June 13, 2021

Selling Online and Building a Successful E-Commerce Business with Joe Scartz

Selling Online and Building a Successful E-Commerce Business with Joe Scartz
Apple Podcasts podcast player iconSpotify podcast player iconYoutube Music podcast player icon
Apple Podcasts podcast player iconSpotify podcast player iconYoutube Music podcast player icon

In episode 77, host Eric Dickmann interviews Joe Scartz. Joe is the Chief Digital Commerce Officer of Velocity Commerce Group and TPN+. He is an experienced executive with over 20 years of quantifiable marketing, digital marketing, and ecommerce success. Scartz has worked across industry verticals like retail, travel, CPG, automotive, branded manufacturers, and government to drive innovative and impactful marketing and e-commerce solutions with proven success. Whether in an e-commerce start-up or in a larger agency, Joe has worked well in team settings as an inspirational leader, mentor, and team member.

Joe Scartz is an accomplished marketing executive, and as Velocity Commerce Group’s fearless leader, he is responsible for overseeing all digital commerce strategy and execution, including mobile, social, and traditional e-commerce.

He has contributed to more than 20 years of success for brands including Harley-Davidson, United Airlines, Budweiser, Clorox, and Hershey. Joe Scartz has an impressive history of helping agencies and Fortune 500 companies meet their strategic and financial goals.

For show notes and a list of resources mentioned in this episode, please visit: https://fiveechelon.com/selling-online-building-successful-ecommerce-business-s5e11/

Send us your questions or comments

A fractional CMO can help build out a comprehensive marketing strategy and execute targeted campaigns designed to increase awareness and generate demand for your business...without the expense of a full-time hire.

The Five Echelon Group - Fractional CMO and strategic marketing advisory services designed for SMBs looking to grow. Learn more at:

https://fiveechelon.com


WEBVTT

00:00:31.339 --> 00:00:33.590
Welcome to The Virtual CMO podcast.

00:00:33.829 --> 00:00:35.564
I'm your host, Eric Dickmann.

00:00:35.899 --> 00:00:48.259
In this podcast, we have conversations with marketing professionals who share the strategies, tactics, and mindset you can use to improve the effectiveness of your marketing activities and grow your business.

00:00:48.813 --> 00:00:51.843
This week, I'm excited to welcome Joe Scartz to the podcast.

00:00:52.082 --> 00:00:58.052
Joe is the Chief Digital Commerce officer of velocity commerce Group And TPN Retail.

00:00:58.382 --> 00:01:06.692
Velocity Commerce Group has deep expertise in omni-channel retail, Amazon, DTC, and pure play e-commerce retailers.

00:01:07.022 --> 00:01:20.251
The company is composed of a group of industry veterans and business experts who help small and large clients with their marketing and account strategy, e-commerce management, content creation, supply chain consulting, and Amazon listings.

00:01:20.551 --> 00:01:28.171
He has contributed to more than 20 years of success for brands, including Harley Davidson, United Airlines, Budweiser, Clorox, and Hershey.

00:01:28.742 --> 00:01:35.461
Joe has an impressive history of helping agencies and Fortune 500 companies meet their strategic and financial goals.

00:01:36.152 --> 00:01:42.301
Today, we're going to tackle helpful tips to widen your online businesses' reach and enhance your e-commerce strategy.

00:01:42.542 --> 00:01:44.341
Please help me welcome Joe to the program.

00:01:44.941 --> 00:01:47.641
Hey, Joe, welcome to The Virtual CMO podcast.

00:01:47.641 --> 00:01:49.621
I'm so glad that you could join us today.

00:01:50.393 --> 00:01:51.352
Eric, its great to be here.

00:01:51.742 --> 00:01:52.882
And thanks for having me.

00:01:53.432 --> 00:01:58.712
We're going to get a chance to delve into a topic here that we really haven't gone into very much on this show.

00:01:59.012 --> 00:02:10.862
But couldn't be a better topic for this time that we have been in and are in, which is really the whole topic of e-commerce and really the changing landscape and how that's affecting businesses.

00:02:11.492 --> 00:02:19.203
Before we kind of kick it off, I'd love it if you could just give people, you know, a 20-second introduction to where you're from and what you do.

00:02:20.313 --> 00:02:20.612
Sure.

00:02:20.612 --> 00:02:30.393
I'm Joe Scartz, the Chief Digital Commerce Officer at TPN and the President of Velocity Commerce Group, which is a part of TPN focused on e-commerce.

00:02:30.962 --> 00:02:31.592
And that's what we do.

00:02:31.652 --> 00:02:33.842
We help clients in four key areas.

00:02:34.353 --> 00:02:35.723
I'll just list them off quickly for you.

00:02:35.723 --> 00:02:37.383
Amazon is a focus here.

00:02:37.443 --> 00:02:42.703
We're working on the platform for almost a decade, to our play.

