Aaron Conant 0:18

Hey, everybody, Happy Thursday. My name is Aaron Conant. I'm the Co-founder and Managing Director of BWG Connect. We're a networking and knowledge sharing group with 1000s of brands who do exactly that we network. And now it's here together to stay on top of the newest trends, strategies, pain points, whatever it might be the shaping digital as a whole, I connect with 30 to 40 brands every week just to stay on top of those trends, more than happy to jump on the phone with anybody on the line today. That's where we get those ideas. So be great to set aside 30 minutes or so we don't sell anything here at BWG Connect, we're just a networking group. But more than happy to connect you with other brands in the space that might be going through some of the same issues that you are as a whole. This the topics that we cover, we're trying not to plan anything more than six to eight weeks out. That's because we just want to stay really relevant as to what the current topics are. But it's everything from you know, Amazon, obviously here in the map space is performance marketing replatforming international expansion, digital age 3PLs are huge right now, if you're looking for any connections across the board, never hesitate to shoot me, you know, as we kind of get ready to kick off this call just a couple housekeeping items. We're starting three to four minutes after the hour, and we're going to wrap up with three to four minutes in the hour to go as well. So just if you're looking at your watch, no, we're going to not be part of the perpetual zoom run over. That's going on. from meeting to meeting right now that I'm hearing from brands as a whole we're gonna wrap this up Get plenty time to get your next beat and grab a cup of coffee along the way. The last thing is we want this to be as educational and informational as possible. So drop any questions you have along the way into the question section there into the chat or always you can email me Aaron aaron@bwgconnect.com that's including an hour after the call, you forgot to ask something tomorrow next week, whatever it is, shoot me a question. Usually somebody that network can get you an answer in under a day. So with that being said, we're gonna kind of go ahead and kick this off. As I noted talking with 30 to 40 brands a week. pain points that are coming up a lot is you know, math as a whole monitoring unauthorized resellers, you know, people shoving it as COVID hit and everybody jumped online and then this really when I think seem to be started to get a control or an idea of really was exacerbated over the past year as a whole. And so that's where you know, this idea of starting a rebooting online map and authorized reseller management came up over and over again we got a great friend partners supporter of a lot of brands in the network come highly recommended from from a ton of different individuals across the board for kind of being interested in expert in this space, Justin over at mySamm and so asked him to kind of jump on the line today share what he's seen going on in the space, you know, different things that are happening as a whole no best practices, things to look out for new things coming down the line anything basically we can throw you know, questions at him. So you know, Justin, I'm going to kick it over you want to do a brief intro on yourself, mySamm that would be awesome. And then we can kind of jump into you know, some of the base questions that I'm getting from brands and then obviously anything that comes through on the Questions tab here will will gravitate towards.

Justin Rychak 3:25

Absolutely so hey all my name is Justin Rychak. I am the Founder and CEO of mySamm started mySamm about 10 years ago. Prior to that I was an econ guy. So I had a bunch of eCommerce websites. We owned a dining table comm volunteers to go light fixtures to go barstools to go. So if you bought from them maybe 15-18 years ago, that was me. My family started 10 years ago, we really started as a map monitoring tool, we did a strategy project for one manufacturer and kind of ended up kind of pivoting and taking all of our staff that was helping with eCommerce sites. And we started mySamm 1.0. Today, we're going to launch mySamm 9.0, which is the latest version of our technology. And with my st. We've got, you know, under 300 brands, I think right now give or take that run our technology really focused on three different areas. One is channel management, which rent talk about today. So that's map enforcement and unauthorized seller management. And then we also get into digital shelf analytics. So kind of helping, there's all these algorithms out there, right, that tend to control how many products get seen by different eyeballs, etc. So we've been doing that for about seven or eight years. And then we've last three years we've got into like content auditing and product auditing. So if you're selling lots of products on tier one websites, how are you doing there? You know, how are you comparing against the competition, that all your content, make it there with what's going on? And what are some like strategies or techniques that you can use to help, I guess maybe outpaced the algorithm if you will, or grow market share and competitive shelves. So anyway, that's the 10,000 foot version from us. I know we don't have a lot of time today. So I'm gonna kick it back over to you, Aaron and let's get started with some questions and see if we can help these guys understand more about math or kind of getting a hold of this This whole channel conflict.

Aaron Conant 5:01

Yeah, awesome. So again, drop any questions you have in the question section there, and we'll start tackling them as they come in. But couple just to set the baseline questions that I get a lot from different organizations in the network, you know, where do brands get tripped up with map or online pricing policies as a whole, a lot of people tried to put them in place, or they've had them or legacy ones in place. And then, hey, we've got this, you know, online versus brick and mortar, which is actually something that you know, Daniels types in a note here, I want to tackle that one right after this one. But where do you see brands get tripped up with map? And online pricing policies?

