Transitioning to AWD: Cost Savings and Inventory Challenges

Join us for an insightful journey with Joe Sanhanga, a remarkable e-commerce entrepreneur generating millions annually through unique and high-priced products. Listen in as Joe shares his inspiring story from his roots in Zimbabwe to his educational pursuits in the UK and the US, ultimately landing in Las Vegas. His journey began on platforms like Shopify and WordPress, selling distinctive items such as African-style swimsuits and nano tape toys, before discovering the immense potential of Amazon's FBA and FBM models. Through their conversation, Bradley and Joe emphasized the transformative power of networking at conferences like Amazon Accelerate.

Explore the strategies behind Joe's successful transition to selling on Amazon, starting with assisting a soil business during the pandemic and leading to the creation of "Wonder Soil," a private-label product on Amazon. Joe's ventures into innovative products like tanning lamps, vitamin D lamps, and seasonal depression lamps highlight the importance of team collaboration and strategic Amazon sales optimization. With aspirations to surpass a $30 million run rate, Joe shares valuable insights into leveraging Amazon's platform to achieve extraordinary growth in niche markets.

Discover the challenges and tactics involved in marketing high-priced products, like a $599 lamp, in a competitive landscape dominated by lower-cost alternatives. We discuss the advantages of having larger margins for experimenting with keywords and bidding strategies, alongside the creative approaches necessary to maintain product visibility amidst Amazon's policies. Joe also shares his experiences optimizing advertising strategies, managing warehouse transitions to Amazon's Warehousing and Distribution system, and utilizing tools like Helium 10’s Adtomic to automate and enhance PPC strategies. This episode provides a comprehensive view of the perseverance and innovation required to thrive in e-commerce, offering inspiration and actionable advice for sellers at any level.

In episode 604 of the Serious Sellers Podcast, Bradley and Joe discuss:

• 00:28 - E-Commerce Strategies and Global Perspectives
• 04:54 - Amazon Product Sales Success Story
• 05:41 - Amazon Brand Growth During COVID
• 11:37 - Strategies for High Price Point Products
• 11:50 - Product Pricing and Brand Strategy
• 15:23 - Optimizing Keywords for Product Sales
• 18:21 - Amazon Advertising Strategy Discussion
• 19:14 - Managing $120,000 of Ad Spend With Adtomic
• 23:49 - Amazon PPC Management Strategies
• 27:52 - Optimizing Ad Placements to Lower ACoS
• 30:51 - Pricing Strategy Impact on Sales
• 32:45 - Warehouse Cost Savings and Amazon Advertising
• 34:28 - Inventory Management for Amazon Sellers
• 38:14 - Optimizing Amazon Listings for Conversion
• 41:17 - Online Presence and Networking

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Transcript

Bradley Sutton:

Today we talked to a $30 million a year seller who is selling, and has sold, some of the most unique products I've ever heard of, including one at a $600 price point, when everybody else is priced at only 40 bucks. How cool is that? Pretty cool, I think.

 

Bradley Sutton:

Hello everybody, and welcome to another episode of the Serious Sellers Podcast by Helium 10. I'm your host, Bradley Sutton, and this is the show that's a completely BS-free, unscripted and unrehearsed, organic conversation about serious strategies for serious sellers of any level in the e-commerce world. In my travels recently, one of the things I like about going to conferences and it's what I always tell people about is that you know you can meet different people, network with people and find out about their story, and that's kind of like how I structure this whole podcast. But then I actually did that recently at Amazon Accelerate and I'm glad I did it, because I'm glad I did it. As I went to this one mixer that they organized and I was at first, I was like, oh man, I was so drained after that day and I'm like, oh man, it's gonna be a crowded place. I don't like to be in crowded places, but you know what? I'm going to hop on this little lime scooter from my hotel and go over to this restaurant where the event was and I was sitting down talking to some people at the table and then I met today's guest there, Joe. How's it going?

 

Joe:

I'm going good. Thanks for having me on.

 

Bradley Sutton:

Awesome, awesome. Now, you said you're in Vegas right now. Right?

 

Joe:

Yes, we're in Las Vegas, Nevada.

 

Bradley Sutton:

Now, that's not a typical Vegas accent you've got. So where were you born and raised?

 

Joe:

Yeah, so I was born in Zimbabwe, raised as well in Zimbabwe, then I moved out to England where I spent a lot of my time there doing some education and stuff and then I got tired of the cold being a Zimbabwean.

 

Bradley Sutton:

You went to the opposite, then if you went to Vegas, I cannot imagine a more opposite than cold place.

 

Joe:

Oh yeah, 100%. I just went on to Google and I was like okay, I want to go somewhere in America, but I need to find somewhere warm. And I think the first thing that came up on the search was Death Valley, but there was nothing over there. So the second thing was Phoenix and Las Vegas. So, I eventually found myself in Las Vegas just because of the ease of doing business. Ability to meet people here is really good.

 

Bradley Sutton:

And did you go to university uh over in UK or in the US?

 

Joe:

yes, I did university in the UK as well as in the US, so I got an accounting degree back in uh UK um and then in the US, I did a um was a business management degree with some entrepreneurship uh additional to that

 

Bradley Sutton:

was it like a unlv or?

 

Joe:

I know this was in um in Phoenix in ASU, yeah.

 

Bradley Sutton:

ASU, uh, Sun Devil right?

