The E-commerce Leader

[00:00:00] Jason: the downside of handing it over to a full outsource service is you don’t get educated in that process
[00:00:09] TEL Intro: We are Michael Veazey in London, England, and Jason Miles in Seattle, Washington. More importantly, you are the owner of a thriving online business, and you want to become the best e-commerce leader you can be. We’re here to get you there for show notes, with links and resources mentioned today. And for other GC resources like downloads, just visit our blog, the e-commerce leader.com.
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[00:01:12] Michael: should you hire an Amazon ad agency?
[00:01:15] That’s the question we’re gonna talk about today. Obviously, a lot of people are very fed up with Amazon management because it’s very time consuming, particularly when things go wrong and they really want their ad spend to be down. So that’s the reasons why people do it. Lots of reasons, but those are the principle ones.
[00:01:31] Make better money and better use of your time. However, a lot of the time, my clients certainly recently have been experimenting with hiring Amazon ad agencies in particular, and, they’re often disappointed. So the question we’re gonna look at today is should you hire somebody? And if so, how are you gonna figure that out?
[00:01:46] We’ve got a few questions you can go through and ask your agency as well.
[00:01:50] Jason: This is such a great topic, Michael. The challenges here are many. There, there’s three or four or five layers we have to unpack here to really answer this question thoroughly. And because it’s not so obvious what the right answer is.
[00:02:04] And so I’m really excited about this topic. I know there’s a lot here to unpack together, so let’s jump into it. What do you wanna lead off with?
[00:02:11] Michael: think the first question I was ask is simply what’s your motivation? Classic question that, film directors ask that actors everywhere, right?
[00:02:17] And I think it’s important to ask yourself that as a, an operator who wants to outsource stuff, sometimes outsourcing can be a really great thing to do, but I think sometimes, It just feels so hard and you’re not sure how to crack the nut yourself. And just as in other things, like a reason to get a business partner is not because you haven’t got a skill set necessarily, you can hire that this is a bit different.
[00:02:38] This is another one where people make a mistake and go, I haven’t got the skill set. I’m gonna hire somebody who’s got it. And then that pain is removed from my business. And I don’t think, in my experience, it works that way. If you, for starters, don’t know anything about, Amazon management, it’s really quite hard to judge whether somebody you’re hiring is any good.
[00:02:56] First of all, you can’t judge very easily, whether they’re any good. And secondly, you can’t really judge their results while you’re working with them as well. So I think this is the first thing you know. Are you doing it for business-like reasons or are you just trying to get rid of paying.
[00:03:08] Jason: Yeah, like this a lot.
[00:03:09] To use that framework then, what’s your motivation? I would say there’s actually three core drivers of common motivation that I see. One is as you package it the knowledge, like you’re looking, you don’t you don’t have knowledge about, let’s just call, let’s just focus on the Amazon advertising side of things for a moment.
[00:03:27] You don’t have knowledge of how to do it. So you’re sitting there thinking I either have to get the knowledge. Or I need to find somebody who has the knowledge. The Dan Sullivan’s strategic coach question is, who not how, so knowledge is one bit, of motivation. The second motivation can just be straight up greed, or not greed, but like profit motivation to be generous.
[00:03:48] But we wanna optimize for profit and we think there’s somebody who can do that better than we can. And so you’re like, man, maybe I’m making $50,000 a month on, on Amazon, but sure, sounds like a hundred thousand would be a lot better. And so you’re just focused on like, how do engineer top line growth.
[00:04:04] The third motivation that could be core to the thinking here is, a. Motivation. Like you literally, you know what you’re doing on Amazon advertising, but you don’t have time to do it on top of running the business, creating the products, managing the team, supply chain, drama, blah, blah, blah.
[00:04:24] So you, you don’t have time and you’re thinking to yourself, I could hire somebody, it just runs my Amazon ads and keeps ’em on track. And that will be, that would be a huge, help to me. So I think those three are how I look at it is skill set. It’s money or time that you’re trying to get after, in terms of, you hiring somebody to help you.
[00:04:43] Does that make sense or are there others along those lines, or what are you
[00:04:46] Michael: thoughts? I think those are really extremely, clear points of acknowledge, profit and time, what we’re hoping to gain or getting time back. I think there’s, by the way the idea of doing it yourself or having somebody else do it for you, an agency model, I think there is a middle ground which doesn’t get explored and it surprises me, which is simply this, it’s a done with you.
