E201: Amazon Update – Black Friday, Review Throttling, PPCNovember 29, 2018 in Ecom-Crew-Podcast
Q4 is already in full swing with Black Friday and Cyber Monday, but before it could swallow us alive, Dave and I decided to sit down and talk about new things happening up on Amazon land.
In this episode we discuss things we discovered with Amazon recently, from good updates like new PPC changes to the frustrating alleged review throttling. We also talk about other things in between.
Black Friday and Cyber Monday deals: are they effective?
The short answer? It depends.
Black Friday and Cyber Monday deals are profitable depending on the niche.
For example, Dave sells offroading products which are seasonal and not really hot items during the holiday season. He does experience a bump up in sales during Black Friday, but it’s not substantial.
On the other hand, my products (coloring books, gel pens, markers) are very giftable. In fact, a huge chunk of ColorIt’s yearly revenue is generated in Q4 during which we run lots of deals, Cyber Week included.
Should you lower prices to fight competition during the holidays?
Our answer? Don’t. In fact, we raise our prices a little bit.
A common thinking among sellers this time of the year is that they need to lower prices to get more holiday sales and therefore, more profit.
While that’s not wrong, there’s a better way to do it.
Increasing your prices will reduce sales, BUT will increase profit per widget. So you can potentially get the same amount of profit but fulfill less items, answer less customer emails and in general, have less headaches.
We found this out last year when we increased prices for some ColorIt products because we were in danger of selling out before the holidays were over. To our surprise, our net profit dramatically increased.
Some buyer psychology plays out here. People are frantically looking for gifts around the holidays and are probably more inclined to finish buying gifts than saving a couple bucks. Also, the more expensive the item, the more valuable the gift is perceived to be.
Pro tip: Make sure to A/B test this. We use Profit Peak, a feature of Splitly.
Is Amazon throttling reviews?
A very frustrating Amazon rumor has been going around seller groups recently. Amazon could either be:
a. not allowing new reviews to be posted and limits reviews to a certain number over a period of time
b. manually reviewing all new reviews posted and puts them in a “limbo” for a few days while being checked
There’s no official word for this yet but we do have some experience hinting that this is really happening.
We’ll see what happens in the future.
New PPC changes
With sponsored products, you can now target by categories and competitors’ products, not just keywords.
We’ll test this out in 2019. In effect, we will have 3 types of campaigns: automatic, manual, and competitor targeting campaigns.
Pro tip: Go to your automated campaigns and look at the ASINs that are converting. These ASINs are perfect for this new update.
Other Amazon updates
Listing hijacking seems to be a lot more rampant these days. It mostly has to do with the holidays coming up. Wherever there’s money to be made, unscrupulous people show up. This is one of those things that keep us up at night.
On a jollier note, we found that if you send a full truckload of products into Amazon, it gets received in 1-2 days. Talk about an Amazon fastlane for larger sellers!
Thanks for listening to this episode! If we’ve helped you in any way and would like more content like this, connect with us on Facebook.
Until the next one, happy selling!
Full Audio Transcript
Intro: This is Mike and welcome to episode number 201 of the EcomCrew Podcast. Hope you guys had a great Thanksgiving if you live in the United States and that you’re having a great Black Friday, Cyber Monday, and I hope you guys have a great holiday season coming up. It’s a crazy time of year. I do want to take a real quick minute and remind you that the day that this podcast comes out there’s less than 24 hours left to sign up for EcomCrew Premium if you’re interested in that. We have a hard deadline at midnight on Friday. We just simply can’t take any more people this year in 2018.
I want to thank anyone that’s listening to the podcast that has become a Premium member. We’ve had hundreds of people sign up this year. It’s been an amazing success and it’s been the great joy of Dave and mine’s life this year helping so many people. So go check that out at EcomCrew.com/premium. I’ll just real quick go over the offerings for that again real fast for our full length training courses, one is on importing from China, one on how to build a seven figure brand, one on Facebook Messenger for ecommerce and another on launching a new number one bestseller on Amazon the white hat way, something that won’t get your account shut down.