Joe:

yes, sir, okay, there, you see it.

 

Bradley Sutton:

I always test my I don't know. I'm not going to ask you any kind of mascot because from England I don't know anything about England schools, but I know most of the US schools have mascots here. Actually, I'm wearing a. We'll talk about this later. I'm wearing a mascot from a minor league baseball team is my hat. This is called from nearby to Arizona is Albuquerque Isotopes. But the reason I use this today was because this is very similar, this logo, to our Helium 10 Adtomic logo. I know you and I were talking about Adtomic, doesn't it look like the A from Adtomic yeah,

 

Joe:

it actually does. Now I see it when you mention it.

 

Bradley Sutton:

So that's why I wore this on purpose. There's a method to my madness, but anyways, before we get to Adtomic, talking about Adtomic, I just want to talk about your e-commerce journey. So when you graduated from, after you know, there at ASU, did you get into e-commerce at all, or at what kind of?

 

Joe:

So this was actually still back in England , around 2017 is when I kind of got first into my e-commerce kind of journey, which was on Shopify. Specifically, Shopify and WordPress was where I started out and I bought a random course of somebody online, learned all about basically advertising from like Facebook, from Instagram, from Google, sending it to this website and landing pages that we used to do. And then, within being in that realm, I started hearing this FBA term being thrown around.

 

Bradley Sutton:

What were you selling on Shopify in those days?

 

Joe:

Oh, so I remember we had to go at, we did these other swimsuits that we did African style print swimsuits, and then we also went on and started doing it was like these little tape toys, sort of like double-sided type tape. Yeah, exactly so we were doing those. It's called nano tape, um, so, yeah, that's basically how, how that started and then,

 

Bradley Sutton:

and then that's when you, when you kind of like, learned about the amazon, uh potential.

 

Joe:

So I heard, obviously, being in that space, I started hearing this word FBA being thrown around uh, the acronym, and you know. Then I went on Google, searched up, okay, what is FBA? And it's some sort of Amazon selling thing. Okay, and then there's FBM as well. So now I'm like, okay, there's these two terms, what is this all about? And that's basically when I started doing my research and I was like, okay, this Amazon thing seems to actually have some stuff to it. And at the time I think the platform is not the way. It's so different now, because sometimes I've got screenshots of my old dashboards and it just looks completely different. So, yeah, that's how I basically then started with Amazon.

 

Bradley Sutton:

Did you start selling like your own account, you know, on Amazon, start selling your own products, or did you just start working for other companies that were selling on Amazon?

 

Joe:

Yeah, so to begin with I was working with this other lady. She basically had soil and the way we actually started working together was I created a website for her, put on Shopify, to sell the soil, and then she was bagging up the soil to try and get it to consumers, because her business was mainly sending thousand-pound totes to farmers. But she said, how can I get this you know three-pound bag to people that are at home and want to grow some plants and what actually it was? This was around 20.

 

Bradley Sutton:

Soil on Amazon, man, when you think you've heard it all.

 

Joe:

It's called Wonder Soil. It's actually one of the rivals to Miracle-Gro and we actually I actually raised it to get the Amazon choice badge. We were on Business Insider as one of the top growing brands on amazon too, um, but basically the cool thing about it was we've tried to find a way to get the soil to consumers and everything worked well, because this was during covid, so people were at home, people had nothing to do, and you know people are growing stuff at home, people. You know we're just trying to, yeah, so the product hit at the right time uh, what year is this 2020.

 

Bradley Sutton:

Okay. 2020 okay yeah. Oh yeah, I mean that was a good time. Yeah, during covid, people were always are really trying to make their own gardens and stuff like grow their own vegetables and stuff like that okay yeah this is a private label brand or you're reselling um others?

 

Joe:

oh, so we actually have manufacturers in China. Uh, that we get all that product for We've actually gotten rid of our warehouse Now. We've gone full into AWD, so we're getting.

 

Bradley Sutton:

Let's talk about that a little bit later in the show too. I haven't talked to many people who are doing that, so I'll be interested in that, ok.

 

Joe:

Yeah, so that's, that's what that one. And then there's another lamp company, which is pretty funny, is tanning lamps and vitamin D lamps, so we run through those on Amazon as well. Those are actually the only there's a lamp that can give you vitamin D.

 

Bradley Sutton:

It's the only lamp the same like the sun.

 

Joe:

Yes, you spend five minutes every other day in front of it and it'll give you. And there's studies on YouTube. People use this lamp, where this lady her name is Carnival Doctor on YouTube. She did a study with a lamp for six weeks and her levels went from 20 something to 40 something vitamin D. She feels healthier than ever and it's perfect. It stopped her from having to buy, you know, vitamin D pills and, of course, all those sorts of things. So, yeah, it's the only one, and you get tan at the same time. So now, that's the difference. So, there's two lamps One gives you vitamin D and one gives you a tan, because there are some people that don't want the tanning effect. So that's what it is. So, it's-.

 

Bradley Sutton:

Now what if you put this tanning lamp over your miracle magic soil? Are you going to create some like hybrid plant? Oh my, you sell the most interesting things. All right, there's a third account too,

 

Joe:

yeah, so it's basically the third account is also in lighting, but this one is seasonal depression lamps where basically you look at it so that one is its own brand.

 

Bradley Sutton:

Did you say depression? Yes, depression lamp Like as in I'm very depressed and I'm sad like that word depression.

