In this fast-paced episode of the eCommerce Evolution Podcast, I sit down with Neil Twa, co-founder and CEO of Voltage, to discuss the future of Amazon selling. Neil, a brand owner, investor, and podcaster himself, shares invaluable insights on how to navigate the evolving Amazon landscape in 2024 and beyond. From AI-driven changes to brand-building strategies, this episode is packed with actionable advice for sellers looking to stay ahead of the curve.
Key topics covered:
- The impact of AI on Amazon's search algorithm, including the upcoming Cosmo engine and how it will revolutionize product discovery
- Amazon SEO strategies for 2024, focusing on optimizing images, titles, and overall listing quality
- The importance of building a true brand on Amazon, moving beyond just being a seller
- Strategies for profitable growth, including Neil's 20% EBITDA target and minimum $12 net profit per unit rule
- The future of Amazon selling, including the potential need for design or utility patents to defend against competition
Whether you're a seasoned Amazon seller or just starting out, this episode provides critical insights to help you thrive in the ever-changing world of e-commerce. Don't miss Neil's expert advice on building a sustainable and profitable Amazon business in 2024 and beyond.
---
Chapters:
(00:00) Introduction
(02:12) The Importance of Amazon SEO
(16:43) Preparing for the Personalized Search Engine Algorithm
(29:25) The Influence of Rufus (AI Shopping Assistant)
(34:11) Building a Brand and Expanding Product Lines
(42:48) Prioritizing Profitability and EBITDA
(48:12) Conclusion
---
Show Notes:
- Neil Twa (LinkedIn)
- Voltage Digital Marketing
- The High Voltage Business Builder Podcast
- PickFu
- Bryan Porter
- Simple Modern
---
Connect With Brett:
- LinkedIn: https://www.linkedin.com/in/thebrettcurry/
- YouTube: https://www.youtube.com/@omgcommerce
- Website: https://www.omgcommerce.com/
---
Past guests on eCommerce Evolution include Ezra Firestone, Steve Chou, Drew Sanocki, Jacques Spitzer, Jeremy Horowitz, Ryan Moran, Sean Frank, Andrew Youderian, Ryan McKenzie, Joseph Wilkins, Cody Wittick, Miki Agrawal, Justin Brooke, Nish Samantray, Kurt Elster, John Parkes, Chris Mercer, Rabah Rahil, Bear Handlon, Trevor Crump, Frederick Vallaeys, Preston Rutherford, Anthony Mink, Bill D’Allessandro, Bryan Porter and more
---
Transcript:
Neil:
Market the product correctly, understand the organic engine versus PPC, and then understand how we create quality products, not me too products to move them into full product launches.
Brett:
Well, hello and welcome to another edition of the e-Commerce Evolution podcast. I'm your host, Brett Curry, CEO of OMG Commerce, and today we're talking Amazon growth building an Amazon flywheel, and how you should grow your brand on Amazon in 2024. My guest is Neil Twa, he's the co-founder and CEO of Voltage. And Neil, surprisingly is from my part of the country. So he's in southwest Missouri just like me and really a unique perspective that Neil has. So he's a podcaster, he's a brand owner, he's an investor, he's involved in private equity, and so he's building brands, he's buying brands, he's selling brands, so he knows the Amazon space inside and out. And so today we're really going to talk about several topics. We're going to talk about AI and how it's changing the Amazon landscape. We're going to dive into Amazon, SEO because it's still super important as we'll talk about what's new there. Going to dig into building a brand and being profitable. And also may talk about how to grow your business during an election cycle, which some wrenches may be thrown in the works a little bit. So we're going to tackle that as well. But with that, Neil, welcome to the show, man. And how's it going? Good,
Neil:
Man. I'm doing wonderful. Thanks for having me
Brett:
Here. Yeah, thanks for being here. I had a blast on your podcast. It's good show. Excited to do the old podcast swap and get you here. We
Neil:
Still managed, didn't do it in person, even though I think we're like an hour when he's southwest. We're literally an hour that hardly ever happens. Dude. I talk to people from all over the world, but I hardly ever talk to anybody in my state.
Brett:
Same. It's always like one of the coasts. We're an hour apart but still an hour. That's so
Neil:
Well had a cram of meeting below this one and one on the other side of it, so it's like I couldn't get to you in time. Totally.
Brett:
We'll get to it. Totally. Exactly. Yeah, that's awesome man. So let's talk Amazon SEO O. And the reason why this is still so important as a topic is because still the vast majority of purchases on Amazon are driven by search. If we want to buy something on Amazon, what do we do? We go and we search. Maybe we're discovering products through the recommendation engine and other things, but it's mostly still search. So if you want to win the Amazon game, you have to know SEO. So Neil kind of break down that what's the 80 20 of Amazon SEO? What are the things we need to be focused on that really drive 80% of the impact? Well, it's
Neil:
Important to understand that that has inverted and changed over the years. Organic used to be the big engine 2012 to 2017 ish. And then with the adoption of PPC and the growth of that inside of Amazon and hiring away Google engineers and reformatting the whole thing, they've now turned into a media engine that by 2026 is going to be a marketing and distribution and advertising engine surpassing the profits of their AWS, which basically runs the interwebs. So this is going to be a massive change that everybody needs to prepare for with 50 50 on the organic now and the PP 50% of your sales still come from organic. Now we will always love to see that inverted and turn that into the 80 20 where we get 80% organic and 20% PPC, which is a shot we always go for. And there's metrics you have to look at in the organic side before that's even accomplished.
And one of the things, it's a tactical level now that I've kind of explained this. Here's a strategy to this, which is basically get more organic sales and get less PPC if at all possible and use PPC to kind of power the engine, but don't make it the engine. And a lot of people miss that because they don't know things like Amazon's IDQ score, which is where your SEO engine is inside of your little playground on Amazon, within your seller account, within your asin, you get assigned a score and that score is going to go down.
Brett:
What is that score again?
