People often forget that feedback can make or break an e-commerce business on Amazon. If you neglect to moderate your feedback, it can spell the ultimate demise for your business. Feedback is the lifeblood of e-commerce growth, and Scott Margolius has become an expert on maintaining a healthy feedback score.
In the Seventh episode of Skubana’s E-Commerce Mastery Series where we invite experts of their respected fields to share their best practices for success, our host, Dr. Jeremy Weisz of InspiredInsider.com interviews Scott Margolius founder of FeedbackRepair.
Some essential lessons from this video are:
How and why we receive so much negative feedback and how to get it shut down quickly
What you should do with specific ASIN’s that are constantly causing problems
The importance of diversifying the marketplaces you exist on to have backup channels, just in case Amazon suspends you for a moment of time
How to be proactive with your feedback
Raw Transcript: Scott Margolius of FeedbackRepair.com
Dr. Weisz: Dr. Jeremy Weisz here. I am the founder of inspiredinsider.com, where I talk with inspirational entrepreneurs and leaders like the founders of P90X, Baby Einstein, Atari, many more, and how they overcome big challenges in life and business. This is part of the Skubana e-commerce Mastery Series, where top sellers and experts teach you what really works. Scott’s going to teach us what really works to boost your e-commerce business. Skubana is a software platform to manage your entire e-commerce operation.
And today, we have Scott Margolius. He is founder of feedbackrepair.com. If you didn’t catch that in the opening statements, he helps people with feedback repair and he helps protect Amazon and eBay sellers from bad reviews and make sure they don’t get removed. He helps clean up nightmare situations of sellers’ accounts or products getting banned. He’s spent 15 years as COO at FIMCO, which is a marketing customer service company. He is a top rated eBay PowerSeller and has been among the top 25 sellers in Amazon for the holiday season.
Dr. Weisz: Go ahead.
Scott: Top 25%.
Dr. Weisz: Top 25% sellers in Amazon for the holiday season. Top 25 sellers would be cool, too.
Dr. Weisz: And, he’ll tell us how you get there, and even, it’s still impressive you’re talking about what volume and capacity is involved in that. That was pretty remarkable when you were talking about that, but we’ll get to that. So, first of all, Scott, thanks for joining me.
Scott: Hey, thank you. I appreciate the opportunity.
Dr. Weisz: Yeah. For fixing the set-up, we’ll talk about what’s behind you in the dark there, some of the e-commerce secret sauce behind you. But first, we’re talking about some of the most common problems causing bad feedback. So that’s people claiming it’s counterfeit, sold as used and people are claiming it’s new, what are the other top problems causing bad feedback?
Scott: Well, there’s obviously a big difference between negative feedback and having your account be brought into review when it’s in jeopardy of suspension. And I think that they’re very much related. I see a lot of cases where someone has been suspended and have their account privileges revoked, at least temporarily, because of the fact that it was brought to Amazon’s attention that there was a negative feedback. They’re looking at this negative feedback automatically.
They’re looking at certain keywords that come up, and in many cases, if there is a claim of counterfeit or if there is a claim of used sold as new, and then there are other ones in addition to that that can flag accounts. But a lot of the time, you’ll see something very simple, straight forward in that they didn’t receive the product, never received it, or it was damaged, or another really big one is not as described. So those are all kinds of things that are pretty frequent and common occurrence.
I’m trying to think, there are obviously quite a few others that has a lot to do with what that buyer’s expectations were. If they assumed that the product was going to be something different than what they ended up receiving, somehow or another, you’re still responsible for that. So a lot of those types of issues can be resolved if you sell via Fulfillment By Amazon instead of Merchant Fulfilled.
Dr. Weisz: Yeah.
Scott: But that’s still not bulletproof, it’s just better, in terms of protecting your account.
Dr. Weisz: Right. Because then you could say, “Well, Amazon didn’t deliver to you, it wasn’t me,” type of thing.
Scott: Right. And then you’re automatically protected and there is a bias on Amazon’s part to protect your account in that situation.
Dr. Weisz: Right.
Scott: Since that happens so often, and you don’t have any control as a seller over whether or not something got delivered, all you can do is make sure you ship the exact product that was listed, make sure your product is in new condition, make sure you packed it well, make sure you shipped it in a reasonable time-frame, so that it is received by the EDD, the estimated delivery date. And that’s about as much as you can do if you’re Merchant Fulfilled. But everything changes if something happens in the process of, between the time it left your doorstep, or between the time it left Amazon’s shipping center, and the time the customer receives it.
And even after that, a lot of the time, what happens is the customer will receive the product and be unhappy with it for whatever reason or they want it for free, so they make certain claims because those specific claims are the only ones that can be made in order for them to be able to get the product for free, get a free refund, and I have to pay return shipping. So there’s a higher likelihood of those types of claims because those are the ones that buyers know they can use in order to be able to cheat the system.
Dr. Weisz: Yeah. And obviously, like you were saying, the negative feedback can then end up triggering your account to get reviewed and then, obviously, banned in the end. What are the other things that you see that cause people to get negative feedback?
Scott: Maybe if the product is damaged when they receive it, maybe if the product packaging isn’t the same, maybe if the customer just doesn’t understand the feedback system. I see that happen all the time. They’ll leave three stars and say, “Okay,” or they’ll leave three stars and say, “Thanks.” Amazon views the three star feedback, instead of neutral, like you would assume, and it’s called neutral, it actually counts against you in your metrics.
Dr. Weisz: Really?
Scott: So that happens fairly frequently. The other thing that happens probably as much as anything, statistically, is they didn’t receive in the time-frame they expected. And on the contrary side of that, the majority of my positive feedback comes from customers who received the product sooner than they expected. So it’s kind of a double-edged sword.
Dr. Weisz: So how did you discover that three stars works against you, and what can people do about it? Because I would think it’s neutral.
Scott: I don’t remember. It seems fairly intuitive once you figure it out. You can look at all your metrics and they show the statistics and determine, “Hey, why are these three stars counting against me?” And I think, it was at that point when I first realized this doesn’t make sense, “Why are they calling these neutral, but they actually count against me?” I assumed that it’s probably stated somewhere that most people would know that.
Dr. Weisz: So, what should people do?
