Episode 167
On today’s episode we are joined by Hai Mag, the co-founder and CEO of Eva.Guru. For those of you who are regular listeners of the FiringTheMan podcast, you have likely heard us talking a lot about the new Eva software stack we have been using which includes dashboard reporting, inventory management tools such as replenishment forecasting, profitability reports, reimbursements that run automatically, and my favorite – the dynamic pricing tool. On today’s episode we are going to dive deep into some common problems that Amazon Sellers run into and how the Eva tool can help solve those problems. Welcome to the show Hai!How can the guests contact? website, email, social?
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00;00;00;02 – 00;00;29;26
Speaker 1
Welcome everyone to the Firing the Man podcast. On today’s episode, we are joined by Hai Mag, the co-founder and CEO of Ava Dot Guru. For those of you who are regular listeners of the Firing the Man podcast, you’ve likely heard us talking a lot about the new AVA software stack we have been using, which includes dashboard reporting inventory management tools such as replenishment forecasting, profitability reports, reimbursements that run automatically in my favorite that dynamic pricing tool.
00;00;29;29 – 00;00;39;12
Speaker 1
On today’s episode, we are going to dive deep into some common problems that Amazon sellers run into and how the AVA tool can help solve these problems. Welcome to the show.
00;00;39;12 – 00;00;43;28
Speaker 2
Hi. Hey, thank you for having me, David then, Ken. So it’s great to be here again.
00;00;43;29 – 00;00;55;23
Speaker 1
Absolutely. So for those of our listeners that did not listen to episode 155, the first time you were you were a guest. Can you give us a brief overview of your background and what led you to founding Ava?
00;00;55;24 – 00;01;32;00
Speaker 2
Sure. After almost a 20 years in software companies like IBM and Oracle and a management consulting company, Accenture, I decided to I had a side hustle, which was an Amazon business with with my partner. I decided to move on and we decided to create IRA because what we so was four years ago a lot of things that we do just because we are computer engineers and focusing a lot into data is helping everyone every e-commerce, you know, owner to be more successful.
00;01;32;06 – 00;01;43;10
Speaker 2
We started with IRA like four years ago and over the over the four years, it has been a great journey so far, you know, developing both the platform and the services around it.
00;01;43;11 – 00;01;59;20
Speaker 1
Excellent. Excellent. Just to lay out kind of the format of this podcast, because it is going to be a little bit different than we have in the past, and we’re really looking forward to it. So prior to this interview, Ken and I brainstormed a series of problems that we have encountered over the last few years in our own businesses.
00;01;59;21 – 00;02;16;14
Speaker 1
These are also problems that we think are very common amongst almost all Amazon sellers. And so what we’re going to do, the format of this episode is we’re going to present you with a prop. Then we’re going to ask, Does Ava have a solution to this problem? For some of these, we may jump on a screen share and take a look at some of these.
00;02;16;14 – 00;02;31;23
Speaker 1
We may just be be answering. So if you’re tuning in to the audio episode, check out our YouTube channel. There will be an accompanying video portion of this that I think is going to be incredibly valuable. So that sound good? All right. Sounds good. So problem number one and.
00;02;31;23 – 00;02;57;04
Speaker 2
Before that, before that, they would let me share my screen. Right. So that everybody sees also the first, you know, kind of the executive dashboard is what we call. So for the ones who are watching our episode, at least they know how the executive dashboard looks like on the UI, because everything from our perspective before all the problems, it starts from understanding your point, right?
- Amazon Kindle Edition
- Horne, Troy (Author)
- English (Publication Language)
00;02;57;04 – 00;03;25;24
Speaker 2
Like, you know, for every seller, what is the profit, what is sales, what is expenses? And you can even see all the details of the A.I. margin or the sales data or experience this data from the dashboard. And in the on the second row, it’s more about like the split between the organic sales, advertising sales across as well as you know, from my perspective, like one of the most important KPI to tacos.
00;03;26;01 – 00;03;34;16
Speaker 2
And that’s kind of the the executive dashboard is just I thought it would make sense to share and start digging into the problems.
00;03;34;17 – 00;03;59;18
Speaker 1
Absolutely. Absolutely. And this is something that I can and I use this tool. This is kind of the heartbeat of our business and something that I definitely like to tune in to daily and see how things are going. So I’m glad that glad that you showed that. So. All right, so problem number one, in order for our businesses to be successful, we need to maximize our net income while revenue numbers are nice, we pay ourselves and the bills with net income.
