
Right.
They will show up and you'll bewatching a hunting commercial,
and then it's like a lady with acleaning supply product and
you're like well, I'm a dudewatching a hunting show.
I have no interest in thatproduct?
Well, what if every commercialduring your prime hunting was
all about the differentcomponents of hunting and the
outdoor tents and the deer sprayand whatever else?
Adam Shaffer (14:02):
But it's targeted to you Is the woman that maybe
is not interested in that maybeseeing a different commercial.
Neil Twa (14:08):
That is correct, yeah, so Cosmo is also going to all
of that around inside the systemtoo, which means you will not
be able to define keywords bothon the flat file and the front
end of Amazon.
The keywords are going to bedefined by the engine itself
from the content, language andcopy and the images and other
factors we don't know all aboutjust yet, but a lot of it was
disclosed in the white paperthat are going to determine your
(14:30):
rankability.
So what does this mean?
Amazon itself knows that 40% ofall of its sales come from SKUs
that are three years or less inage.
Okay, so it's following thesocial commerce trend right,
which TikTok and other systemsare all about demand creation.
Okay, so it's following thesocial commerce trend right,
which TikTok and other systemsare all about demand creation.
Okay, virality, demand creation.
The products and viral videosthat come out create demand and
(14:53):
interest.
It's a very powerful system ofsocial commerce that's being
created.
Amazon has not adapted itcorrectly, but Cosmo is going to
help them do that, because nowit's going to look at all those
signals and all the differentsocial signals and it's going to
say well, if this product istwo to three years older, it's
probably more in demand socially.
It's more in demand becauseit's newer, it's more in demand
because it's following trends,and products that have been
(15:16):
doing well for say, four or fiveyears are going to degrade.
The idea that just because youhad 10 or 20,000 reviews now
makes you the gorilla on thehill and the old goat because
you've been there longer.
Cosmo is basically going toinvert that and change this all
around.
You're going to have to adapt.
You can't just sit on itanymore.
Adam Shaffer (15:33):
Well, I'm glad we talked about this, although this
wasn't what I thought we weregoing to talk about, but I am.
Neil Twa (15:37):
You asked the question .
Adam Shaffer (15:38):
Yeah, I know, but I mean this is great stuff.
I mean everybody needs tounderstand this.
Neil Twa (15:42):
that listens to the show.
They do Absolutely this is huge.
Adam Shaffer (15:45):
So thank you, and you need to keep us all updated
as this thing happens, becauseyou seem to be really following
it.
Neil Twa (15:52):
I love the technology.
It's what I did.
I love the components of it.
I love the systems.
I love the automations.
I love where it's going.
In terms of that, it's scary,as mentioned in other areas, I
hope compliance or oversightwill keep control of some of
that.
Adam Shaffer (16:09):
But there's huge opportunity coming for a lot of
people but there's a lot of paincoming from those who are not
paying attention.
You got to pay attention, Imean, and that's the essence of
Amazon in general.
To be an expert in Amazon meansyou got to live it every single
day.
Neil Twa (16:17):
Amazon is like the ocean you can't turn your back
on it.
It's got riptides you can turnyour back on it you'll be sucked
under Yep.
Adam Shaffer (16:24):
And, like you said , they don't announce this stuff
.
You got to figure it out, andthat's what the community is
good for too, because, whetherwe're competitors or not,
everybody it's such a big oceanthat people help each other out.
Everybody likes to helpeverybody figure these things
out, whether it's a badge ofhonor or just because people are
good citizens, and so that'sone of the reasons I enjoy
(16:46):
Amazon so much.
But, turning to the thing thatI wanted to also find out about
today from you is how doesVoltage go about picking
companies that they either wantto invest in or acquire?
What's the process that you gothrough?
And again, that was originallywhat I wanted to talk about.
So, thank you for the otherstuff, but give us more, because
(17:08):
so many people invest theirlives in trying to develop
products and sell them on Amazon.
How do they cash out?
Neil Twa (17:16):
So here's in simple terms, here's what I'm kind of
looking for in the market, andlet me preface this by saying
that Voltage had a portfoliodivision.
We raised almost $100 millionin capital to become an
aggregator.
That's part of the reason youeven know the name is that we
came to the market to do all theexperience we had and bring it
into a system and a process andan aggregator.
But we chose to stop thatprocess in 2021 in November and
(17:40):
pulled the emergency brake on itonce we realized that, as all
funds were coming andcommitments were being made and
we were about to go startacquiring companies and had
built a pipeline, the buying ofthe companies had gone 30 to 50%
above market and we were nolonger willing to buy at that.
So we put everything on hold,okay.
So, as it turns out, that was asmart thing to do, because now
we are a few years forward andthe capitulation, consolidation,
(18:01):
bankruptcies and all the crapthat I was afraid was going to
happen in this verybattle-confronted area of
product and type and businessstructure basically just wasn't
being operated correctly.
Let's call it what it is.
So, as we are operators whobuild and grow and scale, we
wanted to see that operationalcontrol and we just didn't see
it, so we paused.
Now fast forward.
The market is now right-sized.
(18:23):
It's actually a buying marketopportunity and we can talk
about that.
So we're going to be acquiringmore companies.
We're going under LOI, withfive this year in the process.
What did they look like?
How do we choose them?
They must have at least threeyears of sales history and be
more than just an Amazon FBAchannel only.
They must be multi-omni-channel.
No more can you just sell anAmazon FBA business for 3 to 5X.
(18:46):
You can sell an omni-channel atthat, even if your base is a
million in EBITDA.
So if it's a million in EBITDA,or preferably seller
discretionary earnings, sde,then we're looking for that
company.
1 to 3 million or up.
Adam Shaffer (19:00):
A million in EBITDA is your starting point.
And omni-channel.
Is Amazon and Shopify or Amazonand what?
Neil Twa (19:08):
Amazon and any other channel that makes up at least
5% currently, or in the processof making up 5% to 10% of any
other market share of demandcreation and capture of client
data somewhere else Could be QVC, could be retail, wholesale,
could be a Shopify, a TikTokshop, could be an eBay, an Etsy,
it could be all at Walmart.
It could be a whole combinationof those that are out there,
(19:30):
that are new, that are gatheringand pulling in customers and
data, even if they haven'tmatured yet.
Okay, If they're in the matureDTC side of the world but they
have not opened or reallyexploited the Amazon demand
capture aspect, which that'swhat Amazon is now.
If nobody knows what that means, I can explain that in my words
.
But if they've not done that,we will see that as an
(19:53):
opportunity.
We won't buy on futures but wewill buy on trailing 12 months
and notice that they, if theydon't have an Amazon channel or
they really haven't captured itcorrectly, we know that's a
weakness that we can exploitvery quickly in the growth of
that company in the first three,six, nine, 12 months.
We can go in very quickly andexploit that opportunity for
demand capture.
(20:13):
If they're just a pure DTC atthis point, which could be a
Shopify, TikTok or a websitethat does not have or a large
presence on Amazon all right orestablished a very small
presence on Amazon.
So we can go both directions,if that makes sense, Okay.
And so they need to be at leastthree to five years old minimum
.
Why, as I mentioned earlier,Amazon has 40% of all of its
(20:34):
revenues are from SKUs that are3% or less.
Right, Three years or less,excuse me, Three years.
So that means that SKUs in yearone roughly 5%.
By the time they get to yeartwo, they'll make up 20% of all
of Amazon revenues and then 40%by year three.
So it's a maturation cycle thatwe're looking at a minimum,
which is why they need to bethree to five years old minimum.
And with those omni channelsthey are poised for growth.
(20:56):
With the halo effect of thatomni channel presence, it's
really easy to exploit thosechannels into much larger growth
, and there's always a largercapital partner that's setting
somewhere on the sidelines.
We can't deploy in a familyoffice less than 25 million, and
there's corporate offices thatare like, hey, Neil, we can't
deploy less than 100 million,right?
So don't bother us until thosebusinesses reach that place
where they're going to beacquired at that level.
(21:17):
And then there's, of course, PEgroups at lower amounts in the
three to five to 10 millionrange that we want to acquire.
So again, historicalomni-channel private label only.
No drop shipping, wholesalearbitrage, any of that kind of
nonsense.
Wholesaling, if it is B2B withthe products and private label
going the other direction, okay,when they're wholesaling out
the channels, retail or otherchannels, the private label
(21:37):
brand itself, If they don't haveany trademarks.
We got to put trademarks on Ifyou don't have a trademark, guys
you're just not a seriousseller.
You can't even get brandregistry, so you got to have
those components in place.
If you're DTC, obviously yougot to have some component of
that or we'll have to be able toget it to open the Amazon
channel.
You don't need to have patents.
(21:59):
But patents are no longer justa luxury in my mind anymore.
I am a patent holder in othertechnologies, but on Amazon, for
product-based products thathave the capability of design
patents, you should absolutelygo after that.
You can even just get thenotice of allowance.
Just says I have a highpercentage of probability that I
will be awarded the design ofpatent.
If you can get a design patent,a utility patent excuse me, a
(22:22):
utility patent then go for it.
Why?
Because if you own that in theproduct statement on Amazon,
you're basically in the mostdefensible position you will
ever be in Any other brand orproduct in the marketplace that
is currently operating in aproduct type that is very close
to yours and you win the brandutility patent.
You can go right back to themand say you owe us a royalty fee
(22:44):
or stop selling and you canbasically dominate the market
okay, do you care about thecategory, the product's in?
