The following is a transcript of Episode 24 of Return on Podcast, the show where we help e-commerce sellers improve their ROI in business and in life. For more episodes, subscribe to our YouTube channel or listen on Podbean, Apple Podcasts, and Spotify.
Welcome to Return on Podcast, where we talk about the experiences, the obsessions, and the habits of the most successful e-commerce entrepreneurs. I’m your host, Tyler Jefcoat, and I wanna welcome you to this episode of ROP. Today, I wanna get inside the mind of Amazon. Strange, twisted as it might be, I wanna try to get inside Amazon’s mind.
FBA fees have increased twice already, about to increase the third time here in the middle of 2022. Amazon’s plan to launch new fulfillment centers across the nation has been ratcheted back, and I had a friend tell me yesterday, maybe got scrapped last month, which is creating tremendous pressure on inventory levels for a lot of our clients here at Seller Accountant.
And in spite of these challenges, Amazon is still not just a, but the crucial business partner for probably 75, 80% of the customers here at Seller Accountant. And so we gotta figure out how to work with them even when things are tough for them. And so today I wanna get into their mind. Let’s talk about it. Let’s talk about what’s happening with strategy within Amazon. And to have this discussion, I wanna bring in my friend Stan Friedlander. Hey Stan, how are you doing today?
Stan Friedlander:
I’m doing awesome. How are you doing, Tyler?
Tyler Jefcoat:
I’m having a pretty good day. You’re three hours behind me, so it’s sure enough morning over there on the West Coast. I think you were telling me before we started that literally Amazon’s headquarters is within eyesight, so hopefully they won’t overhear this discussion too much here. Stan, but.
Stan Friedlander:
I doubt it. Or you never know with the overlord, but it’s all good.
Tyler Jefcoat:
It is all good, man. Well, so we’re gonna talk about Amazon strategy, what’s evolving, what’s happening in the space, how our brands that you and I represent as consultants are having to pivot their thinking. But you also have a complicated history with Amazon because you were one of the executives there for a while.
And so I wanna, we do this with every show by the way, just a little bit of your entrepreneurial journey. For you, your entrepreneurial journey was, I was an ex Amazonian that has now launched a consulting practice. And help me if I misquote this here, but I think you were one of the leaders of the apparel line or the apparel category for Amazon, and then you helped them launch the Japanese marketplace. Is that correct?
Stan Friedlander:
I, yeah, I worked in the US way back when, 2008. And I will say that the apparel business was pretty tiny when I started there. I had actually worked it in brick and mortar for quite a number of years beforehand, completely different background. In fact, Amazon tends to hate hiring from offline retail. And when I started there, I think I had six people on my team. And I think the apparel business right now probably has around 400 to 500 people in the US alone. So I, I ran the apparel business until 2012, the footwear business until 2016. Then I moved to Japan, and I didn’t launch the business, but I turned it profitable, let’s put it that way.
And lived in Japan for about two and a half years. Came back to the States and left Amazon after about 10 and a half, and that allowed me to stay married.
Tyler Jefcoat:
I actually get that I, I sold my former company, Stan, because that also allowed me to stay married. That’s a good thing. It’s a good thing to be able to stay married. So just by the way, this is a super side note. I would say less than 10% of our clients at Seller Accountant sell on the Japanese version of the marketplace. Just kinda curious, what is your understanding of what’s currently happening over there? Is Amazon really getting traction in that marketplace, or is it stalled out? What’s your understanding of the viability of the Japanese market?
Stan Friedlander:
No it’s actually, it is still growing. I’m, obviously, I’m not there anymore and can’t speak to true growth or true numbers. But no, it’s still growing. And actually I would argue, relative to the two largest competitors, three largest competitors in the online world in Japan happen to be Yodobashi, Rakuten, and Zozo Town. And my guess is that this audience probably hasn’t heard of two of the three and maybe is heard of Rakuten, since that’s the largest in Japan, and they’ve branched out elsewhere.
But Amazon is growing faster than them over the last number of years, especially during Covid is my understanding, and that’s continued to be the case. Japan went through a different sort of Covid than the rest of us. They shut down somewhat more willingly. That’s the way that the culture might work. And that actually could have helped online even more than it did. But everybody has its own set of challenges. But yeah, Amazon.jp is certainly something folks should look at, but it’s not to be taken lightly as okay, you just copy paste whatever the heck you’re doing in other countries. Not that simple.
And hopefully I have run into clients before that think you can just copy and paste, and language is certainly a barrier. Cultural selling to norms are certainly barriers, and you need to understand those things before you just jump, you know, ahead.
Tyler Jefcoat:
And the topic of this podcast is not necessarily Japan, but I think since we have you here, just one more, pulling that thread a little bit more. Maybe you’re an average million dollar brand, you’re very viable in America, and you think there may be some potential in Japan. What are your kind of top nuggets for, you’ve just mentioned a couple by the way. Probably hire someone that understands Japanese language and culture. That’s two really important ones.
What are some of those other, this is what’s gonna make you successful or make this a complete waste of your time getting into the Japanese marketplace?
Stan Friedlander:
If you can find out your own search ranking data before you even do anything, obviously spend as little as possible to get that data if if you can. And understanding what your, are you even heard of over there? Is your product a commodity over there or are you a commodity based or do you have something special? And then yeah, once you’ve gotten somewhat a general sense of those sorts of things, do you have any sort of viability?
