As a senior vendor manager at Amazon Brazil, Gordon is well-placed to advise grocery brands on how to navigate emerging markets, whilst also providing sound advice to more mature marketplaces from his time in the UK office.
In this episode we discuss:
You can connect with Gordon on LinkedIn here.
Get help increasing conversions and traffic on Amazon here.
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$85 to $117k in 45 days. 2-minute breakdown of what we did.
Message George.
As a senior vendor manager at Amazon Brazil, Gordon is well-placed to advise grocery brands on how to navigate emerging markets, whilst also providing sound advice to more mature marketplaces from his time in the UK office.
In this episode we discuss:
You can connect with Gordon on LinkedIn here.
Get help increasing conversions and traffic on Amazon here.
Subscribe to georges.blog.
RESOURCES
Read our News Feed.
Book an Amazon Advertising audit.
Follow me on Twitter.
Amazon design examples.
Follow our team.
$85 to $117k in 45 days. 2-minute breakdown of what we did.
Message George.
[0:00:01] George Reid: Welcome to us Always Day One. My name is George Reid, a former Amazonian turned amazon consultant. Each week on the podcast you're going to hear industry experts, brand owners and amazon employees share their answers to the basic yet fundamental questions you should be asking yourself about your amazon business now. Let's jump in. Hello, ladies and gentlemen, welcome to another episode of It's always They want today. I'm delighted. I think my good friend Gordon murthy coming to chat to us a little bit about amazon, brazil, amazon emerging markets, um probably will try and sneak in something about irish rugby, which I'll ignore. Um Gordon? How are you today? And uh, let's just lead with that. How are you today,
[0:00:47] Gordon Murphy: George? I'm good. I'm good. Thanks for having me on, find good to finally get on.
[0:00:53] George Reid: I think what I'm really pleased with with you. Gordon? You've just left amazon. You spent a good about 5.5 years there. You stuck it out. Unlike me, you went over to brazil. It's fantastic stuff. And I like, unlike other amazonians, you've immediately updated your linked in to say you've left rather than clinging on and leaving it in that to present state. What made you make that decision just to kind of cut ties and go, I'm an independent man. I'm from Ireland. I don't care. I'm kind off.
[0:01:24] Gordon Murphy: I don't think I really have. Actually, I have because I haven't announced really what I'm doing next. But it was your it was your message prompting me actually, you're you're giving a bit of grief, wondering why why I'm still on. But uh yeah, no, I left in left in May of this year. End of me. So yeah. Good. About 5.5 years. Yeah. Just just 5.5.
[0:01:46] George Reid: You want to give the background a little bit too. Obviously we met 5.5 years ago on day one for both of us amazon you're a little bit of a nervous wreck. I was didn't took under my wing. You explain to the about how your journey looked throughout your your 10 year amazon.
[0:02:04] Gordon Murphy: Yeah so we are joined with you um in the the FDA team in London did about two years there mostly working on Pan EU F B A. And then got an opportunity to move to brazil also with with marketplace. So then I came to Brazil um where I led a team of account managers in the marketplace team we launched seven categories seven G. L's. And then after that which was about two years in brazil I moved to the retail side to look after the grocery category which I did up until up until leaving in me.
[0:02:43] George Reid: And what does that look like? Only played on the seller side. What does that role will actually look like from a vendor manager or I should say senior vendor manager before you kind of like my head off what does actually contain? Those were unaware that a little bit of background.
[0:03:00] Gordon Murphy: Yeah. So,
[0:03:02] George Reid: well,
[0:03:02] Gordon Murphy: I mean on paper, yeah, it's really just looking after the main vendors within your your category. Right. I think in in brazil maybe it's a little bit different because it's, you know, brazil, uh, The whole retail marketplace side launched relatively recently. Right? So he had like marketplace launching in 2017, little by little different categories. And then and then retail, not including books because that launched before, but the other retail categories launching in 2019. So it was all quite new, which I guess meant that yes, you're looking after the vendors, but you're also looking after, you know, the category and you're you you end up doing, um, you know, probably more a wider variety of things than than maybe you would do in a in a larger set up. Right? Um, just just by the nature of being a newer organization, fewer people, right, You don't have as many people to look after the same G. L or the same category. Um, so I think that was definitely, that was definitely a change coming from, from the UK to brazil for me.