00:02:42.753 --> 00:02:46.653
So identifying those next growth opportunities in e-commerce pure play.

00:02:47.223 --> 00:02:49.653
E-commerce either startups or established brands.

00:02:49.683 --> 00:02:50.883
We want to distribute your product.

00:02:51.433 --> 00:02:53.582
The third one is a big one, omni-channel.

00:02:53.643 --> 00:02:55.923
Walmart target, Kroger, Albertson.

00:02:56.013 --> 00:03:02.033
Those types of platforms obviously e-commerce is a much, much bigger component of the clearly even before COVID.

00:03:02.603 --> 00:03:04.203
Uh, and then lastly B2C.

00:03:04.603 --> 00:03:10.332
So how do you manage all four of those e-commerce channels for your brand and have success?

00:03:10.843 --> 00:03:12.763
That's what we help clients do in a nutshell.

00:03:13.423 --> 00:03:16.933
Well, I think you were in a good space, you know, coming into COVID, right?

00:03:16.933 --> 00:03:21.163
This has been transformational I think in terms of the e-commerce business.

00:03:21.163 --> 00:03:22.362
It was booming already.

00:03:22.873 --> 00:03:30.883
But you know you can't walk out your front door anymore without getting hit by a post office car or UPS car, Amazon delivery vehicle.

00:03:31.093 --> 00:03:33.493
There is so much e-commerce that's taking place.

00:03:33.674 --> 00:03:37.683
From your perspective, what have you really seen over the course of the past year?

00:03:39.063 --> 00:03:41.582
We have seen brands have to shift pretty fast.

00:03:42.240 --> 00:03:47.657
I don't know if I want to mention the brand, but we had one client who was pretty dependent upon their brick and mortar locations.

00:03:47.687 --> 00:03:52.667
Although they did have products, they were servicing product hybrid type of business.

00:03:53.117 --> 00:04:00.630
And we had already been talking to them luckily about launching on Amazon as a third-party seller on the platform.

00:04:00.960 --> 00:04:04.830
So for people that don't know, your 1P, you sell direct to Amazon.

00:04:04.860 --> 00:04:14.400
And if you are 3P, you're selling as a seller through their marketplace, A dynamic that has made them successful over the years and having both of those relationships with manufacturers.

00:04:14.400 --> 00:04:19.360
But anyway, we had already started talking to him about 3P, but no work had started.

00:04:19.610 --> 00:04:29.909
We just didn't have some conversations about well you know you've got these product lines, we can take direct the consumer which are separate from what you do on the service side of your business, but clearly complimentary.

00:04:30.360 --> 00:04:33.600
Although a very tiny percentage of their total business.

00:04:34.319 --> 00:04:44.790
So we kind of dragged those conversations along in December and January, February, and then all of a sudden um we didn't see that late turning shut down.

00:04:45.419 --> 00:04:47.729
Uh it was time to get up on Amazon real fast.

00:04:48.269 --> 00:05:25.939
And so we launched this brand on Amazon, and you know days, and eventually got them set up with The Bill by Amazon which allows them to ship out of the Amazon warehouses, allows prime shipping for the consumer, and now it has actually taken and grown, I don't even know how to say it, without giving away the numbers, but let's just say that um that few percentage points of their business that the actual you know hard good products was it is now a much larger portion of their business than it was 12 months ago, uh which is a shift they never would have made it.

00:05:26.299 --> 00:05:58.009
You know I think it's really important to know it has been it has been a really um challenging, exhilarating, bittersweet period for anybody I think working in ecomm because obviously the macro conditions just you know generalities of life that we're all dealing with are extremely difficult and and um certainly devastating for many, but as far as the business side of things goes, it has created unbelievable as probably other people on this podcast may doubt it, people that you talk to.

00:05:58.399 --> 00:06:34.430
No it has created incredible opportunity for people that were positioned for the change, and even for companies that were maybe lagging behind a little bit, the ability to shift um they're uh they're points of distribution and e-commerce, set up e-commerce store is concealing consider selling direct to the consumer or creating new relationships with their retail partners where they're maximizing their assets on e-commerce sites, or maximizing their media dollars or maximizing their supply chain to account for e-commerce all of those changes which I believe we're coming anyway just at a slower pace.

00:06:34.939 --> 00:06:41.359
We're accelerating to the point in the last 12 months where you know I don't think there was a turning back at this point as a brand.

00:06:41.519 --> 00:06:45.409
You need to think about those four channels that I mentioned that that's that which no doubt they are.

00:06:45.799 --> 00:07:02.930
But also think about how are you going to grow into the future and what channels are consumers going to be buying on I don't think this was I do think it was an unfortunate and artificial sort of um propellant of a growth trend that was coming.

00:07:03.439 --> 00:07:10.399
And in the beginning there were people who were saying that they expected you know these e-commerce numbers drop uh as the pandemic ended.

00:07:10.430 --> 00:07:13.039
Now that's when we were talking about the pandemic being short lived.

