The E-commerce Leader

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[00:00:00] MV: It’s really to totally simple. Don’t miss the obvious. So that’s the first lesson for me. But the other one, You know when there is something that has more depth historically and it has resonance, there is a deeper kind of holder that has on the consciousness than if you just come up with
[00:00:14] This is the E-Commerce Leader, a show for you, the owner of a thriving online business. In this shorter episode, we bring you our hot takes on some topical central e-commerce subjects, fresh from our expert panel, Chris Green, Jason Miles, Kyle Hamer, and myself, Michael Veazey let’s jump in.
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[00:01:14] MV: Uh, folks, welcome back. Hey there folks. Welcome back to the e-commerce leader at Roundtable, where we have a chat about whatever’s on our mind, and there’s always something on our minds where people with brains teaming with thoughts and ideas around business and e-commerce. So, um, in no particular order, Kyle, why don’t you kick us off?
[00:01:29] KH: Yeah, no, sounds good. Uh, top of mind for me, uh, over the last few weeks has really been. Uh, regarding Amazon and specifically how if they’re gonna be able to pull off their upstream storage that they started to roll out in beta. And if you’re not familiar with this, uh, Amazon over covid bought a bunch of warehousing space cuz they thought, whoa, we need more f b A space cuz they had this huge covid bump.
[00:01:51] Well then they’re left with all this additional capacity that they didn’t actually need. So what they ended. Testing and trying to do is convert those warehouses to an upstream long-term storage called warehousing and distribution, roll it out in beta. Now it’s really interesting because what that could potentially do is compete against three pls in the marketplace at some level for storage.
[00:02:16] Uh, their price per cubic square foot for long term storage was really competitive. Um, I think it was at like 40 cents. Uh, per cubic square foot in the, during, like non-PE season, which, which is really competitive. And then they guarantee a 99.9% in stock rate on F B A. And they actually automate moving the inventory over from their upstream storage to um, To their FBA fulfillment warehouses, and they’re not the first to do this.
[00:02:43] There are other bigger three pls, like Deliver, which Shopify just purchased this last year that does some the exact same thing. They have upstream storage, then they have their fulfillment network and they’re moving stuff back and forth. So to me, I think it’ll be interesting to, to see how that impacts logistics and if it can streamline cost for people and make your, uh, logistics planning.
[00:03:02] More efficient. We make your operations more efficient as an Amazon seller, there are currently still some restrictions. Not every category applies. Uh, like for example, if it has an expiration date, you can’t use long-term storage, so that does take out a lot of grocery and some other products that would be impacted by that.
[00:03:19] The other thing is that it is definitely still in beta, so not everybody’s gonna be able to put inventory into it yet. But I think if you couple that the warehousing and distribution with their global logistics program, Which is where you can basically do, uh, shipping, uh, shared shipping costs from China on the, on their boat.
[00:03:38] They have a logistics program that they run out of China. , you could really streamline atten potentially your cost structure where you could actually send in your container right to Amazon distribution and warehousing, and then just trickle feed stuff into fba, which will have an impact on like the I P I score, which is the metric that Amazon uses to measure how efficient you are in your inventory and therefore granting you.
[00:04:02] More capacity in, uh, F B A. So to me, I think it’s interesting to play with, I think it, you know, does it, does it save people money? Um, from, on the three PL side, I think it’s, it possibly could. And if they can pull it off and, and make it an actual program that, that makes sense and works for the, the sellers of the world, I think they might have another extension of FBA that, um, will benefit the seller in, in a big
[00:04:28] MV: way.
[00:04:31] Interesting. I mean, so from the very sort of Amazon centric point of view, I think there’re much broader, um, things to talk about here. But I would say the first thing that always strikes me with Amazon is like, Hmm, but all my eggs in one basket, and now we’re gonna put even more of them into one basket
[00:04:45] And there’s the cynical side of me, the downside, the other side though is of course the, the cost of three. I’ve seen my, um, , A lot of my clients sort of have their, their net profit or their pre-tax profit based on the fact that the three PL and logistics is just so much of a cost. Yeah. When you have [00:05:00] to use it.
