Our guest on the 20th of July, 2021, on the sellerboard show, was Richard Hurtley, the co-founder and managing director at Rich Insights.
We talked about:
- Factors to consider when choosing the next marketplace whether its Amazon and beyond.
- Things to bear in mind when launching outside of Amazon.
- How to prioritize different opportunities.
- The key commercial drivers such as profit and sales.
- How to smart plan a successful launch.
Watch the full video: https://www.youtube.com/watch?v=vQHVn6ZiS1k&t=386s
0:07
Hello, everybody, and welcome to the next episode of the sellerboard show. My name is Jenny and our today’s guest was Richard Hurtley from RichInsights. So Richard is a managing director of reaching sites. He shared with us his experience of how he started selling what got him into this industry.
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How he started while he was still in college, and we spoke about choosing the next marketplace, whether it’s Amazon or beyond.
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We spoke about the factors, the main factors to consider for Amazon things to bear in mind while in and outside of Amazon, how to prioritize different opportunities. The key commercial drivers such as profit and sales and how to plan a smarter plan a successful lunch. So yes, I hope you find it very informative. And if you do, give us a like and subscribe to our YouTube channel, please don’t forget to check our website. Its sellerboard com sellerbord is a profit analytics tool for Amazon sellers with a bunch of additional bonus tools like inventory management, the manufactory points which finds lost and damaged goods and helps you get reimbursed. We have a PPC optimization model.
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We have Shopify and eBay, dashboards, connectors, we have an autoresponder that automates mail campaigns, and also the request review feature. So, um, yes, check this out. And if you have not used sellerboard yet or tried it out,
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it’s so it’s only $15 a month. So the link is in the description, sellerboard com. And now let’s start the podcast.
1:51
Hi, Richard, thank you for joining me today on our show. How are you doing? I’m good. Thank you very much.
1:59
So let’s, so tell us more about yourself. So what do you do? What’s your background? How you entered e-commerce and how it all started? So yes, personally, my background actually is in the fashion space. So I not that you would know that. But I actually set up a fashion brand when I was at university.
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So when I was 20. And I ended up doing that for seven years. And through that period, we sold a lot of wholesales we sold to businesses like john lewis, and solando and some other big kind of global as well as UK European retailers.
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And, yeah, so we had that whole kind of experience, and also had our own stores and sold online and sell through marketplaces and Amazon. So we did vendor Central and Seller Central, so experienced both sides of Amazon,
2:51
as well as our own events as well. So we had quite a complex kind of multi-channel business at quite an early age. So I learned a lot. And through that we got an investment in a much bigger company that was now is about 250 million in revenue, I think was about 75 million when I was working with so much bigger and I saw their
3:14
their kind of channel success as well across different channels. So that’s how I started off my working life. So it was slightly different to most people. And I moved around with the business so sort of moved all over the UK with that. And then in 20 14x to the brand and was one of the co-founders in rich insight, which was set up then really to help businesses transition from like business to business to direct to consumer. So where people are kind of trying to work out e-commerce and market-based specifically. And obviously, over that time, I quickly realized that people just really didn’t get marketplaces and didn’t really understand Amazon. So wanted to help people with that. And we created an agency, I guess that just focuses really on that side of things. So what I personally do within that business within reach insight is working with a strategy projects, so help with marketplace selection, help understand, I guess, educate a little bit, sort of boards and, and business owners around
4:16
what marketplaces do and how it operates and how you can make the most of them, and also coming up with the right approach for that particular business. Because obviously, very much varies as to what the answer is depending on what the initial inputs are for each business.
4:31
So that’s kind of what I spend a lot of my life doing. And then the other part is around sales. So helping I guess businesses with more managed service components, so things like more day-to-day help run their business in different markets. And we work with a lot of businesses in the US in Europe, in the UK, and other territories as well increasingly, just who are trying to either break into New Territories or trying to make the most of existing territories. When it comes to marketplaces which obviously Amazon is the domain
5:00
Majority of, but we also work with a lot of other marketplaces as well eBay into Lando and Walmart, and others. So we’re quite varied in that respect. So yeah, so that’s kind of what I kind of do. Obviously, we use sellerboard. We do a lot of, you know, with it with a lot of our clients and finding really useful, which is kind of, I guess what I’m here today.
5:20
Thank you for joining me.
5:23
So, um, yes, but let’s, let’s get back to your business. So, um, so does your agency to do with guys like help
5:33
help clients grow, grow their business? Or are you more focused on helping them choose the right marketplace for their business or their brand, and so on, we’ve kind of got three different elements to service and one is around planning. So it’s very much like choosing the right marketplace, coming up with the right approach, thinking about, you know, maybe listing management software, all kinds of other things to consider in that respect to how you would integrate stocking orders how you manage product information,
6:01
we’ve then got the digital implementation piece, which is both what we would call management and performance. So we’ve got like an operational management layer, which is just handling the listing. So some of our clients have got over 100,000 listings. So obviously, it’s a lot to manage. So we will create efficient ways of managing that. We’ve got other clients with much smaller inventories, it’s about kind of trying to really focus in on kind of polishing the listings and making things kind of as perfect as it can be. So it kind of varies in terms of what we do on an account. But broadly speaking, it’s managing, you know, all the listings, optimization, and all those sorts of error correction, kind of keeping up to date with the different changes on the different marketplaces, etc. And then the second piece is performance. So helping with obviously paid search on Amazon brand content. So if your trademarks and brand registered, then you potentially have access to a plus content,
7:00
and stores so helping implement those, as well as obviously the brand ads and other things that would kind of look after. So yeah, and then we’ve got performance and analysis stuff, as well as ruku, quite a broad service. And it’s very much tailored towards the client because some businesses will have a specific part of that, because they’re covering the rest, and others will have a broad kind of mandate for us, because they don’t have the internal capacity or bandwidth. Sometimes it’s like one region, because they just want to now the UK, and maybe the US business, other people, you know, maybe want us to cover, you know many more territories and be a core part of their internal teams, we kind of work with them to enrich their team and to become almost part of the same family really, in that respect, which I think which, which is what we do with lots of businesses who have worked with for five or more years now. Because we’re kind of instrumental to a part of the process that they need for any marketplace. So um, yeah, it really depends. But that’s kind of a summary, I guess. So let’s say, for example, that I want to start my own business, and I’m kind of lost in the midst of choosing the marketplace, what factors should I consider if, for example, you choosing Amazon, or any other marketplace? Yeah, I mean, I think there are some more Amazon-specific things to consider. But I think generally speaking a lot, a lot of the list is very similar. So I think, if you start off with the more Amazon-specific things, you’ve got to think about, obviously, the account setup has got to be kind of dealt with. And you’ve got to make sure the paperwork is all in place and then correctly.
