April 24, 2024 • 31 mins
Today on The Uncomfortable Podcast, we're breaking our format to bring you an extraordinary guest. Meet Mike Begg, an e-commerce entrepreneur and the co-founder of AMZ Advisors, a digital marketing agency specializing in the Amazon platform.
Mike's journey into entrepreneurship began while working in real estate for Sears, where he foresaw the company's decline. Alongside his friends Robin and Steve, he took a leap into e-commerce, launching their own business to create global growth for brands on Amazon. Tune in for his inspiring story and valuable insights!
About Jeffrey:
Jeffrey M. Gabriel is the founder of Saw.com, a boutique brokerage that specializes in acquiring, selling, and appraising domains. With over 14 years of experience in the domain industry, Jeffrey has a proven track record of closing multimillion-dollar deals and delivering exceptional value to his clients.
Jeffrey's core competencies include remote team management, online marketing, and strategy. He is passionate about helping businesses and individuals achieve their online goals and dreams. He has been involved in some of the most notable domain sales in history, such as Ai.com, Sex.com, and Poker.org. He is also a Guinness World Record holder and a frequent speaker and writer on domain-related topics.
Follow us on social media:
Facebook: https://www.facebook.com/sawcom/
LinkedIn: https://www.linkedin.com/company/saw-com/
Twitter: https://twitter.com/sawsells
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:11):
Today on the Uncomfortable Podcast, we have a
very interesting person outsideof our normal format, which is
Mike Begg, who is an e-commerceentrepreneur and currently the
co-founder of a digitalmarketing agency called AMZ
Advisors, focusing on the Amazonplatform.
Mike made the jump to start hisown business with his three
buddies and get into e-commercewhile he was working in real
(00:34):
estate for Sears and could seethe writing on the wall that the
company, as he said, was goingdown.
Him and his friends, rob andSteve, launched their own
business, focused on all Amazonplatforms globally, to create
growth for brand manufacturers,and you sell products not only
in the United States, europe,Canada, but also in Asia.
You've grown up in New Englandand Connecticut and you are now
(00:58):
living abroad like I used to I'mvery jealous of that in Mexico.
So let's get right into it.
What does your company do?
And then let's back up to thepart about you working for Sears
and kind of knowing when youshould take that leap.
Speaker 2 (01:12):
Sure Jeff, and thanks for the intro.
Thanks for having me here.
So what the company does is weessentially partner with brands
that are looking to sell moreproducts online.
So we'll do all the advertising,SEO, graphic design, everything
that you need to be successfulon the Amazon platform, and we
have a team that's distributedacross the globe so we're able
to handle every single Amazonmarketplace that exists.
(01:34):
So you want to sell in Europe?
Well, our team in Europe hasyou.
You want to sell in Mexico?
Our team here has you.
You want to sell in Asia?
Our team in Asia Oceania hasyou as well.
So that's very high level whatwe do.
I could get down into the nittygritty, but it's probably not
as interesting for everybody.
Speaker 1 (01:53):
Well, so let's go back a little bit here.
And you know you mentionedyou're an entrepreneur, you
started a business with two ofyour buddies.
You were working at Sears inthe corporate world in Chicago.
As I was reading about you, youknow, and with myself, when I
decided to pull, you know, pullthe chute and say, fuck it, I'm
going on my own.
You know what?
When was that moment?
Or when was it when, you like,walked in your boss's office and
(02:13):
you just said, hey, listen, youknow, I think I'm going to give
it, I'm going to give it, giveit a shot on my own.
Speaker 2 (02:19):
So it wasn't a.
I would say it was a gradualtransition.
I don't think I pulled thechute and jumped out of the way.
But first of all, I mean I wasworking at Sears and I had
originally joined Sears to workon a real estate investment
trust spinoff.
So we essentially pulledtogether about $2.5 billion of
real estate, sold it off, tookit public, and then that money.
(02:43):
The idea was that it would keepSears running and the fact was
Sears just kept burning throughcash and like yeah, that was
kind of the problem.
I stayed on after the spinoff,stayed working with Sears,
worked on the real estatedevelopment group, so I was
responsible for taking a lot ofthe valuable assets that Sears
still had and then turning theminto something else.
So taking them all, turning itinto a huge development mixed
(03:12):
juice, whatever it may be andpart of that job was kind of
going around and looking atSears stores and Kmart Kmart was
also owned by Sears at the timeso looking at stores that were
going to close and we were like,oh, this is a good location,
but having a Sears store doesn'tmake sense here, let's turn it
into something else.
Speaker 1 (03:27):
This will make a wonderful spirit of Halloween,
right?
How many times can you say thatExactly?
Speaker 2 (03:33):
And we did all types of unique deals too.
We did like many storage unitsinside Kmart stores, or like
split at Kmart, star Wars, anddid that and other retailers,
but I digress.
The point is that I was goingto these stores, I was seeing
people and I was like hey,you're not going to have a job
in a few months to myself.
(03:53):
I obviously wasn't telling themthat that would have been mean,
but and it kind of made merealize that there's no such
thing as a safe job, there's nosuch thing as job security.
It's just really the decisionsthat the leaders are making and
whether they're good decisionsor bad decisions.
And that's kind of where Istarted having the realization.
From there, I started learningabout how to sell products
online.
I probably tried like three orfour other things before selling
(04:17):
products as well Affiliatemarketing, writing a blog, all
that stuff and I was like thisisn't going to make money.
So I was like, let me figureout how to do something.
And I figured out how to sellproducts.
After I launched my first fewbrands, we got a lot of traction
this is with my partners, Roband Steve and we decided well,
we were actually selling artsupplies and we realized that we
(04:39):
were beating Crayola in some ofthe categories.
We were selling it and Crayolais a monster.
Speaker 1 (04:42):
And we were like oh, these companies don't know what
they're doing.
Speaker 2 (04:45):
That's kind of why the idea for the agency came
from.
After we had about three orfour clients is when I actually
went to my boss and was like youknow what?
I'm going to give this a shoton my own, so that's how I got
to that point.
Speaker 1 (05:00):
So why don't you explain your business a little
bit more about not just being aseller yourself, but helping
others to do what you do?
Speaker 2 (05:06):
Yeah.
So Amazon is an incrediblycomplex platform for a variety
of different reasons, but it'sgotten more and more complex
over time and what we saw eight,nine years ago when I was
starting selling on Amazon isthat the ability for a disruptor
brand or a brand that prettymuch was coming from nowhere to
come into Amazon and startstealing market share was really
(05:27):
easy.
So the example of Crayola Igive we were selling art
supplies, we were sellingmarkers, we were selling colored
pencils, we were selling paints, that type of stuff, and we
would start selling our productsand within a month, a month and
a half, we would be showing upat some of the top search
results for those types ofproducts which, again, it's a
(05:49):
category dominated by Crayola.
It's kind of obvious.
It's like well, how does thismulti-billion dollar
multinational company not knowhow to manage the platform?
And in general it just becomespeople are slow to adapt, people
don't know how things work,they don't have the internal
teams that have the knowledgeand understanding.
So we realized that we couldprovide a lot of value that way
(06:09):
and we also had a lot of bigclients early on because these
companies were looking forpeople to manage this.
So some of the big brands weworked with early on were
Rembrandt, whitening Plackers,dental Supplies, headwear, uh,
burt's bees, so like a varietyof different, like well-known
names were working with us as asmall little agency and, uh, we
(06:32):
were driving millions of dollarsa year in sales.
Uh, revenue for them would dothe platform, which was awesome.
So, uh, yeah, it was reallythat they don't have the
capability or the knowledge todo it themselves.
Obviously, they've started tohire people and they're a little
bit more knowledgeable on howthe platform works, and there's
more and more advertisingdollars pouring into Amazon, but
still it's difficult if youaren't in there the day-to-day.
