Episode Transcript
Ben Tregoe: [00:00:00] Stephan, it's great to see you today. Thanks for joining.
Stefan Haney: Hey, my pleasure. Thanks, Ben. Good to be here.
Ben Tregoe: I'm excited for this episode because you're the master of something that's very important to a lot of CEOs and brands today, which is Amazon. A lot of people are trying to get omnichannel. That obviously means.
Ben Tregoe: You have an incredible experience having worked at Amazon and building a lot of the tools that brands are using today. So I know it'll be fun to dive into that. But even before that I noticed in your LinkedIn you have this, deep, rich history in supply chain. So you've, kind of been in the guts of e-com from the very beginning.
Ben Tregoe: It would be great to start with a little bit of your background and, how you got to where you are.
Stefan Haney: Sure. You don't always know. I, talk to students in colleges and they get super worried and where am I gonna go? What's my job? And sometimes like, just keep pursuing.
Stefan Haney: So I had studied German along with marketing but I knew I didn't wanna do sales and I had this choice of I was very fortunate I had the opportunity to go to Accenture or go be a sales rep for a German company that sold semi truck seat. So I went to Accenture and what I, didn't realize about myself at the time, but I just like learning, right?
Stefan Haney: I like learning and I like transformation. Like how do we do it a different way? At Accenture, I got to be part of a team. Early on in the late nineties, we were connecting a mainframe computer to the internet with cobal. And it's like, Hey, that's hard. Oh okay, let's try it. Let's try it.
Stefan Haney: I, had the opportunity I'd been doing supply chain with Harley Davidson and overseas Germany with a couple German companies and just. How do we, move material around? And the opportunity because of some people I met early on in Accenture to interview at Amazon, and I'm like, Wow, Amazon gets a book to your door.
Stefan Haney: That's amazing. But one of the things I also found too and, like all of us, like invention is messy and you get to a place that seems to be awesome, we're like, Holy cow, how does this even work? There's so much duct tape and bubble gum making this. And so Amazon's growth was great. 2003, we got to transform and I love that transformation.
Stefan Haney: And just to fast forward, we're at this time in brands where 2000, 10,011, I got to part be part of Amazon's third party marketplace and they grew to a million, 2 million sellers. But then all of a sudden there was this brand surge and I could put a brand on Amazon and then like, Hey, Shopify's a good place to start a.
Stefan Haney: And so we're at this transformation space where it used to be if I wanted start a new brand or new product line, I needed to get shelf space. Shelf space was the way I got it. That's how I launched my brand. Now we're launching a brand with a Shopify store and Instagram or in TikTok, right? Cuz that's where customers are and where eyeballs are.
Stefan Haney: Now as part of Foundry we're, we are building a, portfolio company of brands born. And so whereas just like books, when I started Amazon, yeah, the majority of them were physical stores. Now we're working on brands, or the majority of them used to start by physical distribution.
Stefan Haney: And now we start by physical. Now we start with online we build brands online to get connected to customers. So I'm still in that transformation business. Like let's go invent and be curious.
Ben Tregoe: And you're, doing some consulting as well, right? For brands? Yeah.
Stefan Haney: So tell me about that. You, don know And Go ahead
Stefan Haney: I after leaving Amazon you realize, first you're like, Can I be successful anywhere? And then people are like, Tell us, what's it like to be at Amazon? Can we be like Amazon? And so some of it is like, Hey, there are some things that I can use and some people I've met. So sometimes, so as a when there's opportunity, I work with a select number of clients.
Stefan Haney: So I guess I call that a boutique with myself and then some other former Amazon people, former Microsoft people to help companies scale. Help companies come up with a new path of innovation or anytime they're in a scale growing point. One of the things we learned at Amazon is obviously be how to listen to customers online.
Stefan Haney: How do you get customer signals when you're operating online? How to grow really fast, right? We went from, in my marketplace days, we went from a team of hundreds to a team of thousands. So how do you hire, how do you organize those people? How do you start setting goals? And still drive innovation, right?
Stefan Haney: We launched a mobile app. We launched a bunch of APIs. We launched a bunch of seller business tools. [00:05:00] So how do you both hire those people? Scale and grow, and so teaching and working with clients to help them better serve customers. And build teams and organize them and then deliver and execute on an innovation goal is I've been able to do that with a number of clients now both myself and then partnering with other associates in my consulting business.
Stefan Haney: Nice.
