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Hai Mag 0:46
You want to buy this product. Yes, now you can go to another listing similar product or you can just buy add to cart or you can just though the add to cart, right. So if you see the strikethrough price, hey, it’s better. It’s better. Let’s buy like people think coupon codes will have a good impact in their conversion rates. But actually, only the consumers who already decided to buy and they are really careful about the listing, they check the coupon code and then they click the Add to Cart button. But it’s not helping the conversion. It’s just giving them an additional 5% discount.
- Zigler, Dr. Travis (Author)
- English (Publication Language)
- 127 Pages - 03/07/2021 (Publication Date) - Independently published (Publisher)
Welcome everyone to the Firing the Man podcast a show for anyone who wants to be their own boss. If you sit in a cubicle every day and know you were capable of more than join us. This show will help you build a business and grow your passive income streams in just a few short hours per day. And now your host serial entrepreneurs David Schomer and Ken Wilson.
Welcome everyone to the Firing the Man podcast on today’s episode we are joined by Hai Mag, the co-founder and CEO of eva.guru. Eva provides an AI powered repricing, restocking and reimbursement platform for Amazon sellers. Prior to co founding Eva, Hai was involved in several entrepreneurial ventures in the E commerce space, including a tech investor for Einstein ventures, and advisor for algo pics, as well as spending 15 years in the consulting space for companies like Oracle, IBM and Accenture. We are very excited to have him on the show. I will also add that Ken and I have been using this software for about a month now and there if if there’s such a thing as a love story between a business owner and software, I think we may have found our Cinderella. Welcome to the hot. Welcome to the show. Hi.
Hai Mag 2:42
Hey, thank you for having me, David and Ken. So thank you.
Absolutely. So to start things off, can you talk about tell us a little bit about yourself and your path that led you to founding eva.guru?
Hai Mag 2:56
Absolutely. So you all told about myself. But if I, you know, just go back like four years ago, I was the vice president of Oracle, running more than a billion dollar of sales business. And at the time, I was thinking, hey, it’s it’s the right time with retail, you know, experience and with my corporate experience, I wanted to do something new. And from scratch, I met with my co founder at the time, Barry. And he was running an Amazon business for like, seven, eight years. And we come together, we try to find out like what’s missing, or what how we can add value to the brands on Amazon. And that’s where, you know, we started with Eva. And the kind of initial idea was there are this three domains in the Amazon space, that we kind of simplified it to inventory management, advertising management, and pricing and promotion management. And when somebody just focuses on one, the other side also correlated, like all this decisions are correlated and focusing on one doesn’t solve the kind of the problem, which is always the maximizing the profits. And that’s how we started, like, how can we create a platform, which can create decisions based on both inventory advertising and pricing at the same time?
Awesome. So it sounds like the three core focus, there’s three core focuses, and they almost all feed off of each other to make intelligent decisions, correct?
Hai Mag 4:36
Absolutely. So I’m also a computer engineer, like my co founder and somehow our company is like full of computer engineers and AI guys and everybody but sometimes it’s good sometimes not that good like to understand the business. But you know, we always look at the data, right? Like we have billions of data points now only like because you know, we Running Heba on in the US plays for 1000s of sellers, but also in UK, eu Middle East Asia pack. So with all this millions, billions of data points, we are just seeing that correlation of inventory advertising and pricing and how these are impacting each other.
Awesome. So high. Why is price testing important for private label brands? Especially now nowadays? Yeah.