00:07:13.579 --> 00:07:23.269
Uh now that we're seeing it's obviously you know Uh continued and will continue, to evolve, and manifest into a different type Uh uh situation with COVID-19.

00:07:23.659 --> 00:07:26.779
Um we uh we do not anticipate any drop in e-commerce.

00:07:26.779 --> 00:07:30.229
We do see a slowing growth rate.

00:07:31.009 --> 00:07:42.219
Um but grocery e-commerce as an example just because you know that was the last great category to get you know deeply disrupted by ecomm.

00:07:43.039 --> 00:07:51.990
That that will exceed 10 percent, and um you know I believe that it will continue to grow even more rapidly in the future as consumers get close to Instacart and things like that.

00:07:51.990 --> 00:07:52.169
So

00:07:52.642 --> 00:08:04.596
So if you're a business, you make widgets, you've got a product that has broad national, international appeal, you believe that you could grow your business exponentially by selling it online.

00:08:04.745 --> 00:08:09.664
What are the benefits and disadvantages to the different platforms that are out there?

00:08:09.664 --> 00:08:15.214
So obviously you've got Amazon out there, eBay is still floating around doing business, right?

00:08:15.214 --> 00:08:18.154
You've got Shopify, you've got places like Etsy.

00:08:18.274 --> 00:08:24.875
There are all these different marketplaces that seem to appeal to different kinds of businesses selling different kinds of things.

00:08:25.625 --> 00:08:26.794
What are the differences?

00:08:27.484 --> 00:08:32.495
Well I mean clearly you mentioned a couple of them that are really important.

00:08:32.855 --> 00:08:40.985
Amazon is great for anybody that wants to sell a product as a seller to a consumer across numerous categories.

00:08:41.375 --> 00:08:44.705
They are very good for a consumer experience.

00:08:44.705 --> 00:08:52.955
That's still it's, this is evolved over time and this is an old term, but it is still sort of the haven of the spear fishing commerce experience.

00:08:52.985 --> 00:09:08.194
Where I know that I need Uh a new phone cover for my iPhone, I know that Amazon's got a wide selection of them I'm going to go in, and I'm going to look at the first maybe two rows of results on it on a search query, if I search that way.

00:09:08.585 --> 00:09:15.304
Uh it's very unlikely that I'll go through a category and they're sort of left-hand navigation and search and get into uh the phone cover.

00:09:15.304 --> 00:09:20.194
It's more than likely I'll search in the search bar, find it, look at the top two rows, pick one, buy it, right?

00:09:20.434 --> 00:09:24.335
That's$20 purchase$19.99,$39.99, depending on what you want to do.

00:09:24.934 --> 00:09:36.424
But if you're a It has as many of your listeners know, commoditized the commerce experience, and it has done a tremendous amount of commoditization to certain brands.

00:09:36.634 --> 00:09:42.125
Even today, the dynamics exists where certain brands will not sell on Amazon.

00:09:42.454 --> 00:09:52.294
Now many have opened up and some have come on, and some have come off, and now some have exclusive skews, and they manage their portfolio in a certain way where they protect certain skews but not others.

00:09:52.804 --> 00:10:01.564
And this marketplace dynamic which allows for violations of map pricing in certain instances, you Know Amazon fights it.

00:10:01.804 --> 00:10:04.684
They do fight the counterfeiters for example, but they're still there.

00:10:05.164 --> 00:10:18.004
That scenario in that type of commerce environment isn't particularly well-suited towards creators, Um folks that have curated product of their own.

00:10:18.434 --> 00:10:28.475
An artisan type of skill where they want to put something out into the world that is appreciated for its intrinsic sort of either artisticness or it's uniqueness.

00:10:29.254 --> 00:10:34.294
For those types of things, clearly you know um examples like Etsy.

00:10:34.625 --> 00:10:41.975
As a different type of platform for creators to sell direct to consumer is a much more value proposition for them.

00:10:42.004 --> 00:10:58.414
A, because I think people search those sites in different ways, they will do a category-based search, they're less likely to do a freeform Uh search query than they are say for example on Amazon And they want to find new and novel items.

00:10:58.595 --> 00:11:00.514
You can find that on Amazon.

00:11:01.174 --> 00:11:02.794
But it's definitely not pointing to the platform.

00:11:03.184 --> 00:11:29.134
Um so I love in fact um um just last week, my stepmother there in Florida had we had a new um I had a new niece in the family, the Grandmother, my stepmother um wanted to get an updated Um placard for an Etsy sign that we had got her years ago with all the grandkids names on it.

00:11:29.704 --> 00:11:31.865
And so of course she wanted to know who the seller was.

00:11:32.225 --> 00:11:33.304
Where did I find this?

00:11:33.304 --> 00:11:33.995
How did I get it?

00:11:34.564 --> 00:11:44.824
And so of course I directed her back to Etsy, and then you know what Happens in a situation like that Is you become um you begin to have an affection for the artist.

