The following is a transcript of Episode 10 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.
All right. Welcome to Return on Podcast, where we talk about the experiences, obsessions, and habits of the most successful e-commerce entrepreneurs. I’m your host, Tyler Jefcoat, and I wanna welcome you to this episode of ROP. You’ve heard of return on investment. What we’re here to do today is to give you a return on this podcast. In today’s episode, I wanna talk about how to use data, how to use data analytics, to win when you’re managing a really complex set of Amazon businesses. This might be if you’re an agency, it may be if you’re an aggregator, an investor, and maybe if you’re a CFO like me, and my guest today is my friend Paul from MerchantSpring. Paul, welcome to the show, buddy.
Paul Sonneveld (00:47):
Hey, Tyler. Good to see you again.
TJ (00:50):
Thank you, my friend. Yeah, last time I saw Paul, we were actually in the same building in Vegas for a conference a couple months ago. And the dude is bigger than I thought he is, thought he was, man. You’re like a 6’3″-ish kind of guy there. So that was a –
PS (01:04):
Yeah, it happens when you talk to people over Zoom and then all of a sudden you see them in real person. They’re either way taller or way smaller. They’re never like exactly as you thought they would be.
TJ (01:11):
Yeah, it was actually really funny, ’cause there was a former Amazon exec guy that I met at a conference two weeks ago, and I was like, wow, this guy’s like 5’4″. Maybe. He’s like, yeah, he’s really, really, really small dude. But Paul, in case you’re wondering, he’s a big guy. So Paul, listen, let me tell ’em a little bit about MerchantSpring. I’ll let you tell him a little bit more. Here’s what I gather, and then I’m gonna speak from personal experience ’cause I’m one of Paul’s customers. You know, MerchantSpring is an analytics and reporting platform. You’re helping marketplace agencies, aggregators, and let me say professional CFOs like myself, kind of aggregate sales and advertising data across multiple platforms and, you know, at Seller Accountant, we actually use MerchantSpring as part of our CFO offering. So we’re trying to tease out SKU-level performance and kind of take a quick peek at how things are across multiple brands that we’re representing. MerchantSpring’s been a part of my playbook now for almost a year. And I’m pretty happy that I’m partnering with you, Paul. I mean, what did I miss about just kind the basics of MerchantSpring before we dive into our topic for today?
PS (02:12):
Yeah, no, look, great summary. Thank you. And I think you, you know, hit the nail on the head in terms of, you know, you just want a quick peek at things, you know – the main thing that the platform serves is to help you to save time. So particularly if you’re looking across a couple of stores, obviously your example, you’re looking across a whole number of clients, you wanna be able, rather than crunching numbers, pulling things together, you wanna be able to see things quickly and understand how they’re tracking so that you can quickly get into action or you can have a productive conversation with your clients, you know, and if you’re agency that might be the same situation there. So we’re all about putting all that data together in a very intuitive way and delivering insights like, you know, right in front of you so you can do something with those.
TJ (02:55):
Love it. Yeah. And I wanna talk a little bit more about what’s happening in the industry right now, but I want to get a little bit of your story before we dive into that, Paul. You are, you’re a guy that’s kind of gone MBA management consulting. You’ve been a part of a couple of startups now. I’m just curious, kind of take me back a little bit. What was happening in your life when you decided to pivot from your kind of corporate job into making your first venture?
PS (03:22):
Yeah, look, at the time – so the way I got into e-commerce after my consulting gig which sort of, I guess really spurred on the love for analytics and numbers and insights probably a little bit too much, quite frankly, certainly according to my colleagues, I jumped into retail, and I actually love retail. I love to be able to sell products, you know, ship it, do whatever with it. And so I spent quite a lot of time in bricks and mortar retail, and then in e-commerce as well, you know, working one for one of the earliest marketplaces down here in Australia. Well, what I found really interesting is a big dynamic that happened in Australia. So about five, six years ago, virtually there were no marketplaces in Australia except for eBay, right? So eBay had sort of had the market to themselves and as a result, you know, very little innovation and investment.
PS (04:18):
And you know, the industry was stagnating, retail industry overall. And then what happened was Amazon decided to enter the Australian market, you know, and that was a big deal for us. ‘Cause we’ve all heard about the big giant Amazon who’s just killed the retail industry in the US, and now they’re coming to Australia. The interesting thing about that was that spurred enormous innovation in Australia, right? So Amazon launched its marketplace, but literally in those six months that Amazon launched, and actually a couple of beat Amazon to the post, six, seven other local retailers launched their own marketplace. Right? So the reason that it’s really interesting, ’cause all of a sudden, if you put yourself in a client’s shoe or in a brand owner shoe, right, you’ve been supplying to the bricks and mortar retail channel, that’s been pretty stagnant.