 

Joe:

Yeah, depression, you're sad. What does that have to do with a lamp? So, you look at this lamp for 30 minutes and you become happy. I know it sounds stupid, but minutes and you become happy. I know it sounds stupid, but that one doesn't give you vitamin D.

 

Bradley Sutton:

That one doesn't give you vitamin D. Nor a tan. Yeah, you see. Hey, there's a product idea. You got to combine all three and then, oh my goodness, you'd have the most amazing.

 

Joe:

That would be powerful. We've had people that have requested you know, do you have one that does both, or this, this, this? But because of FDA regulations, we've had to separate a lot of the things.

 

Bradley Sutton:

Is these three separate companies or is it like the same group of people who's all owning all three of these?

 

Joe:

So two of the companies is one group of people and the other one is one person.

 

Bradley Sutton:

And then, what do you do in these?

 

Joe:

So I run just an Amazon account. So I run just an Amazon account. So running the ads, running the listing optimization, making sure the account is obviously hitting the sales numbers, everything that just literally goes through Amazon and inventory everything.

 

Bradley Sutton:

What's the overall projected sales for all three combined on Amazon?

 

Joe:

So for all three combined, we're looking at 28. We're on pace to do 28 million this year on all three.

 

Bradley Sutton:

Will that be your best, our biggest year yet.

 

Joe:

Yeah, this would be our biggest year yet. We've seen record numbers in previous months. In previous, like this past quarter, we'd had record sales as well. I know we had our biggest. We had, I think, our first. We had two days in September where we had 100K sales days, which was the first time we've done that. We also had our highest sales days in the past two years. Nine of those days in our top 10 sales were all in September. So we've had record sales. Especially Q3 was really, really amazing. I think we were up about 800K across the board in Q3 alone. So we're on pace to do a really good year and it sets us up for our plan is to do a 2.5 million month at least once this year in total and that will set us up for a run rate for next year. We want to push over to that 30 million stage.

 

Bradley Sutton:

If you're like me, maybe you were intimidated about learning how to do Amazon PPC, or maybe you think you just don't have the hours and hours that it takes to download and sort through all of those sponsored ads reports that Amazon produces for you. Adtomic for me allowed me to learn PPC for the first time, and now I'm managing over 150 PPC campaigns across all of my accounts in only two hours a week. Find out how Adtomic can help you level up your PPC game. Visit h10.me forward slash Adtomic for more information. That's h10.me forward slash A-D-T-O-M-I-C. I'm just curious, before we get into some more details about, like, your advertising because I know that's one of the things that is your specialty these lamps that you're doing like, were these kind of like inventions, or? Or there was an existing market of vitamin D lamps or an existing market of lamps that make you happy Like was that an existing keyword or is this something that you're you guys invented and kind of like created the demand for?

 

Joe:

So it's actually crazy. You say that is because the first vitamin d lamp started in 1924. It was a guy by Dr. Sperti is his name. He's the guy who made it. He invented it and he started selling it throughout the US. It was a company in Kentucky, um, but he was just selling it out of his own like little warehouse and then eventually he got old um and then sold off for business and then basically that's where we put it online, um to run it through Amazon, and we first were going like, for example, the vitamin D one it's the only lamp that's there. The only competition are these vitamin D pills that you'll see on Amazon. But our price point for the lamp is like 599. And we're competing against people that can buy a bottle for four bucks, five bucks on Amazon. So it's been a pretty interesting game competing against people that can buy, you know, a bottle for four bucks, five bucks on amazon. So it's been a pretty interesting game. But it moves. It moves um on amazon. What's the price of the product?

 

Bradley Sutton:

you said 599 599, 599, yeah, wow, uh, I want to. I'm trying to look at, look for it on amazon right now. What's the brand name called?

 

Joe:

SpertI s-p-e-r-t-i, and then you'll see vitamin d we got to show the audience this.

 

Bradley Sutton:

Okay, oh, my goodness gracious, here it is. Hold on, this is incredible. All right.

 

Joe:

That's it and it's right. That's the first one that's popped up against our competition. All those are competitors on the right.

 

Bradley Sutton:

So 500 and Sperti. So that was what the doctor's name was. Who?

 

Joe:

made this up.

 

Bradley Sutton:

Yeah, Dr. Sperti, that was his name yeah, there was a ready demand for this out there.

 

Joe:

Oh, huge, because, if you think about it, vitamin D pills are basically the same target market as us. Yeah, so this is just a non-invasive way that you buy and you keep this for a very, very long time. So that's that. So something interesting. As you go through this, this listing, you're not going to see the word vitamin d anywhere on the listing and you'll notice our carousel images, our images on there. we have our box images because amazon actually took us down because our lamp has the word vitamin d on it.

 

Bradley Sutton:

ah, yeah, yeah, I see it in the video there, so you don't have vitamin d anywhere in there, but you probably got indexed for the keyword by Amazon.

 

Joe:

Exactly so. That's why we use UVB, which is basically the term for vitamin D. So Amazon is not allowing us to use it, even though we're FDA approved and everything. Amazon is just not letting us go for that.

 

Bradley Sutton:

I see some of your main keywords. Yeah, vitamin D lamp.

 

Joe:

Oh yeah, we can use them in the back. Vitamin D light.