Hai Mag 5:30
I mean, when you said nowadays, that’s also a very interesting time we are in because probably we hit the Record inflation rates in the US, you know, like history. And I mean, inflation is kind of an interesting thing, because I’ve been, I lived in almost 4045 countries in my life so far. And I was managing like Africa, where there are countries with 1,000%, inflation or 100%. And, and you cannot imagine, like, like, at some point, people don’t get it anymore, like, what’s the right price for something? Right. And, and even yesterday, I was checking, like, based on like, one of the focus areas we have is supplements. And I was checking, like the supplement the impact of inflation on supplement supplements, and that was between five to 20%, compared to last year. So how can any consumer even knows like, what’s the right price? Like they don’t know. And on the other side length for the Amazon sellers, it was already difficult. Why? Because container prices are dynamic, right? I mean, starting from even that point, right? During the last year, you know, the fluctuations and now it’s going down. And the cost of the the the the manufacturing costs are changing almost every and Amazon FBA costs are changing so much, because like, we need to have like controls with FBA. And believe me four years ago, when we started, we thought, if we can update the FBA fees, every three months, we will be it will be enough, you know, because the changes should happen. Like every six months or so, I can tell you now we are updating FBA fees every day on eBay, because it’s changing, like in every single category in Amazon is like increasing the fees, unfortunately, not decreasing. So what I’m saying is almost every single Cost parameter, and the consumer expectations, everything is like volatile, everything is dynamic. So there is absolutely no no reason left like to keep the price even for a month in a static way. on Amazon, I’m even having this conversation with some of the brands which are doing subscribe and say, and I proved the point that nine to 35% of the the even subscribers do not expect the same grace, you know, after a month, they know that the things are changing every day. So the price testing becomes like not just to test it for a fee percent better profit, or maybe a few percent better revenue. But it becomes like an mandatory piece, like the prices need to change and adapt itself to the environment, the changing costs, as well as inflation and changing demands.
- Hardcover Book
- Diehl, Gregory V. (Author)
- English (Publication Language)
Absolutely. And you know, as a, as a business owner, there are so many things that are out of our control. But the one thing that is in our control is the price that we set. And this was something you know, if you look at an Amazon platform, you can split test main images, you can split test bullet points and titles. But this price, I think is more important than all of those in so we had just prior to signing up with Eva, we had done it manually in a spreadsheet, where we change our price and do a 30 day look back what you’re really not getting real time results. There used to be a product called profit peak, which is since shut down. We tried out cash cow Pro, which we didn’t really like and and this is the first price testing software that we’ve used that were like, Oh, this is real time data. And it’s real time. So like that 30 day look back, we could only do 12 price changes a year to even decide. And sometimes you change your price and you’d wait 30 days and it was the wrong move. And it was like well, dark. I’ve been doing this for 30 days. It’s so I really liked that that feature of it. So you know on the website, it talks about maximizing profit on autopilot. Can you discuss kind of the mechanics behind the price testing software and what exactly it’s doing to identify that that perfect price that optimizes profit?
Hai Mag 9:56
No great question and I wouldn’t even call at like, a price testing software, but what it does is it’s a AI powered engine, which finds the next best price to maximize the profits without sacrificing the velocity. Okay, so that’s kind of the main principle. Now let’s, let’s look at the velocity first because on an under a normal condition, the velocity can be important, but with a with a maybe lower velocity, you can get a higher profit, but in the Amazon, if you are lowering the velocity for any reason, that will have consequences like that will have indirect effects like, you know, if you think about the velocity, for example, if we are talking and thinking about the pure pricing scenario, the conversion rate, right like that will go down as you are increasing the price or in the organic sales, obviously, again, the same thing, like less people will buy your product as the price is going up. So for and the other thing is if the velocity reduces your organic rank, and your keyword rankings or your best selling sales ranking will go down to so which means that whatever we do, the one of the most important thing is like to keep the velocity the same, or to increase the velocity by changing the price. That’s, that’s very important. So it’s not like theoretically, maximizing the profit for the sake of the like, without ignoring the velocity component. So as long as the velocity is same, or more, then what we kind of find by using AI, is, what is the best price point for tomorrow. And based on our analysis, you know, it’s not like increasing the price by a significant demand for tomorrow, like 510 15%. But there is a range that we test the price, like one 2%, more or, or higher. And based on that the AI engine basically learns more, if that was the right decision or not. And the next day, it will correct the decision and try to give a better decision based on the previous day. Now while doing this, we have 24 months of data, and especially the data from yesterday, the data from like last week, the same day, last month, last quarter, last year, the same day or same month, there’s like a different weights of all different types of prices happen in the back in the history of that product as well. So all of them helped to find the best price point for tomorrow without sacrificing conversion rate without sacrificing the velocity. So that’s what we are trying to do.