Justin Rychak 5:37

Great question. I think that there's probably four areas you need to focus on. The first area is for less first issue is lack of organization. And what I mean by that is your pricing policy should really be considered one of your an important component of your overall company's larger brand protection strategy. Right. So there's other components, there's your map policy, but then there's also an online dealer agreements, warranty protections do not sell us and then you also need to have a proactive unauthorized seller strategy as well. So what I would say is lack of organization, you got to think a little bit bigger than just map to a big lack of commitment, right. So for the President on down to salespeople, even not associated with eCommerce, that needs to be understood and enforced. And if there's a break in the chain, you're not going to be as effective. And also too, if you guys have done that before, you know that brand needs to unilaterally enforce its mat policy to be consistent across all retailers. And that means like, you know, you need to enforce your policy based on sold decisions, you know, to avoid antitrust issues, you don't want to create an appearance that you're kind of working with other sellers or something like that. So one is lack of organization two, lack of commitment, three is going to be, you know, your map policy should be marketed. And that's a little different position, right. But your map policy is part of your overall sales strategy. It's actually like an arrow in your sales, quiver. So it's a carrot, not a stick. And you should communicate that to your partners in an effective manner. Right? Really, what you're doing when you're enforcing map is you're trying to keep a level playing field, but you're trying to help your your partners make more money, right? The idea is, Hey, can I help you, you help me help you make more money. So you want to market it that way and not have it be that stick. And then the third, the last thing would be consequences. And you know, 10 years ago, when we started this, everyone kind of adopted the three strikes and you're out rule. And then what happened was their largest account got the third strike. And they were like, well, this doesn't really work. I can't do that. So we saw this pivot. And right now, I would say, generally, the most effective approach to enforcing or having consequences is when you put an account on hold, or you withhold shipment, right. So you find a reseller selling your product, and they are below map and you give them 48 hours to fix it, or 72 hours to fix it, they don't fix it, then you withhold shipment until they do. So that seems to be a very common approach. And then there's another variation, really, that has taken off a little bit more, which is enforcing map or a pricing policy and an account SKU level. So what I mean by that is if you have 200 products, and account x is found in violation of 50 of those 200 products, well, then you withhold shipment on the 50, you don't shut the account off entirely. So the account can then sell the other 150, they're still at map on or at the right price point. And then there's other types of things in terms of repeated offenders, right. So we've got some clients who will, if they found a client in violation on a product, the second time they're going to after that client fixes it, maybe there'll be a on hold period of seven to 10 days or something like that. And then there's also different ways of consequences when you think about dealing with distributors or maybe allowing, you know, not allowing a reseller to sell specific products or collections, or kind of getting into customer segmentation, or product segmentation, or white labeling. So you know, thinking about the consequences, or kind of having that big, kind of thinking about everything, the game theory first before you enforce is super, super important. So I'd say those are four things, right, lack of organization, lack of commitment, marketing your math policy properly, and then thinking through the consequences and understanding like, hey, if I do X, what do I think will happen? And we obviously help a lot of people kind of get their hands around that and tell them what they should expect if they do different things.

Aaron Conant 9:11

So there's not three strikes, you're out. It's basically one strike, we're going to start I mean, that's when you start putting these these, you know, stock ships into effect.

Justin Rychak 9:24

Good question. Um, so Well, I-

Aaron Conant 9:26

I think what people are very rephrase it a little bit is I think he was trying to figure out what's fair, right? Most of us are just want to be fair, and businesses business. But what they don't have is this overarching view of what everybody else is doing. So you get kind of that spotlight, but I don't want to overreact or appear to overreact.

Justin Rychak 9:45

And question so it really starts with the nature of how your econ business works, right? So let me let me explain. If you're a manufacturer, and you sell to like two or three tier one accounts, so maybe you're an Amazon Walmart Home Depot, Lowe's kind of player, and they're doing 80 to 90% of your business? Well, you got to take that into consideration. If you're a brand that has, you know, you're really focused on selling just to retailers and or designers or some other offline specific and you want to protect those people, then you have to kind of think about it differently. So there, there really isn't a magic bullet to say, Oh, well, I'm, I'm going to do it this way. It has it's, it's more of a collaborative Okay, approach, which is, you know, this is how I'm doing business. This is how I want to grow. And this is how I want to use my map policy as part of the overall growth strategy. So whether you're going to levy consequences in one way versus the other, it you have to kind of understand the playing field, and Okay, what am I trying to accomplish. So I don't want to tell you, hey, you want to hammer someone right away. Now, I will back up and say this, when if you're one of someone who's re engaging in your math policy, right, so you haven't done it because of COVID. And now you're thinking about doing this is our best practice, right? If you want to start enforcing that, what you do first is you find out who's in violation. So you get a technology like mySamm or someone else, you start scanning and going, Okay, what's going on. And then really what you do a month before you start enforcing, you call all of your big players, and you sell them and you tell him listen, this is what our plan is, we're going to take 30 days, and we're going to start enforcing in 30 days from now, and account x, I'm going to email you your math violations, and I want you to fix it in 30 days, here are the consequences for being found in violation. And really, what we're doing is you want to protect you, we want to help you make more money to keep the playing field level. So you got 30 days, here's the map, pricing, etc, what we're going to do, and then you email them once per week for four weeks leading up to it. So you extend the olive branch when you initially roll it out. And by doing that, what you're doing is you're gonna basically bend over backwards for them and try to be a good partner. And by doing that, you're gonna get a lot of people to clean up there, a lot of them that violations when you start, and then you're left with a much smaller group of math violations, when you do start enforcing. Now, the level of consequences and what you're doing is going to vary, right? So you kind of have to figure out and kind of go through the game theory first. So I don't want to tell you to just hammer the guy out of the gate, because these are also the accounts who are helping you make money. So but it again, depends on you know what, you know which customer bases are most important and how you want to do.

Aaron Conant 12:15

Awesome, love it. So a question that comes in. I'm recommending we have a different map pricing for online versus brick and mortar to account for shipping and fees. Have you seen many clients do this, you know, having to map prices?

Justin Rychak 12:28

But yeah, you mean you really it's very difficult to enforce a map policy and minimum advertised price policy. So a retailer is going to advertise a price in a periodical or local to their store, right? That doesn't happen very often. But with Econ, you have imat policies, right? Or an eye policy, an internet minimum advertised price policy. So a lot of people have imat policies and get out in front of it because most of the conflict happens on the online. Right. So having an IM that policy is fine. Whether the retailer so I want to qualify this question, if you've got a retailer, who is a hybrid account, so they're selling on line, and they're selling in their store, if they're advertising online that I'm that policy needs to apply. Right. So you can though I think it's that's kind of maybe a distinction that I would go in that way. And if you're really kind of, you know, I want to know more about your scenario before I say, hey, just do this. So if you're whoever asked that question, if you're thinking about jumping to do something next, like, let's get it Let's peel back the layer of the onion here a little bit more, because there's some subtleties and nuance to it.

Aaron Conant 13:28

Awesome. Love it. I mean, that goes for anybody. You need a follow up conversation more than happy to put you in touch with Justin across the board. I think that's one of the great things. Well, you know, the recommendations that come is the strategy that comes along with with the service, you know, across the board. So, you know, if I think about, you know, what does a brand need to think about when it wants to start enforcing its map policy? So we touched on that, are there any other things that they should be thinking about when you get to that enforcement stage? I really liked like how you outlined? Hey, like, you know, this is kind of a policy if you took a break during COVID. And now you're going to come back that you're right, you're not just waiting, and then going walking people over the head. Right. Yeah.

