The D2Z Podcast

The Future of Ecommerce Marketplaces with Mike Danford - 128

• Brandon Amoroso • Episode 128

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In this episode of The D2Z Podcast, host Brandon Amoroso speaks with Mike Danford, CSO at Adverio, about the evolving landscape of online marketplaces, particularly focusing on Amazon, Walmart, and Target. They discuss the competitive nature of paid media, the importance of strategic brand presence across multiple platforms, and the challenges of product saturation. The conversation also touches on emerging marketplaces, dynamic pricing strategies, and the technological solutions available to help brands navigate these complexities. Mike shares insights on how brands can optimize their presence and performance in the ever-changing e-commerce environment.

Here's what you'll learn:
🛍️ The marketplace landscape has become increasingly competitive post-pandemic.
❤️ Understanding the nuances of each marketplace is crucial for success.
💸 Dynamic pricing strategies are essential for maintaining competitiveness.
🚀 Emerging marketplaces are gaining traction and should not be overlooked.
🤖 Technological solutions can help brands manage pricing and inventory effectively.
🤝 Collaboration with marketplace representatives can help resolve issues efficiently.

Timestamps:
00:00 Introduction to Marketplace Dynamics
02:55 Evolution of Marketplaces: Pre and Post-Pandemic
05:59 Navigating Multiple Marketplaces: Amazon, Walmart, and Target
08:47 Strategic Considerations for Brand Presence
12:07 Product Categories and Market Saturation
14:49 Emerging Marketplaces and Trends
17:50 Dynamic Pricing and Promotional Strategies
21:02 Technological Solutions for Marketplace Challenges
23:58 Conclusion and Resources

Mike Danford:

LinkedIn - https://www.linkedin.com/in/danfordmike/

Adverio - https://www.linkedin.com/company/adverio/

Brandon Amoroso:

LinkedIn - https://www.linkedin.com/in/brandonamoroso/

Web - https://brandonamoroso.com/

Instagram - https://www.instagram.com/bamoroso11/

X - https://twitter.com/AmorosoBrandon

Scalis.ai - https://scalis.ai/

Speaker 1:

Hey everyone, thanks for tuning in to D2Z, a podcast about using the Gen Z mindset to grow your business. I'm Gen Z entrepreneur Brandon Amoroso, founder and president of retention as a service agency Electric, as well as the co-founder of Scaless, and today I'm talking with Mike Danford, who's a CSO at Vireo, which helps established brands grow their sales on Amazon, walmart and Target. Thanks for coming on the show.

Speaker 2:

Thanks so much for having me, brandon, looking forward to it.

Speaker 1:

So before we jump into all the things going on with marketplaces today in 2024, can you give everybody a quick background about yourself and how you got into this to begin with?

Speaker 2:

Yeah, absolutely so.

Speaker 2:

Again, mike Dentford, here Primarily about 10 or 12 years ago, got into the Amazon space a little bit of arbitrage, buying and reselling Nike shoes et cetera.

Speaker 2:

And then I went over into my own supplements and some apparel products as well and then I started posting some of the feedback and success that I was having with my advertising campaigns. And then folks started seeing that and say, hey, could you do it for me? And then kind of the rest is history there, from turning into an advertising to a full service marketing agency from there and during that time realized that I really had a passion for large catalogs and how to optimize those and realizing that a lot of brands would expand their catalogs without strategy and realizing that a lot of brands would expand their catalogs without a strategy and obviously figuring out how to help them do that and, you know, be able to make those decisions as to when to cut a product or expand a product line and where to kind of find that data as well. So now we offer that for, you know, mid seven, mid eight figure brands. It's kind of where we're working now.

Speaker 1:

How I mean? I assume it's obviously changed a lot, but since you got started, almost 10 or even more years ago now at this point what are some of the biggest holistic changes that have happened within these marketplaces over that time period?

