Throwback: From Fear to Profit: Overcoming Pricing Hesitations in E-Commerce

In this episode of the Econ Breakthrough Podcast, host Josh interviews Chad Rubin, operations and strategy leader at Profasee. Chad discusses the critical role of dynamic, AI-driven pricing for e-commerce and Amazon sellers, sharing how continuous price optimization can boost profits without sacrificing sales rank. He offers actionable advice on leveraging AI tools, strengthening business operations, and building strong supplier relationships. Chad also recommends influential books and software for entrepreneurs, and emphasizes the importance of surrounding yourself with trusted advisors. The conversation provides practical strategies for sellers aiming to thrive in a competitive, ever-changing marketplace.

Chapters:
Introduction to Chad Rubin and Profasee (00:00:00)
Josh introduces Chad Rubin, his background, and his role at Profasee, focusing on e-commerce and AI-driven pricing.

Why Pricing Matters in E-commerce (00:00:37)
Chad explains his focus on pricing, its impact on profitability, and why many sellers neglect price optimization.

The Fear of Raising Prices and Real-World Example (00:02:01)
Josh discusses common fears around raising prices and shares a personal example of increasing prices without losing sales rank.

Dynamic Pricing vs. Static Pricing (00:03:57)
Chad describes Profasee’s approach to dynamic pricing, the importance of adjusting prices, and the Amazon flywheel effect.

Dynamic Pricing in Other Industries (00:05:28)
Josh compares dynamic pricing in e-commerce to revenue management in airlines and emphasizes the need for ongoing price adjustments.

Three Actionable Takeaways for Sellers (00:06:13)
Josh summarizes three key takeaways: focus on profits/pricing, incorporate AI, and strengthen organizational structure and supplier relationships.

The Importance of Level 10 Meetings and Team Alignment (00:08:38)
Josh highlights the value of EOS Level 10 meetings for organizational clarity and leadership alignment.

Most Influential Books for Entrepreneurs (00:09:41)
Chad recommends "The 4-Hour Workweek" and other books that influenced his entrepreneurial journey.

Favorite and Game-Changing Software Tools (00:11:27)
Chad shares his favorite software tools, including Ellie and Notion, for productivity and business management.

Mentors and Influential People in E-commerce (00:12:31)
Chad discusses the importance of surrounding yourself with trusted advisors and names key people he respects in the industry.

How to Connect with Chad Rubin and Profasee (00:14:46)
Chad provides contact information and ways to connect with him and learn more about Profasee.

Links and Mentions:

Tools and Websites 
Profasee 
ChatGPT
Ellie.com
Notion 

Books 
The 4-Hour Workweek" by Tim Ferriss on Amazon
The Almanack of Naval Ravikant 
The Great CEO Within

People Mentioned 
Brandon Young

Transcript:

Josh 00:00:00  Today, I'm super excited to introduce you to Chad Rubin. Chad leads prophecies operations and oversees its strategy. He often speaks about e-commerce, Amazon, and leveraging AI strategies on webinars and conferences worldwide. He is also the author of the Amazon bestseller cheaper, easier, direct. Prior to Profasee. He founded Think Crucial and co-founded Cubana and the Prosper show. He is also a father, husband, and loves coffee and tacos. So with that, Chad, welcome to the Econ Breakthrough Podcast.

Chad 00:00:35  Thank you for having me. Excited to be here.

Josh 00:00:37  I want to ask you the question, Chad. You've you've gone through multiple exits. You have your own ecom brand. Why the focus on pricing and why is it so important at the end of the day?

Chad 00:00:48  Yeah. So. Well, firstly, the reason why I was focused on price was that I was trying. I'm trying. I'm still working through it. I've been working on turning around my e-commerce business. It's been deteriorated over time. Didn't get a lot of love for me as I've been building other initiatives in my life.

Chad 00:01:03  And so, you know, for me, I optimize spend and my ACOs, and I've been optimizing our conversion rate and my listings itself and the infographics on those listing pages. But the one thing that's driving the most to the bottom line is a very small lever, and it swings big doors, but it's not being swung with price. And I just couldn't understand why. Like if we have a $10,000 ad campaign, you would never leave it on. You would never leave it on optimized, you'd always be optimizing it. So why is nobody optimizing price? Because it's a it's hard to understand and it's very manual. And by the time you make the change to the price, the market shifted. So this is why I focus on it. And it's a juicy it's a delicious problem.

Josh 00:01:50  It really is. And it can provide I mean it's a huge impact to your bottom line, right? If you want to, you know, increase your bottom line, the best way to do it is just by raising your prices.

Josh 00:02:01  Says Roland Frazier, one of the previous guests that we've had on the show. One of the things that he does first, when he acquires any businesses is he simply raises prices. Because to your point, so many brands do not touch their price. They're too scared to be honest with you because they're like, well, I like sales where they're at. If I raise them, you know, 10%, 25%, I'm going to lose it. All right. And I think I actually fell in that camp prior to all of the inflationary environment that we've been in recently with Amazon continually increasing their FBA fees. You've got manufacturers increasing, you know, the cost of goods that you're purchasing from them. ACOs is going up ads. So with all of that, like our back was against the wall, although I felt like, hey, 1999 is kind of the that's the tipping point. You go over the $20 like you cross that mental bridge of $20 and something cents Since all heck is going to break loose, right? And I'm just going to be in a downward spiral, lose my market share.

Josh 00:03:08  And on the contrary, we raise the price by $5, increase the price by 25%, and still maintain we were currently the number two best seller in that entire product category. Didn't move a needle. We stayed right there. Now we've got more profit coming to the bottom line. So I want to ask you the question, Chad. Like, are you seeing the same thing with a lot of the clients that you're working with and these early users of the software, that there is more room to increase prices on Amazon, and it's not affecting organic rankings or it's not a spiral downward. Or are you seeing the opposite true of hey, really like lower your price? Yeah, you get margin compression. But man, you you shoot to the roof and you stay locked in in those top positions. What what have you seen.

Chad 00:03:57  Well, okay. So Profasee in general is about maximizing profit without sacrificing your BSR. So there's a lot of people in the Amazon space that say, just raise prices. And that's a lot of times could be reckless advice and insight, right? Because like, pricing isn't one size fits all.

Chad 00:04:14  And yes, pricing needs to change. But the question is should it go up or should it go down because you can increase price and that may offset demand and you can lower price. It may spur demand. It'll increase ...