#551 – Strategies to Boost Amazon Sales and Master Profitability

Join us for a compelling conversation with Amazon expert Tomer Rabinovich as we uncover the secrets to increased profitability and mastery of the Amazon marketplace. Tomer brings invaluable insights on how to thrive amidst Amazon’s ever-changing fees and storage strategies. Listen in as we discuss the benefits of remote business management and how sellers can adapt to maintain a resilient online presence.

Venture into the world of product development and discover strategies that are revolutionizing product launches. In this episode, we share the story of a product that’s exceeding expectations with its innovative approach to packaging and marketing, highlighting the importance of giftable elements and catering to the mobile workforce. We also peel back the curtain on the evolution of launch tactics, from leveraging PPC to harnessing the power of Google ads and social media platforms. Hear firsthand from our community about what’s currently making waves in the marketplace.

Wrapping up the conversation, we discuss the potency of various launch and Amazon advertising strategies, such as utilizing the Amazon Vine program and the importance of smart PPC campaign management. We navigate through the complexities of new coupon rules and their implications for product ranking, and share strategies for increasing profitability through supplier negotiations and the judicious use of funding. Additionally, we touch on the strategy of offering quantity discounts to incentivize multi-unit purchases. So, come along and gain valuable insights that could propel your Amazon business to new heights.

In episode 551 of the Serious Sellers Podcast, Bradley and Tomer discuss:

• 00:00 – Amazon Seller Strategies and Experiences
• 03:28 – Amazon Sellers Discuss Marketplace Changes
• 08:11 – Navigating Amazon Changes and Branding
• 11:01 – Product Development and Launch Strategies
• 14:37 – Amazon Listing Workarounds for Vine
• 17:20 – Importance of Social Media in Branding
• 20:43 – Amazon Advertising and Helium 10 Strategies
• 21:18 – Optimal Pricing Strategy for Vine Reviews 
• 27:49 – Enhancing Amazon Product Research Tools
• 29:25 – Strategies for Increasing Profitability and Automation
• 32:10 – Negotiating Bulk Purchase Discounts
• 36:55 – Maturing Industry and Setting End Goals
• 39:29 – Quantity Discounts for Multiple Units

Transcript

Bradley Sutton:

Today we’ve got one of the most knowledgeable people in the whole Amazon world back on the show, Tomer. He’s going to give us his best tips on profitability, automations and Amazon product launch. How cool is that? Pretty cool. I think.

Bradley Sutton:

Hello everybody and welcome to another episode of the Serious Sellers Podcast by Helium 10. I’m your host, Bradley Sutton, and this is the show that’s completely BS-free, unscripted and unrehearsed organic conversation about serious strategies for serious sellers of any level in the e-commerce world, and my guests and I are in opposite parts of the world. I’m not in my studio, as you guys can see. I’m here in a hotel in Seattle, had an off-site here. Uh, it’s so about nine o’clock PM over here. Where is it? Where you’re at, uh Tomer right now?

Tomer:

I’m in Ko Samui, Thailand, right now, so it’s 11 AM here.

Bradley Sutton:

Thailand the next day. You’re living in the future already. It’s, uh, tomorrow over there. It’s been a while since we’ve caught up. How is it, first of all, that you are in Thailand? Was this due to the you know, uh, the war that’s going on? Were you able to get out safely? Yeah, yeah.

Tomer:

So since the war started on October 7th in Israel, um a few days later, I took my family and took the only flight available, which was to Italy. So we spent three weeks there, my wife and my three kids, and we didn’t want to spend the winter in Europe, so we just decided to go to Thailand instead, and you know, this business allows us to do that. I mean, I built the business in a way that they don’t have a local office, I don’t have, like, employees coming to the office every day, and, very thankful for this business model, I would say, that allows me to do this.

Bradley Sutton:

How did you land on Thailand? I mean your initial flight, you didn’t have many choices. But then from there, I’m assuming you could cruise almost anywhere in the world how did you land in this middle of nowhere? I’ve never. You know I’ve heard of Bangkok. You know, I’ve never heard of where you’re at.

Tomer:

Yeah. So, again, we didn’t want to spend the winter in Europe, so also the US for that part you know. And Thailand is very cheap, very affordable in terms of living here, and we also spent our honeymoon, me and my wife, eight years ago. So we knew about Thailand very well and it’s a very friendly country, especially with Israel. We have in Israel we have a lot of like Thai employees and a lot of Israelis come to Thailand. My sister is just coming here in two days for her honeymoon. So, yeah, it’s a great country and it’s lovely, it’s hot all year long, so it’s very nice.