8:40
For that to take place, you might need to think about legal entities, VAT and other things that kind of need to be dealt with. So obviously, there’s some great businesses that exist to support you on that now. So there are really partners that can sort of help do that stuff for you. But fundamentally, you need to account Brand Registry I’ve kind of mentioned, but if you’re eligible for that, depending on if you’re like a reseller or a brand, trademarked or not, then that’s something that I think could be important to add to give you a bit more visibility in that market. And make sure you’re leveraging the content, reseller activity, just understanding what is currently happening, as well as just sort of competitor activity, as well as you know, having a good understanding of the market and how it sort of sets. I think you got to think about language, depending on what market phases you’re looking at. I mean, there are different ways of doing this. But personally, the way I like to do it is you start off like scoping out
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a territory. So I would always start with trying to go right, what markets are we interested in? So right now we’re on, let’s say, Amazon, UK and Germany. How can I, where can we go next? And I think he might go right? Well, I know from my e-commerce sales, if you’ve got other channels that you know France is a really interesting market like I’m actually getting quite good sales across borders today from Germany.
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France, from UK, France, whatever it might be. And there’s also some other, you know, eat markets you’re interested in, because maybe there’s real prime relevance, we’ve got competitors doing really well in that territory, whatever it might be.
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And that you should use that to try and create like a shortlist of countries. I think that’s really useful. It can be a long list, to be honest with countries at this stage. Then when you’ve kind of got that that sort of list of countries, you then think about what marketplaces are within that. So obviously, Amazon is going to be the main one. So you’re going to be saying, What is Amazon? You know, is it kind of already there? Is it not? And then equally, what other marketplaces think Amazon will always be the main? Yeah, well, yeah, I mean, I think I think probably with the exception of Netherlands where balls bigger, I think, and there’s other territories where it’s less big. But yeah, Amazon is obviously going to be the driving force for this. And particularly, if you’re already selling on Amazon, you kind of know how it works, obviously, is always going to be front of the queue.
10:55
But as and when that is saturated, or when you’ve kind of you’re everywhere, you won’t be on Amazon, this obviously is worth considering others as well. I think from from from from the other kind of factors to consider, I think, is once you’ve got the list of marketplaces and the list of territory views, you’re kind of filtering it down, is then trying to understand what your kind of key objectives are. So what you’re trying to achieve, and understand so you can actually assess what the right fit is for you. Because I think a lot of people jump into yes or no, before they’ve actually really just defined the criteria. So I think it’s really important to kind of work out what’s important. I mean, I’ve got some examples here of the sorts of things that you know, you might be looking at, but it could be around, you know, is it around, you know, clearing stock? Is it around trying to raise the profile of your brand and a specific territory? Is it around just being more regionally diverse. So being in more be more territories as a business, because you want to be maybe a European business, not a German business, or you want to be in specific locations because you think it’s important for your profile of product?
12:04
Obviously, understanding kind of what your approach is sort of price, you know, are you trying to establish your price? Are you trying to have more of a discounted model?
12:16
And also things like, you know, maybe trading agility, are you looking to kind of just be more nimble. So you can trade across more places at any one time. Those are the sorts of things that you might consider, as well as obviously revenue and profitability, and the obvious things that kind of sit alongside that.
12:36
Because they’re always like, number one, for pretty much any business or thing with a few exceptions, where there might be like, it’s more about brands than is about sales. But I think most businesses, I’m sure listening to this will be keen on the sales, number one, and obviously make sure it’s profitable. Number two, because otherwise, what’s the point? So I think those are the sorts of things that I think can help you. And when you’ve kind of when you kind of got there?
12:58
Is there a question of, you know, within that, what are the other filters that are important? So, the way I like to do is I would create, like a scoring methodology, that would be kind of weighted based on my objectives. So if we’re saying, you know, actually, the number one importance is operation easy, we need this to be super simple to do. So it’s about ease and automation, that’s a priority of the kind of sales and profit, if that’s the case, and obviously, operations becomes a really highly weighted decision criteria, because you want it to be super simple. So, your assess it based on that criteria. So that could be can you get Kent, would you need to create an additional FBA account to fulfill that order to the customer? Or can you leverage your German stock pool?