Yeah. It’s worth hiring at least a, I’m not necessarily saying me cause I can’t speak Japanese, but hiring somebody to do your translation and don’t just assume Google translate. ‘Cause I have had clients do that and think that’s good enough and absolutely not. Especially when you get outside romance languages, it’s pretty bad. And you’ll just, you’ll kill yourself before you get anywhere on the Japanese site.
On that same being said though is can overseas sellers sell in the Japan platform? Absolutely. Absolutely. And the other thing, and we may talk about this as well, but diversify. Don’t just assume Amazon’s it, or Rakuten is essentially a marketplace. And if you happen to sell apparel or footwear, Zozo Town is a marketplace. And Yodobashi is a, like they’re a marketplace model. They’re actually not how the US is set up. So there are other marketplaces you can go to that if you can figure out Amazon, you should be able to figure out the others.
Tyler Jefcoat:
But I think what’s encouraging about that is I hadn’t thought about it that way. If I’m going to – here’s what I’m hearing is, I’m trying to restate what you said there. Don’t halfass it. If you’re gonna go into Japan, do it right and make sure you actually do the real translation. Build real listings. Understand the context of your listing and your keyword ranking and that kind of thing. But if you’re gonna invest those additional resources and a potentially successful launch in Japan, it’s encouraging to know that some of those resources could also be deployed to capture more of the Japanese market through these other marketplace options.
And I would almost argue because of how much, I don’t wanna call it, it’s cultural overhead that would have to be bitten off in order to get into that market, you’re probably doing yourself a disservice not to go ahead and launch listings on those other platforms as well so that you can recycle that same, you’ve spent that 20 grand to have somebody really dig in and build these listings that are in Japanese that understand the market, whatever you had to spend. Let’s use that 20 grand across three different marketplaces instead of just Amazon. Because then our learning and investment carries us further. So I think that’s pretty sound advice there. Anything else about Japan before we pivot the main Amazon here in the States for most of our sellers?
Stan Friedlander:
Same day delivery is not that hard. Don’t assume that you’re gonna do your own shipping. I doubt sincerely, most sellers would jump in thinking that they could do that, but when you start hearing about, oh, there’s fees for same day, that’s the norm. Amazon is same day if you buy before nine o’clock.
The others, typically next day. That’s the competing environment, but that’s the same as true in UK and DE as well, so just keep that in mind is that as you think about Japan or some of these other market segments is that it may seem like it’s a ridiculous price to pay in the US. It’s not so ridiculous in other countries.
Tyler Jefcoat:
Got it. That actually is really interesting that again, that should inform our strategy. Hey, just know that the buyer expectation in Japan is the same as it is in the UK and in, in Germany. And that same day or next morning kind of delivery, which by the way, this is like funny. As a consumer, we buy a lot on Amazon Prime.
I’m a guilty complete Amazon nut as a purchaser. I feel like we’ve had increased lead times in general over the past two to three weeks. We bought a bunch of stuff as we moved into this new office and our user – it’s amazing how quickly – this is to your point there, Stan. It’s amazing how quickly I get frustrated at five day delivery now.
It’s like, what is going on here guys? And just understand guys, as you try to build out your infrastructure and logistics in a country like Japan, that expectation is there, and you need to be engineered and probably have enough stock or have it to where Amazon can fulfill that promise, so. Interesting.
So, okay, broadening out, think about Amazon in general here, Stan. What are you learning this year about working with Amazon that’s impacting the strategy of the customers that you serve?
Stan Friedlander:
I think that you’re seeing, and especially if you pay attention to public announcements and stock price and whatnot is you’re seeing a slow down I think the slow down for Amazon is maybe 12 months later than what you’ve seen in other online retail in the, and I’m speaking US in particular, in that Amazon certainly benefited in 2020. They continued to benefit in 2021, whereas some other online retail, not so much. And I think what you’re seeing in 2022 is the not so much of 2021 is a hangover effect maybe for Amazon.
And I guess my way of saying is I don’t see this as a true long term, that in 12 months are they still gonna be facing, maybe the same sort of, if everybody’s down 10, they’re down 10 type of thing. No, I just think that they had a longer timeframe of the benefit, and now you’re seeing them anniversary, that longer timeframe of the benefit that’s somewhat being nice maybe to my former employer.
But that then there has a sort of a hangover effect, not to keep using that term, to sellers and to the balance of vendors and sellers that use Amazon in that, okay, you’ve got someone that’s, I don’t wanna say they’re panicking, but they’re reacting. Business isn’t as good as we thought it would be, and how, what do we do about it? So you have one, potentially increase FBA fees, demand forecasting is coming down moreso than what you thought. I think what you’re also seeing here is your ability to argue your case. You don’t agree with the demand forecast. You file a case or you try to prove via math that you’re right, they’re wrong, and that’s becoming likely harder for most folks, I’m guessing. And sometimes this is some of the things that I help with.
And I’m also seeing instances, and now we’re talking somewhat strategically, internally to Amazon, is that you might see Amazon figure ways of promoting its own 1P, figure ways of talking about exclusives, which is another way of talking about private label.