Bradley Sutton:

Yeah, I don’t know if I could live there. The food is too good. My weight loss goals will never be met If I would live in Thailand. So, anyways, we’re not here to talk about your world travels. You know it’s been a I don’t want to say almost a year and a half, or almost two years, since we’ve caught up. How are things going in your world as far as the Amazon side of things?

Tomer:

Yeah, so Amazon is ups and downs, as you know, so we have multiple brands that we run in my own business and for the past 18 months I’ve been working closely with other sellers one-on-one. That’s something I’ve never done before. I only done that with aggregators and bigger brands and companies, but now I’m working with like seven eight-figure sellers, helping them mainly scale up to an exit or just to scale up their businesses, and that has been very rewarding as well as challenging, and I think, from what I can see, again, it just depends on the brand, but a lot of brands are now struggling with all the obviously new fees and stuff. But overall, I will say that if you have good products and you have a good brand, you’ll do just fine.

Bradley Sutton:

I agree, but let’s talk about that for a second. Now, things are very fluid at Amazon, you know. So we’re going to talk about some things today that, who knows, a week later, when this episode comes out, maybe everything is completely changed because Amazon has backtracked. But you know, the first fees this year that a lot of Amazon sellers are starting or they haven’t really seen yet, but they can see what’s going to happen is the inbound placement fee. So, first of all, how has that affected, if any, the way that you handle your replenishment orders, like, were you using three PLs before? Were you shipping directly from factories to Amazon? Were you using Amazon Global Logistics? What was your setup before and how has it changed now?

Tomer:

For the longest time. My thesis was that Amazon doesn’t want to be a storage facility. They’re a marketplace. They don’t want to store your inventory for six months time. You had long-term storage fees before. So my thesis was always let’s ship whatever we can directly into Amazon. Let’s avoid using 3PLs altogether if possible. So we try to ship once a month from the factory to Amazon. We still might produce for, let’s say, three months time, but we ship like one month at a time products into Amazon and then we store another two, three months of stock at a 3PL just for like safety. But that was our way of doing things for the longest time and it’s still our way of doing things right now. I don’t think that’s going to change.

Tomer:

And the whole point of Amazon is like you don’t want to have like um, you want to have just enough stock, you don’t want to be overstocked, you don’t want to be understocked at the same time and obviously it’s very difficult when you do B2C, like business to customer type of business it’s very difficult to predict inventory. I talked to this big entrepreneur in Israel selling eyeglasses one of the biggest brands in Israel and I asked him like. I told him I only have one question to you and he’s like what’s that? I was like how do you manage inventory? How do you predict inventory? He says you don’t, he just gets and you give your best guess and then that’s pretty much it. And I like that answer because I feel the same way when it comes to Amazon.

Tomer:

But again, we just did the best we can. We tried to avoid using 3PLs, AGL and the IWD and the different programs Amazon is currently offering. I didn’t use them myself. We do have sales that used some of them and I will say it’s like mixed results. But over time what usually happens is they get burned by Amazon for some reason and they just go back to their freight forwarder, to their own uh solution they had before. And we’ll just see how all these new fees play out, because it’s a bit, I think, premature to tell. I think uh, also, a lot of sellers are trying to kind of raise a flag and tell Amazon look, this is wrong, you, you need to like reverse this. So we’ll see how this all plays out.

Bradley Sutton:

Yeah, I mean I was checking on my some of my shipments and since I have a warehouse at my house, I’ve always just shipped from my warehouse and for me it wasn’t too bad, like, yes, the fees were more, having to ship to four or five locations and maybe East Coast, like I wasn’t. But I calculated it out and then the lower FBA fees didn’t completely cancel out the new fees, but it really made it where it wasn’t that much of an increase. Now, that being said, the people who maybe ship full containers or LTL where they can’t split it feasibly into four different locations, you know, maybe they’re kind of hurt a little bit more. And then of course, we have coming also the low inventory fees which I know there’s a lot of questions about. But just like you said, you know like.

Tomer:

The crazy thing is if you start, if you ship from China, usually you get like one location still, so I think that’s the creepy part about it. And if you ship from within the US, you get like multiple locations. Yeah, it’s crazy right now.