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minimum? So that’s the sort of conflict of what consideration? Would you need to physically segment stock again, basically, to fulfill orders in the market and still get the prime badge if it’s Amazon? Or just generally, if it’s not Amazon? So there are those sorts of considerations? And, yeah, I think he’s just trying to really understand what you’re, you know, what the distribution sort of options are for you in that scenario? Other things like systems like those integrate with your current system, it is now if it’s Amazon, and it already integrated with Amazon? Yes, it will like it, obviously. But if it’s it might, there might be certain nuances to that, if it’s a brand new market to know is FBA pan-European available, for example, you know, that there’s not everything will be immediately available. And so obviously, that might mean that you’re gonna wait until it joins the family at some stage in that respect. So I think there’s there’s a lot of those sorts of more operational factors to consider, and they will have a score against them. So you can, you know, generally, I do like a score out of five, just visited it. And I’ll just create criteria for like zero to five in terms of what each of those things mean. And that will kind of give you quite objectively data to go. Yes, this makes sense. No, it doesn’t, and what makes the most sense
15:00
Which is kind of a key kind of creative thing you’re trying to get as an outcome, you also need to consider things like commercial opportunity, which is looking at, obviously, there’s a mixture of tools now that can give you estimations on kind of revenue and market share. So I mean, that can be quite useful, particularly to Amazon in mind, because there is a fair amount of estimated data there that you can use to get a pretty good view on what a good segment or sort of sector looks like in different territories. That’s, that’s really useful, I mean, to just understand more about, you know, what the art of the possible is, and what the size of the prize is for you. And also the stuff you can do without having to invest in tools, you know, look into what brands are selling that how many skews, they’re listing what the ratings or reviews are, like, you know, all these sorts of things that can kind of give you an idea. And obviously, some of its nuanced, because, you know, some of these reviews might be aggregated across different territories, sometimes they’ll be different. So it’s, it’s not always a perfect way of doing it, but you can get a view just by looking at them and, and kind of working through that.
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And yeah, just seeing how, seeing, obviously, pricing as well, what how you’re quite surprising themselves, and what other products exist and how competitive you in that market. So all of that would sit in my eyes in kind of commercial as a kind of criteria, and then you’ve got a
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brand as well. So this may or may not be relevant. So if you’re a reseller, you’re probably not going to care so much about this like, because you’re kind of selling on people’s brands, and your job is to sell them not to kind of invest in the brand kind of long term equity. But if you’re brand owner, obviously you think differently about that, because it’s a long-term play, you’re building an asset you’re building, something that every decision has, has, has an implication for. So you want to make sure you’re not listing in the wrong place for the wrong reasons. And you might want to understand more about maybe competitors becomes like adjacency criteria. So you might be like, there need to be at least three relevant competitors in this market. Otherwise, I don’t want to go there. Because clearly, there’s not an established market here. Or you might be like, Well, actually, I want to be pioneering and I want to be ahead of my competition. And so that’s a reason to go there. Because that’s the way that we operate, so we want to be ahead of them. So you’ve got to take a view of it. But depending on the business, and like what your appetite is for risk and reward, but um, there’s all those sort of considerations. And I guess, distribution will also dictate profitability, which is gonna be another kind of commercial or financial factor that you want to take into account. So all of these things collectively, and there’s obviously a whole multitude of different variations and things to consider. But I just kind of sticks and main ones that are going to actually going to be like
17:44
a key decision criteria view rather than just bits and data, I would say you should make up some sort of scoring methodology that you can then use to kind of create rules for and then you weighted based on your criteria. So you might say, right, well, you know, 50% of my waiting goes operations because I want it easy and automated and 25% goes to commercial when 25% goes to branch, you see, so you can kind of do it that way. And then you put the percentage scores relevant to each specific data set as well to build that score up. So it’s like kind of from the bottom up and, and that gives a really, in my view, objective, an interesting out outlook on the different options you’ve got with a lot of factors taken into account and one very simple outcome, which is, What’s the score? So I like that because I’m simple. And I like a simple way of understanding things. But I think the beauty is actually the ingredients aren’t simple, they’re quite complex, and you’re kind of synthesizing them into something that is easy to understand. And it’s got obvious logic behind it. So that’s, that’s one way of doing it. The other way is, you just go, what can I do easily? Where can I put my products? Without it, you know, being a huge drain in terms of cost in terms of operational time, in terms of additional content, any trade? How can I quickly and based on the answer to that? Just get the stuff live and see what works? I mean, those are the two ways you can do it. I think in terms of like, assessing severely, you go through the process of doing it more methods on methodologically.
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Let’s bring like a real example. So let’s say what do girls usually like to say? Well, to follow let’s say, I’m interested in selling tooth whitening kit to the whitening kit on Amazon, for example, or in any other marketplace?