In addition to that, we are adding new courses all the time that will be included in your membership and we also do two webinars every month. One is an open Q&A; you can ask us any questions you have about ecommerce in an open Q&A format. We also do our secret sauce webinar that’s behind the scenes of our brands and bringing in other experts. And finally, you get access to a private Facebook group, which is a great community of other likeminded sellers. It’s a really great value. I think it’s one of the best values in ecommerce and the price is going up substantially in 2019 so we can continue to support our members effectively. Again, EcomCrew.com/premium and lucky for all of you guys, that’s the last minute to hear about that for 2018. If you’re not yet signed in for premium, no problem, no hard feelings, those commercials are done.
I feel like we’re like the NPR fundraising drive when we do those commercials. I don’t like doing them too much in the podcast because it’s mostly to provide value. But every now and then, we do open up Premium and I want to make a quick word about that. So enough about that, let’s talk about today’s episode. Today, my boy Dave Bryant is on the podcast with me. We haven’t done one together in a while. It’s always awesome catching up with him. We’re going to be talking about Amazon and Black Friday and some other stuff. It kind of ended up being a little bit about everything. So definitely check that out. There’s stuff that’s not just Amazon stuff in here even though the Amazon updates we try to keep just about Amazon.
There was a lot of other things that we started talking about. We kind of got off on a couple tangents. And I think there’s some good nuggets within. So again everyone, I want to thank you guys for all your support on the EcomCrew Podcast things we’re talking about. As the year comes to a close, we get a little bit of sentimental as we talk about reviewing the year which has been amazing. So thank you guys so much. If you want to go the show notes for this episode, it’s always EcomCrew.com slash the episode number, in this case 201. All right, let’s get into it with Dave.
Mike: This is Mike.
Dave: This is Dave.
Mike: And welcome to the EcomCrew Podcast Dave. It’s good to have you back my friend.
Dave: Yeah, thank you. It’s been a while since we’ve done a podcast together. I had the solo podcast a couple of weeks ago doing my 18 month update on my new brand, but the first time the viewers – or I guess not viewers, listeners have the honor of getting us on the same podcast.
Mike: They’re looking at somebody else right now Dave, they’re not looking at us.
Mike: As much as you want them looking at, I know your [inaudible 00:03:50] good looks.
Dave: I thought they’re looking at the podcast cover the entire time.
Mike: [Overlapping 00:03:54]. That’s what you do, you don’t have a life, but most of the people listening probably have better things to do than to stare at your picture.
Dave: Well, to the listeners you’re missing out, go browse to our podcast cover on your iTunes and take a look at us.
Mike: And then they’ll get in an accident and blame us.
Dave: Right. Well, we have liability insurance, don’t we?
Dave: I think so yeah. Make sure you have business liability insurance by the way, a very important thing to do, a side note, a pro tip from the EcomCrew. All right, so what are we really here to talk about today Dave?
Dave: What are we here to talk about? Well, it’s kind of neat the way I guess not — It’s probably not the best word. It’s kind of strange the way the schedule is going to work out. But we’re going to talk a little bit about Black Friday even though this podcast is probably going to come out after Black Friday.
Mike: Yeah, this will come out…
Dave: Then we’ll also talk about some overall ecommerce news and updates going on in the world of Amazon and ecommerce.
Mike: Yeah, so this will be coming out right after Black Friday, it’ll be episode 201. So you’ll be listening to this one Thursday after Black Friday and Cyber Monday. So the cool thing about these types of thing is we can record what we’re doing and then review it later because we can’t change history.
Dave: Hey, that sounds good.
Mike: So, do you have any particular plans for Black Friday and Cyber Monday going into this?
Dave: Well, we were kind of talking about this off the microphone. And for the types of brands that I’ve been a part of, so Offroading now, boating previously are being previously, those product categories don’t really lend themselves well to the holidays because typically they’re a male dominated niche and it’s not a really highly giftable niche either boating or Offroading or any of those categories. So we’ve never seen a huge bump in sales during Black Friday and Cyber Monday and even the holidays in general, a little bit of a boost but it’s nothing like you’ve talked about where a lot of your brands will get three, four times growth over the holidays where we maybe we’ll get a 10 to 20% growth over that Black Friday weekend.