Scott: You should try to have them removed. There’s a mechanism for that. When you go into Seller Central and you go to Help and then you click on…let me see if I can pull it up real quickly and I’ll walk you through it. If you go to…how much of this are you going to edit out? I’ve got a lot of things…
Dr. Weisz: I don’t edit anything out.
Scott: Oh, for real?
Dr. Weisz: Yeah.
Scott: All right. So if you go to Contact Us and then you choose Performance…no, you don’t, you go to Selling on Amazon. The funny thing is they’re changing this all the time. I used to walk people through it really straight-forward and not miss a beat, but they change it all the time, and different types of accounts have different types of interfaces. So it’s really interesting. There are at least three or possibly more interfaces that people see.
Dr. Weisz: So, we’ll make a disclaimer of it. At this moment in time, this is what it says, yeah.
Scott: And it changed since two weeks ago as well.
Dr. Weisz: Is there a search function people should use, like get feedback removed or something like that that may be more standard?
Scott: This is the easiest way. You can either go to Contact Us, depending on what page you’re on, or you can go to Help and then go to Contact Us. Let’s see if I can do that. Sorry, I’m having to look at my screen beyond my other screen. I’ve got three screens up. And then, you go to Selling on Amazon, and then you go to Customers and Orders, and then you can put in the Order ID of the feedback that you want to have removed. From there, I can’t tell you what happens because I don’t have any negative feedback. So, I can’t walk you through it.
Dr. Weisz: Of course, you don’t.
Scott: Then typically, it’ll ask, “Do you want to have this removed?” Then, it will either remove for you automatically because it meets their criteria, or you will have a response and you’ll have an opportunity to choose from either four or five different things and it just depends. If you’re an FBA seller, most of the time, you would choose “This is an FBA issue and it should therefore be removed for that purpose.” But there are some instances where there will be something else going on, the reason why they would remove it has nothing to do with FBA, even though you’re an FBA seller. So that’s when you have to have a bag of tricks that help you get things fixed.
Dr. Weisz: So, Scott, do you get most phone calls and emails from people who are in dire straits, or do you get more just people, “I need to remove these ten negative feedbacks.” When do people come to you?
Scott: I’d say most of them come from people trying to make their account situation better. I don’t get too many, maybe a few a month, I’d say, of people who are in dire straits. What I have realized, more often than not, usually these days, if that’s a whole lot of caveats in a row, that some of the feedback that people have that they aren’t getting removed, or aren’t concerned about, or aren’t doing anything about, puts their account in a lot more jeopardy than they realize. Those issues need to be attacked proactively and aggressively as quickly as possible because you can’t just let them sit there because of the fact that it really can affect the health of your account. A claim like that and you’re like, “Oh, that’s ridiculous. Let’s see you get all upset.
I cannot believe they’re saying this is counterfeit. I’m so tired of these thieves or whatever.” You’ve got to attack it immediately. You can’t let it sit there. And there are a number of different things that you can do beyond that. For instance, you never let a performance notification go unanswered. You have to look at every single one. I had one customer that had 80 performance notifications that they had never even looked at. I couldn’t believe they still had an active account. Part of the problem is, you can’t tell…their system for showing you the performance notifications, and tracking them, and responding, and seeing what responses are is really, really poorly done.
It’s almost an afterthought. There is not a real system, or a ticketing method, or anything like that that allows you to see what you did or didn’t respond to, or what you said, any of those kinds of things. Essentially, a lot of the time, what I’m encouraging people to do is take a performance notification, and instead of just looking at it, actually respond, even if they don’t want you to or even if they’re not requesting you to, and open a case so that you can get a specific response. And get it on record that, “Hey, I did something about this,” more than just clicking all the way through to the special note that they wanted you to read in help.
Especially claims of counterfeit or used sold as new, those kinds of things, I think it’s very important for people to take action, in order to protect their accounts.
Dr. Weisz: Yeah. So Scott…
Scott: I can’t believe…Yeah?
Dr. Weisz: Go ahead.
Scott: I was going to say, I can’t believe you didn’t tell me that this wasn’t going to be edited.
Dr. Weisz: This is just a natural conversation, whatever we talk about…
Scott: [Inaudible 00:12:35] something?
Dr. Weisz: You can do that, too. So what’s the biggest nightmare that you’ve seen, that you had to clean up?
Scott: I’ve seen a number of them. I’ve seen one customer who had a buyer claim that their product was counterfeit. They had purchased $50,000 worth of that one ASIN, which is pretty deep to buy into a particular ASIN, they had gay lords of this stuff sitting around. And some of the best practices for responding to something like that, let’s say you just have three that you picked up and you bought your product via retail arbitrage or something like that. It’s not a big loss to have a claim like that [inaudible 00:13:29] to be, “I’m going to delete this ASIN of my catalog,” which, by the way, everybody should do.
If you have ASINs in your catalog you’re not currently selling that you’d have no stock on, you should go in and proactively delete those ASINs out of your catalog. A lot of the time what that means is you archive it first and then go in and delete it. But you see a lot of notifications come through where they’re saying, “Hey, you are not authorized to sell this anymore,” or you see issues where you have these kinds of vestigial ASINs still in your catalog that you didn’t do anything with, and you didn’t think anything about because you no longer have stock on that, and that doesn’t mean that you’re protected just because you don’t have stock.
Dr. Weisz: You just need to clean it out.
Scott: You’ve got to clean it out. So, one of the things you’re going to proactively do is, “I’m taking care of this and I’m being very aggressive by going above and beyond and I removed this ASIN from my catalog.” Well, in this case, you’re going to put $50,000 at jeopardy by saying, “I accept full responsibility. I’m sorry I removed the ASIN.” And, a lot of the time, for me anyway, the majority of the things that I’ve purchased for resale are specifically for the Amazon platform, I wouldn’t have purchased them to sell anywhere else.
I’m not going to sell in my garage sale. These same things aren’t going to sell nearly as well on eBay. You’re hosed if you don’t have some sort of other outlet. That doesn’t apply as well, let’s say, if you’re a Skubana customer and you’ve got multiple market places where you purchase something with the eye in mind that maybe you can sell on Rakuten, or Sears, or eBay, or whatever. Maybe you’re a little bit better insulated from that kind of issue.