Okay, excellent. And so just for the audience to you know, Eva has got it. It’s a it’s an entire suite of software. And so you know, David and I in our portfolio company, we’re testing out the, you know, the pricing profit module of this software. And that’s what we’re really doing a deep dive here today. We’re testing out other modules. And before the show, I talked to high and I said, Well, we’ll have you back on later and discuss more about other modules. Today, we’re really focusing on the the pricing, the repricing feature and profitability, and so high on that feature, as you know, someone will say, hey, you know, I don’t have any processing right now? I don’t know, you know, and so they want to don’t want to try that, when they install it most. Most of the listeners are private label. And so what are some of the options and features with the in the in the price testing that you would recommend them testing? Wow,
Hai Mag 13:51
that’s a great question. So first of all, as you already know, it’s really easy to set it up and start testing it because what we always say is like the first thing that you need to know as a seller is what is your real real profit, what’s the accurate profit and at the monthly level data level, as well as at the product level. So that’s the first thing the setup needs to be done. Obviously, by entering the cost information, the system will automatically calculate all the FBA fees everything and come up with a minimum price and the maximum price suggestion based on the cost as well as the margin or ROI expectation. So, once like we define the the interval, the minimum and the maximum price interval, then the rest is done by the system. So the rest means that demand based pricing, but demand based pricing is the default option, right? So it basically looks at the demand trends and finds the next Next day best price to maximize the profit. But there are other things. For example, a second one is the inventory based pricing. Again, it kits automatically, but especially in q4. And for seasonal items, that can be very interesting. Because as the inventory level goes below a certain threshold that the seller defines, the prices will automatically start to increase, which means that because I was talking about the importance of velocity for Amazon, to keep the ranking at the same level, but when the inventory is low, it doesn’t make sense now, to keep the velocity the same, then the system will start increasing the price to delay the stock out. Now, it is also another advantage. During the q4, we have seen a lot of our customers like making an additional 20 to 30% profit, because I mean, they can not replenish anyway. So if it’s the case, why not to make more money? What’s the point of like being out of stock after five days, be out of stock in 20 days, and make sure that like you make more money? Now sometimes, I’m pretty sure like you mentioned that you are doing it on an Excel sheet or manually. I know that some sellers will think hey, I can increase the price by 30%. But then my question, how do you know that you’re going to sell all the items there is also a risk, right? But the system is doing it every day, gradually making sure checking, you know, what’s the number of inventory days in the system, versus how many units should be sold and mass should be the price. So that’s the inventory based pricing that will be also interesting. By the way, a lot of customers use a BSR and tacos based rules. I don’t know if you ever checked that it’s a little bit more advanced that but you can also check like the next week, the previous week’s tacos versus the the last few weeks Darcos and based on that, you know, you define the rules or same thing for the BSR. These are more like a manual rules that can be defined. And also for the lounge, we have something called target velocity based pricing. Because when you are launching a new product, you have no idea about like there is no past that data. So the system doesn’t know what should be the right price, right? Now, what you can do is like you can define the cost and the minimum margin. And based on that, you can also define a target velocity base price, which means for example, if I sell five units, increase the price by 2%. So you can define your own rule of like how pricing should look like based on the number of units that you sell. So that’s also a possibility, which is a pure rule, rather than kind of an AI approach, which might work better for the first three or six months of the product launch, for example.
Okay, one of the features that I have really liked. And I’m curious to ask you, if you can set price rounding. So for instance, if you want your price to end in 99 cents, you can do that. And when I was setting it up, I think I did 50 ASINs, with price rounding at 99 cents, I did 58 cents, with price rounding at 97 cents, kind of the Costco approach. I did 50 ASINs, at 49. And then I did 50. Without anything, just they will. And so you were mentioning the movement of price just by a small amount that two to 3%. When you have price rounding, like say on a product that’s $9.99. And you go to 1099. Are you? Would you be better off turning that price rounding off on your lower priced items?