So for those that sell products that are very commoditized, you clearly have to be careful. You clearly have to wonder how long does it have to be before Amazon just does this as well? If you’re doing one to $500,000 a year on Amazon, is Amazon gonna care and do a private label? No. But if you have one SKU that happens to do $3 to $5 million, you might wanna worry. How easy is that SKU to replicate? Even if you have a great supply chain, even if you have a great factory and you own the own the factory, I’d be careful. I wonder how long you can do that with a limited SKU count.
Those are the types of things that I’m seeing that Amazon strategically, especially anytime they, they have a slowdown as you see this, how do we grow our 1P in a fair way, I’ll use that as a wink. And how do we make sure that we’re still priced competitively? For those that, certainly sellers control their own pricing, but they may feel pressure sometimes that they are not, they may feel like they’re getting nudged more often, that they’re not as competitive. And I will say is that Amazon is certainly watching that more than ever.
Tyler Jefcoat:
What’s really interesting, so you’re articulating some of the challenges of kind of 1P sellers, and we’ll talk a little bit more about 1P versus 3P I think here in a minute. But as we’re on this quest, Stan and I here, to think inside Amazon’s mind, you mentioned two things there. I wanna – I wanted to say we don’t know. Stan and I don’t know what’s gonna happen with Amazon. I loved your thoughts on there’s, Amazon was dominant enough in the market that they’re behind the curb. They survived the curb longer.
First thing you mentioned that I think is really fascinating as our listeners build their strategy for the next six months, getting into the beginning of 2023 is Amazon had to post a couple of consecutive quarters of massive losses to put the breaks on – I was realizing this talking to a CFO client this morning, Stan. The reality is that our business models, especially for 3P sellers that are in my portfolio, we were more profit – we didn’t get as much bad news as we should have back in first quarter.
What I mean by that is demand was depressed. We did over buy inventory for last fall thinking that Q4 was gonna be as big as Q4 in 2020, and it wasn’t. But Amazon propped us up because they weren’t increasing FBA fees as quickly as they should have to keep their shareholders happy, and they were still making massive capital investments in the new FCs.
The evidence that we’re seeing in the last couple weeks is that Amazon is finally having to wake up and kind of, it’s not a humble pie thing, it’s just they’re having to react decisively to the market changes. And the impact on that is gonna be in increased pressure on our profit margins as sellers. And then so that lag thing is something, guys, keep that in mind. That’s gonna not stop.
The other part of that I think is important to remember is that you and I were not the only ones to over buy our products for last Q4 and for Q1. Amazon did too. And so Stan’s talking about this private label 1P Amazon, you know the Amazon Basics batteries that I have in my house right now.
Amazon’s sitting on an extra 60 days of that product just like you are. And as a result, there’s an increased, wink, incentive for Amazon to prioritize the movement of their own overstocked product over helping the poor little 3P guy out there that’s trying to get his product to move. And that’s just something to keep in mind as you’re ordering and as you’re driving your strategy.
And this kind of goes back to the first thing you said, Stan. Diversification is probably a good strategy in general because given the choice to help you make money or help Amazon make money, Amazon’s always gonna choose Amazon. Any thoughts about that?
Stan Friedlander:
Yeah, and actually I should probably say this ahead of the diversification comments. I don’t own a single stock in Amazon. I don’t own a single stock in any other retailer right now. Just FYI. But I would argue it’s one of the first things I say. So the types of different services I offer is when I talk to clients and I’m giving them like the 50,000 foot overview discussion and strategic thinking, which is some of what I do is or talking about organic search, one, and two, talking about – I know my almost all of my background that most people see is Amazon, but I did also work at offline retail, department store retail. It’s the first thing that I tend to argue with, especially with sellers, is be very careful that you have a hundred percent of your business with one person.
Even if it’s good. That one person still drives your cost structure, and to the pull point of FBA fees going up, and maybe they were late, I might argue if I’m Amazon, if I raise those fees, let’s say last Q4, and I’m one of the only retailers that’s announcing, sales are still double digits profits are going up. I just announced a 20 for one stock split. I can guarantee you that, one of the biggest topics internally is antitrust. And so they constantly are balancing this. Do we have some sort of offset or argument? Two consecutive quarters of depressed sales. I might argue there’s also an over investment in FCs, but you can hide a lot of cost in that.
And therefore they can now say, hey look, we can raise fees ’cause we have to. It’s harder for a regulator to, for attorney generals to go after them and say, you’re just predatory. You’re getting away with this ’cause you can. There may be some truth to that, but there is a reality, too. They also, look, if we’re losing money, we have to make money. That’s a free market.
Tyler Jefcoat:
Sorry, there’s a PR part of this that I wasn’t really thinking about, and you can’t do a 20-to-1 stock split and increase FBA fees by 8% in the same month. I get that. I hadn’t really thought about it, but that’s a really good point.
Stan Friedlander:
And so that tends to, that’s why sometimes you may see these lagging, when Amazon does something that seems very, I don’t know that I’d say raising fees is necessarily draconian. It’s, you’re making money. What, but what I would argue is Draconian is if in 2020, let’s say they’re increasing sales 60% because of a worldwide pandemic, and then they announce, guess what we’re gonna raise our merchant fees from 15 to 17 to 19. Yeah. That’s not gonna go over too well with regulators. And they do, most every large decision like that, they’re gonna, they’re gonna factor in how, what’s the optics of this? . And so that is, I mean, it’s always a topic of discussion internally.