PS (05:08):
And all of a sudden, you know, e-commerce is a big deal, right? But all of a sudden you wake up one morning, and you see five or six marketplaces you could be selling on, you know, options and channels that didn’t exist before. And you know, these marketplaces very early on already took a lion’s share of the e-commerce market. So it’s not like you could avoid them, right? And sit tight for a while. So on one hand, a wonderful opportunity for them to grow on the other hand, gee, marketplaces are pretty different to the way you’ve been, you know, maybe running your business normally. You know, all of a sudden you’ve gotta decide what products are you gonna arrange, how you’re gonna price it. You’re in charge of the product images and the creative and, you know, fulfilling D2C orders. Right? Completely new for many, many brands certainly here in Australia at the time.
PS (05:55):
So I decided, hey, this opportunity is too good to be true. I see a lot of need. I see a lot of, you know, pain, and I think I can help. So we started MerchantSpring really as a consultancy, as a full service agency, five years ago to help clients, which was great. So we’re probably one of the first agencies in this space. When Amazon launched in Australia, we launched 12 clients. You know, when they pressed the go button, we pressed the go button on 12 clients, which was pretty exciting. But you know, to pivot again, what got very interesting was, you know, we really struggled to manage all these clients. You know, we couldn’t find a lot of tools that supported Amazon Australia, but also we were managing multiple marketplaces.
PS (06:39):
So how do you see all of these clients in one place? How do you track them? How do you know which client’s gonna pick up the phone, right? I remember there some really embarrassing conversations where a client would call up and say, “Paul, what’s happening to my sales last week, it’s down 30%.” And I would be like, you know, trying to sort of talk for about 30 seconds trying to buy myself some time, and then I’d have to admit and say, “look, I’m really sorry, but you know, we do have a team of people offshore, a great team, and they’re gonna be checking your account, and we’re gonna get all over it in about three hours time, I’ll get back to you,” right? Clearly that’s not great customer service, so.
TJ (07:14):
Right, right.
PS (07:15):
Had a bit of an epiphany and said, look, we’ve gotta do something. Let’s build something. So we essentially built a MerchantSpring-like solution in-house that a lot of people liked. And then, you know, the story went from there. We brought a team, rebuilt it, and are now, you know, offering the platform globally to consumers and agencies and aggregators all over the world.
TJ (07:38):
It’s so good. I mean, it’s actually, it’s funny for those of us who are like own micro brands. It is sometimes we fail to appreciate how much of a pivot it actually is for a traditional brand to get into a marketplace kind of model. I kinda forget about that until you talk to a, you know, legacy $50 million, a hundred million a year kind of outfit, that’s having to pack a box and send it to a consumer for the first time in a 40 year history. Right? That is an interesting opportunity in the market. And then I think what’s really unique about your tool and you just mentioned it there, Paul was that, you know, you built it as an agency to try to create order when you’re managing a really complex catalog or a complex set of channels that you’re selling through. I think, really, it’s really interesting. So let me ask you this: what’s been, anything been surprising to you as you’ve kind of gotten more into helping agencies or CFOs like myself operate in the space? Like what’s kind of piqued your interest here over the last few months?
PS (08:35):
For us. I mean, I think what sort of – let me kind of give you one speed bump moment. Before, you know, when we started the platform you know, we looked at the big market of Amazon sellers, and we thought, gee, wouldn’t it be great to target all those Amazon sellers? So we started spending $20, $25,000 on Google ads, a lot of inbound demand generation. And, you know, we failed miserably, right? Sellers themselves are a tough crowd. We found it really hard to distinguish in between like the beginning seller and the professional seller or the sophisticated one. ‘Cause we really needed to sophisticated ones with multiple marketplaces. That’s where we add value. So we had like no success for a year in that space and quite frankly spent a lot of money. And then you know, a couple of agencies picked us up. And it’s one of those moments where you look back and you go, yeah, of course, duh, like it was our need, why wouldn’t other agencies have the same need, but you know, it didn’t happen like that for us.
PS (09:37):
You know, we were fortunate that a couple agencies approach us and say, “Hey, we think your tool’s really, you know, really good could help us, too.” And we go, oh yeah, of course. And from there actually, what’s been really great and I’ve enjoyed a lot is actually, you know, obviously repositioning our platform to those agencies, which we did about two years ago, but really working with them. You know, I’m super passionate about elevating the agency or, you know, someone like yourself, Tyler, about, you know, how do we help you show up really professionally in front of your customers? You know, how do we give you an edge? How do we make you look really good? And you know, as part of that, how do we put MerchantSpring more, you know, more and more in the background. So, you know, one of the things we’re doing really heavily right now is investing in our, you know, white labeling offering so that, you know, we can make it look more and more like it is your platform. You’ve built it, it’s for your customers, and all that. And yeah, that’s been a really great journey to do that and to really work very closely with people like yourself and other clients to achieve that.
TJ (10:41):
Yeah. I love it. I love it. Let’s talk about – I mean, so you and I are recording this in the middle of a pretty yucky market. It’s a pretty kind of squishy bear market across the world right now, lots of reasons for that, and, you know, what that makes me think of it as an execution coach, cause I’m a CFO, I own an accounting firm, but really what I’m spending a lot of my time doing is helping other CEOs be successful, kind of like you. It’s funny, you use software to do it. I use coaching to do it. I think of the great Rick Flair, professional wrestler, right? His genius was the ability to make the other guy in the ring a genius. Like that’s why this guy is a Hall of Famer. He never looked great. He always looked terrible, ’cause he was teeing up the other guy to slam dunk him. You know, that kind of thing. I think Paul, you and I were in the same business in that regard.