Justin Rychak 14:10

Good question to two more points. I'll add to that, right. The first one is, your brand needs to have a communications game plan before it starts enforcing its policy. Right. So for example, you know, for our new map clients, we give them sample talking points, map enforcement, messaging, and sample map rake emails to edit and make their own. So you want to have a communications game plan first, right? And then part of that is you want to alert your sales reps of your brand's map enforcement timeline and also have your reps proactively communicate these expectations to customers. Right your your map policy is part of your overall marketing policy. Right? Explain how it's going to be good for all parties a race to the bottom no one wins, right? So only a few people are going to win and kind of have that Kenmore CEOs model if you ever heard that Harvard Business case, right where basically tail wag the dog and yet Sears became such a large account they kind of controlled Kenmore, right? So you want to you want to keep the playing field level you want to communicate to all parties and then you really want to celebrate success, and you want to market it as a way to help your clients understand why it's good for that. That's point 1.2 is, hey, think about who the customer base is you want to serve our right your map policy is in place to protect your relationships with large the specific product in a customer types. And the and if you're someone who's trying to protect one customer type more than another will then pay you the language of your policy can can do that, right. So think Just think about it that way as well. So understand, hey, now think through the game theory of Okay, at the end, hey, this is what I want to have happened. These are the problems I want to eliminate. And I know those are general broad stroke questions. There's so much more to it. And I'll just give you a couple of anecdotal points, if you've got tier one accounts, right. So if you're someone who makes a single product or a handful of products, and you've got a lot of different types of accounts, but some accounts are larger than others, well, tweaking products or creating exclusive products is a strategy that one can use. So you just think about like overall customer segmentation, product segmentation. There's so many different creative ways that we've seen different accounts kind of just tackle online growth and protect different customer groups. So that's the one thing I'll just you know, don't don't don't put yourself in a box just because you think you have to be in one. There's a lot of flexibility.

Aaron Conant 16:24

Awesome, right. So in regards to unauthorized resellers, because there's a couple questions that have come in here, so stay I wanted, who are on authorized resellers, and how do they operate just to set a baseline as a whole? For me, too, we got a lot of people on the line today. And so just to set that baseline and then we can jump into you know, Tabitha put into question here we can we can jump out to.

Justin Rychak 16:46

So an authorized seller right is basically an unknown actor selling your products online. Right, I think about online sellers. In general, there's kind of there's a couple buckets, there's bucket one, which is a matched account, we call them in our technology, but that's an existing account, okay. But you might have a an unknown actor, which is an existing account doing business under a new name. So very generic example of that would be Wayfair, launched Perigold as a different website, what's Wayfair doing business under a new name, right, there's an existing account, doing business under new name, the second type of unauthorized seller or unknown seller could be a hybrid account. So hey, I'm Justin's local Emporium. And I've got a website named Justin's custom or jjs, custom something or other online? Well, that's actually the same person who we treated as an offline dealer. But now they're a hybrid dealer, where they're both online and offline. And that account should be given the online policy and the iMac policy, you know, based on how they're, you know, going to behave online. So you've got the knowns, if you will, who may do those tweaks, and then you have another group, which is called rogue sellers. Now, a rogue seller is not a counterfeiter, we're talking about someone who's getting your genuine products, but they're getting through the gray market. So typically, the rogue settler could be a third party seller obtaining your products through authorized dealers. So we know you see a guy who basically approaches an authorized dealer and he plays the Good Samaritan card, hey, I'm too small to sell these products, but they said maybe I could reach out to you and just sell them on like I put some orders through you, you know, that sort of thing. And then they scrape and they crawl under below map on 1000 of your products, and like how this happened, but you have third party sellers, you've got liquidation companies, right? who often sell returns on marketplace sites like Amazon, you've got arbitrage sellers. I mean, there's a course out there online, you can see where people teach this, right, but you've got guys who are maybe selling on the Amazon Marketplace, they get an Ei n number and then they go through Home Depot pros and they're buying product, they're you know, getting account there, then they're just changing the ship to address and applying arbitrage that game. And then you've got affiliate sellers, right. So big one of those is home and garden Better Homes and Garden, right. So what they do is they will send ads out but you don't actually buy through home Better Homes and Gardens. It gets redirected to the actual page. But those are the there's there's many other affiliate sellers who are not as well known as Better Homes and Gardens. They're just other people that are out there doing that type of thing. So the true wrote unauthorized seller are those four buckets, third party sellers, liquidation companies, arbitrage players and affiliate sellers. And also with low barriers to entry, right? unauthorized sellers have grown exponentially, especially with COVID. And whether you're brand new to the technology, like mySamm or any other method brands need to have that systematic way to identify track and remove unauthorized sellers. Right. So there's no there's a process for doing that. And if you want me to get in that just jumped to that.

Aaron Conant 19:32

It's a question that comes in here. What's your experience recommended resolution with enforcing map and unauthorized sellers for brands who sell to distributors?

