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Profits are elusive right now for many sellers on Amazon.
The game is getting harder, not easier.
That's why I brought on Matt Snyder, CEO and founder of Brands Excel, to discuss two powerful tools for your Amazon seller tool belt:
- Seller Fulfilled Prime (SFP)
- Amazon Marketing Cloud (AMC)
Matt's diverse background made for a great interview.
He spent six years with the Dallas Mavericks (and has a few great Mark Cuban stories).
He then transitioned into eCommerce, working with Woot.com and eventually Amazon after they acquired Woot.
Later, he joined Veridesk as the VP of online retail, where he helped grow the brand to a mid-eight-figure business on Amazon, primarily using Seller Fulfilled Prime.
In our conversation, we cover:
- Understanding Seller Fulfilled Prime (SFP): what it is, how it works, and when it's the right choice for your brand.
- The benefits of SFP: increased flexibility, control over inventory, and potential cost savings compared to FBA.
- Criteria for determining if SFP is a good fit for your products, such as high-value items, seasonal or unpredictable demand, and products with many variations.
- The importance of having the right infrastructure and partnerships in place to meet Amazon's strict SFP requirements.
- Leveraging Amazon Marketing Cloud (AMC) to gain deeper insights into advertising performance and customer journeys.
- How AMC can help break down data silos and optimize ad spend across various channels, including Amazon DSP.
- Real-world case studies showcasing the successful implementation of SFP and AMC strategies.
- Lessons learned from working with Mark Cuban during Matt's time with the Dallas Mavericks, emphasizing the importance of continuous learning and taking calculated risks.
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Chapters:
(00:00) Introduction
(02:06) Matt’s Journey with the Dallas Mavericks
(05:56) Transitioning to Amazon
(12:16) Understanding Seller Fulfilled Prime
(21:37) Requirements for Seller Fulfilled Prime
(26:17) Seller Fulfilled Prime Case Studies
(30:37) Utilizing Amazon Marketing Cloud
(35:26) AMC Case Studies
(39:28) Insights from Mark Cuban
(46:09) Conclusion
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Show Notes:
- Matt Snyder (LinkedIn)
- Matt Snyder (Email)
- Brands Excel
- Comprehensive Guide to Seller Fulfilled Prime
- Vari
- Mark Cuban
- Dallas Mavericks
- Dirk Nowitzki
- Woot!
- Groupon
- Living Social
- Shopify
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Connect With Brett:
- LinkedIn: https://www.linkedin.com/in/thebrettcurry/
- YouTube: https://www.youtube.com/@omgcommerce
- Website: https://www.omgcommerce.com/
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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.
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Other episodes you might enjoy:
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Transcript:
Matt:
This is very much, again, it's about gaining control and flexibility over your products, over your logistics and understanding where can you move the right levers to improve your margins?
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 about seller fulfilled prime on Amazon. Is it right for you? Should you consider it? What are the pros and cons, how to make that work? We're also diving in to a topic that's coming up a lot for larger sellers, larger brands on Amazon, and that's a MC, Amazon Marketing Cloud, some really good stuff there. And so I have an absolute expert in the space joining me on the program today, Mr. Matt Snyder. He's the CEO and founder of Brands Excel, and we've collaborated on a few things together. He kind of heads up some content at the Prosper Show. I've spoken there a couple of times, and then we actually met when he was the VP of online retail at Veri. And you may know that brand as Varidesk, but they shifted to Vari because they're going to Onde now. But I have a Varidesk, it's my favorite. Really good stuff. And so just a wealth of knowledge and this guy is going to bring it on the podcast today. So Matt, welcome to the show and how's it going,
Matt:
Brett? So happy to be here, man. Really appreciate the invitation and look forward to the conversation here with you and the audience today.
Brett:
Yeah, man, really excited and I think this is going to be a timely episode for a lot of people because self-fulfilled Prime is a really powerful option on Amazon. It's not right for everybody. FBA is the way to go for many, many brands, but if SFP is right for you, it can be pretty awesome and so excited to dive into that and to pick your brain on Amazon Marketing Clouds. We're going to get into that as well. But first, Matt, this caught my eye immediately when I got on my first call with you. I'm a basketball fan and I'm a Dirk Nowitzki fan, and so when I saw Dirk Jersey on your, I'm such a Dirk fan that I was in DFW airport just like a week ago, and I ate at the Dirk Restaurant. I'm like, this might not even be good. I don't know. I'm going to support Dirk Nowitzki. It's got Mavs apparel everywhere and paraphernalia and whatnot. Actually, it was decent. It was pretty good. So anyway, what's the story with that jersey and what is your background that kind of led to you becoming an expert on the Amazon marketplace?