(06:54):
We've seen stuff.
We've seen some of the weirdeststuff happen.
We've worked with hundreds ofbrands at this point and we'll
see something happen on oneaccount, like three years ago,
and we won't see it again foranother three years.
But if you're in a companywhere you're only working with
one brand when that thing comesup, you're going to have no idea
what to do, and that's kind ofthe advantage that we have is
we've seen pretty mucheverything.
Speaker 1 (07:19):
So a company like Crayola, for example I mean,
obviously it is a householdbrand.
Every child in America andprobably Europe and other parts
of the world have used theirproducts at least once or
hundreds of times Right, I mean,they're probably not used to
selling direct to the consumeranyway.
And then to put the twist ofAmazon on it as well is even
more confusing to them, becausethey probably have a Web site
where everything's overpriced.
And then you go to Target orWalmart or wherever and get the
(07:41):
same box of crayons for twodollars cheaper a box, and mom
just goes there to buy thoseanyway.
So you don't really think aboutit.
But then Amazon comes along andpeople are buying that, so it's
interesting.
And then if you're not going tohelp them with it, then what A
reseller would have to go onthere and create the Crayola
account and add the crayons andthen sell it for them, which
(08:03):
they probably weren't really?
Speaker 2 (08:04):
that excited about.
Is that why they felt like theyneeded to be on there, exactly?
I mean, I think you just youpretty much nailed it when you
create and this still creates alot of problems for brands that
don't have solid supply chainsand solid distribution.
So if you don't have a good mapagreement in place, you get
resellers on the platform whichjust wreak havoc on your
listings.
They'll change content, they'llchange images, they'll take the
buy box from you.
(08:24):
So, yeah, part of it's anecessity.
The other way I kind of put itis that I guess it also relates
to a necessity, but in adifferent way, is that?
70% of all online productsearches start on Amazon.
So if you are a brand andyou're not on Amazon, like, most
customers are not going to findyour product unless they like,
know your brand by heart and arespecifically going to your
(08:46):
website looking for it.
So it's kind of a combinationof different factors.
It's a combination of trying toget control of the marketplace
and trying to make sure thatyou're not letting uh resellers
in, but the other one is justproduct discovery and brand
discovery and customer uh reachand like you can't get better
reach or better discovery, evenbetter conversion rates than
(09:06):
than what you get on amazon sotalking about someone like
crayola or some of your othercurrent customers, or rembrandt
or what any of these companies?
Speaker 1 (09:17):
so amazon, you send them the products, they do the
packing, they do the shipping,they do the storage, but you are
your client, like Crayola hasto provide the product to Amazon
when they're running out oflike yellow crayons, right, and
you're making them manage theinventory.
Amazon's making all thefulfillments right.
(09:39):
If it's Amazon Prime shipping,then it goes to an Amazon
warehouse.
Is that how it works Exactly?
Speaker 2 (09:45):
So there's two different models.
You have 1P and 3P.
1p is you're actually sellingthe inventory at wholesale to
Amazon.
Typically, that's only reservedfor big brands.
It's an invite-only platform.
About 60% of all products onAmazon are 3P, so and 60% of all
sales that happen on Amazon are3P, so that's just.
(10:05):
You know any brand, any person,can start a selling account,
list their products and startselling.
So that's kind of how the twodifferent models are
differentiated.
When Amazon is buying yourinventory, they literally handle
everything.
When you are the third partyseller, you can send your
inventory into a fulfillmentcenter Amazon FBA is what it's
(10:25):
called and from there Amazonwill help you with the customer
service, the shipping, thetracking, all that stuff to the
consumer.
They manage a lot of yourinventory management aspects,
but you as the seller still needto be responsible for making
sure that, yeah, you're sendinginventory in, you're
anticipating the inventory thatAmazon's going to need.
So forecasting is extremelyimportant and yeah, I mean
(10:48):
that's more or less how it willwork.
And then, once your inventoryis at Amazon, either on the 1P
or 3P side, you get the Primebadge, as you mentioned, which
means two-day shipping or less,although a lot of people have
seen that promise kind of falloff over the past few years as
Amazon warehouses have justgotten busier and busier.
There's so much volume, so manywarehouses being opened and so
many people trying to get theirproducts into Amazon that it's
(11:11):
actually slowed down theirprocessing times and the wait
time to get your inventory fromyour warehouse to amazon's
increased by at least one to twoweeks it's.
Speaker 1 (11:20):
It's unbelievable.
The logistics between orderingsomething and then it being
delivered to you, sometimes thatsame day, yeah is on as
absolutely a wonder.
It's like one of the wonders ofthe world.
In my opinion.
You might, if you actuallyreally think the number of boxes
going through Amazon in a dayand just the whole system and it
working, and then working withsomeone like you who's working
(11:42):
with somebody else to get theinventory to them, and all of
that working.
Does that all go under the sameAmazon account?
Knowing that there's peoplelike you helping companies, or
you and your clients accountsand you're kind of sharing.
Speaker 2 (11:56):
How does that kind of all in the us yeah, in the us,
uh, we're in our clientsaccounts and we're managing that
.
Uh, we do have a company inmexico as well, uh, which helps
brands expand to mexico and that, specifically, is through our
own account, just because ofdifferent, uh tax and legal
issues.
So that's kind of the way weneed to go about it there.
(12:16):
And, yeah, I mean the logisticsbehind it is incredibly
impressive, I mean especially onthe Amazon side, but they're
also interesting when we look atMexico.
I mean the big platform here isMercado Libre, amazon's also
big, but Mercado Libre is theLatin American e-commerce
platform and their fulfillmentnetwork, in Mexico at least, is
better than amazon's and wowthey
(12:36):
they literally have thecapabilities to do same day
delivery within like an hour,depending on where you are.
I mean, most of the populationof mexico lives in three big
cities, which makes it a littlebit easier.
Yeah, but it's crazy like weactually on the mercado libre
side, we actually get an order,send out the inventory and we
can't upload it, upload thetracking ID, fast enough to the
(13:00):
platform before the consumeralready gets the product
delivered.
So we get the product deliveredto the consumer and Amazon or
MercadoLibre are like well,where's the tracking ID?
And it's like well, thecustomer already has it.
Do you really need it?
So it's pretty impressive ingeneral how these big e-commerce
companies have figured out todo how to do last mile delivery
(13:20):
in the most efficient waypossible.
Speaker 1 (13:22):
Yeah.
So I'm going to kind of ask yousomething a little bit off off
a normal subject that you'reused to in your own industry.
But just bear with me while Igive you a little explanation of
the question.
So in my business, when we sella domain name to a merchant
like yourself or to one of yourcustomers we talk about if
they're selling toothpaste wecan say, you know, maybe you
should think about buyingToothbracecom or Mintcom or
(13:44):
Mintyfreshcom, and then it goeswith your marketing and it makes
it memorable.
It creates brand recognition,trust, repeat business, word of
mouth, business, you know all ofthese different benefits and
then when someone's running lowon toothpaste, they'll just come
back to your domain name, yourwebsite, and you'll do it again
Now with yourself.
Other than the subscribe optionon Amazon, how are you really
(14:08):
creating brand loyalty toyourself and your vendors?
Because I don't remember I justsee it's Amazon.
Like I don't know that MikeBegg, incorporated Amazon
Advisors, is the one who madesure that it was delivered at my
door and it was exactly as itwas advertised and it isn't
broken and it's good.
Like you're just relying onthat and that is kind of a
(14:32):
strange business model, thatyou're totally in bed and kind
of in there with Amazon andyou're promoting their brand and
making sure everything's okaywith that, hoping that they
provided again that same personagain that you're gonna have to
compete for in the future.
So what do you think about that, of not doing it the
traditional way?
