As Amazon Gets Easier It Gets Harder

Mina Elias:
Welcome back to the Amazon Blueprint podcast, Andy, bro. So tell me, is Amazon easier or is it harder? And are people, like, still having success with Amazon FBA?

Andy Isom:
Here’s what’s crazy. We’re still seeing people having success with Amazon FBA. In fact, I’m still getting messages almost weekly of people who are just barely launching, or I’ll get a message that says, andy, been selling for two weeks. We just crossed 150 units sold, or we just did our first month and sold $7,000. And so Amazon is still very much viable. It’s still very much a business option for a lot of people. But here’s what’s crazy. As Amazon continues to get easier, it’s actually getting harder. And let me explain that really quickly here. Mina, you’ve talked a lot about AI recently. I’ve been following your content, right? And you’re talking a lot about AI. And obviously we’re all aware about chat, GPT and the capabilities, all the software tools, things coming out. And here’s what we’re seeing happening, or at least what I’m seeing happening in the world of Amazon. Even Amazon themselves, right, they just had their Amazon accelerate conference a couple months ago. They talked about the AI implementations they’re doing to make it easier to build a product listing and optimized listing and all the tools to make it easier to manage your supply chain end to end.

And we’re coming out with all these tools, these softwares, these features, everything that’s making it easier to get started with Amazon. But where people are kind of missing the boat here is they think, oh, just because Amazon’s getting easier in the sense that, oh, it’s easier for me to create listings, it’s easier for me to do photos, it’s easier for me to do my supply chain because of all these tools and resources, it’s actually going to be a lot harder than it was five years ago before we had these tools. And the reason for that is because by making it easier to start, easier to run an Amazon business, we are lowering this barrier to entry even more. So now there’s more sellers than ever before jumping on the Amazon train because it’s easier to do, right? It’s easier to start.

Mina Elias:
I’m seeing the same exact thing. And I actually started seeing it three years ago in 2020 when Covid hit. So before COVID hit, I was going to conferences all this stuff, networking all the time. I would meet a lot of business owners, and I’m in LA, right? So I met big brands, like really big brands, and they would say, you know what, man? I’ve heard about this Amazon thing. But personally, I don’t want to get on Amazon. I don’t want to drop the value of my brand or the image of my brand because Amazon is like a store. And I shit you not, dude. After Covid hit every single one of those people because they knew I was in the Amazon space, hit me up and said, how do I get on Amazon? And it was a hidden gem. It was like Dubai, right? Back in 2005. No one knew about it. Everyone was there. Life was amazing. Or like Tulum five years ago, right? It was amazing. No one knew about it. And then everyone’s like, yo, I got to get there. And so institutional capital came in. So these private equity backed, venture backed companies, I mean, think about this.

You are now competing with a vc backed company with five, $8 million in funding in their seed round or their series a, right? So these are people that can have better images than you, better products than you, more reviews. They can literally hire people to run around and do these pop ups to basically pitch people to get the product for free in exchange for review. After 2020, I started noticing that the barrier to entry, which used to be way less, is now way more. I mean, obviously things are getting worse for the average seller that’s on there. But what do we do now? I agree with you. Right? Barrier to entry is easier. They’re giving us more tools. They’re making the Amazon advertising platform even easier to. Now we have a targeting tab. I used to have to do bulk sheets and it was like, nasty to look at. Now you can do all that stuff in the targeting tab like this. So they’re making it easier. More people are coming in. What does that mean for us?

Andy Isom:
Something that we just saw recently, marketplace polls. I follow them pretty consistently. They put out a lot of great articles, research that they do about Amazon and e commerce. And one of their recent articles that they put out was showing that just recently, within the last few months, chinese sellers again surpassed american us based third party sellers on Amazon. For a while there, us sellers actually overtook chinese sellers, meaning there’s more us based sellers doing third party selling on Amazon than chinese brands. But it has since flipped. There’s now more chinese brands than us sellers. And then we also look at the data showing there’s 600,000 new sellers joining the Amazon platform in the last year. But a large, large percentage of those are never making it past 90 days. So there’s a ton of people that are coming in again with the low barrier to entry, meaning it’s easy to get started. But like you said, they’re going up against two big dogs. They’re going up against the big dog of chinese factories who can just simply outprice you. As far as lower pricing, you just can’t compete. We cannot compete with the pricing of chinese factories.

