← Coffee N° 5 with Lara Schmoisman
Coffee N° 5 with Lara Schmoisman
Amazon Is Not a Channel. It’s part of the Ecosystem: What Brands Get Wrong with Laura Meyer
00:29:01
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- [00:00]
A
Foreign. This is Coffee Number Five. I'm your host, Lara Schmoizman. Hi everyone. Welcome back to Coffee Number five. And you hear me talking about the ecosystem at the ecosystem and the ecosystem also has hallow effects and it's so difficult this day and age to understand where your customer is coming from. And you guys, I know that this is a very unpopular opinion, but I'm a super fan of Amazon and everyone knows that. And I think that Amazon is such an important part of the ecosystem that as brand you cannot deny it. And everyone is on Amazon, so you have to be in Amazon. So today I want to bring you an expert in Amazon. So, Laura Mayer, thank you so much for being here. She's the CEO of Horizons. So Laura, I just want to understand. First of all, welcome and thank you so much for being here.
- [01:02]
B
Yeah, my pleasure. Thanks for having me.
- [01:04]
A
And I want to understand a little bit, when did you see this opportunity of working with Amazon and only with Amazon because there are so many people out there, and I don't know if you guys are aware of this, that there are people that they're just Amazon sellers and then their brands selling in Amazon. There's so many different levels of working with Amazon.
- [01:27]
B
Correct. So my history is that I used to work for Amazon corporate in New York City. I was working for their media group and this was back in 2015. So Amazon was still really viewed as the bookseller, the discount retailer. But I saw how fast their media offering was progressing and at the time, that was very much the D to C darling era where Meta could change or even make or break a brand. And I really saw Amazon as that next horizon. But Amazon is much more complex than just running Meta ads for a D2C because you have FBA and all the logistics. Amazon, I joke, is its own country. They have their own set of laws that you.
- [02:16]
A
Yes, they do. Yes, they do. And I always say to every brand that I talk to, don't even dare to do Amazon alone.
- [02:24]
B
Yeah. So you have to understand the, the rules, otherwise you could get yourself into big trouble. And then there's the creative, there's the organic SEO discoverability, and then there's the media. So I started this business, Envision Horizons, 11 years ago this month, which is very exciting. And you know, me and the team, we've really been on this journey as Amazon has really matured into the power beauty retailer that they are today. Because when I first started this agency, they were the ugly stepchild of retail. They, you know, Sephora is still a preferred retailer. But Amazon, you can be in charge of your own destiny. So as you called out, there were our brands that are either Amazon native, like Hero Cosmetics, that sold for what, 600 something million. They originated on Amazon and then they went to Target and then they did D2C. I think that's the order.
- [03:24]
A
Yeah.
- [03:25]
B
And now we're in this new era of Amazon where a lot of the native Amazon brands I don't think are able to break through the noise like they used to. You have to have a multi prong approach of if you're going to use Amazon as your primary channel, you also have to marry it with a social commerce strategy because Amazon is much more expensive to advertise on and capture new customers than it was prior. And that's because you have the Estee Lauders heavily investing in the channel l' Oreal's as well as really any mid sized brand. They see Amazon as their primary growth channel or at least one of and they are spending like it. So if you're one of the brands, you want to do both.
- [04:18]
A
One of the things that I always talk to brands about this is that if someone is Amazon buyer, is your preferred buyer place is Amazon, it doesn't matter where they find you, they're going to go and buy you on Amazon anyway.
- [04:33]
B
Yeah. And you know what's really interesting in this new era of Now TikTok shop, which is a channel we're managing and we're looking at is TikTok can look like a very unprofitable channel. And it's because even though you're investing in affiliate and you're investing in ads on TikTok, they're going to Amazon for the transaction.
- [04:55]
A
Yes. Yeah, absolutely. So you need to be where your consumer is and how to find you. But let's talk about Amazon because Amazon people think and new brands, it's just to put a product, a listing and it's a little more complex than that. So let's break down the parts of Amazon and to understand because I always explain to this that there is things that you can do, things that I cannot do. You have to follow the directions of Amazon. It's not your own website, you don't own the listing and it's something that has. Amazon can shut you down.