I do.
I don't want.
I had a supplement company along time ago.
Do not want any supplements.
So nothing on the skin or inthe mouth, okay, don't want to
mess with that.
Don't need the three letteragencies that come with it.
Don't want to mess with that.
Don't need the three letteragencies that come with it.
(23:05):
Don't want any of that hard Iguess.
I know there's opportunity.
Yes, I know it can be big, butI know that there's some very
unethical dirty business goingon in there and if you think you
can compete on a few hundredthousand dollars, you're wrong.
You need to go to market with ahigh six figures, seven figures
, or you're simply not going tomake the market share by that.
So no interest.
We don't really do electronics,which is, you know it sounds
(23:26):
weird, but we will do electric,but we won't do electronics, and
so electric is a hugeopportunity, with a higher
barrier of entry, to get out ofwhat I call Amazon's mosh pit,
which is typically anythingbelow $50 in my mind.
So we sell 50 to 200 plus inretail price points of products
should be aligned in that insideof the business we're
purchasing, or be able to getaligned and elevated to that as
(23:47):
a part of the process ofevaluation when we go through
the LOI.
Am I answering your question?
Is this good?
Adam Shaffer (23:52):
Yeah, no, you're definitely on the right track.
That's what I want to know.
Neil Twa (23:55):
Yep, they must have that elevated in their brand and
retail price.
Do?
Adam Shaffer (23:58):
you care if it's a subscribe product or not.
Neil Twa (24:00):
Absolutely.
Subscriptions of subscribe andsave increase the valuation of
the company, especially in thelast 12 months, as they're
increasing.
If you show an increasedsubscribe and save over the last
12 months, we're going toconsider that as part of the
valuation.
It is a recurring revenue.
If anybody understands whatthat means, it's the MRR inside
of Amazon.
So if you get subscribe andsave products in there, that's
(24:22):
great.
The more you get, the moreyou're acquiring.
It's even better.
If you take that over to theSaaS world of online Shopify et
cetera and you can subscribe andsave over there with any kind
of subscription business thatyou can create and are acquiring
subscribers and subscriptionsin a front end channel with
demand creation, like Shopify etcetera, then it's going to
(24:43):
increase the valuations quite alot.
Let me just explain what thatlooks like.
If your shop on Amazon and yourshop on Shopify both have
subscribe and savers andsubscriptions on one side and
those are continuing to grow asa basis of the whole company,
what will happen is thevaluation can potentially go as
large as 5 to 15x.
So we can actually seeevaluations for omni-channel
(25:06):
subscription businesses onAmazon and off Amazon combined
reach almost SaaS level now interms of their acquisition right
.
So if you are in a business ofbuilding, please keep that in
mind, because it is a largething that we and others are
looking to acquire.
Is that continuous subscriptionbusiness, not just the single
sales of a physical product, butthe multi-sales,
(25:28):
multi-diversity of sales andadditional sales of higher
valuations within the CLTV ofthe products, as well as
subscribers coming back monthly,bimonthly, six months, 12
months, et cetera.
Adam Shaffer (25:40):
Cool.
That is great news and I thinkfor anybody listening they
should really take a look atwhat they're doing.
Is it a surprise product?
Is it 50 and above?
I imagine weight is important.
You don't want to be shippingboat anchors if you could avoid
it, even though it's FDA.
So you know we try to becareful about that.
Although there's opportunitythere, you know it's not the
(26:02):
easiest thing to manage aboutthat, although there's
opportunity there.
Neil Twa (26:05):
It's not the easiest thing to manage.
Well, there's opportunity inthe profit.
It just changes yourexpectations of whether you're
locked in vanity metrics of howmany units I move every day and
how much revenue I'm making.
Where I'm locked into theprofits and the ability to move
multiple product lines, even ifonly one sells 100 units a month
, I'll get 10 of them and expandout into that market until I
own it with the higherprofitability.
Adam Shaffer (26:27):
And I think the Shopify or Shopify Plus channel
is great.
It does play kind of nicelywith Amazon if you want to use
it as your 3PL and you cancontrol your own destiny a
little bit more.
It's just there's a cost tothat too.
Neil Twa (26:41):
There is a cost, of course, with demand creation,
which is why I prefer to take myAmazon sellers to TikTok shops
first.
The halo effect creates almost30% spillover to Amazon.
Okay, right now.
So any brand that we're liftingup on TikTok shop is being
lifted up on Amazon almost threeto five X larger on Amazon and
even products that are closelyaligned on Amazon that we don't
(27:03):
have on TikTok shop, we'll see.
We'll see spillover too.
So if a product over on TikTokshop is going really well and
it's not ours, we're actuallypicking up and capturing the
demand of that product on Amazonbecause we're outranking the
competitor whose product was onTikTok shop.
So if you're an Amazon seller,you should really be looking,
because it's a search engine.
Now it is on TikTok.
That's changed so you canactually get into the search
(27:24):
results for your brand.
If you go to tiktok and searchfor your brand and find it and
you're on amazon but not ontiktok shop, there's an
indicator you need to get ontiktok shop okay.
Adam Shaffer (27:35):
Does voltage help brands?
Neil Twa (27:37):
we do we're an omni-channel brand management uh
growth company.
So while we may start people onAmazon or help them grow and
maintain their business to ahigher level within that channel
, they should, at a predefinedtime within their numbers, open
another channel.
And we have a very good expertwho's had a million person
account and ran hundreds ofthousands of millions of dollars
(27:59):
through that TikTok shop whohelps?
define open and move them intoOmni to capture both sides of
the house.
There is way more demandcapture between those two
platforms and their searchresults and the affinity of the
buyer type than there actuallyis on Shopify.
And that sounds sort of strange, but it is again people moving
in flow on a platform lookingfor products and already have
(28:21):
purchased something on Amazonand if they don't trust TikTok
shops, they purchased somethingon Amazon.
If they don't trust TikTokshops, they end up on Amazon and
so there's this huge crossoverbetween those two platforms
organically that you don't getthrough the Shopify.
Adam Shaffer (28:31):
I mean, and that's what you get from Amazon.
You get trust, right.
So that's why conversion ratesare usually a bit better and
people feel confident, so it'snot a bad place, even for your
own Shopify site.
There's still probably betterconversion rates on Amazon, as
long as somebody else isn'tEvery time we ran large amounts
of traffic through Shopifystores for ourselves and our
clients.
Neil Twa (28:51):
It ends up spilling back at least 20% over to Amazon
.
So you will see that haloeffect occur dramatically.
And if the account goes down orcertain ad sets go down over
here you'll notice it on theAmazon side because that demand
goes down, account goes down orcertain ad sets go down over
here you'll notice it on theAmazon side because that demand
goes down, which just tells meagain, the Amazon, being the
organic engine it is, has arankability inside of it to this
day.
For anybody who's listening,that is much, much more valuable
(29:14):
than any offsite Amazon.
Things you can do and Iconstantly preach this because
people miss it and they go talkabout well, all the things you
need to do off Amazon to getAmazon to love you more, and
that's actually wrong.
The effect is, if Amazondoesn't love your product more
than the other products in thesystem, no offsite Amazon
marketing engine is going toallow it to continue to grow
(29:36):
organically.
Once this stops over here orsomething fails, you'll watch it
fail backwards on Amazon.
So you need to be able tounderstand the system of Amazon
first, organically, get it intoa maturation with your business
so it absolutely loves you, andthen watch what happens when you
do off Amazon marketing.
Adam Shaffer (29:51):
It takes a lot less effort to watch on Amazon
marketing go really fast.
That's great advice, but Ithink there's a ton of brands
doing the Google back to Amazonright now, doing off Amazon to
Amazon.
Neil Twa (30:02):
They're doing a lot of things to try to manipulate
Amazon to love them, when inactuality they're not
organically ranking well enoughagainst market share competition
on Amazon.
Yet here are the factors thatplay into that, because it has
to do with the exit, it has todo with our looking at the ACOS
and TA cost of the businessesthat we're going to acquire,
because if they got some aspectof that wrong and have done it
(30:24):
long enough in the Amazon system, they will be penalized.
Even if your solar healthaccount is all green, there are
other metrics Amazon'sconsidering and they will be
penalizing you.
And then the question becomeshow hard is it for us to regain
position and market share thathad been lost by its historical
data setting there for six and12 months in a negative position
?
Right, Because then you have toretrain the engine and get it
(30:45):
to believe you're back up here,and that can take a long time
with the engine, especially ifthe data has historically shown
that it's not in that position.
If you are not the higher USPpercentage above the market
share competitors, you will notovertake their position in time
If you are not inventoried abovethe top 10 percent of market
share currently in your, and youshould all know what a node is
(31:08):
on Amazon.
Then you will not overtaketheir position because the
algorithm simply won't allow you.
It won't allow you to stock out.
You will stock out the business.
Therefore, it will throttle youand you'll never manipulate it
into getting you up and keepingyou in that top market share by
any off Amazon activities.
You will simply not make it.
(31:28):
So how do we overcome thatburden Pro tip you got to put in
more inventory.
You have to put in inventorylevels that check in on AWD or
Amazon FBA, above the inventoryor at the inventory levels of
your top market share.
Competitors in your space orAmazon will simply not let you
sell more.
Adam Shaffer (31:46):
That is awesome, man.
Wow, my head's going to explode.