00;03;59;18 – 00;04;23;07
Speaker 1
And so that is our focus. We have heard that Amazon sellers can generally take two approaches. One, you could have a high velocity, low margin product, or you could have a low velocity high margin product for some of our current products. We are not sure what price points we are maximizing net income. We have tried to measure this in our spreadsheets but are constantly running into this situation that I’m about to describe.
00;04;23;13 – 00;04;51;21
Speaker 1
We move the price of product a from 15 to $20. Of course, we are earning more net income per product. However, this is offset by a lower velocity, a lower conversion rate in higher PPC costs. This becomes incredibly complicated to measure, and so we end up picking a number in the middle, say 1750. But in the back of our minds, we know that is more of a finger in the wind estimate and we don’t feel confident in that number.
00;04;51;21 – 00;04;57;11
Speaker 1
And so our question to you is, is this a problem if we can solve and let’s let’s dive into it.
00;04;57;11 – 00;05;16;11
Speaker 2
Absolutely. So that is like, you know, it’s kind of a particular type of a problem because there are too many parameters here and they are all correlated with each other. And it’s not even clear how this correlation works. So this is one of the problems we are trying to solve for, you know, for a couple of years now.
00;05;16;11 – 00;05;40;08
Speaker 2
And it was even the first problem. So also I’m kind of like moving into the pricing management of EVA where for every single product that is private label or a brand, we also have a solution called dynamic price it. And the reason why we started with dynamic price pricing in the first hand was to fix the problem like you described.
00;05;40;09 – 00;06;09;00
Speaker 2
Now back to the problem. There are a couple of things that we look at, you know, and we look at a couple of parameters and how they develop over a certain period of time. And the number one thing that we check is the salespeople varsity. Because, you know, one of the things, even in the beginning, you mentioned low velocity, high margin versus high velocity, low margin, even the fundamentals of Amazon is kind of very much around high velocity, by the way.
00;06;09;02 – 00;06;39;26
Speaker 2
Why? Because if you don’t have the high velocity or the ranking, then the challenge is like you will not be ranked like on the first page or you know, more people will not see you very much like relevant, you know, to have at eye velocity or not to sacrifice the velocity just for the sake of the profit, which means that the the kind of macro economics of pricing in general life is not always applicable to Amazon.
00;06;39;27 – 00;07;01;08
Speaker 2
And one of the reason is this ranking problem, because you always want to rank more and you can not always sacrifice the profit like in the real life just for the sake of having maybe a lower velocity because that it will create that chicken egg problem where you will have lower velocity and you will have less sales. As you have less sales, you will have lower velocity.
00;07;01;11 – 00;07;43;09
Speaker 2
It just goes like that. That’s like one area. The second area that I see here, as you mention, is the advertising relation to the to the sales, because you can increase the price. But if you are also increasing the advertising, then the advertising conversion rate may go down. So here there is another parameter which we really like which is the unit session percentage, I think a parameter that is not always highlighted as much as the CVR, but somehow I like the USB more because CVR has a bit of a value calculation where the average order value is also relevant to CBA.
00;07;43;09 – 00;08;09;07
Speaker 2
But in the unit session percentage, the USP, it is the sales divided by number of sessions basically. So how many sessions you have in order to sell X units, you know, like this kind of like what we are looking at. So we tried to combine all of these two together. So that’s kind of like, I mean, the two challenges, the advertising impact, the ranking impact, but at the same time, how can we maximize the profit?
00;08;09;13 – 00;08;42;26
Speaker 2
The short answer to the question is yes, you are definitely solve that problem. The solution to that is an air based dynamic pricing. But the ingredients of that solution to the API or to the to the engine is the unit USP, because it’s both the organic and advertising sales, which kind of it contributes into the number of sessions, ensuring that ranking is is still there because we cannot just sacrifice the velocity to some extent.
00;08;42;26 – 00;09;03;17
Speaker 2
We may for the profit, but not like in the territorial approach where we just sacrifice for the sake of profit, you know, that we cannot do, you know, combining that USP as well as the ranking into the into the formula which will create the optimum price at any given time. So that’s kind of like what we did.
00;09;03;17 – 00;09;10;05
Speaker 1
Now, how can you show us can you show us an example of of one of these and how it would be adjusting the price around?
00;09;10;05 – 00;09;30;08
Speaker 2
Right. So, you know, there are, you know, a couple of things. So first of all, maybe I can show you a kind of like a just an example where how we visualize the whole pricing. For example, there are two white dash lines here, like the white dash line, which is the on the top is the the maximum price.
00;09;30;08 – 00;09;56;25
Speaker 2
And the one on the bottom is the minimum price. So which means that it’s a business decision. The business owner decides what’s the minimum and the maximum that y can play with the price. And then the buyer is starting, you know, finding the best price point between these two prices, the minimum and the maximum. So what I can do from ERA is also search for, you know, kind of an available item.