I mean, their supply chain is a lot more lean. They can afford much smaller margins. Right, their cost of living. So if you’re trying to get in a price war with the chinese sellers, you’re not going to win. But then on the other side, the other big dog is the people you mentioned, VC backed brands and products that are launching products with 100, 200, $500,000 budgets. The people that are kind of caught in the in between zone of I can’t afford to launch a product, squeezing my margins all the way down to 10% like a chinese seller. But then on the flip side, I don’t have the budget to create a very unique, highly customized product with tooling and molds and marketing budgets of these sellers that are backed by 100,000, $200,000 plus. So that’s where these people that are in this in between zone of like the, I’m a bootstrap, self starter, stay at home kind of working mom or dad or whoever, right? I got ten, maybe fifty k on the high end budget to get this going. It just means they have to pay much more attention to every single detail of their product and of their brand.

Andy Isom
I remember, I’m just thinking about my own brand. I remember back in 2019, there’s all sorts of tools and features, there’s different ads targeting types that we weren’t doing, like display ads, we weren’t running display ads in 2019. And there’s all sorts of different tools now and things. And like, oh, we should be doing TikTok and YouTube videos and all these other things. And it was like, we don’t need to do this. We can sell 150 grand a month and not do any of this stuff. But now, if you want to again compete with the chinese sellers and then the big budget brands, you have to look at all those little micro advantages that you can gain with all these different features.

Mina Elias:
100%. I totally agree. I mean, I’ve said this before, and the difference between you and an aggregator is that you have one product, you have one brand, and you’re going to put 100% of your attention there. So your whole focus should be, you have a checklist, right? Like, how do I optimize my cook? Through rate, main image, price reviews, star rating, promotions, discounts, coupons, badges. You have a checklist for conversion rate, the rest of your images, videos, title, bullet points, a plus content, brand story, UGC, you have to squeeze every single one of those and you also have to have the system of continuous improvement with data to back it up. So every time you make a change, did my click through rate go up? Did my conversion rate go up? Because at the end of the day, the ad stuff I feel like is the easier stuff, right? You’re running ads, you’re showing your product to people. The hard thing is, how do I convince someone to choose me over Liquid IV MMA nutrition 4500 reviews Liquid IV 100,000 reviews that’s the hard part. And I think, yes, number one, it’s like squeezing everything.

Mina Elias:
But I think you’re going to touch on another one, which is really big. But before we get into that, one thing that you mentioned is chinese competitors, they’re now dominating the market. And I think one thing that people sleep on is intellectual property in China. And so if you’re coming in and you’re starting a brand and let’s say you already launched the product and this chinese competitor comes in and they immediately, they take a big part of your market share, whatever, that’s fine. You should have already anticipated that your v two needs to come out. But when your version two comes out, come out with something that you can protect with trademarks, with utility patent design patents, so that when you do come out with yours and a chinese competitor comes in, you have an ip in China and in the US and in other major countries that manufacture, let’s say Vietnam, India, whatever. So that when you do come out with something, you have a significant mold. They can’t come in, they copy you, you as the innovator. And honestly, I think this is for the good of the consumer because it forces you to become an innovator.

So now you’re no longer just like half assing your products and launching them on Amazon. Now you’re significantly solving a problem way better than everyone else. And at the end of the day, the consumer wins.

Andy Isom:
That was something that we anticipated, this happening with our brand and our products. In fact, I get asked all the time, and I’ve been asked this for years now. Friends of know will come up. Andy, you know, I’m thinking about starting a brand on Amazon. I want to sell my own products, right. They see what we did and it looks nice. The lifestyle is pretty easy. It’s not that hard to manage once everything’s up and running. You got the system but they come to me and say, it looks really nice and I feel like I could do it, but I’m worried about someone stealing my idea. Like I’m worried about someone copying my idea. And I just flat out tell them, I say, look, if your product is successful, it will be copied. 1000%. It will be copied. There’s so many tools, software. Heck, forget the software. You could just go to Amazon. Amazon now shows you. It says 500 units sold in the last month, 10,000 units sold in the last month. Anyone can go and look and be like, that product sells really well, I’m going to go sell that too. And the chinese brands, they don’t care.