This is some great, greatinformation.
So thanks, neil.
This is awesome.
I'm going to change the topicand let's talk about the book.
I know we don't like to plugtoo much, but I think it's a
fascinating idea.
And so you created this book,and I'm just going to use the
(32:07):
short name, almost AutomatedIncome with FBA, and it promises
a kind of a profitable, easyI'm ad-libbing a little bit, but
easy lifestyle.
Can you just explain more?
Easier, okay, easier, so canyou?
Neil Twa (32:21):
explain Easier than a lot of things I see people doing
now.
Adam Shaffer (32:25):
So can you tell us about why the book and what
we're going to all learn byreviewing or reading the book?
Neil Twa (32:32):
So, in simple terms, I featured 15 different experts
that came on my podcast in theyear prior to that volume.
We're compiling a new volumefrom podcast experts that will
come out next year.
So it was 15 people who I knowresonate and understand the same
principles of business that wetrain in different areas of
business Focus, from finance toproduct or research to
development, to image andgraphics, split testing.
(32:54):
Folks like PickFu and stuff arein there and interviewing them
in the different areas of theirexpertise and unit session
percentage and conversion ratesand all the other things that
are very important to this model.
Each of them align with myproduct launch playbook that we
developed in Voltage, called the5x5 Playbook, and so, as I went
through the podcast and as Idigested the information and I
had a conversation with them,some of them are extremely good
(33:16):
at what they do and so wefeatured them in the book.
So each chapter and the 15experts are featured in there,
along with our playbookstrategies and our client
results and case studies thatfocus on the outcome of those
things, because we're good at alot of things and some things
we're not experts in.
Everything Nobody can be and sothat book then became the
culmination, and in the processof that, the goal was to
(33:38):
understand what the strategy andtactics should be and how to
create systems of automationusing not just FBA but their
other systems, as well assoftware and technologies and
warehouses and infrastructuresystems that are all around us.
That do free us up to bemulti-seven, eight-figure
operators with virtual peoplewho aren't even employees and no
(33:58):
warehouses and operations tohold us accountable to, because
it's all managed outside.
So that leaves us up to do 15to 20 hours a week of work
managing a multi-seveneight-figure business right, and
so that is the systems andprocesses and the people that
are inside of that were allcompiled in the book to
basically give you that strategy, along with some of the tactics
not just for myself but otherexperts that work this every day
(34:21):
, week and month and compiled itinto a book together, and
everybody helped promote it,because they were all part of
the process.
Adam Shaffer (34:26):
Is it focused more on people that are just
entering the market, or is itfocused on those later stage
ones that you like to look at?
It's actually for both.
Neil Twa (34:35):
It's for both.
So we covered the initial fivesteps of this, first being you
know what the heck do I sell,which is the process of
conditioning and learning,product research and identifying
good products at price pointsand certain metrics you should
pay attention to, and not allthe vanity metrics that most
people end up in what I callAmazon's mosh pit.
So it will help you define aproduct base that is in demand,
(34:55):
that is elevated above that andhas the profitability
requirements to allow you toboth profit yourself as well as
build those systems and getthose people in to support you
while still making a goodbusiness.
Build those systems and getthose people in to support you
while still making a goodbusiness.
Right, and it also teaches younot to run by gut feel.
So we have something.
We go through the numbersprocess of what that should
actually look like, includingall of the fees and other things
(35:17):
that are stacked in thatprocess.
So we take you through that.
So we also talk about thebranding and what it means to
brand versus to sell products.
Selling products is what so manypeople are focused on with
Amazon, but I don't actuallysell products, adam.
I sell listings to an AI engineand once you change your
strategy and understand thedifference, you understand as an
Amazon seller, you are a directresponse marketer okay, that
(35:39):
happens to sell physicalproducts through an automation
engine.
Once you understand your placein that, okay, the invention is
not the key here, innovation isthe key.
And you understand that you'rea demand creation innovator of
product and awareness andperception of value, then the
products will fall in line withthat.
Now, of course, we're not goingto sell me to products and we
(36:02):
talk about that in the book.
How to create a grand brandedproduct that's in demand is not
complicated.
People overthink that andoverengineer it and spend way
too much time lamenting over thepossibilities of the product
but never answering the questionwhat the heck do I sell?
And sales fixes everything.
So if you're going tounderstand the market and demand
, you will fall in line with theproducts.
(36:22):
Just don't create me-toooff-the-shelf products.
Create good products.
That's not too hard.
You know what a good product is.
You're a consumer, so don'tcreate a crappy product just for
profitable reasons.
It will backfire on you.
In this system.
You will not grow a great brand.
Adam Shaffer (36:36):
So it's not too late.
It's not too late.
It's not too late to start aproduct.
It's never too late.
No, no, no.
Neil Twa (36:48):
Because if you're an existing seller, even doing six
figures or so, like DanielLeBlanc came in and Daniel and
David LeBlanc two people, sorry,I just slammed their names
together Then you willunderstand what it means to
create the strategy and go backout of the weeds and understand
what you should be doing daily,weekly and monthly in your
strategy so that the tacticsbecome more important.
They become more revenuegenerating activities.
(37:12):
A lot of people are stillfocused on growth hacks and all
this short-term stuff andthey're actually damaging their
opportunity, and those are forexisting sellers.
I work with many sellers whoare stuck in the process of
trying to launch another productand failing at a few tests
because they never actuallylearned how to run the business
first.
And so we teach you and talkabout that in the book how to
run the business first so thatthe products and the solutions
to the brand fall in place.
And it does take that two threeyear timeframe.
(37:35):
I will not ever tell anybodydifferent.
This is not a two to threemonth opportunity.
This is a two to three yearopportunity.
Amazon will mature you in theproduct process, as I mentioned
earlier.
When you do it the right way,your opportunities will really
explode in year two and threewith the work you do right in
year one, and that's a lot ofwhat we talk about for new and
existing sellers who need toturn around.
(37:55):
David came in for six months andran another thing, a course
program, et cetera.
He lost $200,000 and was aboutto shut the whole thing down,
took a chance on us and I saidgive me five months to show you
what we can do differently.
And he listened and he wastrainable and he was willing to
be coached and in five months wetook him to 200,000 in profits.
He just emailed me this weekendit's the 4th of July weekend,
as the time is going on heemailed me he's going to do a
(38:16):
second podcast soon, so it'll beon my podcast, the High Voltage
Business Builders Podcast, parttwo of his story, and he is now
half a million a month as ofJune.
Okay, so he completely changedhis strategy and understanding,
is now buying back his time bypulling in resources at
operational level, and he willbe.
He's on vacation in Italy whenhe wrote me and he's super
excited to get that built up.
(38:37):
So that's an existing sellersthat need to change and
understand their strategy.
And if you think you can'tlearn anything new, then maybe
you haven't been payingattention today, because there's
a lot.
Adam Shaffer (38:44):
Most people don't understand growing scale on
amazon like I said, I wish I metyou a few years ago.
You would have saved my butt.
But uh, you know, at least Imet you now and I'm learning.
Neil Twa (38:52):
This is great no such thing as a coincidence, my
friend.
There's all in good time yeah,yes.
Adam Shaffer (38:58):
So with that we're gonna start wrapping things up
and um other than you should goout and read or buy your book.
What, what, what words ofwisdom, what's your final
thoughts to the audience today?
Um, either motivational or um,anything.
Neil Twa (39:12):
Well, both.
I guess motivation is fun forthose who are paying attention,
but, again, if you're notmotivated by yourself, nothing
I'm saying or we'll help you dowill ever motivate you beyond
your own drive and desire.
Right?
Because we are literally attimes victims, uh, to the goals
we set or the systems that weput in place, and sometimes we
get locked into those and wethink there's not a better thing
or a better way to do it.
And there's always somebody ata bigger dog status Trust me,
(39:34):
there's bigger dogs than me onthis who go and can do it at
levels you don't necessarilycomprehend yet.
So, really, I always wantpeople to remember that your
opportunity begins at the end ofyour excuses.
If your excuse is there's notenough market on Amazon, you're
wrong.
There's 8,600 units a minute.
8,600 units a minute.
Your market is on Amazon atscale.
You're just not there yet.
(39:57):
Well, neil, there's not enoughmoney?
Well, money is transitory.
It moves around.
It creates inflation.
It moves like a river.
It changes directions, itchanges paths.
There's areas it's moving awayfrom right now, like real estate
and others, but guess what?
It's moving into business,e-commerce and technology, ai
and those systems, and if you'renot moving with it, you're
going to be victimized by it.
So don't be a victim.
Take action on the thingsyou're doing.
And, by the way, you can't gainthe knowledge without action.
(40:19):
I know so many people thinkthat they're just going to learn
that one trick that's going toturn everything around, that
stupid growth hack, thatwhatever.
But you don't get to the wisdomwithout the knowledge, and the
knowledge does not come withoutexecution and experience.
You must execute and experience, fail through the process of
learning and earning as you grow, and the knowledge will come.
And from knowledge will be thewisdom to do it the right way
and understand what you didwrong, and then, hopefully,
(40:44):
you're willing to learn from it,because we all make mistakes
and we want to learn.
So the last thing here is justto remember that we are all on
the path that we are on.
We got to stop comparingourselves to the social media
gurus and commerce world and allthis other crap and start
saying I'm right, where I needto be and where do I need to go
next.