00;09;56;25 – 00;10;36;16
Speaker 2
And you know, like I’m just checking some different examples here. For example, at this moment, what you’re seeing is on the 14th of February, the sales price was 119 that 88. And the based on based on the the the sessions and the number of sales area is increasing the price because the demand is increasing. And by the way, this price changes that EVA does is typically between 0 to 3% and it’s aligned with the Amazon algorithm because you don’t want manually to opt to increase the price a lot.
00;10;36;16 – 00;11;09;29
Speaker 2
And then Amazon would may suppress the buybacks. So that’s also avoided by the EVA algorithm because it’s aligned with the Amazon algorithm. And as the time passes, the price is going up 220 424 and then even 125 up 88, and finally it reaches to 128 that 38. So in six days that price increase do not change the velocity or the sessions which are a result of advertising and organic effort.
00;11;10;03 – 00;11;30;26
Speaker 2
But in terms of profits, we are talking about an additional 15% profit as a result of that price change. So that’s kind of like what I’m seeing for De La for that five days and you are still seeing the sales trend going up for the last week, same day as well as the last 30 days and last quarter as well.
- Donnelly, Darrin (Author)
- English (Publication Language)
- 242 Pages - 05/04/2016 (Publication Date) - Shamrock New Media, Inc. (Publisher)
00;11;30;28 – 00;11;35;18
Speaker 1
And also. Awesome. Sounds good. All right, Ken, over to you for problem number two.
00;11;35;18 – 00;12;00;09
Speaker 3
Yes, absolutely. So problem number two, for an Amazon seller, this one is around product launches and so let’s say we launched a, you know, a very unique product and we’ve got the listing optimized. The images are dialed in, we’ve got video EBC, we’re running heavy PPC, everything is dialed in except for price, and we’re selling maybe we haven’t sold any, maybe we’ve sold just a few and we think our price needs to be adjusted.
00;12;00;09 – 00;12;02;12
Speaker 3
Is this any problem that you can solve?
00;12;02;14 – 00;12;29;27
Speaker 2
Absolutely. So let me let me talk about that one. So for example, in this particular product, which is a supplement, what a what we can see that like, you know, as the if the demand is going down and the sessions are still at a similar if the demand is going down, which means that if the velocity is low but the number of sessions are similar or going up, it makes sense to drop the price.
00;12;29;27 – 00;13;01;02
Speaker 2
And by that dropping off the price to to to increase the USB and as well as the conversion rate, I mean that’s something that we are seeing for two days. And then what happens is like we see a price, we see an orders increasing and the demand increasing after two days of like dropping the price, for example, and the system continues to check both, you know, points that are better or lower or higher based on the demand and the number of sessions that are happening everyday.
00;13;01;02 – 00;13;22;13
Speaker 1
All right. On to problem number three. And this has been one that we’ve been dealing with very recently. So we launched in the Amazon U.S. and then we decided that we wanted to go into the UK, Germany and Canada. So we went from managing one currency to four different currencies and it’s a little bit overwhelming because of the constant fluctuating foreign exchange rates.
00;13;22;13 – 00;13;25;17
Speaker 1
And so is this something that Ava can help with?
00;13;25;20 – 00;13;56;08
Speaker 2
Absolutely. And that’s the way that we do it. We designed the IVA. First of all, it is available in all marketplaces, all Amazon marketplaces globally, I mean, including in Australia, Japan, Europe and all American marketplaces too. So which means that it is pretty easy to switch even from one marketplace to another and analyze the the profits and the revenue in that particular currency and the marketplace context.
00;13;56;09 – 00;14;17;00
Speaker 2
Now, one of the problems that every seller had is having is what would be the price on the other marketplace because, you know, you have the US prices and now what will be the prices on Canada? Now one of the great things here is like with Iva, you can select a master store. There are three zones of Amazon.
00;14;17;04 – 00;14;44;10
Speaker 2
Basically the first zone is America and the second is Europe, and the third is the Asia and Pacific. Now, based on this zones, you can define a master store, for example, the U.S. to be the master store. And you can also define like for the other market places like Canada and Mexico, what type of a surcharge you want to add, because that’s kind of a requirement as well from a lot of sellers.
00;14;44;10 – 00;15;14;23
Speaker 2
They would like to sell with a surcharge of, let’s say, 3% more on the Canadian marketplace or the Mexican marketplace. It can also be 3% more for the Canadian marketplace, but 5% less for the Mexican marketplace, and that this can also be arranged with EVA. And as soon as it’s done based on the international exchange rates, the prices will be converted into that specific marketplace exchange rate, together with the impact of the search, the surcharge.