Tyler Jefcoat:
Wanna talk about 1P versus 3P. The one thing you mentioned a minute ago that I just wanna remind people of, we talked about this a lot on the podcast by the way here, Stan, is that things were really irrational a year ago because of how high multiples were to buy these Amazon only businesses. And the advice that you just gave about being careful to diversify was largely ignored by the market. Probably from beginning of the pandemic until maybe the end of last year. And the reason was is that the private equity markets were paying higher multiples for a single channel, four to five SKU brand. They didn’t want the complexity. They weren’t ready to integrate the operational complexity of having these other marketplaces up and running or having a direct to consumer strategy or a bricks and mortar strategy.
This is just a reminder, guys that listen to this show a lot, this is a win for common sense because what Stan said would always pass the common sense test. Let’s make sure we have multiple streams of revenue, and let’s make sure that we’re not completely beholden to one seller of our product, Amazon being the seller.
And yet we had some irrational swing over the last 24 months that’s reverting back to common sense. And so just here’s what that means. Because of what I understand about the capital markets, probably not a good time to sell your business because of what’s happening in the capital, venture capital world. Now’s the time to probably invest if you have capital yourself, if you’re flush, if you have some cash on the balance sheet, now it’s time to invest in the expansion into other markets, whether that’s UK, Deutch, or Japan like we were talking about within Amazon, or whether it’s time to finally hire influencers and get your direct to consumer marketing strategy up and running.
2022 is probably a year for that kind of infrastructure investment so that we don’t have to be surprised by a 8% increase in Amazon fees because we’ve got five different streams of income, like that kind of thing. Yeah. Stan, if you have any other comments about that, feel free to add ’em. I wanna talk about this 1P versus 3P strategy. What is the, what’s the cutting edge of that discussion right now with your clients? The brands that are really deciding whether to be 1P 3P or both with Amazon? What do you got on that?
Stan Friedlander:
I hate to tell you that it’s an “it depends,” but there is a reality too of, when I’m talking to clients, I wanna better understand, so what are you selling? What is your current distribution? And walk that line of any, as you mentioned, the diversification, I’m looking at is how easy, hard, whatever you wanna call it, for you to suddenly create a – let’s say you’re a hundred percent on the Amazon selling a commodity business. And you may be okay with that declining even, let’s say 5% per year for the next 20 years of your life, let’s say.
But most people, that might seem okay to them, but what if I said that’s, oh, interesting. I admit, I don’t like accepting declines, but that’s interesting. But let’s say it’s 5% for two years and suddenly it was everything. Suddenly you went to zero, and no one’s even telling you why. And you can’t get a why from the one person you with whom you do business.
And I’m just, I’m saying these things because I’ve experienced it. I’m not saying me personally, but I have clients who have. That and yeah, there’s certainly recourses, but does everyone really want to go through those recourses? You probably don’t. Finding me is probably the furthest recourse you, you wanna have to do, going to the press or legal and those sort of things. Those should be last ditch efforts.
But let’s not kid ourselves. Amazon does force that at times. If you have your own D2C that does 10 to 20% of your total, I can guarantee you look more attractive to somebody else at that point. If you can get somehow Walmart, or eBay or whoever, in Etsy, depending on what types of products you sell, to be 10 to 20% and you get your own D2C to be 10 to 20%, suddenly you look that much more attractive.
That’s, it’s just a reality, and it’s to your point, Tyler, that you know, over a 24 month period at one time, what did aggregators, the larger aggregators look like to the market, and then what do they look like today? Those two have gone through an evolution. What do, what does the market think of when I say the market, I mean stock market, what do they, what do they think of people like a Shopify today versus 12 to 18 months ago?
And might, again, I don’t own stock in any of these. It’s just something to think about as to if you took a long term approach to all of this and if you took a step back, and what would you do if you were advising yourself? And it may be even finance 101 or investing 101, but that is a reality of how do you think in terms of being dependent on one person, a hundred percent of your sales. You’d probably say that’s stupid.
So what would you need to invest to get up to five or 10% of D2C? And even if you said that’s, I just don’t have that capital right now, okay. If you could have that capital in the next year or two versus just doing a copy paste and then that got you 1% of your, was your D2C, I’d say you’re probably still, you’d argue to yourself, oh yeah, investing 101 would say, I should go ahead and invest it today to get to the 10 to 20% level, even if that hurt.
Even if I thought I was going into, and I’m sorry to say the R word, a recession. And yes I’m a pretty big proponent of the diversification. I’m a pretty big proponent of figuring out how to keep your model on Amazon whole, keep your competing, your, whatever you’re selling as competitively, and understanding that where you are today, Amazon may not allow that in the future. They may, they are always trying to create competition, and mind you, they can be a competitor as well.
Tyler Jefcoat:
And so what is that discussion, ’cause so many things came into my mind as you were talking there, Stan, but how does that discussion inform specifically the vendor versus seller relationship? So if I’m trying to decide, for those of you guys who listen to this show you like, Yeah some sellers out there don’t even know that people used to sell on 1P, right? There’s still, there’s an entire population of new age private label sellers that know only Seller Central and have never even logged into a Vendor Central account before.