 

Bradley Sutton:

Vitamin D therapy lamp, vitamin D light therapy. Now, I'm just curious. I don't talk very often with people who have this high price point. What is different about having a product that's in the hundreds of dollars? Like, do you approach advertising differently, cause it's not like where I mean. You might now you know you, you might get a hundred clicks with no sale, but still you just get one, the 101st click. All of a sudden, that's $600 of revenue. So, so, like, how is it different, uh, with something like this, compared to your, your other products, which I'm assuming is like more you know, regular pricing 10, 20, 30 bucks.

 

Joe:

So the cool thing about it is that across all the catalog that I, that I that I run, I have products starting at like five bucks, all the way to this one that has $5.99. So the landscape with this one is totally different. Like you said, you can set up an ad, you'll get 50 clicks at $1.20 CPC and, based on our margins, we're still clean on a sale. If we get one sale, we profit. So the cool thing about it is you just have to be a bit more patient. However, because we have such kind of should I say a big space for those clicks, it allows us to test a lot of keywords in this space and we really kind of exhaust any keyword that's there without having to really be careful, unlike if I was selling a smaller, less priced product, I can't just throw in all the keywords and just you know it'll go crazy if it's like a $60 product.

 

So with this, it gives me that comfortability to go out and bid higher and also it allows me to, like I said, like if you saw on that page where you searched, my competition were those pill bottles that are like five bucks, six bucks, seven bucks, so I can bid above all of those guys. So I ensure that every time you search the keyword I'm going to be first, because there's no way they're going to bid the same amount of dollars. I'm going to bid because their price points are different. However, they can take a loss on a sale because they have repeat products. So people finish that bottle, they come back and buy another With ours. That person buys a lamp and is done. So we obviously have to gauge it to a point whereby, okay, this is our ACOS target and at this A-cost target we're profitable. So that's now how more I manage that one. It's more ACOS targeting, but I'm basically trying to make sure I stand out for every single eyeball that's there because I have the room.

 

Bradley Sutton:

So this is interesting because, regardless of the price point, there are similar kind of scenarios where it would be like this they're probably actual keywords of how somebody who's searching for this exact thing is probably very limited Vitamin D lamp or lamp for tanning, you know for your other product, or it's not. Like oh there's you know 5,000 way, you know 5,000 ways that are going to come up in Cerebro to search for this one thing. You're like it's kind of like that way with coffin shelf. If you're looking exactly for a coffin shelf, that's pretty much it, that's it. Coffin shelf or shelf shaped like a coffin, like there's very limited number of words. The other keywords I get sales from is more like the, you know, gothic decor or spooky things. So how are you doing your keyword research? Like using Helium 10 or amazon, for you mentioned you do a lot of testing for targets. So like, where are you coming up with these keywords to test to see if any of them stick?

 

Joe:

So that's. It's more like said, I run Cerebro on a lot of those vitamin D bottle and pills and basically a lot of my. So, like I've said, I've exhausted the keyword vitamin D and the more you get long tail with this product, the less traffic you have. You know, for some of the products you can get long tail with a bunch of keywords and you still have traffic. Like, for example, if it's like a Ziploc bag, I can put Ziploc bag for Legos, Ziploc bag for sandwiches, Ziploc bag for this. You know the list is endless and you have traffic with this. Not many people even know this lamp exists.

 

So what I've actually done is sometimes I go and target competitor company names and key names. So if it's like some company that sells a bottle of vitamin D lamps or vitamin D pills, I'll actually target their brand because when I look at their keyword, it's people that are repeat purchases, so it always has traffic. And but because I can bid high on their own company name, I'm going to show up first and I have the room with my price point to show up consistently and eventually, if you're somebody that is very hooked on buying these products, for vitamin D pills, you're going to see my product and think, okay, what is this? Because it's coming up. I've seen it so many times when I come and buy this product that when you read about our process, you then be like, okay, so this is something that actually can benefit me and can work as an alternative for ingested pills and all the other disadvantages that come with that. So that's basically how I find other keywords and start going for those.

 

Bradley Sutton:

You know, price game is something nobody ever wants to play, and you're not playing at all, you’re doing the opposite. You know, like on some of these keywords I do see some like people ranking for, like vitamin D lamp, but they're, just like you know, $20 products and they're selling thousands of units. But then are you going after those people too, Like the people who are going after that or how? How, how do you still get sales when people can technically get something one 10th the price? People you just got to like, make sure that they know the value of what you, that yours is different.

 

Joe:

Yeah, so that's where we have to communicate that through the listing, and it's because a lot of those $20 lamps that you're seeing there, those are not actually vitamin D lamps, those are seasonal depression lamps. So if you're looking at, can you see that Alaska Northern Lights big box on the right where your mouse is? Yes, that's one of the lamps that I sell. That's for seasonal depression.

 

Bradley Sutton:

Okay, I was about to click on that, but no, I'm not going to click on the sponsored ad and charge you $3 right there. So good thing I didn't.

 

Joe:

But then if you look at to the left, you've got that product. That's 19 bucks. Those are actually seasonal depression lamps, so they don't give off vitamin D. So somebody would purchase that and then they'll realize that doesn't give you vitamin D. So they'll probably return it and then come back to ours. But if they're looking for seasonal depression those would be those ones.

 

Bradley Sutton:

This is just an interesting niche. This is kind of fascinating to me. So then, overall, almost $30 million. What are you spending per month? Or what are you paying Amazon for advertising per month?

