The Art of Inventory and Advertising Optimization for Amazon Entrepreneurs

In this episode, we are joined by Mina Elias of the Trivium Group as we delve deep into the intricacies of inventory planning and mastering the art of Amazon advertising. The lifeblood of any successful business, these topics are dissected to provide actionable insights for businesses striving to maintain a crucial safety stock and gain a competitive edge with superior profit margins.

Episode Highlight:

Inventory Planning Deep Dive:
Explore the crucial necessity of a 60-day safety stock, offering a strategic approach to staying afloat and thriving in the highly competitive world of commerce. Our discussion includes a blueprint for success, incorporating tactics such as introducing enticing product variations and honing supplier negotiations. The episode also shares hard-learned lessons, emphasizing the importance of quality control through a harrowing personal tale.

Amazon Advertising Landscape:
Navigate the intricate landscape of Amazon's advertising realm with us. We uncover common mistakes brands often make and highlight the often-overlooked power of human insight over relying solely on PPC automation. Our guest challenges the status quo, providing a controversial yet enlightening perspective on why some ad strategies might fall short and how businesses can pivot for optimum impact. Additionally, we dissect the effectiveness of video ads and demystify Amazon's perplexing attribution system, ensuring businesses aren't misled by vanity metrics that don't translate to their bottom line.

Whether you're a seasoned Amazon marketplace veteran or just dipping your toes into the e-commerce waters, this episode promises to arm you with actionable insights to stand out in the sprawling Amazon jungle.

Connect with Ben Smith:
Instagram: https://bit.ly/3F4hrt8
LinkedIn: https://www.linkedin.com/in/skipwithben/

Business Social Media Links
Website: https://www.sellercandy.com
Facebook Page: https://www.facebook.com/SellerCandyPro
Instagram: https://www.instagram.com/sellercandyamz
LinkedIn: https://www.linkedin.com/company/sellercandy

Connect  with Mina Elias:
Website: triviumco.com
Facebook: https://www.facebook.com/mina.elias.7
Linkedin: https://www.linkedin.com/in/theminaelias/
Instagram: https://www.instagram.com/theminaelias

Shareable episode link  - https://bit.ly/3tDyPTu
For content collaborations, please email us at: grei@sellercandy.com

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Never Talk to Seller Support Again.

Seller Candy is the expert operations arm of your Amazon business. We provide outcome-driven support for time-consuming and challenging Seller Central issues so you Never Have to Talk to Seller Support Again! With Agency-Level security practices and an experienced team who’s been through the thick of it, we give sellers bandwidth on demand without the hassle of hiring, training, or managing.

#amazonsellercentral #amazonsupport #ecommerce #amazonbusiness

Transcript

Speaker 1: 0:00

the sellers you work with or just from the industry.

Speaker 2: 0:04

Yeah, I still think inventory planning is one of the biggest ones. The reason I mention it is because it is just so painful when you run out of inventory. For people that don't have like a plan, I would say half 60 days of inventory on the side. I know this is easy to say and a lot of people are like yeah, it's easy for you to say that, right, but like, where am I going to pull out like money for 60 days of stock? You can use things like Wayflyer. Wayflyer are very affordable. You can essentially get the funding by a PO for your products and pay for that funding with your profits. If you're not profitable, it's not about you, You're not going to get it anyways, but it's not advisable either way to get a loan when you're not profitable. But when you are profitable you can use other people's money, just so you can have an additional 60 days of stock sitting on the side and then just kind of run through it. So send that 60 days to Amazon, replenish that 60 days. So, worst case scenario, you have 30 days of stock at Amazon at all times minimum, bare minimum and 60 days of stock urgency stock. I'm telling you it may sound like a lot, but you will lose way more money running out of stock. So that's the first thing, and the second thing that I'm noticing is margins are getting tight for a lot of brands and I think brands are like they're not really proactively looking for all the ways that they can improve their margins.

Speaker 2: 1:34

I think there's a lot of ways you can get creative. You can add variations to your listing that have better margins to kind of leverage existing traffic. You're already getting those people into your listing. What if 10, 20% of them bought this other thing that had a little bit more margin or this other thing that had a little bit more margin? So variations are great. I think negotiating with suppliers on better pricing, better terms, all of that stuff is going to help cash flow management and I think going into 2024, cash flow is going to be incredibly important.