Matt:
Well, I appreciate your love of Dirk and I would say probably my all time favorite next to Jordan, but so I like you. I grew up as a basketball junkie, went to University of Kansas, thought I was going to be this great basketball player. Didn't make the team surprise, surprise, but I knew that I couldn't plan it. I wanted to work in it. And so shortly after I graduated, or right before I graduated actually was when Mark Cuban bought the Dallas Mavericks and Mark's pulling all these crazy marketing stunts around, want to hire a referee to run a dairy Queen, and then he's running a Dairy Queen the next day. All these amazing marketer, amazing sales guy. I was like, I'm going to go learn from this guy. So I begged and pleaded with the Mavs for several months to give me an internship. They ultimately did. I packed up from Kansas, moved to Dallas, and was fortunate to work with the Mavericks. Was this a
Brett:
Paid internship or just like, no man, I'll work
Matt:
For free non, they're like, we're not going to pay you. My wife and I was married at the time. We packed up, moved Dallas. I was like, we're going to make it here. And fortunate that it worked out, I had an amazing six years with the Mavericks, went of the finals in oh six with the team. So that's what this photo back here is from is Dirk and Anna. A quick story here on Dirk, just because I think it talks about this special person and player that he was, there's this lady within the MAs organization who was kind of like Call Dirk's adopted mom, and she noticed she ran the payroll and she knows that Dirk's checks were not getting cleared. So she went to Dirk and was like, Hey, see these checks that you are not getting glare. And basically he was like this young German kid didn't know what to do. She kind of had, whoa, we got to get your bank set up. We got to do this different thing. So
Brett:
He was getting these massive checks and just not depositing them
Matt:
Sitting the kitchen table.
Brett:
I'll just put it in the mattress. Yeah, I'll deposit that one. That's hilarious.
Matt:
But one of the things that, again, with Dirk that stood out is I was there for six years and every other week this guy would show up, he'd sit there for two hours, he would sign autographs, respond to letters, just, I mean such a humble guy. And something that I took away from my experience there of just like it doesn't matter how big you get in any space or whatever, it's to stay humble and to give back to those. And honestly, it's one of the things I love about working in this Amazon space is that there's some really smart people in this space who've had crazy success, but all of 'em are so accessible and willing to work and help anybody else in this space. And so it's why I'm involved with Prosper, and I try to do as much as we can to give back.
Brett:
Yeah, I love it, man. And the best, stay humble, and I think all of us can get humbled from time to time. It's sort of like the game of basketball. Being on Amazon is going to humble you at times. But yeah, I love that Dirk story. One of the all time great scorers and those finals when they beat the heat, man, that was just one of my redemption. There's not a basketball team close to me, so I've always just rooted for players because there's not a home team for me living in Missouri, but I definitely pulled for the Mavs for years and loved Dirk. So that was a blast. Yeah, loved it. Cool. And so then as we kind of dig into a few topics and looking at self fold, prime and stuff like that, how did you get to Amazon though? So you're working for the Mavs, this is your dream job. You didn't get to play Kansas, which big KU fan, so another affinity, but you're like, yeah, I'm going to work in it. So you go give your time away for free to get your foot in the door. Obviously that becomes a paid gig. And it was a six year run, you said working six year. Yeah. And then how did that kind of transition into, okay, let's become a master of online retail?
Matt:
So a few things that were kind of pulling me in the direction of Amazon. I had a good friend of mine that somehow he acquired this truckload of Apple accessory products back in the day, like the wired earbuds and power chargers. And he went and sold the stuff on Amazon. He's like, Matt, this is incredible. I'm just crushing it over here. And like, man, this is retail
Brett:
Arbitrage, man. Buy truckload stuff here. Yeah, sell it on Amazon, making a
Matt:
Spread. There's something about this Amazon thing. This is definitely going to be the next big thing. At the same time, mark was advising the founder of a new company that started up in the Dallas area called W com. And so for those who are not familiar with W or Throwback to the old e-comm days, W was this daily deal website and the whole concept was to help brands move their excess or end of life product. And we would do it this way that we would write this kind of funny story about the product, have this forum where you could come and hang out. It's very community driven. We wanted people to come have a good time talk about the product, talk about social events that were going on, but at the same time, then maybe they buy a product. And it turned into this just mass following, I think we had over at one point over a million followers who would come to the page, so we could just move massive numbers of products in a single day.
My role there was to kind of take this idea that we had with Whoop and go replicate that across different retail sites. So we worked with buy.com and once Deal day, all these other kind of daily deal sites that were popping up. And we had great success with this and ultimately caught the attention of Amazon. Amazon acquired the company in 2010. I had the fortunate opportunity to work with Amazon for a few years and kind of see the difference of startup mode, entrepreneur driven to like, okay, now we have these core principles and when there's how we leverage data to make decisions and make stark difference. But it also gave me great insights into the inner workings and the mindset and philosophies of Amazon, which have really powered the rest of my career. Going from there, and after following my time with W, the president of W myself started a business for a few years that was again focused on the state of the deal market.