If you’re coaching a brand, I know it depends, you said it depends. What are some of those things that might strategically mark brand A as being if it depends on this, probably you need to stick with 1P as your primary Amazon partnership. If you look like this or if this is what your goal is, then probably 3P is the way to go. Do you have any anecdotes on that front?
Stan Friedlander:
Yeah, I’d look at it as from two things and I’m hating, I know I’m about to sound Amazonian in this regard. But one is to think about it from how your customer thinks about it and work backward from that. And I know that’s direct quoting from how Amazon would think, but I, I worked there for 10 and a half years, so I do believe in the secret sauce.
So I do believe in who is, who is your customer, who is your next new customer so that they’re just beyond who you’ve gotten so far. But you better damn understand who is your customer right now and who is just beyond that and how are you reaching that customer today. And that’s one way to think.
The other way to think, an other way, concurrently, is thinking on how does Amazon view this whole situation? And I know this is where I would say I think most sellers and even brands just think Amazon’s just trying to make money, or Amazon’s just whatever. And I would say, take a step back from that.
What does Amazon care about more than anything? And actually they do care about the customer experience. Period. End of story. In Amazon’s perfect world, they get to control the customer experience from end to end. Now, end to end means private label and sourcing all the way to last mile delivery to the consumer. And look, they’re not gonna do that in every instance. But I’m, I just gave you strategically, if they could and they could make money, and even just a cent, they don’t care necessarily about making boatloads of money per unit they sell. That’s what they care about is the control of that customer experience.
So understanding who your customers and how you are reaching your customer, but then also understanding where are you in that sort of control pie that Amazon – Amazon would like to control everything. They wanna have it in their warehouse. They probably ship better than you can on your own, so look, there’s a reason why, you know, the FBA fees. Yeah. But if you did it on your own and tried to get an item to a customer in one or two business days, it’s probably cheaper to still do FBA. And that’s why people do it. That’s why Amazon can raise its fees. But understanding that process, it can maybe give you some sense of, okay, they couldn’t control the sourcing because of X, Y, or Z.
You know that better about your own product than I do. I would learn about it if I was advising, but what other competitors exist in your environment? How do you know Amazon won’t create a partnership with them? And if they did, what would you do? And I, and I’m, this is how I think is like I try to think about it more from a standpoint of a three to five year out and then working backward, both from how does the customer think about it. But then if Amazon’s a hundred percent of my distribution, I better damn well understand how does Amazon view me. And no, they don’t care about you individually as sellers.
Sorry, that’s, they don’t. But they still have a competitive strategy on how they think through this whole thing. You should have an understanding of where do you fit in that pie and where are the other people that sell similar types of items. Should you branch out? Should you have more products? That’s another form of diversification.
Do you pay attention to other ASINs that are in your product segment? Are you sure that those other ASINs aren’t paying attention to you? And not to get too much into the nefarious abuse types of things, but are you paying attention to this stuff? Have you ever read your own reviews on your products? I hoped, I hope from, you can probably guess that if that’s one of the questions I’m gonna ask you. So have you read your one star reviews recently? Like you, you should, these are the types of things that, from a deeper dive, you should better understand. And I can guarantee you Amazon has algorithms to understand this about you.
Tyler Jefcoat:
I love it. So the topic of our episode today is getting in the mind of Amazon. Anything else that you think sellers should hear that Amazon is probably thinking right now that might dictate our moves or our strategy over the next six months?
Stan Friedlander:
Yeah, I, I don’t know if it’s the six months, but they’ve announced the Buy with Prime. I know people are understanding the last mile’s been a big deal for them for quite some time. You can probably start guessing that Amazon is branching out into other things that they’ve been good at for quite some time in house. Meaning they want everybody, they want all traffic to be on Amazon. They want everything you – Buy with Prime’s a little bit of branching out, is it not?
And by the way, do you think Amazon could create a website for people? They probably could. Now, have they offered that as a like true Shopify? No. But could they? I’m just throwing this out of how to, that’s why I said it’s more than, it’s probably more than six months out. From a standpoint of right now, do I think Buy with Prime is going to expand and be something that’s bigger than right now?
I’d be shocked if it’s not in two to five years. So these would be types of things that I would be looking at yourself is, should I almost be using Amazon as I hate to say consulting solutions provider because they’re pretty bad at account management, but they could. I think you could be looking at it from that standpoint at the same time is, are you large enough to start taking some of these things in house? Which is another –
Tyler Jefcoat:
Talking about the Shopify thing? Stan, just I read an updated article on that just last week about Shopify’s board has just changed their policy so Buy With Prime is now considered a violation of terms of service within Shopify, and it’s a direct response to your thought thread that you just had where, oh boy, let’s, yes, let’s partner with Amazon on this. And then they get six months into the partnership and they’re like, oh no, we’re now driving traffic to Amazon’s website and we’re giving the gorilla in the room even more power over the value chain.
And so my guess is that Amazon’s response to what I think they would have to view as an attack from Shopify would logically be to try to launch an AWS version of Shopify that is some cheaper something. They’re gonna find some angle to come in app that they, I would be shocked if in the next three years we don’t see that. I don’t know why Amazon hasn’t done it already. It’s been mentioned in every like book about Amazon for the past 10 years, but I think Shopify has finally realized that we felt like we had to be cozy with Amazon so they didn’t try to crush us, and now we’re weakened and we’re realizing that they are gonna crush us regardless. We gotta try to distance ourselves from this animal in the room that’s maybe gonna eat us. And I unfortunately am concerned. If I were a Shopify shareholder, I would be concerned because of the power that Amazon could potentially wield pretty quickly in that regard.
