EP 14 - Steve Simonson - Steve Discusses Live Questions from the Awesomer Army of Listeners

Amazon offers countless business opportunities to entrepreneurs from all over the world.

On today’s episode, we are doing a live Q&A session about everything Amazon. Steve shares his expertise and answers questions from a live audience that will help Awesomers understand more about how the marketplace works. Here are more valuable insights on today’s podcast:

• How to enhance Amazon reviews to boost sales.

• The three Amazon battlefronts: seller activities, buyer activities and ASIN activities.

• How to tap different sources of capital such as crowdfunding, hard money, Amazon lending and Inventory Financing.

• Amazon Advertising Cost of Sale, Sponsored Products and more!

So pay attention to today’s episode and learn how you too can launch and grow your business on the Amazon marketplace.

Welcome to the Awesomers.com podcast. If you love to learn and if you're motivated to expand your mind and heck if you desire to break through those traditional paradigms and find your own version of success, you are in the right place. Awesomers around the world are on a journey to improve their lives and the lives of those around them. We believe in paying it forward and we fundamentally try to live up to the great Zig Ziglar quote where he said, "You can have everything in your life you want if you help enough other people get what they want." It doesn't matter where you came from. It only matters where you're going. My name is Steve Simonson and I hope that you will join me on this Awesomer journey.

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01:15 sec. (Steve Simonson introduces today’s episode.)

Steve: This is episode 14 of the Awesomers.com podcast you can find show notes and details at Awesomers.com/14. That's Awesomers.com/14. Now, today is a talkback or as actually we like to call it an Awesomers back talk session where the audience gets a chance to ask questions. Of course the live audience was generated from folks who follow us on facebook and if you go to Awesomers.com you'll be able to find places to connect with us about for future live episodes. And today we talked about things from the beginner to the advanced levels. Everything from kind of the ongoing State of the Union so to speak talking about the things that are happening with E-commerce at large and Amazon Marketplace specifically and as some of the E-commerce guys asked me why do you talk about the Amazon E-commerce marketplace so much? And I remind of it well it's about 50% of the E-commerce business right now and whether we like that or dislike that is an irrelevant part of the puzzle. It just is what it is and so it's relevant to talk about what's happening in half of the market although I do think it's a much bigger and broader world than just E-commerce that's why we focus on. So sit back relax and enjoy kind of this live Q&A where we go through some of the the questions that were asked ahead of time as well as some of those that were thrown out during the live session and this is your chance to hear an Awesomer back talk episode and we hope you enjoy it.

Steve: Everybody, Steve Simonson. Welcome back to the Awesomers.com podcast. Today we're going to do a live Q&A session and I just focus right in on myself there, to make sure you can get good audio. Usually I will use the headphones and the mic but today I want to just try the raw audio and see how much the audio guys yell at you later. So thank you guys for joining live. We do have a series of participants in the queue already and then I'm going to try to keep my eye on the waiting room as well. So Nancy just asked a question which she basically said: Hey what's your take on the State of the Union so to speak on Amazon? And I think that's a very good question and we're going to kind of start with general news and we'll talk a little bit deeper about what that means for Amazon sellers and E-commerce in general. So first of all I like to start with general news because I think people get a little freaked up about the news especially news they can't control. So as one example, you hear a lot about the you know China trade and tariffs here and there and the sky is falling and on and on and on. I just want to tell everybody take a deep breath. This happens you know on a cyclical basis. There's always been this kind of international trade issues that go on. Maybe now is a little more vocal because the political environment or whatever but my advice is just be patient. If tariffs impact you, they’re going to impact your competition for the most part. So there's really not that much to worry about and long term, all of these things will resolve themselves. Nothing in terms of international trade will just simply disappear, right? Now there may be some short-term price increases, there may be some pressure around that but I assure you that China will do everything they can to remain competitive in the world. Other countries are taking full advantage. Earlier today I believe in the Facebook group, Amazon professional sellers group, I posted an article that talked about the fact that what I call the the Asia shell game, right? So there's many China factories that are now opening up or already have opened up things in Malaysia, Vietnam, and you know one of the Koreas although we can't trade with North Korea. They don't always tell you where they were actually producing stuff and obviously they also do business with Taiwan. They have a mini factories in Taiwan, Myanmar, Cambodia. There's many things that are going on and most of the time those start with the big heavy industrials. So bigger industry wants to have more flexibility with these things because the smallest margin can have an impact. Smaller consumer items haven't moved in mass yet out of China or it depends on the product category but India and Vietnam and other countries are becoming more and more viable for those. So my main point is be patient short-term. Don't get yourself whipped up into a lather because it doesn't really matter in the big picture long line. Now if you're selling extruded aluminum or you know things like that, you're going to have some issues with pricing. That's a commodity, it's always been that way and will always be that way. So don't forget that that's just part of the process.