Speaker 2 (14:53):
I mean everything you said.
There is pretty much a commoncomplaint we get from our
customers.
I mean everything you saidthere is pretty much a common
complaint we get from ourcustomers.
I mean you don't own thecustomer data at the end of the
day.
Amazon pretty much blanks outany personally identifiable
information on every order thatyou get.
So one of the big challengesfrom the brand loyalty
standpoint is how do I getpeople to come back and you
(15:13):
mentioned subscribe and save.
That's a really good option forgetting someone to come back to
your listing.
The only other real option inthe Amazon platform is to use
advertising, and we havetargeting capabilities to target
people that have purchasedproducts, and it's up to the
last 365 days, so we can targetpurchases with whatever look
(15:35):
back period we want.
So, for example, let's say youhave a product that lasts 30
days, so we can target purchaseswith whatever look back period
we want.
So, for example, let's say youhave a product that lasts 30
days.
Well, maybe we should probablystart targeting that person
after 30 days to make sure thatthey're coming back and buying
again.
So the only way to do it on theAmazon side is just keep
putting more money into thesystem.
It's pay for play.
That's kind of the only way itis.
Now, if you run your own DTCwebsite, there's some things you
can try to do, which don'tnecessarily mean they're going
(15:58):
to work.
Product insert cards youprobably ordered something on
Amazon.
It comes and there's a littlepiece of paper inside that says
check out our website or here'sa coupon for our website or give
us a review and we'll give youmore product stuff like that.
Yeah, exactly that type of stuff, and the whole idea there is to
try to capture your informationof the purchase on Amazon.
So a good way that we recommenddoing this to a lot of our the
(16:20):
companies we work with and thebrands we work with is use the
product insert cards to givethem something that can only be
claimed through your website.
So now there's gray areas herebecause of Amazon's terms of
service, but if your productcomes with a warranty that they
need to register for on yourwebsite, well that's legal.
If you are offering a freee-book that they need to get on
the website, well that's alsolegal.
(16:42):
All of those are opportunitiesfor you to start capturing the
customer emails at least, andmaybe some of their other
details, depending on whatyou're asking, once they
actually go to your website.
But from there is where you canstart really building the brand
loyalty on platform or sorry,off platform on your own website
, because now you can startemail marketing them, you can
start putting them intolookalike audiences on other
(17:02):
platforms.
You can start trying to get themto purchase their offering
subscribing, subscriptionservices through your own
website.
Yeah, All of that is kind ofthe way that you really have to
think about it in the long runof how you create brand loyalty.
Speaker 1 (17:17):
All right.
And then the other question isin our business there's this
thing called domain parkingright, and so what happens is if
someone takes a domain name,they change the name servers and
there's ads put on that domain.
So if you have freemapscom,there's links for maps and
somebody clicks on that ad andit's most of the time those ads
are fulfilled by Google andtheir ad network.
(17:39):
When I first got in thebusiness, there were actually
multiple companies that peoplecould choose from, one being
Yahoo, bing, and then they havekind of fizzled in the market
and now it's just Google.
And then Google used to payexponentially more and then
every quarter, every half year,they go because of market
conditions.
We need to turn down your splita little bit.
(18:01):
We need to turn down your splita little bit.
Oh, we need to take a littlebit more off your split.
Oh, because of the market.
But even when the market cameback, they didn't give you any
more back.
They'd say, oh, we're going topull it back a little bit.
So now names that made X amountof dollars per month.
(18:26):
They're probably down from whenI got in the business between
like 60 and 80 percent inearnings that they would have
gotten back then living off ofthese opportunities, I could see
that their price, or theirsplit with you over time would
potentially is going to have toget worse.
Right, and do they change yourrevenue share?
Do they?
Do they mess around with that,or is it really always been
(18:46):
consistent with them as apartner?
Speaker 2 (18:49):
No, I mean they're constantly increasing the fees
to use the platform.
I mean the main fee is thereferral fee and that fee has
been pretty consistent.
That doesn't change.
It's usually a flat 15% fee forselling a product on Amazon.
Where they've really beensqueezing people has been on the
logistics and fulfillment fees.
So if you're using their ownwarehouses they charge you a
certain amount for storage, forpick and pack, for sending every
(19:13):
shipment, and that's slowlybeen increasing over time and
they've been figuring out newways to introduce fees.
So there's a lot of there'smargins that are continuing to
be squeezed by Amazon throughall these different fees.
And you know that's part of thereason why Amazon is being
investigated so much by the FTC,because a lot of these
(19:34):
practices are kind of likequestionable.
So, for example, I can chooseto fulfill inventory from my own
warehouse or I can use Amazonservice.
If I don't use Amazon service.
If I do fulfill from mywarehouse, the ability to get my
product visibility on theAmazon platform is suppressed,
so Amazon is pushing you towardsusing that.
Another good example of this isthis year.
(19:57):
Amazon introduced a coupledifferent fees.
One's called the inboundplacement Well, inbound
placement fee has been around,but they increased it.
And there's another one calledlow inventory fee.
Well, it kind of helps thatAmazon also rolled out their
Amazon warehousing anddistribution service where, if
you use Amazon's warehousing anddistribution service, inbound
placement fees go away.
(20:18):
Uh, your inventory isautomatically replenished, so
your low inventory fees go awayso okay they're just pushing you
into trying to use more andmore of their services and
becoming more and more dependenton them, which, in a way, is
really scary, uh, but it's.
They're just like I said before.
I mean like 60 percent of allsearches are happening on Amazon
.
You can't be there.
(20:39):
You kind of have to be playingthis game even though it sucks.
Speaker 1 (20:43):
Yeah, well, it's the same with parking.
Like, what are you going to do?
You know you're dealing withGoogle.
I mean it is, it is what it is,you know, and what Google does.
What Google does to people isthey will do what's called
clawbacks, and so if you make acertain amount of money in
parking, they could come backand they can say wait a minute,
we don't think that traffic thatcame to your domain name was
real or met our guidelines andwe want our money back, and they
(21:04):
can take your money back.
So I'm guessing you're probablydealing with that with returns.
Speaker 2 (21:09):
In a way.
Speaker 1 (21:10):
So what I don't understand with Amazon, right,
or like if I go to Target or Igo to Home Depot and I bought
like a saw blade at Home Depotand I hand it back to them and
the person at the counter kindof looks at it and goes, ok,
takes the return, they're gonnabe like uh-uh, but like with
Amazon, I've actually like neverheard of Amazon even
(21:42):
questioning anything that I'vesent back.
And it's even at the pointwhere I open the box of
something.
I look at the product and I'mlike you know what, I don't, I
don't want this and I don't evenreally do a good job packing it
back in the box.
I just send it back and I getmy money back and I mean I and
I'm not abusing it, you know,I'm just you know, but I've
never had a return rejected andI've never had an issue.
(22:06):
So like, what is what happenswith that?
You know, in a very quickanswer, people can hear that one
.
Speaker 2 (22:12):
Yeah, so I mean you pretty much nailed it Like
Amazon's return policy is 30days and that's like the minimum
.
So all sellers have to meet 30days during Q4.
They have some extended returnperiods.
But dealing with returns I meanfrom the actual operational
standpoint it's pretty easy as aseller because Amazon's gonna
handle it.
If you're using theirwarehouses, where the fees and
costs come in, is that I'm goingto get my money back, but I'm
(22:34):
not going to get the money backfor the shipment.
So every time you returnsomething, the seller is losing
money on the shipping costs.
If the product comes back ingood condition, amazon will put
it back into inventory and startselling it again.
If it comes back in poorcondition, all you can really do
is have it sent back to you orhave the inventory destroyed.
So it's kind of a lose-losesituation for the sellers in
(22:57):
general.
And I mean you're obviously notabusing the system, but there
are a lot of people that areliterally committing fraud every
day doing this.
