Ep. #891 - Profit Killers for Every Amazon Seller

00:01

Andrew Morgans

What’s up, Hustlers? Welcome back. This is Andrew Morgans, founder of Marknology, here as today’s host of Startup Hustle covering all things e-commerce, Amazon marketplaces, entrepreneurship—you name it, today. We’re going to be talking about profit killers for every Amazon seller. And with me today, I have Jenny Adams Adams from Sellerboard. Jenny, welcome to the show. I’m doing good. Thank you for staying up late. I know it’s a late hour over there. I think you’re in Germany right now. Is that correct?

00:22

Jenny Adams

Thank you for having me, Andrew. How are you doing?

00:32

Jenny Adams

At the moment, I’m in Moldova. Usually, I’m in Germany, but I’m here for another three days.

00:37

Andrew Morgans

Ah, okay, got it. Okay, well, she’s always on the move. Thanks for making this happen. We’ve been trying to get you on for a little bit. Sellerboard has been a tool that Marknology has used for quite a few years and one that’s really helped us to educate our customers. And be able to talk with them about, you know, the financials behind their business and how to get profitable. And you can just only have so much depth of a conversation about profitability, pricing, or things like that, to do without a tool like Sellerboard or something like that. To be able to see the profitability of what’s actually happening in the count. Um, before we just go straight to Sellerboard and talk about profit and numbers and boring stuff, let’s talk a little bit about Jenny if we can.

01:18

Jenny Adams

Spring.

01:19

Andrew Morgans

I start every show just by getting to know a little bit about our guests and kind of like how you found e-commerce because I know you’re not a seller. We talked about that a little bit early. Sellerboard has, you know, ah but policy, yes, that they don’t want sellers working at the company. So we won’t talk about that. But um.

01:29

Jenny Adams

Alright.

01:33

Jenny Adams

Policy.

01:40

Andrew Morgans

You know you’re in e-commerce. You’ve been in e-commerce living, breathing it, working with sellers day in and day out. Um, where does your story begin? I know where you come from. Ah, you speak multiple languages, and you come from all over, but how did you come across e-commerce? Like, let’s start before that. Have you always wanted to be an entrepreneur working for startups? Where did that really come from, or was it something you kind of fell into?

02:03

Jenny Adams

It’s crazy because, basically, I don’t really mention that in shows usually, but it’s the one time mentioning it. But I lived in Egypt. I mentioned it to you prior to our recording. So I lived in Egypt. I graduated from school there. So I speak Arabic very well. Um, I was in an American German school. I studied and graduated, and then I decided that they wanted to study mechanical engineering, so I traveled to Europe. I ended up studying mechanical for a year. Well actually said mechanical engineering for years in Egypt prior to traveling, then I decided to create travel to Europe and started. I studied international colonial relations, the world economy, and political science. I did three majors, um, while being in Europe, I was taking different courses, and I was doing three faculties at the same time in different universities. It was crazy. Um, and I started working at one, so basically working prior to that with my dad in the logistics field. So I know a lot about logistics and how it works. I was working for a company that regulates all the ships that entered the sus can so I know everything about that. Um, and.

03:00

Andrew Morgans

Okay.

03:12

Jenny Adams

So while I was in Europe, I started working for a company that sells airline tickets so I was like 18 and I was telling I was like I started university from 0 again it like the first year of your university I had an opportunity to get to make good money when you’re young when you’re 18 you’re doing a couple of thousand dollars.

03:31

Andrew Morgans

Yeah, and where were you at this time? Were you in Germany? Okay, I like the details. I like the details. Okay, you’re in Moldova.

03:33

Jenny Adams

It’s big money for you. So I started selling online tickets. So basically, what I knew about what I was doing now I was in Moldova is where my grand is. I came to visit her while I was in Moldova. It’s basically between Ukraine and Romania, a small country.

03:47

Andrew Morgans

Okay.

03:48

Jenny Adams

Um, my grandma was here. I did one of the faculties that I did and heard one of them was in Germany, and one of them was in Romania, so what happened is while I was coming, I could do it with the airline. Tickets were remote so what I was doing was building fights in a layer. I can build very hard connection bytes, and I was telling them. Think is that when you are in, um, in a company that sells their airline tickets. This one was huge. It was an awesome international travel network. So what you do is you have a ticket for 500 basically online. It’s everywhere for 1500. You’re selling it for 1300 instead of 1500 like it’s online. You have 700 difference from which you got like 28% commission so selling airline tickets for a year and then I started working late shifts. I wanted to do more traveling. I could do that, but I had to always be on my pc during travels. It was very hard to combine with my universities because I’m like a young I’m like a geek, you know I like studying, I like writing, I like doing projects so like everything. So um, so what I did is my friend and her husband who’s working with me with tickets. She had a husband who had an IT company, and she didn’t work with him because he was annoying. And she was like, we have an account. Yes, um, and there I was. I’m very good. I was very good at sales at that time, and they had an account executive position in one of the leading European outsourcing companies, IT outsourcing, so I worked there for a year and a half.

05:07

Andrew Morgans

She’s married to someone that’s doing it. Yeah, yes, yes.

05:26

Jenny Adams

I was an account executive for a sales team, then we built our own product which was somehow connected to not promoter Score and um, I saw an advertisement ah on some German website that had to do with it like. Part project development or partnerships and affiliate marketing, I didn’t get what that was about. But then the advertisement looked very appealing, so they had all. Yeah, they had all of them. They had.

05:54

Andrew Morgans

Um, okay.

05:58

Jenny Adams

The responsibilities of the job. It was like you had to get in touch with partners. You have to be good at marketing. You have to be good at sales. It was basically everything I like to do, and the work was an opportunity to work on the goal. Basically, you have to be in the country, but you can travel in, and everyone and I applied. And it was a Sellerboard, and basically, I’ve been with them for almost three years. I started doing partnerships and negotiations and affiliate marketing with time. Um, the founders of the company. It’s Michael and Laji. They got tired of recording all the podcasts and videos and them and them and webinars and demos. And they had me try one. It went very well, and we got very good registrations from that one to southernwood, and then they decided that girls do it better than guys sometimes, and then I took over, and I’ve been doing everything from feature descriptions to content writing to negotiations.