Mike: Yeah and yes for sure like IceWraps, same thing by the way. We didn’t quite mention this. This is an Amazon update, or Amazon FBA podcast, I forgot to mention off the top. So we’re not just talking Black Friday, Cyber Monday here for everything, this is more for just for Amazon. So yeah, I mean I agree regardless if it’s Amazon or not because we obviously have our own freestanding sites, IceWraps has virtually zero lift because it’s one of these needs versus a one type thing. You don’t give somebody an ice pack, that’s not really a great holiday gift or a shoulder ice wrap or something because they just had shoulder surgery. I mean, obviously an isolated incident this type of stuff will happen, but pretty rare.
But ColorIt we’ll see a huge bump and it’s really hard to plan. I think the biggest thing is just trying to plan for inventory this time of year and making sure that you have enough inventory in Amazon to ride not only the Black Friday and Cyber Monday wave but the entire month of December virtually. I mean things become quiet and quiet by December 26 but from December 1st till basically December 24th things are pretty nutty [ph].
Dave: Yeah. So are you doing anything above and beyond what you would normally be doing from a marketing perspective during Black Friday and the holidays?
Mike: Not so much on Amazon. I mean, overall, as a company, we do. What we’ve decided to do the last couple of years because it’s been working out so well, a couple of years ago, I realized that the cost of running ads on Black Friday or Cyber Monday were just like astronomical. Everyone’s trying to do it, like the auction that happens in the background for that are out of control. Now on Amazon, we still spend quite a bit of money on PPC, because I think it’s pretty necessary even on Black Friday, but trying to do Facebook advertising or things of that nature, it’s a pretty crowded space.
So what we decided to do is this thing called the 12 Days of Christmas. So December 1st through 12th, we have a different deal every day. We publish that on November 30. It’s a kind of a surprise that we do November 30, and then every day we blast our list with this deal. And we also run ads both on Facebook and Amazon and anywhere we can send out emails and things of that nature. So now things to our Facebook Messenger list and things are — there’s a lot less interference during this timeframe. So that was worked out really well for us.
Dave: Yeah, and one of the things that we are talking about in the Premium forums aside from just marketing is everyone always talks about lowering prices during Black Friday and the holidays. And we were kind of batting back and forth about this, and me and you both kind of do this for our brands is we actually raise prices during the holidays because now you have this huge amount of people and people aren’t price comparison shopping a private label product because a ColorIt product or an Offroading gear product, we’re the only sellers of those products. It’s not like a PlayStation four where people are only going to buy at one time of the year and they’re going to price shop around and they’re going to buy from Best Buy or Target, it’s not the case for a private label product. So I think we’re both kind of in the same boat where we actually raise our prices quite a bit during the holidays.
Mike: Yeah, I mean, I think basically what it comes down to is price elasticity is very different for five weeks of the year, right? I mean, people are, as you’re saying, I mean, they’re not comparison shopping as much. A lot of people, including myself find gift shopping to be a hassle, right? So they’re just trying to get this thing done. Like they don’t — you might put a lot of thought into like your wife’s gift or to your best friends gift. But the other 20 people that you’re going to give a gift to, it’s just like I need to get something so I can check this off my list and move on. And during that time, you’re probably not as concerned with the price of that gift.
And a lot of times people, there’s some psychological stuff, I’ve read about this, that if it’s priced higher, they feel like they’re giving them a better product or a better gift, because they’re thinking I’m going to buy a $50 gift for somebody. Everyone has like this price target, right? So you can change the pricing around based on that in some way. And the reason — this actually kind of happened by accident for us. We were — it was last year and I’m really finicky about wanting to like to raise our prices or lower them. It’s always a kind of a scary moment to be playing around with this stuff especially during the holidays.
