"Build" Guide - how to Build your Private Label Business
Brad’s very first day at Amazon, he was working next to a guy named Tor. When asked what he was working on, Tor responded that he was working on the GCID program. It stands for the Global Catalog Identification system. This means that people can have a brand, and put their own brand on Amazon and have these account numbers linked to their brand. Brad says that this was the start of the whole brand revolution that has happened over the past three years. People have discovered that private labeling is much better than competing by the box. Instead of people competing over the same item using the pricing algorithm, many have moved to private label and own the ASIN. Now they get all the sales.
This year, with all the fraud stuff going on, Amazon is figuring out brand protection and brand control, and those are big things coming from inside Amazon; trying to get more brand control and brand protection. Big brands, like Sony, was the originally intended beneficiary. These companies have a lot of products with fraudulent listings. Then they realized they could extend it for a lot of people.
Amazon has gotten more into brand gating, and brand content because of these sellers. This is likely going to be the beginning of a program that sellers love. Amazon will get that feedback and keep building more and more around your brand. This also builds consumer trust.
That’s a big issue. That’s a major differentiator between them and eBay. eBay feels more like the wild west whereas Amazon was more in control with actual brands. So consumer trust is one of, if not the, biggest thing on Bezos’ mind.
When things like that come out, all the big heads come together and institute new programs to solve whatever problem. Amazon is trying to solve the fraud issue with brand gate and brand control.
It’s not so much about where Amazon is heading, but rather the minds of the brand owners needs to be going in. You have a lot of these large brands that really understand brand management because they have been doing it for 50 or 100 years. Amazon has enabled these new sellers and they are powerful and effective at building their brand.
The idea, for the last couple years, is that these people have gotten a certain part of the brand going and now they have to determine where to go from here. Over the next couple years, you’ll see more sophistication in the brands. Who the brand is, who identifies with it, what’s the target audience.
It comes down to what do you mean by compete. If you think about what the Chinese are good at that those in the UK aren’t. They have manufacturing there with some very competitive costs. There are other manufacturers in the world that have better prices, but they’re harder to reach because you can’t look them up on Alibaba.
The bigger question is, if these manufacturers can cut out the middlemen and sell direct to consumer, where does that leave these middlemen that are trying to create a brand? That’s what the majority of these sellers are.
Many of these manufactures don’t have the acumen to be that middleman. They’re not very good at it. The middleman is very valuable. They are doing the work to build a brand and they’re doing the research on what’s going to be a big seller. There is a place for sellers. Remember, just because these manufacturers can make the products cheap, middlemen are still needed to figure out what products need to be marketed.
There is some worry about counterfeit. If a seller does all the research and comes up with a brand idea, and what if someone else takes the idea and sell their own. Brad spoke with some attorneys when he was in Hong Kong. They said that you can actually set rules and regulations of your products with the manufacturer. That way they can’t take your product and sell it to someone else. You can work within the Chinese system and shut down other manufacturers if they copy what you’re doing.
Just remember what they can do, what your can do, where the value lies, and how your brand can gain consumer trust. How often is a Chinese manufacturer gathering emails, and sending emails to their customers. That’s a very western idea and way of thinking.
You can email Brad at [email protected], or use the contact form on their website, productlabs.net. If you would like to use his video service, please go to amzproductvideo.com.
Brad runs a one-stop consulting firm that helps Amazon sellers and one of the strategies they use is not to think of a product or product sales life cycle one dimensionally. There are different phases a product goes through. You want to identify those phases and what is need for each phase. A lot of people are wondering what to do for an Amazon launch. After the review blast is over, what do you do?
They have something called “Spur the Machine” that they do for their ASINs and sellers. It’s a four phase approach to the first step of getting something up on Amazon. In their experience, it takes about three months to get a product up and running and there’s a lot going into this.
The big thing is to take a snapshot, then stop and review your data. People tend to keep going and make small adjustments along the way. Doing that makes it difficult to see what’s happening and what’s causing it.
Some research was done on this topic. They gathered data from millions of SKUs and they found that the number of reviews stop mattering after 21 reviews. After that, it’s the amount of stars you have. Reviews matter for sure. Intuition would say that a product with 3000 reviews would do better than one with 100. However, according to the data, what really matters is the star rating.
Brad has found that when you run promotions, there is a higher rate of reviews that comes from people buying your product. The normal rate is about 1-3% of people who buy your product, will review your product. That number jumps up quite a bit when you run promotions. Usually, you don’t have to give away more than 30-50 units on products with a lower price point. With product over $100, you could probably get away with less.