Speaker 2:

And I say obviously pre-pandemic, post-pandemic. There's a pretty big shift, but in general it's just getting more competitive in the paid media space within each of the platforms. And certain platforms are a little more advanced than others. Say, walmart, you can't even negate, or Target has a different way of negating and kind of reducing to help you improve your relevancy and exclude traffic. Amazon's probably the more sophisticated out of those marketplaces, with different types of campaigns and targeting and placements and a bunch of multipliers et cetera. So it's interesting to see how each platform is kind of navigating that where they put focus on. In general, again, it's just getting the CPCs, the cost to run advertising. The amount of ad space that's on a landing page, serp or even a product detail page is much higher. Now I think all the platforms are realizing they can monetize that real estate. So then you have to figure out how you actually have to pay to play now in order to where five, six years ago a lot of brands could sling out their products and it worked. Where five, six years ago a lot of brands could sling out their products and whether they had off-platform recognition or et cetera, it was a lot easier to rank. And now you really have to have the paid space, and even more so in defending your own products, et cetera. And some of the platforms don't allow others to target your actual branded and IP, which is interesting, others to target your actual branded and IP, which is interesting. So that's definitely helpful to correct that any kind of conquesting and different types of tactics and stuff. So just knowing those nuances on each platform is definitely important. And then I think that each platform has its own shift in ideology around how to provide seller support, whether that be specific to managing actual catalog or advertising et cetera, because a lot of those divisions are separate on each marketplace. I'll say that a couple of the marketplaces are definitely seeming to put more support on the seller side as opposed to just customer-centric only, and they're really trying to help navigate and make it a more enjoyable experience and easier and also allow for more standardization across all the platforms.

Speaker 2:

I think that you know Amazon in the old days you could kind of pretty much sling up everything you wanted. It wasn't really much of a standardization, except for some general rules that you didn't really have to abide by in terms of you know your copy on the listing certain images, etc. In terms of your copy on the listing, certain images, et cetera. Now they are taking, I think, a page out of Walmart's book where Walmart was always requiring a certain recipe in your title, brand, product attribute, et cetera. And now Amazon's kind of going back to that, both in requiring it, and now, with the presence of AI, they can kind of force it. Hey, your title may include three extra things that we don't approve, and it's okay, we'll let you do it in the back end, but whenever a customer sees it on the front end, we're going to remove it anyways. So it's been interesting to see the kind of the forcing of compliance and things of that nature. There's a lot more development on that as well.

Speaker 1:

When you know Amazon is obviously the you know, the 800pound gorilla in the room and was first to market in terms of Amazon, walmart and Target. Is Walmart sort of second and then Target third? And how do you think about if you're a brand? Do you really need to be on all three? Should you be on all three? Does it depend on your size, your maturity as a company or what's the general landscape of those three? Because I know Walmart has been pushing the marketplace pretty aggressively. Target is one that I've seen a little bit of, but not a ton. So what are your general thoughts around that?

Speaker 2:

It's great and we'll come back to one. I think that's probably more important right now, but I'll reference those three. So you kind of have to think about when you go to the brick and mortar. Obviously Amazon's a little different, but if you think about what Walmart's target demographic is, where they're located, the actual physical locations versus Target and kind of who they cater to and the in-person shopping experience, that does translate over into the online. And what I mean by that is there's price elasticity. There's different price elasticity on each of those marketplaces and Amazon's kind of a little bit of both. Um, I think that most people will go to amazon, uh, just for the convenience. They may have the prime membership etc. They not have a walmart shipping. You know, um can't say when the shipping of other platforms etc. They just trust amazon, it's faster delivery, etc. I think that's a big, big different trader um.

Speaker 2:

And with your specific to should you be on all or one, et cetera. We have brands that will come to us and they may be only on Amazon or some combination of the three. And then we have brands right now that are really going to start pulling off of the platform. I'll say the biggest thing that at least not trying to beat Walmart, but there's something we're trying to figure out right now is they're messing up category notes. But there's something we're trying to figure out right now is they're messing up category notes. And we're also seeing that same thing on Amazon, where the AI is overly correcting and has the wrong impression as to what a product is and it will keep forcing. There's no manual override, or at least one that will stick and persist. So there's a lot of catalog issues. And then Walmart's just a little bit different. Not the volume, you know. Generally speaking, 5% to maybe 20% of what you do on Amazon you'll do on Walmart. Generally speaking, there are certain verticals and niches and product types that will do a little better on one versus the other.