But we had one of our best selling products; we knew we were going to run out. It was just like the sales had blown away our wildest dreams. We thought we planned as good as we could, still wasn’t enough. We knew we were going to run out. We knew we were going to make it through the holidays but we weren’t going to make it through January is basically what ended up happening. And so we turned on profit peak which is a functionality of Splitly and the product sold at the time for 29.99. And what we did was like let me just turn on profit peak for this next 10 days during the last few days of the holidays and see what happens. And we put a range of 29.99 to 32.99 so was it up to a 10% increase. And profit peak maxed out, within a couple of days it had put the price of 32.99.
Now 10% might not sound like much, but what ends up happening is your net profit goes up by way more than 10%. So it dramatically can affect your margins and the outcome for your company as far as net profit goes over the course of the holidays. So we’re going to do the same thing this year when we start seeing sales go up. We’re going to turn profit peak on, we’re going to do it much earlier and let it kind of figure out what the best prices.
Dave: Yeah, absolutely. And if you imagine if you’re selling a $30 product, just to make the math easy, pretend that you’re making a 10% net margin on it at $30, you making three bucks? Well, if you raise your price to around $33, that’s pretty much $3 in profit. Of course, you have Amazon fees on top of that, but it’s pretty close to doubling your profit. So, instead of selling 100 units a day at $30, you only need to sell 15 units a day at $33 to have the same net profit that you would at that lower price point.
Mike: Yeah, exactly. I mean, that’s kind of what I was alluding to. I mean, these are the types of things that we can do another whole podcast about at some other time because we’ve learned a lot about this just over the last few years especially since Jacqueline has been here. You look at doing some evaluations of exactly what you’re saying. Like, would you rather sell 100 widgets in a day and make Y money or sell half that much, and make more than more than that. It’s kind of crazy, like how that can work. And as your margins, as the number, as your net profit margin, the actual dollar volume that you’re making in profit shrinks, it gets more and more dramatic.
So at the lower end of the scale, as you lower your price, it’s not a linear curve. It actually ends up becoming more dramatic, the difference and so does the same thing on the other way as you’re going up. So you might want to be thinking about as 2019 rolls around and also throughout the holidays like can you raise your price? And it would be better to just end up shipping fewer widgets. The only downside to it is that you kind of end up eroding your relationship with your supplier a little bit because you’re selling fewer units and kind of the positive of doing more as you can strengthen your relationship with your supplier, potentially get lower prices over time because of that.
That’s really the only downside, everything else is an upside. You have just less inventory that you have in stock at any one time which is a risk anytime you have more inventory. And you have less moving parts and like your sell through isn’t quite as quick so you don’t have to — the chances of running out and getting into some mistakes and stuff are less. There’s just a lot of ancillary benefits by raising prices.
Dave: Well the great thing is that everybody has to start thinking about raising prices come January anyways because those new tariffs come into effect.
Mike: I was hoping you were going to bring that up, it was supposed to be a happy time. It’s right after Thanksgiving and all that good stuff.
Dave: Well, the good news is Mike that we lost that bet where I was going to say that well, Xi Jinping and Trump get their stuff sorted out before the midterm elections, and you won that bet.
Dave: So there is a positive coming out of this.
Mike: It is. But I’ll never see the money because you never pay your bets.
Dave: But on a serious note though, those tariffs are about to take effect in January. So just kind of reminder to everybody, if you’re importing from China, make sure that your items are not affected, or if they are affected, start raising your prices. And hopefully, like we’re talking about here, you won’t see a huge hit to your bottom line if you kind of adjust your prices to meet your increased cost.
Mike: Yeah, we’ve been able to do some pretty good negotiating because of the tariffs. We’ve actually gotten a little bit of price breaks from our manufacturers through this time that are kind of like temporary, and we’ve been able to leverage the US dollar as one of the factors to be able to help with that. So I mean, just the side tip if you’re placing some orders from China right now, you can get them to help kind of share some of the burden of that potentially.