A Facebook crowd around your brand is a great resource. You can promote new products there and get a good response
If you have built up a following around your brand. i.e. A Facebook page or group. You can leverage that following to help you. When you have an Amazon launch and are trying to get a new product out there, you can post about it on your page or group and tell them about your promotions, and ask them to leave a review. It’s a great resource if you have that following.
You can. It’s the idea of making your Facebook community feel special.
It’s hard to say. Within Amazon, it’s an individual person making the call every time. They have their SOPs that say if someone is given a promotion for a review, take it off. If it’s in a grey area, Brad has seen them overreach their bounds too much. However, there should be nothing against giving away promotions for your products.
It shouldn’t. It’s such a new thing and Brad doesn’t know what the internal procedures are but it’s not an incentivised review. You’re not saying, “Here’s a product so that you’ll review it for us.”
Brad could see that argument between two VPs as he has seen in the past, however, he doesn’t have much more insight than that. All he can really go on is the success of promotions in that past that his firm has experienced.
Amazon has opened up a little more for third-party sellers to be able to get video on the website. This service has gained a distributor agreement with Amazon so they can get videos for other people, onto their listing. It’s different than the typical videos you’ve seen. If you become a vendor, everyone knows that you get the A+ content and you can put a video up top with your images.
Brad’s business partner used to work for IMDB and they know a lot of the people on the team handling this service. The service is pretty neat and they are trying to build up more and more video content inside of Amazon. You can actually put up a video and link it to your ASINs, and it will show up on the page a little further down. It won’t be on the top, it is right above the customer reviews. So when people are scrolling through and looking for more information, there is a section titles “Related Video Shorts.” It gives more information about the product itself, where people will be looking for it.
There are several types of videos you can do, it’s really fascinating. You can do unboxing videos, you can tag them as product comparison, you can do how-to videos, interviews, or you can do a straight-up advertisement for your product. There’s a whole list of different categories you can classify it as. This is particularly important for products that need to be explained or need some kind of information.
The service just processed a video the other day about a drain. It had this really cool strainer system, and the video showed everything about it. How it worked and why it was so much better than the competition.
These are the various tags you can put in. So you get the video ready, then you have to put in some metadata. You submit it through the service and then service processes it and distributes it into Amazon. The categories are Unboxing, How-Tos, Interviews, Product Review, and Advertising.
Yeah. This service wants to get more and more videos on Amazon. They love AMZ Product Videos because the service makes sure it’s high-quality videos. You can just put any video up. It has to be good quality, and you can’t have links going out of Amazon. This service scrubs all that which is why their contact in Amazon are really excited about this distribution agreement.
You just go to amzproductvideo.com and the service does two things. If you don’t have a video, they will develop some videos for you and upload them to Amazon for free. If you have a video, they charge for the processing they have to do, then upload it to Amazon.
It’s really quite easy. You just need: from http://amzproductvideo.com/pages/how-it-works
What we need from you.
We have several things we require in order to take your video upload request. They are:
- High Quality Video. We reserve the right to deny uploading a video where the content, resolution, or audio isn’t generally considered high quality. This is an Amazon requirement.
- Video File. We need a link to the following:
- Video File. Formats accepted are: 3GP, AAC, AVI, FLV, MOV, MP4 and MPEG-2 formats.
- Thumbnail image: 16:9 aspect ratio and a suggested minimum width of 1920px. Formats accepted are: JPEG and PNG.
- Metadata information. This includes:
- Title (100 char max)
- Synopsis (400 char max)
- Video Type: How-To, Review, Advertisement, Comparison, Unboxing or Interview
- Related ASINs: All the ASINs referenced in the video.
With that, you’ll up up and running in no time.
Once the video is on Amazon, it has it’s own page. Almost like it’s an ASIN listing. So you can go through and watch it at any point because it has a permanent location, like a YouTube video.
You can link your video to multiple ASINs. So if you had a brand with 20 SKUs and you wanted to make a brand video, you could link that video to all 20 SKUs. Or you can link multiple videos to one SKU. When you go to the Related Video Shorts on Amazon, you’ll see the video. If you have the URL to that video, which they will send you, it will list all the ASINs associated with it. In that previous example with the brand video, when you go to watch the video, on the right side of the screen, it will list all 20 ASINs.
He doesn’t have as much data as he would like. Based on the feedback from customers, they have seen increases in sales. A number that’s been floating around is that videos can improve conversion rate by 80%.
There is actually a volume discount. It’s 20% off if you do more than one. For one video it’s $250 for the processing if you already have one. If you need a video created, the prices are pretty competitive. Depending on the complexity, a 30 second video will run about $3000, for one minute it’s $4000.
It probably for people that are making serious money on Amazon. Although, if you have similar products, like different variations of pens, you could have one video linking to all those products.