Neil:
IQ score. idq. It's a score basically considered a hundred points and everybody gets a fair shot at it from the very beginning. So the engine itself, this a nine engine in the filing system is just trying to look where to place you and in this big marketplace so that you aren't completely buried by other products in your niche or what's called a node on Amazon with somebody who has 20,000 reviews. So you might want to go compete with them and they don't want to bury you. Why? Because the social aspect in commerce and the economic engine of changing products and innovation means they may not want to miss a great product that's going to market and simply bury some opportunity because the next guy has 20,000 reviews. So they built the system really as a free market, which is cool, so you can actually get a product in the marketplace even if somebody has five, 10,000 reviews.
In fact, Amazon itself has told us that in this search, in this engine that you are going to see 5% of all of Amazon revenues in the first year go to product launched in that year. Okay? It's not a lot, right? So here's where this goes. Strategy year two and year three, that goes 20% and 40% by year three. So you need to think of any market E in this day and age. You've got to battle through years two and three to make any e-commerce platform an opportunity, any paid traffic and opportunity. And of course organic search is a huge component of that done.
Brett:
Just to break that down and just to clarify that, Neil, because that's a really interesting point. So only 5% of sales in a category will go to products launched year. Actually
Neil:
All of Amazon revenues for year one SKUs are only 5%. Yeah, it jumps to 20% in year two and it jumps to 40% in year three. So those who are thinking they're going to hit their home runs in year one need to be really prepared that by year two and year three, the brand is going to mature, the reviews are going to mature. Your ranking and market share are going to mature. Your growth is going to mature along with Amazon's normal growth and expectations. So what do they want you to do? In simple terms? I want you to launch more products. What do I want you to do? Launch more products, right? Increase the base and portfolio of your product base and the engine itself on Amazon will reward you. Why? Because demand capture, we have to understand what Amazon is. It's now a demand capture platform.
It used to be demand creation when I started, which was very different, but now it is demand capture. So things like social commerce, Facebook, TikTok shops, other locations, influencers around the web and et cetera are creating the demand through that creation. But it's being captured 30% of the time from television ads on Amazon 30% of the time from paid traffic channels on Amazon TikTok shops, we see 30% of it go. We call that the halo effect. So in an omnichannel strategy, you have to understand that Amazon is demand capture. So we got to go in with the understanding that this organic engine is setting there wanting to basically present a product based on existing demand. Now, I think so many people think that you go to put a product on Amazon and you need to create demand for it. You don't actually need to do that.
You don't need to get offsite traffic to it in the first six months. You don't need to do a lot of funnels and a lot of heavy lifting. What you need to do is optimize for organic inside. That's your strategy. So tactically, what do we do when you launch an asin? Don't touch it for the first seven to 21 days. I know that the issue is, well, I'm not going to make enough sales. I just put it in there and it's nothing good. That's going to happen. But in actuality, you're going to lower that IDQ score. If you start ads from the very beginning, as will not convert well from the very beginning, and then you'll have a engine that now shows us that it becomes dependent on the ad traffic in order to expand the reach of that asin. You understand what happens? They penalize you, they penalize you because they want to make more money off of you and you and your ignorance go and put your credit card in and start buying traffic from day one and then you are now forced to buy more traffic for the life of that asin.
So how do we avoid that? Don't touch the product launch for the first seven to 21 days. Resist the urge to start no ads. What are you looking for? You're looking for that 80%. Am I dialed in? Do I get impressions? Do I get clicks? Hopefully I get some sales and I start to see how optimized my data set is for this AI engine because that's what it is. I'm not selling products to people. Amazon is I'm selling listings to an AI engine. I'm selling data. So as a direct marketer and a business guy, that's how I approach the system. So I talk about product. So many people focus on product development and r and d to the point of capitulating, any opportunity when they really need to focus on what's the data and how do I sell the product? Because sales fixes everything. And the next step is innovation of a product to move you away from the market share innovation will create more demand and those product skews that mature in 24 and 36 months, you'll continue to innovate them because we all know that products become saturated brands. Why there's 15 different burger joints and 24 different coffee shops because they're all selling similar products, but they're different brands. So in the organic strategy, we need to move towards the brands, and while we do that, we need to be able to capture the demand that already exists and it's in there running at 8,600 units a minute. So don't think that you don't have opportunity on Amazon and you need to do all this other stuff in order to drive demand for your product on the marketplace. It's moving 8,600 units a minute.
Brett:
Yeah, I mean that's the real strength of Amazon. The traffic is there, the demand is there. You just got to capture what is there and then you can move on to the next step, right? So what are some of the components of that IDQ score that we need to be aware of and that we can help guide or manipulate?
Neil:
Some of them are obvious because Amazon gives you that seller health account status and always we want it to be green. That's returns, defects rates and other things you have to pay attention to that. If your product is not meeting demand, those defect rates will go down and as they go down, so does your IDQ score, right? Just the quality and conversion of the listing can also lower it. If you are what's called unit session percentage on Amazon USP or in the marketing world, the conversion rate is lower than the top three to 10 competitors in your node that currently have that market share, you're never going to overtake them, right? You're going to be at a degraded state in the data engine before you even try to manipulate it.
Brett:
Why would Amazon move you ahead of them? They know that for every 100 people that see their products, more people are going to buy than for every 100 that sees your product. So you're going to get penalized and move down
Neil:
The page. They already know the historical data of those products. The data's already there, the system's there, the inventory's already moving. So you are stepping into a very competitive state, which means you need to do something very different to be competitive and no longer can you just throw up a listing and a he'll marry and say, well, I'm going to get a few hundred units and all my hopes and Lambo dreams are going to come true. It just doesn't work anymore like that. It really doesn't, right? So we have to capitalize on that both from a conversion perspective, which is going to do the first 7, 10, 21 days are going to tell us that how well are we optimizing our data against current market share? Alright? And then it's just going to get down to as it works better, and we have a phrase in our company, don't marry your product.