[0:04:12] George Reid: And I've seen it firsthand quite a lot with the missus working at amazon Australia being an emerging market for amazon launching similar sort of time to brazil. What similarity did you notice when you, because the Australian mindset towards work and the Brazilian mind, I'd like, you might be a bit more similar where you're you're there at a job to help have a better life rather than your job coming first. And that's kind of the Australian mindset, but amazon in the UK, in europe and in the US, it's much more dominant. Perhaps. Did you notice any culture ships when you shifted over to brazil from from your time in the U. K? Well,
[0:04:55] Gordon Murphy: I don't know if there's maybe to do with the timing of the business here, but actually, you know, I found myself working longer hours here than in the UK. And I think that's definitely maybe a, I don't know if that's cultural or or what it is. Um But you know, I think it's maybe also a bit to do with the timing of the business. There was much, much newer at that stage. There was in the sort of start up phase, which is obviously very exciting. Um But yeah, I think, you know, it's funny some of the my amazon colleagues in in brazil, you know, they go to to uh, to Seattle for trips and obviously before covid and they'd be they'd be shocked that, you know, everybody's leaving the office at 5 36 o'clock on the door, you know? Um So I was I thought that was funny because here it's uh yeah, I think people maybe it's just a bit of a different culture set up. You know,
[0:05:52] George Reid: I'm really surprised by that. I thought I thought it would be you complete opposite because in Australia, the culture really very much as we we work just so we can live a better life. Um and there's a lot of that leaving on time unless you're coming from different locales and it shouldn't. You kind of got that that really hard work ethic. I thought in brazil it would have been perhaps all acts, but you're right, you are in that startup phase. And I want to kind of start on this topic a little bit with A large number of new markets emerging four Amazon in Europe with the Netherlands, Sweden etc. I think we could probably learn a lot from your time at bill, which lends itself to brands and sellers and how they approach a new marketplace. So just looking at some of the brands you were working with during the last, you've been there for 2.5 years of it, you know, what stand out brands, What were they doing differently? How are they performing? Well, Amazin brazil and emerging market, was there any particular play? Was it just effort? What did that look like out of people?
[0:07:05] Gordon Murphy: Yeah, I think the first thing that comes to mind um both in in marketplace but also in in retail, right? In one P was so brazil is quite, it's quite fragmented in terms of the the e commerce landscape. You know, you've got quite a few quite a few big players, very good for, you know, the competition is very good here. You know, you've got the likes of Mercadolibre, which have been here for for a long time. Um there's a few others that are really uh well established. So a lot of brands were already already selling well on these channels and then, you know, amazon comes along, it's another channel. Okay, great. But you know, it's it's new, it's, you know, it's it's on test, it's let's say. Um so they there were definitely some, you know, some brands that you would expect to do very well, we're slower and that could just be, you know, internally they take a bit longer to get set up to get going. But I think, you know, you do see maybe some of the smaller brands or the, you know, the number four, the number five in the market just going for it, Getting all in with amazon, and they're the ones who who can get ahead right, because they they see it as a new channel and they just go for it because essentially it's a bit like starting from a level playing field, you know, you can you can get ahead of the more established brands. So, you know, we had that, I saw that with with coffee, I saw that with Uh some other drinks brands where, you know, the number one brand on amazon was was definitely not the number one brand in the market, you know, uh that that that can happen, I think quite a lot. And I'd say probably, yeah, looking at, if you're looking at amazon expanding into other countries in europe I would imagine that the same thing. So if I don't know if I was a brand in in Sweden for example and you know amazon just launched recently I think I would try to go go all in on amazon because it is essentially a everybody's starting from zero. Right? So you can you can get a foot up on your on your competitor that maybe you wouldn't be able to get on other existing channels. Right? So I think that's definitely something I saw yeah just um people embracing brace and I think you know you probably we saw this back in in the U. K. Even right. You know we will always encourage senators to just go all in and not not go little by little. Um I think it makes a difference.