There are other services that are similar. Often times you’d have to get the full-package and they can range from $750 – $1000. From what Brad Moss has seen, they are considerably cheaper than the competition. Also, there aren’t many people that are doing this.
It’s a really terrific service. Plus it’s still new, so now is the time to get in on the ground-floor.
Brad Moss was the Business Head of Amazon Seller Central itself. Which we all are at the mercy of. He built the Amazon Seller Central mobile app. He now does consulting company for Amazon sellers, Product Labs.
Brad got his Masters in business. He did some entrepreneurial things, launched some companies which won a few awards for some of them. He was successful in small realms and wanted to see if he could have an impact in a bigger realm, like Amazon. When he first go there he built something that no one has probably heard of because it didn’t launch. It’s called Gamification for Sellers. It was a really cool system that was held up because middle management was fighting over some resources Brad had. It would have made selling more fun and would have been able to track yourself.
When he finished, he had learned so much about Amazon Seller Central and how the system works that they decided to put him over Amazon Seller Central. Amazon had 168 teams that were dispersed through Seller Central. Each team was adding to the system, putting new tools here and there, without a real overhead strategy. That was Brad’s job.
He started putting frameworks down, and added the advertising tab. That team came, for sponsored products, saying they wanted to put it in Amazon Seller Central. Brad felt it was big enough that it should get that spot on top. Seller Central has become a beast unto itself. He wanted to overhaul the entire system, and scoped out how to do that. That only got so far when they starting think about the future. What’s the future of selling and the future of devices. At that time, mobile had come up.
There were a lot of people trying to do mobile at Amazon. They decided to focus on mobile and Brad made a case saying that they would make a lot more money if they focused on mobile. It would be more accessible, people would be able to check their seller account, they’d be able to scan things, and put new products up on Amazon. They passed the idea to the VPs, got the funding and built the Amazon Seller Central mobile app.
Those are systems and programs. So one team may have five systems. The internal structure at Amazon is really cool. It works really well in some situation, not so well in others.
When you’re there, you’re free to take your program, and figure out how to make it happen. When I was working on the gamification, I had my own team. I made the business case that it would improve the business for Amazon. Then we had to figure out how to get this new system, into the existing system.
We had to find the two engineers that were running the front page of Amazon Seller Central. Then we found several engineers that were running the back-end with the listing services. We had to go to all these different teams asking them for a day of their time to help us get into their systems. Amazon promotes that kind of culture where it’s very entrepreneurial. It’s up to you to figure out how to make it happen. It’s not coming from the VP telling certain teams to do this thing. They had to figure out the best way to get these systems to work. They had to negotiate and bribe with drinks after work.
It’s almost like the wild west in a way. It gets even worse when you have different VPs that have their own goals and directives, and it all comes down into one system. That’s where Brad was with in Amazon Seller Central. All these different VPs were all trying to pipe into the same system to accomplish their goals and there was no central authority to facilitate it. It’s pretty wild.
The perfect example is if you look under the reports tab, and there is business reports, and payment reports. Then there is this thing called fulfillment reports. If you go to Fulfillment Reports, it takes you to a new page with a lot of reports on the side. That section is owned by the FBA team, which is a different vice president than the marketplace team. The FBA team wanted to be able to keep adding new reports without having to go to seller central or the marketplace team every time. So they built a new page that they have full control over. However, it doesn’t make much sense from the user’s perspective.
When Brad first started, he was looking into a business case that someone had mentioned. He looked really deep into and thought that it would be really great. He made his report, show the analysis, and told them it would be a $30 million business if they do it. His director just shook his head and said no. That unless it was $1 billion over three years, they wouldn’t go after it.
That’s what made mobile so difficult. It was a really hard case to make. If a majority of the money comes from huge sellers on the marketplace, how would they use mobile, and how would mobile enable them to make more money because a lot of them just use API and feeds anyway. That’s what made the business cases so important.
That’s what is great about Amazon is that the mentality , from Jeff Bezos, is “It’s day one for the company.” The idea that they are still laying the foundation and groundwork for the company. If you do enough diligence from the business side, which was Brad’s job, and look at various things to be building, you can find these opportunities. Don’t settle for $50 million opportunities when you can find a $1 billion one.
You can see how that would trickle down. While working on Amazon Seller Central, people would propose improvements. The question came down to, how many sales will be generated by adjustment. If they can’t prove that it will increase sales, then they don;t get funding for it. So it’s pretty difficult to get funding to make those nice visual adjustments. There are resources called “Keeping the lights on”, that is some resources allocated to keeping things running, and they might be able to scrape resources from there to make those minor adjustments.