Steal someone else's girlfriend instead, right? Because that product data has to prove itself for the first 100 units, and I'm looking at it in a 90 day cashflow plan, okay, a hundred units, 90 days, can I move that in 90 days or less? The faster I move it in 90 days on a hundred unit test order, that will determine how much more inventory I'm going to put in based on conversion and metrics I'm seeing come through the first 30, 60 days. If I'm turning over that a hundred units in the first 60 days or less, I'll order a thousand units. I've seen provable data, I've seen growth in the worst conditions possible. New seller count, usually new health. If you're a new seller and you've got no stats whatsoever, a brand, no one's ever heard of or whatever, you're just at the base of all the business.
It's the worst scenario. If you can get at selling in that scenario, it will only get better if you do it. And what will negatively impact, of course, is bad product at that point because negative reviews will come in, negative seller feedback will come in and that will kill the engine. It just beats it to death. So we have to do those two fundamental things really well. Market the product correctly, understand the organic engine versus PPC and then understand how we create quality products, not me too products to move them into full product launches. The engine will reward that as that stats come in and those sellers come in that IDQ score will actually stay high enough to compete with the current IDQ scores, which we will not know because Amazon close to the test data, but we can see it in the market share of the competitors that are in the market.
Now, you may enter market with 40 to 60 competitors, but let's be very clear, there's only five to seven competitors in your niche you're ultimately ever going to compete with on all of Amazon with billions of SKUs. When you niche your product in, there's only five to seven major competitors you have to deal with and they're the ones that are going to own all the market share, right? So I'm sorry if I'm going too far detailed into your question, but I want to make sure we cover the aspects of it. Organic versus PPC. We're actually going to then focus on something called TA costs tacos. We joke about tacos, total advertising, cost of sale, organic and PPC sales. So once I see organic sales and data coming in, I'll launch my auto campaigns. We'll go through another 30, 60, 90 days guys, not five or seven minutes. I think a whole lot of people want to happen, but we'll go through the next 30, 45, 60 days as that campaign dials in as we see the data and statistics come in, then we make very data driven moves next to target products and growth that continue to mature that product cycle.
Brett:
Great. So kind of going back to IDQA little bit. So we're trying to limit things like returns and defects and negative reviews and we're trying to optimize conversion rate and things like that. What are some of the other elements that are contained in that and how do we know when we need to pull a lever to try to improve a certain element of that score?
Neil:
So with that unit session percentage and basically in the world of conversions, it can be anywhere between three to 5% at volume of movement or as high as five to 25% in terms of smaller niche based products or long tail keywords that offer that higher conversion for your unit session percentage, typically you want to target higher at the beginning and then it's going to come down if it's within three to 5%, usually for higher volume products, you're really dialed in and that's a great metric because if you get the profitability right, then it turns into a whole lot of fun, but the metric of it is if you go to the dashboard, it's changed. If you go kind of to the ASIN listing itself versus we're talking about mobile differences because 60% of all the sales on prime day were mobile, so you got to understand the differences, but they're still 40% of desktop.
That makes up a huge thing and it's easier for people to visualize this for a second, but if you go to the listing and you basically draw an F across it, you're going to come down the image side on the left, you're actually going to go over to the title and then you're going to go down through the first two bullet points. So it's kind of like a big F when they come down through images and they're looking to basically revalidate the capture they have in their mind the demand, it's already created, the audience, the conversation, the referral, the social media thing, a friend that bought it, all they're looking to do is get that validation of emotional charge off the images and say, does it fit, look and seem like something I can
Brett:
Always, is this what I'm looking for?
Neil:
This is what I'm looking for. And it's really down to the images. If that does not quite fulfill the need or something is not answered, you didn't speak to their specific need or unique situation or the solution in which that they were thinking, they'll go to the title and they are like, well, was this the large? Was this this small? Was this the heavy duty was this, well, this fit the person up to 300 pounds. Well let's do this. And if that is validated in the title and you've done a good job, they'll slip right over to the add to cart button and they'll do that in 30 seconds or less. If they don't, they're going to go to your bullet points. By the time they get to your bullet points, you may have already lost them and it goes very fast on this system.
So between the product itself, price point is just a variable of the solution if you are, and what I mean by that is if you're selling products on Amazon like 30 50 less in retail price point 30 or less in retail price point, they're going to be very price conscientious. They're going to be very review driven and I would like to avoid that altogether. So I sell products, and this sounds opposite of your brain, but I sell products 50 to $200 in retail price point because they are not thinking necessarily about the cost, which sounds counterintuitive, and they're not really reading the reviews to look for the negatives. They're looking for reinforcement of the solution. That's a very different psychology of those two buyers. I prefer to play in the one who's like, well, I don't really care if it has a 250 reviews, if there's one that has 200,000 reviews. What I'm really looking for, does this provide my solution? Is it right from me? Solution oriented to problem solve fast and hit that A to cart. Now mobile's a little different
Brett:
Products are just looking at the image, maybe glancing at the title then that's enough for me, I'm just going to buy it. But they are
Neil:
There to capture that demand. You've seen it, my kids, my wife, the 7-year-old, et cetera. We've watched how fast they're just like, Hey, this is the one I want. This is what I was looking for. This is the one that Bobby had. This is the one that SIS had. They're like, whoop, this is the one we want. Knowing the return process, knowing Amazon comes to your door, if I don't like it, I'll return it. Right? That's typically how people look
Brett:
At it. Very cool. Very cool. Talk about the new changes that are coming down the pike here with a nine and some of the AI engine driving that. How is that going to impact search and then what do we need to be preparing
Neil:
For? So organic search itself is going to change dramatically. 10 plus years over 12 years of the A nine system when it first came in, it really hasn't changed. Just the fundamental core of the whole engine policies, compliance, fake reviews, we can talk about that and how it's getting involved and all that stuff has to do with everything that revolves around that same core keyword based search demand engine, and it's all keyword based at this point, but with something coming called Cosmo, there's a white paper on it, it's out there now. You can go check it out if you want to read the white paper. I didn't. I had ai, help me read the white paper smart
And summarize and get into the details and really understand some of the core fundamentals of what's changing. Cosmo is changing as a large language model in LLM into all this data, petabytes, terabytes of maybe even zetabytes of data that Amazon has collected in its entire history, and it's turning that engine into a solution oriented, basically, it's revolving around not just everything you buy, but the people that buy what you watch and what you interact with online. I think minority report, okay, when he's walking through and it's like, Hey, you need this because you're this person, or hey, you've got blue eyes, so you need these sunglasses. It's going to know crazy amounts of things about us, and it's going to go through your Twitch and your freebie and your prime videos and it's going to look at the way you're accessing that data, what you're watching when you're watching it, and it's providing all that information back to this new engine called Cosmo, and it's then going to only present the most highly relevant products to your demand at the time you are looking at it very dramatic, right?