[00:05:03] In other words. You don’t know how to manage ads, but you do know how to hire VAs in the Philippines for, I dunno, $5 an hour, whatever it is, $10 if they have some prepackaged skills. , you’re quite good at that, particularly if you’ve got an existing business. You’ve probably got existing staff at some point or had that experience, in which case what you need is the structure to plug people into.
[00:05:22] In other words, what you really need is the SOPs that a good agency would use, in my
[00:05:25] Jason: opinion. So you just tipped off a framework that’s important to mention, which is diy, do it yourself. , or there’s done with you. Yeah. Where you find somebody to do it with you, like what you just described, and then there’s done for you.
[00:05:38] Exactly. Which is you just have somebody do the whole thing, you don’t even know how to do it, and they do it for you like an agency level. Those are three layers that you do want to think through. When you’re thinking about making these choices. I have opinions about those three. And I do think that’s a fundamental underlying question about, how you want to get through this.
[00:05:57] One of those three things what are your thoughts on if you had to rank order those three? Is it specific to the operator, whether it ones versus better versus the other, or what do. That’s a really good
[00:06:07] Michael: question. Here’s what I think in general, what doesn’t get done and therefore worth exploring is the done with you idea.
[00:06:12] So a lot of people do their Amazon ads themselves and they get to a pain point where it’s taking a lot of, to your point, they don’t feel they have the knowledge, they haven’t got the time. They’re not making a profit now. Okay. The first question I have is, you’re not making a profit is, a lot of things around the market you’ve chosen to go into the product differentiation, the marketing, none of which is gonna be fixed by ads.
[00:06:33] . So sending traffic to a page that doesn’t convert is just gonna send more traffic that costs you more money. That’s not necessarily solving the right problem. So that’s one thing’s kinda related to diy. Slightly different question. I guess
[00:06:44] Jason: I didn’t say profit per se, I said top line sales, but you, I take your point.
[00:06:48] Yeah. Sales, there’s two different things, right? Yeah. If you, if. If you’re, the AVAs is going from 50,000 a month to a hundred thousand a month in top line sales, the underlying assumption is there’s some pony underneath all that poo. Warren Buffet would say there’s there’s, there’s a there’s a gold in them.
[00:07:04] They’re hills. Yeah. And you’re making a profit somehow through that 50,000 and also the hundred thousand. The
[00:07:10] Michael: underlying assumption should be that. I agree. But that often isn’t. So I think the first thing is, people leap from di and here’s, this is interesting discussion because it’s slightly messy, but this is exactly how it works in real life.
[00:07:20] The people go diy, they’re not making a profit, or they’re not making the sales they want. If they’re intelligent operators, they actually know what their profit is. It’s surprisingly hard to do and figure it out. And we’ve talked about that multiple times, but then they often leap it done for you because you feel like, I don’t have the knowledge, I don’t have the time, I’m not making the profit.
[00:07:37] Somebody else must have the solution. And they hand over, I. The responsibility really. So as they say, delegate don’t abdicate. And I think you have to take responsibility for the overall structure of your business. And has it got any chance of making a profit regardless of what you do with the ads or indeed the Amazon operation.
[00:07:52] Jason: And the downside of the handing it over to a full outsource service is you don’t get educated in that process. And that’s why, to your point, the done with you is more join a coaching program. Join a mentorship model, get, get somebody who knows what they’re doing to teach you or pro tip someone on your team to do this stuff.
[00:08:15] Because if you build in-house capacity, in my view, that’s infinitely smarter than just being on this merry go round of ad agency. Number one, how is that? How are they gonna perform? Oh, they stink. Where’s ad agency number two? Okay, We found ’em. Okay. How did they perform? Oh, they stink. Now we’re on ad agency number three.
[00:08:39] Their whole process. You’re barely learning anything about the underlying technical trade skill of managing ads. All you’re learning about is how to vet and find, ad agencies, which is a different skill set. So to me, the done with you model does make a lot of sense because you do want a harvest, education and insights and perspective as you work with people so that you get better.
[00:09:01] Over time. You build that capacity, that muscle, in your own, core system. Now, if you find a perfect ad agency and they’re like we love working with you and for you, and we’ll show you everything you want, but we’ll just also do it and we’re crushing it and you’re making a lot of money, then of course that’s like Nirvana and you’re like, Okay, I’m an ad agency Heaven.