I want to share with you the idea that the media is continuing to battle Amazon and they're putting pressure on Amazon. So what does that mean to you? When the media puts pressure on Amazon and Amazon thinks that the stories are legitimate or in some way could add, maybe impact Amazon's reputation, they take action and often that action is kind of like flailing action, right? They’re just in the panic in like “Hey whack them all.” So you guys probably all remember a couple years back when the New York Times did the big you know fake review article, October 2016 and that led to Amazon saying “No more incentivized reviews”. You know that's just done and you know there's a whole bunch of new ways about reviews that were going to be impacting and trying to maintain control over this process. Just today, the Wall Street Journal published an article called and the title from the great Laura Steven Souza, a very good writer, follows Amazon very carefully for the journal. She says the title How to Trick Amazon Seller or How to Trick Amazon to Boost Sales. And she talks about the the giant click farms particularly in Bangladesh and other areas that set up you know banks of cell phones and other devices so they all have unique IP addresses and they put them on VPNs to the US. They all have unique MAC addresses, that's the address of the actual device itself and then they just run around and they type in search terms and they click on the links for the products they're paid to boost and then they go around and hand it to wish list and all the other things. And all of this is just to try to manipulate the the algorithm and Amazon and so what does that mean? If that article gets traction, they could continue to to remove some of the things that are algorithmically known and understood. Things like you know if you have a bunch of people who click on your item and add it to the shopping cart or bunch of people click on your item and add it to the wish list, all of those types of things even if they're not true sale still can impact your ranking in a positive way and there's been many blind tests that have confirmed that. So my message on that is Amazon's very dynamic situation, it always has been, it always will be like the China trade war and so just go with the flow and remember that if you’re too invested in short-term tactics, you're going to have some issues. And Elena points out regarding the reviews that one of her colleagues who sell supplements and face creams lost thousands of reviews in a day, almost 90%. And then follows up with a question which is: what's the reason? And I will tell you the reason is highly linked to the media's continued scrutiny and then Amazon's own internal, I don't know values of saying “we want our reviews to be trustworthy” and I know dozens probably hundreds of people who are having reviews wiped out like crazy. And we'll talk about that a little bit later on in the episode. So there's a lot to talk about. I have several more questions right now we're going to take just a quick break and then we'll be right back after this.

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Steve: Hey see that was very quick wasn't it? You didn't even have to wait that long. So I want to come back and remind you that we’re listen to the Awesomers.com podcast. You can go subscribe and search for that. It's actually launching on August 1st. So the people on this live call... It hasn't actually launched but we're going to launch seven episodes on August 1 and then we're going to drop one daily episode on August 8th for the next 180 days. So anybody who is crazy enough to do a daily podcast, man oh man that's me by the way. I have no idea why I decided to go purely insane but it's happening so you may as well get on board with it. So you can go subscribe, you can listen download, review whatever you like. As you're listening to this it's already been published and this is probably sometime the latter part of August or early September that this is going.

Steve: Hi Shirley. You're awesome too! In fact you're Awesomer!

10:55 (Steve talks about Chinese sellers, Chinese philosophy, blackhat and whitehat tactics.)

Steve: So let's dive in a couple questions that I had and I did see your other question. Elena asking about Chinese sellers. We'll talk about that, actually lets just talk about it now. So Elena asks: I wonder how we react to Chinese sellers that kill our profit. A little smiley face and I'm sure she's not actually smiling about that. We're all faced with the idea that Chinese sellers can come in and sell against us, right? The guys in the factory, believe me, are very happy to sell against you. They don't understand if they sell against you and somehow impact the market, why your orders go down or why you're mad at them. And as I often do and let me just again pause to recommend the book Totally Made in China by the great Paul Midler and it's a really insightful book on how China works. So will Chinese sellers continue to come in the market? Yes. They're coming into Amazon on a regular basis and Amazon is actually helping that in ways it would make some of you know the other country sellers sick frankly. They're making it really easy because Amazon wants the factories to sell direct. Honestly they want the lowest prices they can get for their customers and they think they're doing the best job possible in that regard. And so I want to say that it's so easy to you know get online when you're in China and it's much harder to get online when you're in the United States or Europe for example. You know we have to have certain tax ID numbers and all these other things but we know Chinese sellers and surely makes it an important point they have classes and summits to teach sellers how to sell. They do in fact, one of a couple of my Chinese team members just went to one in Hangzhou China which or it might have been Hangzhou, I can’t pronounce it very well, but where there were many sellers and vendors being matched up to try to do business together and is an Amazon hosted event. So there are also non-Amazon events there where they're all about teaching you know how to sell on Amazon and many of them teach black hat tactics including if you get a bad review, ask for them to remove it you know it kind of pester them and then if all of that fails just pack their accounts, login-change review, they'll never know and then you know log out. That's blackhat advice that I would never encourage people to follow.