06:48

Andrew Morgans

Um, yes, ma’am.

06:56

Jenny Adams

Demos all the calls. Basically, that Sellerboard takes them. Um, all the partnerships I take them I do demos, I do webinars I’ve never sold anything on Amazon to but do the conflict of interest with their users. Um. But theoretically, I know a lot because I’m content in constant touch with Amazon sellers with people who have agencies with people like you have podcasts, and it’s a lot of, um, theoretical experience exchange. Let’s say I never thought I’d be here.

07:24

Andrew Morgans

I think one thing that’s unique to Amazon, at least to Amazon or Marknology, right? That’s what I like thinking about, just like your decisions early in school and university and politics and mechanical engineering. I lived with a roommate that was a mechanical engineer. So.

07:44

Jenny Adams

Like I’ve never.

07:49

Andrew Morgans

Just a different kind of brain than people that sell. It’s almost completely separate. Do you know? So um, but that’s how I found e-commerce as well, like I had a, you know, a bachelor’s of science. And I loved the marketing. I loved the selling. I Loved the emotional connection with people, whether it’s through podcasts like this, whether it’s through selling online like you know the photos, and it was like a game for me, the nerd stuff, I guess like you call it. It was like figuring it out, and that’s what lays us even to this conversation about profit.

08:08

Jenny Adams

Yeah.

08:15

Andrew Morgans

I wasn’t a seller at the beginning. I’ve been in this space 11 years, um, almost entirely. I’m a seller now. But at the beginning, it was almost all service-based, like I was doing services for others, helping them with their problems. Um, and profit was one that kept coming up. So. Um, you know there’s been other competitors in the space before the Sellerboard. Um, fetch is managed by stats. I love those guys over there. They’re great guys. Um, you know there’s just been if you’ve been to space 11 years, you’ve seen stuff come and go.

08:40

Jenny Adams

Yeah.

08:48

Andrew Morgans

And Sellerboard was one that we found where I’m always trying to imagine coming into Amazon before people really understand what’s going on. Okay, it was a hard conversation. There weren’t blogs to point to. There weren’t Youtube channels to point to there weren’t. There weren’t people putting out podcasts like this every day about Amazon and how to sell on Amazon. It was like the wild west was the beginning. It was so much fun. But at the same time, it was like, ah, I called a different demand generation versus demand capture. Okay, so demand generation is where you’re like telling people about your thing.

09:18

Jenny Adams

All right.

09:23

Andrew Morgans

Tell them. It’s cool. You gotta tell them to try it. They don’t know about it. You’re like introducing them to it. Demand capture is what people already know, and you’re saying, hey, we’re the best software to do this out, and I know you’re looking for profitability software. We’re the best one, and come choose us. So it’s a different combo when you’re like educating and kind of convincing people about Amazon. And it always came down to, like you know, profitability and trying to have that conversation with sellers or potential sellers to be on Amazon. I don’t know if I can make money with all the fees. Well, I don’t know if I can. Um, you know Amazon just takes a lot. We’re not being profitable on Amazon. Well. As a service provider, I’ve been seeing your sales grow by fifty Thousand a month. What are we talking about? Well, I need to know the numbers if we’re going to have this conversation and seller board. You know, just to make the plug, um, seller board was one of the best we found for ease of use. Um, and maybe that’s been because it’s designed for. All different kinds of nationalities, or maybe I don’t know if they’re German or not, are the founders of german. Okay, this is why it’s amazing, probably because Germans just make everything great. You know, in my opinion, we might not get along because I’m so emotional, like you know I’m very emotional, but I want to buy all your things.

10:22

Jenny Adams

German. Yes, Germans do amazing stuff. The quality is always good. The beer is also good.

10:37

Andrew Morgans

Ah, and use them because they work so great, and it’s like you know it was a difference in a lot of times. It’s the difference in keeping sellers or brands in the game making money or not, um, and I think any if as someone else that’s sold from bartending I’ve sold as a bartender while I was on tour and. Selling shows you’re selling CDs at the end. It’s so much easier to sell something that you believe in that solves a problem. Um, that works, or that has great value. That’s how I feel about seller boards. So it’s been something. We’ve been selling as an agency for a long time.

11:15

Jenny Adams

Thank you! There are a lot of great tools out there I never used. But of course, since I’m working in this field, I go to the website and check the memo that accounts I speak to other people who sell, and you always mention some other stuff.

11:18

Andrew Morgans

Of course.

11:26

Jenny Adams

There are a lot of amazing tools for different features which are specifically for something else. But forum, what’s true is true. So the Sellerboard is the most accurate tool in the market right now. It’s been three years since they joined. They were already the most accurate, and they do have amazing features. So there might be other features that are known for something else. Other tools might be better, like a keyboard track or something else. But what they bought was the seller but the developer team. They did an amazing job, yeah.

11:55

Andrew Morgans

I agree, and it was something that helped us bridge the gap with brands because brands come to Marknology manufacturers come to Marknology. They’re saying, hey, we want to be on e-commerce, or we want to be on Amazon. We want to do it, right? Help us get control of our account or help us launch, and they’re counting on us to hold their hand. And educate them about how to sell on Amazon correctly. So you know, in some cases. Maybe they’ve only been doing B2B selling for 100 years as a company in some cases. Um, and they’re trying to step into 2022 and beyond and be relevant, be current and switch this business model to selling a different way. Ah, a huge part of that is communicating about the same things but being able to speak the same language we call I call that text um, but having the same like the same lingo about what we’re talking about, and I feel like Sellerboard for us as a team, and that’s you know that’s what I can speak to for us as a team running multiple accounts.