Shut off all that other noise,put your head down, like Jim
Collins says, and good to greatand become a hedgehog If you
really want to get successful inthree to five years and make a
(41:06):
life changing opportunity withthis business model.
It will require you to do that.
If you're willing to do that, Iwill tell you.
The rewards are huge.
My four girls and I live herewith my wife and we have a 50
acre homestead.
We homeschool everybody.
We do really what I want to do.
If I don't want to have anymore calls today, then I'll just
move all my calls because I can, and if you want a lifestyle
that leads that, that isultimately where, in 17 years,
(41:27):
it's taken me to get to thissuccess.
I help people do it in twoyears, so I think that's a
pretty good trade-off but don'tgive up.
It's a huge opportunity outthere, even if it may not feel
like it for you right now, it isthere.
Trust me, it is huge and mostpeople don't necessarily see it
at times.
Maybe today you saw a littledifferent viewpoint and maybe
that helps you out.
Adam Shaffer (41:47):
Neil, I mean first of all, thank you.
I am motivated from your finalthoughts, so this is the best
final thoughts I've ever had ona podcast.
Neil Twa (41:55):
So thank you for bringing that to us.
My pleasure.
I'm honored.
Adam Shaffer (41:58):
Thank you, and if people do want to get in touch
with you, how can they do it?
Neil Twa (42:02):
All over social media, the S.
My last name is Twa, it isthree letters.
You can Google me and find meon the interwebs, everywhere you
meet in whatever socialplatform is comfortable to you,
or go to my website at VoltageDM.
That'sVoltageDigitalMarketingDMcom.
Check it out, see what you see,check out the presentations of
free trainings and workshops andif anything resonates, just
feel free to hit me up directly.
There's no sales team, it'sjust me for qualifying those who
(42:25):
we work with and if it's aninterest, then have a
conversation.
That is awesome.
Adam Shaffer (42:29):
Well, Neil, you rock and I really, really
appreciate it and we allappreciate you joining us today.
Thanks for the talk, the peptalk and the knowledge Thanks
for having me on, Adam.
Neil Twa (42:39):
It's been an honor.
I appreciate it.
Thank you.
Announcement (42:42):
Thank you for watching another episode of the
Planet Amazon podcast, where wetalk all things Amazon.
If you want to learn about howto accelerate your sales on
Amazon, visit Phelps United'swebsite at phelpsunitedcom.
Welcome to the Planet Amazon podcast with Adam
Shaffer, where we explore theworld of Amazon and other
e-commerce marketplaces.
Join us as we delve into thelatest strategies and tactics
for successful selling on theworld's largest online
marketplace.
Adam Shaffer (00:18):
Hello everybody, I'm Adam Shaffer and welcome to
Planet Amazon, where we talkabout all things Amazon and
e-commerce.
Today, I want to welcome to thepodcast Neil Twa.
Neil Twa is the CEO co-founderof Voltage Holdings.
Voltage Holdings is a companyspecializing in launching,
consulting, selling andacquiring brands, with a focus
(00:40):
on e-commerce channels,especially Amazon, FBA and
multi-channel.
Neil has more than 15 years ofexperience selling private label
products on Amazon, which isawesome, and Neil, together with
Reed Larson I'm assuming that'shis partner recently published
a book and it's got a little bitof a long title, so I'm not
(01:00):
going to shorten it because it'san awesome title.
It's called Almost AutomatedIncome with FBA Build a
Profitable Lifestyle DrivenAmazon Business Exit for
Millions, even Without AnyE-Commerce Experience.
Now I definitely want to knowabout this, so welcome, neil.
Hello, how?
Neil Twa (01:19):
are you doing today, Al?
Adam Shaffer (01:20):
Love that title man.
Neil Twa (01:21):
It is a little bit of a long title now that you say
that.
Adam Shaffer (01:25):
I was going to shorten it, but I just couldn't
do it.
Neil Twa (01:27):
Almost automated income with FBA.
Adam Shaffer (01:29):
There you go, I'll shorten it for you there you go
, but great job in publishing agreat new book.
And before we get into the bookwe'll talk about it a little
bit.
But first and foremost we wantto know a little bit more about
(01:52):
you and how you got into 15years of experience on Amazon.
Neil Twa (01:54):
Tell us about Voltage Holdings, you and your journey.
Yeah Well, I mean, voltage is acombination of both need in the
market as well as intent, witha specific outcome for us, which
is the acquisition of companies.
The merging and buying ofbrands is kind of really the
intent of what's called VoltageHoldings.
We have a Voltage marketing andconsultancy that does Amazon
growth.
It's really focused at kind ofthe higher end, the top
percentage of sellers that wantto really grow and go fast.
(02:16):
You know half a million or morea month, and so it's really
focused on what are thestrategies and tactics that
allow that to occur?
Personally, just, I've been inthe business for 17 plus years,
both offline and onlinebusinesses, developing companies
in the high tech, info,marketing and mobile space, and
then Amazon is technicallyaround 12 years, just to be
technical, but that's you know.
(02:41):
I feel like I'm an old goat inthe years of Amazon these days
because so much has changed sofast and so dramatic in the way
you do business and takeadvantage of the opportunity for
that channel.
But of course, we have expanded, as you said, into additional
channels and created holistice-commerce companies.
So I think it's important tomake sure we understand the
value of that opportunity,especially when it comes to
acquiring the companies or beingacquired and what that looks
like.
So I don't know if I'manswering your question or how
(03:03):
much more detail?
Adam Shaffer (03:04):
No, you're hitting it, man.
You're good, and so I guess thething is, you started out
selling.
Is that what you were doingbefore you were buying?
Neil Twa (03:13):
Yeah, flipping products for profit on Amazon.
It was actually an opportunityto go in and learn the ecosystem
initially because I wasn't evensure really what it was about.
I was doing mobile marketingonline and media marketing for
for companies doing Legion andCPI installs for mobile
applications all across theworld.
In fact we were doing it inspreadsheet uploads because
(03:34):
there was no systems yet to dothat.
There was no usable.
You know, people complain aboutFacebook ads and all the
complexities of that.
It's like we didn't have any ofthat.
We the complexities of that,it's like we didn't have any of
that.
We literally wrote it all outon a sheet and we gave it to the
media guy and he uploaded it tothe system.
Then we waited for two days tosee how close we got.
So it was a very different,different world, you know, in
that buying media space back inthe day.
but got very good at itunderstood the market,
(03:55):
understood the desire ofpeople's willingness to buy
certain things at certain timesand got very good at that.
On the demand creation side Idiscovered Amazon, which now I
know very much is demand captureand we can talk about kind of
the differences when people arethinking this through.
But I was just flipping someproducts just to see how the
system would work.
I knew about FBA.
Adam Shaffer (04:13):
Were these private label or were these?
Neil Twa (04:15):
These were actually just yeah, well, there was
somebody else's private label.
I was just arbitraginginitially, just to see how the
whole system worked.
I was trying to discover whatthe Amazon FBA was.
I knew they had bought theircompany around 2008, 2009.
The logistics company theyrebranded as FBA, which is a
wholly separate company.
It's the sixth largestlogistics company in the world
now.
But that was just how do youplay with that system?
(04:37):
So we would grab products downfrom sites we saw discounts and
we would pull off a hundredunits of that and send it over
to FBA and just kind of flip itand see how that system would
work.
And then we discovered and justin simple terms, I grew up in
the digital world.
I was actually part of the firstteam that launched the first
mobile phone at Sprint andwatched that entire company blow
up.
From the 5,000th employee itbecame 80,000 employees in five
(05:00):
years.
So I got to watch the mobileindustry from the inside out at
the top.
And then IBM picked me up and Iwent on an almost five-year
adventure with them, which wasabout knowledge management
systems, ai learning systems andartificial intelligence and
human machine language learning,and we built systems that a lot
of the interwebs use nowadaysand the frameworks that came out
(05:29):
of the Armonk Labs.
There they do 18,000 patents,so we were involved in a lot of
new creation.
Long story short, when Istarted playing on Amazon and
flipping products, I discoveredit was a large language learning
model, a system that we hadcontrolled in the IBM days, and
discovered that it was, you know, running very similar learning
systems and the way that it wasadapting titles and images and
bullet points and graphics andranking products within the
search engine of Amazon, andsuddenly realized this was very
familiar territory technology.
(05:50):
And so then I started to launchprivate label brands and
because I'd figured out overtime how the algorithmic system
of Amazon was working, becauseit was very similar to code that
we had written and programs wewere using in the IBM days they
borrowed some of that andcreated their A9 engine off of
it.
So at that point it was veryeasy to rank products on Amazon.
I set up a launch process thathad been used and standardized.
(06:13):
I started to teach people thatin around 2014.
It kind of got out.
A lot of companies sort ofdecided to use that algorithmic
process to turn into rankingengines and all kinds of stuff
that many people have heard oftoday.
Search and buy came out of thatand all those initial
implementations of that in theearly days and, you know,
discovered it was a giantranking search engine that
needed certain triggers atcertain times, it needed to
(06:35):
learn certain things.
It wanted to know the power ofthe.
You know, this particular setof features on the page, from
the image to the title et ceteraall had different ranking
criteria and over years I kindof studied and analyzed and
documented that process until alaunch and then we basically
would hit page one for everyproduct we launched.
Adam Shaffer (06:51):
That's awesome man we were going to actually
possibly handle it.
Neil Twa (06:55):
We were pulling capital from everywhere.