[00:05:00] So, you know, that’s the, one of the things that strikes me is there’s big up and big downsides. Really?
[00:05:04] KH: Yeah. No, a hundred. Even shipping costs, like even if you use a three PL to do like direct fulfillment to your customers, the cost of actually shipping. It’s hard to beat FBA in terms of their cost structure for it.
[00:05:19] I mean, and you could end up paying 30, 40, 50% more or higher sometimes using a three PL to ship directly to the, to your consumers and your customers. So it really does, it’s, it’s worth exploring if you, if you are an FBA physical product. Like how is that gonna impact your, your cost structure? Because if you can actually trim it, yeah, I mean I still think you probably need to have some level of a backup plan to Amazon as a three pl, but I don’t think you need to rely on it as heavily as you once did potentially moving forward.
[00:05:55] But it’s always good to have a backup plan.
[00:06:00] CG: Three pl the bane of people’s existence. All I hear from coaching clients is . My, my warehouse is really screwing everything up. I’m having to fly to wherever to confront ’em cuz they keep ghosting me or they, like. We had one client whose warehouse literally burned all his products. They caught, they caught on fire
[00:06:21] It’s like a three year drama in our coaching client’s life,
[00:06:25] KH: and they were underinsured. Oh
[00:06:28] CG: yeah. So yeah, that is, that if Amazon can solve that problem for, you know, for third party sellers, then, you know, I mean they, they, they were pretty good until they outgrew their, their physical space, outgrew their ability, you know, the demand for the space.
[00:06:45] And then they started, , you know? Yeah. Rank raking up the fees. And then of course people hated that and they, they cap your inbound, sh they do all the shenanigans to try to minimize the, of total holdings they have in their system. And it’s so infuriating for
[00:06:59] KH: people. It, it is, I remember the day where you could literally ship in like, uh, container full of goods directly to fba and you could just sit on it and leave it in there for the year and not have any sort of negative impact.
[00:07:11] But
[00:07:11] CG: to say you remember the day is like, What was that, three and a half, four years ago? ? Pretty much long ago. .
[00:07:17] KH: It was like, it was like five years ago. Five years ago ago. Like when you could actually do that. Yeah. And but then they progressively, to your point, they realized it’s, there’s no money in being in the warehouse storage business.
[00:07:29] It’s only money being made in the fulfillment business of them moving goods. And they said, I don’t want to, we don’t wanna store your stuff. We only wanna sell things to, to customers. Therefore, now you have long-term storage fees, now you have FBA storage limits. You gotta figure out a way to store your stuff, you know, on your own and then just send it in.
[00:07:46] Yeah. The amount that we deem to be appropriate for your particular,
[00:07:50] CG: yeah. I gotta tell you, the control freak in me, I always, and we, you know, do this in our own business as well. I just encourage people, bring it, bring it in house as much as you. You know, and obviously, uh, you know, FBA is gonna have its own load of volume of goods, but beyond that, you know, can you ship, you know, have a shipping manager have, you know, people don’t wanna do it, but then they’re caught in the web of, you know, drama of other people’s businesses.
[00:08:16] So what do you think, Chris? There’s
[00:08:19] JM: a lot. Affects all this stuff. And I think the piece that maybe people aren’t realizing, and maybe we are not even thinking about it here, but to me it’s prime eligibility that drives so
[00:08:33] CG: much, so
[00:08:33] JM: many decisions, so many. All of this stuff is based on is it prime eligible or not?
[00:08:38] Otherwise, who cares? Shipping products is not hard. Warehousing stuff is not expensive. Like it’s not a big deal. But if you want your stuff to fly, It has to be prime eligible. So you have to use fba or you have to use some kind of print on-demand platform that has prime eligibility through KDP or virtual by Amazon, all this stuff.