We're trying to solve this problem, but how do brands who now are selling on W and on Groupon living social, like this mass explosion of the daily deal business. So we created this resource or tool, a platform that would allow you to sell your products across all the different retail sites. We would kind of aggregate your orders, your marketing sales, be a kind one-stop shop. We ended up being one of the top 10 fastest growing companies in Dallas through the SMU Dallas Business School and came in seventh. But that year, the company that came in first was Varidesk. And so I met the leadership team over at Varidesk and they had just been, had a phenomenal success with this product. They started as a direct to consumer brand, built this amazing product that was truly innovative, allowed people to go from just a static desk to having a standing desk and revolutionize the office space, but they wanted to expand the channels.
So I came in to help them think through how do we take this success you've had as a D two C brand and build this upon on the Amazon platform? And one of the things that we did early on was make this decision to go solar, fulfill prime. And it really made sense for Varidesk because at the time they had started as a direct consumer. They had all these kind infrastructures in place, they had a three pl, they had a carrier service, they had the technology to run their D two C business, so it's much easier for them to step into this SFP model and have some of these bigger barrier to entry or we solve for it. Initially they had a product that was heavy, bulky, so it checked a lot of the boxes for us. And so I was there for seven years and we took this to a mid eight figure business.
Over the time we've continued to run SFP for the last seven years through the ups and downs and the potential closings and ings and relaunches. It's been kind of a wild ride. But through that, learned a lot about around SFP, the band that could bring brands. And where we stand today, Amazon FBA is still the number one solution for most products, most brands. But as we know Brett, we've talked to a lot of brands that they're just getting crushed right now by inbound placement fees, low inventory fees, fees, fees, fees. So we as brands have to be smarter around adjusting our strategy. Andrew Ja, this last shareholder meeting, he talked about these costs. They're finding ways to improve their profits, they're finding ways to take these.
Brett:
Amazon is going to get their money. Amazon is going to make their margin regardless.
Matt:
And so just as Amazon is being strategic and making adjustments to their side to be more profitable, we as sellers have to be doing the same. And that's where I think this conversation around SFP is a good talking point at this time and where the market is and how things have evolved. And some of these big barriers to entries that I shared, there's really good solutions in place and it can be much more easier for brands who kind of check the other boxes to get started with SFP and it then opens up the opportunity for them to go beyond Amazon and just really opens up a lot of flexibility for these sellers.
Brett:
Yeah, I love it, man. And so yeah, excited to dive in there, but kudos to you guys. Kudos to the Verdes team. I love Verdes. I like the opportunity to stand some during the day and sit some during the day. And so it's really just a great mix of both worlds. As a side note, are you standing right now? You look like you're standing. I'm standing. Yeah, that's what I thought. So yeah, I stand maybe half the time, but probably a little bit less if I'm being totally honest. I sit though in the podcast room, we
Matt:
Always say it's not standing or sitting. It's doing both. It's the movement back and forth. You got to do both
Brett:
Movement. Exactly, exactly. So really, really cool. All right, well it's probably obvious by the name and also because you described it a little bit, but what is seller fulfilled prime for those that don't know?
Matt:
Great question. So seller fulfilled prime, what is this? We all as sellers know that the power of prime, we know that when our product has that prime badge, the customer has this expectation that it's going to be free shipping, it's going to deliver in one to two days if they have any problems. They get all these protections from Amazon to return their product, to make things correct. And to do that, we as sellers get the benefit of using Amazon resources for fulfillment and storage. And it has been the tool that has allowed so many sellers to achieve great success on Amazon. Yeah, because
Brett:
What are the stats, Matt? Once a product or once a company brand goes prime eligible, what sales lift like 30% or more maybe depending on the category
Matt:
In general it's like 20 40%. We would say it varies on the category and things like that, but tremendous impact to your sales. We all recognize the importance and value of prime. And so where self-fulfilled prime comes in is that gives you as the seller, the brand, all these benefits of Prime, but gives you the added flexibility or strategy of being able to keep that inventory within your own warehouse operations or that of a partner three pl. And in this case, what you're kind of eliminating then is you're limiting this period of time where you have to take the product, you have to prep it, send it into Amazon, get the receiving period of time, hope that they don't lose it or something else damage it, but then also all the additional fees that you didn't have to account. And we know that staying in stock on Amazon is rule number one.
We don't want to break that rule of going out of stock. And so you're really dependent on having a lot of things optimized all the way downstream to ensure that you're always in stock, always replenishing, not too much, not too little. It's a hard moving target. And for some brands who maybe they're seasonal, so they're coming to a season where their sales are within a three month window is 80% of their sales, there's a lot of these nuances that sellers have to consider when using FBA. So I would say for a lot of sellers, FBA will always remain their number one solution, but for those who maybe are kind of outside this model, FBA or SFP allows you to get the prime badge, allows you to leverage your own resources and gives you the flexibility to be more controlling over your inventory as well as your fees.