In this case, we persevere aggressively. We asserted the authenticity of the product. We proved the provenance of the product. We provided all the invoices and said, “This buyer is incorrect. They don’t know what they’re talking about. We’ve been selling this exact type of product in this industry for X number of years. Where are the authority on this subject? You can look it up on Wikipedia.” And we said, “We need to be reinstated to be able to sell this product and this customer is wrong.” And we got that, we were able to be reinstated. So that’s an example of an ASIN-specific notification of suspension.
Dr. Weisz: Right, right. So, what’s another nightmare situation? I know you have a number of them. What’s another one?
Scott: I’ll tell you this deal I was working on the last few days with a 25-day suspension for something that he is in no way responsible for. If that doesn’t give you pause and cause you to think, “I don’t want to have all my eggs in one basket.” I had another customer who was suspended for at least 15, but maybe 19 days, I can’t remember what it ended up being in total. He is losing between $11,000 and $15,000 a day.
Dr. Weisz: Wow.
Scott: You’ve got to be diversified. That’s one of, again, one of the advantages of being in a marketplace, having a marketplace product that allows you to get your product into multiple different selling venues, so you have more eyeballs on it than just Amazon.
Dr. Weisz: So what did that person do? They were losing $11,000 a day.
Scott: $11,000 to $15,000.
Dr. Weisz: Why did they get banned and what did they do?
Scott: They were banned for, some of the products that they were selling were like a three-pack with three different specific things and, in some cases, maybe one of the three things was missing or maybe one of the three things was a different color than what the buyer was expecting. And I think that they had about seven different things that showed up as issues, all sort of seemed to compound together. In their case, they got rid of three ASINs completely out of their catalog, and said, “We’re never going to sell these again.”
In a couple of others, they said, “These are genuine. We’re not selling anything that’s counterfeit. We’re the direct manufacturer or importer, but we’re not going to continue to sell this product, or we’re going to have it improved, or whatever.” I can’t remember the specific argument. Essentially, they took responsibility for it, but said, “We’re going to improve process for this, we’re going to put more eyes on quality control, and we’re going to only sell this product via FBA,” those kinds of things.
Dr. Weisz: So were they shipping it out on their own or were they doing FBA in those circumstances?
Scott: At that time, they were in the process of transition. They had some products that were FBA and some products that were Merchant Fulfilled, and I can’t remember the details. But it certainly is definitely a nightmare scenario. Right? Where [you’re shutdown] for 15 or 19 days, losing $11,000 to $15,000 a day, it’s just unbelievably scary. I’ll tell you another thing that I’ve seen several times is, unfortunately, competitors coming in and just ruining things for people by being particularly shady in their dealings.
And so, I’ve seen that happen most often in certain categories, like something around cellphones or cellphone cases, specifically in nutraceuticals, along those lines, private label brands of vitamins, let’s say. I had one customer I worked with who had a goal of having at least 50 different private label offerings in the…let’s call it the vitamin space.
Dr. Weisz: Sure.
Scott: Right? His specific intention was to have this many ASINs and for none of them to be on the first page. So he didn’t want to be found on the first page and his reason for that is, he had noticed that when he had been on the first page, he drew a lot more attention from competitors. So he wanted to be able to fly under the radar consistently without having to draw attention from people who were going to try to hurt his account. He would rather have 20 sales a day consistently on 50 ASINs than to have 100 sales a day and risk losing his entire account or risk being banned from a certain ASIN.
Dr. Weisz: So what are some of the shady…what do people do?
Scott: I really don’t know exactly what they do or how they do it.
Dr. Weisz: Do they put like negative…I’m just thinking do they go on and put false negative feedback? What do they do to ruin people?
Scott: That’s one of the things they’ll do, is they’ll have false feedback. They’ll hire a [shell] buyer, let’s say. I can think of a number of different ways that somebody could do something like that. I hate to even talk about it.
Dr. Weisz: I’m just thinking if someone’s out there and they’re… What’s that?
Scott: I wouldn’t even want somebody to have these ideas. It’s like, “Let’s talk about how to make a bomb.”
Dr. Weisz: Right. I’m just curious. If someone like an honest seller, who’s not even thinking that someone’s going to come in and do these things and something happens to their account and maybe their sales drop, maybe they’ll realize, maybe this is why maybe not, but they may open their eyes. For me, maybe I’m just too naïve and I think the good in people and I’ll be like, “Oh, sales just dropped.”
Dr. Weisz: And maybe it’s something else that, “Oh, a couple of negative feedback came in and that’s weird,” and not thinking anything of it. I don’t even know how can really counteract that, per se but…
Scott: I think there are some things…I think it’s more important to talk about the kinds of things you could do to counteract it, right?
Dr. Weisz: Yeah. Go ahead.
Scott: It’s such a difficult situation when you have the mindset of being the best you can be and everybody is playing fair and it’s a level playing field. That doesn’t exist. Unfortunately. But if you always think that way and never think about the fact that you have enemies, then you’re going to get taken out. You’ve got to have some sort of method of defense, other than just being better than everybody else.
Unfortunately. That’s just kind of the name of the game. It’s offense and defense at the same time. And so it’s interesting, I’ll play basketball several times a week and nobody likes the guy who only plays offense, even if he scores all the points for the game and he’s like, wow [inaudible 00:22:12].
Dr. Weisz: They hate that person.
Scott: They don’t like that person.
Dr. Weisz: Yeah.
Scott: He’s selfish, he’s a ball hog, all these kinds of things, and you get the same kind of thing if all you ever do is play defense.
Dr. Weisz: They like you more, they like you more but yes.
Scott: They like me more but they still would get mad at me if I have an open shot and don’t take it.
Dr. Weisz: Right, right.
Scott: Right? I certainly have a specific role that I usually play and I can be relied upon to have great defense even if my offense isn’t that great, and that works really well, most of the time. But if you have an open shot and don’t take or if you have a lay-up and miss it, oh, boy, people get upset, just likely so. But I think you have to be well-rounded all the way around, just like that’s what you need in your game plan for selling products, especially if you’re a private label seller.