[00:09:21] And, don’t change anything. Don’t quit them. Pray that they don’t get hit by a bus. Just let it roll. But that’s so uncommon, man. It just, it’s very rare to find that level of happiness with these types of
[00:09:32] Michael: situations. It’s unusual. I To be fed, to be not too extra bearish on it. I think that there are agencies who will have a mixture of done with you.
[00:09:41] I either consult with you and they’ll show you their process and they just get it done for you. And that isn’t really a threat to them because it is a pain to implement anything and fire hiring and managing and firing stuff we’ve discussed in great detail before. And it is a huge amount of work, as we both know. And look and I have said before, I don’t put words in your mouth, but I certainly, I would say I’m not the greatest manager. I’m not terrible. I work at it, but I’ve personally come up to about a c plus level of management being like an E, where A is great and the e is terrible.
[00:10:08] Other people may be better at implementation. But at least if they work with you and you see their process, then if you need to implement yourself, because as you say, if they turn out to not be very good, then at least you know how it should be structured. So there, there can be a halfway house there between, done for you and done with you there, I think.
[00:10:23] Yeah.
[00:10:23] Jason: Yeah. So so really the next. Go ahead. Keep going in your, You got a little bit. I was gonna say, what,
[00:10:27] Michael: So the extra question that comes out of that is simple one, you raise an excellent point. Will the agency help educate you and how their process works in detail? ? The other question that is extremely basic, but people seem to ignore to a level that surprises me, given the sophistication of some of the operators we have in.
[00:10:43] The 10 K Collective, for example, is do you make enough gross profit to cover the extra overhead? Like even if you’re just getting, nearly all agencies that do full management will charge a fee plus a percentage of revenue. Most ad agencies will do that. I would say, by the way, another question , is the agency offering a fixed fee or a percentage?
[00:11:00] Obviously a fixed fee I think is better because they’re, you’re not getting penalized for them, getting you better profits and then they take half of it. But that’s a different question, which is also important. But the most basic thing is if they say, charge you a thousand dollars a month, which I think, for a smaller account, our sponsor, Eva will do, for example, which I think is actually pretty good and most people take a percentage.
[00:11:19] Okay, fine. But as you’ll account big enough that you can even cover a thousand dollars a month and still make a profit, because quite a lot of people don’t do that math. Yeah. And it turns out, no, you will actually give a hundred percent of your profit away if you employ this agency, even if they don’t change anything much, which doesn’t
[00:11:36] Jason: make sense.
[00:11:36] So I wanna. . Yeah. I want to ask the question behind the proceeding question to what you’ve just described, which is, are your ads themselves, even profitable, like any profit at all? And it’s important to understand where you’re at in the process of this working or not, and then what an agency may or may not be able to help you with.
[00:11:56] And this is really, I know this sounds basic to think about, but think about it this way. You’ve either got ads that are, let’s just put ’em in three buckets with little nuance. The one bucket is you’re wasting money. There’s no tomorrow just you’re lighting money on fire. It is not working at all.
[00:12:11] You’re dumping, let’s just pick a number, a hundred dollars whatever, a day or a week, a month, whatever. It doesn’t matter. You’re just lighting it on fire. The middle ground is you’re spending money, but you’re not making, break even. The third bucket is you’re making a positive, a good ROI or return on ad bander, however the framework is you wanna use, but it’s working.
[00:12:31] Just say it’s working. It’s definitely working. Now imagine those three scenarios are existence without an agency involved. Okay? But, so then you add an agency. If you put an a agency into bucket number one, where you’re lighting money on fire, you can expect them to light money on fire for you. But if you expect them to get it sorted out from, a total dumpster fire of waste to just totally crushing it, is that really realistic?
[00:12:58] Because they’re gonna be testing whether your thing is even a viable ad. An advertised item. And you have to give them the grace to prove that thesis. It could be a yes, it could be a no, but to assume that it’s always gonna go from dumpster fire to like, rainbows and puppies and splendor and, beautiful profits.
[00:13:17] It’s just super unrealistic. And so I think that’s a really important consideration is, the scenario in which you’re entering into the ad agency relationship. And if you, for example, just to finish this, Hand an ad agency, a, really well working, system where you’re like, Man we’re making five times return on ad spend.