Bradley Sutton:

Yeah. So let’s see, let’s see how things go, but you know it’s not time to panic. Or, oh my goodness, Amazon is dead, you know, because there’s no profit. I mean, these fees are affecting everybody, you know. So if people have to raise prices, everybody’s going to raise their price. It’s not like there’s or, you know, maybe I’m sure for a few weeks there might be people using some kind of software to kind of game the system or something but you know Amazon will catch on to that and block uh that kind of stuff. But you, you talked about the importance of. You know you’ve always talked about the importance of having a strong brand and you know really good product even more so you know that helps us get the what you call the was a six star review experience and things like that. What are some tactics that you’re using nowadays that you feel like sets you apart where, yeah, you know you’re not going to worry too much about you know a little fee here or there, because you know you’ve got a strong brand and or product?

Tomer:

We are now building a new brand, so I can talk about that, because that brand is going to be completely out in the open, kind of like what you did with the different products that you launched, like the Coffin Shelf and a few other products. So this brand is going to be completely out in the open. So the original idea was I have my annual summit called Top Dog Summit. We have the next one coming up in June in the Austrian Alps. And when I was gifting my guests, you know, at the event it was always like a power bank or a water bottle or different things like made in China. We put our label on it and that’s it. They thought about and I was like well, I claim to be one of the top people that know their way around e-commerce or Amazon, then why would I give them something like this? Why not just give them one of my own products? And then I thought about, like let me just build a brand under the same name, Top Dog, and serve digital entrepreneurs.

Tomer:

So Amazon sells to begin with, but then, like, expand the scope for to be much wider than that. And then we kind of started looking into what products we can launch and things like that, and the first idea that we had a lot of ideas, obviously, but the first good idea that we had in that product has been in development for a year and a half now and it’s almost done is a laptop sleeve. So the you know that small bag that you put your laptop in and you can put it in your backpack or just carry it around. So it’s a laptop sleeve that’s also a power bank, a docking station and a laptop mat all in one. So imagine you go to a coffee shop or you go to a conference, you just take this with you. The laptop is inside, you take it out, you can put the laptop on top of it and you can just work all day long. You can connect it with a Type-C port to your laptop and it has a built-in power bank. You can connect another microphone or whatever it is that you need to get fully set up because it’s a docking station as well and it’s a laptop mat so it doesn’t get dirty in like a coffee shop or something.

Tomer:

So that has been developing for a long time and I actually talked about in stage multiple times. Uh, this year at different events and how we’ve kind of using the six star experience for the specific products. And I really feel like and again the sales I’m working with we still have regular products we develop. It takes about three, four months, five months to kind of get from research until you launch. But we also have products that take much longer. We just had a product launch for one of the members in my exit program. Those sales we helped them scale to an exit that was just launched after a year and a half of development and that product is just going to. It just it just kills. It sells like 30 units a day with like two reviews right now.

Tomer:

The main image, you can see the differentiating factor for that product and everything that we do is we really focus on the experience and I really believe that when you create an experience with a product it becomes giftable. So just to give you maybe an idea about the laptop sleeve, what we did is the packaging is very unique. It’s an old idea of a book packaging. I know those that are listening cannot really see it, but it opens up like a book, like this, and then the product is going to come out from the middle of it. So it’s a very cool packaging that we worked a lot on and I’m very excited to show that to everyone. And also, we are giving a free dog keychain when you get the product. Again, top Dog is the name of the brand, and that keychain is going to have an NFC chip inside. The NFC chip is the thing that you put your phone next to, kind of when you pay. It’s the same technology. So when you put your phone next to it and it’s going to have a pop-up on your screen, you click on that and you’re going to see the story of the brand, which we help save dogs from getting killed and finding a home for those dogs with a charity organization we’re working with based in LA, the US.

Tomer:

So we are doing a lot of different things, a lot of different elements around this product to kind of make it very unique and really make it giftable, and we believe that anyone that is kind of like either a digital nomad or I honestly believe that now everyone is working from everywhere, like I have my home office, you have your home office, but now you’re in a hotel. Next week you’re going to be in Japan. People are moving constantly around and they’re not working from one place anymore, and this is what this product is for. It’s not when you’re at home to service your docking station, it’s just something in your backpack at all times and you can just take it with you whenever you’re on the go.

Bradley Sutton:

Cool, all right, so it’s a product that you would actually use. You know, unlike me, who’s selling coffin shelves, which I would never use in my entire life, so I like it. Now, what is what has been your go to launch strategy for, like you and your audience? You know, lately, obviously, you know years and years ago, we used to talk, you know, about people doing search, find buys or two step URLs, and then I feel like the industry kind of shifted all towards you know PPC. You know when, when those were like hey, don’t, don’t do that. You know some, you know, talk about google ads and off-site traffic and sending TikTok. I mean there’s like any uh number of launch strategies out there. What has been for the last you know few months or year? Uh, what you have been using, along with your um community?