Dr. Weisz: Yeah. So then how do we counteract those things? Like you said, we don’t want to give people the ingredients to build a bomb, even though I’m tempted to do that. What are some things they should do to counteract what people can be doing to their account when they maybe see him on page one.
Scott: When you see what on page one?
Dr. Weisz: Let’s say, a competitor sees you on page one, what are some of the things to do to counteract?
Scott: At some point, you have a little bit of built-in protection, right? You can be so big that you’re pretty safe, maybe they’ll go after everybody else, maybe the guy who is the person with ill-intent just sort of writes off the person who has 1300 four-and-a-half star feedback. “I’m never going to compete with that guy but all these other guys, I’m going to try to take them out.” So he would buy their product and leave negative feedback about it, which would not be negative feedback, but it will be a product review, and say all kinds of horrible things about that product or why it’s not as good as something else, or why all the other reviews are very suspect.
And yeah, you should pay attention to this, and try to write something compelling in some cases that would lead other potential customers to think, “I should question why all this feedback is so positive.” But another thing you’ll see is, they will just through sheer numbers try to build the negatives. Right? And in cases like that, where you have negatives that are being built up and they’re not verified reviews, I think that Amazon’s putting some systems in place to try to deflate that methodology. And I’ve actually worked with some private label sellers to have those types of reviews removed, and I’ve been successful with that several times.
It’s not the same as having negative feedback removed. If you ask me to have your negative feedback removed, I can tell you without even seeing your account or knowing the nature of what those negatives are, I’m going to help you. I’m going to be able to get that fixed and I’m going to be able to help your metrics, and I’ve always been able to help people with that. But when it comes to getting negative reviews removed, it’s almost more of a, it’s a best effort.
There are some certain things that you can do that are helpful. And everything I’m doing is white hat, I’m not doing anything that’s gray hat or black hat. I can tell you that there are some ways you could do that, but I don’t do it, so…
Dr. Weisz: Right. There is no true way to insulate yourself besides just being proactive and if something comes on your account and going after it because it’s not true, or something like that.
Scott: It’s kind of the best you can do. I’m sure that if you sat around, looked at specific situations, you could come up with strategies to counteract those types of issues, and I like doing that. I don’t like people, seeing people be in that situation, but I like coming up with those kinds of solutions. And a number of things that I’ve developed to help people with their accounts with that kind of insulation is, not only do I recommend that everybody be FBA as much as possible, but I also recommend that they include inserts with their products.
Dr. Weisz: Yeah, tell me about that. Yeah.
Scott: Well, you’re essentially trying to get this customer to come to you directly, instead of going to Amazon. So even if they’re a thief, you still want them to come to you instead of Amazon, even if they’re unhappy for any reason, you still want them to come to you, instead of Amazon. A number of people have some misgivings about that. There’s a little bit of debate. It’s like, “Well, isn’t that the purpose of FBA?” It’s like, “Well yes, that’s true. But if you truly want to protect your account, you’ll siphon as many of those complaints and concerns away from Amazon’s Customer Service as possible so that you get to handle them directly.”
Dr. Weisz: Just have them email you on your website, they don’t have to post it and it doesn’t become negative on your Amazon account, and you can still handle it.
Scott: You want to handle it before it ever gets to that point.
Dr. Weisz: Yeah.
Scott: And you have to be very careful with that. You don’t want to violate the terms of service when you create those inserts. And it’s a balancing act to make sure that you don’t overstep the line. The number one thing that you’ve got to remember is that Amazon considers all these customers to be theirs. If you’re Merchant Fulfilled, they expect you to provide just as good or if not better of a customer experience as they do. But at the end of the day, they still consider all these customers to be theirs and they hold you responsible if there is a fault of any kind.
And if it looks in any way, shape, or form like you’re trying to siphon these customers away to your own website to be able to make future sales directly, then that could be a real issue. So one of the things that we’ve done before when we’re trying to be ultraconservative is, we’ve taken the draft, all the draft language of a particular insert and we sent it off to seller performance or somebody in Help so as Support to…
Dr. Weisz: Approve it. Yeah.
Scott: …to view this type of language and basically give a stamp of approval. So at least you have something in the record as a case that you can point to and say, “Hey…” Let’s pretend that a competitor bought our product with bad intentions, and then they saw this insert, and let’s say they turned us in, we wouldn’t ever want something like that to be able to be used against us. So you’ve got to be clean all the way around, but it’s an excellent practice for everybody to engage in.
Dr. Weisz: Yeah. So what’s the balance there, Scott? Because on one hand, FBA, people should be doing FBA, on the other hand, obviously diversifying these inserts, you’re going to have to fulfill on your own, right?
Scott: No. You can include them with your FBA product.
Dr. Weisz: Oh, how do you do that?
Scott: Especially if you’re a private label because then you can design the whole box, you can put whatever you want inside the box, all that kind of thing. It’s a little bit more challenging. You’ve got to be a little bit more creative if you’re doing retail arbitrage or even wholesale from a vendor or direct from manufacturer to try to get your insert into that package when you’re shipping it off. That’s a little more challenging, but I think in a lot of cases, it can still be done. It can definitely be done with bundles. You can do that with bundles all day long because you’re creating the bundle.
Dr. Weisz: Yeah. You’d have to have your hands on it first, and then put it, and then send it off to FBA, as opposed to someone who has it manufactured then sent directly to Amazon, right?
Scott: Yes and no, not necessarily. You might be able to have the relationship with the manufacturer that they would do that for you. And more often than not, if you don’t want to handle it, then you’d send it to a 3PL or some sort of a fulfillment center packing, and shipping, and kitting and all those kinds of things. And that would be just one more thing they do while they’re labeling it for you, if it’s not being shipped directly from the wholesaler, the manufacturer, to FBA.
Dr. Weisz: Yeah. That’s a good point, because that is…what can you do to diversify? What are the things do you recommend people do, because that’s a huge theme I see you talking about. People get stuck if all their stuff is on Amazon, they get banned, they’re pretty much up the creek. So what should they do to diversify more? The inserts is one.
Scott: The answer…well, the insert doesn’t necessarily count as diversification. I know one seller who’s an Inc. 500 business, right? He does the majority of his sales on his own website and he uses Amazon as basically marketing to get people to his website because as of right now until, I think, the end of October, I can’t remember the exact deadline, that you still can have Amazon product ads, where you can get people’s attention on the buy page to siphon them off to come to your site. So he’s using that methodology right now to grow. Basically, the biggest referrer for his own website is Amazon, using those ads.