They're going to change the way the engine produces navigation search and results, which is going to be obvious impact to the customer. As the engine test went down, they did it on 10% of their search and market and they ended up with 4.9 billion in additional revenue, a 0.7% increase in CTR and only 10% change. So this is going to happen, and part of rolling that out is we now see rufuss coming to the table because it's going to change the way you interact with the system. You're going to become more dependent on things like this AI system called rufuss, which just launched in early 2024 just earlier this year, and that engine is starting to help you make product-based decisions based on your current data and questions you ask it. So it's formulating even more information into Cosmo to help refine the coming changes. Now, there's not going to be some date in this end, like November 30th, this is all going to change.
Amazon rolls this stuff out and you don't even know what's happening. So as a new seller, you should be very aware of that because the way you think about keywords and the way you're going to be trained to the listing and the way you're going to adapt any old training is all basically going to go away is what I'm saying. And it's going to have to change towards how do I write a natural language convincing query-based listing that has not just keyword stuff but natural language into it, right? It's going to know, for example, and this is one of their examples, that a woman would be pregnant and if she's pregnant, she might want these kinds of products based on her history or other people like her who have watched certain SOS or done certain things. It could go down as far as to her watching bridezilla on freebie and then basically showing her products that would be targeted specifically to her upcoming wedding, whereas right now it's completely general.
So again, think minority report in the way this thing is going to start tracking and showing ads that are relevant to you. It's a huge change. We've never seen anything like it, but of course the system and the data have all now proven that it's going to work extremely well. So existing sellers, if you're paying attention to this, what does that mean for you? Everything you've done with keyword, everything you've gotten away with in the last five or seven years from keyword stuffing listings or putting in semantic based queries into your language and your copy, you're going to be negatively impacted. Here's one thing you could do very quickly, just tactically right now, if you've got an image tag and a listing already running on Amazon, take the images, all of them and one by one, upload them to chat GTP or Claude AI and ask it to describe the image to you.
If the image describes something completely different than what you're seeing, you're going to get a negative strike. So if it doesn't describe the coffee grinder that's in the image, but it tells you that it looks like a dog whistle, you're going to be screwed, right? The images and relevant of the reading, the data and the intuition of the engine are now going to drive the results, not the keywords. They don't need you on the keywords anymore. The engine and the data are way more intelligent than we are, so it's going to be able to show and predict based on images and the copy language and the viewing ship and exposure online and videos and everything they're doing down to what just in time they want to buy to increase that conversion rate. And it's going to come and it's going to come relatively fast and many people are going to be caught off guard.
Brett:
Yeah, it's super interesting. So there's a couple of things that really come to mind here as I hear this one, nobody really has more actionable data and behavioral data than Amazon. Maybe Google, Google's got all your search history and the sites you visit, stuff
Neil:
Like that. Yeah, they're selling information but not products in the menu.
Brett:
Yeah, Amazon knows what you're buying and when and what you're watching on Amazon Prime or Freeview or these other channels, and so they really know you and so that's super interesting. I'm curious, so if we think about a search engine results page, so I go to Amazon and I'm searching for, I just bought a Blackstone griddle or my wife got me one for Father's Day. So I'm looking for all kinds of tools and stuff like that. So I'm looking for Blackstone accessories as a search. What percentage of that search results page do you think will be unique to me versus what percentage will be like cookie cutter across anybody that searches that
Neil:
Keyword? I predicted as this rolls out, and I could be completely wrong in this guess, but I'm going to put my crystal ball out here for a second. And guess that you're only going to see the most relevant listings to you, which may be seven to 10 listings. It may be four or five. It's certainly not going to be hundreds anymore.
Brett:
Interesting. I know when you Google
Neil:
Highest converting relative to your history viewing and intent to buy based on all the data that you've consumed or have had in your purchase history already and people like you,
Brett:
Super interesting. So I remember when Google first started doing personalized results in the SERP and they would kind of say it's about 20% of the results are personalized to you. And I don't know that percentage just probably shifted some over time, but it sounds like maybe Amazon's going all in on, Hey, we're just showing personalized items for you. I guess probably depends on the category, and I probably chose a bad example, Blackstone accessories, there's only so many of them, so maybe that's going to be pretty similar across the board. But what's really interesting about this two, Neil is to me this sounds like now you're just building products and building listings for people. Now you're building listings for your ideal customer. And so
Neil:
As you always
Brett:
Getting a clear picture of who your buyer is, what their life is like, what problem you're solving, what they're going to like about it, what kind of photos would speak to them, what kind of headline would speak to them, because then Amazon should know who's likely to buy it as well. And so this is more about marketing to people than it's building for an algorithm,
Neil:
Specialty marketing to the intent of the buyer, and they've been building that pattern of behavior for a long time, watching your frequently buys, watching data in the background of how you interact and what you purchase versus what you clicked on and didn't purchase and for what reasons you did. And they've been compiling that data for a long time and it's so much data, they haven't had the processing power to actually get it through a large language model, but now they do thanks to Nvidia and the creation of GPUs and all the stuff they're doing, they're building these hyper stacked based machines. I know the one that Elon's working with Dell on right now just went live like hundred thousand Nvidia S one hundreds or whatever the top end one that was, I forget the actual name of it. It's huge processing power. So it's going to be able to really quickly move that data, and I even predict things like, okay, I'm watching an outdoor sporting goods thing on freebie or something for the outdoor bass classic, and here it comes.