[0:09:43] George Reid: It's interesting because thinking aloud, the downsides of going all in a quite low. In theory, the only
[0:09:52] Gordon Murphy: real challenges
[0:09:54] George Reid: operations going all in could be in your splitting your stock from your own website is sending to amazon amazon then perhaps before and your stocks left sat there particularly grocery where you got kind of sell by dates or consumed by dates, which makes it challenging there is that risk there, but you've always got the option to go my websites massively killing it. Let me pull some stock out of amazon or used something like multi channel fulfillment. But the risk is, the risk is low. Um, as is the competition and that's competition with regards to, yeah, people are killing their operations. So jumping on prime quickly. People that are killing their content or transferred over from the website over to amazon. And you know, just yesterday I saw Kitchen ate a monstrous brand in the UK and globally and their content on amazon UK was shocking. And you're kind of going, you've got the content, you're just not transferring over. So that second point, the content there. So it mimics the website and then they're paying for that traffic on amazon because it's never gonna be quicker cheaper brands. In my opinion, we saw an amazon UK where if they were and it's not necessarily, in my opinion, you may disagree. It's not that hard nail getting your content pulled over, getting your operations. So you're doing time and driving some traffic with amazon ads in the early days when the competition is low. It's not that hard to just tick boxes or if you if you found it different in amazon as well, like
[0:11:42] Gordon Murphy: Yeah, I mean, I think there is, there is always, there's always a bit of a teething problems. You know, getting set up. You know, you're getting your catalog ready from the one piece side. I think getting your, you know, your logistics ready. So you're, you're delivering on time and all that kind of stuff. I think maybe, I don't know, maybe from the brand perspective, you know, let's say if you're in a, if you're in a country where amazon is new, right? You, you're already selling, let's say you're already selling very well on a competitive site or competitor channel. Uh, so you've got to, to get set up on amazon. It probably takes the same amount of effort to just listen to sell through amazon. It takes the same amount of time, effort, organization, people, etcetera. Um, so I think, you know, one thing we did see whenever we went into the, uh, more like the long term negotiations in the one piece side, you know, we had this, I don't know what it's called abroad, but in brazil, we call it the SVS, you know, the strategic vendor service, where, you know, brands, brands can um, invest for more closer management and everything. Um, but, you know, a lot of brands maybe would not be willing to do that until, because until their amazon sales reach a certain size, right? So, you know, you think of looking at your investment, okay, I'm investing. I know X on this channel and why on amazon, but it doesn't make sense to me to invest that much in amazon until my sales are so big, you mean? Whereas, of course, like, you have to bear in mind for the, you know, in the beginning, your sales are zero or zero, right? So you have to uh, of course, your investment is going to be much higher percentage of your sales through that channel. But it's like, I think some brands, some brands saw that, and we're like, yeah, it's okay. I'm gonna I'm gonna accept that that, you know, my sales maybe for the first six months are gonna be small, but I'm still going to invest heavily versus other brands. That would say, no, I'm gonna wait one year, gonna wait two years. If my cells grow, then I'll invest in amazon. I think that's two very different, two very different mindsets that I came across. Um and, you know, obviously the results. Yeah, exactly. Yeah, very much. And, you know, and you see, you see that then in the results, right? You know, there's a big difference, I would say between between the brands that say, um, you know, let's give it one year, two years, then, then I'll invest once the sales are up versus the ones that say, okay, no, let's let's let's go for it now. Yes, I might, I might lose some money in the first six months, but over time it will be worth it. And of course, I mean it's kind of easy for, easy for an Amazonian to say what you want better. But there are some considerations I guess from the brand side, you know, maybe if money, if money is tight, you know, maybe you just, you just simply don't have that money to invest in the first six months. So in, so in some cases, yes, of course there are, it does make sense just to wait a bit until your, your sales get going. But I think in many cases, you know, it's,
[0:14:56] George Reid: you're splitting your budget a little bit as well. If you just look at it from an advertising perspective, say, and you're using social ads a lot drive traffic to your site, your main channel where you're making okay sales at the moment and you're going, we're going to take some of that ad budget and put it towards amazon, I'm going to take some of our resource, whether it be designer hours or whether it be operation hours or whether it be just headcount and dedicated towards amazon instead of doing tasks at the website where we're making money, I can see how it's a bit of a wrestle, we're making money over here, but why are we going to spend harmon amazon from me and from experience, you know, as well brands in Australia that I've got here early and set up early. One of the biggest brands here is a pipe brand and here's a guy from the UK lives in Bondi, nice jab, and he just went balls deep really early and he's not necessarily doing and who different operationally is great. He's just, he's dedicating everything to it. And what this does is it carves him out or anyone out in the, which in this case is the, and a strong foothold in that space. So when big brands amazon, like we want to get involved here, You're looking at, Oh God, they've got 500 reviews already for that pep one. I think they've got brilliant relevance already, they get much better cost per clicks and we do, because they are so relevant. The cost per clicks have brought up over the last two years, so getting that traffic is more expensive now than what they paid and it's very difficult even nudged in a position. So in my opinion, I believe you can, you want to go full how many is emerging markets because it's going to be the cheapest possible time if it's part of your intention? Exactly nail amazon and in the country of marbles where I'm viewing it as customer acquisition channel, um, whatever that product, maybe if there's an opportunity for them to get repeat, repeat purchases, customer lifetime value, you go, let's hammer amazon every customer that's coming on to amazon to buy X. Y. Z. Let's say hair care product. I'm capturing them all I'm doing is acquiring customers much cheaper than what it would cost to acquire them on social ads or through just social awareness or influences. So just coming back to brazil, are you seeing a few examples as well where you have these monstrous brands and they're now turning to amazon, then they're going all right, we're gonna focus now. It's been kicking around for a few years as a beard going and are they struggling or they liberating and going sure we shouldn't make?