Tomer:

We are leveraging, uh, the vine program a lot for the initial reviews. So we do a few different things. Let’s say we have four different colors coming in. We might do like we will start at four different listings, four separate listings, register them all up for Vine. Vine is actually a bit cheaper now. It’s like 200 bucks If you do more than I think. It’s like 10 or 15 units, I don’t remember and so you pay 200 bucks for all the reviews and then what we do is we just put them under the same parent and that way we get like 100 reviews when we initially launch the product.

Tomer:

There are also other workarounds around this. Like you can even split it further. So let’s say you have four different colors, you can open eight different listings, but then the four of them are like 10 units that you bring in from that like specific color, like a different FNSKU, just for 10 units, and then you sign that up for Vine. And if that fails, if that doesn’t work, what you can then do is you can just not merge it with the other variations. So you can kind of split it out a bit more. You need to have like a bit different pictures and stuff, but you can get away with it, because you just give it away for Vine and you run out of stock on that, and then you can just give away, let’s say, 10 units instead of giving away 30 units, and that way you can just you can safely merge those together and get the reviews to be like five stars or four and a half when you really launch your product. And if you want to do this strategy, you can even close the main listing. So let’s say you have the color yellow, so you can have like three different yellow listings and then you can have like the main one being closed. Those three listings accumulate reviews. Then you open the main one and you merge those together and then you start your launch with some reviews already.

Tomer:

That’s one thing. On like, just getting reviews in terms of like. So you need two things you need reviews and you need to get ranked. So yeah, I know so. To rank, um, there are uh, a few different things you want to do. So PPC is something you want to start off the bat. Uh, long tail keywords obviously you want to have high bids, for you can have some short tail with low bids if you want to try that. But start like very simple and I think, like with Cerebro or whatever tool you want to use, is very simple to just figure out what are the long tail keywords you should go for and you start those with PPC. We don’t do any search by buy or anything that. We do leverage UGC’s a lot. You can use different tools for that, like join brands or whatever it is you want to use. There are a bunch of them out there and we also leverage our email lists as well when we launch products. So to our email list, what we do, and we collect emails with our inserts and we can talk about that as well. But what we do with the email is we don’t really use the email list on a day-to-day, we only use it for launching products.

Tomer:

So we might email the email list and say, hey, we just launched this new product. If you buy it right now and send me the order id, I’ll send you another one free of charge, or I’ll send you this other product for free or whatever, whatever it can be. That is kind of like complimentary to what they just bought. Let’s say it’s a supplement, you can send them another one. Let’s say it’s a laptop sleeve, you can send them a mouse or something I don’t know or another cord with the product, right, something complimentary to that. And then when they send you that order ID, then you can follow up and say I just shipped you whatever product and can you please leave us a review on Amazon, right? So that’s an easy way. Like, if you have an email list, that’s an easy way to kind of get more reviews and get your product ranked at the same time. And in that email you can just give them the brand name and keyword. But it’s just safer to just give them a direct link to the product and you still get ranked on different keywords if you just give them the canonical URL. That’s, that’s more than enough to gonna get. Uh, get going. We do not leverage uh social media or TikTok or anything that’s for our brands. Uh, right now we do have again sales that I’m working with that are doing a lot of Instagram and stuff. I think it really depends on the brand that you have and how much you really invest in social media most Amazon brands, I will say, are not very social media friendly and a lot of sales, I think, invest a lot of time, effort, resources into those different venues and it doesn’t really pay off for the most part.

Bradley Sutton:

Okay, yeah, very similar to some. I mean, I wasn’t doing all of the Vine, but you know, especially about the PPC and um. You know it’s definitely something I’ve been using. But you know something interesting this just came up maybe two, three, four weeks ago. I’ve been launching a few test products on the different accounts and um. One of my strategies always was and this could be like a just a test Amazon is testing things all the time, but it’s got me a little bit worried because it coincided with when Amazon made the new coupon rules. But one of my strategies was since I’m not doing search, find, buy or using those websites, I would mimic search, find, buy, but in an organic way by just lowering the price a lot on PPC, using a sale price or using a coupon. I always did a sale price, so I just picked you know what price would somebody see the product and even before those Vine reviews started coming in, they could see that, hey, this product is something that I never heard of, but hey, this price like I got to give it a try. You know, like maybe it’s a $25 product but then they see a sale price of $9. I usually had like a strike through price because I would get at least one sale at, uh, at the $25.

