Amazon’s Marketplace & Advertising Today with Dan Ashburn

Oleg: "Hi everyone, welcome to Navigators. Today we're talking to Dan Ashbourne from Titan Network, and today we talk about all the strategy and future of e-commerce. I think this is a perfect guest for us. So yeah, could you, Dan, introduce yourself and get to like how to get to the Titan networks, what's your story?"

Dan: "Yeah, for sure. Well, firstly, thank you for having me. I'm Dan Ashburn, co-founder of Titan Network. Titan Network is one of the largest communities, masterminds for high-level Amazon sellers in the Amazon space. We've been operating now as a community for four years but have been on the back of trips like China magic and various different community-based platforms within the Amazon selling space for almost 10 years now. I myself have been selling third-party private label on Amazon for just under a decade, just under 10 years, and today generate multiple eight figures on Amazon every single year, have a team of 230 people and growing, and network has over a thousand sellers that are producing over a billion dollars a year on Amazon."

Oleg: "Awesome, this is a huge community, and I believe you're learning a lot like talking to all those people. So one of the questions that I was preparing like how Amazon changed over the year like you, I think you've been really from the beginning. I joined Amazon in 2015, but I was not the first definitely."

Dan: "It's crazy. So being in my position, I see a lot and just being a seller through the kind of industry for the last eight or nine years, there has been significant shifts in the most effective model and the platform itself. So whereas maybe seven or eight years ago, it was very much this wild west kind of hacky environment where we would head to Alibaba, take anything we could get, listed on Amazon, we'd be buying reviews and doing all this crazy stuff, ranking with giveaways, etc. Amazon quickly then started tightening the screws in their terms of service and the way the platform operates because one thing they have to do is maintain credibility with the consumer, the trust of the platform, the trust of the reviews, etc. So that was kind of like the early days of the wild west, then it started getting tighter, and a lot of the hacks that kind of used to be effective as in generating sales and revenue were kind of taken away and thing put sort of loopholes are plugged, terms of service was released to stop that. But I think the fundamental shift that's more pertinent that's taken place in the last maybe three or four even five years is the shift from private label being this approach of buying and badging from Alibaba as I call it. So heading to Alibaba, finding a product with some level of demand, listing on Amazon, sticking a logo on it, and selling it, that no longer works. That model is dead. The categories are too competitive, and consumers want to connect with brands that really understand their needs and connect with them on an emotional and personal level and communicating in that way. So to be successful on Amazon in today's world, and I feel like sellers are really understanding this shift now because the last sort of two years it's become very very important, we have to shift our mindset from being Amazon sellers or private label sellers that are just buying and bad ging from Alibaba to being brand owners with a clear understanding of the audience you're serving, a clear brand position, and then putting effort, time, and resource into designing visually unique products that solve very specific problems. And yes, we still use Alibaba to go find quality manufacturers, but we have to go through an additional phase of differentiation and product design to develop truly unique products that visually stand out in the search results, stop the scroll, generate the click, and ultimately serve a specific audience that our brand is positioned to serve. No longer on Amazon can you sell to everyone because selling to everyone is selling to no one. And with the introduction of China-based factories selling direct on the platform, as well as it just becoming a more competitive environment, if you're selling what we call like a 'me too' product that looks and functions exactly the same as everyone else in the market, the only thing that's different is maybe an extra widget or a logo, then within six to 12 months, it's just a race to the bottom on price. And I think that's the biggest mistake that sellers make, and those that are kind of shifting their mindset and really going a level deeper in sophisticating their approach to brand and product are the new age of sellers that are going to win and succeed."

Oleg: "Yeah, I totally agree with you, all the private label is dead, and I usually try to say it more polite way, but you say directly, and yeah, probably this is the right term to say. And you mentioned all about the positioning, right? So when you visually differentiate yourself, some feature maybe, so like you position yourself for the specific audience. But still, for example, from our experience, Amazon algorithm is more or less, it's for like you need sales velocity, you need more units, and more units probably for cheap products that not really super standout. So how do you guys like follow all the changes in Amazon algorithm and like I believe it's getting more and more personalized in my opinion. So I would like to like hear your opinion."

Dan: "That's a great question. And I think the fundamental kind of point, the underlying points is that Amazon is a conversion-driven platform, and every step of that shopper journey from their initial search through to how they browse the search results through to which product they click and then whether that click converts or that session converts into a sale with add to cart being the leading indicator for the algorithm, you have to give Amazon what it wants. And if we kind of take, if we remove the kind of geeky algorithm conversation and take it to more of a human level, conversion comes from speaking specifically to your target audience, understanding them, talking their language, and giving them a solution to what they're looking to buy when they enter Amazon. And if you really focus on audience and brand and really understand the customer you're serving with a product within that brand's positioning, and you get all of this from customer service, reading reviews, etc., there's plenty of market data out there, and there's some great tools for doing this market analysis, and then you make the product visually unique and designed to that audience's taste, not only are you going to win more clicks in the search results because you're going to create what's known as a pattern disrupt as they're scrolling, we know 70% of purchases happen on mobile, it's up to 80% now, as they're scrolling down the Amazon search page on their smartphone, not only are you going to win more clicks because with a better main image that is visually different to the rest of the page and connects to the taste of the audience you're targeting, that's a conversion point. You carry that through into the listing in your primary secondary images, your A+ content, your copy, all written to the language of the audience you're targeting in a benefit-led way. Then you match that with the correct pricing for the market, like the market will always dictate price, so typically you'll have like a lower band, an average band, and a high band. The higher price brand generally have some sort of external influence or proof and/or have a bunch of credibility on the platform in the form of reviews. But providing you price correctly, and then you've done your buying correctly, and you've got your margins and ratios right in your profitability, that's how you win. And everything else then takes care of itself. If you get the product right and you get the targeting of the product to the audience right, and you do your keyword research and selection correctly, and only pick relevant terms that align with your audience, everything then falls in place, and you're giving Amazon what it wants, which is higher click-through rates than the average in the category, higher conversion rates than the average in the category. As a result, they give you better PPC placements, cheaper cost per clicks, your overall PPC momentum picks up, and you start winning placements in the auction over your competition. And the compound effect, providing your targeting relevant terms both in shopper intent and the maturity of your listing, either the number of reviews, you don't want to go too broad if you haven't got reviews to support it, providing you do all those things correctly, that's how you then dominate categories, and that's how you kind of stay above that rising tide and keep that placement organically."

Oleg: "Yeah, awesome. I also try to measure the conversion as a core metric, but yeah, funny enough, even in Seller Central, the conversion is not the like key metric that you can see, and many other tools we use, the third parties, don't also put the conversion."

Dan: "Yeah, or inside of Titan, 3, which is a proprietary set of software cells that we've developed over the last few years, currently they're only available to Titan members. And we've done a lot of work in really breaking down conversion because you'll find that Seller Central, the reporting is hit or miss. I know for a fact that the attribution reporting has about a 30 or 40% data gap in their reporting. You connect to the seller partner API and the advertising API, two separate APIs, and they'll give you different data for the same data point. It's an absolute nightmare. So one thing we've spent a lot of time and money inside of Titan doing in Titan tools, our platform, is pulling in all of those data points, rationalizing them against orders, and really kind of calculating accurate conversion (...)

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