 

Joe:

So monthly. Right now we're spending total across the board with about 120K a month on advertising budget.

 

Bradley Sutton:

Advertising. And then, what's your TACoS then? At kind of, is it different per account? Are you looking at your TACoS?

 

Joe:

yeah, so the lamp TACoS are, like, I think, close to two percent um, and then uh, because that ACoS is really low, um. However, with uh, with the one that's got the majority of the products, our tacos right now we are sitting at a 5.38. That's what we just closed out at, okay. Okay, our ACoS is at 15 point. I think it was 15.5 is what we ended on in September. We brought that down from a 20 ACoS down to a 15. Our goal was to bring it down to 10, but obviously we've done about 50% of that target. Now, which is hard, you know, if you're spending, you know, over a hundred K. To bring down a cost by 5% is really difficult. So that's, that's where we are.

 

Bradley Sutton:

Are you using Adtomic for all of this spend, all of this $120,000 spend?

 

Joe:

We've launched. So with Adtomic, we've put in some rules for some SKUs and we're watching that and I actually had a call with Travis, like I said before, to try and we've got different rules for different products and we're trying to see how we can build out those rules in Adtomic.

 

Bradley Sutton:

Like rules that you were just using manually, like downloading search term reports. What are some of the rules? Tell me how you run your PPC.

 

Joe:

So most of my rules would come into the shipping product, one where basically first rule is identifying the product, pricing. So if it's a bag so let's say Ziploc bag, right, we've got a Ziploc bag, a four by six size. We have different variations. So we have a hundred pack, five hundred pack, thousand pack. The hundred pack could cost maybe 19 bucks, five hundred pack 50 bucks, other one 99 bucks.

 

So based on those, we make rules where if it's the $19 one, we want to start our bids at $0.40 or something like that. Somewhere it makes sense. But then if it's for the 1,000-pack one, we can start off our bidding at $2, $3. And that's because if somebody then buys it it's $99. So it's more of guiding based on that price threshold of the product and getting that rule in. And then, as we keep going, we want to make sure that if it's not getting any spend after two weeks it'll look back and add, you know, 10 cents to it if it's getting too many clicks. And if it gets like 10 clicks at that price, at that um, 44 cents, uh, whatever, 40 cents, um, and no sales, it'll dial it back by five cents or something like that, just to just to start, you know, bringing it back to see what we can get. So those are.

 

Bradley Sutton:

So then, instead of basing your rules in Adtomic, like, necessarily on ACoS, you're like doing it on the, the performance, like clicks and. Are you doing impressions at all, or just mainly clicks? Mainly clicks and then sales? What about your keyword harvesting? Did you set up any keyword harvesting rules on your auto or broad campaigns? Yes, and what's your thresholds there?

 

Joe:

So with there we do have our keyword harvesting set up and we usually just go in when it shows us. Then we'll add and accept whatever we want to Others we don't and we basically just throw them in. So we have one that right now has some rules and we've been working with the one that keeps the ACoS threshold in different margins. That's been looking good. So we've actually decided that when we've got launch ASINs because we're planning to launch another 42 products, I think it was soon is put those into the ACoS threshold, get those spending. Then, once we've gotten some traction with those, we start messing with the bids ourselves because we look at these in different silos as well in terms of market share.

 

So if it's like tapes, we might not be the biggest player in tapes, so we can't really go out the income on the market. But if it's like Ziploc bags, Celo bags, we have tons of market share. Our brand is known. The moment you see our packaging on our default listings, you know it's us. So we bid higher on those ones to really just take up and kill anybody that's coming in. And we're happy to take up that high bid because people repeat purchase on those ones so we can lose money on the first sale because we can look at the lifetime value of those customers and it makes sense.

 

 

Bradley Sutton:

 

How many targeting type, different targeting types are you doing per product? You know for me, sometimes a lot of some. I'll have three main keyword ones, at least, obviously, to start, because then I'll cap it and start new ones, but I'll have an exact, you know, like, like atomic calls, a performance campaign. I'll have a broad campaign with broad targets. I'll have an auto, but then I'll also a lot of times have an ASIN targeting campaign, product targeting campaign. I'll also do a sponsor display campaign. I might do a video, two video campaigns, like a keyword video campaign, an ASIN video campaign and then maybe, if I have, you know, three products in a certain brand, I might have a sponsor brand that's feeding a few of those. Like, are you doing all of those or just you're just keeping it to the basic keyword targeting campaigns? What do you guys do so?

 

Joe:

So for every ASIN we basically have five different ads and it starts off with broad, which is obviously our broad keywords, and then we'll go to exact keywords where basically we don't start off by putting keywords in the exact. We let you know, get it from helium and atomic and then we put those in uh based on what it's telling us, and then we've got auto testing. So we uh, or it's called a auto cam, just normal campaign, which is obviously we let that run in the order category. Then ASIN testing, where basically we're running targeting that specific category of that product. And the cool thing about those ascent testing is it helps us identify new markets. So let's say we have a variation in poly and plastic packaging and let's say this product is sitting at number two. We might actually take that product. And then let's say we have other products that are like three, four, five, six in that category. We might take the number two product and move it to mailbags. It'll drop the BSR because of its historical performance and its ability to perform. We might actually start testing a different category just to gain more market share in a different category because we know we've kind of succeeded in that one. So that's more for ASIN testing.