[00:08:59] So Kyle, you’re, you’re giving me all these like numbers and using all these words to just make me, like, wanna shut down and not even listen all this like fancy logistics, uh, upstream, downstream, all this stuff. And I’m thinking, okay, how can I better, okay, I’m gonna focus. I’m gonna listen to Kyle, where are the opportunities here?
[00:09:16] Because that’s, you know, some people can hear something and be like, oh, I don’t wanna deal with it. Or, Hey, you know what, I’m sure there’s opportunities here. Something in books. How can I get my books into this system to where it’s gonna make sense and I get lower costs and get it to, and I’m like, wait, my stuff stop print on demand.
[00:09:28] That doesn’t affect me at all. Uh, how about like merch and merge my Amazon? It’s like, no, that stuff doesn’t affect me at all. And then I found this Valentine’s Day card, actually, I just made it really. Print on demand assistance Valentine’s Day, and I’m just thinking of all these problems, like I don’t have to even think about what you’re talking about, Kyle, like it doesn’t even, it doesn’t affect me one bit except the prime eligibility keeps coming back because I’m writing a new book.
[00:09:53] I would love, it’s about flipping. It’s like, like, you know, yard sales and like the easiest stuff that you can do to make money on the internet. And I’m like, you know what? [00:10:00] Here’s how you do it. I’m gonna bundle my book with any Gary V book, right? Buy one of Gary’s books, get my book absolutely free. It’s the perfect interests, a perfect lead magnet.
[00:10:10] It’s, it’s perfect. But you know what? I can’t bundle books as the primary product in a bundle because of Amazon. Restrictions and limitations. You have to pay attention to some of those details and I’m like, you know what? I can just sell them on eBay. You know what? I can just sell them myself. I got a Shopify store.
[00:10:25] I know a guy who knows everything there is to know about Shopify. Not a big deal, right? What am I losing? Prime, prime eligibility, which means I’m back to, do I do fba? Do I do? Like how can I get my stuff to be prime eligible and maintain control and limit my exposure and minimize my risk and lower my costs, but remain prime?
[00:10:45] That’s just why Amazon still is that 800 pound grill. Like they hold all the cards. If you want a humongous chunk of e-commerce business, your products have to be prime eligible, not exclusively prime eligible, but have a prime eligible option.
[00:10:58] CG: Let’s all say it together. Prime eligible . That’s
[00:11:03] JM: said it’s less about fba, right?
[00:11:05] Because like. I was one of the very first B sellers on fba, and I remembered and I wrote the first book about fba, and I remember telling everybody I read the Long Tale, it’s probably. I probably interpreted the long tail book the wrong way. Cause I was like, oh, long tail, this stuff will, everything will eventually sell, send in that 20 million ranked book, it only costs 1 cent per month or 1 cent per year.
[00:11:26] Long term. Like, not, not even long term storage fees. It’s just a basic storage fee. Uh, just send everything in. I’m sure Amazon was like, oh, who wrote this stupid book? Who, who is sending in guy? We’ve got, I’m probably responsible for the reason when you try to send in a VHS copy mm-hmm. of speed with Keanu Reeves and Sandra Bullock where they say, no, no, we’ve got.
[00:11:44] we’ve got enough of those in the warehouse. Okay. We don’t need 754 copies of speed on vhs. Okay. Enough. And it’s, you know, things have changed and like, you know, the, the theme is like, you gotta change along with business. You’ve gotta like listen to people like Kyle and be like, Hey, is there an opportunity there or not?
[00:12:00] And decide is there, or is there an opportunity somewhere else? And you know where to spend your time and where to, you know, put your attention. Uh, for some sellers, what Kyle said is very important. You know, for print on demand sellers, we’re thinking, this is so awesome. Not that it’s not important, but I don’t have to worry about that stuff.