Justin Rychak 19:41

Good question. So that's, you know, there's more than one way to tackle that. So let's kind of define that really quickly. So, hey, if I'm a manufacturer, and I'm selling to a distributor or DC, and then I'm allowing that distributor to sell to anybody else, right, that's kind of the nature of that question. And with that, It depends a little bit. And it depends in this manner. So if I've got a ton of direct retail competition, or I don't have any retail sellers, I sell to directly I'm only distributors, I'm gonna think about it a little differently. So there's not a one size fits all solution. If you are someone who sells to both parties, right? Typically people will approach the distributors and say, Hey, listen, we got a problem. And really, we got this channel conflict out there. And we're having these races to the bottom where you know, it's really something that's offense, it's hurting some of our other relationships. So what we want to do is we want to start to enforce Matt. So they have direct communication conversations with their DCs and say, Hey, listen, DC, you didn't tell me who's selling online, here's our philosophy, we're doing it, we're doing it to protect margins and protect you as well. So you get out there and you say we're doing and then you also communicate to them if, you know, we can't have you being part of the problem, we want to address you up front I had you kind of be part of our solution, and we're gonna invest in technology, we're gonna do all this stuff, but we're doing it to ultimately benefit our relationship and keep keep the playing field healthy. So Mr. distributor, can we talk about who you're selling your products to? Or can we work together in that regard, if they, if they want to do it great, you start to have that open dialog, maybe you talk to the distributor about pricing and things like that, before you even set your pricing for that policy, if they're really big distributors, also to you know, you can have situations where you kind of talk to the truth and say, Listen, if it's something where we can't control it, we're gonna have to take it in house, and then nobody can sell it to anybody online. And then there's consequences. If distributors don't adhere to that, they're gonna pay a higher price, they the distributor net price, the discount they get from you may be higher if they're part of the problem, and you continually have to find unauthorized sellers and trace it back and go, Oh, this distributor is the squeaky wheel. So, you know, dealing with distributors, is and how you deal with a distributor is really a function of how you're doing business collectively. And then what you want to accomplish and how adherent to your policies these distributors become. So again, there's no magic bullet to it, you have to you have to have a strategy first, and then see how these distributors are kind of willing to play ball, right. And I think people who are more willing to protect their brand and make it known to everyone they communicate with it, hey, they're pretty effective at doing it. A lot of people take the short sighted approach and say, I'll never be able to control my district is never going to work for me. And you'd be surprised. I mean, so if you are willing and committed to controlling your distributors, it's possible. Now there could be an exception, where you've got one distributor who does 95 of your business, and you're kind of the tail wags the dog, that Sears Kenmore model. But generally, you can reach the chord, where you know, you've got an agreement with you and your DCs. And then it can be reached in a lot of different ways. We have a client who basically has a enormous distribute distribute distribution center, and distribution center was selling to a bunch of people selling on Amazon. And they were like, Look, man, they caught the guy over and over again, and this distributor was doing like, they're behind this, this huge percent of their business, they said, Listen, here's what we're gonna do, we got two options, you can become the seller online for us on Amazon, and we'll teach you, you got to hire the person, and you got to prevent everybody else from doing it online. Or we can take it all back in, and you get none of it. And they basically got an agreement where that distributor now, not under their name, but is the one selling record Amazon, and they've got an Amazon person, but they've now that distributor is kind of controlling. And the reason they gave that distributor, the ability to do so was because that distributor controlled so much of their volume. So they kind of they came up with a good strategy, right? But there's not a one size fits all thing. You have to think through it all the way. So if you guys remember anything from today, don't shoehorn yourself, look at the entire playing field level playing field go, Okay, what do I want to accomplish? What are my strengths and my weaknesses? And then have that map policy support what you want to accomplish?

Aaron Conant 23:48

Awesome. Love it. So a couple more questions that come in that I just want to kind of keep following that stream here. A couple of them, I'm going to combine these first two together, we deal with Amazon arbitrage sellers constantly, any way to effectively take action against them or remove them. And the other one is, you know, right along the same line, are there common ways to get on authorized sellers to remove their product listings?

Justin Rychak 24:11

Sure. Okay. Yeah, great. Well, there's, there's, I could talk for an hour just on that. So let's kind of, I'm not sure if everyone on this call is in the exact same spot. So I'm going to kind of build up to and I'm going to answer both of those questions, but I'm gonna answer the first question and answer the second question first. So let's first talk about like, so we got an unauthorized seller, we want them to remove listing. So what are like the common ways that people do that? Right? I'm not gonna get into too much of the legal weeds, but there's kind of, there's three general genuine, genuinely three ways to do it. Right. Typically, unauthorized sellers are removed or deterred by sending cease and desist letters, sending copyright infringement takedowns and occasionally trademark infringement takedowns and then also cutting off the rogue actor supply typically through secret shops, you know, and in my saying we have an unauthorized seller team devoted to removing sellers, these rogue sellers with methods and we can or we can you can hire us to do it or we can support your team if you want to handle it in house. Okay, so so those are the three general methods. Now let's just talk about them for a second, like how does a cease and desist letter work? Like, what is that, right? So basically, when we find an unauthorized seller, actually what our team does, they're going to research a road account, I'm going to find their contact information, email address, etc, right. And then what our team does, they're going to send a nice inquiry letter to determine if the unauthorized seller isn't account selling under a different name variation, because that happens a lot. And if they send that, right, they're going to that account typically going to get back to you and say, Hey, well, you know, here's our, here's our billing account ID and we can match them up in the system. So we kind of know, okay, this is actually, you know, Johnny is actually changing or whatever it might be. And if they will also say, if it's, if you're not a billing account yet, please remove them. So you kind of have a nice email or a nice inquiry, first certified letter, mail, something like that. And if there's no response, then you basically set up a starting query letter and say, Listen, you know, by mail, or whatever, informing the unauthorized actor, that they're infringing content is not removed, you're gonna pursue copyright takedowns, legal action, etc. So that's kind of the way that you that's, that's, that's kind of the big, I guess, you know, the big, big picture, if you will. So now, if we're talking about Amazon, right, that was the first question, right? How do we reduce on off by sellers on Amazon? Amazon is tricky. Okay. And it's very tricky. And I'm going to, I can kind of go a couple different ways. The first reason I'll tell you why the problem with Amazon is so great. Right? And this is kind of interesting, right? But you kind of have to, you kinda have to follow the money. Right? So. And there's a website out there called marketplace policy, if you're curious exactly what the up to date stuff. So I don't know exactly how much money but if you think about Amazon in general, right, Amazon is Amazon, Amazon Marketplace, Amazon Marketplace is worth like 300 billion on Amazon and Amazon just selling direct is worth like 190 billion. So their marketplace is worth way more to them than just them selling direct. And they make like 15% per sale, and then they charge additional fees, etc. Right. And I think in 2021, to like the bad the fastest growth you're at like 60%, with all this stuff. So you know, so when you follow the money, Amazon does not have any financial incentive to help your brand remove its unauthorized sellers and reduce channel conflict. So they frankly have said, you know, your distribution problem is your problem. So it's your kind of the gains a little stacked against you. Now, there's strategies and techniques that you can use, and we generally have five, right, so from top to bottom. And on our authorized seller team is going to do these things we can one send cease and desist letters to the Amazon storefront to the sellers contact information on Amazon pivoted and now they'll give you information. In most cases, if you click the name of the seller, you'll go to that you know that page where you can see who they are, or there's some contact information. So you do that, right. That's one, since he sends his letters to his you try to identify secret shops, you try to identify who's sourcing the product, and you work to shut down the source. And we teach people best practices there, we can do it for you. But you generally, people can typically find some way to do it. Or we can do a secret shop where Hey, we got 175 secret shoppers around the country for us now. So we can know. And if you're doing a Secret Shop, you want to make sure you don't have someone with your organization, buy it on Amazon, right, these guys are pretty smart. So if someone in your organization is buying it from the same zip code, the warehouse is located, these guys will do a Google search or a LinkedIn search and be like, Oh, that's the guy that I'm not going to ship it to this guy. So you have to be a little smarter about it. So you got a secret shop. So excuse me, this first Secret Shop. We have a lot of our brands tighten up their return policies with big box stores and reduce the amount of liquidated products on sites like liquidation calm, that is oftentimes a lot of three p sellers get their products. So three, we also have brands create and circulate, do not sell this to their authorized accounts and distributors asking them to please don't sell to bad actors. So that's also the fourth thing that do not sell us then the fifth thing is you want to look in the legal weeds here. But Amazon, this is a little tricky. Once you upload your information to Amazon, you if you sign their regular contract, you give further contract you give Amazon and its affiliates and irrevocable right of publicity to use your copy written material. Say it again. So if you sign their regular contract, once you get the data pushed up, if you're responsible for getting your data on Amazon or Amazon's marketplace, you have given Amazon and its affiliates, an irrevocable right of publicity forever. So that's kind of tough, right? So if so, what people are doing as well man once it's there, that's a little tricky. So if you're the type of brand that comes up with new products on a regular basis yearly or something like that, limiting distribution to Amazon upfront is very, very important. Also, you know, withholding certain products and going through that customer segmentation, product segmentation, like who can sell different products online. is also very important. We have a lot of our clients who have, instead of having all these authorized sellers sell on Amazon, they limited sts think strategically to maybe like there's only 10 people who can sell online. So they're going out of they're basically telling all of their existing accounts listed only a certain account can sell on Amazon, they're given, you know, there's some kind of fluid they've got to meet to do it or something like that. So there's, so there's methods of going after Amazon, it's not the same for everyone, it's kind of really dependent upon who you are as a brand and supplier and how your distribution channel kind of kind of works. But the big thing is, right is getting back to that irrevocable rights, right? That contract is pretty stiff. So if you don't want to push that excuse being sold on Amazon, you make sure your eecom team does not upload all of your product data on Amazon's product detail pages, right. And if a third party is uploaded, you can still take it down, as long as your brand has not given Amazon permission to do it. But you just got to kind of think through that. So I know that's a huge, long answer. But there's so much to unpack with Amazon. So anyone that's more specific question for Amazon, let me know I can kind of address those also.