Bradley Sutton:

But then, all of a sudden, for these last two, three products I launched, first of all the strike through price didn’t work, even though I had a couple of sales at the regular price. And then, at the time you know, I started maybe, let’s say, $9, and then it was great and I started getting momentum. I raised the price to 11, 12, 14, 15. But then, before I got to my desired price, which I think was like $24, um, even though I had tons of of sales at different prices, I lost the buy box. Uh, uh, even though I was using sale price. You know, obviously, back in the day, if, if you had a regular price and then you tried to raise it really high, Amazon would make you lose a buy box, but they never did that for a coupon or for a sale price. And then the second thing is I, like I said, I don’t usually use coupons. But then Amazon changed the rule right around the same time where they said, hey, for coupons you need to have a sales history, which kind of like eliminates brand new products because they don’t have sales history. So let’s, let’s just play devil’s advocate and say, hey, this wasn’t just a test. And you know, three months from now, this is the new normal.

Bradley Sutton:

For people like me, who, who need to ramp up that price until I get more reviews, what would be the strategy? I was thinking, all right, let me just have I know how many I want to. You know, “giveaway at the low price in PPC”. I send that amount in and then I have a separate SKU that I’ll then join with that variation once it gets the reviews and gets the keyword ranks and from day one, that one has the regular price. Like, would that be the way to go? Or what would be your strategy in my situation?

Tomer:

Yeah, yeah, I think that makes a lot of sense. I also highly recommend starting at the lower price point, like 20, 25% under your target price, especially for Vine. I don’t know if you know this, but Vine reviewers I think they have like an $800 budget per month or something like that. So if you have a more expensive product let’s say 50 bucks and they think it’s not worth it or it’s like zero reviews or whatever. They can, a lot of the times, Vine reviewers complain about the price and for you as a seller it doesn’t make a lot of sense. Why did they complain about this? He got it for free, but he got it out of their monthly budget. So this is something you want to pay attention to, and a lot of them actually comment like this is a great price, you should get the product right, and you raise the price since they reviewed or whatever. So that’s a really important point.

Tomer:

To answer your question, what we usually do is we start at the lower price point and use a coupon at the same time and just like slowly reducing the amount of the coupon and then removing it altogether. So if you start there, I don’t think you should have a problem on new products. You will have a problem moving forward. We ran a lot of tests on, let’s say, $5 discount and then $5 up with a $5 coupon. So with all those different small tests you probably cannot run those anymore. For most like Amazon will not let you do those tests anymore because you cannot play with the prices that much with the coupons and stuff like that.

Bradley Sutton:

Now since the last time we talked, I feel like Amazon itself has come up with a lot of cool data points that can further enrich the way people prepare for launch or just prepare or maintain a seasoned product like search query performance I think two years ago when we talked last it wasn’t around and some aspects of product opportunity. Explore maybe some parts of Amazon advertising like top of search impression share and things like that. Any of these new Amazon things are you using for your brands?

Tomer:

So we’re not really using any of it for the day to day. We do use a lot of stuff for like product research and keyword research, but mainly for those things. It’s just business as usual for the most part when running the business. I will say PPC is something you need to stay ahead of the game, obviously, and any new placement that comes in or any new ad type that comes in you want to be aware of. And what I noticed is that sponsored brands especially, is something that you can really customize a lot with how you write your collection ad headline and what video you put up there and what video you have in your like in your video ads for specific keywords. And one thing that we noticed that works really well is, well, two things I would say. So if you think about a video ad, right to begin with, it’s almost like a free click that you got, because if someone is, let’s say, typing in a baby shower gift as an example, and they scroll down and see a video and it’s a video of your product and you can see someone gifting it, right and there’s like a stock video in the middle of your video just to show like someone gifting it and if they click, they are very likely to buy at that point, right. But if I would just target, uh, sponsor products and target like baby shower gift, I would probably like never be able to get a sale. Um, so video ads for those type of keywords that have like a very high search volume, that can work really well. And also for the long tail keywords that are very important for your products, that can also work really well, right, like, let’s say, you type in baby bandana, whatever, baby bandana, giraffe, right, whatever, and then your video shows like a baby with a giraffe bandana, right, so that’s going to work really well. Obviously, you want to do specific videos for only keywords that make sense to your brand and not for everything, and you can also do it for different keyword types, right? So, anyway, that’s something that has been working really well.