Ben Tregoe: That's great. Thanks for that background. That's really fun and gives us some good launching points for diving in, going back to Amazon. Cause you know, there's so much interest in at a high level, like what, do you think are the right fits for Amazon in terms of brands? Let's say you're a, Shopify or a d toc.
Ben Tregoe: Brand that's now trying to explore the world of Amazon. Like who makes for a good fit? In terms of the types of things you're selling, the types of companies, the types of people you find success.
Stefan Haney: Yeah. If you're a, you make a product, right? One of the first questions is, do customers search for that product?
Stefan Haney: Do they search on Amazon today? , so I was working with one friend he's starting a, holster business. And at the time he was launching a few years back we look, we started, Do people shop for that product today on Amazon? And the answer was no. There were very few search terms.
Stefan Haney: There was none of his, what he considered competitors. And his path was to build a brand first and build an Instagram build. And Shopify say, Really, I'm gonna go acquire customers. now. So what's one of the first things? There's lots of tools to say, what are customers searching for on Amazon?
Stefan Haney: Are they searching for my kind of products? Are they searching for my brand? Fast forward a couple years and all of a sudden he's got a pretty good business on Shopify and we go back and do that same analysis. Our customers looking for your brand. Are they looking for similar products on. Sure enough, Yes.
Stefan Haney: His success on one channel had resulted in customers starting to search on Amazon. And so we had to think, how do we want to use Amazon? Do we want to use it as a sales channel? Do we wanna use a marketing channel? Do we want to use as a distribution? How did we want to think about it?
Stefan Haney: But it was not, do we use Amazon or not? It was a, how do we use Amazon? So things are a great fit on Amazon, I think when they. The core strengths of Amazon you have in the US you have a lot of customer eyeballs but, it's not like everybody looks at everything. So you wanna look at what's my search and traffic around my kinds of products or in Amazon you call browsers.
Stefan Haney: In, in, my, So do they, they look is my product something that people can easily get? Everywhere or there's big towns, but after Covid a lot of people have moved from more rural prices. It was my selection going to be available. If you can meet those two tests, that's a good place to start.
Stefan Haney: And then start to look, can I efficiently operate on Amazon? So also when you show 'em on Amazon, you're gonna invest in inventory and it's gonna sit in, you have to give it time cause you gotta ship to Amazon. There's gonna be Amazon receive time, so some of your operating capital.
Stefan Haney: Is going to, it's gonna be a different efficiency. So that's another consideration. Are customers looking for your product? Is it something that is gonna be region, regional, or really broad and then is an efficient use of working capital within the Amazon model? Or do you need to change your processes to do that?
Ben Tregoe: And how would you recommend customers or leaders think about repeat purchase? So let's say that you had a, business that. I don't know, maybe you buy multiple holsters. I'm sure people do. But if you had a business, we
Stefan Haney: like him, you give him his gifts, , right? Yeah.
Ben Tregoe: That's maybe more consumable or they're focused on repeat purchase.
Ben Tregoe: Like how should they think about Amazon? In light of
Stefan Haney: that, is that not consideration? There's two things about Amazon versus your own site versus Shopify. And with Foundry, we operate a couple of our own brands, right? One of those brute magnetics, magnetic fishing. We've got br magnetics.com, right?
Stefan Haney: Or we have techno rv.com and and, what we find is, there's different shoppers on both, right? We one common pattern I see is that enthusiasts and people who really want to engage with the topic, right? I love concealment. I want to go to tencor.com and see what content Jeff's put out there.
Stefan Haney: Or I wanna, I'm [00:10:00] really getting into magnet. Or I'm a Nikita guy. Those enthusiasts don't necessarily go to Amazon or they go when they know exactly what they want, they go to Amazon. But when they want to engage in the brand, they might go to the, direct to the site. A first time user, a customer acquisition, someone who's just exploring they trust Amazon, they know they can get prime delivery, and so they they, come to Amazon.
Stefan Haney: So understanding customers may shop. Your sites differently and why it can be good to be omnichannel, but also think about your content strategy. And then customers who are dedicated Amazon customers you can get some hints on repeat purchases. If Amazon's suggesting to you as a seller that you should invest in, subscribe and save, that's a hint to you that.
Stefan Haney: Customers are doing repeated buy, right? Yeah. You think about AOV differently, so you might buy a belt and a holster and a mag carrier, or you might buy a magnetic fishing kit and a grappling hook and an extra rope, right? To your question, running repeat, identifying the opportunity for repeat purchases is different on Amazon and you have to look for signals cuz it's not as easy as a Shopify site where you just run a standard LTV report and be good to go.