Adam Shaffer (06:57):
That's awesome.
So you know the secret sauce ofthe algorithm.
Neil Twa (07:00):
It hasn't changed my man and it is about to right.
We'll talk about that maybe ina minute, with Cosmo coming,
which I've studied a lot becauseit is moving into the large
language model side, and theartificial intelligence piece
which is going to dramaticallychange from a nine to what will
become Cosmo's Amazon.
Adam Shaffer (07:16):
So stay with that, because I want to know more
about that.
So tell me more about that.
Neil Twa (07:20):
Yeah, cosmo basically is their answer to the AI
question in regards to searchengines and in regards to
Amazon's way that it rankskeywords, looks at keyword and
semantics, the way it works atlatent semantics within the
actual keywords themselves.
At this point it has beenprogrammed and looked at in the
(07:40):
A9 engine to be keyword drivenbased on volumes of searches and
demand of volumes, which is inmany ways kind of simplistic.
But Cosmo has now basically beensucking down all of Amazon's
data and you can imagine it's alot of data for so many years
that it has now just beenunleashed about three months ago
and they actually published awhite paper and I put this on my
(08:02):
sub stack for anybody who wantsto check it out.
But basically they publishedtheir white paper and the
findings of that white paperwere that they had changed the
way that the engine was lookingat keyword relevant data to the
listings and using all thesignals of things from the
social, the web, the television,twitch and prime media and all
this stuff that didn't determinethe intent of the buyer, but
(08:24):
not on their keywords but basedon their intent.
And because it had so much data, it was able to basically
increase the conversions 0.7%,which doesn't sound like a lot,
but that translated into like$4.9 billion in additional
revenue on only a 10% test ofthe data.
So they tested it on about 10%of Amazon's daily sales and it
generated about 4.9 billion inadditional revenue.
(08:45):
So they proved that on about10% of Amazon's daily sales and
it generated about $4.9 billionin additional revenue.
Adam Shaffer (08:47):
So they proved that it was incremental.
Neil Twa (08:49):
They proved that it was hugely incremental and they
had enough data to statisticallyjustify what's coming next.
So, as they're rolling, certainchanges are occurring right now
with AI constructing thesummary sections above the
reviews.
They're changing the listingsand giving you 14 days to agree
(09:09):
to the AI changing and if youdon't, they will automatically
change it.
So you got to be payingattention to this, because
they'll notify you in yourdashboard.
Hey, we made these changes.
You need to approve ordisapprove them.
If you don't, you're going toget screwed.
What are they telling you?
What's the important part ofthat?
They're basically saying you'renot optimized for the coming AI
change.
You need to pay attention tothat.
Don't just carte blanche accepttheir changes.
Go understand why are theyrequesting it?
(09:31):
One thing you should know isthey're reading the images with
AI and if your image OK, no,photoshopped image you've been
getting away with for a whilethat has elements inside of it
because somebody compiled it andit's not a real photo, the AI
can't read all of that notcorrectly, and if it dissects
that image incorrectly, that ishow it's going to rank you.
(09:53):
So if your images today do notproperly get described by AI,
then what's going to happen isyou're going to get deranked
when this Cosmo goes livebecause it's going to not just
look at your listing and itsintent.
It's no longer going to look atthe value of the keyword
structure that's in the currentlisting.
It's going to look at otherelements and one of them is the
images, so the image.
Adam Shaffer (10:13):
it's not like a tag.
Neil Twa (10:14):
They're actually looking at the image, they're
literally like you could goright now and go to say, claude,
upload a photo and ask it todescribe what it sees.
If its output is not describingyour product correctly, cosmo
is not going to describe yourproduct correctly, okay.
So if you have a guy fishing ona dock and your fishing pole is
your product, but it describesthe boat, you just missed it.
Adam Shaffer (10:38):
What's awesome is like.
I play in the Amazon worldevery day and I had no idea that
it was this close.
I thought it was years away.
Neil Twa (10:49):
No, you're saying, they're actually.
Adam Shaffer (10:51):
So you're saying they're actually been in 10%.
Maybe they've been using it.
Oh yeah, they're going to rollthis out and it's going to
happen.
Neil Twa (10:59):
They're not going to announce it.
They're not going to do it.
It's on a Monday.
Cosmo rolls out.
It's not how Amazon ever doesany of their changes.
They constantly test anditerate.
There are times of year we knowit's occurring like any
pre-holiday set for the firsttwo months prior to Black Friday
.
They will be doing all thesesplit tests and changes.
You'll see it across the board.
It happens every year.
Some are more dramatic thanothers.
(11:21):
Last year was a little bit moredramatic with some of the
changes they were looking tomake prior to going into the
holiday season.
Some people were positively andsome people were negatively
impacted by those changes asthey split test different things
, including, you know, how manyunits were being sold or not
being sold and a number of otherfactors.
They were just, you know,displaying as they did those
tests and then they locked it inbefore the holiday period and,
(11:41):
of course, people who werealigned to that did very well
last year in the holiday.
So this is going to occur again.
It's going to slowly.
It's already rolling outcomponents of the system itself
as you see them appearing in theautomations and the corrections
of the listings and summariesthat are occurring, as they're
slowly rolling components ofthis whole thing into place.
When Cosmo goes fully live,it's going to be pretty dramatic
(12:02):
for some people.
Adam Shaffer (12:03):
From my perspective.
I mean, it's obviously you gotto stay current and you got to
understand that it's going down,like you said, but Amazon
wouldn't be doing it if it's notgoing to increase conversion
rate, because that's good forthem.
So they just want more sales.
I mean, how could they not?
And if you could benefit fromthem, that's what you should be
doing.
Neil Twa (12:20):
You should be preparing yourself to benefit
from it, because it literally isgoing to change from A9.
You know, everybody talks aboutA10.
There's no A10.
There's only A9.
Adam Shaffer (12:30):
A9 and Cosmo.
Neil Twa (12:32):
There's A9 and all the little bots of compliance
they've put in around the A9engine to deal with fake reviews
and all the nonsense that'soccurring, but the core engine
itself has always been the sameIf it ain't broke, don't fix it
right.
But they haven't had enoughdata to do that.
And now that they've got enoughdata right, they are making,
you know, assertions with thedata that are becoming more and
(12:56):
more specific as they refine howthey're going to change this
data right.
It's looking at feedback.
It's looking at other sources.
It's looking at yourprogramming from your prime and
Twitch streams and your freebievideos and looking and saying,
okay, if your intent is to watcha lot of outdoor movies, then
you must be interested inoutdoors, so we're going to
present you with a lot ofoutdoor commercials.
Adam Shaffer (13:14):
It's awesome and scary Yep.
Neil Twa (13:16):
It's awesome and scary .
Think minority report right,it's going to go to a level at
some point here soon where youknow it's tracking you around
the internet because it nowknows that you are, you know, a
person who lives in the countryand loves to hunt, and so
everything it's showing you ishunting equipment.
So this is where it's goingright and the intent to buy is,
of course I'm watching a showabout hunting on freebie.
(13:38):
And then the commercials areall aligned.
Right now they are not.
Right now they're displayadvertising.
Right.
They will show up and you'll bewatching a hunting commercial,
and then it's like a lady with acleaning supply product and
you're like well, I'm a dudewatching a hunting show.
I have no interest in thatproduct?
Well, what if every commercialduring your prime hunting was
all about the differentcomponents of hunting and the
outdoor tents and the deer sprayand whatever else?
Adam Shaffer (14:02):
But it's targeted to you Is the woman that maybe
is not interested in that maybeseeing a different commercial.
Neil Twa (14:08):
That is correct, yeah, so Cosmo is also going to all
of that around inside the systemtoo, which means you will not
be able to define keywords bothon the flat file and the front
end of Amazon.
The keywords are going to bedefined by the engine itself
from the content, language andcopy and the images and other
factors we don't know all aboutjust yet, but a lot of it was
disclosed in the white paperthat are going to determine your
(14:30):
rankability.
So what does this mean?
Amazon itself knows that 40% ofall of its sales come from SKUs
that are three years or less inage.
Okay, so it's following thesocial commerce trend right,
which TikTok and other systemsare all about demand creation.
Okay, so it's following thesocial commerce trend right,
which TikTok and other systemsare all about demand creation.
Okay, virality, demand creation.
The products and viral videosthat come out create demand and
(14:53):
interest.
It's a very powerful system ofsocial commerce that's being
created.
Amazon has not adapted itcorrectly, but Cosmo is going to
help them do that, because nowit's going to look at all those
signals and all the differentsocial signals and it's going to
say well, if this product istwo to three years older, it's
probably more in demand socially.
It's more in demand becauseit's newer, it's more in demand
because it's following trends,and products that have been
(15:16):
doing well for say, four or fiveyears are going to degrade.
The idea that just because youhad 10 or 20,000 reviews now
makes you the gorilla on thehill and the old goat because
you've been there longer.
Cosmo is basically going toinvert that and change this all
around.
You're going to have to adapt.
You can't just sit on itanymore.
Adam Shaffer (15:33):
Well, I'm glad we talked about this, although this
wasn't what I thought we weregoing to talk about, but I am.
Neil Twa (15:37):
You asked the question .
Adam Shaffer (15:38):
Yeah, I know, but I mean this is great stuff.
I mean everybody needs tounderstand this.
Neil Twa (15:42):
that listens to the show.