Aaron Conant 31:05

Yeah, how many people actually take down so cease and desist letters? Right? If you actually come down when you shoot him a cease and desist letter?

Justin Rychak 31:17

So okay, good question. They do. Yeah. So I think you're kind of asking like, you know, what are you doing, like, percentage wise, like, who cut or lose? What is that kind of what you're going with? Like, what's happening by how successful Can I be? Is that kind of fair?

Aaron Conant 31:27

Yeah, like, Yeah, what percentage of unauthorized sellers, you know, actually route product listings based on receiving the CMD letters?

Unknown Speaker 31:35

Okay, so I'll kind of answer that a little bit larger, right. So. So, managing your channel. And what you do is, is, you know, it's kind of it's, it depends on how proactively you manage your channel. So I can say, anecdotally, right, the feedback I get from an authorized seller team, is about 50% of the unauthorized sellers are going to remove their product listings after receiving a cease and desist letter. 50% now, though, if a brand is even more proactive, like our unauthorized seller, team, filing copyright takedowns, doing secret shops, setting up, you know, doing things like that the percentage of Rogue sellers, removing their listings was even better, probably closer now from 50% probably jumps up to 75 to 80%. And then if you also match up unknown sellers, to your accounts, like kind of go through this process, and then you also cut off supply, oftentimes value if you're taking it from like, 50%, up to like 95% channel conflict. So you're still gonna maybe have another five to 10% of yourself that are really bad actors, where your brands gonna have to make a judgment call, right, the cost benefit analysis to initiating a lawsuit or waiting them out and cutting off supply. But I think the takeaway I want you guys to have is this, it's important important to keep in mind that a brand needs to systematically monitor and resolve its unauthorized sellers. Oftentimes, the sellers remove their practices within a couple of months, and they kind of come back up, the brand maybe isn't looking or something like that. So my advice is to keep monitoring, addressing unauthorized sellers is a marathon not sprint, it is not something where you're going to fire a magic bullet and make it go away. But it's something that if you proactively manage it, is significantly reduce it, but you got it, you know, you got to do it, you can't, you know, there's not an easy, easy button that you push that makes it happen, doesn't do it you got you got to get in there and kind of do it or you to hire someone like us, or you have to have someone your team who develops the expertise can go through it, but it's definitely, definitely possible. And it's not, it's not on, it's not a hurdle you can't get over, you just have to have a strategy you got executed. So and also to think about as well like the, you know, the game is not set up against you. Right? So it's not a poor me type situation, you'd have to kind of get organized and Okay, this is what we're gonna do. We're gonna make it happen. And you know, you got to have a strategy and treat people well and be fair, and it's definitely comparable. That's a word. So.

Aaron Conant 33:42

So next question that comes in here. I'm gonna go back to we're going to have our draft map reviewed by our legal team next week. Are there any legal implications, gray areas to be aware of before drafting a policy?