[00:13:39] We, we spend a dollar and make $5 and I don’t even know what I’m doing. And if I find an ad agency that’s really smart at this stuff and hand it off to them, man, I could to 10 to, 10 to one row as, spend a dollar and make $10 back. And then of course you assume that they will do better than you did.
[00:13:57] But, to be completely candid, I’ve seen scenarios where people aha handed their account to the guru and they totally. Turned it into a dumpster fire. This is not this is a simple process. You have, there’s a multi varying outcomes here. You really can go from really succeeding to dumpster fire by introducing an ad agency and you really can go from dumpster fire to really succeeding.
[00:14:23] So anyway, long diatribe there, but I think it’s important to think through that layer of, potential.
[00:14:29] Michael: Yeah. So let me just then pick that slightly. So the last point you made is true. It can go from terrible to wonderful. And the other way around, more common as exactly as you said is that if you give somebody an inefficient account to manage, they’ll just Yeah.
[00:14:42] Amplify the inefficiency. So if you outsource, if you are literal minded and you outsource Amazon ads expect more of the same as maybe the conclusion. Whereas what I would say is you really need to diagnose what’s the problem behind the problem, or is there one, Because if you’re not making profit, the chances are you are in an overly competitive niche, in which case you might want to tweak or niche down, or various things you can do there.
[00:15:02] , your products isn’t differentiated, in which case you’ve got a long, hard slog and some hard money to spend. If you’re doing physical products, digital products, you got some work to do, but maybe less time in the overall process of money and then your marketing might suck, and none of which is gonna be solved by the ads, as we said.
[00:15:16] So I think it’s a question of really making sure you, you are looking at the right problem, that it is actually the ads in the first place.
[00:15:23] Jason: Yeah. Yeah. Totally agree. This is a central to the idea of doing this, is answering that fundamental. Question. Yeah. Yes.
[00:15:31] Michael: Really. And again, this might be another reason why you wanna bring in a consultant who can look at, they’re an experienced and honest ads consultant.
[00:15:37] They’re getting paid by the hour, rather than taking percentage of your revenue, there’re more likely to say, to be quite honest, your advertising account looks okay. , but , the listings are subpar or something like that. And actually, that’s really important to diagnose accurately. The third, question that comes up a great deal in the last year, particularly because ads, on Amazon have particularly shot up as a percentage of sales, and Amazon is milking.
[00:15:58] The cow has been for the last, year and a half. We’re talking in late 2022. So things may shift again as the economy shifts, but the advertising to sales ratio that you’re aiming at, in other words, you spend, on a given product line, say a thousand dollars a month in ads and you get $10,000 in sales, your advertising to sales ratio is 10%, right?
[00:16:15] So a typical ratio that people have aimed at on Amazon has been 10%, sometimes up to 15%. But, these days the average is really just gone up over time, over the last year, I would say. So it may be that if you are aiming for 10%, because historically that’s what you got, and your agency’s only delivering 15%, that may actually be the best you’re gonna get.
[00:16:36] So that’s really, a basic, simple question, but which you should educate yourself about. And again a perfect place to do that without being self serving is a mastermind. We could just go around the table and say, What’s your advertising? The sales ratio? And it va varies a lot, but if people are in the similar category, you can get a rough sense.
[00:16:50] And, digging around the Facebook forums if you want as well of where that’s at and get a good sensible benchmark before you go criticizing them for actually achieving what’s now the standard.
[00:16:59] Jason: Yeah, I think that’s really important. It’s reali, it’s like what’s realistic? Exactly. Be realistic with these people.
[00:17:05] It’s not nice to superimpose, unrealistic goals on otherwise nice people who you could have a nice time with and do what good work with, but your own mindset is screwing. That’s really a stupid place to be, that is
[00:17:18] Michael: definitely true and your mindset can screw things up. I would say this is a more sort of concrete thing in the sense that the number you have in your head was a valid benchmark a year ago, and it now isn’t.
[00:17:27] Sure. And by the time you listen to this, it might be 20%, in which case your entire business model may be broken because the Amazon platform has changed its nature. Just as people could get clicks on Facebook for 50 cents, three years ago that now cost them $5, and you have to have a different business models cope in that environment, All of which to say, have you got a realistic advertising to sales ratio goal?
[00:17:46] So now you’ve got an extra question here that you bring up, which I think is really interesting.