Hai Mag 19:01
Well, that’s again, I think it’s a very good question. Because when we think that there was a bit of a we also called it like psychological pricing. Now, the psychological, the psychological effect is on two sides, there is a seller side, there is a consumer side. Now most of the sellers think like, Hey, this is for the consumer, probably they will like it if it is ending with 99. And there are studies around that, that it makes sense, you know, to have it 1099 rather than 11. Now they’re like I mean, I read a lot about that. So but I cannot tell you if 10 dot 97 is for example better than 10 that 99 Now, we know that Procter and Gamble Unilever or you mentioned Costco, I mean, they’re all trying that like I’ve seen also I mean, I read all the articles out 47, the power of seven, the power of eight, nine, is it 49 or 99? So there is all this, but there is no, I can tell you that, it’s very hard to prove the point that like one works better than the other. Now we it goes back to the seller psychology as well. And many sellers, like I see one seller is always doing eight, like it’s always eight. He loves that, like all my products. And with eight, it’s fine. You know, that’s a sentence like emoji of the seller. Now very good point that you mentioned, if you have a product, which is, let’s say the price is 2.4. Like to that 43 cents, and it’s kind of rounded between like either 199 or 299. Obviously, then we are talking about a big difference in the price. My thinking is like less than $10, the price rounding can have a significant impact, right, it can round the price. And that can be you know, maybe 1015 20% increase. We can also say that well, does it really matter? Like if somebody purchases 2.2? That for six versus two, that nine nine, will they be discouraged? Because there is a 40 cents difference? That’s another question, right? Like because it becomes less relevant like that people don’t like don’t look at that maybe it’s 4040 cents less or more. I think that it makes more sense about $10 products like to make this work. But even if you do it below 10. Still, the impact is really kind of ignorable, I think
Got it? Got it. Okay. Sorry to interrupt the episode, you may have heard Ken and I talking recently about a new tool that we’re using for Amazon refunds. Now I have used other refund tools like this. However, I can tell you in the first seven days, they scrubbed the back end of my Amazon account going back 18 months in found $5,000 of refunds. And the nice thing about this is, it’s my money, Amazon made a mistake, and they are just auditing my account. The other thing I really like about this tool is there is no monthly fee, they only charge commission if they are successful in getting you your money. Go to catina.com GE T ID a and enter promo code ft m for Firing the Man FTM 400. This is an awesome tool. I can’t say enough good things about it. Now back to the episode. Well, that sounds that sounds good. And to our listeners there is I believe a 15 day free trial, you got to check this out. It’s I as a recovering CPA have fallen in love with it. And I’m excited to continue to use it and you know, hit given answer to when we split tested it here was our results. And we’ll be sharing that in the months ahead. So you know, I mentioned spreadsheet model. So that’s how we were kind of previously doing this. And in the past, we had had a tough time. Because as the price increases, your conversion rate generally will go down, making your PPC, more expensive. The opposite is true as well, as the price decreases, your conversion rate goes up making PPC cheaper. So in these two examples, you kind of have this cancelling out effect where you have your independent variable price, then you have two dependent variables, which is PPC cost and conversion rate moving in opposite direction. And so how does Eva sulphur that?