Brett:
Yeah, I think it makes a lot of sense for a lot of brands and first of all, fulfilled by Amazon, FBA is a magical system and it's allowed millions of sellers to make millions of dollars and be really successful. But it is becoming harder. There are rules, there are fees, there's low inventory fees, it's a complex system. And so who is self-fulfilled prime for obviously you need to have some of that infrastructure, you need to have a relationship with a solid three PL that's going to be able to hit targets or you've got to have your own warehouse and shipping system where you can hit those prime targets of delivery times and things like that. But walk us through who is this right for
Matt:
Great question. And so if we kind of think through just what's changed also in these last few months. So the program was closed for a long period of time this past October. Amazon came back, they reopened the program and kind of reset the benchmark in terms of performance metrics. And we'll kind of dive onto that here in just a moment. But with this, I think what Amazon's telling us, there's a few things they're kind of telling with us is there's absolutely some product groups that they have found are not as profitable for them to have an FBA is probably not as profitable for sellers to have an FB as well too. Those also recognize that their need to expand warehouse operations is going to be that there's a hard cost and if they can pass some of that on to or eliminate some of that by having SFP. And third I think is their approach to how do we get these established D two C brands who have built this kind of infrastructure to run the Shopify or BigCommerce, whatever platform they're on. If we can get them onto Amazon and not have to make them dependent on using FBA, it's another easy switch for 'em to come on
Brett:
For. It's a foreign world if you've built everything for D two C.
Matt:
If you looking at that lens then we say a couple of different options of where it makes sense for brands to consider. The first, as I shared D two C brands, they've already built a lot of this infrastructure, they have it in place, it's much easier for them to add this into it. Now there are the performance metrics that we'll get into and they have to make sure that they have resources and capabilities within their staff to provide that. And in some cases we've worked with brands where they have a system in place where Amazon SFP and their D two C is not quite to the same level as there are costs associated with that, but I say D two C brands are a great fit. And then after that, if you start thinking through what would be the other check boxes to consider, so do a self-evaluation of your catalog and if you have products that are, as we shared earlier, seasonal or sales that are not necessarily consistent, you have different periods of time throughout the year where they go way up or way down insurance, you have the right inventory levels, capacities and fee associations.
SFP can be a good solution for those products that are high in value. We talked about sometimes Amazon damage, they can lose your products through returns. There's a lot of opportunities for that to go missing and there's ways to get reimbursements for those. But we know that those reimbursements are always a hundred percent and there's efforts that goes into that and costs to get those fees back. And so if you have a product that's high value, and I would say we're talking probably $500 higher, things like that, those are products that you should probably should consider maybe looking at SFP for better security and lower cost products that are heavy and bulky. Again, if we kind of shared that's what was the case for VARIDESK and the fewer times that we're taking this product, putting it onto a truck, moving it around, less opportunities for that box to get damaged, less costs that we're putting into logistics and operations.
And finally the last one I would say are products that have high variance. So if you have something that's think of sometimes apparel, which can be tough because you can't necessarily be lower price points and you'd be kind of a higher in price point, but maybe example, we have one brand we work with sales footwear helmets, so they've got all the different sizes, color variations and so it's a lot. And so with that it can be easy for Amazon to either missay it, things can happen. So again where you're have these large varis, those can also be really good solutions for seller fulfill
Brett:
Prime. And with the large variations, Amazon's not necessarily wanting to warehouse all of that. They're not wanting to keep every single one of your skews in the off chance that one of them is going to sell because they've got restrictions now and they are being very mindful of what goes in their warehouses. And if you're not selling, you're going to be charged bigger fees and if you're not selling, you're going to be limited on what you can ship into a warehouse since Amazon warehouse later. And so any thoughts or insights there on the game that FBA sellers have to play and when things might be shifting you to SFP?
Matt:
Yeah, and that's generally one of the more frustrating is especially as we talk to direct to consumer brands who're kind coming into this space and they're not as familiar with FBA, they kind of have their own operations and s SOPs in place for their way of doing business. And when we come in and alright, well we have to do the prepping this way, we have to hit these time windows where we know that receiving is going to take longer. We know that right now we have low inventory fees over inventory, there's a lot of moving targets and can be a lot to try and plan and you got to be very precise and if you don't have the right tools or team in place, it can create a lot of either loss opportunities of sales or a lot of fees that can hit our margins. And in those cases, that's again where we can have more flexibility, more control over those type of factors on our seller fulfilled prime for these brands who check those other check boxes in terms of the product qualifications.