Oh, yeah, a good example of thisis like I just heard about a
brand that had like ahigh-priced ticket item uh, like
two, three hundred dollars andthey were literally taking the
product, taking the product out,putting something else back in
(23:18):
it and sending it back for areturn, and then they're
reselling the product.
So they get the product for free, sell it, make money that way,
and then they're they're doing,uh, they're sending like rocks
so it's like ridiculous some ofthe stuff you see from people
and it really makes you likewonder, like how people even
think about doing this to othersellers, other brands, other
companies, I mean most of themdon't care, obviously, but yeah
(23:42):
it's a huge challenge andreturns is probably one of the
least enjoyable things of theplatform.
Speaker 1 (23:48):
Well, if you see what's happening in
brick-and-mortar locations, withpeople just going in and
blatantly stealing things, Imean if it's a faceless crime
and you're just doing it in thecomfort of your own home, I mean
people obviously are going tokeep pushing the line.
So quickly, in a one sentenceanswer what are your feelings
about Timu?
I heard they do $5 billion insales in the United States last
(24:12):
year.
Speaker 2 (24:13):
It's one of the fastest growing platforms,
Unfortunately.
I don't have a lot that I'mselling on it right now, so I
really don't have much insight.
You haven't even thought abouttrying out?
Speaker 1 (24:21):
Are you worried about becoming obsolete or a dinosaur
by not expanding on a team, ordo you even have that
opportunity to do so?
Speaker 2 (24:28):
I mean we have the opportunity, but I'm not worried
about it at this point.
I mean, amazon is just such abigger platform.
It's just such a household name.
The thing that I am moreinterested in and this depends a
lot on government rulings isTikTok shops.
I think TikTok shops has morepotential in the long run if
TikTok does not get banned inthe US.
So Tmoo is a good opportunityas well.
(24:49):
I mean, there's lots ofplatforms.
You can be on Walmart at sea,depending on the product you
have, uh, but TikTok shops issuper interesting if you have a
really good content machine.
Speaker 1 (24:58):
Uh-huh Got it.
So a guy like me, if I say, youknow what, I don't want to be
in the domain business anymore,I want to get into Amazon, I
want to start selling things, soI would come to you and you'd
say, as long as you can get methe inventory consistently, we
can do everything else for you.
Or if you're like I know theguy that bought bobbleheadscom,
so they make bobbleheads, customones for people.
(25:18):
I think it's more of an Etsything.
But if he had baseball playerbobbleheads, he'd come to you
and say I can deliver a thousandof these a month.
And then you guys are like allright, we'll make it happen.
Speaker 2 (25:28):
If there's demand, right?
Yeah, that's more or less it.
I mean we'll help them get theproducts on Amazon.
We'll help them set everythingup and then run the ads for them
.
So the inventory will go toAmazon.
Every order that comes in isjust shipped out.
That's pretty much it in anutshell.
Speaker 1 (25:44):
So I have a friend that works at a grocery store
and he said that hamburger isthe bread and butter of a
grocery store.
He said in the 4th of July it'sjust hundreds of thousands of
pounds of hamburger just goingout the door and the markup's
good on it.
It just sells and sells andsells.
What is like, what is theautomatic product that you know
(26:05):
your sellers usually can do wellon?
If you can, if you can tell melike what is it?
That is the winner on there.
Speaker 2 (26:12):
There, I would say there's no one thing actually.
I mean, it's really gotten tothe point where you have to be
very niche in the productsyou're selling to be able to hit
something that's just going torun away.
I mean, highest margins by faris supplement products, but it's
also the most competition.
What products Supplements?
Speaker 1 (26:28):
Oh, supplements.
Speaker 2 (26:29):
Fitness supplements, proteins like that type of stuff
.
The margins are incredibly highon it, but your customer
acquisition costs are extremelyhigh as well, so I don't
recommend doing that unless youhave like deep pockets.
Generally, I would say go nichedown, find a little niche where
you have an audience that youcan reach or you know how to
reach this audience and thenfigure out a product that they
(26:50):
want to buy, and that's reallywhere you're going to start
seeing the profit, because youradvertising costs are going to
be low, because it's a reallyniche market.
You have other ways to reachthese people and sell the
products, which is just going toincrease your margin.
I mean, those are generally theways to be successful.
Speaker 1 (27:03):
Got it.
It's interesting when it comesto supplements.
When I was selling the domainsexcom, I went to the adult
video network awards and part ofthose award shows isn't just
the entertainers.
There's actually a very largesegment of the people at those
conferences that makesupplements that do you know
(27:24):
different things to you and someyou might be able to purchase
at a gas station or, you know,online or whatever.
And when I spoke to them andasked them, like you know where
is your manufacturing plant, andsome of them were giggling and
laughing because they say theymake them in their garage.
So you know, when I look atsupplements I certainly spend
(27:46):
time researching the companyname, who it is, when it says
it's lab tested, you know what,what's the lab, you know where
was it tested and the legitimacyof it.
But I find it interestingbecause supplements at Amazon
are quite expensive.
You know I take fish oil everyday and a jar of that isn't
cheap and you know it adds upreally fast.
(28:08):
So I can see that in themargins probably like 50 percent
, right I'm guessing, or higher.
Speaker 2 (28:13):
It's pretty high yeah .
Speaker 1 (28:17):
Yeah, and then when it comes to the type of client
that you would like to focus onwould be a Crayola, or a person
or individual small businesswith a lot of little products
that they specialize in thatthey can consistently deliver.
I mean, what is that kind ofperson that you like to go after
and how do you think you canhelp them?
Speaker 2 (28:37):
We've done lots of work with like Fortune 500
companies and they're great inthe fact that they allow us to
do a lot of what we want, butthe expectations are really high
and you generally have 10, 15people you're dealing with that
all have different uh priorities, and that's one of the most
(28:57):
challenging things about dealingwith large companies.
Uh, the other thing that's alittle bit challenging is they
have massive ad budgets and thenfiguring out how to actually
use all those advertisingbudgets is a is a challenge.
Ideally for us.
The clients we work with arebetween one to 20 million.
Uh, because it they generallyhave a team.
You generally have one to twopoints of contact, which makes
(29:18):
the ability for us to manage therelationship a lot easier, and
it also means they have enoughmoney for us to get the results
that we need or to have thebudget to have the inputs that
we need to help them get thebest results on the platform.
So that's kind of the sweetspot that we found and it's
really where we kind of stick inour lane.
(29:39):
But you know we've done the bigcompanies.
We'll do them again if theycome back.
But, uh, it's just a little bitof it's.
It's a lot more work and it'skind of a headache dealing with
some of those challenges.
Speaker 1 (29:46):
Got it, got it.
And then, uh, most importantquestion you said you're from
Connecticut.
Speaker 2 (29:51):
I am.
Speaker 1 (29:53):
Are you a Patriots fan, Giants fan, Jets fan?
Connecticut doesn't really havemuch of an identity when it
comes to sports.
And have you lost that, oryou've turned to Chicago and you
moved out to Chicago.
Speaker 2 (30:04):
Unfortunately no.
So I'm like this is just goingto blow your mind, but I'm
actually an.
Eagles fan.
Speaker 1 (30:10):
Oh God, even worse.
Speaker 2 (30:14):
My aunt and uncle went to school in Philly, and I
went to school in Phillyactually too.
Speaker 1 (30:17):
Excuse.
Speaker 2 (30:19):
Yeah, when I was little they just bought me all
the Eagles stuff.
I got hooked, but I will sayI'm a bigger hockey fan than
anything, so let's go, rangers.
Speaker 1 (30:26):
Go Rangers.
Yeah, there you go.
They got a decent team thisyear, so I'll see you guys in
the playoffs probably.
So we'll see about that.
We'll see about it.