Dr. Weisz: So, they’re getting rid of those?
Scott: They’re phasing it out, so they say, as it is. Now, there are a lot of changes like that they say are going to take place but never do. So I’d say, gosh, if you’re using that, make the most of it. And ultimately, it doesn’t sound like, to me, they’re completely getting rid of it. It sounds like it’s just going to be changed to look a little bit more like the text ads on Google, instead of having images. So even then, it still might be an effective thing to pursue. It certainly will be worth looking into.
He also runs ads on various different platforms beyond just Google. If you’re looking at some of the other search engines, which I think get overlooked quite a bit. And it depends on your industry, it depends on your particular website, maybe Instagram has the best opportunities for you, maybe it’s Pinterest, maybe it’s Twitter, maybe it’s Facebook. There are just so many other things beyond just AdWords and some of those other platforms are a lot less expensive, a lot less competition.
Dr. Weisz: So what other ad platforms? You mentioned AdWords and then what was the one…what would someone look up to do that for Amazon, you said, the specific one on Amazon, what is that called?
Scott: Well, that was Amazon product ads offered by them and they sell, and they have a number of different advertising functions. I have only used one of them, I think, and I can’t remember exactly which one it was, it’s been a while. There’s a whole [vitaes] of some of the different strategies and tactics that you can get from having used that because, in some ways, it looked a lot like an AdWords account, in that you can deploy a specific campaign, and from having done so, you can gather all these keywords that Amazon thinks are the best keywords for your particular product, and then you can take what you’ve learned from there, that was more of a shotgun approach and develop your own targeted sniper approach to get traffic to your particular product or to your website.
And there are two different…I’m talking basically about two different products within Amazon, but they’re both very effective, very useful.
Dr. Weisz: Yeah. Scott, so on that subject, for you or your clients, what else do you see that’s working for diversification because I do see people just depending almost solely on Amazon?
Scott: I think it’s basically a number of different answers to that, right? In terms of your business model, in terms of where you are from an entrepreneurial perspective. I think everybody, or for the most part, people should be looking at having a diversified portfolio on Amazon. In other words, across multiple categories, across data categories, using multiple different techniques. They should look at their inventory as almost being a mutual fund, right? So you wouldn’t want to be all wholesale. You wouldn’t want to be all private label, necessarily. People are killing it in every single one of these ways. But what happens when something happens?
And you avoid so many different issues like the cyclical nature of sales of a certain type. Let’s pretend that you’re selling only barbecue gloves. Okay. They probably only sell really well at certain types of the year, right?
Dr. Weisz: Right, or in certain parts of the country, yeah.
Scott: Yeah, exactly. There are so many different reasons to be diversified there in terms of, let’s say you have several private label products and your goal is to get out one new one per X per month or for every two months or whatever. Let’s say you get into selling books, and maybe have a particular number of niches within books that you’re focused on. You could do retail arbitrage, online arbitrage, you can do wholesale, closeouts, all these different things, you can create bundles. And each one of those certain areas has all of its own tactics, and strategies, and ways that you could gain advantage.
And I think, many different ways as you can gain advantage and make your product offerings distinctive or insulated against competition, that that makes the most sense. Nobody really wants…lots of people are making a lot of money just selling widgets. Okay? I sell it. I sell 20 widgets a day and I’ve got 1,000 items in my catalog and some are selling 20 and some are selling 10. That’s not nearly as exciting as having some true depth on your bench of the product that you’re selling. I bought an entire pallet of one particular closeout, and it sells awesome for me, and the margins are outstanding, and I’m the only one selling it.
Another reason why you want to have things like that is because I had another product that was really it was great. I was buying it for $5 a piece, it was selling all day long for $25. It’s not the most incredible margins in the world, but it was super reliable and I was selling quite a few of them, sold out. I went to reorder, and I found that, all of a sudden, out of the blue, out of nowhere, there were at least 10 other FBA sellers. Before, it was just me, then all of a sudden I had two competitors. I sold out, waited a month, was going to reorder and I didn’t place another order because there are at least 10 other people competing.
And they were all in a race to the bottom and driven the price down to the point where I would still make money, but I didn’t care anymore. I wasn’t excited about it.
Dr. Weisz: Right. How does that happen? They just research what’s…do they have certain tools that they’re using to find this out or are they just observing certain categories?
Scott: I don’t know. I know what I do. I’ve developed a product research tool that…
Dr. Weisz: Yeah. Talk about that a little bit because this is a spy tool or research tool, or whatever you want to call it.
Scott: Basically, you upload a list and it tells you which of the products on that list are ones that you might want to focus on to sell, it’s that simple, essentially. And there were three of us who developed that. There are two of us who are still operating that research company now. And that’s what I use when I have a huge list that I want to look up, but there are certainly a lot of other ways that people are functioning to find their key areas that they want to focus on. There are a lot of great tools out right now. I don’t…
Dr. Weisz: Have you released it to the public yet or is it only for you, right now?
Scott: Well, it’s in beta but it’s fully functional. Anybody can use. It’s indbl, I-N-D-B-L.com. We’ve actually got somebody who has started using it and they are educating a large number of other sellers. They have a pretty good following and they’re telling us, “Hey, this tool is amazing. It’s the first tool we’ve ever used that worked the first time we used it, and it does everything that we want it to do, and we’re excited to push this out to all of our students.” That’s pretty exciting because we love opportunities like that.
Dr. Weisz: So whether they use this tool or another tool, or research online, how should people best use a tool like this to improve their sales or to find new products?
Scott: There are probably 10 different ways you can use the tool. Once you get your research back and you sort what it is that you’re looking at, so let’s say you sort it by sales rank and then maybe, I always filter out everything that’s a higher rank than the target area where I want to be looking. And I’ll take that and I’ll put it to another worksheet within the same workbook.
So I didn’t lose that data, but it’s not my area of focus at the moment. Because, let’s say, I have 800 items and all of a sudden, I boil it down to, “Okay, here are 10 items that are within the area that I want to focus, in terms of having an active decent sales rank on Amazon today.” Then I’ll take that and I’ll narrow it down further by what’s the best margin because basically we can search by any keyword.