 

Then we have ASIN targeting, where we actually we use our Cerebro to get competitors, Black Box to get competitors Then we obviously target those competitors depending on how many reviews they have. So if it's somebody that's got anything less than four stars, what they're targeting you, because most of our products are sitting within the 4.5 to 4.89 range. So anybody below four stars we're targeting you, and then we also use what's it called. Then those are basically the five that we do per ASIN and then we also use what's it called. Then those are basically the five that we do per ASIN. And then we have started testing some display campaigns. We had VCPM running, which was a waste of money really. It was just the attribution was wrong. So what we're doing now is some display campaigns to actually do some retargeting and basically that's where we've got started going. We haven't done much sponsored brands. Things have just really been working in sponsored product for us.

 

Bradley Sutton:

Or the auto and maybe broad campaigns. Did you set any atomic rules as far as when to suggest a negative match or like a poor performing search term? Or how are you managing the spend on your auto campaigns? Because you know, sometimes if you just let Amazon do what they want, they'll just show you for all kinds of crazy stuff and they don't care about how much your spend is. So what are you doing to keep your auto campaigns under control?

 

Joe:

Yeah, so what we basically do, obviously we have the loose you select the loose substitute compliments and all that type of stuff. We have those like basic keyword rules that we set our bids at where, and we do that based on our pricing. So, depending on the product's price, we'll add in those rules and then basically when Adtomic starts showing whatever negative is in there, we'll go in and either accept the negative and or reject it. And I remember I don't know if it was Travis who told me we don't want to is it reject the negative or something, because it will completely kind of block it out forever or something like that In Adtomic. If you were to do that on a negative, I think it was if you fully approve a negative. So we kind of just watch it and see if it's really a negative and then we test it out. But that's how we kind of do it. So we haven't really put much rules on that side. It's more depending on the price of the product.

 

Bradley Sutton:

And then you said for like keyword harvesting, like if an auto finds something like is it just one for you? And then you, hey, I'll go ahead and move it to one of my manual campaigns. Or do you want to see like two or three orders of some new keyword before you put it to your exact campaigns, or what's your threshold there?

 

Joe:

Yeah, usually we try and get up to about five, five orders. Um, cause, that's that we've, we've, cause we've had keywords where you might get an order or two, and then it just starts burning money after that. So, yeah, um, we let whatever's winning win and then if something shows promise and you know it comes up with like five orders, uh, that'll be cool and then we'll add it back in. And the cool thing about it is, if it was obviously like the, the lamps, five orders is a bit too many for a keyword. But if it's the Ziploc bags, we know we can easily get those five orders and it justifies because you know that the, the traffic on those is way more than the people that are looking for the lamps. So it just depends on the product as well.

 

Bradley Sutton:

 

 

What is what brought you from, I forgot what you said like, from 20 to 15 a cost, like? What specific strategies you think? Like, was it something different? You were doing um, or, or you just change the rules, or what. What can you attribute that lowering of ACoS to?

 

Joe:

Okay. So basically, we started a KPI where we looked at the number of ACoS campaigns that are above 100% in our account, because I think we have about 4,000 something campaigns running. So basically, when we sorted that out, we would start off with, like, let's say, 40. Then of those 40, that's our priority for the month and basically, we'd look at what the ad type is. We'd look at what the ad type is, we'd look at where the you know impression share is going. Is it top of search, is it product key, is it product pages or is it in the categories? And then basically sometimes we would notice that, let's say, if it's product search for this specific ad, it's showing a way better ACoS but it's not getting as much spend and impressions as this one. But you know, the product page is just spending money. So what we'll do is we'll change the percentage on the impression share to show more on that specific placement that's actually performing the best.

 

And what we realized is a lot of our ACoS started just, you know, dropping for those campaigns where we doubled down. Yes, it might not spend as much, you might not as much traffic, but if our ACoS drops, you know, by 50% on that campaign, that's a win. So that's what we're doing. And then sometimes it's actually where you're getting a bunch of sales at like 60, 70% ACoS from top of search, but this product page placement is at 20% ACoS but it's not getting as much spend. So now we'll move our spend and our impression share more on that product page and reduce the top of search. Even though it cancels out some sales, the profitability of investing in that product placement on the product pages makes more sense. So that's how we've been kind of juggling the placements and it's been helping really well to cut ACoS.

 

Bradley Sutton:

When you launch new products. What's your strategy? Is it strictly I mean, like do you have this big audience that you're able to promote to and then they send a lot of traffic that way, or is it 100% with PPC that you're launching products? What's your strategy? Like?

 

Joe:

So 100% of PPC. We have been talking about, you know, starting to get an email list together, but, as you know, with Amazon you don't get that information of your customers, so it's very difficult. If we had like a website, then maybe we could leverage that side of it. But, like I said, 100% of all sales is Amazon and unfortunately, we don't have the customer data. So what we usually do is set up our PPC. Sometimes, depending on the market or the product, what we'll use are the deals, if it's promotions, and sometimes we've actually, you know how you can now put price, the strikethrough pricing. So sometimes when we launch a new product, we launch about a few bucks higher than we're actually planning to sell, and that's because we just want to get the featured offer pricing going. And then, once the featured offer has registered onto Amazon, we'll set a strikethrough price at the intended selling price that we want to and then we'll pump up our PPC. Why? Because now our product is showing amongst everybody else to have this discount of like 20% or whatever it is, and that increases our conversion rate because obviously people are seeing this discount. And then sometimes you might actually get the badge that says lowest price in 30 days and on a new launch. That helps quite a lot and basically that's what we do.