And if anybody is interested inyour services and what you can
do for them, what is the easiestand best way for them to
contact you?
Speaker 2 (30:42):
So one of two ways.
Either reach out to us directlyat the website amzadvisorscom,
or you can email me directly,mike at amzadvisorscom, and I'm
glad to help in any way that wecan Awesome.
Speaker 1 (30:55):
Well, thanks for your time today.
It's been great.
I actually really enjoyed thisone.
I learned a lot about Amazonand a lot about your business.
Speaker 2 (31:05):
And I hope we can get you some good opportunities for
you.
I appreciate that a lot, Jeff.
Thanks for having me again.
Speaker 1 (31:08):
All right.
Today on the Uncomfortable Podcast, we have a
very interesting person outsideof our normal format, which is
Mike Begg, who is an e-commerceentrepreneur and currently the
co-founder of a digitalmarketing agency called AMZ
Advisors, focusing on the Amazonplatform.
Mike made the jump to start hisown business with his three
buddies and get into e-commercewhile he was working in real
(00:34):
estate for Sears and could seethe writing on the wall that the
company, as he said, was goingdown.
Him and his friends, rob andSteve, launched their own
business, focused on all Amazonplatforms globally, to create
growth for brand manufacturers,and you sell products not only
in the United States, europe,Canada, but also in Asia.
You've grown up in New Englandand Connecticut and you are now
(00:58):
living abroad like I used to I'mvery jealous of that in Mexico.
So let's get right into it.
What does your company do?
And then let's back up to thepart about you working for Sears
and kind of knowing when youshould take that leap.
Speaker 2 (01:12):
Sure Jeff, and thanks for the intro.
Thanks for having me here.
So what the company does is weessentially partner with brands
that are looking to sell moreproducts online.
So we'll do all the advertising,SEO, graphic design, everything
that you need to be successfulon the Amazon platform, and we
have a team that's distributedacross the globe so we're able
to handle every single Amazonmarketplace that exists.
(01:34):
So you want to sell in Europe?
Well, our team in Europe hasyou.
You want to sell in Mexico?
Our team here has you.
You want to sell in Asia?
Our team in Asia Oceania hasyou as well.
So that's very high level whatwe do.
I could get down into the nittygritty, but it's probably not
as interesting for everybody.
Speaker 1 (01:53):
Well, so let's go back a little bit here.
And you know you mentionedyou're an entrepreneur, you
started a business with two ofyour buddies.
You were working at Sears inthe corporate world in Chicago.
As I was reading about you, youknow, and with myself, when I
decided to pull, you know, pullthe chute and say, fuck it, I'm
going on my own.
You know what?
When was that moment?
Or when was it when, you like,walked in your boss's office and
(02:13):
you just said, hey, listen, youknow, I think I'm going to give
it, I'm going to give it, giveit a shot on my own.
Speaker 2 (02:19):
So it wasn't a.
I would say it was a gradualtransition.
I don't think I pulled thechute and jumped out of the way.
But first of all, I mean I wasworking at Sears and I had
originally joined Sears to workon a real estate investment
trust spinoff.
So we essentially pulledtogether about $2.5 billion of
real estate, sold it off, tookit public, and then that money.
(02:43):
The idea was that it would keepSears running and the fact was
Sears just kept burning throughcash and like yeah, that was
kind of the problem.
I stayed on after the spinoff,stayed working with Sears,
worked on the real estatedevelopment group, so I was
responsible for taking a lot ofthe valuable assets that Sears
still had and then turning theminto something else.
So taking them all, turning itinto a huge development mixed
(03:12):
juice, whatever it may be andpart of that job was kind of
going around and looking atSears stores and Kmart Kmart was
also owned by Sears at the timeso looking at stores that were
going to close and we were like,oh, this is a good location,
but having a Sears store doesn'tmake sense here, let's turn it
into something else.
Speaker 1 (03:27):
This will make a wonderful spirit of Halloween,
right?
How many times can you say thatExactly?
Speaker 2 (03:33):
And we did all types of unique deals too.
We did like many storage unitsinside Kmart stores, or like
split at Kmart, star Wars, anddid that and other retailers,
but I digress.
The point is that I was goingto these stores, I was seeing
people and I was like hey,you're not going to have a job
in a few months to myself.
(03:53):
I obviously wasn't telling themthat that would have been mean,
but and it kind of made merealize that there's no such
thing as a safe job, there's nosuch thing as job security.
It's just really the decisionsthat the leaders are making and
whether they're good decisionsor bad decisions.
And that's kind of where Istarted having the realization.
From there, I started learningabout how to sell products
online.
I probably tried like three orfour other things before selling
(04:17):
products as well Affiliatemarketing, writing a blog, all
that stuff and I was like thisisn't going to make money.
So I was like, let me figureout how to do something.
And I figured out how to sellproducts.
After I launched my first fewbrands, we got a lot of traction
this is with my partners, Roband Steve and we decided well,
we were actually selling artsupplies and we realized that we
(04:39):
were beating Crayola in some ofthe categories.
We were selling it and Crayolais a monster.
Speaker 1 (04:42):
And we were like oh, these companies don't know what
they're doing.
Speaker 2 (04:45):
That's kind of why the idea for the agency came
from.
After we had about three orfour clients is when I actually
went to my boss and was like youknow what?
I'm going to give this a shoton my own, so that's how I got
to that point.
Speaker 1 (05:00):
So why don't you explain your business a little
bit more about not just being aseller yourself, but helping
others to do what you do?
Speaker 2 (05:06):
Yeah.
So Amazon is an incrediblycomplex platform for a variety
of different reasons, but it'sgotten more and more complex
over time and what we saw eight,nine years ago when I was
starting selling on Amazon isthat the ability for a disruptor
brand or a brand that prettymuch was coming from nowhere to
come into Amazon and startstealing market share was really
(05:27):
easy.
So the example of Crayola Igive we were selling art
supplies, we were sellingmarkers, we were selling colored
pencils, we were selling paints, that type of stuff, and we
would start selling our productsand within a month, a month and
a half, we would be showing upat some of the top search
results for those types ofproducts which, again, it's a
(05:49):
category dominated by Crayola.
It's kind of obvious.
It's like well, how does thismulti-billion dollar
multinational company not knowhow to manage the platform?
And in general it just becomespeople are slow to adapt, people
don't know how things work,they don't have the internal
teams that have the knowledgeand understanding.
So we realized that we couldprovide a lot of value that way
(06:09):
and we also had a lot of bigclients early on because these
companies were looking forpeople to manage this.
So some of the big brands weworked with early on were
Rembrandt, whitening Plackers,dental Supplies, headwear, uh,
burt's bees, so like a varietyof different, like well-known
names were working with us as asmall little agency and, uh, we
(06:32):
were driving millions of dollarsa year in sales.
Uh, revenue for them would dothe platform, which was awesome.
So, uh, yeah, it was reallythat they don't have the
capability or the knowledge todo it themselves.
Obviously, they've started tohire people and they're a little
bit more knowledgeable on howthe platform works, and there's
more and more advertisingdollars pouring into Amazon, but
still it's difficult if youaren't in there the day-to-day.
(06:54):
We've seen stuff.
We've seen some of the weirdeststuff happen.
We've worked with hundreds ofbrands at this point and we'll
see something happen on oneaccount, like three years ago,
and we won't see it again foranother three years.
But if you're in a companywhere you're only working with
one brand when that thing comesup, you're going to have no idea
what to do, and that's kind ofthe advantage that we have is
we've seen pretty mucheverything.
Speaker 1 (07:19):
So a company like Crayola, for example I mean,
obviously it is a householdbrand.
Every child in America andprobably Europe and other parts
of the world have used theirproducts at least once or
hundreds of times Right, I mean,they're probably not used to
selling direct to the consumeranyway.