Instead of showing me a woman with Swiffer wet on the floor, it's going to show me the rods and the reels and the boat accessories and everything specialty relative to my niche and my thing. And I'll be like, oh shoot, lemme get that right. And it'll increase what's 30% of demand from television right now? I think it's going to increase at the 40 or 50% people watching it are going to end up on Amazon and buy the product because it's sitting right there. It's hyper relevant. It's like, oh, that's the fishing poll I want, and there it is. They're offering me a discount. I was just watching bass fishing. It's like,
Brett:
Yep, shoppable moments in those TV media moments. Really, really powerful.
Neil:
The risk is for those who don't listen to this, the risk is those who don't heed the change that are coming and like, well, I'm invincible. I've been there for five years. My ASINs been doing a million plus a year and I'm not going to be infected by this wrong. Your listing is going to be out of date very fast and it's not going to be optimized. You're going to have to be paying very close attention to
Brett:
That. So your advice then one is images and it does make sense and I've had a good friend of mine told me years ago like, Hey, if your images alone, don't sell your product, you need to go back to work on your images. The rest is important too, but the images, if they don't sell the product, get to work, make those better. So we run our images through an AI tool of our choice and have it tell us what the image is. If it's getting it wrong, we got to fix it. What else are we changing then? Are we changing the titles? We're changing the listing, the bullets, we're
Neil:
Looking at titles next really because titles should be very specific to the product type. So if somebody says something's heavy duty, that's really kind of a generalized term. One man's heavy duty could be, it holds a hundred pounds and another other man's heavy duty as well, it's got to hold 300 pounds. So a very good title would be something that's more specific to this is heavy duty up to 300 pounds. So we got to get more specific why? Because the engine's also going to see that and say, well, this will now be categorized into products that can maintain up to 300 pounds. It will differentiate you in the model itself. Cosmo's going to know that if you just put heavy duty, you're going to be lumped into anything that's heavy duty and not hyperfocused. But these changes are going to have to happen, and the titles I see on so many listings are really poorly done.
That's not speaking to the audience or a specific pain point or need and giving them a specific answer that's like, oh, great, this is the one that will hold up to 300 pounds at the cart. Yeah, people can change that really quick listing and title next. If images are something you don't really understand what your customer might want, and as you had said, very astutely, got to know what the customer wants and what they want. Go to pick fu. We use pick foods, great system, love that tool and get your product feedback for people who are on prime and find out which image they like the best and continue to do that process over and over again. Never settle for just one optimization now and something in six months because people like us are doing it continuously and we're going to out position you, so you have to stay on top of that. Always look to improve, then look better, put it back, try the next one looks better, leave it there and just keep optimizing for every little inch you can take because you never know that one will last. 1.0% of CTR might get you above the next largest competitor and boom, you're going to see yourself go on a ride.
Brett:
Yeah, I've said it and forget it's never going to work on Amazon. Got to, I love that initial test on pick fu where it's, it's no risk. We're just showing images of the people, they're voting, but it's almost instant feedback and then you put the winners on Amazon and see how it performs there. It's really beautiful. Two step
Neil:
Process. Always be optimizing through the listing. The title bullet points would be secondary, of course we know reviews have their impact, someone can control in someone we can cannot control when it comes to reviews and of course never fake your reviews or do any of that stuff carte blanche, right? But reviews have a positive impact course in the longevity, the things that are harder for you to incentivize or change or manipulate, so be very careful that. But when it comes down to the listing and conversions, your bullet points would be third and then of course a plus content premium level A plus content will be kind of the fourth. It's not really the first, especially when you get to mobile because back to that, again, 60% of all sales were done on prime on mobile, which means no one's really scrolling through all of that listing a plus content on their mobile. They're simply going through the images, they're validating the title, and if you notice right below that, it's add to cart. So if you don't get them in that first, second, third scroll, you lost them on
Brett:
Mobile. Yeah, totally makes sense. So only for a higher consideration product, are people really going to the a plus content? I still think it's important to kind of shape because when it does feed Amazon more information and for the few people that get there, it's great. But yeah, for a lower ticket item, low consideration product, they're making the decision before the A. Correct. They've
Neil:
Already started, they're just looking at the
Brett:
Price. So let's talk a little bit about rufuss, the AI shopping assistant, and I'll share a quick story here because I really just started interacting with Rufuss over prime day over that holiday, and so probably a lot of listeners have seen it already, but you've got a listing opened up and there's kind of these prompts that are there. Either you can ask Rufuss a specific question, your own question, or they give you some prompts like, Hey, what are customers saying? Or does this fit true to size if it's apparel or something like that. And so I was looking for a product, some cookware, no, I'm sorry, I was looking for that too, but I was looking for an autonomous vacuum, one of the smart vacuums. My wife was interested, so I found one and I clicked on what are customers saying? And it was interesting. Rufuss talked me out of buying this vac. People are pretty mixed. It's pretty mixed on whether this is effective. It's pretty mixed on whether this actually works and you can't customize it. It just pointed out a lot of the negatives, but it was pulling all of that from the reviews, which was super interesting. Well, it
Neil:
Does. It pulls it from the reviews, it gives you the summary. If you've noticed there's an AI summary that occurs now on the listings and RUFUSS helps pull that forward right away. What are the major bullet points? What are the green and yellow and what should you be cautious about? That is something to some degree that the seller can control and to some degree they cannot. In fact, much of that, they cannot control about what Rufuss has to say. So there's where the amplification and a smart amplification of this shopping assistant is going to be on the valid aspect of your product, the creation and innovation of your product, and making sure that the reviews are amplified properly through rufuss. Something you can't control.
Brett:
Yeah, so you've got to build a great product, you've got to get enough customers there. You've got to get good authentic reviews or else Rufus is going to find it, right? He's going to bring
Neil:
Find, drive right into everybody's attention because they're just seeing a point driven. We're six second or less people. We're going to skim through there and be like, okay, well quality is low. People didn't like the value of this, and that shopping assistant is going to become much more powerful as an assistant to the reviews. And we always wondered how Amazon was going to fix some of it's review based problems,
Brett:
Right? Which these are real problems.