00;15;14;23 – 00;15;22;14
Speaker 2
And this will be automatically synchronized every day if the customer wants it, or it can also be a one time synchronization too.
00;15;22;14 – 00;15;37;17
Speaker 1
Okay. So just to make sure I understand that correctly, you would set up, say, the U.S. as your master store and then your Canadian pricing would be based on that adjusting for the current exchange in the premium that you’re talking.
00;15;37;17 – 00;15;38;12
Speaker 2
About, that’s right.
00;15;38;12 – 00;15;54;09
Speaker 1
Okay. That makes sense. And say you like we’ve heard from people that you can earn a little bit more up in Canada. So there’s if you say you wanted the U.S. and Canada to operate independently of each other, maybe capture a little bit more margin up north, could you do that as well?
00;15;54;09 – 00;16;18;23
Speaker 2
Absolutely. That can be done right, you know, by adding that surcharge. At the same time, what happens is, like as soon as these prices are synchronized, then depending on the setting and depending on the demand, the markets will start acting on their own. Right. Like, you know, for example, the Canadian marketplace. If the demand is high, maybe the prices will change according to that too.
00;16;18;23 – 00;16;34;05
Speaker 2
So that will be another area. But it’s also possible to synchronize those prices daily with U.S., which means that then Canada just acts as a slightly market to the to the U.S. market. But you can definitely make more money by adding that surcharge.
00;16;34;07 – 00;16;36;22
Speaker 1
Okay, Sounds good. All right, Ken, over to you.
00;16;36;22 – 00;17;02;16
Speaker 3
Yes. Awesome. Okay. So the next next problem for an Amazon seller, this is huge. This has been an issue for an ongoing issue for several years now, especially recently. And it’s IP inventory performance index. And so it’s it’s becoming incredibly important to monitor that metric. And so let’s just an Amazon seller has, you know, maybe they have 75 or 100 SKUs in their API is very low and they notice that they have a low sell through rate on some of their SKUs.
00;17;02;16 – 00;17;08;20
Speaker 3
And so can EVA identify those SKUs and then change how you can increase your sell through rates?
00;17;08;20 – 00;17;40;17
Speaker 2
Absolutely. So there are a couple of things that may be interesting to show here. One of the thing is the there is an inventory management suite inside the EVA. So EVA is a platform that every single feature is using the same database. One of the biggest things, by the way, I think it’s a it’s an important thing to mention we are another set of tools because there’s a lot of like, you know, companies which just acquire different products and they just offer a bunch of suite bunch of tools.
00;17;40;17 – 00;18;04;16
Speaker 2
Right now on the EVA, the biggest difference is every single feature and function is using the same database. It is the same database. We are able to correlate between advertising ranking USP inventory and pricing as we are able to. I mean, we are only talking about pricing for the last 30 minutes, but we also have the inventory data.
00;18;04;17 – 00;18;29;21
Speaker 2
You know, if we know the status of the inventory, we can use the pricing to liquidate or to accelerate the sales as well. For example, one of the one of the reports that I will allow is the Inventory Health Report, because it is already showing what’s the age of the inventory. Is there any estimated excess units? Is there an estimated long term storage fees?
00;18;29;21 – 00;18;54;03
Speaker 2
Because it’s somewhat related to two things, right? One, IP score is also related to these guys who are not selling, you know, enough. And the second is like not only that, these products are not selling, but also they stay in the inventory and Amazon will start charging you, right? They don’t want that, right? I mean, Amazon doesn’t like or anybody who is in the triple business.
00;18;54;04 – 00;19;17;22
Speaker 2
No warehouse manager likes this. Products that are sitting in there, they’re out because it doesn’t pay the bills like storage never pays the bills over their ups. What pays the bills is the action, the operation in and out, in and out. That’s what that that’s why there is a IP score which is related to a sell through rate.
00;19;17;25 – 00;19;34;18
Speaker 2
Now, what we do is like we play with the price by using like a velocity based pricing, we are able to, you know, like increase the liquidity, you know, increase the demand or increase the sales by reducing the price. That’s what we can do as well.
00;19;34;18 – 00;19;51;25
Speaker 1
All right. So continuing on the discussion of IP, we have a particular account that has over 300 SKUs in managing inventory can be a nightmare. We are constantly going out of stock on products, which then hurts our IP. And so is this something that Ava can help out with?
00;19;51;26 – 00;20;18;17
Speaker 2
The answer is yes, and there are a couple of things that may be allowed to mention here about Eva. Again, we talked about the inventory management and the relation of the inventory to price as well as the profit. So one thing here is very important between advertising pricing and inventory is if the inventory is low, you may want to act totally different than if you have inventory, right.