Brett:
Got it. Got it. So let's kind of review here just really quickly. So high value items, large bulky items that every time they're moved around there's maybe more reason for them to get damaged or there's just expenses in that you got seasonal. Seasonal or unpredictable demand. You got items with lots of variations, sizes, colors, other things like that, slow moving goods and then yet things that require special handling. So that's maybe if you should consider self-fulfilled prime, but FBA is not easy but s fp is not really easy either. There's little room for error, you got to be buttoned up, you got to have your systems in place and Amazon is very demanding. They want to ensure and in fact they demand that if you're going to be selling on Amazon, you have to meet standards. And so what are those standards and what do you have to have in place to be able to fulfill seller fulfill prime? So
Matt:
For sellers who are interested in taking the next step, there's kind of an evaluation process or some qualifiers you have to hit to get'em into the program. Before you kind of get into that kind of first step, what we would say is first you need to do an evaluation audit of your own capabilities. Resources determine can we do this ourselves or do we need to go find the right partner, a third party logistics company to help us with this? So the overall metrics that we're going to have to have, and Amazon breaks us down into three different size tiers. So you have standard, you have oversized and extra large, and those three categories then have different speed performances that you have to hit. But overall what you should think about is we need to be have national coverage for most of our products. Anything standard has to have national oversized and extra large can have regional. So kind of keeping that in the scope of your product mix, we'll help you think through what do we need as a solution. Most times sellers are not going to have the resources or infrastructure to kind of do this on their own because you really need to have two to three if not four locations across the US that you're shipping from the staff and all that. That's just not cost effective. And this generally was
Brett:
Just to meet those speed requirements because Amazon's wanting you to reach a two day shipping window
Matt:
Typically most
Brett:
The us.
Matt:
Exactly. And so that's just not economical and this generally was a big barrier. And also there was a lack of three pls in this space that could actually meet that requirement as well too. We were fortunate, we had a great relationship with a three PL called mainfreight. They've done phenomenal work for Barry over the years, but there's two other, I would say developments within this space we have found two really great partners, one being where to go, which is actually it's a UPS company. So they have the advantage of working with UPS to get you really good rates. They have a massive infrastructure. Now theirs is more of what's called a four PL model where they technically don't own these warehouses, but they have worked with them to get the right technology, the right personnel and the right operations in place to offer SFP. And Amazon's kind of edited 'em out saying, gave them the approval of like this is a company who can offer you SFP. The second thing is a company called DaVinci Micro Fulfillment, they operate as a three pl, a true pl. So they own the warehouses, they own the staff, it's all theirs, it's all their technology. And they have again gone through the approval process of Amazon, Amazon's given the approval they can manage the SFP and they've got six locations across the US And so these
Brett:
Are two, what are those two? The ones the four pl one's a three pl, what are those again? So
Matt:
Where to go? It's your four PL and DaVinci Micro fulfillment is your three pl. So again, as you and I were chatting earlier and we were talking about agencies and not every agency is the right fit for the brand and right vice versa. Same thing here. You should talk to different solutions providers out there because just because this one works for this brand doesn't mean it's going to work for your brand. So those are two great places to start and see if there's solutions for you there. So these two are going to do the heavy lifting of meeting the speed performance metrics, which is going to be on valid track, 99% valid tracking, less than a half percent of order cancellations, and then your on time delivery being 93.5% and that's usually the one that is really can trip people
Brett:
Up. It's tricky man. It's
Matt:
Tricky. It's tricky. And that's where again, having the right partner in place who has the leverage resources of your carrier solutions, who can go on your behalf and when there are problems with your deliveries can use their flexibility or the resources of multiple different carriers to solve those solutions. With that because the other kind of piece of this is there's what we saw, speed performance promises shown to customers and that's kind of determined on your shipping templates and again the number of carriers that you're using are you offering one day, two day ground services. So that's where I would really advise sellers who are kind of wanting to explore this further, talk to sellers who've kind of gone down this path and also make sure you're resourcing the right expertise to help through
Brett:
This. Yeah, it makes sense. So obviously very Verde was a great case study and self-fulfilled prime multi mid eight figure brand really an SFP heavily. Do you have other case studies you can mention? And I know a lot of Amazon sellers are pretty guarded about their brand, things like that. You can be very secretive, but category whatever brands that have transitioned from FBA to SFP and what kind of lift kind of improvements have they seen?
Matt:
So we have two examples I'll share and two different check boxes in terms of the product assessment and I'll leave the brand names out, I can give you some generalities. So the first being is seasonal. So they're a holiday type of product. 85% of their business comes and literally a six week window. So they have a very tight window to hit and they have been doing merchant fulfillment, but so they've kind of got the resources in place, they're leveraging in some additional solutions with some of the three PL solutions we talked about. So we're actually in the process right now working with 'EM to make sure we got all these check boxes in place, all operations in place before we hit this time window for them. So the expectations with them is that adding this into their program is going to lift sales going into their peak season anywhere from 20 to 35%, but it's going to be able to actually, in their case they're trying to just maintain profitability and with the offset of the increase sales. So that's one kind of example where the gold there isn't necessary to improve profitability, but it's more of we want to maximize more of our sales in this small window of time that we have the second. So have
Brett:
That inventory flexibility because Amazon's going to throttle that inventory and you're not going to be able to capitalize on the full opportunity of that seasonal window if they were going FBA only.