Speaker 2: 2:04

So being very tight with that one thing that I saw last or this past year commonly, which I'm surprised about, is a lot of issues during manufacturing make it to Amazon. So skipping inspections is definitely not something I would recommend. I did it when I first launched on Amazon. I skipped an inspection and 60% of my first batch was completely destroyed. I had to message every single person that got a product and beg for forgiveness. So I don't get like a bunch of like one-star reviews. So I would say quality control matters more than anything.

Speaker 1: 2:41

What about PPC side? I mean, I know you guys do a lot of the advertising components for your clients. So, like on the advertising side, advertising has become overwhelming for me. I used to be very hands-on with it and now I'm like, oh my gosh, there's like some new release like every week. So I'm curious are there any areas where you've seen that there's some really common mistakes that maybe newer brands are doing, or even the experienced ones, or ones that just are not as in tune with their advertising?

Speaker 2: 3:06

Yeah, I think the biggest thing that I see brands do is is utilizing like multiple ad types just for the sake of like utilizing them, so like sponsor product and sponsor brand and sponsor display. And one of the issues of that is you have an organic rank like right here you put a sponsored ad and then you know, let's say like you were getting 100 sessions. Now that you have a sponsored, maybe you're getting 120 sessions. You know, because it's like most of the people are seeing both and there's not that many more that are clicking on the sponsored. So how much did you spend for that? You know sponsored rank versus how many additional sessions did you get? Because that's ultimately like your potential for making sales? Then you add a sponsored headline search ad on there. So now there's another opportunity for people to spend money. But then you go from 100 and 20 to maybe 125 sessions. Then you add a sponsored video and now you know you're going to 128 sessions. So you essentially created three you know opportunities for people to spend more money while only adding like a very small amount of, you know, new sessions that are ultimately turned into sales. So that's one thing that I've noticed.

Speaker 2: 4:23

A lot of people will come to me and say we should be utilizing video. I'm like, how do you know that we should be utilizing video? And I'm like, okay, cool, we're not utilizing video right now. I'm going to spend $200 a day on video. And let's see what happens to total sales. We spend $200 a day on video. Total sales go up by $250. And it's like, oh, look at the video in campaign manager has an 8x row, as I told you, so good idea. I'm like, are you sure this is a good idea? Because it looks to me like you only made, you know, $250 more and your profits are actually less now. So I'm like let's pause video. I pause video, profits are back up and you know this is something that a lot of people miss is Amazon's attribution is really bad, at least from what I'm seeing is you can have like one day you're increasing spend and then you notice that your PPC sales go down, but your total sales go up.

Speaker 2: 5:17

And then you decrease spend and you notice that your PPC sales go up, but your total sales go down. So things don't move in the in like directions that make sense and the only possible explanation is that attribution is off. And because attribution is off, it's also off when you look at sponsored products versus sponsored brand versus sponsored display, because essentially the same people clicking on organic, clicking on sponsored you know the different types charging you money. But when you just look at the top line you notice that like, okay, let's correlate the ad spend versus top line. Okay, by adding sponsored brand, I didn't notice that I got that much of an increase in you know top line, and this also happens with organic versus sponsored products. So if you're organically ranked really high, sometimes adding a sponsored position in there results in you getting 10% more more you know sessions, but spending 30% more, 40% more, resulting in a net loss.

Speaker 2: 6:10

So that's one thing on the on the ad side that I've noticed very commonly and, like you said, things are getting more sophisticated. There's a lot more advanced tools and I think that also is like a double H sword. Yes, there's new tools, things that are great, but also I feel like it can cause a distraction to a lot of people when the fundamentals are the same. You know, launching campaigns, you're essentially trying to get visibility on keywords, identify which one of which ones of those keywords you can spend money on and they'll convert profitably, versus which ones you know you shouldn't spend money on because they're not converting profitably.

Speaker 2: 6:43

You know a lot of people just get away from that and start leaning into more. Let's do day parting. You know, like when this Amazon marketing stream rolled out, everyone was talking about day parting. And I'm like guys, I've already tried day parting manually. I'm telling you this stuff it's bullshit and the attribution is off and all this stuff. And they all tried it and no one really had any conclusive data. A lot of people wasted money and all these softwares obviously came out and said we'll target the perfect time that you can optimize and do this and that At the end of the day, when you just look at PPC spend and total sales and you start looking at let me change one factor at a time and seeing the impact on total sales, that's when you start really making progress, as opposed to trying to change multiple different things and hoping that it's just going to go up. Your total sales are just going to go up.