Tomer:

And when we analyze a brand, when we kind of take a new brand on, one thing I can say is that 90-95% of the ad spend is on sponsored products, and I always tell them you’re going to make so much more money with your ads because they only focus on sponsored products for the most part, especially if they do it themselves and not hire an agency or even if they use a software. A lot of times it’s just like sponsored products. But I would say that sponsored brands and sponsored display should probably take up, I would say, at least 10% of your ad spend, but probably should be around 15% of your ad spend. So if you’re not spending that much on those, you can probably spend a bit more and make more money, and I would also say those two usually convert better than sponsored products. An important point about sponsored display as well is that a lot of sellers tell me look, it didn’t work. We stopped using sponsored display, which is fine. It makes sense, especially for a new product. Once your product is more established and you run sponsored display on other competitors or like new sales that came in, you’re going to convert a lot better, right? So I would tell them like, test it again on your best selling products against like the lowest selling products out there, and it should work pretty well.

Bradley Sutton:

Cool, cool. We’re talking about, you know, Amazon tools and things. Well, what about the, the good old Helium 10? One question I’m asking a lot of people this year is number one what’s your favorite Helium 10 tool? I know, for you used to be Cerebro. Is it still that? Or function in Helium 10? And then you know you actually have influenced Helium 10 product roadmap in the past. So if I were to give you keys to our product team, what would you tell Helium 10? Hey, this is what Tomer wants you guys to make.

Tomer:

Yeah, so I think Cerebro is definitely number one on my list. I think it’s the tool we still use all the time to do keyword research. But for day-to-day stuff, X-ray is the number one thing. When we use sales estimation. We tried every other tool out there. I think X-Ray is by far the most accurate tool that we’ve seen, and I can also say why I think other tools out there. What I noticed that they’re doing is they’re kind of taking a snapshot of the current BSR. So let’s say the BSR is 1,000 in the home and kitchen. They will say it sells this much per month and it doesn’t matter what the history of that month is In Helium 10, it shows you the average of the entire month and I think a lot of people think Helium 10 is skewed because let’s say the pot has been out of stock for two weeks or three weeks and now it’s back in stock. They will think, oh, it’s like 1,000 BSR. It doesn’t make any sense. It sells a lot more than that with 1,000 BSR. So I think that’s like a misconception of understanding X-ray, but I think it is a lot more accurate when you understand it actually takes the entire month into consideration.

Tomer:

Blackbox is another tool that we use all the time and I noticed you keep adding more and more functionalities to it, like more and more filters, which I think is great. One of the things we do a lot when you do product research is we put the maximum number of variations, let’s say three variations or less, because you don’t want to find something with like 50 variations for a new product launch. So that’s something we use a lot. Yeah, in terms of future tools, I think what I’m really missing in this space right now when we kind of develop like internal tools for our team and we might like put them out there for free or something for other people to use as well. But it’s just like proper business practices and decision making. I think with a lot of these tools let’s say Cerebro or it doesn’t matter even like X-Ray, whatever tool you have, it doesn’t tell you by looking at X-Ray, is this a good product or a bad product? Right, should they go for this product or not? So I think these type of bigger questions and helping decision-making is what is really needed from these tools, and not just data, data, data coming out of it, especially for people that are not very like analytic I think, people that are more creative it’s very difficult for them to just understand how they should be using these tools to make decisions, and I think at the end of the day, they’ll kind of copy paste it to a spreadsheet to make a decision. So I’m like, let’s build those spreadsheets into the tools and then they don’t need to do that anymore. Anyway, that’s what I think tools should be doing instead of just showing me data. Also, profits, right? There’s a good example of like okay, these are my profits for the past week. What do I do now? Like they went down from last week, what do I do, right? Or my market share ran down from last week. What do I do? So I think that that’s really missing right now.

Bradley Sutton:

Awesome, awesome, all right. Speaking of profits, we talked earlier about new fees and also, of course, PPC. Sometimes it seems certain keywords keep getting more expensive, so of course, the easy thing to do would be just say, oh yeah, let me just make up for this by raising the price, and of course that’s an option. But I would think that most sellers, before they go that route, they want to make sure they have squeezed all the juice out of little things that they could be doing here or there to help their profitability. Anything that you’re advising your students about hey, here’s a way to save money. Or have you audited this, or have you checked that, in order to really squeeze a little bit more profit without having to just go directly to raising their prices?

Tomer:

Yeah, I think raising the prices is, uh, is a nice to say thing, but it usually doesn’t work the way you want it to, because you don’t have the context of your 10 top competitors say, hey, let’s always price by five dollars and like, yeah, dominate.

