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…“the flywheel effect” and we kind of heard this talked about in this Amazon space and e-commerce space but today I want to break it down and this was what we were hearing a lot of at the Resonate event that we were just at. And if you guys have been following along, this again is in the car, but this is coming back from the event that we spent about a day-and-a-half, two days but really it was a day-and-a-half in the conference. We spent some time networking the night before. And what I wanted to do here, Chris, is really talk about what this means. I think it’s a great concept and I love what we learned especially from the people there from Amazon. Yes, we actually got some insight from people that were there that worked for Amazon and that’s what we’re going talk about today in the car so another carcast coming at you. So, a recap of Resonate. So, where do you want to start, Chris?
[00:01:14] Chris: Well, I think let’s start by explaining flywheel and then we’ll kind of dive into the three big things that you and I kind of pulled out of this event which was a lot of fun for us, so we got to go just kind of as attendees this time and hang out and experience the event that way and sit down and actually take notes and learn some things which is always a blast for us. But the flywheel really is all about our buddy, Mo, momentum, and getting it started and then watching things grow. And in any business whether it's Amazon e-commerce or a roofing business and as you start to gain that momentum, things work a little bit easier for you and it spins faster and faster and faster. That's the whole concept of the flywheel. It takes a lot to get stuff moving but once it's moving, everything that you kind of add on there is making that momentum move faster for you.
[00:02:05] Scott: Yeah. It’s kind of like adding a little bit more fuel to the fire once you get it started. Sometimes it’s hard to get that fire started but once you get it started, you just got to keep it going and add a little more fuel to it. But I think also people that are in business, especially if they’re just starting on Amazon and all they’re doing is focusing on Amazon, they still need to understand the flywheel effect for Amazon like what that takes. Like, a lot of people still think that you can just throw up a product and it’s going to take off and kind of like a brick-and-mortar business like the phone is just going to start to ring. That’s not how it works so we have to give Amazon what they want and that is sales. Their fuel is sales.
But with that all being said, I want to really break this down and maybe go over like the first thing that even Amazon reps were saying that were there. Actually, one guy spoke on this topic but really was talking about brand and that there’s a lot of opportunity on Amazon and Amazon wants us to be successful. They want us to have good products and once we do show them that we have good products by having sales and people giving us feedback and reviews and all that stuff and again validating that’s a good product, they will push the product just a little bit more and really giving people the experience, giving people a brand experience through Amazon by using your storefront page, maybe the new landing page feature that they have built in, your listing and different things you can do with that listing. So, where do you want to start with that really?
[00:03:44] Chris: Well, I think it’s just important just to kind of recap that concept for everybody and it was something we heard from the Amazon team themselves, but it was also kind of the theme of a bunch of the other talks and something you and I have been harping on for a while which is moving forward, brands are going to be the thing that dominates. Selling one-off products is not going to be as easy as it was and that’s like the big shift in Amazon from 2013, 2014. The thing that everybody says, “Oh, it’s not as easy as it used to be. Yeah. You can’t just launch a fidget spinner, right?”
[00:04:13] Scott: Right.
[00:04:13] Chris: But if you’re doing the things that make for a “real business” you’re building a brand, you’re doing an email list, you’re doing all these things, Scott, that you and I are talking about, it is just as easy as it was, if not easier and Amazon is starting to recognize that and reward that specifically. They’re building in a lot of new things that are designed to help you through that process like Storefront, like Brand Registry 2.0, like all of these things, and they’re taking into account both the good experiences that brands have had and the bad experiences that brands have had like Birkenstock, right?
[00:04:46] Scott: Right.
[00:04:46] Chris: Into what they're doing inside of Seller Central and they're really trying to make that experience better for us. Now, obviously, that's very difficult for Amazon to do. We've all had the experience where we can call three different times and get three different answers and they are really trying hard to remedy that but when you take a look at some of the numbers that they shared with us at the conference, you can kind of understand why. I mean, it doesn't make me any less grumpy when I don't get the answer I need but I totally get it like last year I think he said they had 300,000 new sellers across different marketplaces. The other thing that was interesting is I think, and I don’t remember if the number was 140,000 total or it was 140,000 of those 300,000.
[00:05:27] Scott: Yeah. It was.
[00:05:28] Chris: So, almost half of those new sellers did over six figures last year.
[00:05:31] Scott: Yeah. They did about 100 some thousand dollars.
[00:05:33] Chris: It was 100,000 or more.
[00:05:35] Scott: Or more.
[00:05:35] Chris: Right. In that year which is really interesting to me because if you think about it like if you just think about it proportionally, half of those sellers assuming there’s equal distribution, half of those sellers only sold for six months. So, if half of those people did over six figures like where is that breakdown? That’s really interesting to me but the thing that kind of stuck out there and I guarantee you if we talked to them a little bit more, that 50% of people weren’t just launching a product. They were launching a product suite, they were launching a brand, and they were putting some marketing effort behind it.
[00:06:08] Scott: Yeah. The one thing that he had said, the one guy that we were talking to that he was saying was like, “Listen, there are opportunities for you to get more exposure and more traffic especially using sponsored product ads,” and he was really stressing that a lot of people they promote and then they stop or they back off or they don't prepare for the bigger days. Now, the one big day that's going to be coming up is Prime Day and tentatively a date’s been thrown out there like July 10, the week of July 10, something like that. And instead of not doing advertising at all during that time because you’re saying, “Well, it’s going to be more expensive, so I shouldn’t do it,” he was saying the opposite. He was like, “You should start ramping that up at least like a week-and-a-half, maybe even two weeks before to kind of grease the wheels a little bit and kind of get yourself going and then to actually increase your budget,” and I think he threw out a number like 200%.