 

Then we start pumping PPC and then, once that ends, we actually noticed with another product where we were averaging about, I think it was 0.78 run rate so which is basically close to a sale a day on that product at 24 bucks. We raised the price to 28 bucks so that we could make a strike through at 24. And then at the end of the strike through because after 30 days when you set the strike through it stops the deal, we actually realized that our run rate went to 0.68 at 28 bucks. So we started noticing that the difference in sales were not actually bad from the price going back to four bucks. That's because we just had forgotten to change it back to that 24. So it actually helped us realize like wait, we were still selling at that 28 bucks, so now we just drop it back and when we drop it back to 24 with that strikethrough it just increases the sales and obviously the conversion rate and the ACoS, which allows us more dollars to spend on that product.

 

Bradley Sutton:

Before you switched to AWD, did you guys have your own warehouse? Did you have multiple 3PLs, One 3PL? What were you doing?

 

Joe:

So we had our own warehouse and basically obviously we're shipping it from China to our warehouse and then from our warehouse to Amazon, and then basically with AWD, and the fees just got out of hand. It kind of priced us out of obviously doing that route, which is why we went with AWD. And it's kind of been our first kind of-.

 

Bradley Sutton:

The new fees you're talking about, like the inbound inventory placement fees and things like that,

 

Joe:

all that type of stuff, yeah, it kind of really hit us hard. So we realized, and we priced everything up in Seoul, it's way more lucrative to go with AWD, and you have to have

 

Bradley Sutton:

Is that AGL too? Or just like? Are you actually having Amazon ship from China or you're shipping it into AWD?

 

Joe:

We're shipping it into AWD. Right now, we haven't fully gone into Amazon shipping it from China, but we're shipping it into AWD. And that's basically where we just noticed that economics-wise it just made way more sense to go with AWD. So we took that big step of obviously getting away with our warehouse and now just sending product into AWD. How big was your warehouse? It was pretty big. It was pretty big. I don't know how many square feet on the top of my head.

 

Bradley Sutton:

Do you know how much it costs per month? About?

 

Joe:

Yeah, it was close to about. I think it was like 25 grand.

 

Bradley Sutton:

Oh my goodness, yeah, so we're talking probably 20,000 square feet or above. They're in Vegas. Yeah, it was pretty big. And then how many full-time employees had to run it?

 

Joe:

So we had four people there

 

Bradley Sutton:

and then now you had to let them go after you close the warehouse. So then it's not just $25,000 a month, but then probably another $10,000 of salary you're saving.

 

Joe:

yeah, so there's a big saving, when you look at it, from everything. And we've kept one person I think it was that basically helps us with inventory forecasting and just helping manage kind of the inventory side of AWD. Because right now we've moved into AWD. But some issues we've had with AWD is when FBA goes out of stock there's like a two-week period we've seen that it takes for that transfer of inventory to go into FBA and that's because AWD hasn't learned our sell through rates yet. So right now, for example,

 

Bradley Sutton:

you can't control that at all. Like you can't just force AWD to say, hey, I know I'm going to sell more, send more to FBA. Like you have to wait for them to be able to see it.

 

Joe:

Yeah. So you can manually send more. But because we have a catalog of 900 products, it'll be very tenacious to look at FBA for all these products and then go to AWD and manually click one. So what we've done is we put the auto replenishment. But because Amazon hasn't learned our products yet, literally, we had a product that had a sell-through rate of I think it was it'll go through about 300, 400 products a month. We ran out of that product and AWD transferred 10 units to FBA and it took two weeks to get those 10 units and those sold out within a day. So it was just the worst and the worst.

 

Bradley Sutton:

I got to start you on Helium 10 inventory management, because helium 10 inventory management is created for people who have three PLs and then and then we tell you, all right, set up a new shipment. But theoretically somebody just asked me to say the other day we don't integrate yet with AWD. I know that's on the roadmap, but like a third-party warehouse, like you know how much inventory is there, so you put the number in and then you know what you know. Helium 10 knows what your inventory is in Amazon. And then so we would just tell you the same way hey, it's time to trigger, you know. So I know you said before like hey, yeah, you might not have time to, you know, be checking 800, but that's the whole point of inventory management where you just you know you better send, you know, 500 units in from your warehouse and so, yeah, we'll get you started on that.

 

Joe:

Yeah, that would be a lifesaver because this is how it's impacting my ads now. So you know back in the day, if you run out of stock on FBA, your listing is not showing anymore, your ads are not delivering. However, with AWD, if you've got stock, what it's done now is it changes our seller delivery date. So we realize that with this duct tape,

 

Bradley Sutton:

and you're conversion like tanks right, because it says like oh, delivery in three weeks or something crazy like that.

 

Joe:

So this duct tape product had delivery in two months. I'm not waiting two months to get duct tape.

 

Bradley Sutton:

So instead of the listing going dead, it still shows available, but then two months.

 

Joe:

So people are clicking on this sponsored ads and they're like, yeah, I'm not waiting two months to get a duct tape, I'm going to the alternative person which is their competitor. So, I'll add just hitting, hitting, hitting, hitting, no sales. And you're like what's going on? And then now when you look at it and it's fine detail, delivers in two months. You're like that's so. Now we've had to end the crazy thing about when you've got 4,000 ads, because you've got five ads SKUs, you can't go and manually turn all those off and then wait until it comes back in stock to turn it back on. So that's been a nightmare as well.