19:37
Well, this is something a lot of people buy. So I know there are a lot of brands that there will probably be a lot of competitors and Amazon selling that and let’s say I’m not I’m not very southern, I’m creating my own brand. What things would I have to bear in mind when launching out outside of Amazon and when launching on Amazon if you’re a brand owner so I think
20:00
Your criteria are going to be different because you’re going to be looking at the brand adjacency is going to be more important to you. Obviously things like brand content, you know, that’s going to be more investment for you. Because you can only to think about a plus content and stores. And there are other creative components, more copywriting, if you’re recent might have like all the information available, we just need to translate it. So it really depends on kind of where you sit. But again, there’s less content to do as a retailer, generally speaking, because you don’t have to think about the foreign content, so
20:32
but I would say, you know, product compliance, or can I physically sell the product in this market? So if you’re the brand owner, you should know the answer to that question. Because you’ll be in charge of the compliance elements. If you’re a reseller, I guess the brand should know the answer to that question if you don’t already. So it’s trying to establish that pretty immediately, because that’s going to help again, define the market you can go after, I know that certain products that you have to ingest or put on your body or in your, in your mouth, like they need there are different compliance requirements in different markets. And it can be as, as specific as by country, not even European kind of approval. I know a lot of things are actually country-specific. So it’s different in Italy, to France to Spain. So it’s actually quite complex. So you obviously want to get some advice on that there are businesses that exist that just the product compliance consultancy and that can help you or ideally, you don’t want to spend any money on that you just want to you know, ask someone who you know, is in that business has already done the research and accounting can do so. I think that’s kind of a key thing to establish. There’s also the view on odd, how are you set up for that particular market? So how do you distribute is a major factor? So if you’re already doing FBA, then obviously you’re going to be looking to lean on FBA, I would imagine for the other marketplaces. So how easy is that to scale? What are the risks involved? You know, in terms of returns, how’s that handled? I just understanding I mean, obviously, FBA is pretty similar in terms of how it’s going to work with different markets. So it shouldn’t cause you too many issues. But there are things to consider, like, if you want to put stock in market, for example, if you’re already selling in Germany, and this is your teeth whitening company, and it’s based in Germany, you want to sort of in France or in other markets, you need to think about sort of VAT registry or the tax registry, I should say, in their respective markets. Because if your stock physically sits in a country means you definitely need to have various elements sort of dealt with in terms of your, your paperwork, relative to each other across the border. From that, if you don’t pan European, you should already be registered in each of the countries that you’re selling through, which I think includes Czech Republic and Poland, as well as the big kind of four in mainland Europe. So those are the sorts of things you should have already kind of dealt with. But if you haven’t, and it’s new to you, and you’re thinking about these options, you need to be aware of that. So I’m definitely VAT tax legal. But yeah, I think, um, yeah, what would you What would your process be, you will be a filtering process fast. So you use those sorts of questions to get to a position of, okay, so I know I’m product compliant in these countries. I know I’ve got sales data in these countries. So maybe you’re already selling to the trade-in,
23:17
in the Netherlands, or maybe actually, you’re doing really well there.
23:21
So you want to you’re interested in the Netherlands, that becomes a priority for you. Maybe in Spain, you’ve got really quiet on it, not on Amazon, but on your own website, you’re already managed. So again, that’s like a data set you can use. And all of that is kind of meat, meaning that those markets are probably going to work better than ones where you don’t have that data where they’re more likely to work than they’ve been in the other markets. So all of that should be factored in. So you need to really think about what information you can gather to make an informed decision in terms of these different sites. And then when you’ve got sort of all that information gathered, it’s and you’ve sort of filtered, then it’s a question of creating the methodology, like I mentioned, and kind of scoring accordingly, which for this brand wouldn’t be really any different to the way I explained it. So if you’re selling dental hygiene products, you still have to think about, you know, things like marketing options, or what you can do in the market, what is this doing? price point, operationally is all of these sort of components really, because they’re all going to play a role in kind of all the different decisions you’ve got to make and being more aware, upfront, I think is is really key.
24:36
And yeah, and then operationally,
24:39
you might need to be thinking about segmenting stock. And if you were to segment your stock, what does that mean, and do you have enough stock? Is that something you can afford to do is
24:51
how much stock Do you need to manage by segmenting stuff into another FBA warehouse or into another warehouse location and and
25:00
Obviously Think about your buying cycle, like how do I get more stock in? How do I replenish that stock? So there are lots of factors to kind of think about when you’re embarking on this, but I think it can be quite overwhelming. But I’d say the simple facts are, define the final long list of all the things you’ve got to consider, which I think most businesses will be able to pull together, like, what are the factors, you know, tax, legal, kind of commercial, competitive price? All of these things need to be kind of listened to work out within that? What are the filters? What is kind of Yes, no answers that will kind of define whether I wanted to do this or not? And what are the things that are more, shall we say?
25:43
scoring criteria? So what are the things actually that will have a selection of answers? And I’m, I’m open to it, whatever the answer if that makes sense. So one of the things that will define where you can include, like, photos might be only one digit to FBA, so, therefore, you’re only going to work in locations where they support FBA. So that’s your kind of, you’ve ruled out a load of countries by doing that. And then probably a load of marketplaces too, because there’s any selection of FBA enabled.
26:13
So so these are the sorts of things and then you obviously get into the weeds of kind of working out a score.
26:19
So So how would you suggest what would be the best way to prioritize opportunities when it comes to launching and different marketplaces? Yeah, so in terms of prioritizing opportunities, I think,
26:36
for me,
26:38
I think going through that process is going to give you the outcomes in terms of prioritization. So obviously, once you’ve got, I think that the reason it’s difficult to answer is that it’s very dependent on what your objectives are, which are challenges are some people operation just aren’t concerned, they will get a system to solve if there’s not a system in place, they’re sought out a warehouse, you know, they need to realize that other businesses are like, well, it’s got to be fulfilled from my warehouse in, in the UK, otherwise, I can’t do it. And in which case, obviously, that becomes a huge priority. And I will make this sort of scoring totally different, and the filters totally different. So I think I think it really needs the ingredients are going to be very dependent on the seller. And I think that’s the first thing. Also, if you’re a reseller or a brand, again, the criteria will be different. And it’ll be we actually got a lot simpler for reseller, I think than a brand, because there are less factors to consider.