And then to put the twist ofAmazon on it as well is even
more confusing to them, becausethey probably have a Web site
where everything's overpriced.
And then you go to Target orWalmart or wherever and get the
(07:41):
same box of crayons for twodollars cheaper a box, and mom
just goes there to buy thoseanyway.
So you don't really think aboutit.
But then Amazon comes along andpeople are buying that, so it's
interesting.
And then if you're not going tohelp them with it, then what A
reseller would have to go onthere and create the Crayola
account and add the crayons andthen sell it for them, which
(08:03):
they probably weren't really?
Speaker 2 (08:04):
that excited about.
Is that why they felt like theyneeded to be on there, exactly?
I mean, I think you just youpretty much nailed it when you
create and this still creates alot of problems for brands that
don't have solid supply chainsand solid distribution.
So if you don't have a good mapagreement in place, you get
resellers on the platform whichjust wreak havoc on your
listings.
They'll change content, they'llchange images, they'll take the
buy box from you.
(08:24):
So, yeah, part of it's anecessity.
The other way I kind of put itis that I guess it also relates
to a necessity, but in adifferent way, is that?
70% of all online productsearches start on Amazon.
So if you are a brand andyou're not on Amazon, like, most
customers are not going to findyour product unless they like,
know your brand by heart and arespecifically going to your
(08:46):
website looking for it.
So it's kind of a combinationof different factors.
It's a combination of trying toget control of the marketplace
and trying to make sure thatyou're not letting uh resellers
in, but the other one is justproduct discovery and brand
discovery and customer uh reachand like you can't get better
reach or better discovery, evenbetter conversion rates than
(09:06):
than what you get on amazon sotalking about someone like
crayola or some of your othercurrent customers, or rembrandt
or what any of these companies?
Speaker 1 (09:17):
so amazon, you send them the products, they do the
packing, they do the shipping,they do the storage, but you are
your client, like Crayola hasto provide the product to Amazon
when they're running out oflike yellow crayons, right, and
you're making them manage theinventory.
Amazon's making all thefulfillments right.
(09:39):
If it's Amazon Prime shipping,then it goes to an Amazon
warehouse.
Is that how it works Exactly?
Speaker 2 (09:45):
So there's two different models.
You have 1P and 3P.
1p is you're actually sellingthe inventory at wholesale to
Amazon.
Typically, that's only reservedfor big brands.
It's an invite-only platform.
About 60% of all products onAmazon are 3P, so and 60% of all
sales that happen on Amazon are3P, so that's just.
(10:05):
You know any brand, any person,can start a selling account,
list their products and startselling.
So that's kind of how the twodifferent models are
differentiated.
When Amazon is buying yourinventory, they literally handle
everything.
When you are the third partyseller, you can send your
inventory into a fulfillmentcenter Amazon FBA is what it's
(10:25):
called and from there Amazonwill help you with the customer
service, the shipping, thetracking, all that stuff to the
consumer.
They manage a lot of yourinventory management aspects,
but you as the seller still needto be responsible for making
sure that, yeah, you're sendinginventory in, you're
anticipating the inventory thatAmazon's going to need.
So forecasting is extremelyimportant and yeah, I mean
(10:48):
that's more or less how it willwork.
And then, once your inventoryis at Amazon, either on the 1P
or 3P side, you get the Primebadge, as you mentioned, which
means two-day shipping or less,although a lot of people have
seen that promise kind of falloff over the past few years as
Amazon warehouses have justgotten busier and busier.
There's so much volume, so manywarehouses being opened and so
many people trying to get theirproducts into Amazon that it's
(11:11):
actually slowed down theirprocessing times and the wait
time to get your inventory fromyour warehouse to amazon's
increased by at least one to twoweeks it's.
Speaker 1 (11:20):
It's unbelievable.
The logistics between orderingsomething and then it being
delivered to you, sometimes thatsame day, yeah is on as
absolutely a wonder.
It's like one of the wonders ofthe world.
In my opinion.
You might, if you actuallyreally think the number of boxes
going through Amazon in a dayand just the whole system and it
working, and then working withsomeone like you who's working
(11:42):
with somebody else to get theinventory to them, and all of
that working.
Does that all go under the sameAmazon account?
Knowing that there's peoplelike you helping companies, or
you and your clients accountsand you're kind of sharing.
Speaker 2 (11:56):
How does that kind of all in the us yeah, in the us,
uh, we're in our clientsaccounts and we're managing that
.
Uh, we do have a company inmexico as well, uh, which helps
brands expand to mexico and that, specifically, is through our
own account, just because ofdifferent, uh tax and legal
issues.
So that's kind of the way weneed to go about it there.
(12:16):
And, yeah, I mean the logisticsbehind it is incredibly
impressive, I mean especially onthe Amazon side, but they're
also interesting when we look atMexico.
I mean the big platform here isMercado Libre, amazon's also
big, but Mercado Libre is theLatin American e-commerce
platform and their fulfillmentnetwork, in Mexico at least, is
better than amazon's and wowthey
(12:36):
they literally have thecapabilities to do same day
delivery within like an hour,depending on where you are.
I mean, most of the populationof mexico lives in three big
cities, which makes it a littlebit easier.
Yeah, but it's crazy like weactually on the mercado libre
side, we actually get an order,send out the inventory and we
can't upload it, upload thetracking ID, fast enough to the
(13:00):
platform before the consumeralready gets the product
delivered.
So we get the product deliveredto the consumer and Amazon or
MercadoLibre are like well,where's the tracking ID?
And it's like well, thecustomer already has it.
Do you really need it?
So it's pretty impressive ingeneral how these big e-commerce
companies have figured out todo how to do last mile delivery
(13:20):
in the most efficient waypossible.
Speaker 1 (13:22):
Yeah.
So I'm going to kind of ask yousomething a little bit off off
a normal subject that you'reused to in your own industry.
But just bear with me while Igive you a little explanation of
the question.
So in my business, when we sella domain name to a merchant
like yourself or to one of yourcustomers we talk about if
they're selling toothpaste wecan say, you know, maybe you
should think about buyingToothbracecom or Mintcom or
(13:44):
Mintyfreshcom, and then it goeswith your marketing and it makes
it memorable.
It creates brand recognition,trust, repeat business, word of
mouth, business, you know all ofthese different benefits and
then when someone's running lowon toothpaste, they'll just come
back to your domain name, yourwebsite, and you'll do it again
Now with yourself.
Other than the subscribe optionon Amazon, how are you really
(14:08):
creating brand loyalty toyourself and your vendors?
Because I don't remember I justsee it's Amazon.
Like I don't know that MikeBegg, incorporated Amazon
Advisors, is the one who madesure that it was delivered at my
door and it was exactly as itwas advertised and it isn't
broken and it's good.
Like you're just relying onthat and that is kind of a
(14:32):
strange business model, thatyou're totally in bed and kind
of in there with Amazon andyou're promoting their brand and
making sure everything's okaywith that, hoping that they
provided again that same personagain that you're gonna have to
compete for in the future.
So what do you think about that, of not doing it the
traditional way?
Speaker 2 (14:53):
I mean everything you said.
There is pretty much a commoncomplaint we get from our
customers.
I mean everything you saidthere is pretty much a common
complaint we get from ourcustomers.
I mean you don't own thecustomer data at the end of the
day.
Amazon pretty much blanks outany personally identifiable
information on every order thatyou get.
So one of the big challengesfrom the brand loyalty
standpoint is how do I getpeople to come back and you
(15:13):
mentioned subscribe and save.
That's a really good option forgetting someone to come back to
your listing.
The only other real option inthe Amazon platform is to use
advertising, and we havetargeting capabilities to target
people that have purchasedproducts, and it's up to the
last 365 days, so we can targetpurchases with whatever look
(15:35):
back period we want.