12:51

Andrew Morgans

Knowing everyone’s figures, being able to speak with them and give them actual actionable advice on what to improve or areas like the title of this conversation is profit killers for Amazon sellers like you know, being able to look and say hey. Overall, like our cost is good, or our tacos are good, or our profitability is good, but there are three skews right here that are killing us, you know, in fees or in returns or something like that that we would never see if you’re just looking at the overall so its ability to get low.

13:22

Andrew Morgans

Um, let me ask you a direct question, and before I do, shout out to our sponsor FullScale.io for making this show possible. FullScale.io is helping people build software teams quickly and affordably. If you’re looking to add to your software team, check out FullScale.io. Um Jenny, what are some of the things like you know you talk, you’re talking to all of them. Partners and customers and demos. What are a lot of the things you’re hearing from sellers? Um, that is killing their profits right now.

13:51

Jenny Adams

I’m gonna talk about hidden profit killers. What I hear the most is they don’t always understand how much money they’re making because I’ve never seen an Amazon Seller Central account but what I’ve heard is. Um, a lot of numbers are shown in the preview, and there is like a preview text between brackets, and they use all kinds of software to pull out their data for some different reasons, but they don’t always know exactly how much they’re doing because sometimes. Um, even software like ours. We refresh them in 15 minutes. For example, sometimes they need the data because they have their partners because they have investors for different reasons. They don’t know the exact numbers on time. So this is the part where returns are the biggest profit killer. Always and it’s not only this so there I’ve gathered topic of why they’re hidden profit killers and how they affected but your business. So the first one is, of course, when you have your inventory misplaced, and they are a warehouse or when you have lost inventory.

14:59

Andrew Morgans

Yes.

15:01

Jenny Adams

Which is normally found within twenty-five days or if the inventory was reimbursed if then if you were not reimbursed for the lost inventory. Or for example, if this doesn’t sometimes happen dramatically or if, for example, a customer bought an item initiated a return but never actually. And returning the item back to Amazon’s warehouse, so sometimes Amazon might not reimburse you for these items. Automatically um, which is why we have a money-back feature that can get you a report and help you get reimbursed for all these items, but this is not the point of it. The point is that even if customers. Um. Send items back to the warehouse sometimes, and they might arrive in a non-sellable condition. So sellable conditions are the worst part. Um, so it happens, it basically is, and even if they return the item, you’re still going in mind because what happens is.

15:48

Andrew Morgans

Um, yeah.

15:59

Jenny Adams

Like a step-by-step process, a customer initiates return Amazon fans at the full price Amazon charges the seller when the product arrives in their view warehouse. The product is usually qualified as sellable or unsellable, and then this stock is updated. The thing is that this is there. Um, the normal strategic scenario. Let’s go to the worst-case scenario. Let’s say again. Customer initiates return Amazon refunds the full price and charges the seller. What might happen is the customer doesn’t send the product to Amazon, and Amazon waits for forty-five days.

16:22

Andrew Morgans

Okay.

16:36

Jenny Adams

Um, charges the customer and then reimburses the seller. So this reverse reversal reimbursement is actually a huge profit killer because what happens is that? Um, even though the item is returned. But even though you’re basically reimbursed for the item. There is a fee for shipping a part of the fee. That’s not actually returned to you, but then it’s like it may be less than a dollar or $2 but still, what happens when Amazon reimburses you back. For the item that did not sell that was not sent, what you’ll see is you’ll see an amount in preview in brackets. This is one of the previous ones that they usually show in your Seller Central account, but this is not actually the real number that you will be reimbursed, but you’ll be reimbursed much less. Because there is a percentage for the charge that thumb is in charge for the way that you’ll not green breast for usually larger than a dollar but still, in the end, you’re going in minus and if you get a lot of returns like this still twenty bucks is still a number let’s say for 20 units. Um, so this is one of them.

17:35

Andrew Morgans

It adds up.

17:46

Jenny Adams

And it’s crazy because sometimes I, um, there are a lot of these features that help you get reimbursed for Amazon, and they charge like Twenty-Twenty five percent commission. We don’t charge anything for it, but still, a lot of customers that are using Sellerboard still forget to check how much Amazon owes them. Usually, um, my advice is to go into the future once in two weeks and see because it’s an automated report that you’re downloading. Um, and I’ve had its, which what’s funny is I had a guy um present on one of my live events, and I was talking of mode money back and stuff. And he was, and while we were, it was like a 2-hour event, he checked how much Amazon owes him, and it was over $2000, and then he just wrote in the live chat hey guys, I just checked right now while you’re talking and Amazon owes me over 2K. I’m like, you’re pink for Sellerboard already. You just visit the feature more often. So there’s such stuff that, um, a lot of errors that you might be charged for you might not know and then if you’re not just and try to get your back within the time. Still, you’re losing.

18:43

Andrew Morgans

Um, yeah.

18:55

Jenny Adams

It’s pure profit then, even if you’re reselling, um, returned items that are in sellable condition. So this is one of them. Yes, I recommend it.

19:02

Andrew Morgans

Right? It’s money that Amazon’s holding that’s yours, you know, interest-free. So um, I want to speak to that just a little bit on the agency side, like speaking about the return problem and it being a huge profit killer, I think that. Really the way that we use money, you know the money-back portion or even like the Sellerboard in general is it’s a data dashboard to tell us you know it’s almost like you’re plugging a machine up to your car to tell you what’s wrong with the NJ or it’s a doctor doing an x-ray or an MRI um, you know for us, it tells us that there’s a return problem.

19:31

Jenny Adams

Um.

19:35

Andrew Morgans

So the best way to handle all of what you just said is to have fewer returns in general. Okay, so you know you can have like if you’re having 2000 in returns like let’s say you get your money back you’re back at 0 and then frequently you’re getting large chunks of differences like that.

19:47

Jenny Adams

Yes.