So you choose your column of keywords that you want to search by, whether that’s UPC, or ISBN, or ASIN, or product description. Obviously, the narrower the information, the better information it is that get returned. So the narrowest information might be the UPC. So you search by UPC and then you identify the column of your price that you want to search by, and we’ll bring back and give you everything else that’s coming from the Amazon database, in terms of sales rank, or FBA margin, or MFN margin, all those kinds of things, number of sellers, the feedback of those sellers, all that kind of stuff. So the next thing I would sort by would be, let’s say, I really don’t want to sell MFN anymore.
I just don’t have time, I barely have time to sell anything at all. It’s interesting. If I see a really good deal, I might jump on it but, more often than not, I’m actually doing research as a value-added opportunity for some of my customers. They always want new product. I’ve got one customer who has 27,000 SKUs deep, not just one off, but deep in FBA right now. They want to grow that to 100,000 SKUs and they’re willing to pay me to bring new information to them so they can continue to increase that.
So it’s a unique opportunity because I’ve got a lot of different things I can research, a lot of opportunity there to provide this information to him, and I’m not taking advantage of it anymore. At one point, I amassed all that for myself, and as I’ve move more and more away from selling and more toward helping other sellers, I don’t have as much use for that at this point.
Dr. Weisz: Scott, the obvious question, which you may not be able to answer is because it’s privy information to your clients, but when you first start selling, where do you find good deals?
Scott: I guess, it depends, I think, a lot on what you’re looking for. Are you RA? Are you OA? Let’s say, for online arbitrage, people, a lot of the time, subscribe to lists, right? So they pay X number of dollars, $25 a month to get 10 deals a week or something like that. There are all kinds of opportunities like that. I’ve got a friend, partner who does that just for shoes, right?
So, there’s a lot margin and opportunity in shoes. So he’s focused on shoes and he’s become an expert there. And you see that for all kinds of different offers, and so, essentially what’s happening is somebody is curating a list of subscribers and they’re using, more often than not, VAs, virtual assistants, who are going out and finding these deals and providing them to the subscriber curator to be able to push those out to people in their network.
So that works out pretty well, often for online arbitrage. But a lot of the time, people will just go to every single deals opportunities. So they’ll go to Brad’s Deals and they’ll go to, my gosh, all the different deal sites, or coupon sites, or RetailMeNot, or whatever it might be to maximize their spend.
They’ll go to rays.com and get a discount on a gift card, then they’ll use their credit card and get their 3% or 5% cash back, and by the time they’re done, they’ve got whatever 25%, 30% off or more off of their purchase, and it was already the best deal available and that’s where they’d get their margins, proposition opportunity to be able to sell it at a better price on Amazon and make money.
That’s all that, and as far as where people are finding their deals, that’s just for online arbitrage and there are a ton more of tips and tricks beyond that just for online arbitrage and then you just take that and move that over to every single different type. There are people paying $5,000 a class to learn how to do private label.
Dr. Weisz: Right. What does someone have to do…Let’s say someone’s growing at a larger scale, like your client 10,000 to 20,000 SKUs or 27,000 or 100,000 SKUs, what do they do in that case?
Scott: Yeah. There are a lot of people out there who have basically more money than they have opportunity. They would basically be able to spend as much as they can wherever there is opportunity to take advantage of. So there are some people that’s like you can hire somebody who all they do is search for you or you can hire 10 people like that, all they is go out into the field and find retail arbitrage stuff for you.
So you see that happening all the time. Let’s say you’re in some major city and you’ve got 10 people who go out every weekend, you hired them part-time or as a contract basis, you’ve given them scanners and you’ve given them all of your different priorities for what you’re looking for in a product and teach them how to do what you do, and they go out and buy all the stuff for you. You can do that.
There are booksellers who do that and who have expanded to multiple different communities. So they’ve hired somebody to go out in their city and they’ve expanded across the country, where they’ve got people who essentially work for them, looking for certain types of books and doing scanning all over the country looking for books. So essentially, there are so many different ways to grow. And going back to what you’re asking as far as diversification, the answer is anything.
You can sock your money away and buy car washes, or storage units, or build your own website and develop your own product and sell on there, be building a brand. It’s just I think people should do things that they’re good at, right? Assess what you’re the very best at and what you enjoy doing the most, and capitalize on that, so that the work that you’re doing doesn’t feel like work, but is still something where you’re able to be successful and gain an advantage.
Dr. Weisz: So, let me ask you, so on that example, Scott, are the books, right? Let’s say someone grows, and they have 10,000 SKUs of book, right? And they’re the book specialty. And let’s say they decide they then want to go into barbecue equipment, right?
Dr. Weisz: Do you think they should sell on the same account or open a different account, and if they do, do they have to notify Amazon so that their book account is not affected by it?
Scott: They would need to notify Amazon if they wanted to open another account because they were really entrenched in a certain type of industry or certain…they’re all books and they want to move into barbecue. So, “Hey, I want to open an account that sells specifically for my private label or for barbecue products, or whatever.”
Dr. Weisz: Right.
Scott: I would go ahead and apply for that and notify them and say, “This is what I’m attempting to do. I’m known as a bookseller and I don’t want to co-mingle my…,” It wouldn’t be co-mingling, there’s a specific thing that means in Amazon world, but I don’t want to join all my product together under one tent.
Dr. Weisz: Right. It’s not like you want to buy Huckleberry Finn and a pair of tongs for your barbecue. Let’s say they want to just separate it out, could that negatively affect their other account? Is it not even worth it at that point to branch out and…?
Scott: I wouldn’t say that. I think that that would be potentially a valuable opportunity to diversify.
Dr. Weisz: Okay. Yeah. I’m just curious because I know a lot of people, they want to diversity and they may not want to…maybe they’re known in certain specialty and may not want to just bring those same products. It doesn’t make sense, and their current audience may think it’s strange if they’re seeing that.
Scott: The hardest thing in the world, to me, is to do something you’re not currently doing, that you’re not good at. Everybody that I run into most of the time, the reason that they’re successful is because they’re doing what they do and they’re really good at it. They are the best in the world at what they do.