- [05:30]
B
Yes, yes they can. So we're actually doing a research project and we're going to be publishing it in February which we're calling the Amazon Impact Grid. So there are hundreds of ways to manage and optimize your Amazon business and it's easy to Say that, oh my gosh, we have to do everything, but no one has time to do everything right away. So we are interviewing experts in the space, our team, and we're plotting in a whole grid from low impact revenue to high impact revenue, from low resources needed to a lot of resources needed. And we're plotting it all on this grid as guidance for the community of like, hey, if you have limited resources, you want to focus on maybe this lower but right quadrant and make sure you do all the things that are low resource intensive but high impact first and then you work your way around the grid. Because there's a lot of things that brands can get distracted by that they think is a must have when the reality is, for example, so Amazon storefronts. I always laugh because a lot of.
- [06:43]
A
There is such an obsession with Amazon storefront.
- [06:46]
B
Beauty brands are obsessed with the Amazon storefront. It does not move the needle.
- [06:50]
A
I know, I know, it's. It's crazy. One was actually yesterday telling me, well, your competitors are offering the storefront. That's a given. You do a storefront, but that's not important.
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B
I mean you're lucky. So the clients of ours have the best storefront possible. Like our client Borghese for example, was actually recognized by Beauty Matter as a finalist for best Amazon storefront last year. It's a stunning storefront. But even when you have a phenomenal storefront, you're lucky if less than 10% of your sales are coming through your storefront. And that's for a large catalog shoppable experience. Yeah, where you're doing your sales is on the pd. So if you're gonna invest a lot of time and resources into creative, put the storefront on hold for a bit. Focus on making sure that your images are informational. It should not be basic e commerce images. You need to think of your Amazon listing like an end cap. It needs, it needs to be attention grabbing. How to use the product Polyno like one of the strategies we've been doing is we'll scrape all the reviews and we run it through AI to find the common grievances for a product, but also the common loves and admiration for that product. And we incorporate that into our creative. If the grievances are, quote, it didn't work well, does the user know you have to use it for 90 days to actually have that outcome? And make sure you lead with that because a one star review is a scar on your Amazon reputation.
- [08:27]
A
Something, I mean, and we'll talk about vine in a minute. But reviewers, they have a voice and it's really important. And I had an experience with a product that had a fragrance and the founder didn't want to put that. She didn't consider that the fragrance was so strong that people will say, say something. And I wanted to put it in the listing because if you don't disclose it is one of the reasons for people to complain.
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B
Absolutely.
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A
And make returns which make it harder.
- [09:00]
B
Yes. And I mean fragrance, we deal with this a lot with a lot of our beauty brands. It's subjective if people like it or not, it's very personal. So you want to call out what those notes are prior to purchase because to your point, it could lead to increased return rates or negative reviews.
- [09:21]
A
Absolutely. So Amazon listing for me at the PDP has an is divided in few parts. I will let you explain it. Which we have the listing, the highlights, we have the A content and then the reviews. But for me, the most amazing thing is that the user experience experience of the Amazon user that you start on top, you go to the reviews, you go to the bottom to see the reviews, but then you need to create a reverse listing because people are going to come from the bottom to top again.
- [09:54]
B
Yep. Yeah. And I think another overlooked element of the PDPs is the video submissions that you can incorporate and the video submissions that influencers or affiliates can also contribute to your listing. And then there's the sponsored product where competitors can show up. Do you run brand defensive campaigns that are asin targeting? There are so many ways to optimize the product detail page, including even varying. So we just came off of holiday. We have a lot of clients who love to have holiday kits. Does that sit on its own? Does that set up as a variation on the legacy listing? These are all decisions that brands need to really think through from a strategic.
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A
Lens, but also it needs to be part of their overall strategy.
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B
Yes.
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A
Unless you are unique seller in Amazon. Because if you're going to show a product in your TikTok, you need to make sure that you people can purchase it in Amazon or you can purchase it in your website. Unless you are running a special.
- [10:59]
B
Yeah, yeah. And that's always a really interesting conversation with a lot of our clients is let's go back to Sephora being the preferred retailer for a lot of beauty brands. They oftentimes will give Ulta or Sephora first access to new lists, to new product launches and they're launching these new products with influencers and on TikTok and they're missing out on this opportunity for that also to be available for purchase on Amazon. But I get that you have to play the game as a brand and keeping certain retailers happy in the process.