19:54

Andrew Morgans

There’s something wrong, right? So it’s not. It’s not like, you know, if you go back two years. Maybe you find that, but let’s say you clean it up, and then going forward in the next three months, you have another 2000 that Amazon owes you. You have a bigger problem than just collecting that money. Maybe your content is wrong. Maybe you’re like, you know. Ah, one time we were overselling a product meaning all of our content was like sell, sell, sell, sell, tell about all the values. All the amazing things, and we had a very high return rate, honestly close to 26% I think on this particular item, and the item was amazing. It is a premium item. It’s like, you know, it’s very nice. But I feel like what was happening was a combination of Amazon being easy to return, so people buying this product and it was like one that you use while you’re injured think of it like a boot or something right? and so I think people would kind of use it for a bit and then give it back. Um.

20:38

Jenny Adams

All right.

20:43

Andrew Morgans

And then also they didn’t know what they were getting. They’re used to getting basic crutches here in the US, and instead, they were getting a very nice item. Um, and so instead, we switched the content to educational, like making sure they know exactly what they’re buying and what they’re going to get and expectations, and we saw the return rate drop significantly, right? Another thing you can do is. If you keep seeing the same skews getting held up in check-in or, like you know, items going missing, so many manufacturers or brands we work with have their way of doing things, and when we’re telling them, kind of how Amazon you know expects these items to arrive. They’re always trying to cut corners. You know, like. Ah, whether the label is not right or they’re trying to use a UPC instead of the skew or these different things that essentially can hold stuff up in inventory when you really just use like we use Sellerboard to essentially say we have a problem here. Let’s go talk to our warehouse because if things get checked in correctly, or we’re not getting as many returns, that solves the bigger problem. As you know, Amazon is taking from those sales, so, while yes, on the backside, you can get money back. There’s also a lot that the program can do to tell you what you should be focusing on on the front side, and um, you know, if you’re looking at your overall return rate and it’s like 4% or something, you’re like oh my god okay I’m below the average of 5% returns. That’s amazing. I’m doing good, but maybe you have one item that’s almost all of that 4%, and you could work on that item to get it better. Um, you just can’t tell without knowing the tools like Sellerboard. I think that gives you that visibility. Did that make sense?

22:08

Jenny Adams

Exactly.

22:12

Jenny Adams

It does. You can also check the return reasons, and just if you have the same reason all over and over again, then obviously something is wrong with your product. But, um, I don’t think that.

22:22

Andrew Morgans

It seems to be getting a little better there because it used to be, um, I feel like customers would just choose like maybe 1 or 3 from like a dropdown like three and it was like item one is described or like you know item didn’t arrive or something like that and the reasons just didn’t feel like they were actually telling us why. Um, but I feel like I think recently Amazon’s allowed the ability to add a couple of comments, and then ah.

22:47

Jenny Adams

They do commands now because, in seller mode, you can view them when you just click on the returns number. It’s like, let’s say for’s, for example, it’s usually in blue, and then all the reasons will pop out in a popup.

22:55

Andrew Morgans

I’m not in the weeds all the time myself anymore as far as operating, but I get in there because we have several partnerships where I own equity and business in brands. We’re building brands with people and partnering in that way, and we use Sellerboard to essentially tell us what those are. Are those shares as partners, right? And so I’m getting into the seller board a bit myself, even as the owner, and saying, okay, we took over this brand. It’s been three months since we’ve been working on it, like you know what kind of changes are happening. It really helps you tell what’s going on you know inside your account. It’s a beautiful interface.

23:15

Jenny Adams

Yeah.

23:29

Jenny Adams

You know you don’t really need a lot of reports or a lot of tools to understand how much you’re making well, from my experience talking with sellers. I think it’s so much simpler. I might be wrong. But I think you just need to understand that you just need, like, let’s say, a profit and loss report or a sheet where you understand how much money you’re making per unit hold. Um, you need to have a cash flow report understand how much money you have um, not whether you have enough cash to you at your business and um, you know the balances should to understand what’s your stock level and when you need to reorder I think having those three don’t need really much having those 3 Basically help you at least if you’re a beginner start and Beyond the go and run your business straight away there I and I correct me I’m wrong. But I don’t think that we meet like that too much.

24:15

Andrew Morgans

No, that’s that most people don’t even have those three, so you know they don’t when you ask them what’s their customer lifetime value. What’s your average order value, or what’s your average return rate, or do you know how much are you making a month in profit? Most of them do not know before we plug them up with a tool. Like Sellerboard, because what it’s doing essentially is bridging the gap, I think between these firms and companies or brands that have accountants or bookkeeping people that do traditional accounting, and they’re trying to do e-commerce accounting. They’re not there yet, you know, it’s basically money and money out, and Sellerboard allows you to see what’s inside of that.

24:46

Jenny Adams

It’s very different.

24:53

Jenny Adams

It is because usually, um, how accountants do it well, they do things late and abstract most of the time. Um, or sometimes they calculate differently like units per profit per unit which is very wrong because there are all those fees and then that you calculate. Um, Seller Central reports in excel are very time-consuming, and of course, tools are much easier because it updates every 15 minutes, let’s say ours, and then you can understand how much money you have at the moment. Well, first of all, you should understand that you should be thinking about all the costs that you have per union.

25:29

Andrew Morgans

Yes.

25:34

Jenny Adams

Um, you will have a Seller Central like this to manage inventory estimation, right? So I even have it in front of me like a picture. The fee is always the fee is not always Precise. It’s an estimation, and real fees are in transaction Reports. Or, for example, in sellerford and opening a hundred windows at the time was still. It’s very time-consuming, and um, this is why most of the sellers think, oh, I have this estimation. It’s very wrong. It’s not there. It’s on the amount. It’s and then but at the end of the day. It’s much, much, much lower because you still have the storage fees. Um, you have the long-term storage fees, and they’re very different because long-term runs are the best there. They usually take ages which are usually higher than one. The storage fees are around 20% of the not-profit, if I’m not mistaken right.