Hai Mag 23:40
So the I mean, definitely, as you mentioned, like there is this like a negative correlation between the two parameters. And one of the things that I mentioned was Eva is made for keeping the velocity the same or more and the conversion rate. It is also something that we’ll look at, but obviously there is another factor there there is organic sales as well, besides the advertising sales, so we look at the conversion rate. But the heavyweight, the most important parameter for us is the velocity. So if fee terroristic, we assume like the same number of impressions exist, and we change the price. And if the conversion rate is the same, that’s exactly the interval that we are changing the price. So meaning that as long as the demand is there, the price will go up anyway. And if the demand somehow goes down or stays the stable, it doesn’t make sense to increase the price anymore. So that’s exactly the system decides in the next 24 hours based on all the data coming during the day. So that’s how like we are and that’s why a lot of like data like a very out that they say like, if the data is only based on all the decisions are only based on the historical results, that’s where there will be a problem with the next decision because it may create a reduction on the say, on the conversion rate. But what we are looking at is, the real time data as well, are we definitely we look at the historical data with AI. But also there is the impact of the real time situation, because Amazon decisions that like next couple of hours next day, are also more important than what happened like last year. So that’s kind of like what we are looking at it as a kind of a design principle to make sure that if the conversion rate is going down, hey, do not increase the price anymore. That makes no sense. You know, from our side, there is another thing, which is a feature, but it’s a killer feature. And we just deployed, by the way, any version of that, which I’m calling it the dynamic discounting, we are still working on it, like what what is available today, I think that has also a positive impact on the conversion rate, we have seen 10 to 15% conversion, because you can implement a sale price on Amazon on Amazon. But by using either the strike through price, for example, you can say between Monday, so every Monday between 5pm to 9pm. I want a 10% discount that strikethrough price, and between 1pm to 5pm 5% discounted price. So now you can define different discounts during the day. On Eva, it’s a killer tell you police think try that because it was not available like three, four weeks ago, in this way. Right now, it’s a kind of a recurrent discount. So you can define it like every Monday, Rush Hour 10% Discount strikethrough price, because when you have a strikethrough price, we see the conversion rate increasing by 10 15% can be really significant to use that strikethrough. Even if you make 3% discount. Still people look at it, hey, it’s better. It’s better than what doesn’t matter. Because now we are talking about this one second, that the brain decides Right? Like somebody the human brain, you are on that listing, you want to buy this product, yes. Now you can go to another listing similar product, or you can just buy Add to Cart, right, you can just do the add to cart, right? So if you see the strikethrough price, hey, it’s better, it’s better, let’s buy. So we see that all the time. You know, that’s also the data tells us that. So I also recommend to use that as well as as another impact to increase the conversion rates.
- Ryan, Robert J. (Author)
- English (Publication Language)
- 137 Pages - 11/02/2019 (Publication Date) - Independently published (Publisher)
That’s interesting. And yet definitely going to check that out and do a little bit more research on that one. But it sounds like that that’s kind of like the crossroads of data science meets psychology, because how you’re right, like when people see a sale price, like Oh, even if they don’t want to buy it or they don’t need it. They say like, oh, that’s a really good deal right now. I’m just gonna get it because it’s a good deal. And so I really liked it.
Hai Mag 28:25
Can I give you another example because that’s so interesting as well. And I think users will like the listeners will like it when we see an FBA listing and FBM listing, for example, on the same for the same reason there is an FBA SKU, and that BMS E, right. And also on EVA, you can define simultaneous pricing, for example, you can say, by using parent pricing, or there is another way to but you can easily say, hey, I want my FBM to be 5% higher than FBA, which is what we recommend, right? Like we always recommend the FBM price to be higher. But also we recommend both FBM and FBA versions to coexist at the same time. You know, what happens? Now what we realize is, if you have FBM, and FBA, the consumer goes into the listing, they see that somebody else is selling the same product, but it’s 5% higher price, actually, that somebody is you? Nobody, nobody checks, right? Like who is that guy? Like he’s like, Hey, I should buy this guy is good. Like, I mean, there are other guys selling for 10% 5% Higher, we just see that like, based on the data, it shows gives us a much better conversion rate, let’s say 5% better, it’s actually around five to six. But you know, every little thing increases that right like you know, this is very easy to set it up. And also it completely avoids you to be out of stock right because you have an NPM listing as long as you can fall. smell it, but nobody’s buying your FPM listing because it’s more expensive. Yeah, like use the idea, right that you know, just buy now because somebody else is to hiring or sorry, selling already for a more a bigger, you know better price. So
I love that i It seems like if you get into the mind of a shopper, one thing they may do is check price to see if they’re getting a good deal kind of, maybe I’m going to check another listing. But when they can go in and see that FBM listing, they kind of check that box of okay, I’ve done my due diligence, are comfortable with this purchase buy now. And so I like that.