[0:18:02] Gordon Murphy: Yeah, well, I think, you know, definitely something I saw was with the the big brands are the big companies. There's a lot of, just by the nature of being a big company, there's a lot of a lot of, you know, legal work to go through approvals, etcetera. So you can take it can take a long time to get into a new channel, you know, whereas a new company, a start up, a small, medium sized business can can get going in a couple of weeks, Right? So that that was definitely different. I think I saw a massive shift, so I joined the one p business about two months, one month before the lockdown came into brazil. Um So that was uh I think for any for any grocery business in the world that was obviously a massive moment in terms of shifting focus to online. Um So you know what we saw was that you had you had suppliers of vendors that were at the time say pre covid, you know maybe maybe their e commerce channel or their amazon channel was managed by, you know, maybe it was somebody in the digit digital team or it was a sub sub team of the of the main business side. Whereas all of a sudden then Covid hit and you know some of their main channels were shut down. So of course, you know they focused heavily then on on their e commerce channels and a lot of them actually in a matter of you know a couple of months built out completely new e commerce structures within their within their business, which I found uh interesting. I mean I guess it's probably, you know, was, was only a matter of time before it happened, but it really Covid really accelerated that. So all of a sudden and as well, you know, we had, because thinking from our side, we were, you know, amazon in brazil uh, because we, we came later than some of the established players. You know, we, we were often the ones bit different to other countries. We are often the ones going after Brown's right, trying to get them on. Um, and they were maybe slow, they were taking a while to get back to us with them once, of course, once Covid hit, then, uh, you know, a lot of, a lot of brands were much quicker and keener to get on. Um, so that was definitely definitely a change. Yeah, I don't know if I waffle bit there. I think I might have drifted off from your actual question
[0:20:26] George Reid: you mentioned at some point, I don't know how you're trying
[0:20:33] Gordon Murphy: not to me, I'm trying not
[0:20:35] George Reid: to pivoting a little bit because I feel what you flogged that horse as much it could be flogged, but really valuable for anyone looking at emerging markets, particularly in europe, um, and if that's you being a US seller, looking at europe as an opportunity, or european sellers, looking at um smaller markets that are just emerging, like Sweden and Netherlands, something to really be aware of on the mind set goals and for those local brands. 11 thing, obviously you've got a few things in the pipeline coming next, but, and we'll get back to amazon, but I want to dig a little bit first into your experience as an inverted commas, Amazonian cringe term from here from now, looking at kind of what's next for you, what skills you think you're always going to be holding dearly onto from that long tenure amazon and what are you all going to be applying at all times of every future endeavor? Because it's an interesting one that we can learn from that, what amazon's
[0:21:41] Gordon Murphy: way of work. Yeah, so definitely at the, at the risk of uh sounding cringe or cheesy, I think um you know, I think the leadership principles are definitely something that you you take with you because unlike a lot of companies where, you know, you have your, they maybe have their values on a, on a wall in the meeting room or on the brochure at amazon, they really are, they really are part of the day to day. So, you know, it's, it's very common in a meeting. Uh, somebody might stop the meeting and ask a question and directly put it back to one of the leadership principles, you know, to say, oh, but like, is that the rest, is that the best decision for the customer, You know, or you know, where where is the delivery results here? You know, that that's that's very that happens on a daily basis, right? So I think uh I think, yeah, the customer obsession thing is it's definitely something I'll take with me. Um you know, really, really drilling down and asking yourself, you know, is what you're doing the best option for the customer. I think that's that's something that um, you know, creates huge, huge value. Um I like the, I really like the working backwards element in amazon, you know, where you, you know, it's kind of P R. F A. Q. Model where you almost envisage a perfect launch or perfect moment, say in the future. And then you, you work back from that, Right? So it's literally working back saying, okay, uh, two weeks before launch, this is what it should look like then, two months before launch, we should be at this milestone. And then, you know, what are those milestones, who are the owners of each of those milestones? And I really, really putting it into concrete steps? Um literally in writing, I think that's a that's a very valuable way of working that I'll take with me. I think somebody just wrote a book about this, if I'm not mistaken. A couple of ex amazonians got a book about the whole work working backwards thing. I haven't, no, no, but you know, I think it is something that I would imagine a lot of people who have worked at amazon would, would take that with them, you know, to wherever