So, for example, let's say youhave a product that lasts 30
days, so we can target purchaseswith whatever look back period
we want.
So, for example, let's say youhave a product that lasts 30
days.
Well, maybe we should probablystart targeting that person
after 30 days to make sure thatthey're coming back and buying
again.
So the only way to do it on theAmazon side is just keep
putting more money into thesystem.
It's pay for play.
That's kind of the only way itis.
Now, if you run your own DTCwebsite, there's some things you
can try to do, which don'tnecessarily mean they're going
(15:58):
to work.
Product insert cards youprobably ordered something on
Amazon.
It comes and there's a littlepiece of paper inside that says
check out our website or here'sa coupon for our website or give
us a review and we'll give youmore product stuff like that.
Yeah, exactly that type of stuff, and the whole idea there is to
try to capture your informationof the purchase on Amazon.
So a good way that we recommenddoing this to a lot of our the
(16:20):
companies we work with and thebrands we work with is use the
product insert cards to givethem something that can only be
claimed through your website.
So now there's gray areas herebecause of Amazon's terms of
service, but if your productcomes with a warranty that they
need to register for on yourwebsite, well that's legal.
If you are offering a freee-book that they need to get on
the website, well that's alsolegal.
(16:42):
All of those are opportunitiesfor you to start capturing the
customer emails at least, andmaybe some of their other
details, depending on whatyou're asking, once they
actually go to your website.
But from there is where you canstart really building the brand
loyalty on platform or sorry,off platform on your own website
, because now you can startemail marketing them, you can
start putting them intolookalike audiences on other
(17:02):
platforms.
You can start trying to get themto purchase their offering
subscribing, subscriptionservices through your own
website.
Yeah, All of that is kind ofthe way that you really have to
think about it in the long runof how you create brand loyalty.
Speaker 1 (17:17):
All right.
And then the other question isin our business there's this
thing called domain parkingright, and so what happens is if
someone takes a domain name,they change the name servers and
there's ads put on that domain.
So if you have freemapscom,there's links for maps and
somebody clicks on that ad andit's most of the time those ads
are fulfilled by Google andtheir ad network.
(17:39):
When I first got in thebusiness, there were actually
multiple companies that peoplecould choose from, one being
Yahoo, bing, and then they havekind of fizzled in the market
and now it's just Google.
And then Google used to payexponentially more and then
every quarter, every half year,they go because of market
conditions.
We need to turn down your splita little bit.
(18:01):
We need to turn down your splita little bit.
Oh, we need to take a littlebit more off your split.
Oh, because of the market.
But even when the market cameback, they didn't give you any
more back.
They'd say, oh, we're going topull it back a little bit.
So now names that made X amountof dollars per month.
(18:26):
They're probably down from whenI got in the business between
like 60 and 80 percent inearnings that they would have
gotten back then living off ofthese opportunities, I could see
that their price, or theirsplit with you over time would
potentially is going to have toget worse.
Right, and do they change yourrevenue share?
Do they?
Do they mess around with that,or is it really always been
(18:46):
consistent with them as apartner?
Speaker 2 (18:49):
No, I mean they're constantly increasing the fees
to use the platform.
I mean the main fee is thereferral fee and that fee has
been pretty consistent.
That doesn't change.
It's usually a flat 15% fee forselling a product on Amazon.
Where they've really beensqueezing people has been on the
logistics and fulfillment fees.
So if you're using their ownwarehouses they charge you a
certain amount for storage, forpick and pack, for sending every
(19:13):
shipment, and that's slowlybeen increasing over time and
they've been figuring out newways to introduce fees.
So there's a lot of there'smargins that are continuing to
be squeezed by Amazon throughall these different fees.
And you know that's part of thereason why Amazon is being
investigated so much by the FTC,because a lot of these
(19:34):
practices are kind of likequestionable.
So, for example, I can chooseto fulfill inventory from my own
warehouse or I can use Amazonservice.
If I don't use Amazon service.
If I do fulfill from mywarehouse, the ability to get my
product visibility on theAmazon platform is suppressed,
so Amazon is pushing you towardsusing that.
Another good example of this isthis year.
(19:57):
Amazon introduced a coupledifferent fees.
One's called the inboundplacement Well, inbound
placement fee has been around,but they increased it.
And there's another one calledlow inventory fee.
Well, it kind of helps thatAmazon also rolled out their
Amazon warehousing anddistribution service where, if
you use Amazon's warehousing anddistribution service, inbound
placement fees go away.
(20:18):
Uh, your inventory isautomatically replenished, so
your low inventory fees go awayso okay they're just pushing you
into trying to use more andmore of their services and
becoming more and more dependenton them, which, in a way, is
really scary, uh, but it's.
They're just like I said before.
I mean like 60 percent of allsearches are happening on Amazon
.
You can't be there.
(20:39):
You kind of have to be playingthis game even though it sucks.
Speaker 1 (20:43):
Yeah, well, it's the same with parking.
Like, what are you going to do?
You know you're dealing withGoogle.
I mean it is, it is what it is,you know, and what Google does.
What Google does to people isthey will do what's called
clawbacks, and so if you make acertain amount of money in
parking, they could come backand they can say wait a minute,
we don't think that traffic thatcame to your domain name was
real or met our guidelines andwe want our money back, and they
(21:04):
can take your money back.
So I'm guessing you're probablydealing with that with returns.
Speaker 2 (21:09):
In a way.
Speaker 1 (21:10):
So what I don't understand with Amazon, right,
or like if I go to Target or Igo to Home Depot and I bought
like a saw blade at Home Depotand I hand it back to them and
the person at the counter kindof looks at it and goes, ok,
takes the return, they're gonnabe like uh-uh, but like with
Amazon, I've actually like neverheard of Amazon even
(21:42):
questioning anything that I'vesent back.
And it's even at the pointwhere I open the box of
something.
I look at the product and I'mlike you know what, I don't, I
don't want this and I don't evenreally do a good job packing it
back in the box.
I just send it back and I getmy money back and I mean I and
I'm not abusing it, you know,I'm just you know, but I've
never had a return rejected andI've never had an issue.
(22:06):
So like, what is what happenswith that?
You know, in a very quickanswer, people can hear that one
.
Speaker 2 (22:12):
Yeah, so I mean you pretty much nailed it Like
Amazon's return policy is 30days and that's like the minimum
.
So all sellers have to meet 30days during Q4.
They have some extended returnperiods.
But dealing with returns I meanfrom the actual operational
standpoint it's pretty easy as aseller because Amazon's gonna
handle it.
If you're using theirwarehouses, where the fees and
costs come in, is that I'm goingto get my money back, but I'm
(22:34):
not going to get the money backfor the shipment.
So every time you returnsomething, the seller is losing
money on the shipping costs.
If the product comes back ingood condition, amazon will put
it back into inventory and startselling it again.
If it comes back in poorcondition, all you can really do
is have it sent back to you orhave the inventory destroyed.
So it's kind of a lose-losesituation for the sellers in
(22:57):
general.
And I mean you're obviously notabusing the system, but there
are a lot of people that areliterally committing fraud every
day doing this.
Oh, yeah, a good example of thisis like I just heard about a
brand that had like ahigh-priced ticket item uh, like
two, three hundred dollars andthey were literally taking the
product, taking the product out,putting something else back in
(23:18):
it and sending it back for areturn, and then they're
reselling the product.
So they get the product for free, sell it, make money that way,
and then they're they're doing,uh, they're sending like rocks
so it's like ridiculous some ofthe stuff you see from people
and it really makes you likewonder, like how people even
think about doing this to othersellers, other brands, other
companies, I mean most of themdon't care, obviously, but yeah
(23:42):
it's a huge challenge andreturns is probably one of the
least enjoyable things of theplatform.