They do Absolutely this is huge.
Adam Shaffer (15:45):
So thank you, and you need to keep us all updated
as this thing happens, becauseyou seem to be really following
it.
Neil Twa (15:52):
I love the technology.
It's what I did.
I love the components of it.
I love the systems.
I love the automations.
I love where it's going.
In terms of that, it's scary,as mentioned in other areas, I
hope compliance or oversightwill keep control of some of
that.
Adam Shaffer (16:09):
But there's huge opportunity coming for a lot of
people but there's a lot of paincoming from those who are not
paying attention.
You got to pay attention, Imean, and that's the essence of
Amazon in general.
To be an expert in Amazon meansyou got to live it every single
day.
Neil Twa (16:17):
Amazon is like the ocean you can't turn your back
on it.
It's got riptides you can turnyour back on it you'll be sucked
under Yep.
Adam Shaffer (16:24):
And, like you said , they don't announce this stuff
.
You got to figure it out, andthat's what the community is
good for too, because, whetherwe're competitors or not,
everybody it's such a big oceanthat people help each other out.
Everybody likes to helpeverybody figure these things
out, whether it's a badge ofhonor or just because people are
good citizens, and so that'sone of the reasons I enjoy
(16:46):
Amazon so much.
But, turning to the thing thatI wanted to also find out about
today from you is how doesVoltage go about picking
companies that they either wantto invest in or acquire?
What's the process that you gothrough?
And again, that was originallywhat I wanted to talk about.
So, thank you for the otherstuff, but give us more, because
(17:08):
so many people invest theirlives in trying to develop
products and sell them on Amazon.
How do they cash out?
Neil Twa (17:16):
So here's in simple terms, here's what I'm kind of
looking for in the market, andlet me preface this by saying
that Voltage had a portfoliodivision.
We raised almost $100 millionin capital to become an
aggregator.
That's part of the reason youeven know the name is that we
came to the market to do all theexperience we had and bring it
into a system and a process andan aggregator.
But we chose to stop thatprocess in 2021 in November and
(17:40):
pulled the emergency brake on itonce we realized that, as all
funds were coming andcommitments were being made and
we were about to go startacquiring companies and had
built a pipeline, the buying ofthe companies had gone 30 to 50%
above market and we were nolonger willing to buy at that.
So we put everything on hold,okay.
So, as it turns out, that was asmart thing to do, because now
we are a few years forward andthe capitulation, consolidation,
(18:01):
bankruptcies and all the crapthat I was afraid was going to
happen in this verybattle-confronted area of
product and type and businessstructure basically just wasn't
being operated correctly.
Let's call it what it is.
So, as we are operators whobuild and grow and scale, we
wanted to see that operationalcontrol and we just didn't see
it, so we paused.
Now fast forward.
The market is now right-sized.
(18:23):
It's actually a buying marketopportunity and we can talk
about that.
So we're going to be acquiringmore companies.
We're going under LOI, withfive this year in the process.
What did they look like?
How do we choose them?
They must have at least threeyears of sales history and be
more than just an Amazon FBAchannel only.
They must be multi-omni-channel.
No more can you just sell anAmazon FBA business for 3 to 5X.
(18:46):
You can sell an omni-channel atthat, even if your base is a
million in EBITDA.
So if it's a million in EBITDA,or preferably seller
discretionary earnings, sde,then we're looking for that
company.
1 to 3 million or up.
Adam Shaffer (19:00):
A million in EBITDA is your starting point.
And omni-channel.
Is Amazon and Shopify or Amazonand what?
Neil Twa (19:08):
Amazon and any other channel that makes up at least
5% currently, or in the processof making up 5% to 10% of any
other market share of demandcreation and capture of client
data somewhere else Could be QVC, could be retail, wholesale,
could be a Shopify, a TikTokshop, could be an eBay, an Etsy,
it could be all at Walmart.
It could be a whole combinationof those that are out there,
(19:30):
that are new, that are gatheringand pulling in customers and
data, even if they haven'tmatured yet.
Okay, If they're in the matureDTC side of the world but they
have not opened or reallyexploited the Amazon demand
capture aspect, which that'swhat Amazon is now.
If nobody knows what that means, I can explain that in my words
.
But if they've not done that,we will see that as an
(19:53):
opportunity.
We won't buy on futures but wewill buy on trailing 12 months
and notice that they, if theydon't have an Amazon channel or
they really haven't captured itcorrectly, we know that's a
weakness that we can exploitvery quickly in the growth of
that company in the first three,six, nine, 12 months.
We can go in very quickly andexploit that opportunity for
demand capture.
(20:13):
If they're just a pure DTC atthis point, which could be a
Shopify, TikTok or a websitethat does not have or a large
presence on Amazon all right orestablished a very small
presence on Amazon.
So we can go both directions,if that makes sense, Okay.
And so they need to be at leastthree to five years old minimum
.
Why, as I mentioned earlier,Amazon has 40% of all of its
(20:34):
revenues are from SKUs that are3% or less.
Right, Three years or less,excuse me, Three years.
So that means that SKUs in yearone roughly 5%.
By the time they get to yeartwo, they'll make up 20% of all
of Amazon revenues and then 40%by year three.
So it's a maturation cycle thatwe're looking at a minimum,
which is why they need to bethree to five years old minimum.
And with those omni channelsthey are poised for growth.
(20:56):
With the halo effect of thatomni channel presence, it's
really easy to exploit thosechannels into much larger growth
, and there's always a largercapital partner that's setting
somewhere on the sidelines.
We can't deploy in a familyoffice less than 25 million, and
there's corporate offices thatare like, hey, Neil, we can't
deploy less than 100 million,right?
So don't bother us until thosebusinesses reach that place
where they're going to beacquired at that level.
(21:17):
And then there's, of course, PEgroups at lower amounts in the
three to five to 10 millionrange that we want to acquire.
So again, historicalomni-channel private label only.
No drop shipping, wholesalearbitrage, any of that kind of
nonsense.
Wholesaling, if it is B2B withthe products and private label
going the other direction, okay,when they're wholesaling out
the channels, retail or otherchannels, the private label
(21:37):
brand itself, If they don't haveany trademarks.
We got to put trademarks on Ifyou don't have a trademark, guys
you're just not a seriousseller.
You can't even get brandregistry, so you got to have
those components in place.
If you're DTC, obviously yougot to have some component of
that or we'll have to be able toget it to open the Amazon
channel.
You don't need to have patents.
(21:59):
But patents are no longer justa luxury in my mind anymore.
I am a patent holder in othertechnologies, but on Amazon, for
product-based products thathave the capability of design
patents, you should absolutelygo after that.
You can even just get thenotice of allowance.
Just says I have a highpercentage of probability that I
will be awarded the design ofpatent.
If you can get a design patent,a utility patent excuse me, a
(22:22):
utility patent then go for it.
Why?
Because if you own that in theproduct statement on Amazon,
you're basically in the mostdefensible position you will
ever be in Any other brand orproduct in the marketplace that
is currently operating in aproduct type that is very close
to yours and you win the brandutility patent.
You can go right back to themand say you owe us a royalty fee
(22:44):
or stop selling and you canbasically dominate the market
okay, do you care about thecategory, the product's in?
I do.
I don't want.
I had a supplement company along time ago.
Do not want any supplements.
So nothing on the skin or inthe mouth, okay, don't want to
mess with that.
Don't need the three letteragencies that come with it.
Don't want to mess with that.
Don't need the three letteragencies that come with it.
(23:05):
Don't want any of that hard Iguess.
I know there's opportunity.
Yes, I know it can be big, butI know that there's some very
unethical dirty business goingon in there and if you think you
can compete on a few hundredthousand dollars, you're wrong.
You need to go to market with ahigh six figures, seven figures
, or you're simply not going tomake the market share by that.
So no interest.
We don't really do electronics,which is, you know it sounds
(23:26):
weird, but we will do electric,but we won't do electronics, and
so electric is a hugeopportunity, with a higher
barrier of entry, to get out ofwhat I call Amazon's mosh pit,
which is typically anythingbelow $50 in my mind.
So we sell 50 to 200 plus inretail price points of products
should be aligned in that insideof the business we're
purchasing, or be able to getaligned and elevated to that as
(23:47):
a part of the process ofevaluation when we go through
the LOI.
Am I answering your question?
Is this good?
Adam Shaffer (23:52):
Yeah, no, you're definitely on the right track.
That's what I want to know.
Neil Twa (23:55):
Yep, they must have that elevated in their brand and
retail price.
Do?
Adam Shaffer (23:58):
you care if it's a subscribe product or not.
Neil Twa (24:00):
Absolutely.
Subscriptions of subscribe andsave increase the valuation of
the company, especially in thelast 12 months, as they're
increasing.
If you show an increasedsubscribe and save over the last
12 months, we're going toconsider that as part of the
valuation.
It is a recurring revenue.
If anybody understands whatthat means, it's the MRR inside
of Amazon.
So if you get subscribe andsave products in there, that's
(24:22):
great.
The more you get, the moreyou're acquiring.
It's even better.
If you take that over to theSaaS world of online Shopify et
cetera and you can subscribe andsave over there with any kind
of subscription business thatyou can create and are acquiring
subscribers and subscriptionsin a front end channel with
demand creation, like Shopify etcetera, then it's going to
(24:43):
increase the valuations quite alot.
Let me just explain what thatlooks like.