Hai Mag 30:40
Yeah, I mean, I would like to give you another one. That’s that’s something it will be very, very interesting is coupon codes. It doesn’t you know that 80% of the people do not check that at all, like 10 slots are interesting, right. But like people think coupon codes will have a good impact in their conversion rates. But actually, only the consumers who already decided to buy, and they are really careful about the listing, they check the coupon code, and then they clicked the Add to Cart button. But it’s not helping the conversion, it’s just giving them an additional 5% discount. So that’s so what we found,
that’s interesting. We so to kind of we have a program in place to avoid long term storage fees. So as we’re approaching like that nine month mark, we had previously been using coupons. And what we found was every time they’re clipped, you’re charged, whether they’re used or not, doesn’t matter. They’re when they’re clipped, you get charged. And so we have actually, we still have that program in place. But we are also using a VA to like significantly decreased the price. And so we’re going to test those two against each other. But you’re right, yeah, I’d never look for coupon codes until I’ve made up my mind that I’m buying it. And so I like that. I’m loving this, you have any more any more of these?
Hai Mag 32:02
Well, you mentioned that what I mean there is that there is a way of like liquidating the stock on that on eBay as well. So you can easily say, hey, I want to sell five units a day. And if I’m not selling five, reduce the price by 3%. So it’s kind of the default is the AI version, right? The demand base inventory basis, all working automatically. But then you can define your own rules like either to increase the price during the lunch. But also you can define the liquidation or maybe you’re always stuck, and you want to sell more. And you can also define that rules too. So that all kinds of helps, for example, in the future. In the future, what we want is, besides dynamic pricing, by the way, that’s a secret thing. But anyway, nobody’s listening us, we want to build the dynamic discounting, you know, is a complete, like dynamic discount, like keep the price the same, but just play with the discount all the time. We’re up sample, you know, that might be also a very introduction, but that’s what we are progressing with that thing, module, the strikethrough pricing, because it’s very, very successful so far, wherever we, you know, implemented with our customers. Yeah,
not to tell you how to run your business. But if you could somehow work in avoiding long term storage fees into that that would be a dream come true, because we have a lot of instances where we would be better off taking our inventory and lighting it on fire than then have getting hit with long term storage fees. And they’re sneaky. They’re sneaky. They sneak up on you and all of a sudden your payout is $5,000 less than you’re like what the hell happened this month. So yeah, anyway, so go ahead, Ken.
Yeah, no, that’s a really good point that David made I think Amazon just last month they announced they implemented a new like nine month storage fee. And so it used to be like it would go up at like six months a little bit or something and then and then it would wait till like 12 months and then it would go way up. Now they put it at nine months just to get more revenue. And so yeah, we’ve got Probert like internal programs that were trying to lick you know, trying to get rid of inventory as it as it ages. But yeah, getting this built into there is would be would be really helpful. I really like the strikethrough pricing I think that like like what you just mentioned hi I know your your team is probably testing us now but like building that into the you know, the strikethrough pricing and then finding out what that is to increase that conversion rate and then cooking that for a while and then kind of tweak in that like I’m excited to get in messed around with that but my question is and so if someone who has not use your software yet and they’re you know as we’re going into like a really lean times I think for the next 1218 months, we talked about inflation we talked about these things where you know Amazon sellers were looking for more profit we’re looking for net profit, right and so let’s say someone someone loads up Eva and and goes to AI based and say hey, I want to demand based pricing set and kind of learn the products. You know, Eva, you know downloads the report ordered gets all the historical data and starts learning about this product. How long before you know the software really finds the price? Where that’s that’s Max, you know that that maximizes profit? Is it like seven days, 30 days? Or does it just just get just continuously incrementally get better over time? How can you explain like that process and how long it takes?