They know all the best strategies that give them advantage. And so, the one client I was telling you about who’s 27,000 SKUs deep and wants to be 100,000 SKUs, but now, he’s also saying, “Hey, help me get into private label.” I’m not really sure if that makes the most sense in the world or not for him because, at the end of the day, he doesn’t really necessarily want to be selling widgets. He’s a really intelligent guy who would like to be building apps and selling apps, or selling software, bringing it to the level of having it be a startup that’s launched, that solves a certain problem. I think that would almost make more sense for him, than to just jump to private label at this point.
If he could do it all, that’d be fine, but he doesn’t have this team that can all of his ideas and develop them for him. He has me, and I only have so much time, and I think he should probably do what he’s best at. And so since he doesn’t have this experience with private label necessarily, maybe it would make sense for him to leverage his knowledge, since he’s been selling for 15 years on both eBay and Amazon, leverage his knowledge to create these unique apps that solve problems that nobody else is solving. That makes a lot more sense to me.
Dr. Weisz: Yeah. And, Scott, so I wanted to ask too, again, I was reading some of the statements of customers, and one person said that they thought you were so well versed in psychology, they thought you had a psychology degree because you were well versed in dealing with angry customers with the reviews. So what are some of the ways you get into that mind-set into the head of the angry customer and how should people respond?
Scott: I don’t know if I can get into the mind-set because I’m not an angry person.
Dr. Weisz: You know what I mean, you respond in a way that…
Scott: I know what you’re saying.
Dr. Weisz: Yeah.
Scott: Essentially, you want to diffuse the situation. The first thing you want…
Dr. Weisz: But there was something you did really impress him. What did you do? It seemed like you must have diffused a seriously angry customer.
Scott: It was interesting in that particular case. He had just found out about me, and he was wanting to learn more about what I was offering, and didn’t really identify himself, and was wanting to see was I a real person. He went to my website and got a hold of me, called me on the phone to see is this a real company? Are they even going to answer the phone? And he was really just testing me, essentially almost playing devil’s advocate with an argument that he was creating to test me, I guess.
He was, I think, being difficult on purpose just to see how I would handle him, essentially. And I was able to answer all of his questions and give him some confidence about the fact that this is real, and I was able to then explain various answers to difficult questions that he brought up about how to handle various situations. And I think it became apparent to him this wasn’t just some sort of throw up a shingle type of deal.
Dr. Weisz: Got you. So on to the top 25% during the holiday season.
Dr. Weisz: So what are some of the things that worked to do that?
Scott: The biggest thing, I would say, is having volume of inventory. You really need to be preparing for Q4 right now and even prior to now and making sure that all the stuff you’ve been selling fairly well throughout the year, you have enough of, and being, not necessarily inch-deep and mile-wide, but a mile wide and maybe deeper than an inch because the biggest thing is, if you’ve got something that has velocity right now during the rest of the year, you’re going to really see that increase as the months go on, October, November, December, and really, you want to make sure that you don’t sell out because you can sustain that volume of sales and increase your price over time as other people start to sell out.
So there are a number of things like that. Some of it is almost…one of my customers is a former commodities trader, and when you get inside of the way that they think about consumers, and the way they think about markets, and the way they think about consumer behavior, and all those sorts of things, you begin to…he’s got this incredible knack for being able to time things, for being able to pick, pop the items and being able to basically source things that are unique, that have limited availability, where he is able to double, and triple, and quadruple, and even far greater the price on these things.
Dr. Weisz: What else, Scott, do you find…for people selling on Amazon, what else can help them boost sales that you find works for you?
Scott: I think you can certainly do some things with keywords that help drive traffic to your products. I don’t know that that’s specific to Q4 types of strategies.
Dr. Weisz: Yeah. Whatever strategies you find. It could be as little or as big, obviously…Even with the Q4 strategy, if someone stocks up, how do they…You don’t want them to stock up and then they just have all this inventory. How do they actually sell it out so they’re not stuck with inventory?
Scott: It’s very challenging, every single one of those buying decisions is unique, in terms of strategy and how somebody found something, how they differentiate themselves. It’s not the kind of thing where you really want to just throw something at the wall and see what sticks.
Dr. Weisz: Right, right. So, can you talk about something so you’re not giving away competitive advantage but something that maybe you’re not selling anymore and your thought process of why you originally bought it and why and then how you stocked up on it? Is there any example that you can give?
Scott: Okay. Yes. Hang on just a second, I’ll be right back.
Dr. Weisz: Yeah.
Scott: So, I can’t remember how long ago this was. It was over a year that I bought this. But I stocked up on these Duck Commander Ball Caps.
Dr. Weisz: Okay.
Scott: I bought these in brown and green, like OD green. And I probably purchased, I’m just guessing because I don’t even know, maybe 250 of each, along with some Duck Commander fleece blankets, and some Duck Commander key chains, and some Duck Commander cups. And they did really well for a while, and then they just completely flopped off the face of the earth. And I ended up bringing back hundreds of dollars of inventory from Amazon that had been sitting there for too long and I just [inaudible 00:56:13] on that. I think I got in too late. I got into a product that was a little bit speculative.
I was thinking, “Okay, the sales rank is such and such when I bought it, and it’s going to get better over time because the demand is going to increase and more people are going to buy it,” and I kept my price too high for too long, thinking that I’d be able to maximize my margin on it and it was a huge failure, a complete mistake.
Now today, to get rid of these things, it’ll make a lot of sense to create bundles. I could create various Duck Commander bundles that, I think, would probably do pretty well over the holidays and I could get this stuff moved out of here. But I just don’t have time. I can have an idea like that, where I can at least break even or get my money back or even make some money, and I just don’t have the time to mess with it. It’s too much trouble.
Dr. Weisz: Right. You have other things that you’re moved on to.
Scott: Yeah. It’s tough. I used to collect items that I thought, okay, I’ve got a brand new pair of aviation headsets. I can’t remember how much I paid for them. I’ve had them for two years and it’s ridiculous. I think about it all the time. I paid $10 or $15 for them and they’re going to sell immediately for $160.
Dr. Weisz: Wow.