00;20;18;17 – 00;20;43;16
Speaker 2
Like and there are two things there. Number one, if your inventory is low, probably you don’t want to spend too much money on advertising. You want to fine tune your advertising, but you don’t have enough stock. Why should you spend all the money in advertising? So this is also important. The second area is if you continue to sell with the same sales velocity, you may be in an out of stock situation maybe in a couple of days.
00;20;43;16 – 00;21;13;21
Speaker 2
So what we build is something called inventory protection buy. And typically that inventory protection is there is a part of me there that the sales, the sellers set as seven days, but it can be changed. The default is like seven. And based on that inventory protection, if you have seven days, let’s say seven is selected, right? If you have seven days of stock left, then the prices will gradually increase as the prices are increasing to the thing to allow.
00;21;13;23 – 00;21;34;19
Speaker 2
Number one, the velocity will go down, which will delay the out-of-stock. And number two, are you going to make more money because you’re maximizing the profit? Now another great example like and this, you know, Q4 is coming right sooner or later, you know, in the next six months during the Q4, for most of the sellers, it’s a guess day.
00;21;34;19 – 00;22;02;27
Speaker 2
I mean, send all the stuff to FBA, all the products they’re buying, but they don’t know if it sells a lot. And if there is a prediction probably made there, let’s say if the 20 days are selected, you know, if there’s 20 days of stock and if you start gradually increasing the the price we have seen like 20 to 30% profit increase during the Q4 by using the inventory protection on EVA and increase the price automatically every day to delay the OUT-OF-STOCK.
00;22;02;28 – 00;22;24;25
Speaker 2
Now, the other way to delay the out of stock is always to know what you can replenish, right. And what’s the right time, which product to replenish. Now EVA is providing a one click simulation of the replenishment, for example, here for a number of product he was telling you about, like what is available, what is in-transit or what is inbound.
- Hollins, Peter (Author)
- English (Publication Language)
- 206 Pages - 03/18/2018 (Publication Date) - CreateSpace Independent Publishing Platform (Publisher)
00;22;24;25 – 00;22;50;06
Speaker 2
And I can easily go and do a one click simulation. And the based on that simulation, the system will tell me how much one is required. And for every single unit, what should be the best way to replenish a similar to exist with within the Amazon. But for many reasons we very much believe that this replenishment tool that I was showing you will give you a much better, much accurate result.
00;22;50;06 – 00;23;13;09
Speaker 2
As we know, the seller, the sales velocity. But also the biggest difference with EVA is like because we know the cost, we also know the the way and the margin. So the replenishment forecasting is done based on the sales velocity, but also incorporating the alloy and margin into the equation, not just the sales velocity but also the out-of-stock days as well.
00;23;13;10 – 00;23;19;13
Speaker 2
So that’s kind of like a very easy way to create a replenishment for gas every week as well.
00;23;19;15 – 00;23;41;25
Speaker 3
Okay. Yeah, I really like that future. You know, we always like making more profit, but actually even when as the inventory is running out, so that’s really cool. The next problem we have in this, this is essentially a problem for every single Amazon seller that ever sold on Amazon. Amazon is such a very, very large company and they have so many fulfillment centers, they have so many workers and things happen, errors happen, mistakes happen.
00;23;41;25 – 00;24;02;07
Speaker 3
And so as a seller, if you’re using FBA, which most everybody does to be successful, you’re shipping your inventory into Amazon, right? You’re sending in a thousand units or 5000 units and they make mistakes, They lose them, they break them, they they do whatever. And so as a seller, we really have no control over that. So is there a function of of either that can help out with getting reimbursements?
00;24;02;07 – 00;24;23;21
Speaker 2
Yeah. And this is like one of the the best functions features that I really like with EVA because it’s very easy to show the value. I mean, it’s always when we talk about pricing, advertising, you know, people are a, you know, it’s great, but how can we how can I see it? But reimbursement once it’s like cash, you know, send back to your account in that disbursement report.
00;24;23;21 – 00;24;55;12
Speaker 2
And so everybody loves this reimbursement. Now, one of the things that we do about this reimbursement is like we look after 20 plus categories. And this month, by the way, we had a record of almost $10 million recovery from the for the Amazon sellers. And when I talk about this to new sellers, like they got surprised, oh, if Amazon lost my stuff, I thought they are paying for it like they don’t think that like maybe there is a need for reimbursements and they are to some extent correct Right.