[00:07:13] Chris: Yeah. It was basically double your budget at least. And it’s kind of interesting because you and I had this conversation last year and we had this conversation for Black Friday. What do we want to do? And traditionally, you and I have either left at the same or scaled back a little bit because we didn’t see that conversion rate, but I think the strategy that they were talking about there makes sense. Now, obviously, he runs the paid search team, so it behooves him to say, “You should spend more money in research.” But the data also backs that up. They were able to share some of the analytics data and basically what they’re seeing is in advance of something like Prime Day or seeing a slow doubling in traffic essentially up to Prime Day for about two weeks in advance. And we could kind of see that in our numbers over the last few years. You start to see that flywheel move again.
[00:07:56] Scott: Yeah.
[00:07:56] Chris: And we traditionally had not done stuff leading up to that, but I think this year we probably will based on that feedback from that team. And maybe we leave it on, on Prime Day and see what happens. Now, what he’s saying is when they look at the numbers for Prime Day and for Black Friday and Cyber Monday, there is not a fall off in sales ever really. I mean, different products may have different things but if you’re running out of budget at 9:00, 10:00 if you choose to run ads, you’re missing out on 80% of the volume per day. And so, the question that you and I have to kind of chat through is, “Are we okay if our ACOS doubles? Are we okay still to do that? And if our ACOS doubles and we’re breakeven, are we fine with that as a brand?”
And I think just off the top of my head, I think for us at least the answer there is probably yes as long as we’re not losing our shirts on PPC on those days because we understand that sales beget sales. Like, the more volume we can push, the better off we’re going to be and even if we come out breakeven or potentially lose $0.50 or a $1 on a unit, that doesn’t necessarily mean the end of the world for us because we’re keeping relevance, we’re keeping that position, we’re keeping that rank, and we’re able to place bigger orders which means our units actually cost less the next time around, all of those kinds of things.
[00:09:09] Scott: Yeah. And I think also we should mention that like you just said was he said that you’re getting sales three days before, the day of, or the day actually of the sale or the Prime Day and then three days after. So, don’t think just because it’s over, it’s over. It’s not. There’s still a flood of traffic that’s there and like he was saying like you have to think about that. If you’re running out of budget in like three hours, you should probably make sure that doesn’t happen because you’re losing a ton of that traffic. Like, there’s so much more traffic during these bigger times, these more popular times that they’re promoting too by the way like Prime Day they’re promoting on TV and stuff, Black Friday, Cyber Monday and let’s just forget even those sales. Let’s say it’s going to be Mother’s Day and you have an item that could be given as a Mother’s Day gift or Father’s Day or July 4 or whatever it is. You should be thinking about that and planning to really start getting things ramped up for those days and really taking advantage of the pay-per-click. Now, the other thing that he was talking about was headline search ads. Let’s talk about them for a minute.
[00:10:27] Chris: Well, before we dive into that, I think, and I may butcher this stat. I haven’t written down on the notebook but it’s in the back of the car. I want to say he said Prime Day was 60% larger last year I think than it was in 2016.
[00:10:37] Scott: Yeah. I think you’re right. So, it’s growing.
[00:10:41] Chris: And at first glance, you’re like, “Oh yeah, but it was a three-day event this year,” but they compared the same 30-hour window to get that stat. So, not only was that the one day of Prime Day 60% larger but you also had two additional days where they were really pushing traffic heavy. So, just another thing to keep in mind like, again, we’re not building our businesses to be dependent on these kinds of events but if we can move a few hundred units of a product that really helps us push momentum especially going into what for most people as a slower portion of the year.
[00:11:14] Scott: Well, here’s the other thing that I want people to understand. Okay. The flywheel effect, what we’re talking about is when you get that wheel started and you get that thing moving, it sort of kind of gets other things moving. It starts to like I kind of just said earlier like greasing the wheels, making it easier, and once that momentum starts to go, other things start to happen. Well, here’s the other thing that happens. You get that traffic, you get those extra sales that you normally wouldn’t have had. Now, you can take that money, put it in your pocket or what I would suggest and other people that I’ve listened to that I respect that have said the same thing, invest that back into your business whether that’s buying more inventory, whether that’s buying a new product to launch, whether that’s buying outside traffic to build your list, whether that’s a Messenger list, whether that’s an email list, whether that’s a custom audience list inside of Facebook. Whatever that is, you’re able to take, again, that’s why we talk about Amazon as our launchpad, it allows us to get cash into our business so this way here we can help to grow and scale that business. So, that’s what we’re talking about like this flywheel effect thing isn’t just like one thing. It’s start the momentum and, in this case, it’s launching on Amazon using sponsor product ads or just advertising in general to really get the ball moving and then start to take the money as it’s coming in to reinvest in some of those other things that can continually keep that thing moving and building additional assets. So, headline search ads.