Neil:
Absolutely. Pros on that are going to be that this is going to amplify good products better. That may have been hidden a little bit in the process of other sellers simply having more time in market and reviews. However, it's a very negative amplification. If you're not careful, it would sink the ship because it will take reviews and then anything summarized will become negative. It's also dangerous in that way, and I hope Amazon puts in a little bit more fail safes on the brand management side to stop fake reviews from manipulating Rufus summary. That could absolutely destroy you,
Brett:
Right? That's still one of the biggest problems on the platform. It still is. I think Amazon has made strides, but the negative, the fake reviews, it's still a crippling
Neil:
And people are like, well, that's Amazon. This is the ecosystem buyer. I get all that. It's a historically long challenge and a lot of data in so many sales and people are like, well, I don't see that on TikTok, and you don't do this on Shopify. You can manipulate every review on Shopify. TikTok shops reviews is just wide open for anybody to do anything they want right now. And so they really haven't put any of the fail saves against the marketplace. And so it's not really a fair comparison. You could look at Walmart, they're doing a much better job of review management and staying on target with review qualifications. They've spent more time than the other platforms getting closer to a more traditional true review and integrity of the reviews. But even as they grow, we're going to face some of these major challenges. So again, it's not apple's to apple's comparison to say reviews on Amazon are all bad in their situations manipulated because I see it on Shopify and all this other, eBay's had that problem forever, right? eBay's always had that problem. It's been one of their downfalls.
Brett:
And so one other thing I want to point out about Rufuss, which I think was really interesting. Another quick anecdote. My son Benjamin, he's seven. We just watched cars three for probably the 30th time, but if you got him thinking he's got a little bit of money that he saved up, and so he was like, dad, I want to shop or cars three toys. So I gave him my phone. Amazon was pulled up, he's looking at different options. He wants the tractor trailer that the car goes inside. And so he found one, I hear him just kind of talking to himself, not really paying attention, and then he's like, dad, look, check this one out. This one, the car will fit in the trailer. See, it says that it will right here. It says that it will. And he had interacted with Rufuss. Oh boy. He clicked on buttons, was like the car will go in the trailer, so this is the one that I want. And I'm like,
Neil:
Alright,
Brett:
Figures it out.
Neil:
Our kids getting involved as we were laughing about earlier with it, one click purchase and stuff all of a sudden with Rufuss helping them, it's like, oh crap. But the intelligent aspect of that is really cool because it's going to start giving you personalized information about your history and the products you purchased and what accessories and goods match up with those, which goes back to brand building again. If you're a single or even three or five SKU product-based business, you are not big enough yet to really have enough data for these systems to compliment you in the coming years, right? We've talked about more than five SKUs for a long time. Why Amazon told us personally that 70% of the FBA sellers have less than five to seven SKUs in their entire seller platform. I'm like, oh, you guys are. Then they told us, well, how do we get more? It was like they told us you put more SKUs in the system, you get above 10 to 15 SKUs and then all of these other things will happen. We're like, well, crap, launch more products. But still people are not paying attention to that. Why? The data you're giving the system is going to be fed into things like Rufuss and Cosmo and it's only going to amplify what you're doing, your reach and how you will control more market share and gain more market share through those systems. Not enough data and it won't be relevant enough.
Brett:
Let's talk about brand building for a minute because this has been a trend for a number of years. We've been preaching it at OMG Commerce, all our Amazon clients that you got to think beyond just being a seller, and I know that's still a term that we're using, that's fine, but think more like you're building a brand. And so you just touched on SKU count or number of ASINs. That's a critical piece of having a real brand and not just being a seller on Amazon, but what are some of the other components of how do I build a real brand on Amazon?
Neil:
Well, there's a reason why Amazon has a billion SKUs. There's a reason why Walmart stores have 250,000 of them in there's because they know that less than 20% of all those SKUs make up their 400, 500 billion a year in sales. So if we know that about retail and we borrow it for the e-comm world, what does that tell us? We need to be building a brand that has a wide enough stance on it with enough SKUs to give us those kinds of numbers. You're simply naive. If you think that you're going to take a multi seven, eight figure business out to market with one to two SKUs, in fact you're dangerously on the precipice of crashing the entire business. If one or two of them go down, no matter what platform you're on selling 'em, it could be your own website, okay? We've got to expand that SKU base app that is a brand driven asset, giving people more of what they want and different shapes, sizes, and boxes.
We know this phrase, and we've probably heard it, success is boring. Why? Once I dial that funnel in dial that vertical in and got my cylinder, I just keep putting more and more of the same products in there and just keep offering innovations and changes and shapes and colors and shapes, et cetera, and widening that base out so that I can find those other products that will rise to the top. That is a brand strategy that leads to you moving away from a product-based business and into a brand-based business that will sustain for a long time, okay? Long enough that you realize that all products have a saturation to them. Now, everybody's afraid of saturation from the beginning. I'm more concerned about saturation in the long run, which is where a product business owner should be focused on the short term, but a brand owner is focused on three to five years.
So I'm thinking very differently about a brand strategy than probably most of you are. And that's what I hope you gain from this is to get to the point where you're starting to think, I need to move more products into the market, find the ones that rise to the top, find the complimentary ones that rise with them, and give enough data to be able to get out of saturation into a hole and only segment saturation into certain verticals when it occurs, and then remove it through innovation. Once I do that, you realize product in innovation is a natural legacy of a brand, and brands like 15 burger joints on the corner don't go away when the products continue to innovate. That's why there's 15 of 'em, right? So everybody's wondering, well, what's the real difference? I mean, the simple difference isn't just more products, it's more emotional appeal and dialing in over a longer time that emotional response that your customers get.
So they're willing to talk to other people and come back and BRI you later. And then if they buy another brand, they feel bad that they didn't buy yours. It really wasn't as good as the one they got, and they'll come back and buy yours again later. So then we move into real metrics of business, the CLTV or customer lifetime value and move into larger metrics that allow us to gain more value from that instead of just looking at first purchase acquisition. Whereas so many brand owners who want to be brand owners still focus at the product side. They're always looking at first customer acquisition, and they're not considering what the value of that customer is. So in simple terms, for those who are currently selling on Amazon, Amazon itself, just as a platform happens to know this. We'll talk about the other ones in a minute if we want, but Amazon itself has a thousand dollars a year Prime membership, CLTV, 12 months, $1,000. What am I going to do as a brand owner, Brett?