00;24;55;12 – 00;25;24;06
Speaker 2
Because the dashboard that I tell it showing you right now is also showing this orange bar. The orange bar is like what Amazon automatically reimburses. So Amazon is trying to do a good job there and already reimbursing if there is lost or damaged items. And there’s like 20 plus categories, as I said. But unfortunately, even if they are with their best effort, they are missing a lot of reimbursements that are not recovered automatically by Amazon.
00;25;24;07 – 00;25;59;08
Speaker 2
And this can be between 1 to 3% of your monthly sales. So in a nutshell, if you are if your revenue is $100,000 a month, we are talking about 2000 to $3000 that can be recovered by the Iraqi. We detect this automatically. Everything is like automated, but according to Amazon terms of service, you cannot automatically open cases. So we have a huge team that is like, you know, opening the cases, claiming that, you know, money for the for the for the sellers.
00;25;59;08 – 00;26;24;25
Speaker 2
Now the another beautiful thing about it is the reimbursement recovery fee for EVA is 13% for the EVA subscribers, which means they only pay one, three, 13% for every single recovery. So if we recover $100, we take $13. If we recover nothing, we take nothing. So kind of a simple, straightforward service, no brainer. Everybody should.
00;26;24;25 – 00;26;30;05
Speaker 3
Use it. Yes, this is probably one of my favorite features of Eva. Excellent. David, over to you.
00;26;30;05 – 00;26;41;14
Speaker 1
Yeah, there’s two things I want to add on to this. So to our listeners, if you have not run reimbursements, the best day of reimbursements is de want because you guys go back 12, is it 12 months.
00;26;41;14 – 00;26;42;05
Speaker 2
18 month.
00;26;42;06 – 00;27;04;17
Speaker 1
18 months. So if you’ve never run reimbursements on day one, they’ll go back 18 months. And so can I remember when we flipped the switch on, we got like five, like five grand, and we had already been running reimbursements using another tool. This was just like the stuff that they did not find. And so this to me, there’s very few things that you can do in your business that give you 1 to 3% this easily.
00;27;04;17 – 00;27;12;16
Speaker 1
Like when I say you flip the switch on and do nothing else. That’s it. It is. I can say as a customer, we don’t do anything for reimbursements. It just happens.
00;27;12;16 – 00;27;13;08
Speaker 3
Profit you can.
00;27;13;08 – 00;27;35;02
Speaker 1
Get. And there’s so many parts of the business that require a lot of effort. This one is you just turn it over and are only charged when you’re successful. And so yeah, not big fan of this tool. So moving on, a lot of our listings have both FBA and FBM to our listeners that would be fulfilled by Amazon or fulfilled by merchant given the inventory restrictions.
00;27;35;02 – 00;27;59;29
Speaker 1
Sometimes they will go out of stock and cannot replenish or FBA inventory. And so we have FBM listings that service kind of a backup. However, we want to ensure that our FBA listings always have the buy box assuming that they are in stock. Recently we increased some of our FBA prices, forgot to adjust our FBM prices, therefore the FBM listing won the buy box and those are significantly less profitable.
00;27;59;29 – 00;28;06;23
Speaker 1
So our question is, is there a way to always have your FBM listings be more expensive than your FBA listings?
00;28;06;23 – 00;28;25;19
Speaker 2
And the answer is yes, absolutely. First of all, let’s start from for every single SKU. Does it make sense to have an FBM version? Because you know, in the past, like five years ago it was a discussion of like FBM is better two years ago, that’s still FBM for some of the items, let’s do FBA for some others.
00;28;25;19 – 00;28;51;06
Speaker 2
Today it’s like FBA is the on the way, you know that’s the right way. It’s the most cost effective and I agree with that. Right. We all agree FBA is the right way unless you have some product which is oversize or some like dangerous items etc.. Right. Or melting item, things like that. But here you go. For every single FBA, there is an out-of-stock challenge and if you have the way around and able to fulfill the orders, it makes a lot of sense to have the FBM version.
00;28;51;06 – 00;29;17;26
Speaker 2
Now having the FBM version has another interesting fact, like I would like to share if on the same listing the customer sees the FBA version, let’s say the price is $10, but also sees that there is another seller actually selling it for $11. But that’s the perception, right? Actually, there is no other seller. It’s you reach your FBM listing and the FBM, this thing is, let’s say 10% more expensive.
00;29;17;26 – 00;29;38;22
Speaker 2
But the consumer, the shopper, things like, hey, there’s another guy selling for $11. We see that it helps the conversion rate to, you know, like to having like another seller selling it for, for a higher price as they go into that FBA listing. So the question is like how can you keep the FBA listings that FBA FBM listings together?