[00:17:50] Jason: Yeah. Yeah. I think another super fundamental just, know, first principles question that you need to ask yourself when you’re pondering whether to use an agency or not is, is, and I’m focused on ad agency in particular, but it could be true for just account management in the Amazon, ecosystem.
[00:18:05] And that the question is, What’s the fundamental risk you’re taking? And I think it’s really important to understand where you’re at in the competitive marketplace. And then to introduce a manager of, your accounts or your advertising, into the scenario. What is the risk there? And, we can put it in a couple different, layers.
[00:18:23] Let’s say for example, just as an ex, a fun little scenario that you’ve got a new product and you are, you are not ranking, you’re not the best seller in your subcategory. Let’s say you’re 10th and you wanna be first, but you’ve got money to blow and you, you’re excited about this product.
[00:18:41] Maybe, this is, maybe this is your. Primary product, and you’ve never been on Amazon before. You have no Amazon sales velocity. You’re just new to the market. But maybe you’re not a newbie veteran, a newbie business operator. You’re just, you’re just new to Amazon. So you’ve got no velocity, no track record on Amazon, no, seller reviews, product reviews, what, whatever.
[00:19:01] Then the question is what’s the risk in that scenario? The only thing you’re risking is your money and your time. You’re not risking your account health or anything of consequence on the Amazon side of the ledger. Now, contrast that to a seller that’s doing, let’s say, a hundred thousand dollars a month in a sales velocity and has a collection, a suite of products that are all, number one or two in their, subcategories.
[00:19:22] That seller has a huge thing to. by introducing an account manager or an ad agency, which is, they could literally have their account suspended or they could have those, number one, number two, slot BSR products, just totally tank. They, they are in a really different spot than, than the person who has nothing to lose on the Amazon side of the ledger.
[00:19:44] And I think that’s really important to think about. So in a way, it, I think what happens in real life is the opposite of probably what should happen. And here’s what I mean. I think what pro, what most hap most of the time happens is somebody gets 50 or a hundred thousand dollars a month and sales velocity going Amazon and they’re like, Man, I want more.
[00:20:02] I wanna go for the gusto. I’m gonna bring in big shooter, Bobby, account management, man to, or admin man cuz look at all his website reviews and all the people who say he’s awesome. And I’m gonna, I’m gonna roll the dice with this new guy. And I’ve seen in this where people’s accounts got crater, that happens more common than somebody coming in saying, I don’t have anything happening on Amazon and I’m not making a penny, but I’m gonna double down.
[00:20:29] It’s very, it’s rarer to see this, but I think in a lot of ways it’s more logical for that person that newbie to Amazon doesn’t have anything to lose. Those persons should be rolling the dice. Somebody who has tried and true system, in my view, as Warren Buffet wisely said, these people risk what they do need in pursuit of what they don’t need.
[00:20:51] And that is foolish. And if you risk what you do need in pursuit of what you don’t need, you’re just, you’re risking way too much, in my view. So anyway, just the thought on that. What are your thoughts on just the fundamentals of the risk involved in this
[00:21:04] Michael: kinda stuff? Yeah, I like that the, as you say, it’s a great basic principle, which is under.
[00:21:10] I’m gonna put it it’s not put into calculations. And the reason for that, to be fair, is that you’re dealing with trying to assess probability almost in a mathematical level. And that’s hard to do. , even statisticians don’t do that. That might happen. Somebody in my family happens to be a member of the Royal Society of Statisticians and, it’s complicated.
[00:21:24] So what I would say is this, you gotta use some common sense. I would say if you recognize the level of risk that you looking at, in other words, what you have is precious and should be protected. So number two, one and two rankings a hundred thousand dollars a month or whatever it is, Amazon account that needs to stay, as open as a sales channel, The.
[00:21:42] Then what that implies to me is you have to do really serious due diligence on, on the people that you are handing, something important in your account over, particularly if you’re handing the whole account over. I have to say the account, the scenario where somebody handles out, handles over entire account management from a whole account when they’re at that level is unusual.
[00:21:58] Have seen somebody explore doing it in the mastermind recently on the advice of a, somebody else I respect to won’t name them because I’m about to say, but I said to him, Why would you do that? One of the strokes you have is you’re really, really good at this, so why would you hand over account Amazon account management when you do that?
[00:22:12] What did they say? What was the answer? What I think, I don’t really remember getting any kind of clear answer about that, except that this guy said it would be a good idea and we could focus on brand building. And I thought there’s validity in that, except that. I put with knowing these people really well.