Bradley Sutton:

And if you are doing that, you’ll get in trouble with, uh, the FTC and Amazon anyway.

Tomer:

So you cannot really do that right. Unless you have, like, the right contacts in China to all of your competitors. So yeah, I don’t think that’s the case. So let me ask you, Bradley, like in your coffin shelf, what are your current terms with your supplier?

Bradley Sutton:

Just the standard. I pay 30% before I make it and then the rest of it I pay when they ship.

Tomer:

Okay, so you can probably get much better terms. And I would say that when you’re tight on cash flow, that’s what you want to do. You want to get better and better terms over time. So you can probably tell them look, I’m going to pay you 30% upfront and 70% after it arrives to Amazon, or you can do it in different ways, right? What I’m doing with the sales I’m helping especially to an exit is the entire goal is to increase profits. Right, we don’t care about cash flow anymore. As long as we have cash in the bank, we don’t really try to improve terms. So, let’s say, your screen terms are 30-70, right, with your supplier, and usually the sales I’m working with is much better than that. Let’s say it’s 30-70. What I will tell your supplier is hey, we got some extra cash and we want to help you out. This is a partnership. We want to pay you more upfront, we want to pay 70-30. Or we want to pay 100% upfront.

Tomer:

This is only something you will do with a supplier you already know and familiar with and ask for a discount in return, and always they will give you like a discount of 5%, 10%, 15% discount for your inventory, always, like we’ve tried that so many times. It always, always works, because they need the cash as well. You know they like cash flow as well. And if a customer came to you and said, hey, I want to buy 12 units from you this year, but I’m going to buy all of them right now, can you give me a discount? You’ll do that right. You’ll give them like 10% off or whatever, like you don’t really care, but for them it’s very significant right. So for the seller getting like uh, and we saved a lot of money for the sales that we work with. So we’ve done that that way. And we’ve also done it in a way where we say, okay, we sell a thousand units a month, it’s 12,000 units a year. We tell the um supplier look, we want to work with you in 2024, 2025, we want to pay for the entire year up front. Let me tell you uh, let me pay you 10 up front for the entire year and give me a discount, and every time you start production, we pay another 20. When you ship it, we pay 70, whatever right, whatever the terms were before is okay as well. But because you pay them so much money up front, they see you’re serious about working with them. They like it a lot. And if you can visit your factory and do it that way, that’s even better, right, because you meet the owner.

Tomer:

But even if you just talk to the sales rep and ask, like you kind of a lot of sellers, what they do is they just ask for discounts. That usually doesn’t work, you know, like the seller, the supplier is going to say I cannot do that. But when you treat like a partnership and you say, look, I want to pay you more money upfront, they will be a lot more eager to give a discount to that point. Imagine again, you get 12,000 units a year, you save $1 per unit, that’s like 12K. 12k in your pocket a year. And when you put a multiple on that when you sell like a 3, 4, 5x multiple, that’s a lot of money, right? You just made from not doing anything besides talking to a supplier in one email. And the other thing I tell sellers is they tell me look, but I’m tight on cash, right, I don’t have enough cash. So I’m like so get funding. If you get funding, the funding that you’re going to get, the interest you’re going to pay is probably going to be less than the discount you’re going to make. So let’s say you get 5% interest rate, even if you get 10% interest rate. So it’s the same, right, you get a 10% interest rate, 10% discount, but when you sell your business you still get the multiple and the profit, and the loan is just an add back to your business. You just cover the loan as soon as you get paid. So it’s always good doing like uh, when you try to increase profits. Talk to your supplier. Offer them to pay them up front. If you don’t have cash, get funding and that that works like a charm every single time.

Bradley Sutton:

Um, one last thing I wanted to ask. Uh, you know, before we get into your tip of the week, is you know? I know Shivali was just with you in the uh European Seller Conference and she said the only thing she said about your, your presentation, was you talked a lot about like automation and things, but she didn’t really go into uh, into detail. So what, what were you talking about? An how are you suggesting to to sellers that they should be implementing uh automations into their business?

Tomer:

Yeah, first of all, the event in Prague was amazing. Augustus put a great show and I was there last year as well. So my talk was mainly about how to run a proper business if you want to remove yourself from it.  And I think when you think about the Amazon business in general, you have really four options. You can either sell the business, automate a business, transfer to your kids or go bankrupt. These are probably your four options, and the last two are probably not viable options. So sell the business or automate. Now let’s say you want to sell the business. You’re probably going to sell to another business later on. It doesn’t matter if it’s Amazon or something else and that business. Let’s say you have $10 million in the bank. You probably want it to be more automated. So you don’t want to do PPC yourself. You don’t want to do customer support yourself. You don’t want to do anything yourself anymore.