[0:23:57] George Reid: they go. Hey folks, it's George here. I'd like you to check out my new site georges dot blog. It's where you can find all of my famous weekly emails as well as how we can work together to repeat that georges dot blog. Now let's carry on with the episode. Yeah. I think if you tie, I agree with both those leadership principles and ingrained in them in your mindset is pretty good and a lot of people miss them. I know when running the business with the brother a little bit and me having been at amazon and thinking about customer obsession plus having the girlfriend Gabby all the times on. Well George is this the best of the customer in that for fuck's sake. And like you're reminded the brother on the flip and flip, hadn't, hadn't had that experience or that mindset as in grains and we had customers with the academy, I'd perhaps take more of a customer obsessed mindset and like, so I think one of the examples was someone's emailed us saying are struggling to lock in and my brother's sponsor was like, yeah, they're probably just an idiot though. And I was like, yeah, I mean they probably are artists because this is the fourth time they've had this issue, but in theory we should be ourselves, What have we done wrong with that to um, to not satisfy that problem or remove that problem from any individual that could be a help page or be in the same token you may be going as a brand. Customers aren't using our product properly or they're not able to assemble it properly. Are there any right? It's easy to say that. I'm sure many brand owners have said that before. Just the customer is not very clever. Okay, the carpet were out there a bit stupid, But that mindset instead of a customer obsessed one where you would go, that's our problem. I think we just move away from customer obsession, started a whole new topic and I'll continue to be one of the most podcast hosts out there. I want to focus on the actual amazon channel. Now. I've got point A and Point B point bees conversation with You. Point a is now looking at Amazon. one question I'm liking treating your opinion is how do you think brands can create sustainable success on amazon now?
[0:26:30] Gordon Murphy: Um sustainable in the sense of ongoing, just kind of persistent or consistent or in what way do you mean?
[0:26:42] George Reid: I mean that's how I would describe the term sustainable. Um yes, that would be
[0:26:47] Gordon Murphy: okay. Yeah. So I mean, yeah, I guess it's it's just a case of um not doing anything too short term, I think. Like obviously looking at looking at long term, uh, brands that I saw doing well, let's say the ones that would invest, say in subscribe and save, right? Rather than investing in maybe a couple of short term deal events or something. I think that those brands with that attitude, I certainly the ones that I've worked with were the ones that had better long term sustainable success. Right? So, you know, in grocery, obviously you have, it's uh, it's recurring purchases is a massive thing, Right? So the more you can get a customer coming back to buy your brand to buy your product, obviously that that makes sense. And that's that's a big focus of the, you know, the consumables categories, right? Both for amazon and for and for brand owners. You want, you want your customer subscribing to your to your product so that he's locked in and he's not gonna switch to a competitor. Right? Um that for me would probably be, but probably be the The # one tool I would say to get to talk about long term sustainable success.
[0:28:14] George Reid: I do enjoy the consumables category. A lot that subscribe and save. I mean there any are there any numbers you saw averaging in just brazil? Obviously different marketplaces, different gigs that brands were shown with you of how important that was to them? Um This is obviously from a brand perspective and all qualitative. Um yeah. Are there any numbers that during conversations go this represents X. Y. Zed for us? Or did they not share that?
[0:28:46] Gordon Murphy: Yeah. Well, I mean there's obviously uh will keep it anecdotal, but you know, some there are there are some brands that had great success with subscribe and save and and of course it varies by product and everything, but you know um I've had a couple of people showing that. Yeah, look this this product is doing, we're having 40, of our sales are coming from subscribe and save, you know, which is which is massive for uh if you're a brand owner that's obviously that's a massive wind. Um So you know um it can be, I think if you were to do that on your own website, say, you know obviously those percentages would be, it would be much smaller. Um So so yeah, I mean I'm not going to go into two details are just but yeah, anecdotal anecdotally you get some really high numbers of what what the potential can be. Um And when you think about it, like that's those are sales, those are basically guaranteed sales right for the next month or the next two months. You can you can rely on those so it it also helps the the brand owner plan you know from a logistics point of view, production and everything. It's it's uh it's very much a win win.
