James Thomson Buy Box Experts Founder on Digital Brands vs Brick & Mortar Brands on Amazon #51

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There’s a battle between Digital native brands and national retailers with brick and mortar presence. And while there’s room for both to sell on the platform, today we will look at how both digital native brands and brick & mortar brands need to compete with each other, and where their weaknesses and strengths lie. 

I’m now joined by James Thomson, Buy Box Experts & PROSPER Show Founder, as well as author of The Amazon Marketplace Dilemma. It’s a pleasure to have you on the show, thanks for joining me.

• For my listeners today whether you’re a digital brand or brick and mortar, there’s going to be some good information. James - you have a Ph.D. in Marketing, so I’m excited to tap into your knowledge and skillset on our podcast today. 
• Let’s first define what a digital native brand is vs a brick and mortar, James how you would you define it?
  • Eating your lunch. Market place pressures 
• What do digital native brands need to do today to compete?
• B2B B2C
  • Costco vs Kroger
• What do brick and mortar brands struggle with?
  • UNFI for retail
  • Tight control over branding/distribution/pricing
    • Fallout - 
• What do digital native brands struggle with? 
  • Don’t setup proper infrastructure
    • Buy a batch of stuff.
  • Lay of the land
    • How deep is the lake, pollution?
  • No ™, no GS1, patent. Other countries ™. 
  • Sell a batch of widgets. 
• Nobody talks in business school about sourcing
  • Distributor could sell product list.
  • Agreement - 
  • Incentive to buying discount for larger quantities. 
  • How do you track. - Transparency program
• Product development
• ™ Resource - International IP attorney
• Online reseller policies 
  • MAP policy 
• Unauthorized resellers. 
• Are there areas private labelers have surpassed national retailers?
• Culture - top down
  • Sell sell sell to sell sell protect
  • Who is going to represent the brand?
  • Punish/fire the bad actors - even if known for 20 years. 
• How long does this shift take?
  • 6-12 months
• Source root problem solving, no bandaid.
  • First sale doctrine
  • ™ violation issues don’t work
  • Levels of chaos.
• Other than COVID What’s different today than say 12 months ago? 
  • States collecting sales tax across country.
  • 3% compliance a few years ago. Compliance at a all time high.
• Protect IP, brand.
• You made a recent comment about Amazon’s culture and it was quoted in the Washinton Business Journal, quote: “Part of Amazon’s culture is to beg, borrow and steal resources from other teams because you’ve not been allocated those yourself. You’ve got to have meetings to convince others to be involved with your project.” - I’ve personally always felt like Amazon was a silo’d organization running around with its head cut off. Can you weigh in further on Amazon’s culture and future as an organization?
  • Amazon hire Type A personality, responsible very specific things and go fast.
  • Test ideas. Prove they work. Then go the resources to scale.
  • Amazon corporate staff tripled since 2013.
  • Collection billion dollar companies under one company name.
  • Gaps occur. - Necessary evil. Growing so quickly so fast.

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