Tomer:

So what I tell sellers is learn to automate your business now. Learn how I take weeks off of the year. I’m going to go next month with my family for two weeks to Hong Kong to Disneyland and a whole bunch of places. Not open my laptop once, right, and when I went to Prague, the same thing. So learn how to run the business in a way that you can remove yourself from it, because if the sale comes, it comes, if it doesn’t, it doesn’t. But it doesn’t really matter, right, because you know how to run a proper business. So to have that in place, you need to go from an employee in your business, a person who is just doing everything on their own, to a manager in your business, so a person who has a few employees they need to manage, to a CEO who has a few managers managing a few employees underneath. And that was mainly my talk and how to get from, like, an employee to a CEO position. And my autopilot business model, which was also covered in my book Ride the Amazon Wave in a lot more detail, but I gave certain rules for the CEO, for the manager.

Tomer:

They need to kind of think about and transition from each one, and I think we all agree that being a CEO of a business is not something anyone can learn how to do unless they’re actually doing it right. You cannot get a degree on being a good CEO and you graduate and then you can be a CEO. It doesn’t work like that and you can see CEOs transferring from a company to a company to a company in different industries completely. But they know how to manage a business right. They know how a business needs to run and I think that’s what Amazon sells really to try and strive for.

Tomer:

And what I really enjoyed seeing in Prague compared to last year is and I kind of see that all over the place right now is that the level of sellers coming to events is higher than before. It looks like the entire industry is maturing. It looks like I’ve talked to a lot of sales they already know everything there is to know about Amazon. So when I came in and talked about something a bit different, something more business related, I think it was very refreshing for them, because on Amazon they’re kind of like up to date on anything. Maybe they get like a small tidbit here and there, but overall I think that was a big reveal for them and I think a lot of them are just hustling and kind of working 24/7 in their business, but towards what? Like? What’s the end goal, right? And they’re not working towards that end goal anymore. And when I started this business I wanted to have financial freedom. I wanted to have time with my family, and if you don’t get that, then what’s the point? Right, why run this business to begin with? And you can hustle for a year or two I’m not saying you shouldn’t, and that’s what I did as well but at some point you need to run towards something.

Bradley Sutton:

And one more thing, guys Tomer is actually recorded for the new Freedom Ticket that has just come out or is just coming out, depending on when you’re listening or watching this but new Freedom Ticket 4.0, make sure to check out Tomer’s module about the Amazon algorithm and all of the insights he gives on that. All right Now, before we get into your last tip of the week, how can people find you on the interwebs out there? You know your course, community. How can they find you? How can they find you your book? Is it still available? Et cetera, et cetera.

Tomer:

Yeah, so my book “Ride the Amazon Wave” is on Amazon, obviously Audible as well. Anywhere that you buy your books from, you can probably find it. In terms of finding me, you can go to jointopdog.com. Join is J-O-I-N topdog.com. We do a lot of different things. You can also find our summit there, if you want more details on that, yeah, and you can also find me on Facebook, Linkedin, if you just want to message me. I’m always happy to talk to sellers and help them out.

Bradley Sutton:

Now it’s time for your 30 or 60 second strategy or tip.

Tomer:

What I will say is that one thing that we saw like a small increase, you know, anything kind of adds a bit, and I wanted to. Maybe it’s something not a lot of people are doing, but B2B sales is something that can get you like extra cash, right. So one of the things you can do is you can do quantity discounts for B2B sales. Like, if you go to Sales Central and you go to your inventory, you can see, uh, quantity discounts for business. So you can just uh, you need to set up like a B2B account first and then you can do that. But you basically do quantity discounts for like two. If they buy two units, they get, let’s say, three percent off. If they buy five, they get five percent off. If they buy ten, they get ten percent. Whatever you want, just don’t do quantity discounts for one unit. If you do it for one, that actually hurts your coupons and deals and things like that. So you want to avoid doing it for single units, yeah, but the previous tips were better than this one.

Bradley Sutton:

Hey, they’re all good, all equally good. Well, thank you for taking time out of your day there in beautiful Thailand to come on to this call. Uh, our audience always loves and looks forward to your episodes and hopefully that we’ll see each other in person soon.

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