So what's the big picture about China? They have very good pricing obviously but they have terrible marketing and that's not going to be solved and you can't and by the way often they're good pricing comes at the cost of having to ship it from China, right? Because they're skipping customs, they’re skipping all that other stuff. So what I would say is you have the advantage when it comes to marketing, if you create a brand that is truly unique and a product that is incrementally better than the competition. It doesn't mean China won't copy that and keep up so you just have to keep iterating. If you just buy the cheapest whatever silicon spatula or garlic press or you know barbecue grill cleaner from China and expect to put the cheapest package on it and somehow be brand differentiated and survive in the market, you're making a mistake. I don't think that is a long-term strategy to be honest with you. If you really want to be, successful build a brand. Do proper marketing which you can always outmarket Chinese factories. They're just not into it the same way. They can out blackhat you but you can out whitehat them. And I think white hat will often win in the end and I know many guys with significant Chinese competition and they're still staying at the top of the market because of their marketing prowess and their understanding of how to do business not just on Amazon but the E-commerce at large to create a true brand. So Elena says some of our Chinese competitions have very good product listings that they do PPC which is expensive. And if she says it looks like they're in it for the long run. Listen, there are some exceptions to the rule. First of all, it's very rare for them to have a good product listing but if they're smart enough to go find somebody who's a native English speaker making a good product listing, then they're getting some of the marketing. When they do pay-per-click guys if they're smart enough to find somebody who can help them with natives you know English or whatever you know German whatever marketplaces keywords, more power to them. That's them getting good at marketing but they still will never quite understand the way these markets work. Doesn't mean there's not some great exceptions to that rule. Anker is a wonderful brand you know based in China and has become a dominant brand even in other channels outside of Amazon. So it can be done but it's very rare. If you find Chinese competitors on specific items that are getting marketing that is as good and as sophisticated as you can do, you should find other items because that's a battle that you won't win long term. Again, FBA, assuming they put an FBA, you guys are equal there. Assuming you put in marketing, you're equal there and you know you couldn’t fight the fight. Price, often they will try to have a little lower price. Many factories will do what we call “just a break-even price” and try to just build volume. That's the famous Chinese philosophy. It's just volume, volume, volume and later though they’ll tweak figure out how to make money. So again if you really want to understand China go read the book Poorly Made in China by Paul Midler. You can learn a lot about China and it's really about 15 years of my world kind of baked into you know one one book. It's not based on me by the way. It's just stories that I identify with very clearly.

16:53 (Steve talks about relevancy, reviews, traffic and advertising.)

Steve: Okay, so another question that was asked online. I believe James asked this. He says he's new to all this, want some advice and he's got his own product which is last year on Amazon but his perception is and what he's heard is that - a lot of traffic is driven by reviews and then advertising. And I just want to clarify this for everybody and we're going to talk more about reviews and the great review purge that's going on right now a little bit later. But the idea that reviews drive traffic, I don't think that's accurate. I think reviews drive conversion. So the more product reviews something has on Amazon that gives the customers the warm fuzzy and obviously the higher those average reviews are and Amazon now doesn't even use the average. They use machine learning too make their own score. So in the old days it was like you get a hundred reviews and you know ninety were five stars and ten were one stars, you can just do the math on what your star rating would be. Today they don't do it based on pure math. They do a machine learning and they weigh the different reviews based on conditions that we don't know and can only speculate about. Things like the quality of the reviewer, the quality of the review itself, how often that reviewer reviews. All kinds of little things that we can again speculate about what we don't know. So reviews are not going to drive traffic. You know what the logical question is what does drive traffic? Traffic is driven by your natural ranking or you know your and which is also part of the search algorithm. So technically it's possible on Amazon to kind of go into a category and subcategory and use their browse tree as they call it and find a product but in my experience very few people, very few indeed use that browse tree as as their navigation. They search, right? They go to Amazon and search. So that means to get traffic you need to have visibility in search. That search is probably A9 algorithm. I know some of you guys are advanced but the person asking the question just launched. So we're sharing this with them. Once you have... To get ranking in the A9 algorithm, you need to drive basically a series of things on Amazon that I alluded to earlier that the Wall Street Journal is just complaining about. How many people are searching it? You know getting impressions on that listing. How many people are adding it to a cart or wish list or other types of behaviors that say are engaging behaviors at Amazon. When the most important way we believe is that people buy the product, right? So once your conversion rate goes up, Amazon starts to predict how much revenue they're going to make by showing your product compared to another product. So I want that to just sink in a little bit, the A9 algorithm is not just sorting on relevancy, although that's becoming a very important key. Maybe I'll talk about relevancy a little more in detail in a moment but it's not just how relevant the search term is. It's how relevant each of the items that are matching the search query and then it's scored based on how much money Amazon thinks it's going to make by listing you in various positions. They do all of that math kind of live and it's a very powerful system. So if you're not making sales, it's difficult for Amazon to give you any sort of ranking and that's why you know these types of giveaway programs that have always existed to try to drive your bestseller rank on this BS are higher and higher. We do have a very insider resource that we used to do ranking on different channels - Amazon, eBay, and Walmart and others potentially as well Jet and so forth. If anybody is interested in learning more about those they can go to Awesomers.com/contacts and just make an inquiry. Maybe we can make an introduction for you. To do giveaways that actually can then help you bring brand awareness. The side effect is there's sometimes some positive ranking. So you can check that out. So it's not reviews that drive traffic, it's reviews that drive conversions. It's not.. Thank you by the way Melissa for putting in that link. Everybody in the chat window can go to the link and just click on there. So it's not just about reviews that helps conversion. Traffic is driven by the algorithm and how visible we are. Your mission should always be to be on page one and ideally the number one spot on page one. That's going to give you for the most traffic keywords, that will give you a lot of sales but that's all natural organic traffic and over time that's going to go away. One final word on relevancy, I know I'm ranting here just a little bit, but you know a year ago maybe even six months ago, Amazon did not score relevancy the same way as it scores it today. Today relevancy is far more important. So a year or two, three years ago, it was very easy to just kind of put lots of keywords in the back of your listing and into your listing title and then all the points and so forth and ultimately that worked pretty well to be relevant or to be found on lots of keywords. Today the way the relevancy works is you know if you're putting too many keywords back there, you can dilute your relevancy on your primary keywords. So what that means and see if I can come up with an example here on the fly, if you're trying to rank for silicone spatula and you just put in silicone without spatula then you may end up start ranking for just straight silicone things. You know there's other things made of silicone - baking mats and so on and so forth. And so you want to be very careful about your usage of really important keywords and that's something that has changed and evolved over time and we'll probably talk about a little tool that we can share with you to help you score that stuff right after one of the upcoming questions.