[00:12:51] Chris: Headline search. And that was something that they brought up and obviously again it’s the Amazon paid search team. So, they have a little bit of an agenda here, but it is something that quite honestly, I can see improving businesses. It’s something you and I have tested in the past and it works. There’s not a ton of volume in terms of the sales there. At least in the past for us, there wasn't but some of the data that they were showing there was pretty compelling because they’re getting higher click through rates even our own sponsored ads. The biggest thing, the biggest hurdle for a lot of people I think it’s still not in everybody’s account, at least as of this conversation. It is available for people who are brand registered and I believe we’re in the beta of that because there was another criteria that they were using to roll out some of those features and it's like you have more than 500 5-star feedback in the last 12 months or something.
[00:13:34] Scott: Something like that.
[00:13:35] Chris: We know you’re moving a decent amount of volume because you’re getting us feedback so we’re going to give you the feature to test it. You also have to have multiple products to be able to use the headline search ads and the thing that’s interesting with the headline search ads, yes, it tends to be a little bit of a lower volume than what you get in terms of like a click through or total impressions for the sponsored products which are what you traditional hear us refer to Amazon PPC as but the headline search ads for those of you guys who don't know are those banner placements across the top where you see like awesome garlic company and then there's the three products and the banner ad across the top. Those are headline search ads. What they were showing at the conference was that they actually have a higher conversion rate which makes sense because it's kind of a newer placement for Amazon but you're also seeing the thing. It's the very first thing that people see and so if somebody clicks on that, they're likely to buy the product.
The other reason that I think and I think the real reason they have a higher conversion rate is that you’re actually, instead of driving them to a product detail page, you’re driving them to the storefront and you actually have more control over that specific experience than you do even like sponsored product ads because I can build out a storefront page that gives a really nice unique marketing experience much more like a landing page that I own and if somebody clicks on my garlic press side of that ad then they go exactly to the page that I built specifically for that. So, we’re able to actually do something like, I don’t know, what I call real marketing like we’re able to build out a unique user experience for those people, tackle things in terms of sales objections or any of those kinds of things that we would tackle on a landing page that we actually had control over. We can build that out inside of Amazon storefront and drive the traffic to that. So, even if they’re not in that 3% right now who are really raring to buy a garlic press, I actually have a chance to sell them the garlic press versus them just passively buying it. Does that make sense?
[00:15:24] Scott: Yeah. It does. And what I want to throw out there and have you explain is because he was talking a lot about where to drive that traffic. You have a couple of options in headline search and why don’t you talk about that like the two different places that you can drive that traffic from that ad placement?
[00:15:45] Chris: Right. So, you can either drive it to a storefront page or you can drive it to an ASIN list basically which the ASIN list is what we traditionally have talked about like you searched for something on Amazon and you see that list of products that comes up, that would be an ASIN list. In this case, it’s just you put your own ASINs on that list. So, it drives them to what looks like an Amazon search results page or you can drive them to Amazon storefront.
[00:16:07] Scott: Okay. And with the storefront page, it’s more of kind of like a website experience where you’re able to see bigger images. It looks like a storefront and with the other one it’s like you said it’s kind of like you searched and now you have like maybe you have five products and you see five like search results that come up in a list and then you can kind of thumb through them. So, really the headline search is meant to send you to one of those two places. So, if you don’t have a storefront page, that would be something that I would recommend and they all recommended that everyone should have a storefront page.
[00:16:48] Chris: And even if you’re not doing anything with it right now, build out just kind of a generic one because they do give you that unique URL so it’s Amazon.com/MyAwesomeBrand which is kind of cool and it gives you just a place where you can push people from external sources like Facebook without having to worry about it. The other thing that’s really cool about that storefront feature and you and I have talked about this in the past, you can actually track conversions from external sources in that now using what’s called a UTM variable. Basically, you put a little piece of text from the back end of the link and if you run a Facebook ad or something like that to your storefront page, you can track those conversions inside of Amazon which is really nice. It’s something you’ve never been able to do before.
So, it gives us that little additional piece of real estate inside of Amazon. I would say go get it. There’s no reason not to have it and if you have that built out instead of seeing the like really terrible looking list of products that comes up when somebody clicks on your brand name, Amazon automatically directs them to the storefront once you build that out and get it approved. The other thing that’s nice is like you don’t have to know how to code. It’s not like building a website. It’s a drag and drop builder and so you can drag in. They’ve got a little widget along the right-hand side. You drag in. I want a big photo and a little bit of text on the right and you just kind of drag in the elements that you want, and you go from there.
[00:18:03] Scott: Yeah. Again, it’s another piece of property, right? It’s another piece of real estate that you get to have on that platform. Okay. Is there anything else we want to talk about there before we move on to the next area?
[00:18:16] Chris: In terms of like ads in general, I don’t think so. Now, the next area and correct me if I’m wrong on this but the next big thing that I kind of pulled away from it in terms of the Amazon flywheel really was a little bit of kind of validation for what you and I have been thinking. We kind of cornered some of the Amazon guys and said, “We know you can’t tell us exactly…”
[00:18:36] Scott: What the algorithms means.
[00:18:38] Chris: “In your own words, would you say that this is correct or incorrect?” Like, I’m not going to tell you to tell me but I’m going to ask your opinion. And so basically, one of the rumors that has been out there and something you and I have talked about is, “Oh, I just spent a whole bunch of money in PPC. Amazon’s going to rank me,” and you and I have kind of talked about that and said, “Well, I don’t really think that’s how that works.” Amazon is much more concerned about relevance to the customer. In the Amazon ecosystem, relevance to the customer means the product that that specific person’s most likely to buy. And in the conversation with the paid search team from Amazon, basically, they said, “Yeah.” Like, you could spend all the money in the world but if nobody ever buys your thing or nobody ever clicks on your product, it’s not going to help you rank. But “in theory” all else being equal, the very first thing that Amazon would look at is impressions. Is this listing getting impressions whether they’re paid or organic? If yes, is this listing getting clicks? Are people clicking on it when they see it? If yes, is this listing getting sales? If yes, how often are they getting sales?
