Sourcing, Quality Assurance and PPC Management (Interview with Daniel Audunsson)

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Our guest on the 29th of March, 2021,  on the sellerboard show was Daniel Audunsson from

We talked about:

  • Product Strategy: How to pick products and scale your products selection.
  • Professional Supplier Management and Sourcing Quality Management.
  • PPC management.

Watch the full video here:

Hi, everybody, welcome to the next episode of The sellerboard Show. My name is Vladi Gordon, my today’s guest is Daniel from And we’re going to talk about operations, streamlining your business processes in your Amazon FBA business for growth. So we talked about product strategy, how to pick products and scale your product selection, but supplier management and sourcing quality management how to do this professionally how to communicate with your suppliers, which contracts Do you need, which agreements and documents to basically to scale your, sourcing process. And we also talked about PPC. So Daniel told us about their approach to managing PPC, managing your target acos and bids in order to reach your profitability targets. So yeah, check this out. I think this is going to be valuable, especially if you’re a growing seller. And don’t forget to give us a like if you like this content, subscribe to our channel, and check out our software sellerboard is a profitability tool for Amazon sellers with a bunch of additional bonus tools like inventory management, their money back module, which finds lost and damaged goods and helps you get reimbursed. We have a PPC optimization module that automates your bids, according to your acres or profit targets. We have Shopify dashboard coming up. We have an autoresponder that automates mail campaigns, and also request review clicks. So you’ve probably seen this new functionality in the seller central request to review button which triggers a message from Amazon to the seller with a request to leave a product review and seller feedback. So sellerboard can completely automate this through an API no chrome plugins needed or something like this all runs completely automatically in the background. If you haven’t used it yet, or tried it yet, then try this. This is amazing. And the Pricing starts at $19 a month. So the link is in the description. . And now let’s start the podcast. Hi, Daniel. Thanks for joining us.

Thank you. Well,

it’s my pleasure. Hey, so yeah, Daniel, tell us about yourself. How did you get into this Amazon? sphere?

Sure. Yeah. So I’ve been doing this since 2012. And I started as a college students. And this wasn’t very excited about the prospect of normal job and those kind of things. So I’m looking for some alternatives. Basically, as I mentioned, we came across selling private label products on Amazon before it was really like a big thing. And yeah, it was the right thing at the right time. So that’s a good success.

And we’ve been selling in Europe or in the US

have sold and do sell in both US and UK, Germany, but mostly it’s been us. Okay, cool.

All right. And, yeah, tell us about your current business. So what are you doing now?

Yeah, so right now, you know, I still have my private label, business, it has been going for almost 10 years. But I also have a company called into profits, which is more like a consulting company, mostly working with bigger sellers, like high 678 figures. You know, I’ve had a very big operation myself, so I’ve got some unique experiences there. But so I’m able to, yeah, I’ll add a little value to other sellers. With that, well, it’s an experience. It’s okay, and

what are you guys doing? So is it basically like a coaching or no optimization? So what exactly is your like service?

Yeah, so it’s, it’s essentially like systems and operations. So one of the issues I think sellers have is kind of like with the boring stuff, you know, not like, I want us to talk about the marketing and the strategies and you know, people tend to like that but, like the boring stuff that has to happen over and over again, you know, like managing a healthy supply chain does having good systems operations. hiring people building a team, a lot of the people we work with have some sort of ceiling, in their business in terms of how far they’re able to go. Oftentimes, it is due to them being, like, basically a solopreneur, you know, doing everything themselves, they transition to go from, you know, know how to do something yourself. And and actually, we’ve known how to build a team around the business. So sort of where we’re at.

So are you actually like helping customers grow? Or are you coming in at a later stage when somebody is already scaled or big? And kind of automating the operations?