Justin Rychak 33:56

Yeah, I mean, it's funny. I've probably read 300 map policies. Right. And I will tell you that it depends on like, we had a we have a client in the last month where their their legal team, like came up with something outrageous. So my takeaway for you would be focus on consequences. And it's, it's something where, sure, you should certainly have a legal team look at it, but there are some best practices you kind of need to adhere to. I've got I've got like a guardrail email, I can kind of give you if someone's interested in that, where I would really encourage you to kind of think about consequences. Think about your it's both a map policy, right. But you also have to have that authorized dealer agreement. So everything outside of pricing should be in another agreement that's equally as important as your map policy. For example. You know, you don't want distributors, you don't want known accounts, retail accounts acting as distributors without consent. So you want to get out get out in front of that say, Hey, listen, if I'm selling to you and you're not a DC, you can't turn around and sell it to someone else. Why? Because you want to you want to cut down on these Unknown sellers who are doing it, you don't want to, you want to get out in front and say, hey, you've got to disclose who you're doing business to ask to me, right? You could have told me your name. Like if you're online doing stuff, and you're now a hybrid account, you have to tell me who you're doing business. If you can't have 50, different names online, you can have one, right, and you got to be consistent with it. If you have a website, you've got to give your phone number and email address every time you advertise ourselves. We don't want to be associated with partners who hide the ball. That's not the type of people we want to be associated with. You can't do Name your price tools or things like that, right. So you've got your pricing policy, you also have, you know, your authorized dealer policy, and you can kind of combine the two, I don't think anyone has agreements, right. It's all a policy, which is like, Hey, you want to give people the flexibility to follow it, and need to be given the flexibility to not do business with them, but you want to lock them in. But you have to have both of those documents, at least those issues, or at least the issue that come up, I'm Incorporated, I've got a webinar series that we did a couple years ago that kind of touches on those things. So if someone's interested in that I can I can send that to you. Or we can have another follow up call, or I can have one of my sales, or business account executives kind of talk to you guys through it as well. But there's, you know, I guess my other point is don't don't rush, right, you can definitely make changes to your map policy. But you've got to set the game up to win. And if you're getting advice from just your general counsel, and not like a math expert who's out there, like watching the bullets fly and seeing people be effective, you might be rewriting a policy or you might have a policy, that doesn't work. And we have probably undone I would say 30% undone, we probably had 30% of our clients have to make changes to their math policy, simply because they created a policy that was the it wouldn't work. It wasn't effective. It didn't think about both sides of the equation, or really what they wanted to accomplish. Right? So when you're talking to your attorney, say this is the outcome I want to get to. So how does my language need to be written in order to achieve what we're looking for? Right? And you don't, I mean, most people don't want to get to the point where they do know business online, right, they want to take advantage of the econ channel, and they want to grow in intelligently. So you got to think about how you're going to be a good partner to them as well. Right. And I think also that and that authorized dealer policy, a lot of our clients, we encourage people to say, hey, look, this is what the brand and the manufacturer is going to do, we're going to ship within one to two days, or whatever your shipping time is, we're going to warranty our products for all authorized sellers, and not warranty them for unauthorized sellers, right, we are going to, you know, provide this provide this provide this and you get out of this we're gonna do but then we're doing this, here's our expectation of you being online as well, if this is this is a two way street, here's what we're gonna give. And here's what we expect from you. So there's a lot that goes into that. So whoever asked that question, I would say, you know, let's have an offline questions, kind of discuss it for you, because you, it's easier to, you know, prevent a problem than to go out and have a new policy that's going to create problems for you later. And there's a lot of things that people do that create pitfalls that can be avoided.

Aaron Conant 37:57

Yeah, it's just, it's super interesting from the standpoint of where I think we're on this maturity curve. That got accelerated during COVID, where the map policy, the enforcement, you know, and we were in the beginning stages of trying to get it to work out to see what was fitting for our organization as a whole maximizing profit, still, at the end of the day, that was fair across the board, or how we deemed it fair. And now we're, we're getting to this maturity curve, where we're realizing these seven different things that we're addressing independently, you know, now are all combined into one holistic strategy. And so now, you know, as you're mapping them out, and connecting them all, you know, in the back of my head is just like, Hey, guys, I know your thoughts there you see the same thing.

Justin Rychak 38:45

Yeah, no doubt. And let's, I want to address that map policy question. And this is actually goes across the board for everyone. There are really three types of problems that occur in a variety of different ways for everybody. Okay, so I'm gonna, let's just talk about how your map policy should address these problems. That Problem number one, is really this. It's a bunch of unauthorized sellers who are creating channel conflict. Right? So it's Yes, it's a pricing issue, but it's, it's a distribution problem as well. Okay. And that's math problem number one. math problem number two, is me two guys. So guys who are really tier two and tier three accounts, who are advertising through Google or eBay or Amazon or however you allow that to kind of occur and they're just the only thing that they can compete on is price. They've got a website that you wouldn't recognize. Maybe you do a lot of business with them but they really aren't a household name. They don't have really, they're not a destination websites. Some people do it well to likes Simax is a great company but they're no one goes to simax.com they they send their amazingly well. You do amazing job of like sending fees to different places, right, but they're not necessarily The Nation website. So that's, you know, the tier two tier three guys. And then the tier one. The last problem is the tier one guys. And that's where you have like Amazon and Walmart, who are like competing against each other and looking a little crap out your product or can't realize a profit, right? These guys will battle head to head for different market share, and they'd rather lose, they'd rather, you know, have your product, no longer make a profit, then lose a sale to Amazon or vice versa, right. But those are the three problems that generally everyone deals with unauthorized sellers creating channel conflict, me two guys who are basically out on marketplaces and search engines who are doing stuff, and then larger tier one guys who tend to compete against each other or more destination sites known for that product category. And your map policy should kind of think about those three problems, because that when you boil it all down, that that's kind of it. And then there's the counterfeit. But that's outside of that, though. So think about those three things as you're kind of addressing the the map policy.

Aaron Conant 40:55

Yeah. Awesome. Love it. So a couple more questions that come in. What are your thoughts? Let's jump to this one. What about patent enforcement? Is that an option? If you have a patent?

Justin Rychak 41:06

How does that play in? That's a great, you know, you I'm married up my wife is an attorney. So and she runs our UAS division and you're asking the wrong, right check. I will tell you that that definitely comes up a little bit, but genuinely you're doing copyright infringement. takedowns or occasionally trademark infringement. takedowns, the patent is really hard to kind of deal with, I think you're probably asking, I think I'm going to assume you really are going more down that trademark route. And you can certainly do trademark rounds. But at that the patent or the trademark might be more of a counterfeit kind of deal. And from an Amazon perspective, you know, it's counterfeit, No, you didn't do it, Hey, you got to prove it, which is a whole other thing. And that's kind of outside the scope of what we do. But that's, that's the patent type thing, hey, someone's, you know, made the same product as ours. So that's kind of outside the discussion. But people we definitely help people go after a, you know, unauthorized sellers to cease and desist. And then copyright infringement, and then the traditional occasional trademark infringement takedown yet.

Aaron Conant 42:08

But what are your thoughts on map holidays, a period of time where selected items are allowed to be sold under map? You know, thinking about Prime Day, Black Friday, Cyber Monday? Does that pop up a lot?