Stefan Haney: But there are signals there if you know how to look for them. And and then also thinking not just about repeat purchase the item, but really how you drive and repeat purchase within your. . Okay. And uh, how do I drive those accessory sales? Or how do I drive the and then you can start to look at I describe running a business on Amazon sometimes, as sailing, and sailing.
Stefan Haney: A small boat in a big lake. Okay? So in sailing, part of it is you pay attention to the wins, pay attention to competitors, pay attention to the data on Amazon, Pay attention to what are the algorithms. And you have to learn how to read them. Unless you're like me, you got to work. And you know how those algorithms work.
Stefan Haney: You learn how to read them. Yeah. Okay.
Ben Tregoe: So I mean to, that's a little foreign for a lot of people that grew up in the DSC world, right? I mean, they kind of have their set of how you build that business, how you run that business, the tools and the people. what, are the right, How do people think about that?
Ben Tregoe: Do they need a different type of person? Or what skill sets do those people need to be successful on Amazon? And also then let's talk about tools that, that might be unique to the platform.
Stefan Haney: Yeah. First I think all the entrepreneurs I've had the chance to meet who've built a business on shop fire, built a business on Amazon f.
Stefan Haney: I grew up in small business, high school, worked in small business but I do notice some differences. So on Shopify you have access to a lot of data. You know what the data is, and you can build some fairly common reports. Banbridge growth has a lot of great education. And as your business grows, you start to move into how do I manage working capital?
Stefan Haney: Is my business growing? A lot of people start with, I just wanna sell stuff. And so if the revenue number's growing, everything's great, and then they start to go, Oh, what's my repeat purchase? Am I using working capital efficiency? Because they start to go wait profitability and margin. The way you get to that on Amazon, you use a different set of reports, right?
Stefan Haney: And so it's like learning two different languages. You can't just carry over. You're still trying to optimize for revenue growth, profitability, growth, and ltv. But you're thinking about the ratio of your ad spend on Amazon will be different for PPC versus SEO and Google AdWords versus Amazon or sponsor brands.
Stefan Haney: And sometimes it's a little more trial and error. The kind of things if you're thinking, Okay, I'm a great, I have a great D to C business, It's been running well, whatever platform shop, a five big camera server, and now I think I wanna start selling my products on Amazon. Get ready for a little bit trial and error.
Stefan Haney: You're in, that's something new for you. You're, an expert here, but you're not an expert there. And then I think there's some great resources in the community. I wanna be careful cuz it's easy to quickly pick up a lot of. And then you're like, Wait a second, I didn't learn anything.
Stefan Haney: And those costs just ate everything. There's no opportunity here. Yeah, there's a lot of great ages out there and you may wanna selectively use them, but there's also a lot of great resources to study. Steven Pope Just pushes a lot of content out. His business is called my Amazon guy, right?
Stefan Haney: I got an Amazon guy. Yeah. And there are virtual assistant. So one of the things you want to think about as you go onto Amazon is I need to learn I need to learn about how do I gain traffic. So I need to [00:15:00] learn about PPC and efficient ppc. How do I learn? Some people learn by webinars and podcasts.
Stefan Haney: Other people learn by just trial. Set yourself a budget and do it. Some people learn from teachers, and so some great folks like Steven Pope or Brian Johnson out there on ppc, you're gonna have to learn ppc. Another thing you have to learn is just, you know how to read Amazon on terms of the data that they're giving you.
Stefan Haney: And again, same three things. There's some. Podcasts or some people like myself or some of these other folks who will publish or will gladly give you an assessment. And then you just try it. Yeah.
Ben Tregoe: I, was fascinated when you were showing us the seller central tools, the it was the combination of like tools and then your knowledge of what those tools were trying to communicate or how to get the right data out of it.
Ben Tregoe: And obviously you have the the, benefit of like having built a lot of those tools. But how does somebody get up that curve in, in learning a new system? And how long does it take? I mean it. . Yeah. Like how long should people expect it, it takes them to become really proficient at Amazon?
Stefan Haney: Yeah, that's a great question. I think for everybody it's gonna be a little bit different. We all learn at different rates, so it's not a great answer. But just to go back for a minute. In, 2009, which wasn't that long ago you logged into this Seller central tool set. The seller central is the B2B portal, seller central.amazon.com.
Stefan Haney: It's the, B2B tools portal to do everything to run your business on Amazon. And so one of the things, again, just to go back to your ask question when you run your own Shopify store, your own D TOC store, you're trying to get people to your store and it's your store, you own the whole thing.