Anything you’re learning about communicating with Amazon right now that we should know? I know you do a lot of the, how do you get issues resolved with Amazon? Is there anything that’s been helpful to you and your clients in terms of effectively communicating?
Stan Friedlander:
Well, it, I mean, that’s one of the services I offer is essentially how to speak Amazon, how to speak Amazonian, understanding that as much as Amazon can come across as the faceless wonder and what do you mean communication matters? Yeah, it does. Strangely to actually get a human to respond, you have to speak in a certain way, which actually is the way that you’re thinking that they don’t communicate, meaning they’re very emotionless, they’re very numerical.
So prove your point without emotion. Don’t start screaming in an email, which by the way, if you’re writing an email, that means you’ve got some sort of contact. Jeff B is not the contact. And figuring a way of how does Amazon benefit from whatever you’re arguing? And it can’t just be because I got turned off. That’s not the way to communicate with Amazon. The way to communicate with Amazon is explaining how this is hurting their customer. Because trust me, they don’t view it as your customer on Amazon. They view, and I’ll say it, when I ran the footwear business. If a seller somehow found me, let’s say, and that was their comment, I can tell you pretty egotistically and very quickly, you’ve just turned me off, ’cause I view it as, no, this is my customer.
These are the types of things as, if you are reaching someone, you are reaching a human being. And they are very egotistical. And they view that they’re probably smarter at whatever they’re doing than you are. So prove whatever you’re doing as to why this is hurting their customer. They’re out of stock. The detail page had information that’s wrong. Amazon might have changed it in some way, or some other seller might have changed it in some way. You’re competing with sellers. They don’t believe you’re the brandowner. However you’re communicating with them, understand that the end of the day what they care about is how is their customer impacted. So when you’re communicating, start with the customer.
Tyler Jefcoat:
And by the way, Stan, my eight year old’s amazing at this. My eight year old is amazing at articulating why it’s in my best interest to give her whatever she wants. And what’s interesting, and Bonnie has taught me this, thank you, Bonnie, but if you, and view this the same way with Amazon, guys.
If I can forego the need to have the moral victory and actually will choose to do what I have to do to get the result I want, it’s kinda like Dr. Phil, would you rather be right or happy, right? That kind of thing. Like if you view Amazon that way, which is exactly what you’re just saying, Stan, and say, hey, what does, what is it, what, how could I take – because almost any concern with Amazon could be restated in a way that is, their customer would be happier if this happened, or “my concerns that the customer’s experience” or – like and so doing, spending the time and kind of, there’s a little bit of an ego swallow.
And that’s why this is a bit of a rope-a-dope strategy actually, Stan, is that if I can swallow my ego and come at Amazon from Amazon’s side of the table, I’m gonna win nine times as many of those cases as if I go through it trying to either bloody Amazon or blame Amazon or win a moral victory of saying I’m right and you’re wrong.
And that kind of intuitively makes sense, but naturally we don’t wanna do that. Nobody wants to do that except my eight year old who intuitively knows how to use her will to get what she wants. But anything else about that? I mean it makes so much sense, other than hiring you by the way, like to just –
Stan Friedlander:
And then the other thing is to think in terms of what numbers do you have that back up your argument and use them and be right. Don’t use numbers that are wrong. Don’t tell me numbers that you think are right and then I find out are wrong and they’re already in an email somewhere. You pretty much have just shot, you’re gonna be, you’re gonna start over at not just square one. There’s a square negative one. When Amazon thinks that you’re trying to pull a wool over them. That’s how they, that’s how they think.
And then the other thing too is that, let’s say, and I’ve had this too, of somebody else in your product segment is doing something wrong, and you just want Amazon to do something about it. And so you prove to them, you send them, copy, screen copies and all these different things. One is go back to what I just said is how is this hurting Amazon’s customers and speak in those terms without emotion and without adjectives.
And two, Amazon’s not gonna tell you, oh my God, we’re so happy you told us this. Thank you so much. Number two is not going to happen. Get over it. I might say, this was great. I don’t work there anymore. Amazon’s not gonna tell you that. So just get that outta your thinking of them saying they’re sorry or you were right, I was wrong. ‘Cause 98 to 99% of the time internally, they were right.
And they already know that ahead of time. So just, just understand that if the problem goes away, and it may go away without anyone even telling you. So even to no one responds to your email, did you check to make sure, is that competitor still there? Or did that wording on that detail page that you felt was misleading, did it go away? Then that’s your win. And if that doesn’t enough for you, then don’t pay me. You know, because really all what you’re hiring people or to get solutions is what is the solution you’re genuinely looking for here? And if you’re looking for, you want me to get you to have Jeff Bezos at your front door, anyone who’s promising that, God love them, but –
Tyler Jefcoat:
So Stan, I heard some nuggets there. You’re gonna communicate with Amazon from their perspective without emotion using data that is not BS. And then you’re going to, I would imagine that the screenshot, so that you said this without saying it, but make it idiot proof for the human being within Amazon to follow the logic of your argument.