 

Bradley Sutton:

Now Interesting, okay. So yeah, it looks like AWD, like overall pretty decent. You save all those fees, probably thousands and thousands of dollars of fees. You're saving tens of thousands of dollars in warehouse, tens of thousands of dollars in warehouse. But on the flip side, you almost have to, you know if, if you're not using Helium 10, um for inventory management, you almost have to like hire another full-time employee just to manage that, depending on how many SKUs you have, or else, or else you're going to lose, you know too much money.

 

It's not just the lost sales, what's advertising, like you said, very good, very good, uh, very good point. Um, if I were to ask you like, all right, hey, end of the day, not everybody can, can have a business that does 30 million a year. What set? What has set you guys, uh, apart? Obviously, you know you have some cool patent and some product. You know for one of them that that nobody else can get. That's been around since 1920, but it's anybody you know. I'm sure there's billions of or millions of businesses that were made a century ago, that that technically you could sell, but that doesn't mean you're going to be a 30 million dollar seller. So what sets you guys apart, would you say?

 

Joe:

I think it's that consistency and never give up mentality when you start off a product, because a lot of things that I've seen with other sellers is they're quick to write off a product because they're not profitable with it within the first kind of initial launch phase. And what I've noticed is we stick out with the product and our launches are in strategies here. So we start off with a launch. So, let's say, we're doing zip bags right and we have these zip bags. They're heavy duty, so it's four mil size. When we start off with a zip bag, we're happy to lose some money on that because we know it's repeat purchases. So we now have to calculate and understand okay, this is the frequency of those sales, this is what we expect to come in, what sizes are winning, and basically having the consistency to keep pushing, even though it might not be profitable to start. Eventually, when you start getting those repeat sales, you'll see the profitability come in and that's where those products, when they start winning. You do the exact same thing with new launches and it's, like I said, that consistency to keep doing that with new launches and new launches and new launches has been a game changer. And then also just not being afraid to test Amazon. So you know, like I said with our vitamin D one, we've thrown different keywords in there, we've thrown different words in there, even at times where you get delisted because Amazon said these things don't work or this is, you can't put that writing, so it's.

 

It's helped us push our listing and appear in different places and we always do tracking to see if it's click-through rates, if it's the title. So, for example, some of our titles have our brand name, which is spot and industrial. That's a pretty long brand name and if you look at our uh, a product of ours on mobile devices, our brand name takes up should I? I say, 40% of the title. So a lot of our keywords and use cases don't actually show on mobile. So what we did test was removing the brand name and leading with the use cases and the product keywords and it started converting better because nobody cared what our brand name was.

 

But if they're seeing that zip bag for Legos, for this, for this, and it's heavy duty and it's waterproof, that's what people want to see and it increased our click-through rates, which increased our conversions as well. So stuff like that and they're minute tests. But if you do that on a catalog and with products at a volume, it can be a massive scale. And when you realize that from a potential of okay, we have 800 ASINs, 50% of them increase in conversion rates by just 10, 20% I mean in click-through rates you're bringing in even way more traffic and if you hold your conversion rates, that increases your sales without having to do any change in bids and anything like that. So those key changes allow you to save your dollars but still gain on all that traffic.

 

Bradley Sutton:

Now, if I were to ask you your favorite Helium 10 tool, is it Cerebro, is it Adtomic? Is it Magnet? Chrome extension, what is it?

 

Joe:

I would say I love the Chrome extension because it helps me. If I go onto a competitor, straight away I see what they're lacking If they don't have 150 characters in their titles, if they don't have enough bullets, if they don't have, you know, enough bullets, if they don't have enough images. So the moment I see a competitor that doesn't check all the boxes that the Helium tool shows, I'm targeting them. Why? Because if you look at my products I have 10, you know most optimized on your thing. Then at the same time I look at keywords and it gives me a breakdown of how much revenue is in this keyword, how much revenue is in this industry. So before we go launch a specific product like we were launching an anti-slip tape because we want to add to our tape ranges so just looking at that, you'll look at that keyword anti-slip tape. It brings in 600 million a month from all these different competitors.

 

Now I can run those competitors through Black Box and I love Black Box as well because it helps me really fine tune what I'm targeting and who I'm looking for. So, I can say they get X amount of revenue monthly with X amount of reviews. Like I said, if they have anything below four, Black Box shows me those people. Those are easy people I can add to my product targeting campaigns and I know, because our listings are optimized, we'll easily take some sales from those people. Campaigns and I know, because our listings are optimized, we'll easily take some sales from those people. So, I would say the listing Blackbox and also the Chrome extension will be my two favorite.

 

Bradley Sutton:

All right. If anybody wants to find you on the interwebs out there, like on LinkedIn or somewhere like you open to saying how they can find you guys out there.

 

Joe:

Oh yes, of course, on LinkedIn obviously it's just Joe Sanhanga, my name, and then on Instagram it's j.sanhanga, which is my last name, s-a-n-h-a-n-g-a, and that's mostly where I am on social media. But any questions or whatever I can on LinkedIn, you can just pop it in and I'll try and help where I can.

 

Bradley Sutton:

Awesome, awesome. Well, thank you so much for coming on the show and hope to see you at an upcoming event soon then.