Stefan Haney: And so you really getting people there, but then the operations within the store, you own it. When you run on Amazon, you're on a shelf in a mall or on a rack in a mall. And so I may be DeWalt and I'm in multiple places inside of Home Depot, right? I'm not even in my own store or my own store front.
Stefan Haney: And so that mindset is helpful to understand do I stand out on the shelf, right? Customers, when they shop, they're looking at my product. But all of us, you can luna's, like we all probably compare two or three items or when we look at search results, that's like the. And so the operations are a little bit different.
Stefan Haney: You're not just running a store, you're running a brand within somebody else's store, and it's somebody else's customers, right? So that, changes what you have to learn. And Seller Central in 2009 like to do a return to a seller was an email , right? When you shopped on Amazon and you re I wanna send this mug back, right?
Stefan Haney: Yeah. Please email the. . Yeah. So in 10 years, Amazon really, and they talk about this, they invested tens of thousands of engineering hours to be able to say, All right, let's make sure that every seller who's on Amazon has the, floor is basic tooling to run their business with a set of recommendations and, not just data, but actually interpreted data and recomme.
Stefan Haney: So all across Seller Central. It's not intended to be the best tools, but it's to be basic tools help you with automation. And as your business grows, you may choose to use more advanced tools in the Amazon ecosystem. And even in Seller Central, there's a directory of other tools with ratings and reviews.
Stefan Haney: So you're like, Oh, I don't have that many products. I'm gonna use Amazon's automated pricing. And then competition's heating up and I think I might have some pricing opportunity. I'm gonna switch from Amazon to a third party tool, maybe prophecy from Ja Rubin cuz it will have more advanced functionality.
Stefan Haney: So to answer your question, how much time, how long do you give yourself to to, learn Amazon? Learn it by Sahi. Once either figure out your slice and just get really good at optimizing it. So maybe take four of your products or one slice of your brand and say, Okay, can I get really good? Can I be competitive?
Stefan Haney: Do I know how to get traffic? Yeah. If you're doing it yourself borrow some people, there's some great virtual assistance around the world and say, Okay, I'm gonna borrow an expert on pp. And I'm gonna use them for three months, or I'm gonna use them for six weeks. But you should be good.
Stefan Haney: You should start getting a sense of running your Amazon business within weeks or sh or short amount of [00:20:00] months. Okay. And, the big factor here is are you a product that. People tend to think Amazon is, one river, and so all these customers are coming. So if I just throw my product in the river, lots of customers will see it.
Stefan Haney: And the better way to think about Amazon is a watershed where there's lots of streams that flow down to a river, okay? And your product line may be kind of nichey and it's in a small stream of a watershed. And that's an Amazon tip by the way. We were looking at a report in South Central that tells you your conversion rate for the ca and it tells you the benchmark of the category conversion rate that you're in.
Stefan Haney: Brute magnetics, is it in the industrial supplies category because it's a construction supply and it's a magnet, and so we're using it to clean up metal around a job site or maybe you're using it as a scrapyard or is it outdoor? Those two brows nodes, those rettes on the Amazon watershed have a very different level of traffic.
Stefan Haney: Yeah. And have a very different conversion rate. Yeah. So that's your pro tip. When you start understanding that tip you're starting to optimize your Amazon business. That's a good six months in, or you found a really good mentor or found a really good kinda expert to learn from.
Stefan Haney: Yeah. Do. Cause you start with the, I have a product, are customers looking at my product? How do I get more customers? Okay. And you, and then you go to, okay, there's organic traffic and paid traffic and yeah. Then you start to work yourself through that. And then you go, Okay, I'm paying too much for traffic.
Stefan Haney: How do I get more traffic at a more cost efficient? And so you walk this ladder Yeah. Of of,
Ben Tregoe: do you think I mean certainly at the experimental stage and you weren't expecting a lot of sales, you wouldn't hire somebody specifically for Amazon, but you know, at what point do you need to hire a person to run your Amazon business?
Ben Tregoe: Or, do you, Maybe that's a false assumption.
Stefan Haney: I've seen three approaches to people hiring to run their Amazon business. One is they recognize they wanna learn fast and they, have a successful d TOC site, but they recognize that Amazon has 65% of three P dollars in the United States, and they wanna sell their products everywhere.
Stefan Haney: Customers. Yeah. So back to my holster guy he said, Hey, I wanna make sure people are shopping. They find my product. Yeah. Uh, And they see my video content, right? And maybe we sell on Amazon, maybe we just make sure people find my product and learn about my product on Amazon. And one pattern is hire someone who's hire an agency or hire a virtual assistant just to manage my.