So, how many people are seeing it? How many people are clicking it? How many people are buying it? And then what is that conversion rate? That is the thing that Amazon is looking at. And then there may be some minor relevance to reviews and some of those other things but whether you’re talking about organic or paid, that’s really kind of how it breaks down at the 500-foot view of what they could talk to us about and it’s interesting because just kind of looking at it, that makes logical sense when you say, “Okay, what is relevance? Well, relevance is the thing.” Amazon cares about a sale, the search engine for buyers so they want to show the thing that’s most likely to convert to result in a sale for that specific person. And so, really when it comes down to with PPC is the reason that you would want to run PPC upfront and this is a question you and I get all the time is, “Should I start PPC day one or should I wait until I have a good conversion rate, until I have a base of reviews?” and you and I kind of change on this a few years ago. We would probably have said, “Get your base of five to ten reviews and then run it,” because we know that’s going to help with your conversion rate.
[00:20:35] Chris: Now that you can’t do giveaways to your reviews and the reason you would run PPC upfront is just to try to get some velocity but even before that, it’s to get impressions and then it’s to get some clicks and then to get some sales. We need to get traffic to that listing to see if it will convert knowing that once we get a handful of reviews from the people who buy from us, that conversion rate is going to get better and that’s going to help us rank even faster on that flywheel. So, the very first thing we have to put onto that listing to get that little wheel moving is eyeballs. Then once we have eyeballs, we have to get clicks. And once we have clicks we have to get sales. That's really the big steps in that process. So, if you're about to launch a product, by all means, turn on Amazon PPC from day one. Now, don't just spend money to spend money. You need to dial it in and you need to start making some sales from it, but Amazon isn’t necessarily looking at the dollars that you’re spending. They’re looking at the impact of those dollars are having compared to what other people are doing. So, the more targeted and the more relevant you can be with your PPC, the more lift, in theory, you will see in your organic ranking as well.
[00:21:36] Scott: Yeah. That’s exactly what I asked them. This is kind of how the conversation went down. I said, “Hey, there are some people that believe that if they spend money within the sponsor product ads area, that that will help them rank.” Yes, they could get sales and that could help them but then also Amazon sees, “Well, they’re spending money with us. We should give them a little lift because we like them because you spend money with us.” Some people have said to me that that’s what they believe and for a second, I kind of thought maybe that is true. I don’t know. I mean, they do think like that and then I’m like, “But really they’re trying to figure out what the customer wants,” and if you start giving it a whole bunch of keywords and then you get impressions and there’s no sales or very low sales then it’s going to show them that that’s not what really people want.
And he validated that for me and he’s like, “Actually by you going in and pruning your keywords that are getting impressions, getting clicks, but not getting sales and pruning them, it's actually going to help you because then you're only going to be ranking and really showing up for the ones that are relevant and that convert and that will, in turn, help you organically.” So, that’s really what we’re talking about. And when they have those numbers, those metrics, that data, that’s when they’re going to start to be able to again get that part of the flywheel moving because now they have data to go off of. Once you’re brand-new, they don’t have any of that data but when you start sending traffic to it, it’s going to tell them those metrics and then that’s going to help the algorithm organically say yes or no or how much lift to give you.
[00:23:21] Chris: And the thing that was kind of interesting and again like a lot of this stuff if you sit down and you think about it logically it makes sense but it’s not always the way that we approach it. There are tens or hundreds of thousands of products in the Amazon catalog that no one has ever seen. So, as soon as we get one impression, we rank higher than tens or hundreds of thousands of people like think about that. And then the biggest takeaway in something, Scott, that I don’t want people to miss is you said pruning makes you more relevant for the things that matter but not pruning or not targeting relevant keywords can actually hurt you.
[00:23:52] Scott: Yeah. And he said that. He said that too.
[00:23:54] Chris: And that, again, it makes sense. It’s probably not just going to hurt you on those keywords but if Amazon is showing me for something I’m not converting at all or I’m getting a ton of traffic from something that’s not very relevant which Amazon does a lot inside of their PPC algorithm to try to make products as relevant as possible. They use a second priced auction so you’re not ever paying what you bid like say you’re the highest bidder, you’re not paying that. You’re paying whoever bid the second most. That’s the maximum you will ever pay on Amazon and they do that because they don’t want you to just be able to spend $20 on a keyword and show up for it but there’s still going to be some stuff that sneaks through once in a while. And the example that I always use is showing up for bench press when we target garlic press because it’s a press and so it’s somewhat related. We’re not going to get a ton of impressions there but if they have the ad inventory, they might show us to see what happens. Well, if we’re actually getting traffic from that because people are just clicking on it and it’s not converting, it’s hurting the conversion rate on that listing which means it’s dragging us down overall, we only want to target the things that are relevant for us. And so, if we’re going after a bunch of things that are irrelevant, it’s actually hurting our organic ranking even though we’re only driving the traffic through PPC.