27:34
But, yeah, you need to go through that process. And then when you’ve done that, I think it’s it’s again, the waiting part of it, waiting accordingly, and then seeing the results. So the results should help you prioritize, I think that’s my point. So let the data do the talking other option, as I mentioned, test it, in a true sense of the words, get the product sold, get sales data, and see what’s worked. So this stuff, if there’s a selection of options, all that seems sensible to you, and you just feel like you don’t need a whole headspace of trying to figure this stuff out in a kind of more strategic way. And you just want to dive in. And that’s your personality type that is absolutely cool. Like there’s no problem, that sometimes it’s a better approach, if you’ve got the capabilities to do that easily. And if you’re not kind of going into things blind and creating issues for yourself, but if you’re confident in on the operational components, and you want to do that, and again, do that have a similar approach to marketing, obviously. So it’s apples to apples comparison, you can’t be spending lots of money on Amazon ads on one site and none on the other, it’s got to be true.
28:38
So you’re actually comparing the same kind of opportunity. And, and then based on that, you know, give it some time, see what works, and then double down on the things that work, stop the things that don’t work and the usual optimization processes you do with your listings or within your, with your paid search budget and all the rest of it. So that’s the way I would kind of go about it, you know, depending on what temperament I was, and my appetite to risk and how comfortable I was kind of test and learn versus calculate and assess, because I think they’re different personalities in different businesses operate differently.
29:17
Cool, so much information. Very interesting. So my next question would be
29:24
about the key commercial drivers, let’s say profit and sales.
29:29
What would you say about that? So I think on. I mean, everyone is running after profit, and everyone wants to make more sales. This is their main goal. Sorry.
29:45
I was just thinking the same actually, I think I think from a sales perspective, I think there are quite a few things you’ve got to consider. I mean, they’re all quite obvious, but I think can easily be forgotten about. So the first one obviously is price.
30:03
So, you know, if you want to be successful, you need to understand your pricing, I would say before you can understand your pricing, you need to understand profitability, because your profitability, would you drive your pricing, if you’re selling unprofitable without being aware of it, and clearly, there’s a problem. Equally, if you’re, you know, maybe selling far too high in terms of your price, making loads of profit, but selling their units, then again, that’s a problem. So I think I would always start with profit.
30:30
And then as an assessment and just understand that better understand these costs, and then you’ve kind of got a better, better way of exploring these types of decisions, I think, in terms of and I come on to how to do that in a second. The other things are format. So this again can help you a profit. So it might be you’re selling one unit, and it’s just not profitable, it’s not viable, you’re having to sell it for more money than people are prepared to spend in order to make a profit. So let’s say, generally retails at seven pounds, you’re selling on Amazon for 12 pounds, because any less, you’re making a loss, just based on the associated costs, then, clearly, that’s not great business for you. And, and not great for the customer either. But how about depending on the product, if you sold back to back at three a bundle set, which included our product, like all of a sudden, that could go from quite unprofitable to actually really profitable because you might, your average selling price might jump from
31:34
12 pounds to 25 pounds to 30 pounds, and then all of a sudden your distribution costs as a percentage much lower. So I think formats, like a real untapped opportunity for a lot of businesses where they just go right, I sell one unit of this in all my other channels. So I’m going to just do the same here. Or when the opposite when they go rice at a 24 pack or this for this channel, which might just be completely unrealistic to sell that, you know might be fine for business, who’s buying in bulk and not great for a consumer who just wants maybe other than 24 packs and nappies, maybe they want four packs in nappies. I mean, it’s like trying to find the right balance for kind of a consumer who wants she’s happy to get a discount for buying more at the same time, but maybe once enough to be able to realistically store it for a period of time. That is, you know, a realistic, maybe it’s a month. So obviously marketing, understanding what your approach is, to the marketing is key. So what your ad cost is going to be on the PPC spend assuming you’ve got one, again, that’s going to differ between a brand and a reseller brands go more margin, they’re happy to invest more into PPC, a reseller less margin, and probably kind of tighter in terms of that respect. So they want to rely more on organic sales, which obviously means that kind of reseller and competition become increasingly important, because if they’re competing for the buy box, and they can’t go that far south on price, and they can’t market the brand, it becomes a challenge for them to make it work. Because of brands always going to have more margin. But what’s useful for reseller to know is that the brand probably wouldn’t want to discount their product, because they’re the brand owner. So it’s kind of pros and cons, I guess, in terms of other things, lt promotion, so links the pricing, but you might want to think about obviously, p sales events sort of to drive sort of sales effectiveness,
33:23
in line with customer demand. So when there are more people on Amazon, obviously, Prime Day we’ve had recently is
33:30
Black Friday, which you guys might know of, which is coming around, we see that and we know. And then all these other big sell events, Christmas, etc. So it’s important to make sure your promotion is aligned with that. And you’re thinking ahead because not everyone will be and you can make more of that bumper traffic that wouldn’t otherwise be on the site.