Scott: And I don’t have time to mess with it. It’s awful. I bought a mobility scooter for $50 and then bought $100 worth of batteries to replace the originals, and when I list that thing, it’s going to go for $800 to $1000. I just don’t have time to mess with it. I don’t have time to change the batteries, I don’t have time to get the pictures taken. It’s horrible. I’ve got a…
Dr. Weisz: Yeah, keep going with these, these are good. Yeah.
Scott: I’ve got a Budweiser blimp pool table light that I bought for $75 and there is another one listed right now for 500, plus shipping.
Dr. Weisz: Wow.
Scott: I went out and bought the light bulbs to replace the bulbs that are in it, the things intact, it’s in pristine condition, all I have to do is clean it up, take some pictures and get it listed. I don’t have time. It’s a bad situation, in terms of it’s very obvious to me that I can’t focus on selling things the way that I want to when I can’t even get them listed. Obviously, they’re never going to sell if I can’t get them listed, and they have to have eyeballs on them, and right now is the time to do it because I should be taking advantage of what’s going to be a busy holiday season. And I recognized that I’ve collected over 10 pallets of books, and I’ve collected them over time…
Dr. Weisz: For what?
Scott: …from various different resources. Excuse me. And I knew I was not going to get to it. I knew I was not going to have time to scan these things. So I weighed them and sold them basically by the pound to somebody I found through a partner, Peter Valley, and he found several people and this guy just happened to be an hour and a half away. He drove down, picked him up, helped him load his pickup and he had to come back and load it again.
So, I ended up…I kept probably four pallets of books and probably not very smart of me, I just went and bought two more pallets of books and a pallet of records. And the bad thing about it is, I’ve never sold a single book or a single record, but here I am sitting with at least six pallets of books and a pallet of records, and it probably doesn’t make sense for me. If I was my own client, I’d say, “What the heck.”
Dr. Weisz: Right.
Scott: Right? And, unfortunately, I’m a lot better [inaudible 01:00:08].
Dr. Weisz: You’d knock some sense into that person.
Scott: Yeah, yeah. I really need to sit down with people every once and in a while and say, “Hey, what do things look like from your perspective?” And unfortunately, all my friends come in to my warehouse and they’re like, “Hey, this stuff is really cool.” It’s like a kid in a candy factory, but they’re not giving me the actionable advice that I’d be giving to them if they were a client to tell them, “You need to do this, and this, and this, and this is a huge mistake and change this,” and that kind of thing.
And it’s kind of an issue. It’s like I’ve developed a stupid meme that I probably should have spent time developing with the picture of Leonardo da Vinci with a quote saying, “Very few people notice, but the inside and outside of my house needed to be scraped and painted.” Right? And it’s just like, I’m not trying to compare myself to da Vinci or something, but it’s the whole story of the cobbler’s kids don’t have any shoes.
Dr. Weisz: Right, right. So, what about…?
Scott: So it’s getting kind of embarrassing.
Dr. Weisz: What’s your best idea that people should steal that you’re not going to use, Scott? Or you know this product has huge margins, you’re not going to do anything with it, someone listening, maybe like they’re going to go run with it. What would you tell them?
Scott: I don’t know if that exists or not.
Dr. Weisz: No? Well, you mentioned one, the one about a couple of those products that you mentioned before.
Scott: I don’t mean that, I mean if you’re a client, I can give you that. I can tell you which direction to go in, I can give you some specific product that makes sense for you to sell that I’m not currently selling. I can do that for you all day long. As soon as I say, “Hey, everybody should sell barbecue mats,” it’s no longer a good idea, right?
Dr. Weisz: Only people who have listened this long in the interview get this.
Scott: It’s just going to happen, right? If you’re tracking a number of people who…if you have some sort of service that tells you how many people actually watch to this point…
Dr. Weisz: Yeah, I do. Yeah.
Scott: So what’s it going to be, like 1/100 of 1%?
Dr. Weisz: Usually, 20% ish, 20% will start the video.
Scott: I’d be shocked. No. If they’re listening to in the background and have speakers and they can hear it anywhere in their shop, maybe. Not that you’re not doing a great job, I’m just saying that’s a lot of content for somebody to take in, right? [Inaudible 01:02:34].
Dr. Weisz: Well, I can also send an email saying, “Listen to minute 71, where Scott is going to tell you the actual product that he’s not going to do anything with that has $100 margin for you.
Scott: Right. I had a product like that, and I just gave that to this one guy. It’s like, I’m not going to do with it. I don’t know why on earth I didn’t buy it. I had two different vendors like that. And actually, I’m going to give him a third one. These are things I already researched. I’ve already picked out exactly what I wanted to buy. I already knew how much I want to spend. I never did it, and I was like, “Well, I might as well give it to him.”
Dr. Weisz: Yeah. That should be a premium subscription on INDBL, like premium subscribers get your researched top three products, or something. You only allow certain premium members and then they get your researched products.
Scott: That’d be pretty slick, really. We’ve talked about building out something that’s similar to that. We’ve talked about…
Dr. Weisz: Because they don’t want to do the work. People don’t want to do the work. They just want you to tell him what is going to sell.
Scott: That’s why I offer so many done for you services. I can tell you how to basically do everything to remove your own feedback, but most people don’t want to do that. And the clients I’m looking for are the ones where they want me to do that for them. Right?
Dr. Weisz: So, what about eBay?
Scott: I’ve got one client with 4,000 negatives and neutrals.
Dr. Weisz: 4,000?
Scott: Yeah, 4,000.
Dr. Weisz: Wow.
Scott: And he doesn’t want to do that himself.
Dr. Weisz: You can’t do that yourself.
Scott: No, I probably can’t. That takes too much time. I’m going to have to hire some people.
Dr. Weisz: You need some negative feedback repair apprentices or something.
Dr. Weisz: Yeah.
Scott: I have people I could use for that. But, this is more…I see more of a need to have more people like that who are highly trained and skilled that I can trust and my clients can trust to do that on an ongoing basis because they obviously have to replicate me, and then if they run into an issue, then I can help them with that.
Dr. Weisz: Right.
Scott: That’s the thing that makes sense. That this becomes more of a commodity instead of a service.
Dr. Weisz: So what about…Scott, we didn’t talk much about eBay, and obviously we’re talking about d