[00:25:00] Scott: Yeah. The other thing I want to mention here that was talked about was Bidplus. Now, let’s first off explain a little bit what Bidplus is. The way that I understand it is it will increase your bid up to 50% of what you’re willing to spend if it means you ranking higher for that in search.
[00:25:25] Chris: To some extent. So, the way that that has worked just based on the data that I’ve seen is it will try to get you into the first or second position for sponsored ads. And the reason and the time that you want to use something like Bidplus and this is something that the Amazon paid search team kind of validated for us well, something we’ve talked about in the past, is really if you are converting better in those first few sponsored ad positions. Now, there is a publicly available report now inside of your ad reports which is your position report. And basically, it will tell you if you’re in those top spots, those Bidplus eligible spots, how you’re converting, and then if you’re in like the rest of the house, wherever else you show up how you’re converting there. In most cases, you’re going to see that you convert better in those top spots, so it may be worth using it if you’re not already showing up in those top spots normally or on a day like Prime Day it might be worth turning it on or the Fourth of July or any other big shopping day. Any day that you see a local mattress ad on television like a Flag Day Sale, any of those kinds of things, maybe you turn Bidplus on just to make sure that you stay in those top spots if you see that you’re converting better there. If you’re already in those top spots consistently without Bidplus, turning it on isn’t going to do anything for you. If you’re ranking fourth or fifth, it might help.
[00:26:42] Scott: Yeah. Again, so that report that you would pull is in the backend of Sellers Summit or not Sellers Summit. Shout out to Steve Chu. I got Sellers Summit because I just got back from there too. Seller Central.
[00:26:55] Chris: Good lord, I want to say seller support. We’re struggling here. Seller Central. It’s in the ad report section. It’s the keyword placement report. It’s also prominently inside of Ignite as well and I know that was one of the things that they sort of to pull into that software because it is important and it’s something that Amazon didn’t give us for the longest time. You kind of had no idea where you were showing up on a consistent basis. You could search for your own thing and find it, but you didn’t know in aggregate which is kind of important because I need to know if I need to raise my bid, lower my bid, whatever, and it’s good to know that now we can say, “Okay, I know definitely that when I rank number one I convert 50% more.” So, that’s something if you guys aren’t already looking at that. Not to like throw another PPC thing on you but if you’re interested in Bidplus or you want to try to get some more out of your PPC, check out that report and if you’re not normally in those top positions, turn on that Bidplus and then see what happens.
[00:27:47] Scott: And so, I’m going to give a little shout out here to Seller Labs who that’s the event that we just attended, Resonate, and Ignite is a fairly new tool for them and actually you are in part of the beta team I guess building out that as far as feature sets and stuff like that and it’s come a long way but it makes it so much easier to use that because a lot of that gets automated by you setting those parameters and then again like you just said, being able to see those positions and where you’re more profitable, it’s just huge like it’s just amazing. So, I would say right now if you guys are not using that or if you haven’t checked it out, I would definitely go check it out. There is a 30-day I believe it’s a 30-day free trial if you go through our affiliate link, we are affiliates for that, so you would buy us each a cup of coffee. I think Chris drinks tea, but you can head over to TheAmazingSeller.com/Ignite and, yeah, they’ve got a great support team there. If you need any help with anything, they will help you out but definitely check that out. It helps so much to manage your campaigns and also drill down and really prune the ones almost automatically once you set those parameters inside of that tool.
[00:29:13] Chris: Not to like talk about tools for an hour because you can do this stuff manually but it’s interesting because you’ve kind of taken a dive into Ignite and some of the stuff in your brand and I can do all of that manually but it’s kind of giant pain in the butt.
[00:29:28] Scott: Yeah, with spreadsheets.
[00:29:28] Chris: Even for me, I like ads and I like seeing the data, but I don’t like spending two hours a week on that. It’s not necessarily worth my time and if you use a tool like Ignite, it does really speed that process up for you. You can go in and just hit – the whole point of any tool is to make your job easier and the way that Ignite really does that is through the auto-suggestions. They're not trying to automate it because PPC isn’t science. It’s art and science. And so, what they’re really enabling you to do is make CEO executive decisions. They’re saying, “Hey, this is what we’re seeing just so you know. Here’s how confident we are. We know that based on all of this data, that you should do this. Do you want to? Yes or no.” And you say yes or you say no. And they recently rolled out some automation even to make that even easier where you say, “Look, if you’re 95% confident that that’s the right choice, just do it,” and then they’ll do it and then they’ll present you with the things that they’re a little less confident about based on the data and that really takes what’s a few hours a week and drills it down to 10 minutes or 15 minutes and you can still look at all of the data if you want to do that but it makes the management of that, especially as you start to scale, a heck of a lot easier.
[00:30:35] Scott: Yeah. No. I love it. All right. Cool. So, what else we want to talk about, about this flywheel effect?
[00:30:41] Chris: I think the biggest thing once the flywheel gets going, Scott, is that a lot of people run into making bad choices and that slows the flywheel down or fud so if you want to dive into that.
[00:30:51] Scott: Fud? I love that one. What the fud?
[00:30:54] Chris: What the fud? If you want to dive into that a little bit I think that was an interesting little mindset piece to leave some people with today.