Speaker 2:

And then Target, primarily as an invite only, they've kind of opened it up. They got burned last Q4 in 2023 with having a bunch of inventory on hand that didn't sell and it was a big thing. So they were really apprehensive to invite new sellers on, and it still is an invite only, at least in our experience. So it is great. And the brands that do get a presence or are able to go through everything on Target, that is a very stable and viable channel for them. And I believe one that we're missing, at least in that initial comment, is TikTok. So I think that's where we're seeing one. Amazon and TikTok are starting to figure out how to communicate and figure out how to play with each other. And then obviously you have Amazon going up against Sheen and the other low costs. And then obviously you have Amazon going up against Shein and the other low costs and they're trying to get the Chinese sellers and have a special program, special pricing et cetera on their own Amazon platform et cetera.

Speaker 2:

But again, brands that have a really good presence, like a real brand presence, people are actually searching for them on any of these platforms. I think they do really well on other platforms just because already brand recognition, it's just where they are most comfortable, you know, adding to cart and already have that trust and faith in the shipping systems or the. You know, hey, I like the security of using this marketplace, et cetera. So I think it kind of goes back and forth, but it's, it's dynamic. You know, we have brands that are good to see you know their own website, and they do really, really well and they go to Amazon. It doesn't work. Or vice versa, they try to go off Amazon onto their own, and it's just.

Speaker 2:

I think it's very, very unique and different and it comes down to patience. I think there's a lot of timing involved in it as well. And then it's you know, we work with brands and typically it's about a year. And then we work with brands and typically it's about a year. Hey, we're going to go on another platform or we're going to try pushing a different platform, or whatever it may be. You really need to give it a full calendar year to understand what's going on. And then having each marketplace have a dedicated rep, someone that can help us navigate those.

Speaker 2:

When we're having category node issues, hey, why are we having this?

Speaker 2:

How can we overcome this and how impactful is it to the business and things of that nature.

Speaker 2:

So, again, it's specific to each brand, I would say for sure, and I think the only way to do it.

Speaker 2:

We like to hey, to be objective, let's actually put, get on the platform, understand the lift, make sure it's not too big of a lift for the brand. Let's kind of make sure we're not doing all of it at once and and then look into about three months, six months in, and say, hey, how much is it to maintain this? Is it more juice worth to squeeze those types of questions. And then it's what does this do to our other platforms? Are we actually having an incremental lift here or are we actually pulling from one platform over to the other one, which is obviously the more complicated part to do? But we do see that, especially when I start getting on the five, six plus channels, it's like, okay, we're not really increasing the total global top line here. We're just getting more and more pieces on different platforms. So how do we do this and what's the best ones to keep going forward? And that's about it. That's an annual conversation for most of the brands that we work with.

Speaker 1:

Yeah, I've seen a few brands that had a big investment in a Shopify presence during COVID pull back from that and go exclusively Amazon, typically. You know Food Bev, where the unit economics on going DSC on a Shopify website were just abysmal. You know, like you know, if you're a kombucha company and you're selling three or four dollar kombucha in a glass bottle and it needs to be, you know cold chain and all these other things, like you know, it doesn't really make a whole lot of sense. And do customers even really want to go to your you know your website to shop from you in that way? It's much more of a. You know we grocery store or we're adding it to our basket of other items on one of these marketplaces. So I've seen that.

Speaker 1:

But then to your point. Some of the product categories on Amazon are extremely saturated and it sometimes will not work for a successful Shopify brand who is maybe like a skincare company. And then they try to go into Amazon and they're starting from scratch. They have no reviews yet and it's just extremely painful to try and get them over and across that hurdle. Would you say that Amazon is still the place to start your marketplace journey if you're a D2C brand and you need to think about one of these three.