26:24

Andrew Morgans

It can be it depends on what you know, how much your product is making per sale, or you know some people are selling watches, and the FBA fee is small because it’s a small item and it’s not that heavy and so the FBA fee is a small percentage.

26:37

Jenny Adams

Yeah, size is reduced.

24:44

Andrew Morgans

It is relative that you know what you’re selling. But um, yes, you’re right? And honestly, as someone that’s been doing this a very long time and come across all these problems and lost clients because of these fees or got hit with long-term storage fees or you pulled it all out, and you couldn’t send inventory back in you kind of learned these things the hard way. Um. You know, and seeing things change, a lot of it has been. I can’t tell your FBA fee till we ship the item, and then we need to benchmark it and make sure it doesn’t change. You know, but that item needs to be shipped by Amazon before you have an accurate fee. Um, and it was working through these things like, let’s say, long-term storage fees. Um. I’ve launched my own warehouse, and you know I highly recommend to brands working with us that they have FBM and FBA. Why? Well, it allows us to use a tool like the inventory and see which items are hurting us in long-term storage fees or even before we get there running a lean. Um, lean management when it comes to supply chain where you know we are only keeping 30 to forty-five days we have items in FBM that are essential if the items are slow-moving or let’s say we’re selling like a 40 pack or a 50 pack of something or we want to be essentially we backfill FBA. So if. There are 30 items in stock, and they have run out. FBM kicks in while we’re sending inventory in because it just really pays overtime to be very on top of that inventory. So that you’re not storing too much, and it’s things like the tool telling you that that you then create the solution which is.

28:13

Jenny Adams

Yeah.

28:14

Andrew Morgans

Need FBA. I need FBM. I need lean inventory and things like that. Okay, the way you’ve done things before is not working. We need to send in smaller shipments more often or something like that, right? It keeps changing across the board. Um, so these are things that like it’s really your health check. It’s super important the profitability part. Um.

28:22

Jenny Adams

Yes.

28:32

Andrew Morgans

Because you have to be profitable to stay in business, right? So and I think that’s another reason why this was something that was very hard for me to learn, um, coming into e-commerce as someone that just is a bootstrap guy like with you know, running a budget and a checkbook I used to be in a band living in a van on the road on tour like you run really lean. You know and um.

28:49

Jenny Adams

Yeah.

28:55

Andrew Morgans

Just to be able to survive well, when I never started helping sellers, I only thought of it from this perspective, like, okay, we have to be profitable. We have to make money like I need to understand this, and then I worked with Adidas, and I worked with some big companies where it was about spending the marketing dollars hitting topline sales. You know, different goals and strategies than just having a profitable business, but what I will say is that the aggregators that are in this space, right? There’s like there’s I think 70 plus right eighty plus like twenty-something billion got dropped into our space in the last couple of years.

29:21

Jenny Adams

A lot of them right now.

29:27

Andrew Morgans

I love it because it just brings a level of competition and excitement, I think to the space, but also, um, they are here because when the pandemic happened, and there was nowhere to invest their money, they looked to Amazon businesses. They looked at brands people are selling on Amazon, and they saw profitable businesses, which is something that the economy needs whenever you’re going through a slump, whenever you’re going through an economic depression, and things like that. So. That’s why our space started getting this attention because of sellers understanding this and having profitable businesses, which is just really rare in the startup world.

29:50

Jenny Adams

Um, nice.

30:03

Andrew Morgans

Ah, usually it takes several years to get profitable, and Amazon sellers can come out the gate if they know what they’re doing, you know, with profitable products, and it’s like, um, the very reason why we have the tools is I guess my point is like the reason the aggregators are to this space is that people are thinking and caring about these little things like.

30:19

Jenny Adams

Um, and has.

30:21

Andrew Morgans

Like FBM and FBA and long-term storage fees and return rates and essentially creating profitable businesses, I get excited about it. Um, just because I think what we’re doing is special in the e-commerce space.

30:32

Jenny Adams

It is um I was because you know I’m using in touch with different people in this fear I was um, a few months ago I’ve been well I’ve been in constant touch with one of the aggregator firms. Um. There are guys who invest their None guys. I’m not mentioning names, but they invested billions of dollars in the business. They were doing something they were somehow connected to companies like Google but on different market ones not in the US. Um, so they had these bills to invest, and they opened an aggregator firm. So basically, they bring out businesses, and it’s funny because they were new in this sphere and around a year and a half, two years ago, and when we had the calls with them, then we had calls with them recently. And it was so funny because I’ve been in this for a long time and they were like they had all this money to spend, but they didn’t even understand how the whole business is going now they understand more, but still, it was very funny because the market did get a lot of attention the pandemic you’re right, and people started. Running investing a lot without understanding how it’s going, so you do need those, but um, you mentioned a great example with the watch because watches will basically, um, optimize storage fees because of their reduced size. The pack is usually smaller. When you’re selling small stuff is one thing but imagine you’re selling big stuff. They are heavy because they’re taking a lot of packaging needs. So this is a bit harder for sellers like this because they don’t really understand them because, um, we had Herberg found over 70 hidden.

32:14

Andrew Morgans

Wow.

32:15

Jenny Adams

Amazon fees so that we get all into account so there is if they have been bound and as an example of been bound transportation fee and there is an f been bounded convenience fee and then it’s an unbound defect fee and transportation program fee and transportation fees. So. They sound all the same, but they’re actually or all different. There is a cloud coupon redemption fee. Um, and customer return per unit fee is the one I was talking about earlier, and there are around 60 over 60 of them where we found over 70, so there are all and so over 70 fee types. That you’re constantly being charged for that. You don’t know because they’re not shown in this other center. There are the numbers shown only in the preview, and you have disposal fees, labeling fees, bubbler wrap free, and fixed closing fee, taping fee. Um there. There’s also compensated clawback, so this is all that ends this. The number of fees that you’re being charged for that you don’t know about and as well as lensing costs can change whether it’s my period by batch or by the marketplace and you always need to understand your cost of goods. How much you’re managing them, and I think this is the part which most sellers are. Constantly complaining about all these fees, and they are profit killers because you think that, oh, by the end of the month, I will have this menu on cash on hand, cash in hand, but it’s never the same number. This is the part because even when you’re tracking the changes.