[00:31:02] Scott: I think it really is and I thought it was interesting that it came up a couple of times in a couple of different presentations about like decisions and making bad decisions and making good decisions and when do you make a decision. And it’s like we’re having to make decisions every single day, every like almost minute of the day. I’m making decisions right now as we drive. Should I put my direction on to go left and get to another lane because this guy is moving really slow or should I continue to stay here because it’s probably safer?
[00:31:32] Chris: I’m going to go with my intuition here and say get in the left lane.
[00:31:34] Scott: Are you? Okay. I’m going to go in the left lane. Guys, I’m turning the direction on left.
[00:31:38] Chris: It’s a data-informed decision.
[00:31:40] Scott: Yes, and you were pretty confident in that, so I went with it.
[00:31:42] Chris: I just sounded confident. I had no idea if it was a good choice or not.
[00:31:45] Scott: So, we are actually taking that advice. So, that was a decision. See that right on the fly. We made a decision and it worked so far. All right. But, yeah, I mean, whenever we're thinking about like growing or scaling, it's scary like there are things that we were like we don't want to disturb something because it might make things worse, but it could make things really a lot better. So, why don’t you describe fud, what that means, and then we can dig into a little bit more of kind of how this kind of apply to us and how we can kind of get around it.
[00:32:19] Chris: I mean, at again the 5,000-foot view, fud just stands for fear, uncertainty, and doubt and it comes up anytime you have to make a big decision in the business. The biggest place, Scott, where you and I have seen this for the longest time and we get an email a day or two emails a day that say something like this, “Hey, I look at all my numbers. They look great. I talked to my supplier. The price is great. I’m terrified of sending them $2,500.” Fear, uncertainty, and doubt in yourself and then the numbers. What is your response to that? Well, we still deal with that, right? Every time you and I order a new product we have that same exact issue. It’s not like it’s this one-time thing that goes away, but you have to understand that that’s going to happen. It’s going to happen at all different points in your business whether it’s the first time you order a product. Whether it’s the thousandth time you order a new product, whether you’re just trying to decide what to do with your Amazon ads, you’re going to have those places and you have to acknowledge the fact that that exists, but you have to also understand that it’s kind of an arbitrary feeling.
It’s an arbitrary sensation, right? Our bodies do that to us because they are afraid we’re going to get eaten by a tiger. That’s not going to happen in this business but a lot of the choices that we make on a daily basis or even just the frustrations that come up, right, we run into a shipping problem and then we start to have fear, uncertainty, and doubt and it leads into frustration and it puts us into the fight or flight mode, right? If we can acknowledge that, that goes a long way to helping us make the right decision to get us out of that thing, out of that specific situation whichever one that is. The other big thing there is taking a second, taking a step back, reevaluating what it is and then going with our gut, going with our intuition based on the information that we’ve been able to bring back in and the example that I’ll go back to is ordering your product because that’s where a lot of people have, that fud pop up for the first time because they’re really confident during product selection. They’re really confident talking to a supplier and then they’re like, “Ooh, there’s some money involved.”
[00:34:17] Scott: It’s about to get real here.
[00:34:19] Chris: And taking a step back there, the first thing obviously would just be, “Hey, like take a breath. It’s okay.” And the tactic that I use, and it was something that they kind of touched on, it wasn’t exactly that. It’s like a box breath. So, five seconds in, hold for five seconds, five seconds out and you repeat that a couple of times and that does – it just kind of resets your nervous system and it takes the stress away. So, whether it’s your supplier, your boat sank, and you’re stressing out about that or not that that happens or it’s you’re about to place that first order, your adrenaline gets up and then you start to question yourself. So, if we can take a step back, reduce that adrenaline, reduce that stress, then we’re able to make the right decision.
And then the second step there for me would be to just reevaluate the numbers and then if they look right, take that action whatever that action is, placing that ad, placing that order or saying, “My gut’s telling me I should test this before I go all in.” Well, if you look at the numbers again and that’s what it’s saying then figure out a way to test it or just go ahead and do it. But we have to understand that we need to make that decision at some point. None of these things are like the house is on fire and we need to exit. Like, we have some time to make these decisions even though it doesn’t generally feel like that and if we take 30 seconds to calm ourselves down, take a step away from the computer, take a breath, we can then come back and say, “All right, I’m going to look at Jungle Scout one more time. I’m going to double check my fulfillment fees on Amazon and I’m going to double check the product cost to make sure that the numbers work and if they do then I’m going to go with it.” And that’s really what you have to do.
[00:35:48] Scott: I think it’s also like you said before, it’s like taking a step back like sometimes you just need to take that five-minute break or maybe a 24-hour break. Maybe you just need to walk away and come back or like a couple of guys actually, that said breathing. It’s like we all know that like have you ever sat there and you’re just like you take a nice deep breath in and you hold it and then you let it out and it just kind of feels good like you do that a few times and it makes a difference. And that might not be enough. Maybe you have to walk away and take a breath and as we pass a car with the dogs head out the window biting at the air which actually my new puppy was doing that the other day.
[00:36:38] Chris: Dog was halfway out the car.
[00:36:39] Scott: I know it was. That was kind of scary. So, anyway back on track here because we are on the road and…
[00:36:46] Chris: It’s kind of interesting to me because the thing that’s the least helpful when you’re stressed out is somebody going, “Hey, Scott?” “Yeah.” “Take a breath.” That’s the least helpful thing but when you do that yourself, when you actually take the breath, it’s really helpful. Like, if somebody tells you, “Dude, just go breathe for a minute,” it’s like a really frustrating thing. But if you actually do it, it’s extremely helpful.