Stefan Haney: Okay. Because I don't want to spend the time to learn about traffic. Cause I'm really running my D to C business, so I'm gonna hire a specialist to give me a fast forward. Yeah, right on. Making sure that my products look good on Amazon and I don't know all the buttons to push and files to upload.
Stefan Haney: So I'm gonna hire a specialist to get set up and get a fast forward. That's one pattern. Cause I'm still running my D to C business and my. As an operator, I'm gonna keep my main attention there. Okay. And then at the point that you now have and you decide like, Hey, there's enough business on Amazon to warrant a full, It's the same decision you'd make in any part of, do I need someone to run well, my business, do I need someone to run shipping?
Stefan Haney: There's enough orders going out every day that someone should just have that as a. So in this case, you're not hiring knowledge as much as just there's enough work, right? Somebody's gotta ship the products into Amazon Fulfillment fulfillment by Amazon. And I want them to really pay attention and report to me.
Stefan Haney: So that's a second pattern is people great. Go. Awesome. I'm all in. Yeah. And then the third pattern is, again, at scale, they may replace those virtual assistant or they may replace the specialist with an. Because now they're like, How do I go the next step function. The business is running on Amazon, but I know that Amazon's fees are complicated and Amazon's probably accidentally overcharging me, or they're not the rate.
Stefan Haney: Now I need somebody like gida or Riverbank Consulting, or one of the patterns I see in sellers is they start out, Nobody's selling a product like. And they get customers and they get attention and they forget that sellers watch for what customers are [00:25:00] paying, attention to and copy you. And they may copy you legitimately or illegitimately, different problem, but they're gonna copy something. Like now when people search for concealment, holsters, instead of seeing just my brand and the brand I've worked hard to build, people are like, Hey, that's what customers are shopping for. I'm gonna sell that too.
Stefan Haney: And now they see five things and the prices start to compress. And you're like, I need to do something. So Anchor was super smart. Anchor watched that and they would add a feature to the product. So they'd be able to keep their price because they gave you a little more, right? Instead of two USB ports, they gave you three, right?
Stefan Haney: Yeah. And so their product had more features for a little, just a little bit higher price, right? And they, but they would watch and then people would copy that. And so they'd add another feature. Or you have to find efficiencies in your business. Pay attention to these great reports from Bainbridge to say, Hey, we can save some costs.
Stefan Haney: Or we can proactively identify mix shift. Yeah. And so that's the first thing. The first hurdle that I see with successful sales in Amazon is when people start copying you, how do you find, how do you deal with price compression? Yeah. The second one is on Amazon, is things can run for a while, but you know, mason jars are still mason jars, right?
Stefan Haney: Thermos are still thermos, but a lot of products, they really want to see a new product. If you have a brand, I wanna see a new product. Yeah. And sellers can find it a challenge to keep up the new product velocity while their business is also scaling. Yeah. And that's a challenge I see some sellers face.
Stefan Haney: They get good at managing their growth and they're not launching new products to keep driving that growth
Ben Tregoe: And, So the downside of not launching new products enough is, what you, it's easier to copy and you just get into a more of a commodity? Or are you saying that the buyers, the consumers are looking for new things and.
Ben Tregoe: You're not delivering it, but your custom, you're a competitor.
Stefan Haney: Yeah. I mean, why do people buy new cars? And, they want a little more feature. They want more feature for the money. Some things just wear out and you could sell them the same thing. Yeah, but so it could just be new models.
Stefan Haney: But it can be a challenge for a small, medium business where they're like, Man, my business is growing 20%, so I had to put new shelving in the back. I hired a person and we put some new systems in to manage our pricing, so we're more competitive. And then all of a sudden somebody launches a slightly better mouse trap and they're like yeah.
Stefan Haney: I don't, my manufacturer can't copy that. Yeah. Or my manufacturer, . So it just, for example, it's just sometimes it's just product evolution. Yeah. I've got a bunch of kids, as and so I've bought a lot of little scooters, micro scooters, razor scooters, and first they just have the wheels and then they started having flashing lights in the wheels.
Stefan Haney: And then they came in a variety of different colors. Yeah. And so sometimes new practical doesn't have to be like a massive expansion. It's just the evolution of the product line.
Ben Tregoe: What are some common mistakes that you see brands making regardless of stage so even people that are experienced or just starting a,
Stefan Haney: What are some, Yeah.