Yeah, so it depends a bit, you know, we have clients that are earlier on, sort of minimum criteria we give us like, you have to have product, at least when you’re selling, because to apply the systems, like, they’re also going to benefit you unless you are sort of, at least committed to this and serious and sort of up and running. So we have some people earlier on, like, six figures, but we also have like, literally Seven, eight, and even nine figure businesses, too, you know, usually they do more because of specific things, because we provide like, basically like the mindset of high level and, and the connections and different things, how to structure a business. But we also have specific systems for specific things like supply chain management as a team tracking, business metrics, and also PVC. You know, so like, a lot of the people that work with us join, because they want to do PVC in house. So we have very good systems there as well.

Okay, cool. So I think I like your point about, like, moving from solopreneur kind of business to, to a scalable business, is I was a seller myself, and I think I’ve never actually managed to move from solopreneur to team and the problem I had was, you know, a lot of things that are profitable, when you’re small, like a solopreneur become unprofitable, or problematic if you start scaling, right. So because because you need to build some overhead. So that’s, that’s an interesting topic. But maybe let’s start at the beginning. You know, so beginning is probably like product selection, or strategy, right? So when I was a seller, my strategy was basically I was picking random products where the numbers looked good. But I found it wasn’t very scalable. And it was also a lot of work. So what’s, how are you doing this? Or what’s your approach to? operations here?

Yeah, yeah, I think you’re absolutely right like that. It kind of works in status. So what’s important at one point becomes, like less important, another point, that kind of thing. But obviously, what you choose to sell is probably the most important thing of all, because if you have the right product, then everything else becomes fairly easy in terms of selling the product and things like that. But obviously, doesn’t mean that it becomes easy to scale the business with a lot of products. So So yeah, I mean, we do have basically very systemized methods to select the products. Usually, like, if you’re already have a pretty established business, like initially, you have to do like brainstorming and start from somewhere, right and, and we test smaller orders, and sort of do a very scientific process and cannot listen to what kind of works easily, you know, we’re trying to find something that’s easy, not difficult. So we talked about that. But, uh, basically, like, as you grow, if you have a base of products, what tends to be the easiest way in terms of product selection is to take a very data driven approach and analyze what you have, you know, look at your data, you know, variations, you could potentially do related products and things based on what’s working. So like, let’s say you’re looking at your PPC, you might have, you know, great keywords and things that work well for you and maybe be able to tap into that more with, you know, related product or variations and things might see thing, see things show up. They’re suggesting that, hey, I’m you and selling my product through these keywords that are not meant for my product. So if I actually sold that product, these keywords are actually for it’s more specific, it would do even better. So there’s a lot of things like that. And then also, for you know, bigger businesses, what tends to be very valuable to is to look at actual products and kind of evolve them. So maybe you start customizing them or improving the actual products and that goes on A lot of value within your business and tends to kind of, you know, keep you on top, you know, because if you’re too static with the product, you don’t do anything to that product, and is expected to last, you know, four to three years probably isn’t going to happen, there’s going to be competition that comes in erodes that advantage, you have an issue when there’s a lot going on to it. But hopefully that makes sense.

So would you like, Okay, my problem was, this totally makes sense. And I want to also add variations, but, but it’s so much work, right? So how do you scale this? Because, you know, solopreneur, obviously can’t do everything, right. If you start outsourcing, or trying to get help, you know, we need to educate people, and so on. So how, how to basically grow your portfolio if you’re a solopreneur?

Yeah, sure. I mean, good question. Because it’s one thing to, like, know how to do something, and then another thing to be able to actually execute it at scale. So the way I look at it, obviously, the simplified version, but basically, like two parts to it, first thing is you need the structure, right? So you need to have clear systems, effective systems, where you can basically get as much output through as little effort as possible, you know, so you can streamline your activity, to let’s say, if you’re adding variations, you can do the right things in the right order, minimize a waste around that process, and have a structure. Then the second thing, and actually what we can measure, you know, what you’re doing with that measure, obviously, cast and all those things, time things, right. But then the second thing is, is really the, the hiring the team building. So I learned a lot through the years on that, like, the importance of hiring really good people for, for instance, how to get Yeah, be able to get really good talent on board, how to work with those people, how to train them up how to get them, then running your systems, not like a robot, which I think is an issue people have, like, if you hire a VA, to just run something robotically, you know, then they sue tends to be that all the questions and decisions still fall on you. So it’s kind of like an extension of yourself, and it can become kind of annoying and frustrating, as well, and to do a worse job than you would do and all that kind of stuff. So it’s a different thing to actually have a team where people are actually smart, take responsibility and can make decisions for you. And that’s when you start to get a real team going in a real business that can actually escape.