00:11:45.634 --> 00:11:55.654
In that case as opposed to the retailer, much like you might with a brand perhaps, but in that case you've got to remember, where can I find the artist who built this sign?

00:11:56.225 --> 00:11:57.034
Are they on Etsy?

00:11:57.064 --> 00:11:58.144
Do they have their own website?

00:11:58.174 --> 00:12:04.985
And who knows that may transition to even perhaps a different type of direct to consumer relationship with that artist.

00:12:05.194 --> 00:12:07.595
So it's just a different buying process.

00:12:07.745 --> 00:12:09.904
And where does Shopify fit into the whole process?

00:12:10.855 --> 00:12:20.284
I have had great systems of getting to work on some Shopify products are pro Uh excuse me projects over the last year with great clients.

00:12:20.794 --> 00:12:29.225
And you know I can tell you that Uh if it's directly in that process,even major brands today Um we have a Shopify project going on right now.

00:12:29.794 --> 00:12:37.924
Um you know even major brands today, you know midsize brands, um they'll look to Shopify, maybe the elite Shopify package.

00:12:38.105 --> 00:12:41.314
right away, it's like$300 or$400 a month, still.

00:12:41.434 --> 00:12:43.914
You know edit space, pricing.

00:12:44.174 --> 00:12:45.365
But it goes down from there.

00:12:45.454 --> 00:12:48.365
I think you can get down to like$29 a month or$39 a month for.

00:12:49.054 --> 00:12:52.954
So it has democratized e-commerce in a way that was unthinkable even 10 years ago.

00:12:52.954 --> 00:12:59.164
Really Uh and Shopify as an extremely important player um so where does Shopify fit in that that?

00:12:59.164 --> 00:13:08.404
Could be the platform that this uh artist is selling there, the product on their own website, and then they use Etsy as an additional means of distribution and customer engagement.

00:13:08.855 --> 00:13:14.735
Even uh like I said major brands are doing it as well if they want to try out direct consumer.

00:13:15.485 --> 00:13:20.434
Um the way they go they go to Shopify, they might look at Magento, they might look at big commerce.

00:13:20.975 --> 00:13:28.235
You know where they don't go anymore that they did when I was starting out or doing a lot more of this work, uh they don't go to IBM WebSphere.

00:13:29.914 --> 00:13:32.524
I haven't heard WebSphere in a long time, yeah.

00:13:32.524 --> 00:13:33.004
Yeah.

00:13:33.605 --> 00:13:39.914
Well I have a special place in my heart for WebSphere because I spent an entire summer camped out in Malvern, Pennsylvania.

00:13:39.914 --> 00:13:43.704
I shouldn't mention the retailer I guess but uh people could figure it out.

00:13:43.865 --> 00:13:54.845
Working on a WebSphere project and believe me, Shopify is a one point nation compared to some of that.

00:13:55.204 --> 00:13:58.884
It even works for enterprise when you're looking at you know trying some things out.

00:13:58.884 --> 00:14:01.774
But Shopify is really building your own store.

00:14:02.384 --> 00:14:07.294
But don't they have some fulfillment as well that uh that helps you?

00:14:08.105 --> 00:14:09.034
Yeah they sure do.

00:14:09.034 --> 00:14:33.664
And I think that that's been a big key of all of this, is how can you simplify the process of plugging into a third-party logistics company, finding partners for merchandising, warehousing, and then ultimately providing an Amazon-like experience in terms of the logistics side of things, which is not easy to do.

00:14:33.904 --> 00:14:36.365
Functionally, that's what the FDA platform does.

00:14:36.365 --> 00:14:50.554
The fulfilled by Amazon platform does for their party sellers also is to guarantee a certain level of customer experience that is met in terms of shipping, Uh and of course they have very stringent demands that those on their sellers.

00:14:51.004 --> 00:14:55.024
Etsy has some of the similar demands that are placed on sellers in terms of qualifications.

00:14:55.294 --> 00:15:01.745
Same with Target Marketplace, uh Walmart Marketplace, you have to apply to Walmart, you have to be invited to Target.

00:15:01.774 --> 00:15:07.534
So can you look at those marketplace growth, you know there's B to C, there's marketplace growth.

00:15:07.985 --> 00:15:15.274
Um anybody operating a marketplaces is holding those sellers um the high standards.

00:15:15.304 --> 00:15:37.625
And then again in the case of Shopify and B2C, what they're trying to do is while they don't necessarily hold sellers to those same um demands, because they don't you know it's a Different business model, they have the software and the infrastracture, they don't have a relationship with the consumer per se Shopify doesn't.

00:15:37.625 --> 00:15:39.875
Amazon does, but Target does, Walmart does.

00:15:40.324 --> 00:15:41.914
They need to protect that relationship.