Matt:
Absolutely, and just knowing that in that period of time you've got these inbound delays that can occur and so there's a lot more variables to try and account for and if one of those misses, it can have dramatic impact on your top line sales. Our second is, and we're kind of in the final process with this one too, so we haven't fully crossed the line with them, but they sell somewhat of a seasonal, it's more of the up and down sales throughout the year, but consistently selling year round. And theirs isn't necessarily heavy products but they're kind of bulky in size, so I thinking maybe greater than 24 inches by 12 inches but in a higher price point range from like a hundred dollars to say $200. And so they have been doing FBA exclusively and it's worked well for them. It's year over year.
We're having great sales growth for 'em, but the profits were getting eaten up here is we're having these different fee structures come in. So we worked with the team at DaVinci and we did a cost analysis. We took their last 12 months of their sales, ran it through their system and kind of analysis and we came back to them and said, right now your shipping costs are 19% of your sales. If we can move this to our platform, it will maintain your prime badge so you'll still get that benefit of the sales left, but we can take this down to 11% of your sales. So that is a massive dramatic savings right there. And one again, you wouldn't typically expect that FBA to be beaten by SFP, but it's a great example of where if you partner with the right resources and kind of put the right plan together, it can be a great win. And as we tell brands in this case, we may not move their entire catalog over, we may find select products where it makes sense to put that at SFP and these other products make sense to keep an FBA. So if you're thinking through this, it's not an all or nothing, this is very much, again, it's about gaining control and flexibility over your products, over your logistics and understanding where can you move the right levers to improve your margins.
Brett:
I love that. I love that it's not all or nothing. You can look at your catalog and understand what makes sense to keep FBA, what makes sense to make SFP to really maximize control top line bottom line and look at that holistically. So if you're thinking about self-fulfilled prime, reach out and chat with brands Excel and Matt can help you out there. Let's transition a little bit Matt, because we don't have a ton of time left, but I do want to touch a little bit on a MC. So Amazon Marketing Cloud and it's become very obvious to Amazon sellers over the last few years that growth on Amazon is largely pay to play. You need to invest in ads in almost every scenario where it's at leased to launch a product but likely to maintain sales. And so what we do at OMG is we're kind of full funnel ads.
We're looking at sponsor brand video, which we be called video and search. We're looking at sponsored brand ads and of course sponsored product ads and looking at all of that. We're also, we do a lot with YouTube and Google and Facebook and so sending that traffic to Amazon on occasion or we're just advertising D two C, but there's always an Amazon Lyft, even if we're sending traffic to a Shopify store, there's some people that like to research there but buy on Amazon. And so Amazon developed a MC to try to help marketers get better visibility and better tracking and things like that. How were you guys using a MC vary and how are you consulting coaching brands to utilize A MC?
Matt:
I love this topic and it's one of the most interesting ones to dive into right now. And this question is coming up with a lot of the brands we're talking to and we're talking with some brands who are, maybe they're spending a little bit less, they maybe they're spending 10 to $15,000 a month, but even there we're running into these challenges with just focusing on sponsor products and sponsor displays. There's only so much you can do with those tactics and talking with brands who're spending 10 million a year on Amazon and beyond that on other channels and they're like, we know when we stop spending or reduce spending sales go down, but we don't know which of these tactics or what really is going on. So there's a lot of unknown.
You shared YouTube and DC all these. I think that for longtime brands have kind of operated in the sense of, okay, we have our paid search for our D two C page, we have our social, our email marketing and SMS, and then we have Amazon that sits over here and maybe we even have Walmart sitting over here, but they were all very siloed and there was budgets for each one in some cases. Some of these companies we've talked with, they have multiple brands and even each brand had its own kind of segment and budget and everybody was working independently of each other and everybody was kind of not knowing what was crossing over with all these different budgets and tactics. And I think brands are now realizing that are coming to a place where we need to break down these silos, but how do we do this in a way or how do we get the right insights and signals to help us make the right decisions?
And so it's exciting as a MC is to me where I tell brands is before you jump all into this, there's a ton of value you can get, but it's really before you even get to that step is really understanding what is it that we as a business and brand, whatever our biggest challenge we're, what is it that we really want to solve and what are those measurements going to be to base these changes on before we go into a MC, because as we dive into this, we'll talk some details is a MC can provide a lot of great useful information, but it's about being specific and ask the right questions to get the output that you really want that's going to be incremental and impactful for your business.
Brett:
Yeah, it's really great and it's one of those things where sponsor products, the bedrock, the foundation of your Amazon advertising strategy, but there's only so far that can take you for certain categories. It can be mostly what you need, but it does depend. So we've got a couple of brands we're working with right now, high growth brands. One is in the haircare space, one is the cleaning space, but they don't fit squarely into a category and there's not a perfect alignment with search queries in their products. And so sponsored products are great and they're high return, but we're hitting a ceiling, right? Because there's only so much search volume and still with a lot of, I mean most product discovery on Amazon has done through search. And so you got to kind of look at how do we get creative, how can we show maybe a sponsor brand video ad this product demo video ad and maybe some related categories or show it on related products or things like that. How can we do DSP, Amazon DSP and sponsored online video or prime video ads? Some of those things that kind of go a little upper funnel or get a little broader, but then we got to see, but is that driving incrementality? Is that driving a sales lift or is it waste? And sometimes that's hard to kind of piece together. And so A MC helps there any good use cases, studies, any examples of, hey, we used A MC and unlocked this insight.