TJ (11:24):
But when bear markets arise, execution is crucial. You die if you don’t execute because there are always gonna be winners and losers. And so obviously from a mindset standpoint, we wanna train ourselves to say, what does the current ecosystem make possible? And one of the conclusions I’ve come to, and this kind of leads me into my question is the person that has the best data, the best information to make the quickest pivots, the best decisions during a crappy market is the person who’s gonna win. And I’m just, I just wanna kind of get your reaction to that and kind of ask you, what are you seeing in terms of how brands can use analytics to navigate a really challenging market?
PS (12:04):
Yeah, no, it’s a really great question. Look, the things I have certainly seen and the things that we’re passionate about really speak to ultimately profitability, you know. Things are very tough right now. There’s a lot of downward, upward pressure on costs. You know, from a supply chain, inflation, all of that. So, you know, I think where I’ve seen a lot of sellers and even agencies fall into traps is, you know, chest beating around, look at these amazing sales, right? Or look at this amazing ACOS, you know, or look how wonderful, how many of, you know, this product, now it says 5,000 star reviews. Now all of those things are really good in themselves. But certainly at a time like this, you can achieve all of this and make zero money and you know, we like to call it, you know, just being a busy fool.
PS (12:58):
Right? So I think it’s really, really important to have a strong view on the entire aspect of your multichannel operation, right? So we focus on four areas, very specifically, sales. Yes, of course you wanna know what’s working or not working. Advertising, you know, that itself is a big piece. We focus on that specifically because it takes up a lot of investment and spend. Operations, right? So, you know, are you in stock, outta stock? What do you have to replenish? And of course the last but most important, profitability, you know, being able to see, okay, am I actually making money? Where am I making money? And if I’m not making money, why is that? Being able to do that very, very quickly and understandably, and as things get even tougher now, and particularly as stockers, it’s pretty restricted.
PS (13:52):
We’re now setting into very interesting conversations, which is, hey, I have two containers worth of products. I wanted to order four, but I can only afford two with, you know, shipping prices going up and all of these things. I’ve got two product, two containers full of products I’m operating across marketplaces in Europe and in the US, across multiple ones. How do I now allocate that inventory? Right. If I send it to an FBA warehouse, it’s really expensive to get it back and put it somewhere else. So how do I distribute that inventory across multiple channels? And how do I make sure that that working capital, that I’m allocating essentially to warehouses channels, whatever, how do I make sure that you really get a good ROI on each of that? You know, the last thing I want is run outta stock on Amazon, but I’ve got thousand units sitting in Walmart and it’s gathering dust, right? It’s that balancing thing. And it’s not an easy thing to do openly is getting really, really important as well now, making sure that, you know, you’ve got no poor performing working capital across your supply chain.
TJ (14:53):
Yeah. I think that’s unbelievably well said, Paul. You just articulated like 80% of my job as a CFO there, which is we should be going to our suppliers right now and saying, hey guys, we we need different terms. We may not be able to afford – we may not have the cash flow for the number of containers we were buying. And then again, this was the great answer to the analytics question is we need better intelligence to help us understand where to deploy our limited resources. This is not novel in a bear market, right? I mean, this is kind of the Warren Buffet school of investing is I am, first and foremost as a CEO, the allocator of my limited resources, the 80/20 principal, the ability to look at my portfolio and understand, you know, opportunity costs. I only have a hundred dollars. If I had unlimited money, I would invest in everything, and I would have a million units in every country on every shelf.
TJ (15:49):
But scarcity, if you remember from your Intro to Economics class, is the principle by which we are forced to make choices. And I think like you’re saying there, Paul, lead times are up container costs are a lot, they’re not going down anytime, at least – by the way, I do think they’ll go down in the next year, but not in the next few quarters. So in terms of you know, think about the life cycle of an e-commerce brand, that’s an eternity. A year in tripled logistic costs is an eternity for an e-commerce brand. And so having access to granular data that helps me understand what is this marketplace in Australia doing versus maybe Japan, where I’ve just launched. I had a guy recently selling a product, and he was shocked. He’s doing more than anybody else in the Seller Accountant portfolio in Japan, because he has a product that really fit a niche there. And to your point, his ability to identify that quickly and redeploy his resources into that part of the war that he can win is really crucial. And yeah, I just wanted to affirm you, man. That’s really well said. What else would you add to that about like using analytics to really kind of win in a weirdish market?
PS (16:59):
Well, part of it is also going back to your, you know, the execution question, right? Running, particularly something like on Amazon, but a lot of other marketplaces too, you know, running your brand well takes a lot of effort, energy. You’ve gotta keep your eyes on a lot of things. And it comes down to execution too. And you know, it’s not, you know, we’ve all seen the stories about a lot of aggregators. They’re struggling to get that performance out of the brands, gee, the cash generated is going down, you know, the [inaudible], all of that. It’s a bit of a horror story that’s going on right now, but it does speak to the point of execution. You know, I think running a successful Amazon brand is actually way harder than people think, right? You may go to your, you know, how to become a seven figure seller, you know, in 30 days, you know, it just doesn’t exist.