[00:37:07] Scott: It really is.
[00:37:08] Chris: We need to understand, right, we’re going to get eaten by the tiger. Nothing bad is going to happen if we choose incorrectly. Even if we make the wrong choice, in the long run, we’re going to learn something from it and we’re going to be able to grow and we’re going to continue to exist as individuals even if we make the absolute worst choice possible. So, we just need to go with our gut. Data-informed intuition. Look at the numbers and then go with how you feel about them.
[00:37:34] Scott: Share that quick little story about the Navy SEALs with the box breath.
[00:37:38] Chris: Well, I could probably, I probably should look up the number because I’m completely making up the number off the top of my head but one of the things the Navy SEALs have always looked for ways to increase the number of people that graduate from Navy SEAL basic training and they tried all kinds of things and one of the things that was like astonishingly successful in terms of not just like one or two extra people graduating but like big chunks of extra people graduating was the inclusion of box breath or combat breathing because it enabled them to deal with much more stressful situations.
And if you guys don’t know anything about Navy SEAL training, Google it. It’s the most ridiculous thing on the planet like the final exam for Navy SEALs is they put them underwater in scuba gear and then the instructors dive into the water and unhook everything and tie it in knots and make them put everything back together before they drown. Like, that’s one of the things they do kind of towards the end of SEAL training and they’re logging stuff and they’re shooting stuff and they’re blowing stuff up and they’re doing all this kind of stuff and just being able to take 25 or 30 seconds to breathe, to reset their central nervous system was one of the most successful things they tried in terms of getting more people to graduate without changing the requirements of what they actually had to do.
[00:38:55] Scott: Yeah. That’s huge. So, yeah, I mean I know it sounds really simple but…
[00:39:00] Chris: It sounds ridiculous.
[00:39:01] Scott: But try it. What do you have to lose? A couple of breaths?
[00:39:05] Chris: Twenty-five seconds?
[00:39:06] Scott: Yeah. Twenty-five seconds. So, yeah, but again going back to fud like that fear, that uncertainty like and the doubts like we all have them. It’s normal. We were sitting at a table last night at dinner having a great dinner at the event and we’re actually sitting with two of our first 25 in our Private Label Classroom.
[00:39:29] Chris: Which is a little bit of a surprise. We didn’t know they’re going to be there.
[00:39:31] Scott: It really was, and it was pretty awesome because we didn’t realize that, I mean, we knew those guys were pretty successful, but we started naming people that were in that first group and there was quite a few that went on to do some really good things, really big things. And I guess my point going back to those guys, I got off track there, was that they still even though they’re successful right now, they’re still facing fud and you know what? So am I. So are you.
[00:40:05] Chris: Every day.
[00:40:06] Scott: Every day but we know how to deal with it and we recognize it. We don’t like say, “Oh, I’m not,” and try to fake it. You have to face that and then you have to move on and you have to make a decision and you have to make a good decision, the best decision you can by looking at the data but then also your gut like does it feel right? What if you don’t do it? What will happen if you don’t do this thing? What will happen? What's good that could come from it? Like, so some of those things you just have to ask yourself those questions and give yourself the answers and not necessarily have to convince yourself but really weigh it out both ways and not just jump into something either hastily and you want to go in there and you want to do your research and stuff but not too much, not where you procrastinate. You get kind of stuck in that little thing.
[00:40:55] Chris: I think one of the other interesting ways to tackle fud and we’re blessed to have somebody in our team constantly pushes on fud.
[00:41:03] Scott: Oh yeah.
[00:41:05] Chris: Is that really your belief?
[00:41:07] Scott: A little shout out to Joel on this one.
[00:41:08] Chris: Are you sure that’s what you think?
[00:41:11] Scott: Yeah.
[00:41:11] Chris: And even having that challenge to be like, “Well, is that what I think? Do I really think that? Do I have a rational reason for the reason that I’m stating this as a fact right now?” is really nice but if you don’t have someone in your team like that, you can still do this and the exercise and it’s something that Joel throws in my face all the time is, “Well, what’s the worst that will actually happen?”
[00:41:30] Scott: Yeah.
[00:41:31] Chris: Right? And when you’re in that moment of, “Oh my God, I need to make this decision right now. My business is going to burn down because Amazon misplaced some of my inventory. What’s the worst that will actually happen?” Well, it turns out that when you take a step back and you think through that question rationally, not emotionally but rationally, the worst thing that’s going to happen if Amazon loses your inventory is they’re going to reimburse you for it. And even if for some reason they didn’t, you’re going to figure out a way to get the money back for it. They’re going to take care of you. They’re going to figure it out and they’re going to help you find it. It may not be the easiest process. It may be frustrating but the worst thing that’s going to happen is they’re going to reimburse you for the inventory that they lost. And actually, you generally come out a little bit ahead because they reimburse you for the cost or not just the cost of the units but the price you would have sold it for minus fees and that actually be a blessing in disguise and the same thing with the order. If I’m going to place that first order, well, what’s the absolute worst thing that can happen?