33:49
Product relevance is really important. So understanding with new sites in mind, how relevant new are some of the information I shared earlier, and those ways of doing things can sort of help. So you’re looking at within the cat within the subcategory that is relevant to you, or the mixture of subcategories, like what’s going on one of the best sellers, you know, obviously you can get best seller rank data in terms of who they are is really useful. What’s their price point? You know, why are they selling so well, what their views are? They don’t get a bus content, you know, have they got a store, you know, other bullet points strong? And just understanding that you know, what’s their mix of imagery? Do they have feature led imagery, this sort of annotating all the great things about the product, just trying to learn from some of the people who are at the top? Just competitors? Yeah, your competitors. And some of it might be even competitors might be like, like alternative product in that category. It might be things you don’t even sell last year, they’re displaying that really well. And there are good ideas around what we could do to bring it into our specific genre of product. So um, I think it’s always good to look at that. The policies is something that often gets forgotten about, but just again, if you’re using FBA, and it’s an Amazon-specific play, then that becomes
35:00
less relevant because your policies are kind of Amazon’s policies often. So there’s not much sort of nuance to that. But if you’re selling it did, you know fulfill by matching or in a different way, then clearly that that’s important to be relative and proportionate to a customer in a market. So if you’re, for example, sending products from the UK to Europe, which obviously at the moment is increasingly a challenge with Brexit and everything,
35:25
if you just sort of Chuck on a level of cost to make it worth the work for you, but you’re doubling the actual cost of the product at the same time, because no, that’s the proportionality of distribution costs, the product cost and clearly a customer is not going to find that very attractive, when they could find something locally with a note with free delivery, or you know, with a slight increase in price for free delivery or with at the same, a much cheaper price with with with a small charge for delivery. So
35:52
all of that makes, you know, makes a big difference. And obviously, free delivery is the aspiration, I think, you know, for most buyers, you just kind of expect it now. So bit different if you’re buying something incredibly bulky and quite cheap, you know, you can kind of get it, or there’s certain sort of product types where you might get why you’d want to offer delivery charges. But generally speaking, I think that’s kind of a really important one. And also, not just that, but also your SLA is like what are your handling times? And what are your dispatch times you might have free delivery, but if you’re offering it in a month’s time, I’m not interested. So you know, what’s your turnaround time? How good are you on your distribution and, and kind of see these markets is critical. competitor activities. So like understanding, as we mentioned, what’s going on there, and again, market trends as well. So these is quite good tools to understand what’s happening in the wider market, particularly Amazon in mind, I think that can that can really help when it comes to assessing
36:49
different opportunities.
36:51
And, and kind of understanding reading what the sort of growth rate is like on this. And you can use keywords as well for that, obviously, there’s a mixture of tools available for that as well, just to give you a view on like, you know what, what the growth is, perhaps in this area. And I think it’s also really a bit of a sales point of view to try and make the most of this that clearly your listing strong, goes without saying you’ve got a good listing, it’s enhanced, you’ve got good.
37:17
A plus content, your titles enhanced, you’ve got the right search terms to kind of sit behind your listing, your bullets are strong, you’ve got kind of if you don’t have a boss comes in your good description, summarize your business, your brand, your product, imagery, strong image quality is good, you’ve got the right selection of images, you’re ordering them the right way to do all this was things to consider. And then within that is like what the perceived value is. So if you’re selling an item, which the average selling price for, for the best seller is like 10 pounds, you’re selling it for 20, then you need to understand explain why you’re 10 pounds more expensive. And I think that comes up what you’re talking about like you know what your features and benefits are, as I mentioned, like feature-driven imagery, imagery as well, like you’re trying to get that across. And just generally trying to get those sorts of things into the listing. So that objective Lee looking at it, you can compare that to the temporary one and tell me if you buy it like that’s the kind of real question. Because if you wouldn’t, then that’s your problem. In itself, those are the sorts of things. I think, for-profit, we touched on the kind of, I think the biggest thing for profit to be aware of.
38:31
And I guess it’d be a mixture of people listening, but some will work across different channels that have an e-commerce site as well as an Amazon site as well as perhaps other marketplaces.
38:43
So they will have kind of a mixture of different experiences ready around stuff like basket size. So I think on our website, the average is not 2.5 to three units per transaction in terms of the website. So
38:57
that’s your website. So if your average selling price is, let’s say 10 pounds, you’re taking home 25 to 20 pounds in order on average, which is fine. But on the marketplace, it’s 1.1 in terms of units per transaction. So it’s a very different economic landscape. So what that means is your average selling price will be close to 11 pounds and 25 pounds. And to go to my earlier point that causes you issues around profitability because your distribution cost doesn’t change dramatically between you selling 2.5 units per transaction or 1.1, in terms of the actual costs and dispatching is pretty much the same. So as a percentage of your overall costs, you might be sort of 3040 even 50% which kills your margin right before you start.
39:44
That’s kind of one thing to understand the average selling price and that’s driven by basket. So, you know, within that, you know, are there opportunities to try and cross and upsell more, potentially it’s difficult though marketplaces because really, a customer is going to be on Amazon, looking for a mixture of things, and you can’t control where they go and whether they’re going to see your product or not. So maybe, I think for me, it goes more down to how you format your product. So maybe you sell it, as I mentioned, in a format that enables you to be profitable. Or you kind of try and filter your product selection by things where you can, you know, it will be profitable for you, despite what I just said. So that’s where profit analysis comes in. And you need to be pretty on it, I think in terms of understanding the drivers for profit, and how different things make sense. And what I like to do is, I’ve got like a little scenario model, I can just pump in, it’s super simple, like anyone can build this in Excel, but you just pump in the sort of the different factors like average selling price, average cost price, and all over selling price cost points if you wanted product specific. And then you obviously put in you take away the VAT, take away all that kind of other kinds of cost components, commission rates, software costs, FBA costs, you know, fulfillment costs, and customer service costs, relevant returns costs, what’s left, and then that kind of gives you a view on actually, is this viable for me? And do I want to do this? And maybe you can play around with scenarios, right? Well, what if I did it in this way? So I’ve pushed my average selling price up to this, you know, times 2.5, you know, my average selling price goes up by five, but in a bundle of kind of, you know, three products is makes way more sense than it would maybe doing it as one so so those are that’s one thing to think about. Obviously, dispatch costs, distribution costs are kind of essential. So understanding FBA, what’s interesting in FBA is obviously, there are different tiers of product like standard, oversize, standard, oversize loads, all of these things have different cost components, they’re quite stark, obviously, I think there are the light delivery options as well, which a lot cheaper. So if you can try and get your products formatted from a packaging perspective to fit those requirements for volume and for weight, clearly, you can make loads more margin, because if you’ve already gone from, let’s say, what would have been three pounds 30. And all of a sudden, you made it one pound 20. Because your packaging is compliant with the requirements of Amazon. And wait was never an issue. It was just the fact that you had it in this big box. And actually, if you flattened it and put it into this format, all of a sudden actually made sense. Again, that’s a very clever way of reducing a the footprint from a carbon perspective, but also from a cost perspective. So it’s definitely worth looking into, you know, packaging and being clever and understanding the guidelines around Amazon. That’s fine, but also understand what the alternative costs are. So you’ve got Amazon costs FBA certipur. What if you use another third party? What would they cost you to get?