Speaker 2:

We have brands that come to us and if you're not already on Amazon, we'll actually look. And if you have a strong volume of reviews on your own website, there's a way on Walmart to syndicate those reviews to your listings so you can actually take your D2C reviews and post them on your own listings on Walmart. And that's a nice way to kind of hit the ground running and we'll have brands do that. It's free light lift. It's a couple of emails getting connected, listing it and going, and then you can see. You know where it is. You don't have to put inventory, you can kind of just do your own and see what happens. And I think that's a good way and we like for them to go ahead and do that, because we don't know when they're going to start charging for that, if they're going to start limiting it or not allowing it moving forward. So like, hey, let's go and at least get your products uploaded, your Walmart IDs established and get the reviews over, at least right now, in case this Walmart does take off, or they finally figure it out, or Amazon does it and you have to come back to Walmart or have a slower play on one platform or another, and then, yeah, most folks just really want to get into Amazon. It's just such a such, so large it's. How can we do it? And and and.

Speaker 2:

Brands have to be very strategic in which products they put there. Which ones will take off. What does? It's not just what works on your DTC or what works on one platform doesn't necessarily work on the other. I mean, we have brands where you know they'll have a you know we call it parents or groups or product type that does really well on one platform and it's just a stronghold. And you go to another platform and people aren't looking for that product or, to your point, it's way more saturated or you're more price sensitive on that platform than others. So it's not even brand to brand, it's product to product, sometimes Style to style, size to size, different types of packaging, different types of combination. I mean it's a lot for some of the brands. Again, that's why we work with larger brands, larger catalogs.

Speaker 2:

We have a way of Okay, let's go to those other platforms, but also let's look at the ones that you're already on. And why are your B, c1, c2 tiers not performing well? When is the last time you revamped them? When's the last time you tested pricing changes or updated your copy or any of those questions before we really go into other platforms, because any brand, even a brand that's just on Amazon or just along the marketplaces, a lot of them neglect the basics or they did it back in 2020 or 2018 or whenever they first joined the platform even 2023, and they haven't updated.

Speaker 2:

The advances are there, so you have to stay on top of it. And then maybe they tried and they put a little advertising after it, but it wasn't a full send approach or it wasn't a balanced approach, like, hey, let's revisit that, let's take some reallocation of some dollars to go there. That's one of our favorite things is, you know, within 30, 60 days working with a brand, hey, you're moving products that we've never been able to move in a platform, or it's been you know, four or five years since we've even seen this product move. How are you doing it?

Speaker 2:

so those are awesome for us to do as well, but, um again, I think it's going down brand, sub-brand, product lines and actually individual products sometimes.

Speaker 1:

Which product categories do you?

Speaker 2:

say work best on each of these three. I don't know if it's necessarily a product category. I think there's always gaps that you can fill in each one. I think that it's to your point. It's one how saturated is it and what is it saturated with? Is it saturated with inferior quality, superior quality, superior reviews, superior pricing. There's a few different ways of looking at it and we kind of do an audit beforehand on the actual market to understand what the chances of likelihood are of entering that and penetrating that, and it's different on each platform. I'll give you an example. We have a brand that is on seven or eight marketplaces and one of the struggles they have.

Speaker 2:

Now to your other question is once you're on that many marketplaces, your pricing has to match. And some of those websites say Macy's, even Home Depot and a few others will randomly run a sale and you get a sale calendar, but you don't really know our promotional calendar, you don't really know exactly when it's going to do it, but you can lose your buy box on the other platforms because that particular marketplace is running a deal. So you have to be able to follow that and understand hey, is a 10%, 20% discount across all my channels? Can I afford that? Is it worth being on that platform? So that's another piece as well.

Speaker 2:

But going back to your question again, you don't really know until you get in there. You kind of have to do an analysis and a lot of times it's. I think it's easier for some of the brands. It's easier for them to actually just put the product up there. They have a PIM or a down and they can add another marketplace and they can move some inventory over. A lot of times it's just let's find out by actually putting on there, as opposed to spending all this money and time and hypotheticals and understanding. Again, if it's expensive or hard for them to shift or move the logistics, then yeah, we'll do the actual due diligence up front. But a lot of times it's let's put it out there and see what happens, see what sticks, and then revisit on a quarterly basis.