Matt:
I think what you shared there, we've experienced, and I've seen it with some of our brands we're working with where we have been successful with the sponsored product placements, but as other competitors are coming into the space, CPC costs are going way up or in some cases the audiences are just smaller is we've got to grow beyond just pace search. And so as we get into DSP, what we've come across is some cases you can do targeted segments or you can do some audience modeling on DSP, but even within those two parameters of levers that you have on the DSP model, as we've done some models we've come in and we've seen where there's just a lot of wasted spend or overspend on certain tactics have just not be able to get UL enough in terms of your targets. Especially in these cases where maybe you have a smaller audience and you're trying to then go capture interest from lookalikes or comparable products using A MC.
We can use all these different signals of not just a, you think of the traditional A MC models, it's going to give, you can see the path to purchase where you get, okay, they sponsored product placement at DSP, but within the standardized reports that Amazon's provided for us, it only goes so far. Even with those, that's where we see working with the right providers in this space to help you really customize the sql. That's what's kind of the really powerful level here is that Amazon's created some great templates, but you can do anything. That's where I say it's about asking the right questions and then having the right resources and team behind you then to go and create those SQL queries and reports. So when we've been able to go with that next level of going even more granular in terms of really understanding well, how many different touch points do they have on S Spark products and how frequently do they get served up with our DSP ads to then really craft in that more specific targeted audience is when we really see the explosion of growth within the power of DSP and A MC working together.
Brett:
Yeah, yeah. It's the future to really get the most from DSP and others of Amazon advertising. You kind of need a MC. And so yeah, both in the attribution piece and kind of understanding what's going on, but also in this targeting and audience building, there's really nothing like A MC. So pretty excited about that. Now, any final thoughts on A MC? I've got a couple more things I want to wrap up with.
Matt:
I think again, as brands, if you're in this position where you're just not seeing the same level of impact with sponsor products and you're pushing to DS DS P should be looked at and measured differently. And that's usually the biggest challenge or roadblock we run into with brands of,
Brett:
And there's some flaws with how it's measured on its own just in the DSP platform. There's some serious flaws there.
Matt:
And so I think A MC where originally was thought of as well that's for enterprise level brands or that's for brands spending a ton of money on Amazon. I think that was true a year ago. I don't think it's true for brands today with where we are and the resources that are out there is that if you're spending 10,000 a month on DSP, you should definitely be looking at A MC and using that to help us build those better models. And we didn't touch on the fact of we're talking about Amazon performance, but if you're a D two C brand or you're spending money on these other platforms, wow, there is so much opportunity to bring this data all together and help really understand the full journey of your customers, not just on Amazon but across your D two C and across these other retail sites to just improve those dollars and get more out of it too.
Brett:
Yeah, super exciting man. Really excited to see how that continues to develop and we're excited to use it for our brands as well. And so I would be remiss if I did not ask you based on your time with Mark Cuban six years with the Dallas Mavericks, and this is a little bit off the cuff, we didn't really prepare for this necessarily, but any lessons or insights or takeaways as you observed Mark Cuban operate? What were some of the top lessons from working with him?
Matt:
It's interesting, you either have fans of Mark Cuban or you have the haters of Mark Cuban. Sure. Those who say he just got lucky. If you dunno the full story Mark made, he's had two big decent-sized exits, the second one being broadcast.com, which made him billions of dollars and just sold 'em MAs again for several billion dollars. So he's had success multiple times and I think one of the things I took away from him is just no matter how successful you've been in a certain segment or business, it's always about just continuing to learn. He would talk about back when he started his first company of billing network systems and he just would go home and just devour these resources around training manuals and he just knew more than anybody else when he stepped into a room. And I'm not saying that I know more than anybody else, but it just showed me that, especially as I've gone into the space of Amazon specifically, is you just can't rest on what you know today because this space is, we're talking to A MC, we're talking SFP and Amazon space has just continued to evolve and if you want to stay relevant and if you want to stay at the top of your game, it's always about just continuing to just be in the market learning and not just resting on your laurels.
This one and the second one, just being that we had all these different saying kind of Mark Cuban sayings up around the office and one of those being it's a little off cuff here, but it's called No Balls, no Babies. And the whole concept here just being that you got to be willing to take some risk and you got to put yourself out there. And that's one of the things I took with him is that I tell my kids all the time is if you don't ask, you don't get. And being able to go out there and just first you got to make sure you're in the position to be successful and to be able to bring value and to go up against some of the best in the industry, but then you also got to be able to go out there and put yourself out there and also be willing to ask for that sale, ask for that opportunity, ask for this promotion, ask for this opportunity for me to prove myself. If you don't put yourself out there and be willing to take some risk, then you're never going to reach your ultimate.