Stefan Haney: Those two patterns that I mentioned are, first like you if you're trying to delight customers, you do want to keep evolving your product. And if you had been successful in Amazon, you are also dealing with the problem of blessing. You're dealing with growth, right? Champagne problem. So that's one.
Stefan Haney: Understanding that you're not, that you're operating in someone else's store. So it's, there's gonna be copycats, including Amazon, right? Yeah. Because Amazon's trying to delight customers and, so they can, That's what they're trying to reward and that's what they're trying to do. I think the third is common pattern, whether it's mistake or whether it's a success pattern, is understanding how to keep getting better at working on Amazon and how to.
Stefan Haney: Read Amazon. So mean that topic of Amazon copied my product, right? Amazon's the big bad guy. Yeah. There's a lot of software and a lot of systems at Amazon and so there's not necessarily motive, not saying the table's flat, but it is their store. But there's not necessarily motive.
Stefan Haney: And Amazon's still got plenty of improvements and people can get hung up in this, kind of eddy wheel. Amazon's not fair. How do I be successful? It's kinda like the officials in a football game just play better right then. Leave no doubt, right? Do what you [00:30:00] can play better and leave no doubt.
Stefan Haney: But that specifically means Amazon will launch a bunch of features and you should try them all. Okay. And, see if they work for you. And know you can study Amazon if the future works. Amazon will. If the feature doesn't work, Amazon will kill it. Sometimes they kill it fast. Remember, pay phrase no.
Stefan Haney: Amazon launched pay phrase, I think it was like 2006, 2007. It was this crazy idea that if you give people, let people make their own phrase, they can pay with it. It didn't stick. Amazon killed it, and now here 15 years later, we have Venmo in the cash. And we're paying each other by phrases, right? Yes.
Stefan Haney: So sometimes Amazon's before it's time but also you sometimes also being an early adopter. So Amazon launched merch by Amazon, right? It was a cafe press kind of thing. You could come up with designs and upload them. It by being, by getting an account fast, like, I'm gonna try everything that Amazon.
Stefan Haney: It's a good thing because it was very successful and Amazon said, Sorry, we're not taking any more accounts. We'll be doing it by invite only. Wow. And so people are like, Sweet, I'm signing up. I'll try everything Amazon does. Yeah. Great. So that's one thing about understanding Amazon. Try everything they launch.
Stefan Haney: Yeah. But recognize they don't always know they're guessing. Second thing, recognize Amazon's gonna keep. . So you, that's why it's more like sailing. You can't go, This is the way, and it will always be this way. It's no, Amazon's gonna change the search algorithm a little bit. They're gonna change policies on marketing, and they're doing it not to mess with you.
Stefan Haney: They're doing it because they're, gonna continuous improve to try to delight customers and, so you're going to have to keep adapting your process. because the bar is gonna keep going up. And people think they can get to a process that sellers think or business think they can get to a process on their side and just be done.
Stefan Haney: Yeah. It's like, no, you're gonna have to keep investing in your Amazon improvements. And that's probably different than your d c a little bit. Yeah. Amazon gonna start with like, Hey, two day shipping is the standard. Yeah. Except for me, I live in rural America, so it's not always two day, but yeah. . And then all of a sudden, when I lived in Seattle, man, two hour shipping was the standard.
Stefan Haney: That's right. And sellers like, I can copy today. Yeah. And then like, holy crud, I have no idea. I'm two hours shipping. Yeah.
Ben Tregoe: That's, one area that you hear. One area you hear a lot of people struggling with is the changes in inventory. Rules about how much you have to have available.
Ben Tregoe: You can't store too much. Like what are some tips or thoughts there for managing that better?
Stefan Haney: Yeah. I mean, that's a great example of sometimes Amazon's a little too when I was in charge of Seller Central, I, some of the feedback I, would get from experience sellers with like sometimes when I'm communicating with you or via seller support, not me personally, or when when I'm trying to use your tools and look at the data on seller central.
Stefan Haney: I feel like I'm talking to a small child in a different language. I think you're trying to tell me something in important and I just can't tell what. I think from a inventory score can be a little bit like that, right? It's got a code name, I p the inventory performance index, and it's a synthetic metric.
Stefan Haney: So pick my advice. What's Amazon trying to do, right? Amazon's trying to follow the pattern of more what you subsidize and less of what you. So they wanna subsidize terms, they wanna subsidize a low return rate, they wanna subsidize you having efficient use of the space they're charging you for.