[00:22:26] This guy’s been the mastermind like five, four years now. I’ve known really well. And I said but you’re really meticulous about a lot of your Amazon management processes. And he’s got a background in business intelligence. The guy created grass for 20 years about business. , data he’s good at data, and they’re also got a, he’s got a partner, he’s good at production.
[00:22:42] So they got both. And so I said, I don’t see the business case for outsourcing that. And actually it didn’t need to do any complicated calculation cuz the agency fee was something like $30,000 a month and it was just a hundred percent the fees that ebitda. So it was just a point in this exercise, but it did strike
[00:22:56] Jason: me, Let me propose a underlying thesis there for why that person would pursue that idea.
[00:23:02] And I, cuz I’ve had clients that I’ve had this exact same conversation with. It’s really interesting to me. And I think the underlying psychology there is they discredit their skill and they are not as clear. on their level of skill as, an outside objective person would be. And they overestimate the skill of the ad agency, individuals or teams compared to their own skills.
[00:23:28] And it’s really interesting because, because as it happens, actually, a lot of veteran operators in specific trade skills get very good at marketing their product. And that’s the key to think through is, can this ad agency market my product to my core customer in a way that is better than I can do it?
[00:23:49] Or my team could do it, or I could train a VA to do it. And I think people underestimate their own skills and overestimate the skills of others, in the pursuit of whatever, more time, more money, more, whatever it is, whatever it might be, skill set. So I think that’s a fundamental psychological hurdle people get over.
[00:24:07] Or get stuck into, that leads them to that line of thinking. And then they’ll rationalize it with logic. Oh, they won’t say to you I’m really insecure about my own skill set, cuz that’s touchy-feely stuff. But they’ll have that actually be the underlying thing. And then they’ll say I can, for the users, five reasons I’m gonna make this change.
[00:24:24] But Anyway I think that’s an, a really interesting dynamic that happens with us as operators, over time. I
[00:24:29] Michael: really agree with that. I’ve seen that a lot like this guy. Honestly, like recently somebody approached me to see about doing account management for them. I might do it.
[00:24:37] It’s not something I’m keen on doing, but he’s a great guy and there’s a lot of strengths to his operation, which I won’t go into now, but one of the immediate thoughts I had is who can I get to do this? Exactly the thing I was saying, I don’t wanna outsource, bits. If he’s outsourcing to me that gets messy.
[00:24:51] I wanna keep it in house. But on the other hand, I thought, I want some great processes to create SAPs around. I don’t want second, I don’t wanna do a second rate job if I’m gonna do it at all. And the first person I thought of was this guy I’m talking about in the Mastermind. Cuz I thought, actually I trust him, I know him.
[00:25:06] He’s keen, he’s still got stars in his eyes about the Amazon thing. He’s done very well and he’s got really great processes that work. And I, and he’s one of the people that’s trying to outsource ironically. So you are absolutely right. I can think of one particular person. The other thing I would say is, You make an exceptionally important point that I don’t want, that we shouldn’t gloss over.
[00:25:22] Just because somebody’s good at marketing generally doesn’t mean they can market your product with a level of passion and understanding of the market that you probably have, which is probably why if it’s working at all, you probably went into a market in the first place that you either understood to start with or you understand now from years of experience.
[00:25:37] And those nuances matter in terms of differentiation and brand. And so you’re right, it’s, it can be outsourced. Some people I know are great operators and very good at cashflow management and numbers, but they, their marketing was terrible when it came to the Mastermind and it’s now quite good, but not amazing.
[00:25:52] And a couple of them are just not even there yet. And I would just literally say, I think you should hire a branding agency. Maybe also the ads, but the branding would be the first thing I’d get managed actually. Yeah. , you make very good points, but can they sell your product better than you can Is an excellent.
[00:26:08] Yeah,
[00:26:08] Jason: I think like question yeah, no, and I think there’s a set of solutions here that, are, will emerge if you just read between the lines of what we’re all saying and I’ll, so I’ll just articulate the set of solutions. And some, I think good ideas that will come out of these sort of concerns are, are fear mongering over the topic, which hopefully we’re not doing that.
[00:26:29] But, lemme just say a few things that I think are logical. That is, you should test your way into such adventures with people. Always hand people the smallest, component of whatever. Can hand them. I don’t, wouldn’t turn over the keys to the whole house. Maybe give ’em the broom closet.