Alright, let’s talk about, like the next stage sourcing, you know, how, how do you? Like, do you have any specific systems or like approaches? How to scale this process, right? Because like, my problem was, I had 15 different suppliers. I had a different status with every one of those suppliers. For some, you’re just negotiating some, you’re just, you know, exchanging samples, right? Some products are being produced already. And I even like need a place to store the status. Because, you know, at a certain point, you’re not sure anymore. What did I order and what it’s like on the boat? Right? So how do you build a process and how to manage this

is definitely the most complex part of the business. And, essentially, like, you just need really good tracking and things like that, and the right kind of structure. So basically, we have several different systems we use for things. So like documentation, and the tracking is very important here. So like, when it comes to reorders, you know, we use a certain tracking system for purchase orders, we have actually agreements we use with the suppliers, to get them to sign there’s a certain protocol to it. And then tracking the orders from you know, ordering, through production, monitoring the lead times into the shaping face, you know, getting the quotes, finalizing everything. So we just basically track it states through a couple of different systems that cannot connect longer. So it’s simple. It’s actually quite complex. But we try to make it as simple as possible because by nature, it’s already very complex. But the key is to is to have a very good overview and the right kind of structure for it.

How would you like when sourcing like, I want you to manage Quality? You know, is it? Is it the one time pre shipment inspection? Or? No? What options do we have here?

Yeah, that’s a great question. So actually, there’s a couple of things we do there. Basically, we were looking to dis reduce risk, right as much as possible. And so in, like, in reality, it obviously starts with just selecting your supplier and things like that. And having a good process to actually find a great supplier in the first step is kind of like hiring, you know, you’ve got to find the right person. So we have a good process, our cue process for that, factory audits and things, you know, make sure we’re getting like a legit factory, not like a trading agent, assembly shop type of thing. In China, at least. So we have, yeah, we have processes entire way, when it comes to ordering, we have a process to define the quality of the item. So like all the specs, for components, like what goes into that, and actually defined proper inspection criteria for the product, because you could do just like a generic inspection, but it might not check the most important thing with this particular product. So we have that, we always use pre disorder agreements with terms and things. And built into that is the actual inspection. So we do a pre shaping inspection based on our criteria, which I think is worth it as an investment because if it saves you want that order going into FBA can ruin that product, right with bad reviews and things, high costs, getting that out. So we do that, you know, to be as certain as possible that everything is okay before it shipped out. But then we also look at the feedback. And as we’re selling, you know, any feedback that comes through on the product, any issues, or things like that, we take that any kind of feed it back into the the specs, the inspection criteria. So if like, if you have an issue, make sure in the next order, we actually attack that, specifically, we’ll make sure it’s not an issue again. So it’s kind of like an optimization process to dial in the quality with a manufacturer, eliminate issues and reduce the risk of them happening. So if you want to be actually have these agreements in place, we can refuse the order, if an inspection isn’t acceptable, and the supplier will have to redo it and things

like that. So once you recommend to start with pre shipment inspection, or even earlier in the during the manufacturing process,

Yeah, great question. Pre shipment this the default. So we do that. We rarely do inspections, like within the manufacturing process, but not saying you never want to do that. You might want to do that. This depends on the situation. I would say. It’s rare that we do that, though. But you could I guess if it’s something, you know, that could not come out, right, if it’s not done correctly this days, and things like that. And of course, if you have products where you’re sourcing several parts of several places, you know, it becomes more complex and but everything should be inspected for sure.