PS (17:49):
It is hard work, you have to be dedicated and it’s about, you know, getting twenty 1-percenters, right, as opposed to doing, you know, just sourcing a great product and you know, in will come the millions. Right? So, you know, that’s really – and I think, you know, one of the things that we try and do is just to serve all that up. For example, you know, we’ve got these store dashboards. You look at a store dashboard and the way we’ve designed it, you should be able to literally, at the speed of mouse scrolling, so you’re scrolling down the dashboard. You quickly go, right, today, right? ‘Cause everything is kind of in the moment from an execution point of view. Today, okay. I’ve got an issue around account health. I need to fix that. I’ve got a policy violation. ACOS is okay. TACOS is okay. I’m getting good return on advertising. I’m not gonna worry about that. Okay. Let’s look for product sales. Okay. My number two and three products, one of them’s losing the buy box, the other one’s outta stock. And oh, by the way, you know, I’ve noticed that two of my listings are suppressed, right.
PS (18:43):
So what we’re try and do is just feed that up until I’ve just identified, literally in the space of 10 seconds, you know, five or six things I can implement probably in the next hour to make a material difference to my sales this week. Right? So, you know, and maybe this is like I spent a lot of years in sort of retail and there was always drummed into me. You know, I remember sitting in a meeting in one of the senior managers goes to me, “Paul, retail is detail.” But you know, that’s sort of, you know, I’m a big believer in retail. It’s like a detail, but also it’s an every day trading type of thing, you know? Yes, you need to set your strategies, but you have to be all over it on a daily basis as well.
PS (19:20):
So you know, find a way, find the rhythm, you know. I’d say some of the best agencies we work with, you know, Aaron Moore in Phoenix is a great example. He runs his agency with military precision. He’s got checklists. He knows exactly what he’s doing every single day, you know? And he works it very, very well. And you know, he’s actually a boutique agency who only runs it by himself, and he’s able to service more than 30 clients. So he does it well. But execution is his main focus, and you know, for those sellers listening, if you feel like you’re just taking a little bit laissez-faire and if you don’t have a plan, like you get outta bed in the morning, you don’t even have a plan in terms of what are you gonna do today to drive your sales, then I challenge you to say, take a step back and build a little bit of, you know, discipline, workflow, you know, and what does good look like during the course of your week?
TJ (20:13):
Yeah, it’s really well said Paul, it’s – by the way, for those of us, and I’m an MBA like you are, I didn’t work in management consulting directly, but it’s a little bit of a win for common sense that the irrationality, the deletion of the word execution from the model a year ago is kind of getting sober. I mean, there’s a little bit of a like, oh, okay. Like just doing things the right way consistently actually does work. And it’s you know, I do think that you’re right Paul, and that the investors – and by the way, if you’re a CEO of a company, you may not be an aggregator, but you are an investor. Like you are first and foremost, again, a deployer of the capital that you’ve either begged, borrowed, stolen, invested, taken from mom, whatever it is, you are a steward of those resources.
TJ (21:01):
And so I think there’s there’s a cautionary tale there. I think this has happened by the way at every iteration of Amazon. Amazon 1.0 was Amazon selling, Amazon 2.0 was the feeding frenzy a decade ago where you could throw any product online and immediately make money. And, you know, 2016 or 17 come, and version 3.0 was, oh, now you gotta run ads. You gotta be differentiated. And now there’s actually maybe a 4.0 iteration coming out where we need to be more more focused in the details. The market isn’t matured, but it’s maturing. And therefore the cheese is gonna go to the execution artist. It’s not gonna be just a throw products up and make money. That’s okay. Knowing the rules of the game is helpful ’cause now I can play by those rules and make sure that I’m actually one of the executors and not a victim of the market that’s in front of me. Let me ask you this, Paul, what’s next for e-com in your mind? I man, you’re, you’ve been around this block a few times. What do you see happening over the next hill?
PS (22:03):
It’s, oh, look, that’s a really tough question. And I certainly don’t [inaudible] to be an expert of any kind. Look, I do see a couple of trends, and they do vary a little bit by geography. I still see a whole lot of other retailers launching marketplaces themselves right. In the US, Amazon has a really big lion’s share. And so, so strong, so dominant. You know, I don’t feel that Walmart, you know, I think they’re a great marketplace, but have they really made significant inroads in the last few years? I can’t really say that they have. You know, maybe I’m being a little bit unfair there. So I think, you know, in North America, a lot of it is about you know, Amazon innovating, continuing to innovate and really drawing greater audiences and greater product offerings.