[00:26:44] Give them a bit or a, a sub something, within your account to work on to prove themselves if and whenever possible. So compartmentalize and hand them a small amount, let them demonstrate stewardship and then, turn over more, I think is a really logical, thing to consider.
[00:27:03] The second thing I would say is, building in-house capacity over time is the grown up way to do this stuff. And I’ve worked in billion dollar organizations actually that still had out, had agencies that did specific technical things, but had huge in-house capacity and that, so that in-house capacity component of it is what you’re thinking about.
[00:27:25] What part of this makes most sense in my operation, My a hundred percent full-time employee, whether it’s a va, abroad, or whether it’s a W two employee that works right there with you, how much of it is in house is I think a key consideration. And as much as you can lock down with success and bring in house profitably, the better off you’re gonna be.
[00:27:47] Yes, you have to manage. But, overall you’re gonna have a much more solid system than if you’re, outsourcing stuff to agencies and they get bought out or get hit by a buzz or, they change industries on you, Or they get a new account rep for your account who happens to be, clueless, the, these are all common scenarios.
[00:28:07] So anyway, I think those are a few, just a couple tips for how to navigate this, Michael, if you have any other thoughts about how to proactively get at this in a, a productive way.
[00:28:16] Michael: Yeah, one thing where we are engaged, we’ve put at a lot of the risks and problems, and I think it’s good to have a realistic conversation.
[00:28:23] I’m reflecting as I often do, really the experiences that I’ve accumulated over the last, couple of years of observing what’s happening with serious e-commerce operators, not just in my business and not just in one other person’s either. Having said that, there is a powerful argument in favor of outsourcing or getting stuff off your plate and delegating, which isn’t quite the same thing.
[00:28:41] To your point, testing your way into things is the way to square that circle, isn’t it? If you have a thesis , you should test it in a way that isn’t gonna blow your business up. And whether you think product X is gonna be the next big product. Product. The other thing I would say about burning in house capacity is this, that you may not have the capacity to build capacity.
[00:28:57] What I mean is if you are busy operating your business, and to some extent you are one of the people that makes the thing run, then you aren’t necessarily in a position to do the higher level work at a scale where you can manage everything in house. So eventually people get in-house photographers, in house art teams, most of us don’t have that.
[00:29:14] So I think there is a point in development where an agency can make sense on paper. Without denying the fact that you are absolutely right over time, if you get big enough that the in-house Platy is something you want, ultimately, I just think there is a place for an agency on the way up towards that if it makes sense for you.
[00:29:30] Oh yeah, I
[00:29:30] Jason: totally agree. But there are operators that actually have in-house photography and those elements do, it’s a growth process. Over time you figure out what you can add and sometimes it’s serendipitous, it’s Oh, I hired a social media helper and she’s also awesome at photography.
[00:29:44] There you go. Now we do in-house photography, stuff like that. I think another, tip for making this work is always don’t hire an agency on just the back of. Promo materials or their sales page, landing page, ideally you’re getting a referral from somebody you trust, and trust.
[00:30:04] Hey, I know this person and I’m asking them who they use and they love who they use cuz who they use is really working well for them. And they wouldn’t be lying to me. They wouldn’t be, this isn’t a clip from their conference or people are on a sugar rush and make a little testimonial blurb and now it’s on their website.
[00:30:20] This is a authentic, real referral from somebody I know who uses this person. I think that level of. Vetting is really, there’s a lot of wisdom there. The only way you get that to happen is to be a part of a small group mastermind where you’re working with veteran operators like Michael, in your, your mastermind there in London.
[00:30:39] I’d imagine there’s a lot of that happens around the table. Hey, who do you use for this Huge
[00:30:44] Michael: amounts? What, Yeah. A lot of it is around that, and the Facebook group is actually quite active, not with random discussions, but that’s one of the things that people just I often say, Look, we haven’t got much time to get into this now, but can I just ask, those people who said that they have a great, whatever it is, Amazon account management guys, a great accountant, great lawyers for intellectual property, there’s things that typically come up, just pop the details in the Facebook group and we only share it within the group, and those are really valuable.
[00:31:08] Yeah, absolutely. I tried and tested. Recommendation it is worth, burden of hands worth to the bush as they say it is worth 10 times more. Just one, tiny point in favor of Amazon agencies out there. The, our sponsor, Eva does actually offer Amazon ads management.