Dave: Yeah, I’ve talked to a couple of suppliers now, and they’ve all been really generous trying to help us out by saying, oh don’t worry, Dave, what we’ll do is we’ll reduce your invoice value for your customs clearance. And I’m like, I don’t think so. I’m not going down that road because even if I was ethically inclined to do that, you can be sure that customs is reviewing all customs documentation, looking for trends. You are submitting an invoice with every clearance and they can kind of review product A at September’s cost to product A January 2019 when you import it. So if they’re seeing that your costs are all of a sudden being declared at half what they previously were, they’re probably going to be a little bit suspicious.
And what a lot of people don’t realize is people think that once you’ve cleared your shipment into the US and it’s actually at a warehouse and in your warehouse that you’re scot free, and that customs cannot go back to you, no, they have a year that they can go back and review all your documentation and they’ve done this to us before. There’s an interesting story with Nike. They have this done to them. Customs actually went back over I think five years of their import records to determine that they were importing their shoes under the wrong code. And they basically sued them for tens of millions of dollars and it almost bankrupted Nike way back when. But the takeaway is that yeah, customs can actually go back through your records up to a year and even longer to make sure that you were compliant.
Mike: Yep, luckily we haven’t had that happen but we’re definitely aware of it. We were made aware of that very early on and yeah not good.
Dave: Yeah, when you buy those bonds for your clearance that is what your bond is going towards yeah.
Mike: All right, so let’s move on to the next topic here on our list of the Amazon things for the month. Man, this one here is so freaking frustrating for me, which has not been announced formally, but we know it’s there because we’ve seen it happen personally and we’ve seen it come up in the Premium forums or Facebook group more than once, and I’ve also seen it in the Million Dollar Sellers Facebook group which is review throttling. I don’t know Dave, I try not to use curse words. So take it away.
Dave: Well, there’s two types of review throttling. There’s the one where now they’re just not allowing reviews to be posted at all and they’re only allowing a certain number of reviews to be posted on a product over a period of time. And now rumor has it is that Amazon is actually manually reviewing all reviews posted to products and basically putting them into a waiting period for up to several days before they actually get posted.
Mike: I just don’t see like how Amazon has the manpower as big, even as big as they are to review every single review that gets posted to amazon.com.
Dave: Yeah, I mean, I guess they’re putting it through hopefully some kind of type of algorithm and then with a little bit of manual intervention tied into it, but you can tell that Amazon is obviously hypersensitive right now towards the huge review controversy that’s been circling them through all the major media basically eroding Amazon’s legitimacy and their review legitimacy and people are starting to lose trust in Amazon all because of these fake reviews that are going around. So I think Amazon right now is basically doing a hail Mary trying to figure out some way to stop this whole catastrophe that they have going on with fake reviews.
Mike: Yeah. I mean you see these types of phenomena happen in society in all kinds of ways where like something so out of control that whatever it is, a government body, a company, a person, whatever has to react to it. And the way that they react to it is typically like just as polar opposite as the ridiculous thing that they were allowing to happen to begin with and I think it’s pretty similar here right. It’s like they had this review abuse that was so rampant and so ridiculous going on for so long. And now with the throttling thing, it’s from my point of view as a legitimate seller, it’s going too far the other way. I mean, this is just absolutely ridiculous. If we have a really great product that people want to leave a review about, and they can’t, that just hurts us. It doesn’t hurt Amazon.
So this is where it gets frustrating from this place of point of view is I mean, Amazon is not negatively affected by the review count going down. It only hurts the individual product or seller or company that is having the review count throttled. And it’s so hard to get reviews on Amazon to begin with if you’re doing it the way that we do it, which we’re not asking for reviews. We don’t even send a follow up email anymore and we haven’t for a long time to err on the side of caution. And when I get a customer that sends me a screenshot that shows that they were trying to leave a review and they couldn’t, it’s pretty much like zero to explosion at half a second for me.
Dave: Yeah, it’s interesting. I was reading the other day that in South Korea, what they do is to create any social media profile; you actually have to register with your social insurance number. And obviously, it doesn’t totally eliminate fake review profiles or social media profiles, but that would be one way that Amazon could ultimately try to get this whole fake review thing under control. And I’m not sure exactly how they would implement it but obviously they have a huge problem with fake accounts being created. And I think some level of verification in that regard might be their ultimate solution because whatever they’re doing right now it’s definitely not working.