[0:30:05] George Reid: So with subscribe and save I think other things to think about, you've touched upon their how it reduces some of the operational complexities when you've got that predictable um sales channel, you know you're gonna be getting X. Y. Zed in from amazon each month which is great. But it's also really interesting to think about when you're acquiring a customer on amazon through amazon advertising the way you go about bidding and how aggressive you intend to be too when that customer changes completely. If you've got good data showing you a large percentage of subscribing to your product and a subscription each year or an average a subscription last X amount of time. And means why to us in terms of that really changes the mindset when you're going into okay into that game of all right, we're now doing a bidding war and it's not just flicking the switch. I don't know what the experience you've seen a brand's doing really well. You flick the switch with subscribe and save. You create a compelling offer to encourage them to actually go on to the subscription rather than buy one off obviously. But it's not just that what what experience you have with brands are doing well. Were they doing anything else on top of that? Which made it work in your opinion? Really, really well.
[0:31:41] Gordon Murphy: Yeah. So you definitely something you you come across is a concern or worry about. Okay I I've got this product on subscribe and save. so, you know, I'm invested in that, so therefore I don't want to put it on prime day, or I don't want to put it on black friday, because I'm already I'm already investing in this product. But actually, again, you've got the other point of view, which some brands say, okay, I've got it on subscribe and save. It's taken a long doing okay, I'm gonna put it on prime day or black friday, get a massive spike in sales and subscriptions, and then hopefully, you know, x percent of those will carry on for the next X. Many months. Um And that's so that actually combining, combining your subscribe and save with offers, right? That's um something that can that can work well. And maybe it in the short term, you're thinking, you know, I don't want to do that because I'm already, you know, you're essentially essentially double double investing may be on the same product but if you're confident that you can hang on to the customer on that subscription, you know, for for a while then it might be worth it. Right. I mean of course every every brand and product they're all going to do their own calculations and and figure that out for for the for themselves. But it's something to think about. You know that it can be worth going hard on a black friday deal with the subscribe and save product because then you can get the extra sign ups and you get the the recurring revenue.
[0:33:24] George Reid: Ah Those brands also including Notes of some sort in the packaging to say that subscribe and save is available and what that subscribe and save offer maybe. So normally one off its 10 go and subscribe and save its levin and then all those one off purchases are getting that suggestion of if you enjoy this there is the option to go and save 30% on this monthly purchase of yours and it's just it's placing in the customer's mind to go you know we are creatures of habit once we find something we like then we're happy to get it again and again.
[0:34:07] Gordon Murphy: Yeah I haven't I haven't seen that um it made me think of something else just a bit slightly unrelated but kind of related. Um you know how some brands would would post on their instagram for example oh you know now you can you can get us you can get us on subscribe and save on amazon you know by by it once and receive it every two weeks in your house you know but I always found it amazing the amount of brands that don't do that don't announce, you know, on their social channels that hey, you can come and buy, uh, either subscribe and save or, or just amazon in general, You know, I always found that strange that there's kind of, this complexity, not complexity, but there's a thing with, with, with e commerce that brands will be very happy to direct traffic to a physical store, right to go and buy the buy their product, but there will be a bit hesitant maybe to direct traffic to their read their amazon listing because they've got their own e commerce right, where they probably got, you know, they probably got a better margin of their e commerce, but they see it as cannibalizing, which I don't think it isn't necessarily the case, you know, because just like a, just like a physical retail store, you know, you want to drive traffic there, you also want to drive traffic to your, to your amazon listing, right? And um I think it would often be the case that you know, customers who are going to see that by an amazon uh yes, maybe some of them will by an amazon rather than buying your on your website. But I would also think that a lot of customers would buy an amazon our customers who maybe would never have even bothered buying on your website, you know, So I think I found that interesting, you know, and again, like with with subscribe and save like some, some brands were very active and said, hey, you know, big, a big sort of campaign to announce that hey, you know, you can get us on subscribe and save, but actually a lot of brands don't do that, you know, which is a miss, I think,