00;29;38;22 – 00;29;57;01
Speaker 2
Now one of the the best parts of the best parts of Iraq now. Okay. So that’s kind of like again, a little bit cap here, I guess that I’m going to show about the parent A’s and pricing. Okay. Let’s talk about the parent and child pricing because like I mean, I would like to kind of cover two things at the same time.
00;29;57;01 – 00;30;24;20
Speaker 2
So one is that like you have the FBA and the FBA versions and the other one is like also you have different variations of the same product and you would like to control everything altogether, meaning that for example, for this parent, the reason one parent reason you have a master child like I mean in the setting. So this first one is a master child and the second SKU is the FBI version of the first.
00;30;24;20 – 00;30;52;10
Speaker 2
Now what you want to do is like you want to decide that your FBM to be always 10% at all the FBA, so it can easily be set up on the parent child pricing. Now not only that, you can set up the FBM version, but also you can set up like a two pack version, let’s say, to be all the way 80% more than the master app for the child, 80% more than the child.
00;30;52;10 – 00;31;20;21
Speaker 2
So with all the different variations of colors, size and also like two pack for packed eight pack versions and FBA and FBM, you are able to set up like custom rules to make it work. That’s one way, the manual way, but you have the full control. And the second is like Eva air is automatically if you have an FBM version and an FBA version, EVA Air will automatically set the FBM a bit more higher than the FBA.
00;31;20;21 – 00;31;47;22
Speaker 2
So you don’t need to even touch that because it will work automatically. Now the question is, hey, what about if the dynamic pricing changes the FBA, like next day the FBA price goes 3% up. What will happen with the FBA if that happens? The EVA will also synchronize the FBM aligned with that FBA price. Meaning if FBA price increases by 3%, BPM price will also increase by 3%.
00;31;47;22 – 00;32;08;11
Speaker 2
So the relationship that you define, which is like let’s say FBM to be always 10% ABO will be maintained if the the child is Q which is the master, that’s the FBA price changes, then automatically all the other slave SKUs or slave essence prices will be changing accordingly.
00;32;08;13 – 00;32;29;19
Speaker 1
This is huge and this makes yeah, we have quite a few products that have that two pack, four pack, eight pack type of variation and being able to move them in tandem with each other really, really helpful in. So yeah, this is, this is a great solution to problem number seven. So can anything else we want to cover or hi anything else we want to cover while we’re here.
00;32;29;19 – 00;32;51;03
Speaker 2
Absolutely. There is one more problem that I solved that problem for the last three months, coming to me all the time, which is about like, okay, you are is great. Amazon price. This problem is solved. But what about Walmart and Shopify? Because all the private label and bras now Walmart is kind of being more sexy. Looks like in the last three four months.
00;32;51;03 – 00;33;18;26
Speaker 2
We will see if it is like fashion or it will be like, you know, kind of it will continue. But one of the other challenges, unfortunately, if your Walmart price or Shopify price is much lower than your Amazon price for some reason than Amazon, you can have a buyback suppression problem, right? Like, yeah, and if your buybacks is suppressed, probably you’re going to lose like 30 or 40% of your sales and there is no other impacts to this problem is solved.
00;33;18;26 – 00;33;56;25
Speaker 2
What we do is like we are able to synchronize your Amazon prices now to both Walmart and Shopify. That’s number one and number two and minor release that we did two weeks ago. Again, you can put a percentage like that or an amount like a surcharge on top of that Walmart or Shopify synchronization, meaning that you can have a price on Amazon, $10 for a product and you can define the synchronization as, I don’t know, let’s say 10% more for Walmart and the Walmart price will be 11 and 20% more for Shopify than the Shopify price will be 12.
00;33;56;26 – 00;34;19;06
Speaker 2
You can do it in the other way and you can have your Shopify price to be 20% less than Amazon. But just be aware that for some reason Amazon can suppress your buybacks if they are scanning like all the basically the, all the Shopify pay. Just sometimes it happens, sometimes it does it with Walmart. I think 90% of the time Amazon knows the Walmart price.
00;34;19;07 – 00;34;20;20
Speaker 2
Hard to escape from that.
00;34;20;23 – 00;34;26;17
Speaker 3
That’s a really cool feature in our high. Is that like an API connection or is that that’s what that was a new really.
00;34;26;17 – 00;34;54;01
Speaker 2
Okay yeah it’s like it’s to release you right like you basically connect your Shopify through API. Same thing with Walmart and once you do the connection then you decide if it is that direct synchronization or unit you need. Some like unit may add a surcharge to it and it’s super great. Like I love this one. We tried immediately 1015 stores and it makes a lot of sense because Amazon data is huge.