I mean we can see this as part of the some of the groups that we’re part of and seeing how products are basically winning by getting a huge number of fake reviews. But some deeper level of identity verification to be able to post reviews, I think is probably the way that Amazon ultimately have to go. I’m not sure how they’re going to do it but I think that’s definitely on the cards.
Mike: Yeah, it’s actually — I’m going to tell you a quick little story that’ll make you laugh. But Grant and I, the Grant that used to do the podcast with me, we had bought the domain name reputable.com at one point when we’re doing our domain investing and we were looking to try to solve this as a third party company at some point. We just realized there was more that we could tackle so we just never pursued the project but there’s definitely not just on Amazon, but throughout the internet and throughout the world, and all kinds of scenarios, a bunch of fake reviews, you’ll pass fake reviews.
And you end up with fake reviews on house renting websites, or on Google, wherever it is. If you could figure out a way to have a universal identified, like your identity is verified, and that you actually made a purchase or actually consumed a service in some way and that the reviews were real, it would definitely be a cool service.
Dave: Yeah, I mean, that’s a problem waiting to be solved. And there’s a bunch of companies who have tried it so far, but obviously none of them have had huge success with it. But that’s probably definitely the next Google of our kids’ generation is some type of company that can solve this whole identity verification. And even having a daughter now entering school age pretty soon, I know that cyber bullying is such a huge issue and people bully under anonymous profiles and it’s — I mean this is the problem of our generation. It’s no longer two kids going out to the backs of the school yard fighting, it’s all the cyber bullying and doing it under anonymous profiles. And obviously in our cases people leaving anonymous reviews. I don’t know, somehow we need to wrap up this problem and solve it.
Mike: Yeah, no doubt. All right, so on to something that’s — I don’t know, I think a more upbeat topic I guess, because I’m actually kind of excited about some of the new PPC changes that Amazon has made. So let’s talk about some of that.
Dave: Sure. So the big change in Amazon PPC right now is that you can now with sponsored products, you can target not only by keyword, but now you can target by categories and competitors’ products. And this was a feature that’s been around for quite some time with display advertising, which was part of AMS and it was also a part of headline search ads, which they changed the name now, I forget the name now the headline search ads, but it’s been a part of those advertising mediums for quite a while, but now it’s actually a part of sponsored ads.
Mike: Yeah, I’m excited about just because it gets everything under one platform. And we had been using the AMS platform to do just this one thing. So it was just disjointed and the reporting wasn’t as good. And there was a different login; it was kind of just a pain in the rear end. So I’m excited that it’s going to be a part of the regular sort of essential login. The downside is that more people have access to it now and it’s been one of these like golden nuggets that we’ve been able to take advantage of for quite some time. But again, I think that the simplicity will help us quite a bit. And as a tip here, first of all, we have an episode about PPC, you might want to go back and listen to that, we’ll put that in the show notes.
But just since we’re talking about it, one of the things you’re going to want to do is go look at your automated campaigns, and then look at — download all the data, you can either do it right through Seller Central or we use Sellics. It doesn’t matter how you do it, and look at what’s converting for you on your automated campaigns. And in that list of not only keywords will be a whole list of ASINs. You’ll see the ASINs that are converting well and those are the ones that are right for setting up these new types of ads for.
Dave: Yeah. Well, the thing is so I do think that the changes that they rolled out are actually, this is not simply a replacement of display ads that was a part of AMS, this actually goes even further. So as far as I understand it, display ads were basically, they were only one specific location on a product detail page right below basically the buy button. But now with this new change that Amazon has rolled out, these ads you can actually control the placement. So right now again, you can advertise under the buy button but also I believe you’re now you can choose to have these ads basically displayed under the products also purchased.