But what happens like if the if you find a defect during the pre shipment inspection, because you probably pay normally you pay in advance right before the inspection, or at least a big part of of the money, like I don’t know, 70% or so. So what happens if you notice? Okay, the products are completely unsellable.

Yeah, great question. Again. I mean, basically, what we do is we have like the default payment terms is 3070. So deposit is 30%. And essentially, of course, you could maybe negotiate that to be better early on, you might not get those terms already, we try to put this in our favor. And essentially, what the purchase order agreement is saying one of the things is that unless the product passes the pre segment inspection and we approve it, you’re not going to pay the 70%. So the supplier has to fix the issue. Usually if there’s like defects and stuff, they will replace those items and things like that. I mean, inspect again, the basically is built in so we don’t pay, you know, the majority unless it is approved by us.

Does the supplier know this criteria before they start the production?

Yes, because it’s like we issued a purchase order, right? Who basically it’s it’s a purchase order that outlines like the order the units and everything, but also it has terms and we use agreements like in China that are English and Chinese, so they should underline standards, and they are supposed to seal it, you know, with a Chinese seal. And do those things, send it back. So they’re basically signing the agreement. So the purchase order is also like an agreement that they’re signed.

So, tell me like, what, I didn’t know, maybe we can pick some example product? I don’t know, jump rope, I’m always making the example for jumper. At what level? Should you specify those quality criteria? Right. So is it like, you could say, okay, it should be the product should be best quality, I guess. Or you could specify it like, the very high level of detail. But I think for me, it’s it was sometimes not clear what is obvious to the supplier and and sometimes things that are obvious to you, as a consumer are not obvious to the supplier. Right. So yeah, how do you decide? Or what’s your experience? At what level? Should you specify those inspection criteria?

Yeah, so depends a bit on the product. But basically, you want to go as detailed as possible. So we kind of work with a list of different things like the materials used, you know, the way they’re put together, the look and feel, you know, different things, we kind of go through this list with a product to define what we regard as important. So we basically just try to be as specific as possible, and understand the product. Now as you go forward with this, too, but at least, you know, you would want certain things like in a jumper, I’m trying to think what it would be, but I assume like, like the stretch, you know, you could stretch it or something melody break in on the handles coming off. So maybe that’s something you define that it’s like, strung together in the right way, and it can resist after a certain amount of pressure. And you would want that in the inspection. Basically.

Okay. Okay. So it’s, I guess I understand it’s really product dependent. Okay, I think it’s very Oh, one more question. I think it’s very, very, like, systematic what, what you’re doing and on I was selling, I was never taking care of any purchase agreements or criteria. So I was just basically telling him then already, right. But this isn’t necessarily the best, the best approach to the quality. But tell me, like, when does it make sense to do those things, right? Because if you’re a small seller, and you for making your first order, probably it’s too much overhead to put all those agreements in place, and so on the character stuff, so when does it make sense to start with them?

Yeah, it’s actually a very good point, I think some of these things you should really have, like they want and would be better, like the purchase order. Not that doesn’t take too much time. And I think it would really help you like any case, you know, reduce risk, and also come across as professional things. But you’re right, I think certain things you wouldn’t want to do from day one, because you want to be kind of agile, and flexible and quick. So as we focus more on helping someone that has good business, successful business, make it better, you know, make it more profitable, make it more efficient, make it scalable, reduce risks, you know, reduce costs. And so that’s when these systems obviously do that for you, like, you really need those system, that sort of a certain point. Or you’re going to have issues like you’re going to have, like even just staying in stock, you know, is a big thing. As you grow with many products, like it’d be very tricky to stay in stock. But if you think about it, like you could actually make more money in your business, if that’s all you focused on, like, let’s say this year does never run out of inventory, then if you were to launch like two new products, because you just I mean, that’s something you already have at St. Same goes with like bad orders, quality issues, I mean, they can really trip you up. So we want to get those things, you know, secured and stabilized as you grow.