22:58 (Steve talks about ByBox.)

So another question says is there best way to get into the ByBox as quickly as possible so that. I know it's a newbie question. We're going to get some more advanced stuff here in a minute but to get to the ByBox when you first launch, you got to get sales. So even if you're the only seller in your own private brand, when you launch a product you often do not have the ByBox based on Amazon's own rationale. I could again speculate as to what that is but it doesn't matter, it's common. My advice get some sales and I know it's easier said than done but you have to just get sales to happen on that transactions or what will earn you the ByBox and the ultimate thing is you know you have to make some sales, your price has to be considered competitive by Amazon, and that it will compare dynamically and automatically other products it thinks are similar to yours. And if it thinks it you're not competitive even though it's your own brand, it might take away the ByBox from you. If you raise your price too fast, it might take away the ByBox from you. And if you're not in FBA, you will often not get the ByBox. Amazon's trying to drive people to use the FBA warehouses. So that's how you get the ByBox. That's from Raifi. I don't know how to pronounce that name so apologies and I don't have names for every, all the questions but I won't give.. Oh Melissa corrected me. It's Awesomers.com/contact. So I may have misspoke myself. So apologies there. If you're going to and ask for some of these resources just go to Awesomers.com/contact. We'll try to help you out with those.

24:34 (Steve talks about product variations, parent-child listings, ASIN and many more.)

Steve: A new question from Michael. He says he's got a couple products he's trying to sell and he's curious whether or not they should be set up as children under the same parent or just set up as separate items. And so I've heard every variation of this argument over time. If the products really are similar for example color variation, size variations, or multi packs. In my view you know for me pack, a ten pack whatever, I think those are all fine to use child listings. On child listings, it can be very effective to get you know different opportunities when it comes to the search especially if you change the underlying keywords and titles and so forth enough to rank for different keywords. So that can be a nice benefit. Also the way reviews work at least in most categories and this is subject to change, we've started to see a change in some of the categories but in most of the categories reviews will aggregate to the parent. So when you have multiple children let's just say you have three children items, each child items, they have a hundred views each, when you load that any of those items that any of those aces on Amazon they all show 300 reviews and then whatever the appropriate star rating is. The purpose of that or the benefit of that is that by having these children ads you can look like you have more reviews in total. Another benefit that we've used over history is that if we had one item that started getting negative reviews and pulling our ranking down, we could just take that child, disconnect it from the parent and those reviews will be deleted but also the negative reviews would no longer be impacted as well. So that is another part about you know parent and child relationships. It is possible and Amazon is now starting to regulate these a little bit more that they're going to scrutinize these listings and if they're really not appropriate to be variations they're going to eliminate that option or otherwise make it inaccessible. One of the things that The Wall Street Journal article How Sellers Trick Amazon to Boost Sales, they talked about this idea that old ASINs with reviews like it could be an old boat engine or a boat harder you know whatever just an anchor from a boat and then tons of reviews but you're launching a new you know whatever baking mat, if you find that old ASINs with a bunch of nice positive reviews you can just attach it to that item and even though the anchor whatever that old boat part is gone and discontinued and no longer available, all those reviews still show and that is a tricky little technique and believe me Amazon's not a fan of it and the more scrutiny The Wall Street Journal, others put on it, believe me the less it'll be available.

So Shirley asks, innocently I'm sure, how do you attach these items? And fundamentally you make a parent item and then you make you know corresponding children item. So you can make your own parent. It could be you know just Steve's parent ASIN and then underneath it you can make Steve child 1, Steve child 2, Steve child 3 and if you found one of those old things maybe it's your own old item that has a legitimate purpose, will promote white hat, you just go to Steve's old item 4 and attach that even though it's a discontinued item because there's a lot of equity in properly relevant corresponding reviews. And if you don't know how to make parent-children, Amazon has uploads, templates, and things like that that show you. We use software to do it because we're lazy.

Ed asked if there's a tool? There are a number of tools that will do kind of parent-child variations and I don't have any websites for you right off the bat but I can in time, we'll probably share some of those with folks.

Okay let's see another question. She says she, Elena says she used to have a tool and I think it’s Volumetric she used to use but it started to break for the EU countries and this related to keyword search volume. So for those of you who are diligent and thinking about some of the things I've talked about, I've said hey to get into the A9 algorithm you want to have your listing be relevant. You want to have it be found. You want to list those keywords and you're backing keywords, your title, and your bullet points and the question is how do you know which words are relevant and how do you know how much volume they have. And so I'm going to share a tool that we use with the output at the chat here and this is a tool that it's called Seller Tools and that link will get you a little special price by the way. And by the way I'm not the affiliate. I don't do affiliate stuff on Awesomers. Any of the programs I support the Empowery E-commerce cooperative, that's a non-profit member on cooperative. I don't do any of this stuff myself. Haven't ever done kind of direct affiliate stuff and I'm not planning on it either. So all of that is to say that the tool will help you track relevancy of a listing. It will also help you track actual keyword volumes. So Amazon made a change, I don't know I'll say three or four weeks you go to their their keyword volume API that allowed people to go get the API and the guys we use how to fix within three hours. So, and it works across Europe but it works across the US. The charm of relevancy and give you keyword suggestions and to you know find the keywords, the traffic the volume on those keywords that are most relevant. So you can kind of wait where you should put those into your listing and it even gives you relevancy scores. In fact one of the other things I like about it, is it will give you the projected number of giveaways you need to be giving away in that product to become really powerful to get onto page one for example. So highly relevant.