‘Cause not only like – you should make it, not only should you be correct, but you should make it incredibly idiot proof for them to go to the data source. Hey, I found this on this report with this date range. So that when they do go –
Stan Friedlander:
When you’re saying that, and I talk to a lot of sellers, you sell five ASINs, you do $3 million, you love this product and you know it inside and out. I probably don’t, you hired me to, you know, you couldn’t get somewhere. That’s, certain ways I’m hired. I probably don’t know your product at all. I have people that’ll send me a screenshot and I’m like, looks fine to me. What am I, tell me what am I looking for?
And by the way, you’re actually paying me to do this. Now picture you’re at Amazon, no offense, probably you filed a case, they’re in another country. They’re probably getting paid pretty crappy, and they probably have an incentive to turn this around in 30 seconds. And you just sent them, “this is wrong, you gotta take this off their site.” Deny. That’s the easiest, make it as easy as possible for them to see whatever the problem is that you’re talking about. And by the way, they still may deny. And then you have to sometimes find people like me.
There is a reality, too, that Amazon has its own set of problems of how they deal with problem, you know, cases, complaints. But if you’re trying to do the best that you can, yeah. Make it idiot proof.
Tyler Jefcoat:
So resolving issues, you’ve tried. You’re frustrated. You need to hire someone that has the Amazon language and lingo. Stan, you’re one of these consultants that can really help people with that. You’re, my understanding is you’re not like a huge team. It’s you. Like you are a guy that really understands Amazon in and out. And my question is, what are the kinds of brands out there, maybe what are the kinds of concerns that may come up where someone may need to find a way to reach out to you?
Stan Friedlander:
You have to decide how large this problem is to you. That’s for sure. I’m not free. And I know none of my competitors – and I don’t view what, I actually don’t view what I do as that it exists much. There’s certain things that exist, certainly. But if I’m just trying to solve a problem on Amazon and you found me, it’s likely that you’ve gone through some other means, too, and it’s likely that I’m maybe escalating this internally at Amazon just because I may know where to go. And I also will tell you, and you know this is something that’s tied to this, is Amazon is making that even more difficult, even for people like me, to get to the right people. They’ve threatened firing people, you know, for contact information and whatnot that gets outside of Amazon because I, for whatever reason, they think they can control a million emails that exist within their system.
And also by the way, some of us are genuinely just trying to solve consumer problems, so you should actually care. But you see how I’m looking at it. I’m actually trying to solve a problem that if I was still there, and these are the types of cases I take, I will only take a case that I, for the information that’s provided to me, if I was the category leader for this area, if I was the VP for this area, it’d be like, why haven’t we solved this fucking thing? Sorry to swear. And that’s, I view that’s how people internally at Amazon should be. So I take it with that same passion of you should care about this.
Where do I go with it? And that’s, I will just say is, that’s becoming interestingly harder as Amazon’s becoming more and more bureaucratic, quite frankly.
Tyler Jefcoat:
Makes sense. That’s actually, that’s a nice pin in the discussion is if you’re doing something that you just shouldn’t be doing and it isn’t in Amazon or their customer’s best interest to solve this problem, then you’re probably not gonna get very far with Stan or anyone else. But if the concern is legitimate and you’re frustrated, which does happen, by the way, Stan, what’s a good way for people to reach out to you if they wanted to learn more about getting your help with a hairy problem?
Stan Friedlander:
Actually just my email, which is my name, so FriedlanderStan@gmail.com, spelled exactly how it is on the screen. No period. Capital shouldn’t matter to Gmail. So FriedlanderStan@gmail.com is probably the best way. I’m pretty –
Tyler Jefcoat:
And so what we’re gonna do is we’ll make sure the show notes have that exact email address. I’ll make sure that my content team makes it really easy. So whether you’re listening to this on the audio version or you’re on YouTube here, you’ll have access to his email. Reach out to Stan if you have questions you’ve tried. It’s challenging to get a need, to find a way to to communicate with Amazon and help reframing the problem in a way that is gonna be a win for Amazon and not just you bitching about it, ’cause that’s probably not gonna get you very far.
Listen, I wanna, I always like to close the show. We talk about numbers, we talk about strategy. I wanna talk about humanity here for a second. You’re, you got family, you do things that are not just Amazon consulting. What’s your hobby, man? Stan, what do you do when you’re not untangling Jeff B emails and stuff like that?
Stan Friedlander:
I’ll give two things. I just moved my son into college in his first year, so I’m officially an empty nester now, and I know some folks view that as whew, thank God. I’m not in that regard. I’m still getting very used to it as to not having noise or someone’s going to give me a sarcastic joke or call me a boomer or something.
And I’m not a boomer, I’m not quite that old. That’s one. Two is I play baseball cause I still think I’m gonna wake up one day and throw a 95 mile an hour fastball, and that’s likely not gonna happen. But I still do play. I have several surgeries on, actually, strangely, both shoulders. So I guess that just shows how much I throw into it. And so I still play baseball year round, and I absolutely love the sport.
Tyler Jefcoat:
That’s amazing. So are you a Mariners fan being up there in Seattle?
Stan Friedlander:
I went to the first game ever, in the Kingdome. They lost 7-0 to the Angels. Frank Tenana started for the Angels. Nolan Ryan won the next day, and the Mariners won on the day three which is about their record for that year. One and two times about 50. And yes, I’ve followed them. I remember the day that Ken Griffey was, even though I knew he was looking to be traded and whatnot, I had to pull off the side of the road when I heard it on the news radio on my way home from work. Back in the offline retail, when I worked at that time.