Speaker 1: 7:32

Yeah, definitely. I mean it definitely can feel overwhelming. So I like that back to the basics. I know you got your start, mina, and kind of the supplement space. So I kind of jokingly said at the intro of this show but I've always stayed away from that space, just because I've seen so many accounts that have gotten like just dealt with, so much trouble either where they're squeezed out of the market and they don't have the money to spend to fight back, or they're just getting their products taken down for claims or something like that. So I'm curious, like how you see the supplement world on Amazon these days. Do you still have your brand or I don't know if you exited that or you still have it?

Speaker 2: 8:05

No, it's still there. It's still there. I had another one that I started and exited, but my OG1 MMA Nutrition is still there. We still run it as if it's one of our clients and it's like the opportunity for me to always find every single new thing that comes out on Amazon and test it on that like account. So it's been a great sandbox.

Speaker 2: 8:27

Yeah, you talk about supplements and I think a lot of people share the kind of the same feelings of like supplements are so competitive and like how do you deal with so much competition? I think it stems from something deeper and the deeper thing is it's only a lot of competition if you're not creating that much of a better product. But if you come up with a solution to the problem that's better than everyone else's solution and you have a review strategy and you kind of understand okay, right off the bat, I can't go for those big keywords. I'm going to go for those longer tail keywords. But when I do go for those longer tail keywords which have lower search volumes, easier cost per clicks, not that many people, not as many people are bidding on them, cpcs aren't as high. You're able to start carving out a piece of the market for yourself, especially when you have a really good product. And so if you're considering like, okay, I'm in the supplement space, or I want to get into the supplement space and maybe you feel like it's not going to work out If your product is definitely better than everyone else, if the price is in line, even if you can potentially be kind of on the lower range of pricing, starting off, if you're able to get reviews which, by the way, one quick hack on how to get reviews, because you can get like 30 reviews from Vine right, try and get, like you know, eight different variations from your manufacturer. You know as like samples, like, say, hey, can you send me like 50 units of this, like slight variation of the product, and list them all at the same time, and you'll initially, you know, from Vine you'll get 30 times eight, 240 reviews. So that's a way to get reviews really fast from Vine. Use multiple variations. You never have to reorder those variations, or maybe they you know one or two of them start selling well and you're like, okay, cool, let me like reorder more of that one, but of course, make sure that you know your main one that you know have plenty of stock for. But yeah, I think a big, big part of like for me.

Speaker 2: 10:31

If you go and look back at when I launched in 2018, I had the ugliest listing. It was a golden bag. It had like a sticker. Like I'm like I don't even know why people bought it. Like why would people buy such a cheap product, cheap looking product, and I think there's no more room for that anymore.

Speaker 2: 10:49

But if you do come up with a solution that's better than everyone else, you package it really nicely and then you follow all like the you know right, like fundamentals of Amazon really good main image, really good listing, images, selling the product through the images, things like that you should be 100% fine to.

Speaker 2: 11:07

We're launching supplements every day, some of them without really big budgets maybe $100 a day, $200 a day and a lot of them are succeeding because the products are really good. And then some of them, I'll talk to the founder and I'll say listen straight up, I have no confidence in your product. I don't see a reason why I would buy this one versus others. And they're like no, I think this and that I'm like fine, whatever you want, it's your money. We give you our recommendation and then, after months of bleeding and bleeding and they're like okay, fine, I think we should kill it and I'm like dude, it's, people don't want it. People don't want to buy a 200 review product, 100 review product. That is just like the same as everything else, maybe inferior, maybe slightly better, like you need to have a much better product because you're competing with someone who's not as good as you but has 10,000, 20,000 reviews.

Speaker 1: 12:01

Yeah, love it, I mean it. Let me ask you a question Do you like pineapple on pizza, if you even eat pizza?

Speaker 2: 12:07

Oh, no, no, no, no, that's a crime.

Speaker 1: 12:09

After telling me you have a food scale, I'm worried you probably don't eat pizza.

Speaker 2: 12:14

No, I love pizza. I love pizza. I went to Italy and I ate pizza every day for like two and a half weeks, and so now I don't eat pizza anymore. Maybe for the next two years I won't eat pizza.

Speaker 1: 12:24

Okay, fair enough the reason. I ask if you do you like pineapple on pizza, though, or does it not have a place there?