Speaker 1 (23:48):
Well, if you see what's happening in
brick-and-mortar locations, withpeople just going in and
blatantly stealing things, Imean if it's a faceless crime
and you're just doing it in thecomfort of your own home, I mean
people obviously are going tokeep pushing the line.
So quickly, in a one sentenceanswer what are your feelings
about Timu?
I heard they do $5 billion insales in the United States last
(24:12):
year.
Speaker 2 (24:13):
It's one of the fastest growing platforms,
Unfortunately.
I don't have a lot that I'mselling on it right now, so I
really don't have much insight.
You haven't even thought abouttrying out?
Speaker 1 (24:21):
Are you worried about becoming obsolete or a dinosaur
by not expanding on a team, ordo you even have that
opportunity to do so?
Speaker 2 (24:28):
I mean we have the opportunity, but I'm not worried
about it at this point.
I mean, amazon is just such abigger platform.
It's just such a household name.
The thing that I am moreinterested in and this depends a
lot on government rulings isTikTok shops.
I think TikTok shops has morepotential in the long run if
TikTok does not get banned inthe US.
So Tmoo is a good opportunityas well.
(24:49):
I mean, there's lots ofplatforms.
You can be on Walmart at sea,depending on the product you
have, uh, but TikTok shops issuper interesting if you have a
really good content machine.
Speaker 1 (24:58):
Uh-huh Got it.
So a guy like me, if I say, youknow what, I don't want to be
in the domain business anymore,I want to get into Amazon, I
want to start selling things, soI would come to you and you'd
say, as long as you can get methe inventory consistently, we
can do everything else for you.
Or if you're like I know theguy that bought bobbleheadscom,
so they make bobbleheads, customones for people.
(25:18):
I think it's more of an Etsything.
But if he had baseball playerbobbleheads, he'd come to you
and say I can deliver a thousandof these a month.
And then you guys are like allright, we'll make it happen.
Speaker 2 (25:28):
If there's demand, right?
Yeah, that's more or less it.
I mean we'll help them get theproducts on Amazon.
We'll help them set everythingup and then run the ads for them
.
So the inventory will go toAmazon.
Every order that comes in isjust shipped out.
That's pretty much it in anutshell.
Speaker 1 (25:44):
So I have a friend that works at a grocery store
and he said that hamburger isthe bread and butter of a
grocery store.
He said in the 4th of July it'sjust hundreds of thousands of
pounds of hamburger just goingout the door and the markup's
good on it.
It just sells and sells andsells.
What is like, what is theautomatic product that you know
(26:05):
your sellers usually can do wellon?
If you can, if you can tell melike what is it?
That is the winner on there.
Speaker 2 (26:12):
There, I would say there's no one thing actually.
I mean, it's really gotten tothe point where you have to be
very niche in the productsyou're selling to be able to hit
something that's just going torun away.
I mean, highest margins by faris supplement products, but it's
also the most competition.
What products Supplements?
Speaker 1 (26:28):
Oh, supplements.
Speaker 2 (26:29):
Fitness supplements, proteins like that type of stuff
.
The margins are incredibly highon it, but your customer
acquisition costs are extremelyhigh as well, so I don't
recommend doing that unless youhave like deep pockets.
Generally, I would say go nichedown, find a little niche where
you have an audience that youcan reach or you know how to
reach this audience and thenfigure out a product that they
(26:50):
want to buy, and that's reallywhere you're going to start
seeing the profit, because youradvertising costs are going to
be low, because it's a reallyniche market.
You have other ways to reachthese people and sell the
products, which is just going toincrease your margin.
I mean, those are generally theways to be successful.
Speaker 1 (27:03):
Got it.
It's interesting when it comesto supplements.
When I was selling the domainsexcom, I went to the adult
video network awards and part ofthose award shows isn't just
the entertainers.
There's actually a very largesegment of the people at those
conferences that makesupplements that do you know
(27:24):
different things to you and someyou might be able to purchase
at a gas station or, you know,online or whatever.
And when I spoke to them andasked them, like you know where
is your manufacturing plant, andsome of them were giggling and
laughing because they say theymake them in their garage.
So you know, when I look atsupplements I certainly spend
(27:46):
time researching the companyname, who it is, when it says
it's lab tested, you know what,what's the lab, you know where
was it tested and the legitimacyof it.
But I find it interestingbecause supplements at Amazon
are quite expensive.
You know I take fish oil everyday and a jar of that isn't
cheap and you know it adds upreally fast.
(28:08):
So I can see that in themargins probably like 50 percent
, right I'm guessing, or higher.
Speaker 2 (28:13):
It's pretty high yeah .
Speaker 1 (28:17):
Yeah, and then when it comes to the type of client
that you would like to focus onwould be a Crayola, or a person
or individual small businesswith a lot of little products
that they specialize in thatthey can consistently deliver.
I mean, what is that kind ofperson that you like to go after
and how do you think you canhelp them?
Speaker 2 (28:37):
We've done lots of work with like Fortune 500
companies and they're great inthe fact that they allow us to
do a lot of what we want, butthe expectations are really high
and you generally have 10, 15people you're dealing with that
all have different uh priorities, and that's one of the most
(28:57):
challenging things about dealingwith large companies.
Uh, the other thing that's alittle bit challenging is they
have massive ad budgets and thenfiguring out how to actually
use all those advertisingbudgets is a is a challenge.
Ideally for us.
The clients we work with arebetween one to 20 million.
Uh, because it they generallyhave a team.
You generally have one to twopoints of contact, which makes
(29:18):
the ability for us to manage therelationship a lot easier, and
it also means they have enoughmoney for us to get the results
that we need or to have thebudget to have the inputs that
we need to help them get thebest results on the platform.
So that's kind of the sweetspot that we found and it's
really where we kind of stick inour lane.
(29:39):
But you know we've done the bigcompanies.
We'll do them again if theycome back.
But, uh, it's just a little bitof it's.
It's a lot more work and it'skind of a headache dealing with
some of those challenges.
Speaker 1 (29:46):
Got it, got it.
And then, uh, most importantquestion you said you're from
Connecticut.
Speaker 2 (29:51):
I am.
Speaker 1 (29:53):
Are you a Patriots fan, Giants fan, Jets fan?
Connecticut doesn't really havemuch of an identity when it
comes to sports.
And have you lost that, oryou've turned to Chicago and you
moved out to Chicago.
Speaker 2 (30:04):
Unfortunately no.
So I'm like this is just goingto blow your mind, but I'm
actually an.
Eagles fan.
Speaker 1 (30:10):
Oh God, even worse.
Speaker 2 (30:14):
My aunt and uncle went to school in Philly, and I
went to school in Phillyactually too.
Speaker 1 (30:17):
Excuse.
Speaker 2 (30:19):
Yeah, when I was little they just bought me all
the Eagles stuff.
I got hooked, but I will sayI'm a bigger hockey fan than
anything, so let's go, rangers.
Speaker 1 (30:26):
Go Rangers.
Yeah, there you go.
They got a decent team thisyear, so I'll see you guys in
the playoffs probably.
So we'll see about that.
We'll see about it.
And if anybody is interested inyour services and what you can
do for them, what is the easiestand best way for them to
contact you?
Speaker 2 (30:42):
So one of two ways.
Either reach out to us directlyat the website amzadvisorscom,
or you can email me directly,mike at amzadvisorscom, and I'm
glad to help in any way that wecan Awesome.
Speaker 1 (30:55):
Well, thanks for your time today.
It's been great.
I actually really enjoyed thisone.
I learned a lot about Amazonand a lot about your business.
Speaker 2 (31:05):
And I hope we can get you some good opportunities for
you.
I appreciate that a lot, Jeff.
Thanks for having me again.
Speaker 1 (31:08):
All right.
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