Brett:
Yeah, I'm going to go after Prime Prime. I'm going to
Neil:
Go after Prime members to get them to buy $1,000 of my product in a 12 month period. That should be my CL tv. I should match that. So if I have a $1,000 product and sell one of them, congratulations. Right? True. But that's not really how it works. You're going to sell a hundred dollars product 10 times at least, and you're going to get 'em on subscribe and save, and you're going to buy other products. You should be looking at that as more of a minimum because that's what Amazon's basing its product based model and its revenues off of Match it and watch what happens.
Brett:
Really cool. So we're looking at minimum of five SKUs, right? So beyond five SKUs puts you in the top tier of FBA sellers, and I think one of the things that I like to look at is what does a customer say after they buy your product and they're talking to someone comes over to visit, they're like, oh, hey, where did you get that Tumblr? Where did you get that knife? Or whatever. If the person just says, oh, I just got it on Amazon, I don't know what it is, but I got it on Amazon, or do they say, oh yeah, it's this brand and I bought it on Amazon. And one example, a buddy of mine, Brian from Simple Modern, was on the podcast a few months ago. They built this brand, simple, modern starting on Amazon. Yeah, good stuff. But it's such that I would say to someone like, this is my simple modern Tumblr, rather than leading with, oh, this is something I got on. Amazon takes work and intentionality and understanding who their customer is and building the product for the customer, and then of course all the branding components that go along with that. But I think that's really where the game is headed, right? Brand building and not just, well,
Neil:
It really is. So in simple terms, if you're a seller or you're new, don't send product into Amazon in the original China's Chinese packaging, right? Brand differentiate from the very beginning. Then you'll move away from, I found this on Amazon to, it's actually simply modern, the Tumblr. It's in your image, in your products, in your packaging, et cetera. Don't be lazy. Take the next little step to finish packaging and branding. It could be very simple. It can increase the value. We've taken one product and innovated it by simply increasing the brand value through the packaging and sold the product for more. It's about perception
Brett:
Of that value. It makes sense. Just like packaging sells products on a physical shelf, the packaging sells products on the digital shelf. I
Neil:
Know everybody buys it. It's kind of silly, but it's the iPhone and Android box. It just, it's so different when you're paying for it and you feel the difference in it. Well, we are driven by that feeling, so we need to make brands that get that emotional connectivity and stay with us for a long time. That's why you and I wear white new balance, right?
Brett:
It's a dad life, man, the white new balance trend. But I hear there comes an age, they are coming when the comfort is just too much to resist and you have to,
Neil:
Jts are making a comeback, right? J are making a comeback. Everything was
Brett:
In high school.
Neil:
People are so funny. You talk about Brandon awareness, it's just a quick story. I was in an airport, I think it was Colorado, was headed back east a while back. I was in line, the lady who was in front of me, I believe it was Delta Airlines if I'm not mistaken, I noticed that she had some towels on her case and I looked over and there was my brand on the side of it and I go, Hey, what do you of those towels? And to your point, she said, oh, this is brand name. I got it on Amazon. I'm like, they're really cool. And she's like, and I go, I sell those. And she goes, you sell these products? Yeah, I sell those on Amazon. She's like, well, that's so cool.
Brett:
My brand,
Neil:
My product in the wild.
Brett:
That's awesome, but that's when you know it's a brand. She said the brand name first. Brand first. I do this with other products. I'm like, I don't know what it is. By got on Amazon was whatever.
Neil:
It's something I got off of. I can't even think. And that's what so much of the TikTok stuff is because literally, here's an example of that. I was looking to play with this little thing. I got it off TikTok shops and I bought it, and if you look at the product and the thing, it was selling in relatively good, but there's literally nothing on it. I have no idea who built or manufacture this thing. It's just, it's a box from nowhere land.
Brett:
Just a quick money grab right there is what that was.
Neil:
Well, they got me for my six bucks,
Brett:
Hopefully. We'll see. That's hilarious. So I've got three other topics. We're almost out of time. So one quick one, and we'll make this so brief that we're probably going to do it injustice, but we're going to go there anyway. Profitability. This one we talk about a lot. This is where really everybody in the industry is focusing is how do we grow profitably? I think there was a time in e-commerce and even Amazon where it was like grow at all costs. We'll figure out profits later. Those days are gone now we need profits today. How do you coach people? How do you think about it with your brands growing profitably? Just kind of your top two to three tips.
Neil:
So my baseline of expectation for a new brand or moving an existing brand into this position is 20% or greater. How we get there and when we get there is just a matter of the numbers. So in any 20%
Brett:
Ebitda, right? So 20% net net,
Neil:
20% net ebitda. So how do I get there? I got to have products that actually build into that. So the portfolio builds into that. So the entire brand, after all cost of operations, goods and services, et cetera, it come down to 20%. So the end result is I need to obviously start at the product level. So for us, we don't sell products that have less than $12 in net profit per unit in them. Point blank after all fees, goods stacked, returns, shrinkage, advertising, et cetera, $12 minimum. Typically we're in the 24 40 $8 range. That gives us enough profitability to acquire the customer organic sales, to obviously balance that difference and then stay in the growth mode with the business. So knowing that from the very beginning, that is where we need to go. If you're not there, you need to move yourself into an elevated position, which means you need to elevate and every product you've got can be elevated in your mind.
You might be like, oh, I see other products. There's no way I could sell this product for more money. You're wrong, point blank. So you have to be able to look for ways to innovate and elevate right all the way through to a notice of allowance for a design patent. If you can get that on the product, you're going to indemnify yourself and add additional value. Of course, you got to launch new products to get a utility patent, but you can reinnovate products in a brand or relaunch a new product that has the opportunity to innovate and get it to a utility. If you can, and it exists on Amazon, then you can go right back and offer them a cease and desist letter or a royalty agreement, and here's your royalty agreement. I now own the rest of the product in this marketplace and the becoming effect, I believe going forward.