[0:36:16] George Reid: I think even if you're using things like instagram and link tree combined within the link tree giving the option to go amazon subscribe and save 30% off for instance, which may be the description offer um instead of going direct to the website and you make a good point there, the conversion rates and amazon are so much higher than a website and the friction so actually get that subscription is much lower. The trust is there? No, the certainly now again when you're going here on my credit card details charged every single month on some completely random website, I was with amazon memoria customer, I know that my details are safe with you, I don't need to upload them again. So it's very painfully, there are no hurdles in the way that trust is all there. So from a subscription perspective it's a no brainer to push them to amazon if you can, Then I remember chatting with our Good Man Donald, when we talk about amazon business a while ago of yes, you know, you're using amazon to acquire those customers, ideally you want them on your own website, you make more money and it's a double discount really because amazon are going to take a Grocery fee of whatever, like 12%, whatever it is, then you're given a subscription which could be another 20%, let's say. So you're getting chopped down, then you've got the Amazon fulfillment all of a sudden your margins are getting ferociously chopped down. Um so send them to the website where the margins are higher is kind of a swings and roundabouts. But what Donald kind of raised a valid point is you don't want to upset amazon and run the risk of performance issues by having different pricing, but perhaps you can create different offers on your website. So you're on your website. Maybe you get a bundle and you're subscribing to a bundle. The price is lower than amazon is a bundle or every single one you get, it's the same price, but you get this included free and you're getting them to go through the air, the website channel and you're just looking to create different springs. Again, you know, you still, you're still utilizing amazon in my opinion to get the subscribe and save and maybe you have one line of the, of the 10 lines available. So the brothers just about to launch an amazon with this middle way of company and they do kind of a main subscription for a big five pack of hair care process is basically you go through this process and then releasing his hair oil and they're going on to amazon for the hair, Just the hair oil. There's just one bomb product six they're going to utilize amazon for, so that could be a good subscription product each month, your side or every quarter you're inside that letterbox mail away from a way of mayor wave continuous awareness. Have you discovered our full range over here on the website? We've got the main product. So you're using it maybe as a loss leader. But the main reason you're utilizing amazon and amazon subscribe and save. It's just to get through the door to people just to build trust with them, to build awareness to start having conversations with the customers and those customers conversing with their friends. Yeah, the, the hair oils brilliant. But you know, they keep introducing me to like the websites over here. I've checked it out. I follow them on instagram and they're getting so much great, huger generated content of people loving the process of, I do shampoo, I do this, I do that other, that's not an amazon, but I can go to the website either and that's where the money, the margin really is. So you utilize amazon with a lost leading product, a sample product to go, you subscribe to this and then we upset you to kind of the big boy up here where you've got nice meaty margins. And that's another way to also think about it in my opinion of either splitting your range, which is advisable, sometimes having different offerings. What's your take on that?
[0:40:25] Gordon Murphy: I don't know about leaving stuff off amazon, you know, I mean, maybe I, maybe I spent too long in the company, but I'd be, I'd be in favor of, you know, putting it all on there. Um, just because you know, I think it helps with with traffic with with brand awareness with everything, but um you know, I think definitely the bundle option on your own website could be something that makes sense, you know, and then, you know, I think when you look at Prime as well, I mean Prime is so, so good, right? So attractive from a free shipping point of view. You know, maybe maybe you're selling uh you're selling like packs and bundles on your on your website. But then on amazon with Prime you can you can get customers are almost more to trial easier, easier, right? Because there's less as you, as you mentioned, there's less of a barrier to to make that purchase because they've already got their account uh probably already shopping something on amazon that week anyway, so it's just an easier conversion. Um Yeah, look at
[0:41:35] George Reid: it, the data does show and you probably have seen heaps more data than what I've seen in the last three plus years of the more inventory you have bigger range you have on amazon, the more availability you have of that range all products get up. Well that's There's no surprise if you've got one product doing well, if you add 10 more, that one product is going to equally improve awareness, it just comes down to looking at those margins and understanding what your long term play is. Because I know in the particularly grocery category margins are stupidly tight if amazon's gobbling up a lot of that can leave you with nothing. So you argue what's the point? You know my conversion thumbs up but what is the point was this? You know I've had conversations with grocery brands no doubt you've had more conversations. Was that something you saw often as well? People just going gordo like I'm not making any money here, I can sell who cares?
[0:42:36] Gordon Murphy: Yeah. I think Def definitely some of the you see it with the larger companies and brands right? Where maybe, you know, maybe you got 20 products in the mix and I think what what we would always do both, you know, in the conversation with them, you know what you're looking at is okay, maybe this product is has got a tight margin. So what can we do to increase the relevance of this other product, you know, which has got a better margin? So maybe that's that's the one we're gonna we're gonna work on with deals for example because you know, it's better for everybody. So I think like port portfolio management I think is is important, you know, because maybe, you know a brand has, they might have this one S. K. U. Which maybe it's quite low margin, but maybe it drives traffic and then customers by the other S. K. U. S, which have got healthier margin, you know? Um and that's something that's something that needs to be to be managed carefully, I think, you know, um you know, when you're when you're thinking of, when you're thinking of deals or when you think of events, um it's often the case that you're going to have mix mix margins across the brands portfolio.