All right. So look, let’s keep the launch part. So we talked about product selection strategy, and then sourcing, let’s skip the launch and go to ads, right? Or actually, maybe, maybe ads are also relevant during the launch phase. I don’t know what’s your view on ads actually. Is it something you view as a booster like just just to get the blood going or something that you run continuously?

You might be surprised by this actually, like I guess we were a little bit different. With our approach, but we use PVC almost exclusively to market our products, we don’t really do much else. And obviously, we’re choosing products that work well with PVC on purpose. I can be higher price than him some things like that sometimes. But we launched more or less just through PPC. And that’s the main mechanism we use for ongoing promotion. And one of the things we do that’s I guess, different there to more sellers is we really focus on the relationship between like PPC, ads and your rank. So the page optimization, the keyword indexation and keyword prioritization, conversions like the offer, and, and all those things like this focus on those fundamental things, doing PPC, extremely well being extremely on top of it, reducing waste, you know, maximizing market share, but then balancing that out with organic ranking things to find like, this sweet spot where you are the most profitable, because you get definitely spent more than you need to on PPC. But you could also spend less like a lot of sellers will think that a lower a cost is is a better thing. But sometimes it’s actually it’s not like you also reduce your organic sales and visibility if you reduce your equals or the amount of PPC spent to retract that relationship and try to optimize that, basically.

So how do you track it? I mean, not necessarily at scale. But in general, what does it like? What’s the what what is this relationship? If I make one PPC sale through a certain keyword, I should like rank higher on that keyword is that, that the relationship?

Yeah, it can get really complex on like the keyword level, you know, because you have hundreds of keywords and maybe 1000s. But the big metric is the A CTS, which is basically, your ad spent compared to your total sales. So what I see a lot, for example, is, you know, your a costs goes up and you’re like, Oh, that’s bad. But if you look at a CTS, it actually went down. So you’re actually better off now with a higher A cos. And this is because your organic has grown more than the pates. Right. So, Beals attracting is like the percentage growth in organic versus paid, and things like that. So we’re trying to find it’s usually more like on the whole product level, you know, we have systems to take the keywords and things and and optimize them within the listing make sure was working well with PPC has is given enough weight to rank for it as well. I think so then he had that as an outcome process. But basically, we have, yeah, overall, we’re tracking on the product level, like where we are the most profitable. And also, yeah, they issue t s, essentially is what is a little more complicated. But that’s essentially the metric, you know that we focus on more than a cos?

How do you know whether so for example, your AC or d s, I think we’re calling it a real a cousin, or software, but it’s basically the relationship between it’s basically the sales spend divided by the total sales, right? Not by advertising sales. But But Tom says, right, so but if you if you see like a drop, so that’s a good thing, right. But how do you know you grew organically because of of the ads, you might have grown organically because of something different, right?

Yeah, that’s a great point. So again, we basically only do PPC, so I guess that makes it a bit simpler to understand. But what we do is like we have mysap, like a target A cos, and we keep our PPC optimized around that. So by moving that number, let’s say you started 30%. And then you reduce it down to 25%. And then 20%. It’s kind of like split testing, we’re able to see the impact at each point, and where we basically have the most profit at the end of the day. It’s not again, it’s not a perfect science, but it gets as close to the ideal spot with each product.

So what’s your approach on on the acres? Like, is it is there a good number that that you kind of target? We’re talking about acres or how do you know what’s your ideal acres?