[00:12:16] Yeah. Which is why I, I spend so much more time on the print on demand side, but it’s, there’s a lot out there. Yeah,
[00:12:22] CG: a hundred
[00:12:22] MV: percent. That reminds you really of that, that Elon Musk quote, which I think I’ve learned from a guy called Jason Miles on the internet court, which is the best part, is no part, which is, in other words, if you don’t have to do the painful thing in the first place because of your a business model.
[00:12:34] That’s the best thing. The second, the opposite extreme though, to your point Jason, of are you willing to build your own fulfillment, um, center and combine it with, you’ve gotta be prime manageable. So to combine those two points, so Chris is, and Jason’s, I would say, I’ve got one client that has done that.
[00:12:48] They’ve got their own warehouse and they’ve got so seller fulfilled prime, which is hard to get, hard to maintain. and you’re risky and unless you’re really good at what you do. But what you do have, of course, is a warehouse with highly trained staff. Yeah. Such that you are not got the same sort of single source to NCI as bring everything in f b, and you’re not subject to the f b inbound shipment, uh, problems, which so play.
[00:13:10] Like people at q4, particularly seller prime, not easy to achieve though
[00:13:14] CG: seller fulfilled. Prime key metric is speed of shipment. Mm-hmm. , eBay used to demand that of us 10 years ago. Here, here’s the interesting thing about seller got the door in two days or in trouble. I mean like, yeah.
[00:13:25] KH: So seller, seller fulfill prime was this big push that Amazon did and then they rolled it back.
[00:13:31] CG: Yeah, cuz it probably worked
[00:13:32] KH: too well. Exactly, because like what, what is the primary driver to use? FBA is to Chris’s point, you get prime eligibility. So if it worked too well and people are moving out of FBA and they’re losing money, guess, guess what? Program was now on a wait list? Only seller who failed Prime.
[00:13:48] CG: Mm-hmm. . Yeah. There you go. Well, it’s always, it’s a, it’s a cat and mouse game, right? With an 800 pound gorilla.
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[00:14:45] MV: Yeah, as you say, cutting mask, getting with an 800 pound gorilla. That’s pretty much it. Well, so, so change topic quite violently, but I mean, um, I’m going to segue using Chris’s visual cue of the, the Valentine’s card.
[00:14:56] So, um, I’m always , I always think of Valentine’s [00:15:00] Day, uh, in, in the following way that I go out and spend more money than I feel I should as a consumer. And I think, ah, this is a great marketing opportunity. That reminds me I should talk about that. So, um, , tiny bit of a spin on it to try and make it less kind of something that you bung on your blog post because you can’t think what else to write about.
[00:15:15] Um, The interesting thing about Valentine’s Day, let’s go back in layers. So Hallmark has been selling cards for Valentine’s Day for about a hundred years. So they’ve done very well outta, they commercialized something that was a famous festival that came off the middle age when people in, you know, medieval times in Europe gave each other cards that came off the back of.
[00:15:35] A beatification via Pope and, and sort of creating a saints day. And that came off the back ultimately, like so many Christian festivals was pasted on the back of a Pagan festival, which is pretty fruity and I won’t tell you what they did, but it was, you know, quite sexy and not particularly what you call romantic.
[00:15:50] So that struck me as an interesting, uh, it’s spin on the whole business. Cause I, I just kind of nerded out about this cuz I couldn’t see it last night and I was just googling Valentine’s Day. . And um, obviously one very obvious thing to just remind people to do is make sure you catch the major festivals.
[00:16:04] Like I had a, a client who’s selling, uh, chocolate bundles, uh, products recently, and they were doing very well. I said, okay, go and produce a hundred of ’em. Those, he said, what? I said, yeah, it’s working. So double down, triple down, quadruple down, and we’ll see how it does. But I said, okay, your focus has to be Valentine’s Day.