[0:43:58] George Reid: And would you you're you're always gonna have hero products with the brands that we're doing what zeal right now. And also in your time at amazon UK or conversations with other stakeholders across the business, we're brands doing well, managing that portfolio very well as well, where they're going right, we know this these are loss leaders, we win these products, but we don't make much money and then we we know we're going to get an up sell onto our main baby over there, which is also an amazon. Is that something that was implemented across the board? Yeah,
[0:44:35] Gordon Murphy: I don't know if I'd say across the board, but certainly certainly the large companies that have a a wide range of products, you know, different difference of categories, different brands, that kind of thing. They would be quite used to this, right? This is kind of there, they're used, they're used to doing this in various channels, you know, I think you see it with the classical case of the supermarket and the physical supermarket, they put they put the milk at the back of the store because that drives to traffic in, you know, and then they sell, they sell more of other products. That's that's also the same from the brand owners perspective as well, Right? So they also have, um, they also have their products that are going to drive traffic and their products that are going to drive margin and I guess it's about trying to, to strike that balance the best way possible. Um, but I think it takes, it takes time, right, because also, you know, their, their sales on amazon are often going to be different to their sales on, I don't know, mercadolibre or uh, you know, this other supermarket chains. So it's, it's gonna, yeah, I think it would need, it needs to be a just adjusted every, every channel you, you go down, right, because it's not going to be the same.
[0:45:52] George Reid: Mm, Okay, I'm, I'm conscious of the time over there with some of our tech issues. I want to finish up with one cute question and we can then round things up. I know there's plenty left on the table and that is. What do you think the biggest threat when amazon businesses right now?
[0:46:08] Gordon Murphy: Uh, tough question. Um,
[0:46:13] George Reid: Well we have we have all day while I've
[0:46:15] Gordon Murphy: got no, we
[0:46:16] George Reid: don't. Thanks for you there. Well, I
[0:46:20] Gordon Murphy: think, I think, you know, I think, I think as, as amazon is always launching new features, right? New features, whether it's, you know, we're gonna launch subscribe and say that we're launching advertising, whatever the next thing. You know, you you do have the risk of it's gonna, if you don't, if you don't go all in, then you might get left behind, you know, so a bit like what I said about in a new use the example of Sweden and the Netherlands, uh, the same way it's an advantage for new brands to get in. It's also a risk for existing brands, right? If they're if they're too slow to move, uh, whether that's a new market, a new country, right? Or or a new program, a new feature. Um, if there, if everything is already working for them on amazon, you know, they're probably less likely to take a, take a risk on a, on a new feature or, or a new marketplace. So I would say that maybe, yeah, maybe that's a risk. Or let's say,
[0:47:15] George Reid: how do you feel about amazon creating their own brands? How do you feel about FBI roll up companies with shed loads of cash and how do you feel about chinese manufacturers, creating brands and amazon and that massively any of those kind of cause concern?
[0:47:34] Gordon Murphy: Yeah, I guess I, I've probably got my, my brazil, um, cap on where I don't, that's not really on the radar, you know, it's not it's not really a talking point, I guess, But but yeah, certainly owned brands. Yeah, of course, definitely relevant. But then again, you know, you look at every single supermarket, they've all got a pretty extensive range of their own brand selection, right? And that's never, I don't know, I don't think that's ever really cause any long term damage to, you know, most most good brands. So of course that that will happen. Um But, you know, I think that's um that's just that's just life, you know? Um Whereas chinese, yeah, I don't know, chinese sellers again in brazil, it's not really um it's not really relevant right now, but but yeah, I guess like knockoffs is always a risk, but that's why I think, I think you've you've alluded to this as well, you know, making sure you're building building a brand and not just, uh, an amazon listing, right? I think that's, that's really important. And that goes that ties into off amazon as well as as well as on amazon. So yeah, Good man.
[0:48:50] George Reid: Thank you so much for your time and your patients with my never ending technical problems. I know you've got baking in the oven at the moment, not, not physically, um, that I'm aware of down. You've got a nice little project making or what. It would be good to follow up again a few months and, and see if you're in a position to discuss a little bit more because I definitely want to tear it to pieces. Nice man, I look forward to
[0:49:17] Gordon Murphy: that.
[0:49:18] George Reid: Good stuff. Thanks George.
[0:49:21] Gordon Murphy: Good.
[0:49:23] George Reid: Bye. Bye. Hey guys, just a quick one. If you are enjoying the podcast, I either have some actionable next steps or new ideas. I'd really appreciate if you could one subscribe to the show and leave us a review. These are really, really important to us as you probably know, being in the amazon world
[0:49:40] Gordon Murphy: and
[0:49:41] George Reid: two. If you're looking for additional support with your brand, head over to the website, it's always day one dot co dot UK where we've got links to other resources as often our guys speak soon.