PS (22:59):
I do see a lot of, you know, and I’m, this is not me trying to predict the future. This is just me observing what some of my clients are doing and trying to sound smart about it. I do see a lot of effort and investment going into brand building, particularly building brands offline or off Amazon, let’s put it that way. Still having Amazon as the main business, but how do you put things around that to reemphasize the brand and really trying to build it as a brand, as opposed to a label product? That’s what I really see there. Of course the economics, it’s gonna be a lot harder. So because of the, you know, some of the challenges we spoke before, I think we’re gonna see quite a bit of cost reengineering, even just product reengineering, whether it’s in size or shipping, or I think you always need to innovate just to continue to squeeze a couple more percentage points margin out of there. Outside of the US, particularly in Europe, in Southeast Asia, here, down here in Australia, I, you know, we see continued growth of additional marketplaces.
PS (24:05):
You know, Australia now is getting to this ridiculous point where there is probably something like 20 marketplaces you could sell your product on. Now I would say of those 20, I would say 14 of those are a complete waste of time, complete waste of time. Right? You know, because they just don’t have the audience. You know, yes, it’s great to have a marketplace, but the first thing you should do is go to a tool like Similarweb and see whether the website actually is adding any traffic. You know, that’s ultimately the main value that a marketplace brings that brings an audience, right? You don’t have to, you know, spend money on Google to get the audience to your site. So I think, you know, there’s a lot of retailers, I think they’re gonna fail. You’re gonna be seeing a lot of them just pulling outta marketplaces ’cause the numbers just don’t work. Certainly here in Australia, I think we’re gonna see that. And I think merchants need to be smart, just to focus on, you know, major in the minor – sorry, major in the majors, I should say, and avoid those minors as well. So yeah, there are just some things, and I’m sure there’s more questions than answers there, but that’s certainly some of the things that I see, Tyler.
TJ (25:11):
I think that’s well said, my friend. I was talking to a friend of mine actually on the show a couple weeks ago, Chris Shipferling, and he said, he kind of mirrored what you said a little bit. He said, you know, I think the need for differentiation and actually trying to build a community preferably off of Amazon, if you have the time and cash is really important. Now I think for me, the caveat, the like CFO caveat I add is if my product is more commoditized by nature, that’s okay. It’s funny, I have a friend that is pretty plugged in with Walmart, and I do agree with you. Walmart’s like 5% of Amazon right now. It’s not even close in the major markets and for online. Obviously Walmart is still a juggernaut in the retail space.
TJ (25:57):
Yeah. But, but if you have, what’s really been interesting, Paul is that if you had a product that’s more commoditized, maybe doesn’t even do as well on Amazon, but it’s more of a staple, it might actually do well on a marketplace. Like Walmart, where there just aren’t as many offerings that meet those staple needs. Whereas more of a long tail nichey product that you may be doing really well on Amazon is gonna fail miserably because Walmart hasn’t done what you just described in the marketplaces in Australia. Walmart just doesn’t have the eyeballs yet. They don’t have that buyer intent that Amazon owns in America. And so as we’re kind of coaching our clients, now it’s a little bit of a, okay, let’s get a little bit nuanced. If you are not gonna sell in the next year, it’s probably time to be investing off of Amazon to try to diversify your portfolio a little bit, and how you choose to do that diversification is gonna depend on the kind of products you are selling. Like if you’re selling white paper bags, you probably need to stick with marketplace as your primary vehicle. If you’re selling, you know, what mother/baby kind of products, then developing that connection with her, with your customer is gonna pay dividends, and you may actually be able to take some market share, it’s not meaningful, but a little bit of buyer intent from Amazon. Once you own that intent, you can do a lot with it.
TJ (27:16):
So it’s – but in terms of what’s next for e-commerce, I don’t really, it’s such a funny, it’s such an absurd question ’cause we don’t know. Right? Nobody talking about this knows what’s gonna happen with e-commerce. I think the headwinds will continue, just in my opinion. I think we’re gonna continue seeing some consolidation with these aggregator version 1.0s. And the great news, Paul, is I think that the overall economics of the e-commerce like megaverse, right? That’s the universe where we sell products online. It’s not going anywhere. It’s gonna continue to be strong as we get through the next couple of years. Anything else that you would leave as kind of a, hey, I’m a brand, I’m trying to figure this out right now. Any other counsel or advice you you’d add before we pivot and talk about something fun for a second?
PS (27:58):
Yeah, I think the other thing that comes to mind as we were talking is, you know, just back on the topic of brands, and I wanna talk a little bit about Prime Day as well, cause it’s coming up, but brands, if I look at the evolution and even I’ve seen this in the last two to three years, you know it used to be like a lot of sellers would just go onto, you know, Amazon trying to source a thousand products, trying to win the buy box on 50 of them a day. Like it’s the prey and spray approach in the hope that, you know, some of them will win and you get some sales, right? It’s almost like this sort of drop shipping-type model. I hardly see that anymore now. Right? I think then we moved into, okay now, you know, let’s create my own product. Let’s source a water bottle outta China. Let’s stick my label on it. Let’s have my own barcode on it. And now I’ve got my own product display page. So at least I can try and run my own race. You know, I think that’s starting to run its course, ’cause a lot of people are working out, you know what? I’ve got a page full of blue water bottles. They’re all a slightly different label, but it’s the same product. So it’s really about brands, right? And I know this is super cliche, but actually having a product that stands for something, that is differentiated, that is uniquely you, supported by a great brand and all that off marketing. So that’s where I see the evolution. I think, unless you’re in that space, places like Amazon are gonna get way, way, way harder on that.