Speaker 2: 12:29

No, I hate it, I hate it. It's a crime to have pineapple on pizza.

Speaker 1: 12:34

Good to know. The reason I ask is that this is our controversial take section, so I like to ask all of our guests what's one thing that they might believe that other people in the industry might not believe or might have different thinking on. So I'm gonna ask you that question Is there anything that's more, maybe a controversial take that you have, or a hill you're willing to die on? I guess, so to speak, about something in the Amazon world?

Speaker 2: 12:57

Yeah, yeah, I think you know you already kind of saw the answer right it's Amazon PPC software, I think you know. I think software is good and bad, right, like anything. I think the good of software is that you know it is automatic, so they can do certain things that a human might not catch, maybe because they're not working or it's the weekend or something like that. So I think PPC software can be a great guardrail. What I hate is the way that software companies sell PPC software. They sell automation and AI like it's like this real thing when, deep down, you know, we know that there's like not really that much AI, there's not really that much things being done. A lot of it is rule-based. Even when it is AI-based, it's based on what it's you know. We don't even know what it's based on. They make it very complicated to understand what it's based on. Or they say that it takes into account everything. I had a conversation with software company the other day and they're like yeah, we take into account everything. I'm like you take into account conversion rate. They're like yeah, we take that into account. I'm like you take into account like competition. Yeah, we also aggregate the data. Take that into account. I'm like, so you literally take into account everything, how? And it's like, yeah, you know, like the AI is constantly learning. I'm like that's no, tell me the truth, tell me how you're pulling all your competitors' data. You literally have like API scraping or bot scraping the listings, downloading data from Heal and Ten. Tell me the truth. So I think the problem is software companies PPC software companies really pitch the fact that this automation is gonna is what is gonna cause the improvement in people's brands, when really it's not. Because, if you think about it, let's say that your software can make a thousand changes a day, 2,000 changes a day. We know that Amazon attribution is off. So you're making these thousand changes based on numbers that you're seeing that are wildly fluctuating, and an ACOS could be today, 80%. Three days from now, that same exact keyword ACOS drops to 20% because someone purchased, but maybe it took a day for it to register or took a day for them to purchase. So after one day, they purchased and so that keyword went from an 80% ACOS to 20% ACOS. And now you just negative their pause, they're lowered the bid on a keyword that was super profitable. And so, because of these things, because of changing so many things and then trying to figure out what change caused a positive or negative impact on total sales.

Speaker 2: 15:32

I don't think that software like AI automation, making all those changes daily, real time, I don't think that has any value. I think the value of software and how we've used software and I'll shout out Scale Insights for being a great partner and helping us as guardrails For a lot of brands. We set some guardrails. We say if a keyword spends X amount of dollars and no sales, add it as a negative. If a keyword spends or the ACOS is X amount, like over 80%, and has less than two sales in the last 60 days, add as a negative, like things like that. You know it's just like, okay, prevent overspending. And then also it's not making all of those changes that we were not unable to, you know, figure out like. It's like okay, it's making one type of change, two types of change, to prevent overspending. It's not automatically launching campaigns, it's not increasing bids and decreasing bids and doing all of these things. And then I'm like, okay, cool, why did my sales go up? I can't figure it out because I look at my history tab and there's a thousand 500 changes yesterday alone.

Speaker 2: 16:39

So that's kind of my topic and I really I mean I admire what software companies are trying to do in this space. I just hate that their marketing is very, very misleading and they are trying to sell people on. It's like they're kind of very similar to the gurus, right? The gurus who you know, with the Lamborghinis that are like Amazon's passive income. All you need is one product generate 8K. You can buy it on Alibaba for $2, sell it on Amazon for $30, makes $8,000 a month. Join my course and I'll show you how to do this. And this is how I paid for my Lamborghini.

Speaker 2: 17:11

And you know they sell you that dream and that's what PPC Software is doing. They're selling you that dream of plug in that software. We're gonna, you know, look at all of these things and we're gonna automatically change this and that and it's gonna grow. And I'm like so your, you know your software does that. Just go, connect it to the stock market and, you know, make billions of dollars on the stock market. If that's how good your software is, you don't need to sell it for, you know, $100 a month to Amazon sellers.