33:29

Andrew Morgans

Um, yeah.

33:46

Jenny Adams

In your cost of goods if you track it way, period. It’s never a hundred percent precise, but it’s fast. An easy way to do this, and then first out it’s a hundred percent precise, but it’s very complicated too on to calculate and when you’re waiting for the average. It’s like It’s a tough way there and halfway here. But it’s kind of almost perfect, so you should understand that you should always mention the cost of goods that you have and how much money you’re spending. Whether it’s a fada, should you learn anything else because still, you’re spending the money, and it’s in the clear past to hand?

34:21

Andrew Morgans

Right? I don’t think enough people do that on the Sellerboard feature to be able to add those additional fees that aren’t like, you know, coming from Amazon like photography or whatever a lot of our brands at our agency fee in there so that they’re getting the real picture.

34:33

Jenny Adams

Um, yeah. And yeah, exactly.

34:37

Andrew Morgans

I think that’s what you’re referring to, right? Like additional fees. Okay.

34:42

Jenny Adams

and like I mentioned with the returns, I mean you’d have, as I said, it’s less than a dollar. Well, if you’re, if you’re selling. For example, for an item that costs eighteen point ninety dollars, you have a referral fee and Fb fee cost of goods. You have. That you have so the profit from the eighteen ninety dollars will be around none 8 $ 7 and out of the $7 when the item is returned. Let’s say, as an example, you’re spending one refund fee. You’re still spending. Let’s say it’s a dollar 22 returns $20. Still, it’s the money that you can buy something for.

35:15

Andrew Morgans

Right? And I think I’m sorry I was just gonna say I think that that’s why you know so many people just focus on advertising spend. But there’s really so much operationally that you can improve that. That’s really where the margin is lost or won. In my opinion, it’s your box size. It’s your cost of goods. Are you buying from China buying, from Latin America? Where are you sourcing from? Can you get it cheaper? Can you bundle them? Can you handle it? Can you get them inbound to Amazon correctly with the tape and the labeling and the box label so that they’re not getting these additional fees?

35:54

Jenny Adams

Um, exactly, I always change the change of your month. It’s crazy how validating it is. So yeah, so what? I’d suggest, in my personal opinion, I think returns are like the biggest heal and private Killer, and it would be. It’s much easier to minimize return costs and do some changes like, of course, you kind of usually what everyone else will say is that well, I’ll optimize text and images and products and packaging, and that’s it still. You need to understand return reasons apart from optimizing these points. Um. And of course, you can get this. You can understand the return reasons by going to Seller Central. Then I think you go to reports aba customer concessions customer returns and then there is ah after this whole long way. There is ah there is the last column um to ah to ask. The task for reasons to return or ask for customers to leave you um feedback well instead you can use just like not a responder feature that we have, and there are many of them which will automatically send request review emails from Amazon or you can use your own template in this customer. Leave your review or give some feedback as to why they’re returning the product. Of course, it’s in an era that we are now. I think 2022 is crazy. We have all these cell phones with three cameras. It’s funny, you know, or um or you know I like the Wakita and do it on the Apple watch.

37:11

Andrew Morgans

Um, okay yeah.

37:12

Jenny Adams

This is the fun part. It reminds me, kind of like my child. You know, but still, um, we have all these technologists that are making things so much. So so and much easier because back in 2016, as far as they know, I might be mistaken that there were no. So accurate tools out there are firms and sellers, right? So I understand why then customer client sellers had a lot of issues understanding what they were doing. It would be funny. It is kind of funny that some people still do not understand how much money they’re making. Cash on hand and cash by the end of the day, they do not understand that they should manage the returns and optimize their fraud listings. Um, understand the reimbursements calculate the reimbursements that families know about them um and everything else because I think everyone is running after getting more units sold like with all the PPC campaigns at the moment, right and therefore forgetting to keep track of everything else.

38:12

Andrew Morgans

Yep. I think that’s where some of the aggregators are failing. Operationally it takes great tools and experience and a great team. A lot of knowledge to really run an e-commerce business like the operations from supply chain to. Product design product development choosing the right items in the right size, thinking about that intentionally, I’m not just building a box; I’m building a box. I understand what the tier sizes are at Amazon, so I can be under. You know if I can be a smaller size tier. Why wouldn’t I do that when I’m developing my products? Um, you know, just digging into those things as an agency as a service provider. You know, trying to boost my way into a business in the early years, I was losing. I would lose. I can’t control customers’ understanding of their cash flow. I can’t control customers choosing to have quality products versus cheap ones. You know, bad products I couldn’t control. Um. If they understood their fees or if they were packaging them right because they were using their supply chain. All of these things that essentially made me lose or lose a client are how I felt like I’m a competitive person. They’re hiring me to run this business and grow it, and there are certain things outside of my control that we weren’t able to do, and these were where a lot of our learning came from. Okay, I lost this client because it looked like sales were going. We’re doing one but this or that or but this or that whether it was as a product and so for us it became well I’m only trying to work with brands that have great quality products.

39:35

Jenny Adams

Exactly.

39:40

Andrew Morgans

And so it became like, you know, that’s a filter. I don’t want to work with these cheap knockoff products because then we’re going to have major return problems and then like I’m not going to be in business with them. You know, very long because then you have to deal with all these problems you get to choose what you want um or people choosing like for me the conversations now are like talk to me about your supply chain. Trying to work with me, I want to know everything about their supply chain. Even though we’re talking about marketing and selling on Amazon, right? It’s really the supply chain I want to talk about because you know how many times I’ve lost because we’ve oversold products, and they can’t get products back in.

40:06

Jenny Adams

And they know nothing about it. True.