Yeah, it’s going with different products. Usually we started like the breaking point. And because we lost the campaigns and everything, like they’re going to be at a pretty high cost, first couple weeks most cases. So we launched quite a lot, test a lot. And then we optimized it down to that target acres. And again, usually start at breakeven point. And then, once we were at that consistently, we can see like, how the product is performing, like how many? Yeah, how much sales volume of things are we getting, which will tell us if we’re in a good place with the product, or if we need to troubleshoot, like, let’s say, the conversions could be holding us back limiting how much we can sell about a cost and things. But if it’s looking good, you know, usually we would test low and that target A cos, but like 5%, seeing the impact, like overall. And then if that is better, we would keep going 20% analyze it, is looking better or not? That’s sort of how we do it to find the the perfect A cos, you know, but obviously, this will then again, change over time and things like that.

So, suppose you know, your perfect acres or like if we picked a target, right, it’s at breakeven acres minus 5%, which would be the new margin, I guess, right? How do you? What what’s your approach to changing bits to achieve this? target?

Yeah, so yeah, really good questions. I think that is a song that we do a little bit differently as well, you know, so basically, we measure, like, there’s a few processes we have, but at the like, targeting level, like the keyword acent, we are, we’re also measuring what the cost is. But it also like some things won’t have any cost because there’s no sales, right? So we’re also monitoring for like a cliff threshold. So let’s say something had six clicks, eight clicks, no sales, you know, we would want to cut that down.

But if a cost cut down in the sense of, like, reduce the bid, or, or put yes

or no. Yeah, so we are not really so much in like, the negative keywords and stuff like that, you’re more reducing the bits because it could work at that lower bit. Because the placement might be different. So that’s, that’s our approach is more like lowering the bits. And seeing if it works, obviously, at some point, if it’s not working, it’s just gonna die off. Yeah. But we use, we use bulk operations and API to, you know, be able to do this at scale, like, source reports and things to the bulk reports to be able to, you know, take an entire accounts data and basically do these things at scale. Because you, you know, if you’re manually clicking and campaign manager, it’s small, sustainable or scalable. Yeah.

Yeah. Interesting.

Okay, so

let’s talk about keyword harvesting. Do you have any specific process for this? Or like moving keywords from auto campaign to manual campaigns or, or something like

this? Yeah, yeah. So the way we do this is we have basically a couple of different campaign types, Kim’s campaign structures, which are essentially processes like, you know, so piece, and each one has its own, like harvesting method for keywords, in essence. So we have one campaign type, which we call uniques bids will harvest untapped opportunity within your account. So let’s say you’ve got an auto campaign running, somebody is working there. to scale that off, you’d probably want to take that and put it into a manual, test exact phrase and broad, see what happens different bids and things like that. So yeah, we do that. And same goes like if something comes through phrase match or broth, nuts, variations, we might want to isolate that variation in another campaign and see how far we can take that. So that’s one campaign structure then we have you know, there’s like the auto suggested terms by Amazon, some things outside of Amazon like reverse Aysen searches and things, some competitors so it’s kind of like a mix. And sort of the big benefit comes from having this healthy mix of campaigns that is always monitoring things and testing things and trying to maximize market share or find more things that can work sort of on a regular basis because things change you know, you might have new keywords pop up that people are using yeah that are working

Yeah. So Daniel, would you like do this job for for a seller and take this PPC management and also other stuff that we discussed completely or like to help help them build this system or or and then kind of like a coach that growth coaches and like this So what’s your approach?

Well, we have we do actually do both. But it’s much more of the latter. So we’re actually giving sellers like the systems to do this themselves and do it in house. So we show them how to hire someone to do it, basically, within their own team.

Okay, very cool. Look, Daniel, thanks so much. I think this was very informative. Tell us where can our users find you? You mentioned into profits. We’ll put the URL in the description, by the way, but maybe you can tell it for those who are just listening.

Yeah, sure.

Yeah. So this into That’s our website. So And you can see some stuff on their content and like a free case study if you want to learn more.

Cool. Thanks so much, then. Good luck, and have a great day.

Yeah, you’re most welcome. Thank you for having me.

All right. Thanks so much for watching guys. If you like this content, then don’t forget to press the like button, subscribe to our channel. And I’ll see you next time. Bye bye.