Stefan Haney: And I can only put in there what I can put in there. So you have to think about your mix, right? I'm not putting one product in. If I have a brand, I'm putting my brand in. And maybe I put my best sellers in for a little while to see if I can boost my index and, get more index.
Stefan Haney: And then I balance my best sellers on new products, right? And so I think about my mix to use inventory. Maybe I use some seller fulfilled prime, or I use a lightning deal, right? Cause the end of the day Amazon's gonna reward things itself. Best way to get more search. Sell stuff, right? Yeah. Yes. You can buy your way up to the top or sell stuff.
Stefan Haney: So sometimes investing in prime day or investing in a coupon or investing in a lightning deal can give you residual value of your [00:35:00] brand. And that works back to I p that's a great example. I think one of the, one of the interesting things that's gonna play out right as a brand is buy with. Because that's clearly a shot across the bow.
Stefan Haney: How's that work with Shopify? How's Shopify gonna react? Is it something you should just try? Probably should you try it on all your brands? Don't know, right? It's early days, but Amazon's clearly putting a lot of momentum behind it. Go
Ben Tregoe: d go a little deeper on buying with Prime.
Ben Tregoe: Like how, when would you try it and when wouldn't you? And what do you think? It could go. Where do you think you could go for Amazon? Yeah.
Stefan Haney: Prime's a great experience, right? I've been a prime customer for a long time, right? I think you're a prime customer. lot of people are prime customers.
Stefan Haney: And so one of the things I've loved about Shopify is when I go from one Shopify site to another Shopify site and they recognize me, they're like, Hey, here's your code. Use that shared wallet. STR was kind of there first. And Amazon is doing something similar. So if you're starting, if you have a pretty solid D to C site, maybe you have two for different sub brands or for whatever reason and you're just getting started in Amazon, that's a way to say, Hey, cuz Amazon's gonna look at the data, right?
Stefan Haney: They're gonna look at did people buy. It also means can help you get some of that inventory. Because Amazon's gonna reward your turns. And you're selling in multiple channels. Yep. But you know, there are different cost structures, right? You're working capital and how the cost structure of your own site versus Amazon site, you may want to decide like, which is actually gonna make you more money, right?
Stefan Haney: Is the lift gonna be worth any extra costs? Is it going to create Amazon customers and move people to Amazon? So dynamics that I don't think we know yet. But you're gonna wanna monitor as you try it, right? So you might try a subset of your products or a subset of your brand before you just roll it out across your whole site.
Stefan Haney: And it's a good way to potentially get started on Amazon, right? If you're not already, .
Ben Tregoe: Do you, I mean, do you think that this is like a, Shopify killer or do you wouldn't go that far
Stefan Haney: or, I mean Shopify has been going for a long time to that's like good news, right? It's like, Hey, it's conflict, it's a prediction.
Stefan Haney: Shopify's. Put a lot of time in and they've, hit niches and Amazon hasn't, achieved, but it's easier to build a site. It's easier as a brand to, to communicate with your customers. Amazon's still evolving on how do they help brands actually represent themselves with videos and contents and maybe they feel a little behind there.
Stefan Haney: But I tried, I'm not sure I got as far as I would've liked in building brand tools, yeah. The same way communicated TikTok and Instagram and anyway, I could. Sure. Shopify, you can put that content more easily. And Shopify's tried to build some delivery network for some time and they haven't hit it yet.
Stefan Haney: So I'm, not ready to go. It's a Shopify killer. But I, it may kill delivery within Shopify. Cuz it does add a headwind. Yeah. Uh, There,
Ben Tregoe: Yeah. Yeah. Hey, so we have a few minutes left. Tell me more about Foundry and what the types of brands that you guys are looking to acquire or build.
Ben Tregoe: You know who might be benefits.
Stefan Haney: Yeah. What a fun time to be an aggregator. It was 2020. I mean, it's been a fun ride. It's kinda like Covid 2020 Thio comes out and all of a sudden we go from having seven aggregators to 97 aggregators is always a little bit different.
Stefan Haney: First we're pretty heavy operations. Obviously I played a lot in seller Central. I am, my peers and employees of Foundry have, we certainly have finance guys and acquisition guys, but you know, our CEO Helen Vae led a lot of stuff at Young brands and, Walmart Kyle Walker and, and Matt Rhode.
Stefan Haney: And we've, been people who work with brands and we know what Q4 ship cutoff means. We know Running a brand on Amazon, a Shopify, and the operation side, and in this environment with supply chain be difficult. That's been a big deal for Foundry, right? And we've always second thing is we look, we really love the entrepreneurs and so we want to be connected with our founders post acquisition.