Hai Mag 35:21
Sure. So, I mean, as you know, a new seller, like a new eBUY user, like connects the store, the first thing that we do is like, we take 24 months of revenue, the sales data from Amazon, and at least three months of the advertising data, which is what is available on the on the Amazon site. So the data is already more than enough, like, as soon as like, we have that, the full 24 months and all the settlements and everything and typically takes couple of days. But normally, the user can start using the system after six to eight hours, but in a couple of days, we already have all the data and and the decisions are big, like made by ILA right away. And these are the kinds of the right decisions. Anyway, what happens is, there is all this other features, like, you know, which we mentioned about dynamic discounting, or rule based pricing, or taco spades, or BSR. Base, and it’s very much depending on there are business decisions where there are a lot of business decisions. So it takes the user to kind of like, learn all the features and use it in the right way, maybe another three to four weeks, but then, you know, the rest will be done done by Eva. And the price will be always optimized based on all the all the parameters, not just the cost, but also the context parameters as well. And so I think that’s and and, you know, when we started, we were right, like I mentioned about advertising, inventory, and pricing correlations. So Eva is not only about pricing management, obviously, there is at least there is three other ways that the work can be used to maximize the profits. One is that we talked about a little bit before the could show the reimbursements. So we do the recovery at a 13% success rate on 26 different categories. And we believe that we are now the mass to be mastered the whole reimbursement thing, and in a great way that we can provide at least a 50% cheaper service than the market, but also it’s much better. So that’s another way of maximizing the profits, we are able to create replenishment forecasting by by Eva in a couple of seconds. We are improving that all the time. But that helps to reduce the time to work on this replenishments by 90%, if not under it. And that’s also very valuable to reduce, you know, like the staffing costs. And you mentioned for example, long term storage, we also kind of deliver inventory at three ports, we always show what’s going on with the long term storage it’s also my nightmares when I was like you know, like running our own business like we we got an invoice at some point. And there is another thing Eva is also a three PL provider, we have more than 120,000 square feet of space in Houston as well as in in in LA in California. And because we are a three PL provider, I can tell you easily that the nightmare of the warehouse guys is the storage because storage is expensive and you cannot charge a lot and the way that Amazon is trying to build this FBA is like you know things come in and things get sold, right? Like the expectation is it’s not stored that much. Actually, it is stored now a lot because we cannot say that the Amazon FBA is the most efficient and profitable business, right? Probably Amazon is even losing money and compensating it with advertising. But the more people keep, like the storage, there is more loss. I mean, the more things, you know, at the long term, so that’s why we should expect even more fees coming from the Amazon side with that long term storage. Because I mean, they don’t want to lose money at the end of the day. But that’s where you lose money by keeping the customers stuff in your warehouse and doing nothing but just paying, I don’t know, 20 bucks per pilot or something like that. Doesn’t doesn’t help really.
- Amazon Kindle Edition
- Brooke, E. (Author)
- English (Publication Language)
Yeah, and I think one reason those are especially sneaky as you’re not writing a check form every month, they take them out of your disbursements and so it doesn’t hurt like it does when you write a check or send a wire. It’s really it’s just a really subtle are expensive the business that you if you don’t pay attention to it, it can really come and bite you. So one thing you can you talked about, are you at ESA question about how long does it take. And I, as we were prepping for this for this podcast, I jotted down some stats from our first 14 days. So we did three brands and six marketplaces, three of those six marketplaces saw double digit increase in profitability, two of the six saw single digit increase in profitability. And one of them saw a decrease, but that was a function of a stock out on one of our hero skews. And so we’re only 14 days, that was an only a 14 day look, we’ll definitely be talking about on the podcast a lot more. But like to the listeners, if you listen to the Firing the Man podcast a lot, you know, I’m a I’m a profit margin junkie. And and I’m really liking this so far. So Can anything else want to chat about before we jump into lightning round? Or fire up?
No, I’m good. Hi, any, any highlights of the software that we didn’t cover that you want to hit on? Before we go into the fire? We are
Hai Mag 40:58
working a lot on the advertising aspect right now. I mean, that’s my, I mean, we are 150 people team with a 35 People just working on developing the software. And the primary focuses on advertising because I want to nail it down, I want to make sure that all the sellers have the best advertising, you know, kind of approach and in a cost effective way. Because whatever we do, we try to make it really cost effective. Nothing like percentage base software and things like that. And the right now for example, from Eva, you’re able to see for any product, what’s the inventory, and what’s the impressions, conversions and the campaigns related with that product, which means that you can have decisions or you can have inventory based advertising decisions, like if the inventory is inbound, or its there is a very low stock, then probably you can reduce your campaign budgets, because it doesn’t make sense to spend too much money just by doing that we have seen like five to 10% increase in acres, a lot of because none of this automation software is really inventory aware, or most of the VAs or PPC specialists, there is a way of checking yet of course, what it’s like too much work like nobody’s doing it. Now putting it all in the same dashboard. I mean, it becomes super easy just to check all the inventory, and at the same time, check the campaigns and do the job. So this is one of the things that we did, but there will be more coming with the with the advertising stuff as well.