If your shop on Amazon and yourshop on Shopify both have
subscribe and savers andsubscriptions on one side and
those are continuing to grow asa basis of the whole company,
what will happen is thevaluation can potentially go as
large as 5 to 15x.
So we can actually seeevaluations for omni-channel
(25:06):
subscription businesses onAmazon and off Amazon combined
reach almost SaaS level now interms of their acquisition right
.
So if you are in a business ofbuilding, please keep that in
mind, because it is a largething that we and others are
looking to acquire.
Is that continuous subscriptionbusiness, not just the single
sales of a physical product, butthe multi-sales,
(25:28):
multi-diversity of sales andadditional sales of higher
valuations within the CLTV ofthe products, as well as
subscribers coming back monthly,bimonthly, six months, 12
months, et cetera.
Adam Shaffer (25:40):
Cool.
That is great news and I thinkfor anybody listening they
should really take a look atwhat they're doing.
Is it a surprise product?
Is it 50 and above?
I imagine weight is important.
You don't want to be shippingboat anchors if you could avoid
it, even though it's FDA.
So you know we try to becareful about that.
Although there's opportunitythere, you know it's not the
(26:02):
easiest thing to manage aboutthat, although there's
opportunity there.
Neil Twa (26:05):
It's not the easiest thing to manage.
Well, there's opportunity inthe profit.
It just changes yourexpectations of whether you're
locked in vanity metrics of howmany units I move every day and
how much revenue I'm making.
Where I'm locked into theprofits and the ability to move
multiple product lines, even ifonly one sells 100 units a month
, I'll get 10 of them and expandout into that market until I
own it with the higherprofitability.
Adam Shaffer (26:27):
And I think the Shopify or Shopify Plus channel
is great.
It does play kind of nicelywith Amazon if you want to use
it as your 3PL and you cancontrol your own destiny a
little bit more.
It's just there's a cost tothat too.
Neil Twa (26:41):
There is a cost, of course, with demand creation,
which is why I prefer to take myAmazon sellers to TikTok shops
first.
The halo effect creates almost30% spillover to Amazon.
Okay, right now.
So any brand that we're liftingup on TikTok shop is being
lifted up on Amazon almost threeto five X larger on Amazon and
even products that are closelyaligned on Amazon that we don't
(27:03):
have on TikTok shop, we'll see.
We'll see spillover too.
So if a product over on TikTokshop is going really well and
it's not ours, we're actuallypicking up and capturing the
demand of that product on Amazonbecause we're outranking the
competitor whose product was onTikTok shop.
So if you're an Amazon seller,you should really be looking,
because it's a search engine.
Now it is on TikTok.
That's changed so you canactually get into the search
(27:24):
results for your brand.
If you go to tiktok and searchfor your brand and find it and
you're on amazon but not ontiktok shop, there's an
indicator you need to get ontiktok shop okay.
Adam Shaffer (27:35):
Does voltage help brands?
Neil Twa (27:37):
we do we're an omni-channel brand management uh
growth company.
So while we may start people onAmazon or help them grow and
maintain their business to ahigher level within that channel
, they should, at a predefinedtime within their numbers, open
another channel.
And we have a very good expertwho's had a million person
account and ran hundreds ofthousands of millions of dollars
(27:59):
through that TikTok shop whohelps?
define open and move them intoOmni to capture both sides of
the house.
There is way more demandcapture between those two
platforms and their searchresults and the affinity of the
buyer type than there actuallyis on Shopify.
And that sounds sort of strange, but it is again people moving
in flow on a platform lookingfor products and already have
(28:21):
purchased something on Amazonand if they don't trust TikTok
shops, they purchased somethingon Amazon.
If they don't trust TikTokshops, they end up on Amazon and
so there's this huge crossoverbetween those two platforms
organically that you don't getthrough the Shopify.
Adam Shaffer (28:31):
I mean, and that's what you get from Amazon.
You get trust, right.
So that's why conversion ratesare usually a bit better and
people feel confident, so it'snot a bad place, even for your
own Shopify site.
There's still probably betterconversion rates on Amazon, as
long as somebody else isn'tEvery time we ran large amounts
of traffic through Shopifystores for ourselves and our
clients.
Neil Twa (28:51):
It ends up spilling back at least 20% over to Amazon
.
So you will see that haloeffect occur dramatically.
And if the account goes down orcertain ad sets go down over
here you'll notice it on theAmazon side because that demand
goes down, account goes down orcertain ad sets go down over
here you'll notice it on theAmazon side because that demand
goes down, which just tells meagain, the Amazon, being the
organic engine it is, has arankability inside of it to this
day.
For anybody who's listening,that is much, much more valuable
(29:14):
than any offsite Amazon.
Things you can do and Iconstantly preach this because
people miss it and they go talkabout well, all the things you
need to do off Amazon to getAmazon to love you more, and
that's actually wrong.
The effect is, if Amazondoesn't love your product more
than the other products in thesystem, no offsite Amazon
marketing engine is going toallow it to continue to grow
(29:36):
organically.
Once this stops over here orsomething fails, you'll watch it
fail backwards on Amazon.
So you need to be able tounderstand the system of Amazon
first, organically, get it intoa maturation with your business
so it absolutely loves you, andthen watch what happens when you
do off Amazon marketing.
Adam Shaffer (29:51):
It takes a lot less effort to watch on Amazon
marketing go really fast.
That's great advice, but Ithink there's a ton of brands
doing the Google back to Amazonright now, doing off Amazon to
Amazon.
Neil Twa (30:02):
They're doing a lot of things to try to manipulate
Amazon to love them, when inactuality they're not
organically ranking well enoughagainst market share competition
on Amazon.
Yet here are the factors thatplay into that, because it has
to do with the exit, it has todo with our looking at the ACOS
and TA cost of the businessesthat we're going to acquire,
because if they got some aspectof that wrong and have done it
(30:24):
long enough in the Amazon system, they will be penalized.
Even if your solar healthaccount is all green, there are
other metrics Amazon'sconsidering and they will be
penalizing you.
And then the question becomeshow hard is it for us to regain
position and market share thathad been lost by its historical
data setting there for six and12 months in a negative position
?
Right, Because then you have toretrain the engine and get it
(30:45):
to believe you're back up here,and that can take a long time
with the engine, especially ifthe data has historically shown
that it's not in that position.
If you are not the higher USPpercentage above the market
share competitors, you will notovertake their position in time
If you are not inventoried abovethe top 10 percent of market
share currently in your, and youshould all know what a node is
(31:08):
on Amazon.
Then you will not overtaketheir position because the
algorithm simply won't allow you.
It won't allow you to stock out.
You will stock out the business.
Therefore, it will throttle youand you'll never manipulate it
into getting you up and keepingyou in that top market share by
any off Amazon activities.
You will simply not make it.
(31:28):
So how do we overcome thatburden Pro tip you got to put in
more inventory.
You have to put in inventorylevels that check in on AWD or
Amazon FBA, above the inventoryor at the inventory levels of
your top market share.
Competitors in your space orAmazon will simply not let you
sell more.
Adam Shaffer (31:46):
That is awesome, man.
Wow, my head's going to explode.
This is some great, greatinformation.
So thanks, neil.
This is awesome.
I'm going to change the topicand let's talk about the book.
I know we don't like to plugtoo much, but I think it's a
fascinating idea.
And so you created this book,and I'm just going to use the
(32:07):
short name, almost AutomatedIncome with FBA, and it promises
a kind of a profitable, easyI'm ad-libbing a little bit, but
easy lifestyle.
Can you just explain more?
Easier, okay, easier, so canyou?
Neil Twa (32:21):
explain Easier than a lot of things I see people doing
now.
Adam Shaffer (32:25):
So can you tell us about why the book and what
we're going to all learn byreviewing or reading the book?
Neil Twa (32:32):
So, in simple terms, I featured 15 different experts
that came on my podcast in theyear prior to that volume.
We're compiling a new volumefrom podcast experts that will
come out next year.
So it was 15 people who I knowresonate and understand the same
principles of business that wetrain in different areas of
business Focus, from finance toproduct or research to
development, to image andgraphics, split testing.
(32:54):
Folks like PickFu and stuff arein there and interviewing them
in the different areas of theirexpertise and unit session
percentage and conversion ratesand all the other things that
are very important to this model.
Each of them align with myproduct launch playbook that we
developed in Voltage, called the5x5 Playbook, and so, as I went
through the podcast and as Idigested the information and I
had a conversation with them,some of them are extremely good
(33:16):
at what they do and so wefeatured them in the book.
So each chapter and the 15experts are featured in there,
along with our playbookstrategies and our client
results and case studies thatfocus on the outcome of those
things, because we're good at alot of things and some things
we're not experts in.
Everything Nobody can be and sothat book then became the
culmination, and in the processof that, the goal was to
(33:38):
understand what the strategy andtactics should be and how to
create systems of automationusing not just FBA but their
other systems, as well assoftware and technologies and
warehouses and infrastructuresystems that are all around us.
That do free us up to bemulti-seven, eight-figure
operators with virtual peoplewho aren't even employees and no
(33:58):
warehouses and operations tohold us accountable to, because
it's all managed outside.
So that leaves us up to do 15to 20 hours a week of work
managing a multi-seveneight-figure business right, and
so that is the systems andprocesses and the people that
are inside of that were allcompiled in the book to
basically give you that strategy, along with some of the tactics
not just for myself but otherexperts that work this every day
(34:21):
, week and month and compiled itinto a book together, and
everybody helped promote it,because they were all part of
the process.