Gary makes a comment and he says, “Recently, I heard that reviews are attached directly to child only now. Not among the family sharing.” So the question is just to restate kind of Gary's point, excuse me Gary, that there are some categories where your child items now they’re their own reviews. My ASINs are the only ones showing but there are other categories where they're still rolling up to that parent level or the family reviews if you will. So some categories you may have three child ASINs even though it's under a parent but when you go to that individual child ASIN and you're only going to see the child’s countless reviews. Whereas there's other categories that do not operate that way. And so I do still think that the potential to manipulate old SKUs to be part of the equation works and but instead of me sharing black hat techniques, I'm going to stay on the white hat side. Just say that people should stay away from that because ultimately all these hacks, review hacks, ranking hacks, all these hacks, Amazon will beat out the wrinkles over time. And so I generally will stay away from that. So let me pull up my questions again. Bear with me just a moment. Actually while they find my questions we're going to take another quick break right now and we'll be right back

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33:42 (Steve shares an opportunity to take part in an Amazon beta test.)

Steve: Okay we're back again everybody. Can you believe how fast that was? Amazing what you can do. So we've shared that really great keyword tool. I think that will help you out Elena. And I do want to let everybody know that at this moment as we are live here end of July- first part of August, if you would like to take part in the Amazon beta test, I have a special opportunity for you. Amazon has been in the freight business, it’s purchased a freight provider in China and is now offering kind of freight directly. They've been testing this for a few years. We were a part of the Dragon Boat project three or four years ago in Hong Kong and that's basically where Amazon said we'll take your containers and we'll take your freight from China to Europe or China to the United States over time. They did both and they're continuing to grow that program. This particular beta is a very short beta or very short in terms of availability. Only 40 participants and is to test the integration of the freight from China to Amazon in the US or wherever it's going and by the way it will go you know anywhere in China to the US or to any Europe or to Japan for that matter and it's all integrated into your Seller Central account. All of the controls are integrated. So they'll do less of container load, they'll do full container load, and they'll do air. And all the quotes, all of the transportation, all that stuff's built in the Seller Central in this beta and you know this beta may last you know two or three months, it may last a year or more, I've seen betas go all over but that's something we're just sharing here with Awesomers out there. So again you can go to Awesomers.com/contact if you want to be part of that beta and just put in you know I want to be part of the Amazon Freight beta and then we'll make introductions to the folks directly at Amazon for you. So that's something unique that not everybody gets a chance to.

So Shirley asks the right question which is, “Is the pricing for freight competitive?” Answer is I don't know. I personally, they did fine on the Dragon Boat project but we're very persistent when it comes to shopping for freight and I would just compare it honestly. I certainly wouldn't, I would not personally accept paying more just to have it integrated in my Seller Central that is not worth any premium. So if they can't be competitive, then you wouldn't use them and if they can be then it's an interesting opportunity. Again for those keeping score at home I think Empowery has some you know freight connections that can help you and you're welcome to check those out at Empowery.com.

36:34 (Steve talks about Amazon review purge.)