Okay, yeah, that’s awesome. And yeah, definitely agree. Like the more you know, the more modules you can plug in and be like a cohesive environment, monitoring everything. It’s more intelligent decisions in the business. So that’s really awesome. Well, cool. Hi, are you ready for a fire round?
Hai Mag 42:57
Right? I don’t know. What’s a fire round?
Unknown Speaker 43:00
Find out? Yeah. All right. Okay.
Well, we’ve got, we’ve got a series of four questions that we ask all of our guests, and they’re, they’re very easy. What is your favorite book?
Hai Mag 43:10
Okay. So that’s a nice question.
Now, we could come back to that one, if you want to go.
Hai Mag 43:19
Okay. Like, they’re like, it’s very interesting. I never told about like, I’m a big fan. I read all the books now you’re like asking me which which sound you like the most? That’s why I pick which one? Well, which one is the book like? The so maybe I can say like, the one of the things that I’m really impressed is the the capital by Thomas Piketty. I think the way that, you know, it’s the capital in the 21st century, and the way that the money is flowing in the world and the rules of the capital, which is almost like an extension of what marks the philosopher like, you know, you know, kind of his novel, which is, like, very much known as the capital or Das Kapital, in German. And this is like an, an, a newer version of the, the 21st century version, which I really like in the business, you know, to understand, you know, the importance of money and how the capital works in the world. Okay,
interesting one, what are your hobbies?
Hai Mag 44:25
So I’m as you know, as I’m in San Diego, one of the big things that I do is surfing, so I love it very much as well as hiking and spending time with the kids. Very cool.
What is one thing that you do not miss about working for the man working for
Hai Mag 44:43
Yeah, like corporate America.
Hai Mag 44:46
Ah, okay, so I am not missing to have a boss. It’s up to her word.
For sure. Awesome. I love that answer. All right, last one. What do you think sets apart successful ecommerce entrepreneurs from those who give up fail or never get started?
Hai Mag 45:09
As you mentioned, the the ones who are successful sooner or later, I believe the ones that have the grit, the long term, the the the resilience, and the grit. And if they work hard, I mean, there is absolutely no reason not to be successful. So I think you know, for an intrapreneur like, they always ask me, I mean, as Eva is also a startup as SAS startup software as a service, when do you think it will fail? Well, it will fail at the time I give up. Right. So so it is really important not to give up. It’s also important to know when the quit,
excellent answer. Very good. David, over to you to close out the show.
Yeah, absolutely. I want to thank you for being a guest on the Firing the Man podcast. We’re gonna post links to Eva dot guru in the show notes, and definitely looking forward to staying on touch.
Hai Mag 46:07
Absolutely. Thank you for having me. Thank you.
- Gildner, Gil (Author)
- English (Publication Language)
- 205 Pages - 03/28/2019 (Publication Date) - Baltika Press (Publisher)
Thank you everyone for tuning into today’s Firing the Man podcast. If you liked this episode, head on over to firingtheman.com and check out our resource library for exclusive firing the man discounts on popular ecommerce subscription services that is firingtheman.com/resource, you can also find a comprehensive library of over 50 books that Ken and I have read in the last few years that have made a meaningful impact on our business, or that head on over to www.firingtheman.comlibrary Lastly, check us out on social media at Firing the Man in on YouTube at Firing the Man for exclusive content. This is David Schomer and Ken Wilson. We’re out
before you go fun fact for all you Amazon sellers out there when you start selling in international marketplaces, all of your reviews come with you. At the beginning of this year, Ken and I sat down and talked of ways that we could double our businesses in size and landed on international expansion as our number one initiative this year. We partnered up with Kevin Sanderson from maximizing ecommerce and he has made the process an absolute breeze walking us step by step through the process. If you want to grow your revenue and reach new customers head on over to https://maximizingecommerce.com/fire and connect with Kevin Sanderson today. Now back to the show.