Speaker 2: 17:39

And, like they know, I mean, I think deep down, they know, I think software will eventually get to a point where it's like software is empowering people to make decisions, but like that automation and that like automated you know, sort of like we take all the actions for you, we use AI. Eventually, people are gonna find out. I mean, every time I hop on a call with someone, they're like yeah, we came from this software company, we got burned. It didn't go well at all. Now we're looking for an agency and I think, after they churn enough people, people will start realizing that, okay, yes, software is cheaper, but it costs more money in the longterm, cause you know, it's yeah, it's just you're you'll end up like losing more money versus and I'm not saying I'm not endorsing that you have to use an agency like mine, do it yourself or, you know, have an employee or something you know. But there needs to be that human element of looking at the data, interpreting the data, deciding.

Speaker 2: 18:33

Okay, what am I going to do? I'm gonna pick one thing, one focus. I'm gonna, I'm gonna try and scale. So I'm gonna launch a few new campaigns, increase a few new bids. Okay, cool. It's a small section of things that I did. Did that result in an increase in revenue, yes or no? And it's very controlled and it's that discipline as opposed to let's change 600 things.

Speaker 2: 18:54

I heard Mina talk in this podcast about optimizing main image, price changes, adding subscription, and say, if this counts, cool, let me do six things and then see if my total sales go up or down. And that's what I struggled with when I first started. I essentially heard everything implemented all at once and then I'm like, okay, I can't, I can't do anything. So I'm like, okay, fine, let me go back, let me just implement one of those things. And I would implement and then wait and watch the result. I'm like, okay, cool, taking notes, and I did that again and again and again and again Over the course of the years.

Speaker 2: 19:25

I figured out, you know, certain things that I feel work and I feel that don't work. But then again, they are not truths or laws, they're just hypotheses and I have to, you know, test them every single time and I say, okay, cool, we're taking over this new account. Our hypothesis is, if we take these keywords, you know search terms that we found in the search term report that were profitable, launch them in their own campaigns with a slightly higher cost per click or a slightly higher bid than the cost per click we should hypothetically generate more sales. Let's test it and we test it, monitor it. It works amazing. It doesn't work. Okay, move on to the next thing.

Speaker 1: 19:57

Mina love it. You've got a high energy, a lot of knowledge. I mean, I feel like we could talk for another like two or three hours. Well, let me just say it, I could let you talk for another two or three hours, because you've got a lot to go on. I want to be respectful of your time, though. So definitely a controversial take, by the way, it's great to hear it. I want to turn it around to you for a second. If people want to get in touch or learn more, where can they find you or where's the best place to reach out to you?

Speaker 2: 20:22

Yeah, I think my Instagram at the Mina Elias and LinkedIn is Mina Elias, m-i-n-a-e-l-i-a-s. Hit me up for our Amazon growth toolbox, which is essentially my entire company's toolbox of all our macros, excel spreadsheets, keyword campaign creation sheets, deduplication, merging, like Cerebro, with the search group performance report, with the search term report, identifying profitable search terms, not profitable search terms, adding negatives at scale, everything, profitability calculator guides, youtube videos, anything useful we store in that toolbox and we give it away for free to everyone who's trying to succeed on their journey on Amazon. So hit me up for the toolbox or go visit the website. It's TriviumCocom. We have it there too, and if there's anything I could do to help, just let me know.

Speaker 1: 21:15

Cool, love it, man. For those of you watching and listening, we'll put links to anything Mina just mentioned down below in the description or show notes as well, so you can find them there. But with that being said, mina, thank you again for coming on and dropping all the wisdom. We definitely need to have you back. All right, that brings us to the end of this episode. Thanks again to Mina of Trivium Group for joining us today. Hope that tonight's episode brought you some kind of insights or strategies that you found valuable. As always, thanks for tuning into the Amazon Strategy Show and spending your time with us.

Speaker 1: 21:44

If you did find some kind of value in today's discussion, we kindly request that your rate review our podcast on Apple Podcasts, spotify, google wherever you might listen to it or on YouTube. Your feedback definitely helps us out and it helps us reach more e-commerce enthusiasts just like yourself. Don't forget also to follow us on our social media pages for updates behind the scenes content and more. You can find the links to everything talked about in this show, including those social links, in our description or in the show notes. So that's it for today's episode. Make sure to mark your calendars. We're going to be back again next week with another captivating discussion, and we're also going to be bringing more expert insights, more game-changing tips from some of our amazing guests. So, without further ado, this has been your host signing off and wishing you a happy selling.