[00:16:18] It’s really to totally simple. Don’t miss the obvious. So that’s the first lesson for me. But the other one, You know when there is something that has more depth historically and it has resonance, there is a deeper kind of holder that has on the consciousness than if you just come up with something like Prime Day, which is a big deal for Amazon sellers and will exist in 10 years.
[00:16:36] Who knows? So those were my thoughts about Valentine’s Day. So I check that one in there.
[00:16:43] JM: You like the history of Valentine’s Day, or I would market it as is your product for one of those older days? to see who catches it or to, and just to differentiate, uh, like I wasn’t paying attention. It’s Valentine’s Day today.
[00:16:54] I’m like, oh. It’s like,
[00:16:55] CG: oh, shoot,
[00:16:56] JM: okay, . It’s just, you know, it’s today on calendar. Uh, but I’m like, you know what? I was gonna send an email to my list, and I’m like, you know what? I’m not gonna send it today because it’s gonna get mixed in with any other marketer company that’s putting out a happy Valentine’s Day from your favorite streaming company.
[00:17:09] Or like, Mistake in my opinion, but I’m not gonna like lump my message in with, with all that extra stuff. So you do have to pay attention, whether it’s for managing inventory or for promotions or for just not being tone deaf, depending on what it is. All of a sudden you’re like, oh, I shouldn’t say that on this day, kind of thing.
[00:17:25] Um, yeah, people love to spend money. I mean, everybody here knows it’s just a day. Everybody here knows that significant other does. It’s gonna get mad if you don’t spend a hundred or $200 or something even more ridiculous on this day. But we do
[00:17:36] CG: it anyway.
[00:17:38] JM: So from the other side, we might as well sell something to everybody that wants to buy something anyway.
[00:17:43] And yeah, you know what, there should be like an advertising campaign of like justify, hey, you know how you couldn’t justify this purchase all year long? Well, why don’t you get it for Valentine’s Day? And like a justification, you could rerun that, that type of promotion for every single day, every single holiday or, yeah.
[00:17:59] No, don’t get me started on, we’ll go down a marketing idea path. We’ll never get off.
[00:18:05] MV: Sounds great. I like this justified buying an expensive thing because of, of some kind of holiday. I think that’s brilliant.
[00:18:10] JM: Justification buying. Yeah. You write a whole book about it.
[00:18:13] CG: Uh, there’s, I would a huge opportunity for Valentine’s Day o obviously the huge opportunity in a lot of holidays in terms of marketing.
[00:18:20] We had a client who did a very cool thing is primary customers are, uh, are women, older ladies. And so he ran a flash sale during the super. And it was like 40% off only during the game itself. And it was a really novel thing because, you know, a lot of people do a, a sale of some variety on Thanksgiving, Christmas, Valentine’s Day, president’s Day, that kind of thing.
[00:18:44] But his was a kind of a novel twist on making something unique out of, uh, a surprising, you know, uh, annual day. And, uh, that was pretty cool. I like to, and he crushed it. I mean, he just, he totally destroyed it. This is kind of an interesting take on using a special day in a, in a unique way.
[00:19:04] JM: We were differentiating, which is probably the bigger point, right?
[00:19:06] It’s loud out there. Yeah. Yeah. How do you someone see your message and it’s differentiate.
[00:19:10] CG: Yeah. And his thing was so smart because he didn’t have to say it overtly to his. Customers that the sale is happening during the Super Bowl because number one, you don’t care about the Super Bowl. And we all know that generally the husbands are gonna be obsessed with the Super Bowl, and therefore he’s giving his customers an opportunity to go shop online, have a fun time during that period of time where it otherwise would just be, you know, kind of, uh, you know, not into a game or, you know, you know what I mean?
[00:19:40] And that’s, that’s maybe sexist or whatever, but. , generally speaking, at least in our family, my wife watched the game with me so she could watch the commercials and uh, you know, that’s kind of what we do.
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