00:15:42.544 --> 00:15:50.615
What Shopify does is tries to give you the tools through their partnerships, and plugins, and third-party developers who create apps for the platform and so forth.

00:15:50.824 --> 00:16:05.105
They try to give you the tools to recreate a customer experience that is somewhat close to what people might expect out of um Amazon and Walmart as it relates to Uh troubleshooting, product shifting, all those sorts of things.

00:16:07.170 --> 00:16:10.020
Hey, it's Eric here and we'll be right back to the podcast.

00:16:10.020 --> 00:16:14.880
But first, are you ready to grow, scale, and take your marketing to the next level?

00:16:15.091 --> 00:16:21.451
If so, The Five Echelon Group's Virtual CMO consulting service may be a great fit for you.

00:16:21.721 --> 00:16:27.630
We can help build a strategic marketing plan for your business and manage its execution, step-by-step.

00:16:27.870 --> 00:16:30.420
We'll focus on areas like how to attract more leads.

00:16:30.691 --> 00:16:34.831
How to create compelling messaging that resonates with your ideal customers.

00:16:35.191 --> 00:16:38.760
How to strategically package and position your products and services.

00:16:39.091 --> 00:16:43.500
How to increase lead conversion, improve your margins, and scale your business.

00:16:43.831 --> 00:16:51.600
To find out more about our consulting offerings and schedule a consultation, go to fiveechelon.com and click on Services.

00:16:52.050 --> 00:16:53.311
Now back to the podcast.

00:16:55.360 --> 00:17:09.549
You know, I'm old enough to remember you know eBay and its heyday, when everybody in their neighbor was trying to sell stuff on there, and people used to be very excited to get a stamps.com kit or something that included a scale, so you could weigh your packages and get the appropriate postage.

00:17:10.000 --> 00:17:20.826
And then people began to realize what a pain that is, how much time they can spend just preparing everything to ship out, and send and drag off to the post office, Fulfillment is really a game changer, isn't it?

00:17:20.826 --> 00:17:28.446
In e-commerce, the fact that Amazon can deliver something that you ordered, you know four or five, six hours ago to your doorstep.

00:17:28.533 --> 00:17:31.353
know who would have even envisioned that, not too many years ago?

00:17:32.133 --> 00:17:46.472
Well and I think it's interesting because now it's again, it's one of those amazing things I wish I had it in front of me, I just don't remember But Um When Prime first started out it was definitely not um 48 hours shipping.

00:17:46.593 --> 00:17:48.333
And in many cases now it was one day shipping.

00:17:48.873 --> 00:18:00.903
I forget it was I forget if it was five days or what the what the uh what the exact number of days was, but um it is a continued game of advancing consumer expectations.

00:18:01.682 --> 00:18:06.423
And um you know now you're in a situation with Prime now where it's a couple of hours.

00:18:06.722 --> 00:18:09.452
Yeah, which you know Prime now has been out for a couple of years now.

00:18:09.992 --> 00:18:12.093
And that's their modus operandi.

00:18:12.093 --> 00:18:17.952
There was a big article Which only made it halfway through this morning, today's Wall Street Journal, Uh talking about Amazon.

00:18:18.103 --> 00:18:19.863
Actually I still have it up on my browser.

00:18:19.893 --> 00:18:28.923
How strong is Amazon's hold over some of these partners because they're still dealing with some of the antitrust issues that are going to I think continue to get news for quite some time.

00:18:29.552 --> 00:18:36.062
And so as they look at you know controlling the entire consumer path to purchase, Amazon has made everything.

00:18:36.163 --> 00:20:30.873
Uber efficient in means of distribution and connecting with them Uber efficient and they use their clout across multiple Um businesses to control that relationship Um with some of those branded manufacturers to drive that efficiency pass that value onto the consumer So how's that relate to what we're talking about It's been through that Force of will That they've been willing to continue to reinvest in this cycle of innovation To get us to a place where you have two hours shipping And the best that some of these other players can do Is to try and emulate and learn from that I would think that if anybody You know th the one exception always and we've seen it work now Uh Is Walmart who has just done an amazing job catch up There's still you know there's still not the same percentage of e-comm sales but of course of total retail sales are much bigger So you have a big player There has invested a lot of money whether it was in jet or in the series of acquisitions they've made Um to play catch up not only on the customer experience side the product search side product pricing side But on the fulfillment side and they are famous now for um you know the idea of the dark store uh the idea of uh product um excuse me Of uh uh store Innovation test labs They actually have a few of these ones in New Jersey For example where they're testing out the inserts Three wins and actually trying to through technology apply lessons from e-commerce to an in-store environment and so on pivoting a little bit sorry but it's this idea of you know the success in e-commerce logistics and operations driven innovation for doll legacy, in store operational models, and even the insourcing using technology after the consumer So it's been a pretty fascinating thing to watch.

00:20:30.903 --> 00:20:37.532
Because you got to remember You know even 10 years ago, E-commerce was that was growing.