So we'll talk just briefly again about the Amazon review purge. So I want to reiterate, we talked about this in a recent live Q&A as well but the pain continues. We're watching thousands of reviews on individual products that you know ultimately probably you know millions of reviews are being deleted. But these reviews which are often proclaimed as a hundred percent organic are disappearing. Now if I take Amazon, I put the Amazon head on for minutes, it's kind of like going to the prison going hey anybody here innocent? Everybody goes yes I'm innocent, right? So you know I I have to you know take it with a grain of salt when everybody tells me their reviews are 100% organic and yet they're being deleted anyway. Now that said, now I put my seller hat back on and I know they're deleting organic reviews. I know they are getting false positives. And I know their algorithms are not working. Well and it's based on firsthand you know stuff I'm seeing in my accounts and very close people in the Catalyst88 Mastermind. We're watching legitimate you know no frills, no gimmicks kind of reviews being deleted on a regular basis and it's the source of this issue is coming from three battle fronts that Amazon has opened up. So the first is seller activities. If Amazon thinks even there's a whisper of “leave me a positive review”, that generic of a statement, you can be put on alert. You can be suspended or that part can be suspended for something like the time it can be suspended for reviews or any variation of that. And they can give you a warning that says “Hey if you continue to try to manipulate reviews, we will shut down your account”. So Amazon is very serious about this. I don't want anybody to take that for granted. It's happening, it's real, and it's serious. So seller activities need to be very carefully done. Now it's okay to ask for reviews. You just can't ask for positive review, right? And I wouldn't even use the word review. I would ask for feedback and I would not try to you know that in the old days some of the the tricks were, hey I'll send them an email and go hey click here if you know had a great experience and click here if you have a complaint and the complaint would take them to like your seller feedback which is really easy to get rid of and the positive ones would go to to the ASIN review, right? And Amazon, inherently, we all knew that was not the right thing to do but Amazon's like hey that's not fair and if we see you doing that we're going to you know take enforcement action. So although I do want them to get rid of all the fake reviews that we still see, guys launching, typically Chinese sellers launching, and they first or second day they have five or six hundred reviews and they're all you can see the timestamps you can see the date stamps are all brand new and we know how they do it. We know how they do it! Amazon should know how they do it! Which is to say that they are one of the most common ways that, Chinese sellers are doing this is they deploy a network of Chinese college students and they pay between five and ten dollars per review and these students they go by the product and they leave a review and you know the Chinese sellers think they're you know brilliant for doing this and that’s still sneaking through in many regards. So seller activities is one part of the battle that there’s still actually to be taken on and there's probably action that needs to be unwound that they've been a little over-aggressive. And I'm happy to report to all of you guys that myself and the Catalyst88 Mastermind next week we have high-level meetings at Amazon with a bunch of executives that are responsible for these things and we're going to continue to fight this fight. So seller activities do the right things, stay white hat that's one part of their battle. Another part of the battle is fire activities. They're starting to basically if you are a buyer and you just left nothing but positive reviews, you're a suspect, right? You are a suspect especially throw a five-star and especially if they were incentivized or discounted or couponed in some way. And Amazon has taken away you know the verification badge. You know it's unverified when it’s getting a certain level of coupon but I think they're scrutinizing that even more and I think that their artificial intelligence that the machine learning is now applying you know kind of profiles to some of these sellers or buyers. And they're getting rid of buyers, they're bouncing buyers.

41:10 (Steve talks about battlefront in buyer-seller activities.)

Nancy it sounds like I hit a button with Nancy. She says she wish they would find those buyers who only have the fives and the ones and those who buy in return. So on that front Nancy, you'd be happy to know Amazon took some big steps to spring on rampant returners and just fired the buyers. You could no longer buy on Amazon and many buyers were outraged by it. So they're taking you know battlefront (1) is seller activities, battlefront (2) is fire activities and battlefront (3) is ASIN activity profile versus the category. Now this is again, Amazon doesn't ever publish how their algorithms works. They don't publish how they do many of these things. It's very rare to get any kind of data points from them but our estimation is that the ASIN seller activity if it is above a certain percentage for example let's say your item somehow has a 20 or 30% review rate and the category average for your particular category or item or subcategory we’re not sure which but that average is 3 or 4 or 5% then it'll (a) potentially just remove those reviews and (b) it'll put you on an ASIN suspension for reviews which basically says this item cannot be reviewed at this time. And those will typically last for anywhere from three days to three weeks. It depends on how egregious the algorithm thought the situation was. So those three battlefronts I want you guys to remain vigilant on. Seller activities, buyer activities, ASIN activities and just know that Amazon is very serious about it.

42:47 (Steve talks about sources of capital.)

So I'm going to rewind here and we're going to… 'm not going to get to all the questions but I'm going to go to our live questions which are more important. And so the general question and since it's sent to me privately, I'm not going to name you but you know who you are, says, “Nnow or in the future can you address sources of capital if you're heavy in the Q4 but need cash to drive that large amount of that inventory”. So let's set the stage for this problem. In order to have your materials and so forth arrived for the Christmas season, you need to have orders in you know May, June, July, right? So they can be produced August, September, October. The August stuff should already be shipping, right? Once it's produced and arriving in the United States roughly about September which means you know you're still ahead of the curve but you're not that far ahead. You go well if you do it August 1 and arrives let's just say September 10th, right? It's not uncommon to have a 40 or 50 day lead time especially if you're going to East Coast. Now you're in the middle of September and you know Halloween kind of is really where the season kicks off if you will which is October 31st but the problem is just because it arrives doesn't mean it's instantly available at Amazon, right? There's the queues get longer. Some Amazon warehouses get full and they have to ship around other places. So that can add on another three or four weeks to you. So you really have to front-load that that Q4 inventory to make sure that it's in place and settled before those warehouse closures or before the warehouse delay start happening. And you know in terms of you know finding capital, there's all kinds of ways you can do capital. If you're running out of your own cash, there are you know ways online to do you know crowdfunding. You can actually do a crowdfunding campaign to sell the park as well which we'll talk about in future episodes. There are there's so-called hard money that is really expensive. There's Amazon lending that's a by invitation only but if your accounts been around at least year and you have reasonable throughput, you'll probably get some Amazon lending offers. And there are other things we're seeing out in the marketplace and I know that the Empowery commercial, our E-commerce cooperative is working on trying to get like inventory financing. And if you want to get involved with inventory financing go to Empowery.com/contact and let them know you're interested in getting involved in that project because we need more people to model that. And inventory financing is interesting because all the inventory that you have in Amazon right now is just like a dead asset, right? It's no money but with inventory financing you can draw against that, that asset that is there. So as an example if you have a hundred thousand in inventory, let's use a little higher numbers because it doesn't make sense economically to do them too small. Let's say you have three hundred thousand of inventory in Amazon, wouldn't it be nice if you could draw 50, a hundred, maybe even up to a hundred fifty thousand dollars and a reasonable interest rate against that inventory. That's the kind of things that inventory financing can bring to you. And of course it will follow this up but in other episodes. Thank you for the suggestion Nancy. Getting terms from your Chinese suppliers, this is possible. I've talked about this a number of times but I want to reiterate it for everybody that hasn't heard. Chinese factories can give you terms. They back them by the Chinese National Insurance Company. It's a government owned company called Sinosure. And if you've been importing or I should say generally if you've been exporting China for more than a year under your company name, you probably already have a credit profile and probably can already get you know 20, 30, 50, a $100,000 worth of credit from Sinosure and your objective is that use that as a negotiating leverage with your Chinese supplier. So we can talk more about that on a China episode but it's definitely something that is doable. It's not easy, it takes a little getting used to and you know financing deals often will have cabinets that you have to be cognizant of and that has a little brain power to it but over time everybody, everybody is limited by cash flow. Doesn't matter how big your company is. Tesla their number one concern and what Warren Buffett says will give them the most problem is having enough cash flow. So it happens to everybody at every level. Particularly when you're successful by the way.