40:16

Andrew Morgans

Or they have an incompetent warehouse that constantly has us having issues with Amazon. These are all things that are maybe not so sexy like when it comes to Amazon, you know if you’re marketing what you do content or PPC, but these are things that are super, super, super important.

40:30

Jenny Adams

It’s funny I’ve been, um, with one of the cyborg’s partners a few days ago on a call, and he’s complaining about stuff, and he’s complaining, complaining, complaining, complaining, and at one point understand that he doesn’t track his in-bond shipments. So the number that was sent such errors in inbound shipment. So he’s saying, well, I’m not making this, and it’s always enough, and I think I ordered a lot, and I’m shaking the velocity of the sales and how selling it should have been enough, but I order it, and he goes complaining. Um. Like one to 14 minutes and then understand that he had inbounded quantity deviation. I believe that’s what it’s called, right? So some people don’t even track the mound that should be checked in Amazon’s warehouse of unions of the brothers that people are ordering. It is, and I think that.

41:17

Andrew Morgans

Missing, just missing items.

41:21

Jenny Adams

This or for me and that was like a sign you should. You should try this because I thought everyone tracks them but obviously not, and I think that also should be considered as a hidden profit killer because these are still. It’s your money at the end of the day, and you can save up as well as you can, at least if you don’t really care about them much. Well, of course, if you’re selling 100 to 3000 units a month. It’s money for you if you’re selling. I don’t know any units. Well, you’ll say, oh, I don’t care, I’m selling anyway. But even if you collect, let’s say, all this money from the reimbursements that Amazon owes you from there. Errors in inbound shipments and such and make sure that, um, you’re getting fewer returns and you collect all this money in a jar. You’ll have enough for Disneyland a few times a year for your kids and family. If you have, yes, you look? Yeah, I mean either.

42:11

Andrew Morgans

Yeah, send us, send us, please. We’ll tell you, and we’ll split it with you, and we’ll go to Disneyland as. I mean, I’m not too old for Disneyland.

42:21

Jenny Adams

Um, planning the one in France very soon. Hopefully, um, before summer ends. Um, so yes, I think those are the main ones, and I think that if people focus more on and the av fee changes whether their products are being remeasured and they’re automatically sent and the wrong graph for sales. Our customer returns that were initiated and never sent back or changing categories or lost in damage stock in Amazon warehouse if you got reimbursed for these. You’ll obviously have some reimbursement, some reimbursements that you can put aside, and so it’s pure profit at the end of the day. And it’s your money, and I think it’s worth every penny asking for because it’s your investment. Um, so yes, so I think that ah, what sellers can do is track their profitability and think about all costs because, as mentioned, they’re over 70 fees. Being charged for you. I don’t know about it, and if you’re spending on photo shooting for some advice, whatever it is. You should always insert it into the cost of goods because you understand at the end of the day how much money the product or even marketing it turned out for you. And keep returns under control and follow all of the errors.

43:35

Andrew Morgans

I love it. I have one more thing for you, but before we go to the final part of the podcast, a shout out again to our sponsor FullScale.io, for helping you build software teams quickly and affordably. Okay, Jenny, um, yeah, thanks to FullScale.io um, okay, my last thing for you.

43:47

Jenny Adams

Yes, thanks to FullScale.io.

43:48

Andrew Morgans

Um, thinking about like it’s pure profit, thinking about you know, investing in content things like that one thing I think about and a reason that we push Sellerboard as an agency or a profitability tool is um, Marknology is so much more than a marketing agency. Okay, so what.

44:03

Jenny Adams

Is.

44:12

Andrew Morgans

Ah, Marknology is really just an Amazon seller with an amazing team that can run everything themselves but rarely can ah 36. We have 36. Thank you, um, we’re growing, and you know we’re a full-service team with honestly between my sisters, we have 60000 hours on Amazon and me.

44:18

Jenny Adams

Ah, how many people do you have on the team at the moment? All right. It’s huge, I mean.

44:34

Andrew Morgans

Um, so we’ve spent a lot of time understanding how this works and what I was going to try to say is that whenever we get hired, I’m always trying to have the conversation people see our retainer, or they’re like, okay how much are you going to do for me in sales. Okay, or if let’s say it’s profit sharing and we’re getting a percentage of growth or something. Um, okay, how much do you think you’re going to grow? Okay, I’m already going to release these new skews. I know that that will mean new sales. Why are you gonna get credit for that they were gonna launch anyway? Everyone has this scarcity mindset thing, and for me, it’s hard to communicate it. Ah, pre. Working together right, but like once we’re working together, I think it comes in full light. But for us, there’s so much we do that isn’t, um, just about topline sales that is essentially healthy for the business, right? So if an example would be. We just started two months ago with a brand out of London. And we’re selling on http://amazon.com. They’ve already been selling, but we came in sales grew by like I think in the last month like the first full thirty-day cycle sales were like there’s a $600 difference and we’re doing like twenty Thousand a month just for perspective.

45:42

Jenny Adams

Alright.

45:45

Andrew Morgans

Um, so not a huge difference if we were just looking at sales. They’d be like, okay, that was a good month, like let’s keep going, right? We’re not like growing, but it’s like we didn’t drop either in the transition. That’s a good thing, but when we looked at the profit, we saw almost an increase in profit. Such sales. Now being managed by us whether that’s PPC, whether that’s returns, whether that’s different things we’re working on, right? We’re just getting started, but immediately we saw an improvement and profit that we took home that the seller took home, and my point of saying all of that is, um. There’s so much more to selling on Amazon or e-commerce than just topline sales and marketing and buying content and doing PPC you can. It can be unsexy, but you can be doing the same thing and taking home so much more money if you’re paying attention to the things that matter.

46:32

Jenny Adams

Exactly to all the details.

46:36

Andrew Morgans

Yeah, and it’s real tools like Sellerboard that allow us to tell that story to brands. Um, and say, hey, it’s this operational efficiency and its operational improvements. Really Amazon is a scoring algorithm. It’s scoring all of these things. It’s not just looking at your top-line sales. It’s looking at your return rate. It’s looking at your inventory.