To answer your question, kind of forward thinking in the question is that in 20 25, 20 26, it's my personal belief that you are going to need some design patent or utility patent to really defend yourself in the coming marketplaces. And that will differentiate above Chinese sellers and everything else. Especially as we see Amazon trying to make a very short term, in my mind, a temu move that's going to literally implode here along. I think there's just an opportunity cost to do that, and it's going to destroy itself. So I don't personally believe that has a long effect, especially with anything changing in the geopolitical world. I think that's too dangerous of a move. I think it's an opportunity cost. We're going to see, most likely they'll back out of it at some point because it's not going to be really sustainable in the end. But for us, brand and long-term growth is going to come at the profitability from the product all the way through the brand. So again, cost and operations get down to where's the rest of that money go. I don't hire employees.
Brett:
Nope. Don't hire employee. That OPEX has got to be really, really low.
Neil:
It has to be low, right? But it doesn't, through automations and systems and tools, now I can take one operator and have them run two or three accounts because once they're running them under SOP, once they're running 'em with OKRs, once they're running 'em within systems of automations, things we developed a voltage, things we use externally to help create the automations of that AI being one, systemized automations and tracking being another PPC automations and large language systems that basically go in and automate PPC management for us, once we know it's dialed in, that can take one person and turn them into a multi-use case across multiple businesses. And so we can run very lean in this model at very large scale with everything being outsourced, Amazon a WD, third party logistic warehouses. You don't need the freight and shipping management of that. So that gives us the opportunity to scale profitably in economies of scale without going operationally. How do I know? Because I ran a 21,000 square foot warehouse with 12 employees once upon a time. I don't recommend it. It's no fun.
Brett:
Not the business. You want to be in the business,
Neil:
You don't have to be in that business you did once upon a time. But in literally the last five years, thanks to hypergrowth expansion of the markets during a certain period whose name shall not be mentioned, that period allowed for massive growth of automations and systems that do not require me to have a warehouse anymore, to move logistics and product everywhere in growth.
Brett:
It's exciting times, man. It is a crazy time to compete against Chinese sellers and the team moves of the world and fake reviews and all this stuff. But it's also a great time because I really believe we touched on it, right? You build products now for customers, build products for your avatar and think building a brand and how do we continually extend our line and launch the next product because futureproof our business. And then how do we think about profitable growth? How do we treat this a real business and not just a money grab? How are we thinking about managing our p and l and optimizing for ebitda? Because if we want to have an exit one day or we just want to ride this thing for as long as we can, you need to treat it like a real business.
Neil:
You have to, because in my world, there's no such thing as a side hustle or a hobby business. You're going to do this, right? And then we're building and growing and of course we're exiting and acquiring as you and I discussed. And so that way I'm talking from a buyer perspective. I don't want to buy your single channel business. Totally. It must have multi
Brett:
Omnichannel, right? That is risky. I think. Yeah. The trend is omnichannel. And so for those that are listening, because we're basically out of time here, but for those that are listening, who should reach out to you and how can they reach out to you? And what do you guys do? Because you guys are buying brands, you're selling brands, you're coaching and building, helping you build brands. But talk a little bit about what you do and then who should reach out
Neil:
To? Well, we are launching, growing and Building. We're a consultancy group. We have a closed mastermind called Business Builders, which allow people to come in and I train them as CEO operators to give them a leg up, an opportunity to run their 100% owned business model. Why? Because in the end, I have a first rights of refusal to acquire that company in three years to five years when it gets above a million in ebitda. So I take them from beginning launch and all the way through growth and optimization to exit. We exit to our private equity group. So if they want to do that and they're brand new and they want a real run at this to make sure you bring 50 to a hundred K to the table, because we're going to go real fast. We're going to go hard. We're going to go into places where there's opportunity costs, but that's where the profits are.
It's where the growth will really be. It's where the market opportunity is. Don't treat it like a small business and it's going to be a capitalized inventory business. This business grows on capital inventory, which means it requires cash like real estate. So don't think about it any differently. You got to buy more real estate, more inventory to make it really grow, but you don't have to buy more people unlike real estate. And I don't need totally, it's turn tenants and termites either. Plus I can return much faster than $500 a month on a rental property at the growth and growth. So if you're in that place and you think about it and you're new, that might be something you want to talk to me about. We've got free resources, you speak to me, it's an invitation only kind of thing. We'll see if we're a good fit and maybe we get in the same rowboat.
I just want to make sure our goals and expectations are set for growth and they're set for exit, which is kind of the model we work. If you're an existing seller and you need optimizations of growth and you've kind of stagnated through some growth within your brand, you're not really sure how to turn that around or turn the gas on it. We've done that with a number of companies, anywhere between million to 30 million in sales a year and help them grow and expand and create more profitability out of their bottom line by showing them things that they really didn't optimize for before. And even from growth capital methods to grow the business through capitalization methods as well as additional products and leveling up. We teach them how to do that. And then of course with the exit in mind, always with the exit in mind.
Brett:
Yeah, love it. So you're building coaching incubating brands that you can one day buy and then build and sell again. And so it's really interesting model for sure. So what's the best way to get in touch?
Neil:
Voltage dm.com? Voltage digital marketing.com. You can go check that out. Yes. My last name is, it's three letters. You can Google me. I'm not far away from anybody. Voltage, one word. You'll find my social medias. That's another way to connect, but probably the website's the best way to unlock some training there, see what we do, understand how we move this forward, and of course, reach out to me if there's any interest.
Brett:
Awesome. Neil Twa, ladies and gentlemen, we will link to everything in the show notes if that's easier for you to find. It'll be there. But Neil, this was fun, this was fast, paces was intense. You delivered a lot of value, so really appreciate you coming on.
Neil:
Thank you, sir. Appreciate you having me
Brett:
Here. Absolutely. And as always, thank you for tuning in. We'd love to hear from you. Hey, if you haven't done it yet, leave that review on iTunes. Also, if you're listening to this and you thought, Hey, this would be a great episode for so-and-so to listen to because they're building on Amazon, please share this. That means the world to me. And with that, until next time, thank you for listening.
.png)