- [11:35]
A
There is a huge issue in the beauty wellness industry about pricing, that your Amazon pricing cannot ever be lower than retail. How do you recommend to handle that? Because also when you have to ramp up a product in Amazon, there is a strategy of pricing.
- [11:55]
B
When it comes to pricing on Amazon, it does really depend on brand positioning. If you're a luxury or premium brand, you should be precious in how you discount. And where we really push our more premium brands to participate is in those large temple events like July prime day or even October big deal days or prime big deal days. We actually don't like to encourage an always on promotion strategy. You can do lightning deals and yes, those things move the needle, but you also don't want to teach bad habits to your customers and you also don't want to be upsetting your other retail partners. So we really partner with our clients from an Omni Channel perspective. We're not trying to just have Amazon monopolize all of your online sales. We understand you have other relationships so you can expand your brand, but there are times where maybe you sell an Amazon exclusive bundle and that's the product that you can really use to do more price testing.
- [12:55]
A
So let's talk about for a minute about getting into Amazon. Because it's a process, it's not an overnight thing to put a brand on Amazon. And it takes a lot of research and a lot of teamwork. Yes. So when you onboard a client and I know that you have some proprietary tools that I would love to hear about it. And also I know that also now you started with something very unique that is the Amazon Ambassador program. Because Amazon Ambassador is a little painful to work with. So let's talk about all these. So let's start off onboarding a client because there is a lot of keyword research and this is what I always tell my clients. It's not the same keyword research as we gonna be doing for SEO or social media. It's a very different kind of research.
- [13:48]
B
Yeah, it is. We actually have a, it's a few years old now, but we do have a guide on our website. It's a white paper and it's a 40 day to launch operational guide for Amazon. So before you get excited about the creative and the media buying, you need to have the foundation of operations in place. So fba, do you have your products FBA ready? Do they need to be prepped? Do they need to be Poly bagged? Do you need GS1, UPCs, all of that?
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A
Yeah.
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B
Do you even have the right bank account information to set up your account? Like there are very fundamental things that need to take place. And it's interesting because even large, very, very legitimized brands can sometimes run into roadblocks when simply setting up their seller central account. But the great thing is Amazon has done a great job especially in really like the last five to six years in supporting brands in that process. And they have their new business unit where they do support brands for the first 12 months in overcoming some of those issues. But yeah, number one, you need to make sure can you get inventory into Amazon correctly. You need to be double checking the unit economics. Do the FBA fees make sense with your price point? If you're a mass price beauty brand, you may not want to sell a single unit on Amazon. You may have to sell in three packs or variety tax so that economically it makes sense sense. And then once you have the logistics and operations set up, that's when you really start to do the SEO work. So as you called out the keyword research and Amazon keyword trends, they change every single day. We were a big fan as a firm in using Helium 10. We also use data Dive, Fungle Scout and then Amazon's own search per search query performance page as the directional data where we need to position and index our clients. You know, there's building out the pre product detail pages that we've discussed, there's acquiring reviews and then you have to start the media. And with Amazon there is a concept of being retail ready before you really start to scale spend. But even then there's a chicken in the egg concept of well you have to sell units to get reviews. So you do really have to build in the first few months losing money breaking even on Amazon to get the momentum going.
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A
Absolutely. But also, I mean let's talk about PPC for a second, our media buy in Amazon because it is expensive. It is expensive and you have different strategies to go about ppc. But at the end of the day do you see anything that works performance base better for brands and other things like at the beginning you suggest to go into auto just to go and find and get what's working and then you increase in exact match. Maybe.