Andy Isom:
They don’t care. They will completely make an exact replica of your product and start selling it. So you have to accept, like you said, you said it really well. You have to accept that this is going to happen. If you’re successful, you need to prepare for it so that you’re not shocked. Like, oh my gosh, I had no idea people were going to copy me. If you know beforehand that’s coming down the road, you can take the steps to protect yourself in the beginning. So that’s what we did. We knew we were selling $2,000 a month. No one was copying us four or five years ago, but we knew if this gains momentum, we had a differentiated product. We knew if this grows, if this gains momentum, people will copy us. So we applied for a patent. It took us three years, but we won our patent. We have submitted over 75 copyrights with us government. We have a trademark. So we set ourselves up from the beginning, anticipating this was going to happen in the long run, and then we’re set up better to protect ourselves. So that’s one thing, like you said, I reiterate that take the steps necessary to protect your ip as soon as you can, right?

Andy Isom:
But then always continuously be looking to innovate, like going off what you were talking about, how our strength as a solopreneur for most people who are doing this is you likely have one brand, one product or one product line, different variations of that product line, be the best at that product line. For other brands out there, you think about even going to like retail, going to Walmart, great value brand. At Walmart, there’s hundreds if not thousands of products within the great value brand. And is great value brand really a great brand? I don’t know. It’s kind of a generic, cheap brand because they just do everything, low cost, low price thing. But it’s not like they’re really excelling in any specific product versus that’s what we can do is we can really try to excel in our very specific product line.

Mina Elias:
Totally. And then there’s one thing I think you did amazing that I also think a lot of people misinterpret. And it’s another lever for success on Amazon, which is branding. So can you touch on branding? Like, what is your definition of branding? Because I feel a lot of people misunderstand this. A lot of people think branding is your packaging, your colors, your logo. So touch on branding and how branding has helped you become more successful branding.

Andy Isom:
Honestly, if I could try to put it pretty simply in my own kind of definition of it, branding is establishing an emotional connection with the customer, in my opinion. That’s how I think about branding. A lot of people, like you said, they think about branding as a logo and design of packaging. Like, oh, you need good branding. Like, okay, I got a really sick logo. Packaging looks really cool. I’m going to charge $40 when the competition is all charging 20. Now, that’s great when you’re Nike, and again, you’re huge and everyone knows you and LeBron James is endorsing your products. Yeah, great, go charge $40. But this misconception everyone has is good branding is a good logo and good packaging. And then they do that, throw their stuff up on Amazon, try to charge more and then wonder why no one buys their stuff. And they’re like, well, I have a good logo and good branding. It’s like, nobody cares. Nobody cares. In fact, I had someone come to me saying, andy, can you look at my product? It’s not selling super well. And I’m like, okay, let me take a peek. Take a peek at their listing.

Andy Isom:
And they’re selling a product just like tons of the same product already out there on Amazon. The other competitors are all selling this exact same thing for about $12. This specific person is selling their version for $25. It is exactly the same. I’m literally looking at the photo, I’m like, this looks exactly like the $12 version. And so I tell them, I said, you’re not getting any sales because one, you don’t really have any reviews like you just launched. But two, even without that, you’re $25. The listing right next to you in the search results is $12. And I’m looking at both. I’m like, those are identical. And then they tell me, but we have our brand, like, look. We have our logo printed on the product. And I’m like, nobody cares. No one cares about your brand, there is zero emotional connection between customers or potential customers and your brand. So you have to understand that creating an emotional connection with your customers or potential customers, right, that takes a lot of time and a lot of effort off of Amazon. Right. That is like establishing a community, building a story behind your brand.

