Episode Highlights


[03:42] — Ethan introduces Amify

• Ethan McAfee is the founder and CEO of Amify, which helps medium- to large-sized brands sell directly on Amazon.
  
  
• Through their service, they help brands manage their listings, optimize their supply chain logistics, analyze data, and take charge of customer experience, among other things.
  
  

[04:25] — Pros and cons of selling on Amazon

• When Amazon came about, brands thought of it as another retail distributor or seller.
  
  
• Ethan comments that brands need to think of Amazon as a platform and extension of their websites, not as a retail distributor. 
  
  
• Most brands are still using middlemen or 3P (Third-Party) sellers on Amazon in this day and age.
  
  
• When brands begin to think of Amazon as another channel for direct sales, they gain an advantage over data and customer experience.
  
  

[07:00]  — Why controlling your customer experience matters

• When you sell directly, you can control how your brand looks and your customer’s experience.
  
  
• You get data that tells you about who your customers are, what they’re buying, and how likely they are to buy again using Amazon FBA.
  
  
• FBA gives you real-time data, which also allows you to adjust your logistics promptly.
  
  
• The data you get from FBA should only be used for analytics, not to reach out to customers directly for ratings, for example.
  
  

[09:45] — 3 main ways to sell on Amazon

• Brands can sell via Amazon 1P, which means they sell directly to Amazon, and Amazon will sell to the end-customer.
  
  
• Third-Party Retailers, or 3P, is another option. Wholesalers can partner up with retailers to sell their products.
  
  
• The last option is to sell directly, and the pros of this are getting more money since you’ve removed middlemen out of the equation.
  
  
• Brands who sell directly don’t usually know how to implement strategies correctly, so they hire Amazon consultancies like Amify.
  
  

[13:00] — Who benefits from selling via Amazon 1P?

• 1P is excellent for huge brands that are already household names. 
  
  
• If a brand sells products at a low price point and doesn’t care too much about resellers taking a dollar off a product’s price, then Amazon 1P might suit them.
  
  
• Low-price products are difficult to sell outside of 1P, because you need to consider the shipping and handling costs that come with it.
  
  

[16:10] — Pros and cons of 3P retailers

• Ethan states that selling via Amazon 3P is an easy way to get on Amazon.
  
  
• A brand can authorize select retailers, creating a valuable wholesaler-retailer relationship that benefits both sides.
  
  
• However, this may unintentionally lead to partnering with retailers who don’t give you any value.
  
  
• The vast majority of Amazon 3P sellers are not value-adding, and can rather act like “leeches.”
  
  
• Having too many resellers might be detrimental to your time, health, and the growth of your brand.
  
  

[22:00] — 3 reasons why most brands do direct selling

• According to Ethan, one main advantage of direct selling is cutting out the middle man–this means more money going into your pockets.
  
  
• During COVID times, it makes more financial sense to be earning more after cutting out the cost of paying third-party retailers.
  
  
• The second reason is it lets you have more control over your customer experience.
  
  
• When you sell directly to your end-customers, you get to know what’s selling on a day-to-day basis. In short, the third reason is about having data that will save you more time.
  
  

[28:15] — Compromising with your 3P partners when switching to direct selling

• Your brick-and-mortar partners will likely be upset if you were to switch to direct selling.
  
  
• To soften the blow, you can still allow them to sell via FBM (Fulfillment by Merchant).
  
  
• Finding this compromise allows you to have a backup, for example, during holidays when Amazon FBA warehouses become crowded.
  
  

[29:10] — Amazon and the marketplace

• It seems Amazon would rather be a marketplace than a retailer.
  
  
• Ethan shares that Amazon is trying to move away from being a 1P seller for a lot of brands in the last few years.
  
  
• One reason why Amazon wouldn’t prefer direct selling is because of prices, and Amazon aims to be the lowest price in the entire market for products.
  
  
• The downfall of being an open marketplace is the great numbers of counterfeit and unauthorized sellers, which then affect customer confidence in platforms like Amazon.
  
  
• Amazon, over the last few years, has made changes such as showing seller information to make the Amazon experience more beneficial to customers.
  
  

[34:00] — What does an outsourced Amazon management team do?

• Amify helps brands with things like supply chain management and inventory forecasting.
  
  
• When consulting with a client, Ethan shares that Amify assists with the “three little pigs.”
  
  
• The first is managing inventory levels on Amazon and ensuring a brand doesn’t have too much or too little in stock.
  
  
• Ethan also analyzes data to forecast demands.
  
  
• With such data put together, the brand can adjust its supply chain and logistics.
  
  

[37:25] — The importance of having a strategy

• Ethan says that deciding on a strategy is the most important thing you should keep in mind. 
  
  
• It’s crucial to have the basics down. 
  
  
• Foremost, be clear on who is in charge of your Amazon brand management.