00:20:38.252 --> 00:20:47.163
But it was certainly never going to be a big player in certain categories grocery being one apparel being one of the others and those are two very fast growing categories at this point.

00:20:47.163 --> 00:20:56.972
So it is interesting now is that years ago, see in store borrow lessons from e-commerce and it almost represents a bit of a full one ADM kind of the way people think about it.

00:20:57.062 --> 00:21:05.012
Well it's interesting how you talk about that as well, because you know the analogy that always gets used is about a war time, right?

00:21:05.012 --> 00:21:10.593
And you know you can get tanks to the front line, but if they don't have gas you know what what difference does it make, right?

00:21:10.593 --> 00:21:19.593
So logistics are what wins battles and so much of what has happened whether you look at the growth of a company like Amazon or a company like Apple, right?

00:21:19.593 --> 00:21:23.792
A lot of what's happening is behind the scenes logistics that make it work.

00:21:24.153 --> 00:21:35.762
But one of the things that I wanted to ask you is obviously when you're a participant on a platform like Amazon you know they're taking a cut, they squeeze your margins a little bit to be able to do that.

00:21:36.032 --> 00:21:40.742
One thing that I've noticed now is an increasing number of sponsored posts.

00:21:41.012 --> 00:21:52.292
So they're looking to take an additional cut to sponsor a post to get it to the top of the listings, and like you said just like Google search results you know people rarely go beyond a page or two to be able to see what's there.

00:21:52.772 --> 00:22:03.292
Are you starting to hear from clients that this is really putting the squeeze on margins the more and more they have to pay now to even sponsor their listing to get it higher priority?

00:22:04.252 --> 00:22:09.532
It's um you know back in the old days and still today in retail, you paid slotting fees.

00:22:09.772 --> 00:22:36.833
And so these are the new sliding fees and the issue is Um that it's not just about a slotting fee though because at least then you had a position at retail that where people could find you And so the biggest the biggest I don't know if the misconception or misunderstanding, but the biggest misconception or misunderstanding I suppose in e-comm today is that well because it's an endless aisle, you always have the opportunity for success.

00:22:37.192 --> 00:22:47.212
That's just not true many of these big platforms I mean yes there are always going to be amazing success stories, um but it's a bit like in some ways playing the lottery.

00:22:47.633 --> 00:23:09.413
Assuming no other investment uh if you're the put up a product detail page is the 1945th uh I don't know Hair gel, for example Uh and you don't support that with paid media Um effectively Uh you're not paying the slotting fee per se But you're not getting slotted.

00:23:09.442 --> 00:23:10.492
Nobody's finding you.

00:23:11.032 --> 00:23:22.522
And so it is necessary now to be successful on these platforms to pay that slotting fee to manage it uh like it's paid search, and using some of the same sort of strategies, but also new ones and new tools as well.

00:23:22.522 --> 00:24:04.613
Like we have a partner pack for you that we use for some of this work um to make sure that you are efficiently drawing the right person or right product, and then of course you know the product detail page is where they learn what they want to learn and either convert or don't but um absolutely and Amazon and um uh and uh negotiations with you will also um want to understand how much of that product you're willing to invest in Um and then unlike other retailers of course those negotiations are less often Um face to face for many brands they are algorithmic in nature and um to drive that algorithm you've got some money they it's fascinating.

00:24:04.823 --> 00:24:09.682
I mean It's interesting people talk about the consumer the flywheel effect on driving product sales.

00:24:10.163 --> 00:24:25.002
Uh there's a flywheel effect of managing your relationship with Amazon too Uh and that that flywheel Uh move uh unless the um investment is there to help you get the visibility that you need Uh to help them make the margin that they need to make.

00:24:25.002 --> 00:24:31.042
So it's an amazing mouse trap and it's a monopoly.

00:24:31.042 --> 00:24:32.242
I mean it's a it's a beast.

00:24:32.482 --> 00:25:00.952
One thing that surprised me a little bit I think it surprised a lot of people was I don't remember how many months ago this was, but Amazon one day decided to cut their affiliate fees So know we're living in an age of influencer marketing where a lot of individuals are uh because of their influence in one way or another are helping brands and products sell, and then Amazon comes along and says well we're not gonna reward anybody for that, we're gonna really cut that back.

00:25:01.012 --> 00:25:04.762
Do you think that was simply the case of we're big enough, we don't need to do this anymore.

00:25:04.972 --> 00:25:06.742
Or what do you think were thinking was behind that?

00:25:07.552 --> 00:25:10.282
I think that there's two things to that.

00:25:10.282 --> 00:25:12.353
Number one is the former I agree with that.

00:25:12.353 --> 00:25:17.782
We don't need to do that anymore and we can pay A little or less to get the same sort of traffic drivers.

00:25:18.262 --> 00:25:28.982
Uh number two is I do believe at their core um, they either make the book on Bayzos you want to read about this or any article, or whatever newspaper clipping.