Andy Isom:
Who are you? Why are you doing this? Who are the stars of your brand? Is it you? Is it for us? Is it an animal? Is it an idea? Is it a like, what is it behind your brand that creates an emotional connection? Because the science research is out there. You know this, Mina, people are driven to make decisions based on emotion. That’s why we make decisions. Most of our decisions are emotionally based. Even when we purchase stuff online, even if it’s a $25 product on Amazon, a lot of it is emotionally based. So if you’re going to have a brand that stands out from chinese brands or even big box Nike, you’re trying to compete against Nike, like people bigger than you, you need to have some sort of unique emotional connection. And for a lot of you guys, like, right, right. Who are just getting started, this is going to take time and this is going to take place off of Amazon and your efforts off of Amazon.

Mina Elias:
And would you say probably one of the biggest things that you can do for branding purposes, and this is something I notice most people don’t, is go and talk to your ideal customers and really know them intimately. Because when it comes down to building a brand, let’s say I’m building an electrolyte powder. And I know that my ideal customer is like women that are in this age group that do these activities, that have this sort of income level. That’s who I’m going after. When I do create that product, am I getting that feedback from them so much that it’s like, we like this color palette. This is what moves us to buy. Because when you do that amount of work, there’s very few people that are going to do the same amount of work as you. Chinese sellers are not doing that level of mean branding. Ultimately, yes, it’s emotional connection outside of Amazon. But if we were to bring it in Amazon, it’s very difficult. It can be done. And I think it can be done by really understanding who your customer is and that that messaging needs to be so on point as if you are in their head talking to them.

Mina Elias:
You know what I mean? You’re in their head. You know exactly what they want and you hand it to them and you say, my messaging, my positioning, everything down to the color, to whatever, because you know your customers so intimately well, when they see that product, they’re like, yeah, that’s the best one. That’s for me. And I think it is so hard to build a brand on Amazon because there is no emotional connection. It’s just a store. You walk into whole foods, you want to buy a hot sauce, you go to the shelf and there’s 65 different hot sauce. There’s no message behind it, there is no founder story. You could put a little bit of that in the brand story. But at a glance, if I’m Mina and I’m looking for something trough hot sauce, that appeals to me. It’s simple, it’s minimalist, it looks cool, it’s designed well. And I’m like, that appeals to me versus all the other hot sauces that it looks like it belongs in a cafe on the side of a bodega sort of thing. You know what I mean? So I think that’s where branding can play a role in Amazon.

What else would you say are ways for Amazon sellers to succeed now? Now that things are getting harder, I’m.

Andy Isom:
Going to use a phishing analogy. I love fishing, and on my podcast I talk all the time about phishing. So my listeners know this. But I think a big mistake that people make who are getting started with Amazon is they try to go too big too fast and they stumble, right? They try to go after too big of markets, they get Google eis, right? With the demand, they’re pulling up jungle scout, helium ten or whatever and they’re seeing like, oh my gosh, like 2 million searches a month and this brand is selling $450,000 a month. And look at this one. And they get Google eis of these really big time niches. And if I could relate this to fishing, it would be as if, let’s say you’re brand new, right? You’ve never run an Amazon brand. Maybe you’ve never done e commerce. You’re doing this for the very first time. That’d be like someone who has never been fishing in their entire life and they want to go catch a marlin, swordfish. A marlin, a big fish. So what do they do? They go out into the ocean. They have no idea where to go.

Andy Isom:
The ocean is vast as can be and they wander out there in their boat and they just like drop a line in the water. Your ods of catching a marlin, which we could say is like a big home run winning product that makes you millions of dollars. Your ods are so slim, like you don’t know where to go in this vast ocean to catch marlin, you’ve never done this, right? And that’s what people do is they’re like going after the biggest fish in the sea and they’re just wandering out there because they don’t know what they’re doing and they’re trying to go after too big of a fish too fast. Versus what I would suggest people do is go fish at the local kitty pond. Right? Like, you think about the little pond, it’s tiny. They stock it full of trout. You can see the fish right there in the water. You throw like, velveeta cheese on and you catch a fish every time. Is it a marlin? Absolutely not. But you’re going to catch a ton of those little tiny trout and those will add up. That would be like picking a very specific niche within a niche and dominating that sub sub niche.