47:16 (Steve talks about Amazon ACoS and sponsored products.)

Ok, so we have a question from Shirley. She says talking about sponsored products, they budget around 20 or 30 a day. By 10:00 a.m. the budget’s gone but with little or no sales. So we're upside down on sales versus as spend so we pause it and then the sales drop off to little or nothing. And so that's a little contradictory Shirley because if you're getting those sales and then sales drop off then there's some cause and effect that's not happening there and I do understand if you're saying that you don't see the attribution but remember that Amazon sponsored products takes sometimes upwards of two to three days to attribute the sale to a cliff. So it's better for you to go back and look at the attribution over time. You know let's say a week in the rearview mirror but I would highly recommend scrutinizing your budget and I would also say it's possible. She says the month report shows your upside. Yes, it's definitely possible to spend more than it's worth but you should consider lowering your cost per click because obviously the cost per acquisition numbers are not working. Cost per acquisition by the way, CPA is a term that I use, is similar to what Amazon calls ACoS, right? It's a percentage, ACoS is a percentage of your ads fan to revenue. Now when you're upside down that means literally you could be spending you know for every dollar you spend on advertising, no excuse me for every dollar you get in revenue, you're spending a dollar of ten in advertising, that's not super profitable. It's not at all profitable. On that sure metric but there's a lot of us that believe that by getting good ranking and getting sponsored product sales, that's how you pull in some of your organic rank. I do want to say, I don't think I'm breaching any confidentiality agreements here, but I want to say that in the old days we believed that Amazon was tying sponsored products directly into the A9 algorithm in terms of the search results and the relevancy and so forth and we don't believe that's happening anymore. So you know my number one advice and that is if you’re burning through your budget too quick and you feel like you're upside down has lower your cost per click, keep your budget the same and then see if it lasts longer. And I would.. Yes, I would still.. So Shirley shared some of her numbers talking about 225 is what they suggest. Although they paid less that's a common thing. You pay less in the auction and she says still not number one in the sponsored products. So obviously that's a very competitive item that you're dealing with and I would be very, so I would do a full review of the keywords you're using and make sure you're really on relevant keywords. I would make sure that you have exact match types and phrase match types and then also do some automatic stuff to find new keywords over time. So there's a whole.. So it sounds like she's already got some of that going but I'll bring out in a future Awesomers episodes one of my favorite resources used to run the Amazon sponsored products department at Amazon and we will talk to him about some of his best practices. But really you know having the most relevant keywords, making sure that you do the match types, doing the long tail keywords and then lowering your bids, and kind of just taking the data and decide what's working.

Okay, so let's see here. I’m looking through questions, bear with me just a moment. Alright I do have one more question I'm going to address which I think is an important one and and luckily there's a resource that we can share with you to help with this. So I don't have the name on this one, my apology, but they say hey I'm looking to outsource customer service and other work to the Philippines but they say one of the applicants is you know already worked for another Amazon or working for another Amazon seller and they're concerned about the IP addresses. They’re concerned about you know what this could create in conflict. So the first question is there used to be so much chatter about you know you better get a VPN and you better never sign on to more than one account with the same IP address or the same device or whatever. And I just have to say I never bought into any of it. I've never done any of it and we have owned, legitimately owned, operated multiple Amazon accounts over time. Even today we still have two or three active Amazon accounts. And we don't bother changing our MAC addresses or our computers or IP addresses. We just log into each account individually and we don't sweat it. So I don't think there's any accessibility issues. But I do see issues when people are trying to find help and finding consistent help in a sustainable and friendly way and also affordable for that matter. And I'll tell you one of the resources that I have really appreciated and enjoyed is specializes in helping you recruit and find you know individual resources across a broad range of seller activities. Everything from customer service to support to you know whatever really whatever you need and I'm pasting in the link. This gets you a little special deal and Nate and the gang over there, they really are quite good at it. So you can find this in the show notes, you can find it in the chat. So if you're listening live, you see it in the chat. If you're listening later to the recording, you can find it in the show notes area. But the reality is to be able to go in and find resources in marketing, service, tech, graphics, accounting, it's really a pain. And you can go and find hey I just need somebody for ten hours a week and I just need this much help on this particular topic and they'll find you an expert and if they find you somebody you don't like, you don't have to use it, will cost you nothing. And that is a really exceptional value proposition and something that I highly encourage people to consider. So for those listening right, I'm going to give you the last chance to kind of enter some questions and I'm going to get to maybe just last a little bit of business here and then we're going to close it up. So anybody live, now's your your final chance. Thank You Nancy! She says very helpful. Appreciate that.