PS (29:27):
And you know, also there’s, there’s very little margin left in the other two scenarios too. So that’s sort of, so if you are sort of selling on Amazon and you are seeing your business kind of stagnate and maybe you fall into that second category, not a great place to be, but you’ve got something there, but I would say, you know, I’d challenge you to say let’s build on that and let’s build, you know, let’s really invest in your MPD to come up with something that consumers really, really value. The other thing that, you know, and obviously as you start talking more ideas popped to my head, just on the topic of Walmart, you know, you mentioned something there that’s quite interesting, and it speaks to the heart of curated versus open marketplaces. Right? So one of the great things about Walmart, and certainly some of the marketplaces in Australia, is they don’t let anyone on, you have to be approved, right?
PS (30:14):
So yes, Walmart is 5% of Amazon, but the sellers are probably something like, I don’t know what the number is, but it’s like 1% of the sellers on Amazon. So if you think about, I was thinking about like there’s fish swimming in a fish tank and how much fish food is there to go around. Sometimes, if you have the right product and you’re, you know, you don’t face that much competition, you may get more fish food on some of these curated marketplaces. Again, you know, you need to have something unique. You wanna have something complimentary to what a lot of those marketplaces offer. So there can be opportunity. You know, I wouldn’t want to throw the baby out with the bath water on that. And last Prime Day, I know we’re all getting very excited, very hype.
PS (30:56):
I’ve been asking the questions, different agencies in Europe and North America and Australia, and I say, what are you doing this week and the next week to get ready for Prime Day, right? Whether, you know, it happens end of June, early July. And the answer has been really surprising. There’s the expected answers, which is, you know, we’re working with our clients, we’re getting inventory in, we’ve got campaigns running. It’s all really good. We’re gonna drive the biggest results to, we are telling our clients not to get overexcited, do nothing. Right? Actually Prime Day is just, it’s a bit like 11/11 in China. All we’re doing is creating this huge tidal wave of product flowing through the supply chain, which we’re gonna sell at a massive discount. You know, so we’re just gonna be busy fools for a day. But particularly in the constraint now where stock is limited, costs are high, being able to pull that bulge of stock, clear it quickly, do all of that, it’s, you can actually cannot afford to do Prime Day, you know, and run that on break even, or you know, really low profitability.
PS (32:00):
So my other kind of steer to your question would be, you know, what is your Prime Day strategy and have a good one that suits your business. Don’t just get caught up in the hype and saying, oh, it’s Prime Day. Let’s try and do bigger numbers than last year for the sake of it. You know, focus on how are you gonna squeeze profit out of Prime Day because that it’s hard to get hold of inventory. You can only sell it once. When it’s sold, that’s it. You gotta wait for the next unit to arrive, to try and work out whether you can squeeze some cash out of it. Sorry, that was a very long answer. And I’ll hand it back to you, Tyler.
TJ (32:34):
No, no, but it was a really good answer because I think in an environment where lead times are unpredictable and freight costs are high and then buyer demand is actually just down a little bit year over year in a lot of categories, paying Amazon to buy the real estate for a Prime Day or a Black Friday kind of event, you’re exactly right in that it actually may not make sense for a lot of brands. Now I will say this, Paul, some of the stronger brands that I represent are still really killing it right now. So to be clear, if your brand is flat, it could be a category level. It could be an anti-Covid kind of correction. But I could not agree with you more. It makes zero – it’s the definition of insanity to take a loss on a product only to pay triple the container cost to get a new one rush-,shipped here so that you can sell more of it.
TJ (33:25):
So I think embracing the moment and realizing that I can overpay for advertising for the limited eyeballs available because we’re in a bit of a bearish market, that’s one strategy and it may fit into a high growth strategy if you have a lot of capital. But for a lot of the brands out there, it’s time to just be kind of getting better at what we do. How can we listen to our customers better? How can we tweak our offering? How can we make sure our listings are solid and almost prioritize conversion over volume so that you’re bringing in the right clients. You’re not discounting things too much. I actually completely agree with you there. It’s a really good note. So, all right, man, I wanna get a little geeky here with you for a second. When you’re not running wildly successful software companies or hanging out with your family or whatever it is, what is it that you do? What’s fun for you, Paul? What do you do in your life that brings you joy?
PS (34:18):
So you sound like Marie Kondo there for a sec. You know, of course I like clearing out my wardrobe and rolling up my clothes into little balls, you know, getting all organized and all that. No, that’s not quite true. My wife certainly wouldn’t agree. So one of the things I’m really into is basketball right now. And, you know, as you mentioned, I’m fairly tall, but I actually took up basketball really much later in life. Like of course I played a little bit in high school but never played in a team. And my son is playing pretty competitively now, and I thought I should keep up. So you know, I’ve joined a couple of social comps, you know, played last night, played on Tuesday night. So it was getting pretty serious, particularly some of the training sessions getting a little bit serious. It was solely pitched to me as a social event, but clearly it’s not. But it’s really, really great.