Tyler Jefcoat:
Back in the old days. Man, I used to love so I was a kid right when Ken Griffey, Jr. was a rookie. That was the heyday of the baseball card trading. So by the way, being an Atlanta Braves fan is equally infuriating as what you just described there. We did finally breakthrough and win. My Georgia Bulldogs broke through and won a national title last year. This has been a year where Georgia’s getting un, we’re un, our head’s inflated right now, Stan.
We’re unnecessarily happy. So the problem with that is there may be a crash coming here for the state of Georgia, but yeah man, those were the good old days. There’s so many great baseball players in the nineties. Actually, I’ll tell you this. My dad, my brother and I collected every collectable baseball card in 1993. It was our, let’s do this with dad thing. And the strike happens in the spring of 1994, and we just lost complete momentum. And obviously the Braves were good for the second half of the nineties, and we enjoyed going to some games.
And I still follow the Braves, my COO, my business partner Ashley, is a fanatic. She watches every single Braves game, could probably keep the score. We asked her in a meeting the other day what the batting average at one of the players was, and she knew it. And I can honestly say I’m not that plugged in anymore right now, but I do love the game. So do you play this just like rec league, Is there like adult men’s baseball rec league happening there in Seattle?
Stan Friedlander:
Yeah I know that most of the players on, they have different levels. I would say that if you use the word rec to my teammates, they’d probably get upset. No, they’d call it competitive. Some of us do travel around. I would say I’m in tournaments probably two or three times a year, and it’s, we say that, but there is a reality to usually, it’s also at times when Seattle weather during the nine months of darkness it’s, that’s where I’m traveling somewhere else, so to play baseball. So yeah, I do take it that seriously.
Tyler Jefcoat:
No, this isn’t Tyler’s church league softball here. Like this is a different animal. I completely get you .
Stan Friedlander:
I do also wanna state, because I do know you’re a Braves fan, is I will say, the other day watching one of the greatest games I’ve ever seen and watching Julio hit a ball 117 miles an hour at a 17 degree angle, and it still hit the second deck facade. That’s probably the hardest ball I’ve seen hit this year. That was, or maybe ever. Sorry. But not that sorry.
Tyler Jefcoat:
No. Sorry, not sorry. I completely get it, man.
Stan Friedlander:
It’s kinda like booing Russell Wilson. Eh, I respect the 10 years. But I respect –
Tyler Jefcoat:
But don’t expect a welcome when you come back to Seattle, Russ.
Stan Friedlander:
Yeah, that’s right.
Tyler Jefcoat:
I love it. Okay. Hey, final segment of each of our shows each week, Stan, is, we call it the Return on Podcast. This is where guys like you, who’ve been really successful in their careers tend to have some habits, some hacks, some practices, personal or professional, that have given them a leg up. And I’m just curious, is there anything that pops into your head that you do on a daily or weekly or monthly basis that you think gives you an unfair advantage. It’s really given you a great ROI?
Stan Friedlander:
An unfair I, maybe this is, I don’t know if I’d call this unfair, ’cause it actually creates an expectation that’s sometimes hard to live up to, but I tend to be pretty responsive. And I know my old team might say that I’m overly responsive and can tend to be 24/7 in that regard. I, if I care about what I do, I genuinely do appreciate and respect, and I loved what I did at Amazon. I really did. And I loved what I did in offline retail. I love growing businesses, and I think that as people are in their own career or in, or whatever they’re selling or whatnot, is you should ask yourself, do you love what you do? And if you don’t, how could you?
If you don’t find yourself of constantly thinking about what can I do to grow my business or how can I solve this problem right now? So that I am that way. On the flip side, strangely, and I know my wife would complain about this, I turn it off. I go to sleep. I don’t, I view it as if you do what the best you could do, then, and if the best isn’t good enough so be it. I’m probably not gonna throw a 95 mile an hour fastball so when I pitch this Saturday or whatnot, I will do the best I can.
Tyler Jefcoat:
Love it.
Stan Friedlander:
Yeah. And you sleep at night.
Tyler Jefcoat:
It’s almost there’s an all in and then all out kind of mentality. Let me, lemme leave it all on the field.
Stan Friedlander:
My team probably would say that I’m that way.
Tyler Jefcoat:
Yeah. I think that’s awesome, dude. I think that’s really good. Thank you for that. So here’s what we’re gonna do. We’re gonna we’re gonna close this episode. Stan, this has been amazing. Thank you so much for your time and your insights into getting into the mind of Amazon, really driving strategy here over the next eh season, let’s call it here. Just want you to hear my gratitude. Thank you for joining us today, my friend.
Stan Friedlander:
Oh, thank you for having me. It’s been great.
Tyler Jefcoat:
And then just in closing here, guys, Stan and I are grateful that you would hang with us for 50 minutes and listen to us rap about Amazon. This time is valuable and we hope it’s served you. If it has, would you share this podcast and disseminate it to your audience where Stan and I are better at talking about Amazon than we are at marketing a podcast. And so we need your help. And with that, I think we’re gonna close today’s show. We’ll make sure that Stan’s email is posted in the show notes, and until next time, I’m Tyler. This has been Return On Podcast. Take care.