And when you’re in that moment right before you go to place that order and you start to experience that little bit of tightening in your chest, a little bit of anxiety because it’s $2,500 or $5,000, whatever that first order is for you, when you take a step back and you think about it rationally, the very worst thing that happens is that money disappears. Right now, if it’s your last $4,000 I would not suggest ordering a private label product right now. But if it’s not your last $4,000, that’s the absolute worst-case scenario. That is not the most likely worst-case scenario. The most likely worst-case scenario is you come out close to breakeven and you learn a heck a lot of lessons and that was something you and I have always said that and I’m sure there’s a lot of people listening that are going, “Yeah. Okay. Whatever.” But we talked to a whole bunch of people over the last two weeks who were not successful in their first product but came out right around breakeven with a whole bunch of lessons and then turn around and lit the world on fire with their second or third product. And so, it’s funny because we’ve always kind of said that in a vacuum with some anecdotes and some stories from people. Then over the last two or three weeks, I’ve heard it over and over and over again of almost that exact story.
[00:43:27] Chris: I made a mistake in picking my first product. I was still able to break even with it because I don't have to sell a handful of them to cover the cost and then I cleared out the rest and I actually made a little bit of a profit where it came out exactly breakeven and learned from that lesson, and then I was able to progress and grow. So, that’s actually the most likely worst-case scenario and in most cases, you’re going to do much better than the worst case.
[00:43:50] Scott: Absolutely. All right. So, let’s wrap this up. I know we are heading back and we’re digesting a lot of what we took in. Again, at any event, there’s going to be things that you hear for the first time and there are things that you’ve heard many times but sometimes you need to hear it again to make you realize what you need to be doing also just having the conversations with people. So, if you do have a chance to attend an event, the right event, I like smaller events, 200 to 300 people. It just makes it a little bit more intimate, but you have to walk away and again take that deep breath, take it all in, hopefully you’ve taken notes, and then start to reflect a little bit and then decide what is in your business that you can do right now with something that you’ve taken away?
And the one thing that I’ve taken away that I want to really convey here to you guys and it really does work very well with the new direction that I’ve announced for The Amazing Seller TAS is really building a brand and really fueling that brand with momentum and the flywheel effect as they’re talking about and that we’re going to be really drilling into each component of that flywheel, so we can keep that momentum going. And Amazon is part of the flywheel. It’s part of the momentum that we can get but then also building those outside channels, the different assets that we can have out there. Like I said, the email list, the Messenger list, the custom audience in Facebook, those are assets that can fuel that flywheel. I almost said five wheel. Flywheel and…
[00:45:36] Chris: Scott's getting tongue-tied.
[00:45:37] Scott: I am. I’m getting tongue-tied here. And once you can get that momentum going and then you’re just going to be working towards keeping that flywheel spinning and it gets easier because those assets start to build and then when you launch a new product, guess what, you just touched one of those audiences or those lists that you’ve built, you tell them about it, and you can then start to fuel that area of the business whether that’s the Amazon channel, whether that’s your funnel that you’re building, a free plus shipping offer, whatever, you’re going to be able to do that.
So, brand, brand, brand is to me the word of 2018 and beyond and what we do inside of that. That will change over time, but the fundamentals will always be the same and, yes, Messenger bots right now are kind of big in the new shiny object and it’s worth doing right now but building an email list is too and building that custom audience in Facebook. So, these are different things that we’re doing right now but it’s all about having that touch point that you can control that you can send people a message and then have them go over and taking action that you tell them whether that’s consuming a piece of content, sharing it, entering a contest, or buying a product. That’s really what it’s about to me. So, what else do you want to wrap up with there, Chris?
[00:46:56] Chris: I think the biggest thing, one, from a live event perspective the hardest thing for everybody and the conversation we’re having last time was hearing it at this event too is having one takeaway. Everybody wants to go home and implement Facebook Messenger bots and all these cool things that you can do but you need one thing you need to focus. And so, again, take that breath, be gentle with yourself and come back 24 hours, 36 hours later and look at the notes that you took and say, “What’s the big thing that I can – what’s the big rock I can put on the flywheel and see what will work?” Not all of these hundred little things which will add momentum and will add up over time but are going to be more of a distraction right now than anything else. And I think finding one big nugget that you can take away from each of these kinds of things and actually implementing your business is a huge thing for people. And then number two would be I agree. Brand, brand, brand absolutely is kind of the message moving forward and we’re not saying that you have to be Coke or Nike or Adidas, but we are saying that you need to try to put the right stuff in front of the right people. And that really, if I was going to be snarky about it, that’s what a brand is. It’s putting the right market in front of the right message and then they buy your stuff.
[00:48:10] Scott: Yeah. Absolutely. Awesome. All right. So, let’s remind them with the show notes. We should probably do that. Guys, the show notes can be found at TheAmazingSeller.com/530. Again, that’s TheAmazingSeller.com/530. I would also remind you if you’re listening to this for the very first time or maybe you’re just getting started still and you want to kind of fast-track that the little bit or you want a little bit more focus on how to find your market and start your brand, I would definitely recommend checking out our Product Discovery Bootcamp. You can find that by heading over to TheAmazingSeller.com/Bootcamp. Again, that’s TheAmazing.com/Bootcamp. All right, guys. So that’s it. That’s going to wrap it up. Remember as always, I’m here for you, I believe in you and I’m rooting for you, but you have to, you have to, come on, say it with me, say it loud, say it proud, Chris is going to say it with me on the count of three. One, two, three. Take action!
[00:49:09] Chris: Take action!
[00:49:11] Scott: Have an awesome, amazing day! And I’ll see you right back here on the next episode. Chris and I actually looked at each other when we said that. It’s amazing.
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