[00:31:23] So having been really rude about it all, I would expect everyone to put them through the same sort of, diligence that we are suggesting. . . But there are a couple of moments, the mastermind now who are using them or have used them. So you could probably get an honest, refer to that if you wanted to get in touch with me if that’s something you’re considering.
[00:31:38] Wrapup: Hey folks. Thanks for listening to another episode of the E-Commerce Leader. We’ve racked up quite a lot over the years now, and I hope that you find this one helpful because it’s certainly a live topic amongst Amazon sellers. I know this is not an abstract question. It’s a very real question that keeps coming up with smart people.
[00:31:54] So should you hire an Amazon. A agency. The basic questions we’ve suggested you might wanna ask are, do you have the right motivation? And, will the agency help educate you about the process? Or are you gonna lose that ip, as it were? That knowledge, do you make enough gross profit to cover the extra overhead?
[00:32:10] Are your ads at all profitable? To begin with, as Jason pointed out, what’s the risk? What could go wrong and how do you assess that? Really important. And are you hiring an agency just on the back of their advertising rather than having really got referrals from trusted, colleagues and friends.
[00:32:25] And as Jason, my mentioned kindly, but I think accurately someone like a mastermind or a sort of peer group of some kind is the place where you can really get frank unbiased opinions. Even my opinion, we’ve gotta be honest, is obviously biased because, One of our sponsors, or the main sponsor for the e-commerce leader is Eva.
[00:32:42] And Eva, is focused. Automated pricing, stock management and, profit and loss management as their main focus. But they do also run an advertising agency and indeed an Amazon account management agency. And you supply the same rigor to considering firing them as you would anyone else. But if that is something you want to check out, I would just say that, the mastermind members, a couple of the mastermind members and the amazing FBA.
[00:33:04] Mastermind’s called the 10 K Collective Mastermind. Have been using, Eva recently for just that, for their advertising management. So if you wanted to get a referral to somebody that you know and trust, I have to do it privately for reasons of privacy, I’m not gonna keep names out on the internet.
[00:33:17] Get in touch with me, just Michael, m i c h a e l, at amazing f b a.com. I’ll just go to amazing fba.com and contact me there. . If you think that Eva could be a solution for you and you can get a free PBC audit from them, that’s definitely worth having cuz talking of risk and rewards a. Anything is low is no risk really, isn’t it?
[00:33:38] A bit of time. But, they do a very third job of an audit. There are other people out there, so go check them out as well. There are people that I think are good value and know their stuff, They’re smart people, but don’t take my word for it. Go and get the audit. And if you want to get a referral, from somebody that I know and trust, at least if you trust me to do that, we can set that up for you.
[00:33:57] The other thing to say, of course, is if you want to, check out. 10 K elective Mastermind itself. If you live in the UK or Europe, and can get to London at least, a few times a year. We run meetings, at present six times a year, physical meetings in London. In between, we do Zoom meetings and we bring in experts on the Zoom meetings as well.
[00:34:14] We’re gonna be ramping things up from 2023 in terms what we offer, but for the moment, the core of it is that trust. Peer network of people that you can talk to without any ax to grind, without anything except that honest experience of Amazon operating is Amazon focused. Although people in the group.
[00:34:32] Do, sell on other platforms, Of course include there in direct to consumer sites, some of which are Shopify, some WordPress. If you wanna be part of something like that, the amazon mastermind.com is the place to go. If you want to check out what adjacent and Kyle do for their clients, which is really a sort of all encompassing thing that covers Amazon and direct to consumer sites, then go to omni rockets.com.
[00:34:54] That’s om for mother. In for November, i Omni rocket.com. Thanks very much for listening. Don’t forget to subscribe to the show as well on whatever podcast player you use and keep listening. We’ll keep talking about this topic next show because it’s a really important one for the moment. Thanks so much for listening to the e-commerce dealer.
[00:35:10] TEL Outro: That was the E-Commerce Leader podcast with Michael Viy in London, England, and Jason Miles in Seattle, Washington. If you liked this content, don’t forget to subscribe to the show on your podcast app for free resources, including PDFs and videos on topics like traffic products and sales channels. Just go to www dot the e-commerce leader.com.
[00:35:36] No hyphens, just as it sounded. Thanks so much for listening.