- [16:55]
B
Yeah, we, we are fans of auto in the right context and with the right negative key terms on your, your negative list. Again, it really depends on the brand positioning. So for example, when we work with more premium luxury brands, we actually start spending on Amazon DSP Way earlier than we would a mass masstige brand. Because find the keyword say face cream for a $200 cream, it's just not going to convert. Or for premium products, you really have to sell them the brand and target a certain lifestyle to find the right audience that will convert. So to go back to, I think the original question was how do you get started with paid search? And it really depends on your brand positioning. If you're a premium, paid search may only get you so far. So what we really try and do is pressure test to identify the point of diminishing return. And for premium brands, that point of diminishing return on paid search comes a lot sooner than mass masstige brands. And the reason for that is if you're buying the keyword face cream and you sell a $200 face cream buying that keyword and you're competing with Olay and other mass or more impulse purchase price points, it's going to be very hard to compete if they don't even know who your brand is. And once you pressure test like, that's when it becomes clear where you need to start to incorporate DSP into your media plan. And so that's what we're always doing with our clients is as volume and as demands fluctuate of what consumers are searching for, we're always trying to find the optimal investment of paid search before that dollar becomes less efficient and it would be better used or invested into dsp.
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A
Something I want to put out there which is really important for everyone to know is that being on Amazon is not cheap.
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B
No, absolutely not.
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A
It's really not for more than Amazon charge you $39 to be selling. You have many other costs including PPC which is shipping. There's so many costs involved.
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B
There are, but I would argue every channel is expensive to operate.
- [19:17]
A
Absolutely.
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B
B2C is expensive to operate. Launching in Sephora is expensive to operate. There are no free meals in the E Com game, that is for sure.
- [19:29]
A
Absolutely. But it's Amazon has all these not explained cost that people are many times surprised of what what they need to be paying for.
- [19:40]
B
Well, brands really need to understand what is coming out their payments report if they're on 3P and they need to understand their statements from vendor Central if they're a 1P business. And then vendor central accounting I will say is much more complex and harder to match together. Where seller central the data is a little bit more transparent.
- [20:04]
A
Something in Amazon which is really important beyond those keywords and the brand awareness is to position ourselves against the competition. So I'm not necessarily your same competition, the one that you have in other channels, as the one that you have in Amazon.
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B
Correct.
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A
So how do you identify who is your competition and how do you tackle that? You try to be at the same place or you try to differentiate it from the competition.
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B
Yeah, this is a big thing we educate our clients on because they may say, you know, survey isn't a competitor of ours, like, we're much more premium. Well, in the Amazon ecosystem they just might be. And so how we're looking at it is one, we're looking at market share and market size insights to see. Are you of similar price point and are the Amazon customers shopping this brand within these categories that you sell in? And then with Amazon Marketing Cloud, we can also start to build some lookalike audiences and test, you know, if someone is buying CeraVe, do those customers also convert in trying your brand? And so that's really where DSP gets excited. Exciting is more of those audience lookalike that we can layer into their media buying. But yeah, I mean there, there are also brands where they kill it on Amazon and they don't even sell in the other channels that you operate in.
- [21:33]
A
Yeah.
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B
And so there, there is that education curve for sure.
- [21:36]
A
Absolutely. Something also that I learned through Amazon is that you need to be really, um, if you're a small brand in Amazon, you need to be very aware of what's going on and constantly seeing what your competition is. Because there are new sellers all the time.
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B
Yes.
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A
And so also I want to ask you a question because I think that this is the part, the hard part of Amazon, which are the red flags, the suspensions and the communication that you constantly need to have with Amazon. How do you deal with that?
- [22:11]
B
So suspensions, I would say it used to be a much bigger issue years ago than it is today. In my opinion, they've gotten a lot better around their suspension policy and handling of various situations. But I will also say a lot of our clients are part of the Amazon SaaS program and advantage of the SaaS program is that they can help expedite the reinstatement of a suspended product. But I remember when I first started this agency, it was like the wild west. Like a random product would get suspended without notice.
- [22:51]
A
Absolutely.
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B
Now there, there's more of a process. You know, you can see those flags in seller central. There's better communication, in my opinion. It used to be really vague why something was suspended and you kind of had a guess in your appeal.
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A
But at the same time now There is a lot of AI and AI is flagging things that many times. Like, what was this?
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B
Yeah, I guess I may be in a luxury spot where we have people at Amazon we can call. And so it's less stressful of a threat than it was in the earlier years of running my agency. That said, I mean, there are things that we can't control. Like we have a client where there was an FDA warning letter put out related to their line of products, which then Amazon scrapes the FDA warning letters and has suspended a product. And so we are working to resolve that. But again, like I had, we worked with the brand thinks period underwear for many years before they were acquired and kind of restructured after that. But they were flagged as a medical device and it took like six months to get their top seller reinstated.