53:49 (Steve talks about hijackers.)

So I do want to talk about this idea that hijackers are happening and that it will always happen. Elena, you're very welcome. Hijackers have continued to happen if you don't have your brand registered and you don't have gating and you don't have even the enhanced level of gating that now exists. So it starts with getting a trademark, getting a brand registered, and then starting gating. Amazon really wants you to be in their exclusives program which I think is too much money. They want you to pay five percent to keep anybody else off your listing and it's almost like a mob I'll break your legs if you don't you know pay the protection money. I dislike that as a philosophy. They have their own reasons and they're fine. I can debate on either side of the equation I'm sure. But I do want to let you know about the fact that hijackers often are result of the giveaways and actually Shirley just you know talked about this. You know that when you sell a bunch of stuff really cheap on these, I'm not going to name their names at this moment, but on any of the services that are relying on 99 percent coupons. I do want you to know that you're opening yourself up for hijackers. Now in those agreements with some of the big brands, the most respectable brands who will help conduct some of those giveaways and awareness promotions, in their agreements it says that people are not allowed to resell the stuff. It says it in their Terms of Service but they do it anyway and there is no legitimate way to get rid of them. They have the right to resell that part. They bought it in their own way and they can sell in their own way and there's nothing that you could do about it. So you really have to ask yourself why would you want to do that. And whereas you know I won't use generally those types of giveaways at this stage. I won't say I won't do it ever but we must prefer a different methodology and that's the one we said if you went to Awesomers.com/contact and just you know put in the message that you want to be introduced to kind of a branding and awareness campaign, branding and ranking campaign then we can we can help you with a resource set. In my case, we had an item where we were re-launching. It went from position 280 to position number three in seven days with a hundred twenty-five giveaways. Zero were resold and hijacked me and it worked like a charm. This is something that continues to work over and over and I want to reiterate to people out there, not everybody gets access to this thing. It's kind of on a case-by-case basis but it's something that is actually working that we appreciate. So, anyway I want to remind people that somebody has a first right to sell that or it's called first use right or something under copyright law and basically it says not only can they sell your item, they can advertise it as the brand that they purchased. I've seen sellers that are outraged that somebody's using their their brand name or their logo or whatever but they're able to use all of that stuff under the fair use policy. I think that's what it's called under the copyright laws. So you know be careful about how you do that. Try to minimize it obviously where you can and you know avoid the problem. So Gary, definitely appreciate your your comments. For everybody thank you very much. I do want to just share with you in closing, the Awesomers.com podcast will go live on August 1st and you can find it on the Apple platform and the Google Play and probably a couple others as well. I don't actually know where it's going to be honest with you. My job is just to do these and then the team takes care of it. So thanks for their hard work. But it'll go live on August 1st and we're going to launch with I believe 7 episodes on the first day and then we're going to drop a brand new one every day from August 8 onwards for at least 180 total episodes. So my commitment is, for six months, I'll do a podcast every day. They'll change format. Sometimes we're interviewing Awesomer, sometimes we're interviewing authority, sometimes I'm just ranting about my own stuff I call those “insights”. You can put quote marks around it if you wish. And other times we're doing book reviews and other times we're doing Q&A and so forth. So it should be interesting. I hope it's interesting to you. And and it would be helpful to me if you went and you know subscribed and shared and listened and reviewed and so on and so forth. So I really appreciate you guys taking the time, especially all of you guys joining live and we'll do this again and we can talk about other things that are important to you each and every time. So thanks again for joining everybody.

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59:49 (Steve shares his closing remarks.)

Steve: Ah! A lovely, lovely time fielding questions from brilliant entrepreneurs and Awesomers from around the world. We have participation from Sweden and Japan and Australia and the United States and I can't even name where everybody was from. But really it's great to see people online and get your chance to get into the you know session, the live Q&A or as we like to call an Awesomer back talk session. Now some of these in the future we may just do one-on-ones where we do a video interview or audio interview or whatever with some buddies got questions or we may even open up the audio mic on some of the guest participants so they can participate. In this case, we used chat and so you're going to want to be able to go to the Awesomers.com/32 show notes page to see some of the notes and some of the links that we've shared with the audience during live chat and vice-versa. But we hope that you got something out today's episode. Again we covered some of the things that are really advanced and some of the things that are really basic but all of it is worth hearing and all of it’s worth kind of reinforcing what's important as we see it in today's marketplace. We hope you enjoyed every last minute.

Well we've done it again everybody. We have another episode of the Awesomers podcast ready for the world. Thank you for joining us and we hope that you've enjoyed our program today. Now is a good time to take a moment to subscribe, like and share this podcast. Heck you can even leave a review if you wanted. Awesomers around you will appreciate your help. It's only with your participation and sharing that we'll be able to achieve our goals. Our success is literally in your hands. Thank you again for joining us. We are at your service. Find out more about me, Steve Simonson, our guest, team and all the other Awesomers involved at Awesomers.com. Thank you again.

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