Brett:
Yeah, it's so good. I love both of those points. The first point being usually those that are accused of just getting lucky, there's usually a ton of hard work behind that and almost obsession. He was going home reading manuals, right? For fun. He's digging into stuff. And I think there's a certain level of success that requires that if you're going to be in the top couple percent of Amazon sellers or D two C brands or whatever, it's going to take a little bit of obsession for you to get there. And I love that second point, man, you got to be bold. You got to ask for stuff, right? I've been chatting a lot with my 22-year-old son. He's in direct sales and he is doing a great job and he just read the autobiography of, not autobiography, but the biography of Steve Jobs and was talking about how bold Steve Jobs was.
And I remember there's a story in there when Steve Jobs was like a teenager and he wanted to learn from Hewlett Packard and he is like, I bet I could just find the founder in the phone book. This is back when the phone books were a thing. And so he did, he found one of the founders in the phone book and just called him in the evening and got him on the phone. It's like, Hey, I've got some questions building this computer. I got some questions about whatever. And the founder was like, man, you want a job? You want to come and do a summer internship? And that really paved the way for Steve Jobs and Steve Wozniak in a lot of ways. And it was because Steve was like, I'm just going to call him at home in the evening. Where most people were like, well, I don't know. I want to do that. We sit and analyze, but just got to be bold sometimes. Got to ask for the sale, got to do the deal, got to start. Because a lot of times we get stuck in our heads and we don't operate so beautiful lessons. Any final Mark Cubans?
Matt:
So just to round down that, I told you at the beginning of this about my internship there, but I didn't tell you the full story is that to get this internship, I follow this mechanism is that I got the email address of the HR person and of the director of sales. And so I just would cold email these guys twice a week. I'd see some follow the game, Hey, you have a great game. Must I have just a call out? And then ultimately over my spring break I said, I'm coming to Dallas, will you guys meet with me? And they were both reluctantly, were like, sure, whatever, to really show them some sizzle. I made my resume on a PowerPoint with the CD Rom and sent that to them. This is cutting edge back in 2002.
Brett:
I've not heard the word CD ROM in so long. I'm so glad you said that. Age myself.
Matt:
And so I show up on my spring break and I can tell they're both just trying to do anything they can to talk me out of this. And so I was like, look, we don't have internships, we don't have any jobs. I don't have a way to pay you, so I don't know, you tell me where we stand. I'm like, say yes and I'll be here as soon as I graduate. And so the next week they're like, fine, if you want to show up, we'll find something for you to do. And just as I got there, one of their other account executives had just, and so they had just entered the renewal season. So I got to then step into this role of filling his shoes for the next three months as my internship of how do I can show myself as a salesperson? And I never would've had this if I just didn't take that risk of just, I'm just cold email, put myself out there and make an ask. Ultimately, that led to my first start.
Brett:
So cool, man, what an amazing story. And you didn't just ask one time and you didn't just ask in the same way each time you found a reason to follow up, great game, here's a call out, Hey, can I do this for you? And eventually you did that so much that they couldn't ignore you, right? They maybe didn't want to give you an internship. We got nothing, man. We got nothing for you. Whatcha going to do. And you just kept on asking. And yeah, I think if we can get to that place where we're impossible to ignore, that's really, really powerful and you just got to figure out a way. And so if you are willing to be bold to push for someone to find a way, it'll often happen. And yeah, man, such a good example. Such a good lesson there. Thanks. Thanks for sharing that. Awesome. As we wrap up, as people are listening and they're like, okay, I got to look at self fulfilled Prime or I need to just analyze my Amazon strategy, how can they get in touch with you, Matt? Yeah,
Matt:
So you can easily reach me. My email is matt@brandsexcel.com. You can also find me on LinkedIn. I'm sure we can maybe add my link here.
Brett:
Yeah, I'll look all in the show notes.
Matt:
I'd offer every lesson you here if you're interested. I just want to know some more. You want to go a little bit more in depth? I have a free guides, just a comprehensive guide to sell Fulfill Prime. It'll walk you through everything we talked through today with a little bit more in depth. And Brett, I'll share this with your team Thursday, we can just make this accessible or again, shoot me an email and gladly send it over to your free resource for you to review and help you answer some of those additional questions.
Brett:
Love it. And that's brands plural, Excel, ex CEL, correct.
Matt:
Brands, B-R-A-N-D-S-E-X-C-E-L.
Brett:
Awesome. Matt Snyder, ladies and gentlemen, Matt, this has been fantastic. Look forward to doing this again sometime, and thank you so much. Thanks
Matt:
Brett.
Brett:
Absolutely and always, and as always, thank you for tuning in. If you found value in this show, please share it with someone. If you know an Amazon seller that's kind of been wrestling with how do I make FBA work and should I do SFP, then send them this episode. If you've not done so already, we'd love that review on iTunes. And with that, until next time, thank you for listening.
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