Andy Isom
And then when you’re like, okay, I got the hang of this. Catching a bunch of fish in this little pond, then you go to the bigger lake and you already kind of got a little bit of a feel for things. You go after a little bit bigger fish, you’ve already got some experience, some reputation. If we could say your brand has built up some reputation. You go after a little bit bigger fish, then you say, okay, now I can go to the got. I kind of understand the concept here. I’ve got some experience. I’ve already caught a whole bunch of fish. I’ve got money in the bank. Let’s go Marlin fishing. Rent a boat, rent a guide. Right? Which we could say is like having the money to invest to go after a high demand niche, and you’re going to have a much better chance of success. So, like, you were giving the example. If it was even supplements, there’s people out there like, oh, I’m going to sell supplements or I’m going to sell a pre workout mix or whatever. And then it’s like, okay, who is your pre workout mix for? Oh, it’s for everyone.

Andy Isom:
It works great for everyone. Women love it. Men love it. It’s like, no, we already got brands on Amazon with 50,000 reviews targeting everyone. You are not going to compete against them. You need to find your sub sub niche of 30 year old moms who are recovering postpartum, who just had a baby, who are just doing yoga, really focus in and get a ton of sales for that specific audience, because your brand, your packaging, your offer really speaks to them. And understand you’re not going to make a million dollars off that sku. But once you start stacking a whole bunch of little Skus like that, then you can venture into a little bit bigger market from there.

Mina Elias:
Totally. And I say this all the time, because when you are starting out, you have so much skills that you need to build, right, the main image, understanding how to do the main image and split, testing the main image, building a beautiful listing, getting reviews, doing your PPC. There’s just so many. Managing inventory, cash flow cycles. There’s so much stuff that you need to become an expert on. And so I think it’s two pieces, right? Number one, do you have a great idea and a great product? Number two, do you have the right execution? Like you can have the best idea in the world, like a product that would be a home run on Amazon. You don’t know how to do the execution, which is the listing, the images, the pricing, the reviews, the PPC, all of that stuff, the inventory management, supply chain, it’s going to fail. Or you have like a shitty product with incredible execution. Again, it’s probably going to fail, right? So it’s this balance and it’s like, since you’re going to fail either way, if you don’t have perfect execution, okay, have some, okay, products, not home run products. Get the execution down to a science.

Mina Elias:
Become really good at everything. Find your little pockets of like, how can I get amazing images for cheap, no limit creatives? And I found these six creators that can give me videos for $100 each. But they’re incredible. They have millions of views because finding all of these pockets and your little system and your freight forwarder that’s trusted and finding your capital funding person that can help you when things get tough and you need a little bit more inventory, getting all of that stuff dialed in, and then it’s like, okay, cool, now we can go after home run products because I have that down because you’ll waste a home run product on bad execution, but you’ll never waste okay product on bad execution because that’s part of your training. So get the execution down, go for the home run products, and then one of them will hit. Andy, bro, this was incredible, man. Thank you for sharing so much good stuff with us. You have a massive resource, which is your podcast. Can you please tell us where to find you?

Andy Isom:
Yeah, you can just search selling on Amazon with Andy Isom. That’s the best way. Any podcast app, Apple Spotify. Selling on Amazon with Andy Isom and you should find it.

Mina Elias:
Yeah, I think you’re ranked number one for Amazon FBA and selling on Amazon, right?

Mina Elias:
Yeah and I love that your podcast is not just like interview after interview, but it’s like a lot of tactical stuff. So if you want to learn more, definitely check out the podcast and have you back Andy to talk about some other cool stuff.

Andy Isom:
I appreciate it Mina and I’ll just throw this out there too. Guys, Mina has actually been on my podcast twice now. I can’t remember off the top of my head the two episode numbers, but if you scroll there you’ll find my interviews with Mina on my podcast.

Mina Elias:
Yeah, some good PPC gold nuggets there so make sure to check it out guys, take it easy.