Speaker 1:

You mentioned Home Depot and Macy's. You know, on a quarterly basis you mentioned Home Depot and Macy's what's like a marketplace outside of the three you know big ones that you see as an up and comer that people should be paying attention to.

Speaker 2:

Oh, that's tough. So we work with brands that you can kind of get facilitated on multiple other marketplaces, and some of those you have to actually have brick and mortar, you have to actually have inventory on their shelves before you can even get on those platforms. It's interesting. I don't have an exact answer, but I'll tell you that what? Let's go home to Home Depot.

Speaker 2:

So what you would buy in a physical store, at Home Depot or Lowe's, as opposed to what you might buy online from Home Depot or Lowe's, as opposed to what you might buy online from Home Depot or Lowe's is there's it's there's overlap, but there's a. There's a section of that where you're like, wow, I would have never went to the physical Home Depot or Lowe's and bought this product, but it's available on their website. Again to your point earlier, I'm building my car, you know I'm doing a home project and oh, we've got this other product and I'll just add to the cart while I'm there. Right, or it's got a promotion, or I wasn't even thinking about it, et cetera. There's no real it's per brand. We've seen brands that again I'm referencing one that's in Home Depot that I would have never guessed they would have been in Home Depot. I would have never said, hey, let's put your products in Home Depot, on Home Depotot, it's just, it's just interesting. But think again it's whoever the consumer is and what they're comfortable with and where they spend their time. If you can get your products in front of your target and where they spend their time and what they already have the um, the trust and and in the actual platform and the brand and whatever platform you know home depot versus lowe's, or um, what used to be Bath Beyond, which is no longer, and some other stuff. If you can just get in front of those and your product makes sense, I say, do it.

Speaker 2:

And again, I think the big caveat there that we're dealing with one is another. One is on Macy's. I think the big question that we need to ask on those platforms is what is your promotional encounter and how are you doing it? And if it's a top seller on another platform say Amazon versus Macy's do we even want that product on Macy's? Because we know that there's going to be a promotional encounter that impacts my sales on the other platform. That's what we do right now as well is hey, when they run the promo, how does it impact us on each platform? Is it worth it? Again, because you're having the price match. Otherwise you just lose the sales and the traffic for that day or that four-day promotion they're running, etc. So that's a whole other game in itself.

Speaker 2:

I mean, we do dynamic pricing across the platforms and we try to start with Amazon first, just because it guarantees everyone, amazon is the most restrictive and most reactive to your pricing off of Amazon. So we want to start there. But again, it's very interesting. Each brand's different and their collection of sites that they're on are different from time to time, and it's just kind of understanding those intricacies and, for us, being able to level set on there's only like two platforms that you run advertising on. That will give you access to multiple marketplaces. So at least we have that consistency, we understand how that works and it's the other little intricacies and unique issues that arise. Again, pricing is another thing.

Speaker 2:

I think that that's you asked about 2024. For us, 2025, our vision is massive on dynamic pricing and how to really take gamification and the advanced in AI, obviously, but the dynamic, like being able to manipulate and massage your prices and like it's an auction of click-through rate, an auction of conversion rate as opposed to ads, right. So how do we take that same philosophy and data that we have and do it on just pricing and how to keep advertising the same, because we've got, let's say, a great stable process, and how can we just change these other levers to get more? I wouldn't say manipulate, but massage and stabilize the buy box and the sell through, et cetera. So that's definitely where I think we're at for 2025 as well.

Speaker 1:

Yeah, I didn't even think about the promotional calendar from some of those marketplaces and how that can impact you, because you know Amazon doesn't have a promotional calendar that they that they roll out, but Macy's Macy's obviously does, and you know some of these. You know, like Macy's, it feels like there's a sale running every you know every day. I can confirm yes, there's a sale running every day. I can confirm yes. Are there automated solutions or technologies out there right now that can help support merchants with these pain points?