00:25:29.002 --> 00:25:33.863
And they really are hyper-focused on the customer.

00:25:34.403 --> 00:25:43.972
And if in fact they can get product to market more efficiently, more cheaply, and uh provide a price and then a customer service for the consumer that's compelling, they're going to do it.

00:25:44.363 --> 00:25:47.722
And so it's a lot of these things, reviews is another great example.

00:25:48.113 --> 00:25:56.423
Um they have now discontinued or are in the process of discontinuing some highly successful review programs for their third-party sellers.

00:25:56.423 --> 00:26:00.323
So it's a different dynamic than the affiliate example you gave, but why would they do that?

00:26:00.742 --> 00:26:08.423
Why would they do that If I am a marketplace seller and I rely on the early marketplace review uh seller program?

00:26:09.083 --> 00:26:23.062
Um and I think the reason that they do that is um number one, they feel like we can drive more authenticity that is reflected back to the consumer and try and continue to gain trust in a way.

00:26:23.123 --> 00:26:24.282
They don't want to become Facebook.

00:26:24.903 --> 00:26:29.113
They already have enough issues with counterfeit and uh and uh

00:26:29.113 --> 00:26:31.532
And fake reviews and things like yeah.

00:26:31.712 --> 00:26:34.552
Fake reviews was huge two or three years ago on the news and it still is.

00:26:35.032 --> 00:27:11.752
And so even with something as benign as an early reviewers program Um if in fact I think that will Hey there varnish The customer experience or the implied authenticity of the platform, Uh I think they may get away from some of those things, and I and I think, come back to your question, you know maybe some of those affiliates um either want the right types of partners or there were too many of them that seemed um maybe a little shady or shifty or you know, not really wanted to be uh, they don't have to rely on that sort of thing And cutting the fees is of course at its core And honestly maybe I'm giving them too much credit.

00:27:12.383 --> 00:27:14.262
What did I really just them wanting to cut fees.

00:27:15.299 --> 00:27:20.631
You know there are a company very much like Apple mentioned before you know, they do like control, right?

00:27:20.631 --> 00:27:36.785
They like to control all aspects of the experience and they've done such a fantastic job improving customer experience over the years that having somewhat shady characters out there, plugging products, and getting commissions for that, I can see why that may have been somewhat disturbing.

00:27:37.264 --> 00:27:56.014
But you know at the same time I've heard from people who are selling on Amazon you know, back to this idea of a sponsored post, that you know they're happy to take your money uh for a sponsored post to move you up the listings, but they don't give you as much credit for the sale when it happens as they do when you get an organic sale.

00:27:56.224 --> 00:28:01.384
And so in some ways you're penalized for having a sponsored post versus an organic sale.

00:28:01.565 --> 00:28:04.444
It seems like there are a lot of competing factors in there.

00:28:04.625 --> 00:28:13.984
So you know when I talk to clients and they're selling on Amazon today, of course everybody's looking for a leg up, how can they get their product higher up in the rankings?

00:28:14.345 --> 00:28:24.214
And even though I think they could save money, save some margin by selling directly, they just keep pumping people to Amazon because they want to move up those listings.

00:28:25.085 --> 00:28:26.105
Yeah they sure do.

00:28:26.224 --> 00:28:28.535
It is very much in line and they dropped price.

00:28:29.375 --> 00:28:46.174
You know and there's a whole strategy about launching products on Amazon, whereas you know you may not have needed or wanted price incentives pre-Amazon to do this, or you may have launched with the day limited hyper-focused price incentive and key areas or key markets or where you're trying to disrupt a competitor.

00:28:46.684 --> 00:28:51.184
But you know real brand marketers never liked doing that.

00:28:52.115 --> 00:29:48.545
The reality is to play the algorithm on Amazon and particularly with a product launch, it's one of those things you can do is just to launch with a vendor powered coupon for God's sake or some sort of lightning deal or whatever Uh and it's it it strikes at the core of some clients You know and and some ultimately don't want to do it and don't um because they you know they come out of the brand school of brand integrity not Uh no price incentives or low price incentives certain categories of course are more particular about that than others Um But the thing that we remind them of is no absolutely You don't need to be on a price incentive For the duration of the quarter but if you're going to go out to market with a new campaign or new program Sure It's a good way to jumpstart your position because to your point The value of those organic sales is tremendous, uh and you want to get as many of those as you can.

00:29:48.545 --> 00:30:02.884
And in particular you know they want to see that you can get somebody into a repeat purchase cycle, so you know incentives drive subscribe and save get them into a help show Amazon that you can drive your own sort of mini flywheel within their big flywheel.

00:30:02.884 --> 00:30:08.734
And there'll be you know to the extent that algorithms are happy, they'll be happy.

00:30:09.194 --> 00:30:18.964
Well I'm curious you know with so many people out there selling different things, at what point or at what size does it make sense to engage with a firm like yours?