- [24:03]
A
Well, you want to hear a horror stories, I'll tell you mine. We have an LED mask.
- [24:09]
B
Yes, those get flagged all the time.
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A
But it got flagged as a pesticide.
- [24:14]
B
So that was a big issue for many years. Things across all categories were getting flagged as pesticides. Yeah, it was just all you had to do. There was a period where you just had to submit some paperwork and a questionnaire. But yes, I agree there were some wonky things that happened with that whole situation with pesticides.
- [24:35]
A
Yeah. So I want to ask you a question since we're talking about AI, because now Amazon is using a lot of AI, so how do you see this evolving? Because now they. Even in your listings, you can use AI, you can use. I'm sure you're going to have something to say about that. And also even in storefront, I was looking yesterday and. Oh, you want your storefront to be done with AI?
- [24:59]
B
Yeah, yeah, I. Look, the beauty of AI is it makes a lot of things accessible to a lot of people. Gone are the days where you need massive brand budgets to have really creative, in my opinion, like AI can really make good creative accessible for everyone. And that's a beautiful thing. What I worry about though is that everything starts to become a sea of sameness where all the, you know, all the AI creative agents are basically doing the same exact creative as everyone else. And then you start to lose brand identity. And that's why I strongly think that creative directors are always going to be an important component of a brand because it would be like us all getting plastic surgery and looking the same. Like you lose that identity. You want uniqueness in the world and you want to be able to stand out.
- [25:56]
A
But at the same time, and this is Something that I see with brands all the time. I'm a big supporter of keeping the narrative and the branding. But in Amazon you have such a strong rules of how you need to do things. And like you were explaining again in the listing, it's important that visually people see what will give you success. That sometimes how do you make sure that you're connected and you don't lose the brand in the listing that you have so many limitations.
- [26:26]
B
I think the key thing is one, you have to hold true to your brand guidelines so you can still have your look and feel even if you are following say a template that a lot of brands use of. If you're say I'm going back to the face cream example, you know, the main image is something that's zoomed in with the right shadowing so you increase click through rates. The second image is maybe calling out the ingredients or before and after photos if it's anti aging. So there is a general formula that we do follow for many of our clients, but the aesthetic of it is still unique to the brand itself.
- [27:04]
A
That's super important because I see brands that they're working with not the right Amazon people and they really pace in order to say, oh, this is what works in Amazon. And they, the branding look, it's, it.
- [27:18]
B
Is very clear when a brand is using maybe some more general services and it looks like a, I don't want to be snobby but like a PowerPoint that was like copy and pasted in. You know what I mean? Like the text overlay and whatnot is not to the elevated level that a brand may, may want.
- [27:36]
A
Yeah. And also, I mean you need to know how to do Amazon. You cannot do it just because even putting a listing, you need to know where you're going to put text from Amazon and where you're going to put text inside an image because otherwise it's not text that Amazon can read as a keyword.
- [27:53]
B
Yeah. And when it comes to text, it has to be mobile optimized too.
- [27:56]
A
Absolutely.
- [27:57]
B
Over 70% of sales are being done on these, you know, these blocks of technology of hardware. You need to make sure even though you're designing everything on your laptop or desktop, that it's fully legible on your phone as well.
- [28:13]
A
Absolutely. Yeah. The user experience is the first thing so important. So Laura, thank you so much for being with us today. I have one more question for you.
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B
Sure.
- [28:25]
A
How do you drink your coffee?
- [28:27]
B
How do I drink my coffee? On the go? I will take any caffeine available to me as long as it's in a to go cup.
- [28:37]
A
Well, sounds great. Well, thank you so much again for being here. And to you guys. I will see you next week with more Coffee, number five.
- [28:45]
B
Thank you so much.
- [28:46]
A
Find everything you need@larashmoisman.com or in the episode notes right below. Don't forget to subscribe. Was so good to have you here today. See you next time. Catch you on the flip side. Ciao, ciao.