So there’s always a row of sponsored products there, so I believe now what Amazon is doing is previously this was decided simply under automatic campaign and Amazon would decide what products to show there. Now they’re giving you the control to choose what pages you want your products to display under. Now, the question is, does that replace what automatic campaigns were doing previously where Amazon was basically using an algorithm to decide what competitor products your products would be displayed on, or does it supplement it? I’m not quite sure the implications there. But I do believe this is actually in addition to product display advertising.
Mike: Got you. Okay. Well, it sounds like we have some homework to do and explain about the changes. And unfortunately, like, normally, I would just be like jumping right on top of these new types of things and seeing what’s going on. But they did it like right before Black Friday and we had some other things to focus on. We were dealing with some new ads and trying to get all of our 12 Days of Christmas stuff done. So, after Thanksgiving, I’ll dig into that and probably do an episode on that.
Dave: Yeah, well, the interesting implication is too that it’s probably going to mean that now a well organized account will have three different product categories. The categories are advertising automatic campaigns, your manual campaigns, and then your competitor targeting campaigns.
Mike: Right, it makes sense. Cool. Well, yeah, definitely looking forward to digging into that and doing some testing and seeing how things go with that in the 2019. I love stuff like this. I love having things that are new. It gives us an opportunity to optimize before everyone else can. So we usually when things like this first come out, there’s always an opportunity. Plus it’s just it sounds like we will have more granular control, which is also pretty cool.
Dave: Yep. And more work as well.
Mike: Yeah. Well, that sucks. So speaking of sucking, let’s talk about another topic that’s a little more frustrating which is listing hijacking, which has become more rapid over at least like the last three to six months it seems like.
Dave: Oh, it’s been crazy. There is somebody sharing on another group, basically an elastic, exercise elastic bands category on Amazon. So basically, exercise bands to help you work out and basically all the top listings on that category on Amazon had had all of their images replaced with a picture of an elastic band. But they replaced it with a picture of a PlayStation four and all their bullet points and descriptions were replaced with Chinese text. And it was horrifying thinking that if that was your product, somebody had basically just sabotaged all of your sales going into the holidays.
Mike: Yeah, I mean, this is the type of stuff that keeps me up at night. It makes me worried about Amazon as a platform. I’m not going to get off on a soapbox about this on this podcast, but definitely it keeps me up at night. I mean, having to worry about — I don’t have to worry about my Shopify store going through this right. It’s unfortunate. I mean, I’ve definitely seen this type of thing happen in other industries typically where there’s money to be made, competition like this comes in. And if there’s money to be made at the volume that we’re talking about here on Amazon, then the unscrupulous show up and that’s just part of the life cycle of these types of things.
Dave: Yeah. And just to give a rundown for how this is working for people who might not be aware of it. So there’s two different ways that you can do it. You can just as a third party seller, if a product is not enrolled in Brand Registry, you can just go on there and request changes to be made to pretty much any product that’s not on Brand Registry. Or even for products that are in Brand Registry, if somebody has a vendor central account, and people can buy these vendor central accounts now for about eight to $10,000, you can — vendor central changes will basically supersede any third party changes.
So one of my products if I had a vendor central account, I can basically log in there and request all of Mike’s images and product description text to be changed. And those changes within vendor central are going to supersede all of Mike’s changes.
Mike: Yeah, pretty frustrating.
Dave: It is. And again, I mean, I think Amazon is going to close that loophole pretty quickly, but for the time being, it’s open and yeah, you can absolutely have your listing sabotaged right now. And definitely in the higher competition categories, it seems to be more prevalent than the lower competition categories. But it’s — I mean, it’s crappy that any product should be subject to that.
Mike: Yeah, I agree. All right, so the last thing I had on the list here is a little thing that we found out by kind of accident because our company has been growing and we’ve been getting more efficient with how we send stuff into Amazon. So we use a third party logistics company to receive our containers from China. And then as soon as they receive them, they palletize them and then some portion of those pallets go into Amazon and the rest of it stays at the 3PL so we can be paying significantly less storage fees at the 3PL than we do at Amazon especially in the fourth quarter when Amazon raises their rates. So, because we’ve been getting more efficient and just more organized, instead of sending stuff in as we panic and realize we’re running out of stock, we’re typically sending shipments in once per month.