44:27
over 70 in southern border, you were able to count over 7000 fees? So yes, when you calculate all that, I mean, you shouldn’t be understanding what you’re left with.
44:46
Yeah, and I think that’s a lot you can actually use that data to then draw out assumptions and examples based on actual kind of costs and sales data, which is what you know, we use it for I think, is the It’s kind of very useful to kind of understand that as well. So definitely got an existing market. Other things, obviously, you know, trying to find the balance between profit and sales volume. So you can be very profitable with sell nothing, because you’re five times more expensive in your marketing better, or you can be very competitive and make no money. So again, it kind of feeds into that kind of price pricing as an outcome to the profit assessment pieces is kind of really critical returns, depending on your category, like fashion, is like a killer for returns on certain non certain sites, I think the famous one is obviously solando will kind of German German market is more genuine, and I’m sure Amazon Germany will be a higher response rate in this category than others. Because culturally, you know, in that particular market returns are always higher, because the customer is much more used to returning items online, they just, it’s just habitual. Whereas in other markets, it’s an inconvenience, and they don’t think about it as much. So I think understanding returns, the reason that’s important is because the returns cost will be part of profitability assessment. So if you’re, if it looks great, we haven’t factored in returns, but actually, you add in returns, and it’s much higher than you thought it’s gonna be, and there’s a cost associated, then that can really kill a model. Now, you know, if you’re most categories, that non fashion, like averaging one to 2% returns. So it’s not like a huge issue. But there are certain categories when they’re size size variations, or maybe there’s a particular product realities that mean, people are more likely to return that can skew that dramatically. So I definitely think about it through the lens of that, obviously, marketing. So you’ve got to think about your marketing spend, like depending on where your appetite is for that. But I’m thinking that’s gonna have an impact on sales, but equally have a have a drain on profit. So you’ve got to know what your A cos is likely to be often people have to start off unprofitable grow the velocity and over time, reverse that, when you’ve got momentum, which is how a lot of businesses work. And giving yourself enough time to assess things there’s, as I mentioned, you know, if you look at looking at profit through the lens of one month, it’s very difficult to be profitable when you’re just starting out. So I did, I said, take a longer term view on it, like try and obviously going to be affordable for you’re going to have to spend, you know, spend the money. So you’ve got to have some some sort of reserves or some cash flow in place to do this. But no, give yourself six months, as a minimum might say, ideally 12 points to really see how this works, obviously make decisions, change things for that time. But give yourself enough time to really kind of see what works for you. Because I think if you don’t give yourself a time, you can make a knee jerk reactions every you know, when you look at data to regulate, you can look at it day to day rather than week to week or month to month. And you can go well, I had a really bad day yesterday. So I’m gonna change in price. And it might just be nobody bought the product that day, it was a hot day, and I didn’t want to buy that particular product is all out in the sunshine. Like, sometimes people can overthink things. And so looking at it with a bit more time, I think is is gives you much more accuracy in terms of your decision making. And, and obviously, there’s a load of other overhead costs that you might need to consider in setting up new territory, which we’ve kind of touched on earlier around maybe legal entities, VAT, maybe distribution kind of set up another stock segmentation, like these things are worth considering as well. But I’d say they’re more kind of overheads than variable costs, and kind of hopefully more sort of investment, then thin kind of ongoing kind of cost suddenly.
48:46
Cool. Um, let’s get back to rich insights. So you mentioned that you guys help with planning. So what would you consider to be the main key points to planning a successful lunch, I mean, let’s name the top three, for example.