Adam Shaffer (34:26):
Is it focused more on people that are just
entering the market, or is itfocused on those later stage
ones that you like to look at?
It's actually for both.
Neil Twa (34:35):
It's for both.
So we covered the initial fivesteps of this, first being you
know what the heck do I sell,which is the process of
conditioning and learning,product research and identifying
good products at price pointsand certain metrics you should
pay attention to, and not allthe vanity metrics that most
people end up in what I callAmazon's mosh pit.
So it will help you define aproduct base that is in demand,
(34:55):
that is elevated above that andhas the profitability
requirements to allow you toboth profit yourself as well as
build those systems and getthose people in to support you
while still making a goodbusiness.
Build those systems and getthose people in to support you
while still making a goodbusiness.
Right, and it also teaches younot to run by gut feel.
So we have something.
We go through the numbersprocess of what that should
actually look like, includingall of the fees and other things
(35:17):
that are stacked in thatprocess.
So we take you through that.
So we also talk about thebranding and what it means to
brand versus to sell products.
Selling products is what so manypeople are focused on with
Amazon, but I don't actuallysell products, adam.
I sell listings to an AI engineand once you change your
strategy and understand thedifference, you understand as an
Amazon seller, you are a directresponse marketer okay, that
(35:39):
happens to sell physicalproducts through an automation
engine.
Once you understand your placein that, okay, the invention is
not the key here, innovation isthe key.
And you understand that you'rea demand creation innovator of
product and awareness andperception of value, then the
products will fall in line withthat.
Now, of course, we're not goingto sell me to products and we
(36:02):
talk about that in the book.
How to create a grand brandedproduct that's in demand is not
complicated.
People overthink that andoverengineer it and spend way
too much time lamenting over thepossibilities of the product
but never answering the questionwhat the heck do I sell?
And sales fixes everything.
So if you're going tounderstand the market and demand
, you will fall in line with theproducts.
(36:22):
Just don't create me-toooff-the-shelf products.
Create good products.
That's not too hard.
You know what a good product is.
You're a consumer, so don'tcreate a crappy product just for
profitable reasons.
It will backfire on you.
In this system.
You will not grow a great brand.
Adam Shaffer (36:36):
So it's not too late.
It's not too late.
It's not too late to start aproduct.
It's never too late.
No, no, no.
Neil Twa (36:48):
Because if you're an existing seller, even doing six
figures or so, like DanielLeBlanc came in and Daniel and
David LeBlanc two people, sorry,I just slammed their names
together Then you willunderstand what it means to
create the strategy and go backout of the weeds and understand
what you should be doing daily,weekly and monthly in your
strategy so that the tacticsbecome more important.
They become more revenuegenerating activities.
(37:12):
A lot of people are stillfocused on growth hacks and all
this short-term stuff andthey're actually damaging their
opportunity, and those are forexisting sellers.
I work with many sellers whoare stuck in the process of
trying to launch another productand failing at a few tests
because they never actuallylearned how to run the business
first.
And so we teach you and talkabout that in the book how to
run the business first so thatthe products and the solutions
to the brand fall in place.
And it does take that two threeyear timeframe.
(37:35):
I will not ever tell anybodydifferent.
This is not a two to threemonth opportunity.
This is a two to three yearopportunity.
Amazon will mature you in theproduct process, as I mentioned
earlier.
When you do it the right way,your opportunities will really
explode in year two and threewith the work you do right in
year one, and that's a lot ofwhat we talk about for new and
existing sellers who need toturn around.
(37:55):
David came in for six months andran another thing, a course
program, et cetera.
He lost $200,000 and was aboutto shut the whole thing down,
took a chance on us and I saidgive me five months to show you
what we can do differently.
And he listened and he wastrainable and he was willing to
be coached and in five months wetook him to 200,000 in profits.
He just emailed me this weekendit's the 4th of July weekend,
as the time is going on heemailed me he's going to do a
(38:16):
second podcast soon, so it'll beon my podcast, the High Voltage
Business Builders Podcast, parttwo of his story, and he is now
half a million a month as ofJune.
Okay, so he completely changedhis strategy and understanding,
is now buying back his time bypulling in resources at
operational level, and he willbe.
He's on vacation in Italy whenhe wrote me and he's super
excited to get that built up.
(38:37):
So that's an existing sellersthat need to change and
understand their strategy.
And if you think you can'tlearn anything new, then maybe
you haven't been payingattention today, because there's
a lot.
Adam Shaffer (38:44):
Most people don't understand growing scale on
amazon like I said, I wish I metyou a few years ago.
You would have saved my butt.
But uh, you know, at least Imet you now and I'm learning.
Neil Twa (38:52):
This is great no such thing as a coincidence, my
friend.
There's all in good time yeah,yes.
Adam Shaffer (38:58):
So with that we're gonna start wrapping things up
and um other than you should goout and read or buy your book.
What, what, what words ofwisdom, what's your final
thoughts to the audience today?
Um, either motivational or um,anything.
Neil Twa (39:12):
Well, both.
I guess motivation is fun forthose who are paying attention,
but, again, if you're notmotivated by yourself, nothing
I'm saying or we'll help you dowill ever motivate you beyond
your own drive and desire.
Right?
Because we are literally attimes victims, uh, to the goals
we set or the systems that weput in place, and sometimes we
get locked into those and wethink there's not a better thing
or a better way to do it.
And there's always somebody ata bigger dog status Trust me,
(39:34):
there's bigger dogs than me onthis who go and can do it at
levels you don't necessarilycomprehend yet.
So, really, I always wantpeople to remember that your
opportunity begins at the end ofyour excuses.
If your excuse is there's notenough market on Amazon, you're
wrong.
There's 8,600 units a minute.
8,600 units a minute.
Your market is on Amazon atscale.
You're just not there yet.
(39:57):
Well, neil, there's not enoughmoney?
Well, money is transitory.
It moves around.
It creates inflation.
It moves like a river.
It changes directions, itchanges paths.
There's areas it's moving awayfrom right now, like real estate
and others, but guess what?
It's moving into business,e-commerce and technology, ai
and those systems, and if you'renot moving with it, you're
going to be victimized by it.
So don't be a victim.
Take action on the thingsyou're doing.
And, by the way, you can't gainthe knowledge without action.
(40:19):
I know so many people thinkthat they're just going to learn
that one trick that's going toturn everything around, that
stupid growth hack, thatwhatever.
But you don't get to the wisdomwithout the knowledge, and the
knowledge does not come withoutexecution and experience.
You must execute and experience, fail through the process of
learning and earning as you grow, and the knowledge will come.
And from knowledge will be thewisdom to do it the right way
and understand what you didwrong, and then, hopefully,
(40:44):
you're willing to learn from it,because we all make mistakes
and we want to learn.
So the last thing here is justto remember that we are all on
the path that we are on.
We got to stop comparingourselves to the social media
gurus and commerce world and allthis other crap and start
saying I'm right, where I needto be and where do I need to go
next.
Shut off all that other noise,put your head down, like Jim
Collins says, and good to greatand become a hedgehog If you
really want to get successful inthree to five years and make a
(41:06):
life changing opportunity withthis business model.
It will require you to do that.
If you're willing to do that, Iwill tell you.
The rewards are huge.
My four girls and I live herewith my wife and we have a 50
acre homestead.
We homeschool everybody.
We do really what I want to do.
If I don't want to have anymore calls today, then I'll just
move all my calls because I can, and if you want a lifestyle
that leads that, that isultimately where, in 17 years,
(41:27):
it's taken me to get to thissuccess.
I help people do it in twoyears, so I think that's a
pretty good trade-off but don'tgive up.
It's a huge opportunity outthere, even if it may not feel
like it for you right now, it isthere.
Trust me, it is huge and mostpeople don't necessarily see it
at times.
Maybe today you saw a littledifferent viewpoint and maybe
that helps you out.
Adam Shaffer (41:47):
Neil, I mean first of all, thank you.
I am motivated from your finalthoughts, so this is the best
final thoughts I've ever had ona podcast.
Neil Twa (41:55):
So thank you for bringing that to us.
My pleasure.
I'm honored.
Adam Shaffer (41:58):
Thank you, and if people do want to get in touch
with you, how can they do it?
Neil Twa (42:02):
All over social media, the S.
My last name is Twa, it isthree letters.
You can Google me and find meon the interwebs, everywhere you
meet in whatever socialplatform is comfortable to you,
or go to my website at VoltageDM.
That'sVoltageDigitalMarketingDMcom.
Check it out, see what you see,check out the presentations of
free trainings and workshops andif anything resonates, just
feel free to hit me up directly.
There's no sales team, it'sjust me for qualifying those who
(42:25):
we work with and if it's aninterest, then have a
conversation.
That is awesome.
Adam Shaffer (42:29):
Well, Neil, you rock and I really, really
appreciate it and we allappreciate you joining us today.
Thanks for the talk, the peptalk and the knowledge Thanks
for having me on, Adam.
Neil Twa (42:39):
It's been an honor.
I appreciate it.
Thank you.
Announcement (42:42):
Thank you for watching another episode of the
Planet Amazon podcast, where wetalk all things Amazon.
If you want to learn about howto accelerate your sales on
Amazon, visit Phelps United'swebsite at phelpsunitedcom.
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