00;34;54;01 – 00;35;22;28
Speaker 2
The other value is now you are able to synchronize the right price to Walmart and Shopify too. So it also fixes like one other problem, right? A lot of sellers saying, hey, if I use dynamic pricing, my Walmart will be still the same price because it’s fixed. Like I cannot update the Walmart price everyday. Right. And for some reason, if for the sake of dynamic pricing, Walmart price can be a lower from the Amazon price and it will end up in a buyback.
00;35;22;28 – 00;35;38;13
Speaker 2
So pressure now with that synchronization, all the problem is solved with that buyback suppression and maximize the profit on the Walmart and Shopify. That’s also enabled. And because the Amazon data is already enough to find the right price even for Shopify and Walmart.
00;35;38;14 – 00;36;00;03
Speaker 3
That’s a really, really slick feature. I really like that and definitely will increase profits, revenue and profits, right? If you don’t get the buybacks suppressed and your profits and revenues goes up. So that’s really cool. I know we’re coming up on time. Heid I really want to thank you for, you know, showcasing all of the features of Veeva, covering all of these problems and solutions to the problems that that, that the tools provide.
00;36;00;03 – 00;36;04;04
Speaker 3
So we want to go ahead and close out the show with the fire out. Are you ready? Hi.
00;36;04;04 – 00;36;05;09
Speaker 2
Yep, I’m ready.
00;36;05;16 – 00;36;07;09
Speaker 3
All right. What is your favorite book?
00;36;07;09 – 00;36;22;26
Speaker 2
So it’s the the the capital from Thomas. Pick a showing then I’m telling you about, like, how like, the important is the capital to run the business and the economy in the world. In the world scale basically. So it make it’s a it’s a very nice book.
00;36;22;29 – 00;36;24;16
Speaker 3
Okay awesome. What are your hobbies.
00;36;24;16 – 00;36;31;20
Speaker 2
Being like living in San Diego? Two things that I really like the most is surfing and rowing.
00;36;31;22 – 00;36;36;29
Speaker 3
Awesome. That’s really cool. What is the one thing that you do not miss about working the man?
00;36;37;05 – 00;36;53;26
Speaker 2
Definitely. What I do not miss is like invite, like people inviting to me to a meeting which there is another ten people and nobody knows why where they are. It’s like all this inefficient, ineffective meetings I have not missing at all.
00;36;54;00 – 00;37;02;20
Speaker 3
I definitely agree. Awesome. Last one. What do you think sets apart successful e-commerce entrepreneurs from those who give up, fail or never get started?
00;37;02;25 – 00;37;43;24
Speaker 2
I know the the answer is in that in the question itself, right. You know, first of all, like not giving up is like Super eight. Gordon Right. Like, you know, they always ask like when the startup fails, well, when the founders give up, right? So it’s kind of an important thing. But what I see right now, like how to be successful if they, if the guy already has the resilience is to really master the data, like being data driven, mastering the data and having a holistic wheel off the e-commerce, not just focusing on one single thing, like I want to make the advertising right?
00;37;43;24 – 00;38;02;19
Speaker 2
No, it’s really all about inventory advertising pricing together rather than fixing like just one of the issues because all of them are correlated like having that holistic view and being data driven can make the ecommerce sellers really successful.
00;38;02;19 – 00;38;09;21
Speaker 3
I think that’s an excellent answer as well. I like a one big echo system. Awesome. I really appreciate you coming on the show. I David, you want to close out the show?
00;38;09;21 – 00;38;18;02
Speaker 1
Absolutely. Hi. You mentioned it before we hit record that you had an offer for our audience. So could you share that with them?
00;38;18;02 – 00;38;42;27
Speaker 2
Hey, that’s a great one. So, I mean, thanks for having me on the show. You guys are great e-commerce sellers and there are also a lot of great sellers watching and listening the show. So for them, what I would like to say is like they if they want to use the platform first of all, they can go to Emma, that guru, and start leveraging the platform for a 15 days free trial.
00;38;43;04 – 00;38;59;19
Speaker 2
Now if they really like it, I would like the over 50% off on the first month subscription and they can use the code firing the men 50 to when they subscribe. So that will already immediately create a 50% discount.
00;38;59;19 – 00;39;17;19
Speaker 1
Perfect. That’s firing g EMR in five zero and we will post that in the show notes. I want to thank you for being a guest on the firing, the main podcast, and looking forward to continue to use this tool to solve problems in our own businesses. So thank you so much.
00;39;17;20 – 00;39;19;27
Speaker 2
Thank you. Thanks for having me. David. Then can.
- King, Patrick (Author)
- English (Publication Language)
- 161 Pages - 05/30/2022 (Publication Date) - Independently published (Publisher)