49:02
I think for a successful launch, there’s quite a few factors to consider this in terms of like governance, we need like you need a project plan. And that project plan needs to be realistic. And by realistic, I mean, you need to bake in unexpected events, because as we know, Amazon and other sites often have things are out of our control that we have to deal with. So I think having timeframes with some flexibility, but also with some realistic kind of based on your past experiences, you know, some of the some of that kind of knowledge brought in because it might sound very simple things like setting up an account in the market, what other things can take a little bit of time. And obviously you’ve got to make sure you get all your ducks in a row, you’ve got your paperwork in place. So I think doing it in the right order with a project plan that can help map out or make sense and all the dependence in terms of I need to do this then that needs. Once I’ve done that I can do this. Those that’s really important. So we use them I think Asana for that in terms of cost management and kind of help posts and timelines, loads of Monday, like loads of different software that exists to kind of do similar things, Trello, whatever, but have a system, I would say, to help manage it from a project perspective, because it just gives you accountability. And also, it gives you a view on progress and how things are going to can otherwise slide and then it just becomes quite challenging. So I’d say, get an effective project plan, if you’re already sort of selling on Amazon, that’s probably less, it wouldn’t be a priority, because chances are, you’re already you have a way of working. You know, if you’re doing FBA, only then stocking orders aren’t relevant in terms of integration in that way. And you’ll be probably doing some more manually for product information point of view. So that’s that’s relevant, if you’re doing across multiple sites, then that becomes increasingly like a critical component is like you know, what software you’re using, and how you can manage this at scale. So I think that that, depending on the sites is important. In terms of other things that are kind of critical to having a successful launch, yeah, I would say, listing, the listings got to be really good. Like, if you’re hitting a new market, you know, which is different language for you than your native language. Think about translation properly, though, think about, what I would do is if I’ve got really big catalog, we’ve got 100,000 skews, I’m not going to translate every single one natively, it just is not going to be financially viable for me. If I’ve got 1000, skis, I might not translate all of them in that way. But what I might do is go well, I know my best seller is like these 20% drives 80% of my sales. So what’s the 20% that is driving my revenue. And maybe I do those natively. And that’s my approach to translation, and then the remnants, I will do maybe more of an automated way. So maybe I’ll use some of the more automated options to do that translation initially. And then I’ll optimize them and you know, prove them over time. So that’s a really good place to start. Or if you’re really small catalog, just do the more natively I’d say, you kind of get in what you put out of it with new markets, I think if you’re doing it very
54:18
optimized, then the sales are going to be great. I mean, I can tell you that now. So I think it’s best to spend to try and do it in that, you know, with that in mind, to get really good content, make sure it’s relevant, make sure you know, again, all the assets using ready perhaps if you’re already live, or what assets you’re trying to create. If you’re not live on Amazon, it will be utilized to maximum effect. thing that’s really key. And probably marketing will be the next point. I think just thinking about marketing, which I’ll include promotions and making sure you’re planning for that making sure it’s not a surprise, you’ve got brand content, you’ve thought about that if you’re a brand, if you’re a reseller, that you’ve just got all the information needed to make a really good optimized listing in the first place. And that you’ve got an approach to trying to be the buy box winner in that territory. Yeah. So yeah, I think I think, you know, those are the main ones. I think, obviously, pricing will play a role. And that’s, that’s really important for the reasons I mentioned earlier, that kind of goes into the listing point, like the listing needs to be compelling. And I think pricing is a key factor to that. Yeah, I’d say it that’s, that’s kind of those are sort of the main the main things to consider and, and where you where you might need support, like, look for partners, there’s always people who’ve got the specialisms figured out in certain very niche areas. So like if, for you, the biggest issue around your launch is like not knowing what to do around VAT. Speak to like simply VAT or like one of those partners about that and try and get some advice. Like don’t just leave it for for another day. I mean, it’s very quick and easy to have a quick intro call and I understand these things better. So I’d say use this as an opportunity to, to download from other people and understand things a bit bit more, rather than burying your head in the sand and hoping it goes away. All right, very cool. Um, tell us more about creature sites about the services. You guys offer what you do, you’re based in London, right?
55:20
Yeah, I mean, when it’s not locked down, we’re based in London. Yeah. I mean, I’m speaking from Tunbridge Wells in Canada at the moment. But yeah. We use a Gemini speaking we’re based. We’re an Old Street. But I think we’re all in and around London, I think in the main. So we will be going for seven years, our role is very much to help businesses grow market basis, I guess the best sort of user cases that I think we’re best suited to wanting to expand onto the new sites and maybe not being hugely confident. Maybe you’re selling on Amazon, but you feel like it’s under optimized or there’s things you should be doing to improve and you’re happy to spend a little bit on trying to try and get those things improved. I think that’s that’s sort of sensible. So you know, the weather that’s sort of project based stuff, which we can support with. Most of our work really is on the managed service basis, which is people in kind of permanent resource, helping manage the channel ongoing, which, as I mentioned, includes lists the listing side a lot of the themes to mentioned, as well as potentially, depending on the scope of services, you know, performance management, PPC management, like, you know, there’s a lot that we can support manage. So, um, yeah, I think we’re definitely here to support businesses in that respect. And, yeah, I guess, we work with a mixture of sellers, we do work with quite a lot of leading brands like internationally. But we also work with some really great startups and sort of smaller businesses who are kind of on their journey, and just growing quickly and trying to find the right sort of working relationship to kind of grow. We’ve got some entrepreneurs who work with you got multi million pounds worth of business, on different channels, and are running it from their bedroom. So it really, it really does vary. But um, yeah, I think it really depends on do you need to do you need additional bandwidth? And where you’re kind of challenges really lie in terms of what you’re trying to achieve? And whether you’re capable internally of achieving that. But um, yeah, we can, I think our role really is to add value and to help become like a growth partner for the long term so that we can help businesses with their growth strategies.
57:29
All right, very cool. Um, that was super informative for me. And I think for our audience, as well. Let us know where we can find you. We’ll make sure to put the URL underneath and for those who are listening. Yes. So it’s a rich insight, richinsights.co.uk. So Richard inside code at UK, and you can obviously get in contact Dan, if you’ve got other further questions, or you want a bit more info, appreciate his valuable whistlestop tour of lots of things on this on this course. So um, feel free to, to add, I am getting in contact with any questions, and I’m happy to myself or the team, were happy to sort of help you.
17:14
Oh, nice. Thank you so much for joining us today. And good luck, and I hope you have a great day.
17:23
Thank you so much. Appreciate it. Thanks for your time. Speak soon.
17:32
All right. Thanks so much for watching guys. If you like this content, then don’t forget to press the like button and to subscribe to our channel. And we’ll see you next time. Bye-bye.