PS (35:06):
But you know, one of the things, so I’m six foot three, and one of the challenges I’ve set myself this year is to be able to dunk a basketball, right? Doesn’t have to be mid game, just from standstill, whatever. But this is one of my challenge, and I’ve got about, you know, seven months left. So I’m doing, every time I’m at the gym, I’m doing these crazy explosive squat jumps, try and get higher and higher and trying to get the legs and all the muscles to work together. You know, trying to lose maybe 10 kgs. I don’t know what that is in pounds, but you know, trying to get, you know, things in the air a bit easier to –
TJ (35:41):
I think it’s about 20 pounds. You and I are both probably, we are getting more airborne 20 pounds lighter than we are right now. So I get you there. Yeah.
PS (35:50):
Yeah, yeah. So that would be ideal, right? So yeah, that’s the – actually I’m, you know, and I’m, you know, I even, like I ask my son to coach me, right. We go to this gym, you know, this little hall across the road, and you know, I’m just shooting and jumping and, you know, he’s just coaching me. We’re just, you know, he’s only 10, but it’s a lot of fun. So yeah, it’s interesting playing with a whole bunch of guys that have played their whole lives, and all of a sudden I’m here trying to, you know, pick it up as a late starter. But lots and lots of fun, and hopefully I do get to do that slam dunk. You know, I’m optimistic, I’m optimistic.
TJ (36:29):
I need that success story video before the end of the year. I cannot wait to get that from you, Paul. That’s amazing. Well, it’s awesome. I love that. Actually a great way to honestly connect with your kid and do something that’s good for you. And obviously you’re doing some explosive lifts. That’s probably – and losing a few you know, kilograms is probably not gonna kill either of us either. So that’s, I’m with you there, dude. So we close each episode with this. So we call it the ROP section. This is you know, the most successful e-commerce entrepreneurs are really people who understand how to manage themselves, right? There’s habits, hacks, practices that really give us ROI. So we can invest money and get ROI, or we can actually like do the right things consistently, and I was just curious, I’m just asking you as a guy that’s really done well in your career, what are some things that give you unusual ROI that you would say you might wanna give this a shot if you’re looking for a new habit?
PS (37:25):
Yeah, yeah, absolutely. So just on a personal level productivity, one of the things, and I think this was born outta the pandemic having to work at home for a while. So there’s a few things that I do, probably three or four things that really work for me right now. So the first thing is I break my day up into two halves. So the morning I work from home, and then I cycle to work, it’s a five minute ride. It’s not very far. And then I do an afternoon at work. And by breaking the day into half, it’s almost like I reset. So when I come to work in the afternoon, it’s almost feel like I’m starting a new work day, and I’m energized, and I’m ready to go. You know, admittedly, I focus on different things in the morning than I do in the afternoon, but I find that sort of cutting it in half and changing the environment somehow triggers my brain to thinking, hey, it’s another day let’s go. Right? So I’m getting that extra motivation out of that.
PS (38:18):
That’s one, the other thing that I’m trying to do now is break my day up in like half an hour or hour blocks. And I’ll say, okay, I’m gonna do half an hour and I’m just gonna do some admin, or I may have to do some, you know, some deep work and I’m saying, okay, I’m do an hour on it. And I’m trying to be really strict on that and remove all distractions. And that’s working – I do find I get a lot done that way. And lastly you know, obviously because I’m based in Australia, time zones arent great. So I do a lot of early morning calls, a lot of evening calls, and sometimes, you know, I get to 10 o’clock in the morning, and I go, gee, it’s, I’m gonna go through the rest of the day.
PS (38:56):
And one of the skills I never used to be able to do this is to have a really quick, we call it like a power nap, you know, 20 minutes. Usually it’s like 11 o’clock in the morning, I’ll just have a 20 minute nap, and it’s fantastic. It really just recharges me. You know, sometimes, I dunno if you ever find this, but you you’re trying to get something done and you feel like you should have finished this an hour ago and you’re still going. And you’re like, my brain is ticking so slowly. And also your motivation. You’re not feeling great about doing the work. That is a signal that you need a 20 minute nap because I can guarantee – by the way, don’t sleep much more than 40 minutes is like my absolute max, otherwise you’re gonna write off the rest of the day. You wake up and, you know, you feel positive, you feel energized, guess what, your brain is working again. So that’s the other thing that I do, probably I’d say at least a couple of times a week, so.
TJ (39:48):
I mean, the neuroscience, I was reading Daniel Pink wrote a book a few years ago called When, when you should do things, and the statistics are shocking at how bad an idea it is to like go into surgery with a physician right before lunchtime. Or if you, you know, end up on the wrong side of the law and you have to get in front of a judge right before lunchtime, like the stats on those outcomes are really, really scary. They’re terrible, you know. You want that, like, I’m thinking about in the States here, you want that like 7:00 AM in the morning surgery, and for you, Paul, it’s different because you’re starting way early. I mean, normally when you and I talk, it’s like late in the afternoon my time, and it’s like, what, three or four o’clock in the morning, your time, right?