00:30:19.474 --> 00:30:32.444
Are you talking millions of dollars worth of revenue, or you know tens of thousands worth of goods in terms of numbers, what is a point where it says you know, if we really want to grow we need to get an agency involved to really help us push this forward?

00:30:33.365 --> 00:30:39.214
We have clients that are startups and we have clients that are Fortune 500 companies.

00:30:39.785 --> 00:30:46.174
Um and the reason that's important is for the startups or I'll try and distinguish maybe there's a better way to say this.

00:30:46.565 --> 00:31:10.144
For the startups in many cases uh, maybe like other people you've talked to we are running their third-party account, or uh we are running Media and we're doing content, or we're doing SEO consulting, and we're doing content, or For many it's a combination of all those things plus we're helping them because they might also have a first party relationship with Amazon.

00:31:10.384 --> 00:31:15.394
Um which isn't entirely related but separate sort of uh engagement.

00:31:15.904 --> 00:31:25.595
Um But you know you don't Um you don't There are consultancies and agencies out there for every size of brands.

00:31:25.684 --> 00:33:29.164
You know there's I, it's funny I had a And I feel like the best thing is either an agency or consultant or whatever is you can do is to be straightforward with these clients and say look it no you're There's a benefit to going with a an independent contractor or consultant There's a benefit to going with an Amazon specialist and then it may be a benefit to go into a Omni channel You know larger agency that can handle You know a lot of different things And it's about where you are and it's not always about where you are and your um size um it's about where they are in their strategy Where does Amazon sit in your strategy Where does Amazon and DTC sit in your strategy Oh and by the way are you really looking to go mass And selling to one of these big retailers And are you using an Amazon or D to C to help tell that story And is that a story that will be compelling to say for example Target And say dependent on your answers to those questions you're going to find the right group to help you Um my favorite I don't I won't be too pitchy but we do have a case study of a client is all say who got bought by SC Johnson And you that client didn't pay us a tremendous amount of of money Um Uh but I was never happier than when that company was bought by SC Johnson a few years ago based on the work we did on Amazon Um because that's a real human story and you don't always get that I mean you great to help clients build their careers have success do the next great thing for the next great consumer package Good company Um but you can build brands on Amazon You can build brands DTC You gotta think about how they work together And then find the right partner that can answer those key questions I mentioned a minute ago because you know that's That is pivotal Uh and even if um if you have the time to do it yourself do it yourself see what you can learn and not learn do it for a while And then see when you have realized what you don't have to do or don't have success at where you need help Oh that's certainly another way to do it for very very small organizations And then you call You know one of us

00:33:29.464 --> 00:33:33.365
I think that's great advice and something you know we advise often on this show.

00:33:33.664 --> 00:33:37.234
I think it's really important that you understand how the tools work and the systems work.

00:33:37.234 --> 00:33:40.835
And so you can have that high level knowledge so you can speak intelligently about it.

00:33:41.194 --> 00:33:50.575
But bring in experts to do things on your behalf when you can afford it, because you can accelerate your growth, you can spend your money more wisely.

00:33:50.575 --> 00:33:57.384
Experimentation is great, but it's costly, and it takes It takes some time and money to experiment, and time is money.

00:33:57.654 --> 00:33:59.545
And so you can lose a both ways.

00:33:59.545 --> 00:34:01.134
And so I'm a huge believer in them.

00:34:01.555 --> 00:34:08.688
So this has been really fascinating like I said we haven't really talked too much about e-commerce on this show, and you've been a great guest to have on to talk more about it.

00:34:08.927 --> 00:34:18.498
As we kind of wrap things up here today, I'd love it If you could just share with the audience where they can find more about you and your company online, and we'll make sure we link that up in the show notes as well.

00:34:19.248 --> 00:34:30.137
Yeah, well I hope they can find me sometime in the near future at a trade show near you I um, I used to go to them all, shop talk and you know CES NRF.

00:34:30.198 --> 00:34:34.998
And I missed that part of the job and I miss connecting with people that way but I'll see them there in 2022.

00:34:34.998 --> 00:34:43.648
It looks like,hopefully but other than that you can find me at either tpnretail.com or uh velocitycommercegroup.com.

00:34:43.668 --> 00:34:52.317
We are a part of Omnicom Media Holding Company, I'm always happy to be on a show like this and get to connect and glad we got to do this Eric.

00:34:52.588 --> 00:34:54.717
It's been a It's been a ton of fun.

00:34:57.603 --> 00:35:01.114
Thank you for joining us on this episode of The Virtual CMO podcast.

00:35:01.264 --> 00:35:08.764
For more episodes, go to fiveechelon.com/podcast to subscribe through your podcast player of choice.

00:35:09.123 --> 00:35:19.204
And if you'd like to develop consistent lead flow and a highly effective marketing strategy, visit fiveechelon.com to learn more about our Virtual CMO consulting services.