Justin Rychak 42:22

Yeah, right. So that's an opportunity for you do make more money. So you should embrace every opportunity you can to make more money. Now, having said all that, right, so you mentioned Prime Day or Wayday on Wayfair, whatever, right. So the one thing you want to do is you want to unilaterally enforce your policy, here's a couple ideas or suggestions you might want to think about. So typically, you know, participating in a map holiday. One strategy is you announce your map holidays throughout the year, and in our technology is pretty awesome. You can upload your pricing and say, Hey, on these days, we don't we don't want enforce map. So we kind of let you do it. Or you can upload your pricing for certain timelines and say, oh, on this day, we're gonna allow 15% off our map price. So you can do Mac price reductions, right. So I've $100 products and for these this week, you can sell it at $5 across the board, or you can do Hey, there's no map holiday for certain products, then you come up with your schedule for the year. And then you're also going to have accounts, you say, well, we want you to do this. And generally people will have map holidays for different types of different times during the year though, brands will create that a lot of times it's brand specific or product category specific, right? If this summer is a slow time for you, a lot of people do different things during the summer, we'll have more holidays, or maybe they'll take different segments of their product line and have map holidays during slow times. Right. I don't know if you're a seasonal business, but that happens a lot, as well, as well. And then the other. The other kind of piece of it is this and this is the one kind of takeaway is from a legalities, the wrong word. From a best practice perspective, I would say Listen, if if a large if a small account approaches you and says we want to do a map holiday, and they're a tiny account, well, there's no business there's, there's no money and you're doing that, right, you just got to tick off guys who are doing more business, that doesn't make a lot of sense. When a large account, who does sizable business with you comes up and says hey, I want to do a map holiday, it's usually worth your interest, say, okay, we're going to do that. And maybe you do it at a skew level for some products or a collection level. That's definitely within your rubric, what you should think about, if you want to do it for all of your products, pay great, that's fine. But you want to keep a level playing fields, what a lot of people do, and in my saying you can email every single account like in two seconds, like you can communicate within our technology, which is great, but you want to you want to give everyone the same shake. So let's say tier one account x comes up to me and says we're gonna do a map holiday next month, this is really important, you should participate. You kind of work out all the details for it. But a good strategy would be to email all of your other eCommerce accounts maybe the day before that the power of that strategy kind of starts with that account and say, Hey, we're gonna have an impromptu map holiday on these this next week here to feel free to participate. If you want to write you're getting you're keeping the blank the level, you're just being a good partner to everyone. You're kind of doing it to serve this large account and let everyone participate. But this account here had a much more, much more opportunity to get themselves ready for it, if that makes sense. But yeah, definitely do it, right. I mean, your map policy is a part of your overall marketing policy, right. And you're doing your map policy to help everyone to keep the playing field level and prevent a race to the bottom. So your map policy is just one more arrow in your sales quiver, it should not prevent other sales opportunities, it shouldn't prevent other sales opportunities from happening.

Aaron Conant 45:31

Awesome. So a couple questions that come in. And one is around just because at the beginning, you mentioned the content tool that you had. Can you address that a little bit? And then also have another question around imat policy with Amazon enforcing not enforcing? So I'm really like, what is the content piece of what you do? And I want to jump over to the sitemap for Amazon.

Justin Rychak 45:56

Yeah, so you know, we we there's three pieces of our technology channel management map, and unauthorized sellers was the first thing that we built 10 years ago, plus, now we've got these other two pieces. One of the second piece was digital shelf analytics. So now we were able to tell you and help you understand how much market share you actually have on the shelves. Now, you index now how am I doing relative to my peers? I'm doing x million dollars on account x, is that is that good or bad? Like how am I doing? And how much market share do I have? And is it increasing or decreasing? So we help you do that. We also get into helping you understand price points and algorithms, right? So if you're participating in a product category, you make products for a certain category, and there's 50,000 other products out there? Well, man, there's a there's a certain level of competition now, right, and I like it or not with all the large tier one sites, Amazon, Walmart, wayfair, Best Buy target Bed, Bath, you name it, right guys, you know, household name, Macy's, Bloomingdale's, etc. An algorithm determines who gets to see your products, there's 23 factors, but an algorithm takes that into consideration. And if there's a couple 1000 products in that shelf, when you go to that website, and you search for your product category, they'll tell you how many products on the top, if there's a couple 1000 products on that shelf, a new problem has presented itself. And that is an algorithm is going to turn determine what you get to see who gets to see your products. So what we do now is we built something called this content management suite, then we do content alignment. But we will find all of your products on a website or in find the shelves where the customer interact with your products. And then we'll take your content, and we'll compare your will tell you how many products on the shelf. And then we'll compare your content against the winners, the average of the winners, okay, this is how your content compares against the other, the winners on the shelf. And what we do is we basically say are you aligned with the winners or not because if the computer program is determining what wins, and you have three images, and the average is five images per product, or your you got two bullet points, the average is five bullet points, or the average number of words per bullet point is for your years of Florida, it's actually 15 words like you're deficient. And when you're the greater the category, the competition, the more important it is to have content alignment. And there's a problem. And a lot of people think they take this approach, and it's unfortunately an incorrect one. They say, Oh, well, as long as we just get our products to the website, we're good. And what the reality of it is, when your products first show up on the website, that's when the game starts. And just writing copy and getting stuff, there is not the right strategy, you should optimize your content before you get it there. So we've taken the last three or four years and really got it into this and said, okay, like there's there's two ways of content alignment, there's before you upload it, because you never get a second chance to make a first impression. And then there's after you upload it, you got to see how you're doing and you got to audit it, someone's got to do it right, you got it. And what's crazy, what we didn't realize when we got into this is only about 80% of your content typically makes it up and is displayed on the tier one sites. Sometimes it's less. So you do all this work, spend all this money on imagery, get all these bullet points written and only about eight out of 10% 80% of it makes it there a lot of times disappears. So and it hurts your here's your ranking. And that's not to say that these tier one accounts are bad. There's just millions of products and they're growing so much and they're having trouble keeping up with it. And no one's going to guard your money like you will. So we've started seeing this enormous growth with clients recently over and they now like the team that we deal with that on over our clients is a there's a certain type of person there's like a an analyst and auditor type who's like they're responsible for the 3000 products on Wayfair. Or the 500 products on Home Depot, or the 150 products on Best Buy or whatever it is because hey, making sure your content is better than the average and it's a moving target. It's better than that the winners is important. Right? We all know that content that we did five years ago is not the same of the content requirements we have today. It's getting worse and got to keep up with it. So digital self analytics, content alignment, product auditing are the two other pieces that we have. Let's get to the other question on Mac. Yeah.