Speaker 2:

Yeah, so a lot of these merchants will have a PIM or DAM or a pricing platform or an inventory platform to where they can have rules in place where if you know, this didn't follow that and you can put um. Even inside of each platform, they have some dynamic pricing um mechanisms in place where you can put floors and ceilings on price. And then obviously we use third-party connectors to help us with that as well. And you know, sometimes it takes a day or two. You know you'll get two, you lose the buy box or you'll be suppressed for your listing or both, and it takes a day or two to figure it out. You can't really see everything intraday and if you have thousands, tens of thousands of products on some of these catalogs, it's very difficult to catch everything and what matters when there's hundreds of alerts in your dashboard when you go in. So it's, how can you stay on top of that? And being prepared and given the again, I think the biggest thing is having your parameters in place and being prepared for those. You kind of know when the promotions are going to come through. And then the other piece is follow and make sure it makes sense. Should I have that product on the platform where I know they're going to win a promotional calendar, or should I take that because it's maybe don't run that analysis. We're not really sure how to run analysis, so we help them with that as well, and that's really fun for us as well. We'll take, you know, we run some correlations and all statistical models across each platform and run hypotheticals and look backs and it's fun. It's fun for me, it's one of the things I like to do, but it's again, you kind of need to do it. You need to do it, you need to understand how it's going to be and measure it. I mean a lot of hypotheticals, but you don't really know until you do it, and sometimes Amazon doesn't do it, like they don't catch it. Or you can change the name slightly, or you have a slightly different SKU, or you change the UPC, but it's the same product or a very similar product.

Speaker 2:

So we have other little ways. I'll call them hacks, if you will just trendy word. But, um, we have brands that come to us and say, hey, we sell on costco and this part does really well, and it is not hard for us to one have a different upc and have a slightly different box or package where we sell one less bar or one more bar if it's a soap or whatever it may be, and then like, then you can't, they don't. Um, the pricing, deltas and the promotional counters don't impact one or the other because it's not the same as that product and that's been. I think that's going to be a big thing for us in 2025 is helping some of these catalogs with these established products that they've been selling is, hey, let's think about this differently.

Speaker 2:

Let's, you know, gain, I'd say, gain the system, but also let's play with interim service. We always want to do that as well. But how can we make this slightly different to where we're not triggering? But but each platform may not know the difference, right? Whoever's shopping on one versus the other may not really know the exact difference of the product. Um, maybe it's a different thread count, maybe it's a different thread style, a slightly different size. You know, half an inch bigger, half an inch smaller, that kind of thing.

Speaker 1:

I've seen Costco, where you can only get them on Costco, but it's essentially the exact same product that is everywhere else on the internet, and so that makes a lot more sense now in terms of why somebody might be doing something like that.

Speaker 2:

Yeah, because what you'll have on Costco is folks will buy it in bulk and then they'll resell it or put it against your listing that you have on Amazon. So you don't have the buy box. So you're also like, hey, I know you're going to buy and resell this. You know you're going to do the retail arbitrage as opposed to the online arbitrage, just like I was with Nike's and whatnot when I first started, you know, 10 years ago. You're like, hey, here's your sandbox. Go do this over here Like it's okay product. We know what the experience is going to be, but don't mess with our product that we have. It's very specific to Amazon or Walmart or whatever platform they're on.

Speaker 1:

So, yeah, definitely Well, I appreciate you joining us and for sharing all these insights. Thank you for taking the time, but before we hop, can you let everybody know where they can find and connect with you online if they want to learn more about your services and some of these marketplace opportunities?

Speaker 2:

Yeah, absolutely, Again, thanks for having me. And at Varioio so A-D-V-E-R-I-Oio and, if you go forward, slash downloads we have what we call the eight-figure toolkit and a bunch of tools that I've been building over the last five or six years in the team as well. We give a lot of those away once we build them at a small scale before we roll them out to our larger brands, etc. So those are available there for your audience as well. Obviously, you can find me on LinkedIn, but the website would be most of our resources and you can stay in touch from there.

Speaker 1:

Awesome. Well, again, thanks for coming on For everybody listening. As always, this is Brandon Amoroso. You can find me at BrandonAmorosocom and Scalistai. Thanks for listening.