Stefan Haney: We see the acquisition as the beginning of a relationship. We look to reengage and redirect them to give them, let them do more of what they. So if it's launching more new [00:40:00] products both in their brand that we just bought or other brands, we love that, right? Or if it's just communicating customers, we've bought their company.
Stefan Haney: Will probably be some, we'll redirect somewhere, but it could be working with other founders to help them exit, right? So that second thing we love we, kind of, we love our founder. And then also with Foundry we've been in verticals, so we love pets. We love personal care.
Stefan Haney: We recently bought a company called Supply and Razors and Men's Personal Care outdoor recreation, like brute or some RV companies like Level Mate. . So we like these verticals and cuz it lets us build, Do we wanna buy an asin? Do we wanna buy a whole brand? It lets gives us more flexibility there.
Stefan Haney: Foundry has we're thrilled. We're still buying we're still hiring but we continue to be selective to buy brands that have strong EBITDA, strong growth rate. And that's limiting the pool a little bit cuz it's been harder. But we wanna buy companies with momentum. that are of a certain size.
Stefan Haney: And then we look if they're on one channel, we bring them omnichannel we accelerate their product development. Yeah. We start to look to bring them to more customers either through markets. Sometimes we do physical stores. So we've done a few partnerships to bring our brands into physical stores because we have that experience in those relationships.
Stefan Haney: So we're, still looking for a few good brands, and particularly in those verticals.
Ben Tregoe: Yeah. And what's the minimum revenue or EBITDA?
Stefan Haney: Yeah, we like to see we like to see brands that, that are a million plus. Or, at least around a million in EBITDA are with the momentum. Typically now sometimes we'll see a smaller company that has some great products in our verticals that we can either merge to our existing brand or we can bring in as a product line. But you know, typically we're looking for things a little. Because the floor of operating costs on Amazon there's a floor.
Stefan Haney: And what we do also at Foundry is we've been pretty good. We have a shared supply chain team, so all our brands get integrated into supply chain team. All our brands get integrated into our shared services marketing team. And we're basically building an agency and an incubator at Foundry to operate parts of our brands or operator brands.
Stefan Haney: And, that's been doing it all in a year. .
Ben Tregoe: Yeah. That's awesome. And then just to, finish up, I'm sure there's a lot of people that have been impressed with you and would love to reach out and learn more about the services you offer in consulting. How do they find you? Who are good fits?
Ben Tregoe: Who, shouldn't reach out, who shouldn't reach out?
Stefan Haney: Oh sure. So very accessible on LinkedIn. It's an easy way to, get a hold of me Stephany on Linked. Email says Stephan advantage leader.com. And my name's in there cause I've got the German spelling of my name. And I, look to work either directly with executives or with leaders at a company who are growing their business or want to expand their business.
Stefan Haney: I spend a lot of time as Amazon grew fast, right? I've always said, as your business doubles or as your business as your team doubles, it's probably time to take a look at your processes. Or your people and do an audit, right? And say, Are you scaling? And, that's one area that I've either built teams when people are transitioning to something new and I've done it before either I work directly with them on engagement or advisory or I build a small team people to, help show them.
Stefan Haney: Cuz you learn a lot by showing or doing alongside people as much or more than telling people. So taking people through that journey of a strategic plan, a growth plan, an annual plan, or. How do we launch this new innovation? Define and launch a new innovation project is something I do quite a bit.
Stefan Haney: And then usually for Amazon advising I like to keep a nice boundary. I spend a lot of time with Foundry but I have a, great set of people out there that I, often refer people to I'm looking to get started on Amazon, who can I talk to if it's you. Yeah. And I have a number of people that I can help, guide.
Ben Tregoe: Oh, nice. So people should reach out for that as well. Yes. Okay. Awesome. Stefan, this is great. Did I miss anything? Is there anything that you
Stefan Haney: Ben, we've covered a lot of ground. It's, a pleasure. Thank you. Very podcast. And, here I love Bainbridge Growth. I think a lot of things, and I didn't mention earlier sellers can get so hung up in the transactions and they, need to learn where the profit is and where the costs are on in this business.
Stefan Haney: And you guys have built a great set of reports and, a great set of, guidance even to [00:45:00] help people know what is going on in the business, but also is it good? And love the chance to, talk with you and see your products at work as well.
Ben Tregoe: Thank you. Thanks. I appreciate that.