TJ (40:27):
So having that break in the middle of your day, I do actually – it’s funny, you’ve mirrored what he said. He says his best practice is to drink a tiny bit of caffeine because it takes 20 minutes to kick in, take a 20 to 25 minute nap, and do it kind of almost at the beginning of the halfway point of your day and for you, that’s probably about 10:00 AM your time. That’s a really good hack. In terms of the second one you mentioned about being able to do deeper work, is there anything in particular that’s helping you tactically, like drown out distractions? Like what, what has been your winning formula for – you and I are both like, you know, high energy visionary guys where like every ping like distracts the shit out of us. Like, what are you doing that helps you kind of tune out the noise and really get that deep work done?
PS (41:15):
Yeah. the first, sometimes there are, certainly in the business that I’m in, sometimes when you wake up, there are a couple of things, little fires that are burning, right? So I think for me, I like to put them out, so I’ll spend half an hour, and I try to solve through those. ‘Cause if I don’t, those things continue to play in my mind, but I try and set a timer and say, look, I’m gonna spend half an hour. And that means I’m gonna work with our tech team or do whatever and sort that. That means I can sort of, either the ball’s been put on someone else’s court, the fire’s out, or someone else is looking after it. So I can sort of close off from that. Then, of course if I’m doing stuff on the PC, I like to just close all windows and just focus on what I’m doing.
PS (42:01):
So if I’ve got a Google doc open, that’s the only window I have open. I don’t believe in notifications. So I turn off, on my phone or Slack, or I don’t have any notifications on at all. And then the other thing I like to do, and I’ve got it here is, I always have a notepad with me just to write, ’cause things will pop in your head and sometimes they’re good ideas. So what do you do with those, right? And I’ll quickly write them down, or I quickly write a little to do. That helps me to sort of let go, but knowing that I can come back to it. So just pen and a piece of paper right next to me helps, too. And then finally –
TJ (42:37):
[inaudible].
PS (42:37):
Yeah, yeah, yeah.
TJ (42:40):
In fact, I had something pop into my head that I realized I hadn’t followed up on a minute ago, we were talking, and I just like needed one word on this notepad next to me here to make sure I can delete it. It’s not in my RAM anymore. It’s not clogging up. I can be totally present. And yeah, I resonate with everything you just said. I think if I could give listeners out there one gift, it would be take five minutes and pull up the notification setting on your iPhone or Android or whatever you, use and just turn off the notifications on the apps you don’t like. Like literally, I think you should probably turn ’em off on all your apps ’cause I hate notifications also. But if you’re nervous about that, just go through, like, I can’t tell you, Paul, it was a few months ago, I was like, wow, I’m getting pinged by like a game that I downloaded two years ago that hadn’t even played. It may be a fun game. Like I like playing chess. I get the chess app, but I don’t need it to ping me every time there’s a chess notification.
TJ (43:32):
And so if you literally did nothing else but turn off notifications on the apps that don’t matter to you, that won’t create anxiety, you will buy yourself tremendous amounts of focus during the day. I’m a huge junkie for deep work, Paul. That’s why I wanted to dig in and ask you that a little bit. I’m exactly like you. I need to eliminate everything. All the noise has gotta be gone. I love setting a 52 minute timer. By the way, this is like a – I don’t know why my mentor called it 52/17, but 52 minute timer, I get myself that eight minute or maybe 17 minute, like depending on how my day’s oriented, permission to goof off afterwards, I might need to reorient my brain, go walk around. But I am unassailable for 52 minutes where it’s like, that is, there is nothing but absolute focus on one problem. And it’s amazing what you can get done if you put that kind of pressure on yourself just to like do one thing at a time, so.
TJ (44:22):
Listen, man, this has been a great conversation. I wanna honor your time and honor our listeners time here also. MerchantSpring.io. I’m a happy customer of MerchantSpring and really am grateful for my partnership with Paul and his team. Anything else we should know about MerchantSpring or what would be the next step if somebody wanted to learn a little bit more about potentially using your tool?
PS (44:42):
Yeah, look here’s the plug, right? We offer a free trial. So the way it works is you sign up, you connect as many stores as you want, and we will sync the data, and you can just start playing around, kicking the tires on it. And, and looking at it like that. Of course I’m here. The team’s here. If you want a personal demo, we’d love to show you. And you know, what we’re also really interested in is if you’re looking at the product and actually there’s things you don’t see, we’d love to hear about that too, because we’re pretty busy with features. You know, right now we’re doing a lot of work on the Amazon vendor space and building out the the brand analytics for that particular piece, and you know, always looking for input ideas and suggestions. So yeah, please hit me up on LinkedIn or just take out a trial account on our website.
TJ (45:30):
Love it, Paul. Thanks again for joining me. I really value our friendship, and I’m grateful for you. And for those of you listening, thank you for joining into this week’s Return on Podcast with me, Tyler Jefcoat. If this content serves you, if this has been a show that’s been meaningful for you, maybe you pulled away a nugget. We’d love it. If you’d share it with your friends or like, and subscribe to the channel. And until we see you again in the next episode, go kill it. Have a great week.