46:54

Jenny Adams

I never checked when I started working for Sellerboard three years ago. There were over 6000000 sellers in the world. It’s funny that I don’t know the number that’s at the moment I think it’s like 8

47:12

Andrew Morgans

Do you think it’s gone up or down? Okay, I know the world. Yes.

47:15

Jenny Adams

I think it’s going up. I’m sure it’s going up, but it was 6 when I started. I don’t know. It’s funny that they never Google the number that’s now, but I should have it just got on the top of my mind. So yeah, well, I’m saying here sit that was over 6000000

47:24

Andrew Morgans

Well, for me, it’s like a service provider that’s not software and a saas like we. I can only handle you knowing my agency. My team can only handle so many brands. We have to be selective and choose the right ones we want to grow and build with software that can do much more than that, and I think that’s why a lot of. You know great Amazon sellers go into software. It’s because they can sell it unlimitedly, and they don’t have to deal with humans, which is the hard part of growing any business. Um, but one seller if there are 200 plus agencies like mine or you know even if you add one software. We’re at none if all of them have.

47:42

Jenny Adams

They do.

47:56

Jenny Adams

Conduct from.

47:59

Andrew Morgans

You know a couple of hundred clients even, which is a large number. There are still millions of dollars exactly.

48:02

Jenny Adams

There is space for everyone. I think it’s always gonna be this way because it’s crazy and now even the gators kind of came In. Um, but yeah, it’s a big world in terms of all these speakers. All the people who are in then all the guys who just mean you recording podcasts are doing. Something similar. It’s a tiny world for us. But for everyone else.

48:24

Andrew Morgans

As well. What is the last question for you as we wrap up just because I know we’re coming on an hour, um, we’ve talked about some of the hidden profit? Ah, you know, profit lost things that sellers can think about, um, what are some? What’s one of the best?

48:33

Jenny Adams

Yes.

48:40

Andrew Morgans

Ah, features of seller boys leave it here like maybe it’s not about just profitability but like what’s one that you like when you’re talking to people using the software that they just love the most.

48:52

Jenny Adams

It’s different for everyone. I’m not a seller, and I like the money backmost because I just like how it calculates the money you can get back? Um, I think for the most all for some. It’s tough to respond to your request and.

49:00

Andrew Morgans

Yeah.

49:07

Jenny Adams

They get a lot of feedback from clients from buyers on it. For others, they use it for inventory management, right to understand when you’re supposed to restock, and so on, um, for others, most of the agencies. They very much like the dashboard because you can always click on more features and understand everything. It’s different for everyone. For me, it’s the money-back I don’t know, but about the rest of the tools, as mentioned, it’s totally different people. Some people use it per alert. I Do Love all of it. A lot of money backmost some people use it only for Alert. So It’s different. How big are your stories, how many products you have, and what exactly is needed?

49:32

Andrew Morgans

I love it, and she said all of it. She said she loves all of it; basically is what she said, guys.

49:44

Jenny Adams

I will not just because I work for Sellerboard. Will they not be pushing it for everyone, right? Well, you will probably find the feature for you if not every single one but one. I guarantee you that you will, well, it’s the most accurate tool in the market at the moment. It’s been sensitive since it started in 2000 and 1918, so yes, I do love our software. They’re very great and amazing software out there. I will say that mine’s the best because I work for it but not only because of it. We do have very good features. We started with $15 a month users who will. Click on the link country. The podcast will get two months or free trials instead 1. Um, and yeah, I mean, it’s worth giving it a try. Still, the podcast is not about sellers. It’s about, um, focusing on all the hidden profit killers and what sellers usually don’t focus on, especially when they have over None units sold per month. They forgot about the little part because they think, ah, I will not save up on such stuff, but actually, you will, especially the more units you sell, the more you have going under your eyes of all their errors all expenses that you’re not actually not using in your standing up.

50:39

Andrew Morgans

Yep.

50:58

Andrew Morgans

Jenny, that’s so good, and I think that’s a great way to wrap up the podcast.

51:01

Jenny Adams

And here is advice from a non-seller. Well, other than other people’s mistakes, this is basically what I’m saying.

51:10

Andrew Morgans

Not 100% the same as I, um, you know, I like to think we’re one of the best agencies in the space, and we love it. We love each other. We love software like this because it just allows us to communicate, and it allows us to see what’s really going on and get a health check, and I guarantee you if not. Send me a Paypal request. I’ll pay you for anyone listening to this show if you try the software and you don’t at least make yourself more or save yourself that amount of the fee for signing up or trying the software. It’s absolutely guaranteed. Either way.

51:39

Jenny Adams

It’s two months of your trial, and no cards are required.

51:44

Andrew Morgans

My point is that you will surely make your money back or save that money or find an opportunity. That’s worth that. Um, you know, using these tools, you have to dig In. You can’t avoid what you know you don’t know. What you don’t know is really what I think about, and these tools help you figure out what you don’t know about your business and how to get better. The goal has to be. Constantly getting better as the game gets Harder. We just have to be better and better and better and keep leveling up and figure out the solutions to the challenges that are coming Up. You know, post-pandemic from inflation to supply chain to delays.

52:15

Jenny Adams

I think they’re gonna be planning more challenges and surprises. Exactly. Thank you, Andrew, for having me. It’s a pleasure, and it’s an honor.

52:18

Andrew Morgans

I agree, and that’s why we have to get better fast, you know, to stay on top. Jenny, this has been awesome. Yeah, thank you so much for being on the show.

52:32

Jenny Adams

Pleasure and honor both. But it was great. I’ve wanted to get on your podcast for a long time. And I can finally make it, and I finally made it. Thank you. Yes, thank you.

52:39

Andrew Morgans

Well, it won’t be the last time we have you on. I can guarantee you that. Thank you for your time. Thanks for staying up late to make this happen. And to our Hustlers, thanks again for tuning in. We’ll see you next time.