And now that we were doing, I think the maximum is 12 pallets. I have to go back and review that number you can set up with partner carrier or with unit shippers without it being a full truckload, consider what they call a full truckload. And now that we’ve been doing that for the last few months, I can tell you that from the time that they pick up to the time that it gets checked into Amazon is usually like no more than one the two days till it’s like completely like checked in and received an Amazon. So, if you happen to be listening to this and you’re a large enough seller that that’s applicable to you, it might be something you want to look into. Because especially this time of year it can save a bunch of time even in the depths of Black Friday here and sending things in for the holidays.
The way it basically works is we set up the shipment, the trucking company will then schedule a delivery appointment with Amazon and then once that appointment is made they come pick it up. And this time it was a four day delay. So if they take a little bit longer than the typical one day we’ve been seeing, but still way, way quicker. And then once it shows up, the delivery appointment is made; the stuff gets offloaded and checked in right away. I think because it’s a full truckload they’re having to — it seems like they have a special department or way of handling these high volume sellers and products. So just an FYI, if you happen to be at that level, it’s been a big win for us.
Dave: Yeah and I think Amazon what’s happened is they put more staff on during the holidays because we ship about half of our shipments in as full container loads. And actually earlier in the year, we got faced with a situation where almost two weeks we couldn’t get a delivery appointment. And it’s one thing when your inventory is simply not being checked in, it’s another thing when you’re being charged storage fees like we were basically at the port and we got a $2,000 bill nearly because we couldn’t get a delivery appointment for two weeks. Lately though, these have been — the delivery appointments have been much sooner. And yeah, I concur with your experiences lately that everything seems to be being delivered within at least a couple of days, sometimes even shorter than that almost immediately.
Mike: Yeah, I mean, so for us, I mean the repercussions of this, if we can see this happen over time, we can be confident that Amazon will pick up receive checking all the inventory within one week, let’s say, let’s say that’s the number. Right now, let’s say if we’re averaging two weeks, which is more like what it’s been. And we also have a buffer built in for the times that Amazon is like, who the hell knows what’s taking them so long?
Every week is 7 to 8% that we can reduce our cost of carrying costs of having inventory. And we basically have one week’s less of inventory that we have to build into our cycle. And so this can be a pretty major thing for us. It could free up a ton of cash going into 2019 and reduce our carrying costs of having inventory if this persists, and we can say okay, over January and February, March are all behaving the same way, we’d probably would make a permanent change to our logistics and planning.
Dave: You can be absolutely sure Mike that the fact that you’ve now started to count on this, Amazon will get back to their old ways and take months to get things checked in.
Mike: Yeah, that’s the way it always happens, that is for sure, that is definitely for sure. All right well, that is the end of my list, do you have anything else on yours?
Dave: No, I think that’s just about it. And as I play Manny here for the next couple of weeks, I am off to pick up my daughter, and if I don’t hurry I’m going to get charged the $5 a minute for pick up minute that I don’t pick her up. So I should get running.
Mike: I can have some fun with this. Let’s talk about some other things real quick.
Dave: You may talk to yourself.
Mike: All right guys. All right, so as always, I want to thank you guys for listening and supporting the EcomCrew Podcast. 201 episodes, it’s pretty crazy we’ve gotten to this point. I hope you guys enjoyed the 200th episode and that was that special episode. We have another trick up our sleeve for next week at episode 202. So I hope you guys enjoy that. And I hope you guys also if you live in the United States had a great Thanksgiving. And anybody that’s out there in ecommerce land, I wish you guys the best of luck this holiday season. And until next time, happy selling and we’ll talk to you then.
Michael started his first business when he was 18 and is a serial entrepreneur. He got his start in the online world way back in 2004 as an affiliate marketer. From there he grew as an SEO expert and has transitioned into ecommerce, running several sites that bring in a total of 7-figures of revenue each year.