Aaron Conant 49:58

If you have an IMAP pro See was specified cross consequences yet you don't or won't make Amazon follow the rules? Does this now negate your IMAP? policy?

Justin Rychak 50:10

Good question. So Amazon's is a sticky wicket. So if you're selling directly to Amazon, Amazon will typically say we're not going to follow now I think that's kind of where you're going with this right? Oh, yeah, we're not gonna follow it. And you got a couple options, right? option one is an Amazon will say this, they will say, look, we're gonna only follow the market. Right? So I don't know your brand. So we've got brands on one end of the spectrum, a client, a part of this network, who is they're ferocious, they're like, we don't give a rip, who sells our stuff online, we have such a strong brand, that we don't, we'll shut off Amazon. So they basically tell Amazon. If you break math, we're not going to supply and they tell Amazon and they basically have of their price. They pull products off of Amazon requirements. And then what they do is they have a third party seller. And they're like, Listen, third party seller, I'm gonna pull it from Amazon, no longer gonna sell it to them. I'll allow you to sell it. But if you sniff it, you screw up one time and you're below map one time I don't want to hear your excuse. I'm gonna pull it from you. And I'm so they line up these. You got vendor Central and Seller Central, but they play the three p game. And they also deal with like Amazon Fulfillment by Amazon. So there so don't, don't think that you must be shoehorned into playing Amazon's game Amazon's way. Right? If Amazon is out there, and they're breaking, I don't know your situation with Amazon's out there, they're breaking back with a concrete and electronic all kind of channel conflict for you. And you've got an otherwise healthy ecosystem. And they're the problem. And you got to treat Amazon differently. An easy way to do that. And I'm in one industry that we have a ton of clients in. And man, no one sells direct to Amazon anymore. Because Amazon has repeatedly behaved in a way that is just problematic. They're awful, but you don't get to talk to them in some cases, right? Sometimes people have great relationships with Amazon. And there's, there's, you know, Amazon's the best of times and the worst of times, right? So but you've got to be willing to engage in other practices. And the good news is, is I know people are afraid, but I can't get on to Amazon. It's okay, there are plenty of agencies who can help you. And there's other strategies that you can employ to take, don't not lose market share and have more control. So you're not at a disadvantage, if Amazon doesn't want to play your game. You can help the other guys other than Amazon get in line, which is what you should be doing and enforcing your Mac policy. And that's not that hard. And then Amazon should get in line. If Amazon routinely plays the game where they're like, Oh, you know, they found some other guy breaking maps. So therefore they're doing and sometimes Amazon leaves the market like there's no we've caught them leading the market right there, the guy who went down first. So then you slowly pull yourself away from Amazon, and then you you before you do that, you get an agency to basically start doing, line them up and evaluate them and say, This is what we want to do. But you've got to be willing to look, you know, let's be clear. We're all in business to make money. Right? You want to do business and have partners that you have great relationships with. If someone isn't a good partner to you, and they're hurting your brand, or your reputation that you've got to do something about it can't be beholden to them. So I would encourage you, if you're facing a lot of channel conflict plan, and you know that Amazon is behind and you've already done it, then hey, let's start talking to some agencies and say, Hey, we're, we want to go the three p route, pull away from Amazon, use somebody else.

Aaron Conant 53:24

Awesome. Love it. I see we're like right here at time. I'm gonna kick it over you to you Justin kind of wrap us up. But I also want to say thanks to everybody who got it. And thanks for the awesome questions, you know, more than happy to put you in touch with Justin 100%. With a follow up conversation, there are leaders in this space that come highly recommended from throughout the network of a ton of different organizations and brands. If you're looking for any other kind of service providers across the board, or any of these agencies, don't hesitate to shoot me an email Aaron aaron@bwgconnect.com we do this all day, every day, we help you know 1000s of brands out every year with this space. So don't ever hesitate to reach out to the network as a whole. Justin, as you kind of wrap this up here in the next minute. And we can let people get on to the next meeting without being late. That'd be awesome, key takeaway.

Justin Rychak 54:10

Yeah, we are cast, we go through these calls. Because this call went so fast. I feel like I only got to 20% of what I want to talk about. Guys, listen, you know, you're not alone. Right? This map issues have been going on for a decade. So what I would encourage you to do is to get get information, right. And I'm more than willing to talk to you guys. We try to be as transparent as we can. And we got I think under 300 brands and we've lost like nine in the last 10 years. And I think part of the reason we do this, but just to tell you this is how this will work. And this is what doesn't work. So don't don't be afraid to take your time because it's easier to prevent a problem that is to undo one so if you're kind of getting back into the Mac game, just give us a call. We'll help you and you know, because the map policy and what you want to break out. What you want to do is is support your overall sales growth strategy. So thinking through all of that is, is much is really important. So don't rush, right take your time, understand what you want to accomplish those three problem areas are kind of talked about, make sure that your map policy kind of addresses those three problem areas, and you've got clear consequences. And you've got a marketing strategy, you've got a communication strategy and put all those things in place first, it's okay, right. And if you maybe you're not quite sure that, okay, let's kind of figure it out, get it, get it kind of updating cleaned up pretty quickly. So you have a very concise message. Because oftentimes, we've got clients who maybe they tend to change very frequently. And then sometimes it almost erodes what they're trying to accomplish, because they just they rushed. So don't rush. And if you're going to make changes, be deliberate on it, you can certainly do it but you can be delivered at it. Just don't. Don't be that don't be the brand that's kind of changing every couple of months, because ultimately, I think you're going to road a lot of goodwill that you have with your good econ players.

Aaron Conant 55:53

Awesome, love it. Thanks so much, Justin for your time today. Thanks for being such a great friend, a partner supporter to the network and so many brands in a wealth of information. Thanks for allowing us to throw questions at you for the past 35 minutes or so. And again, encourage anybody in the line today have a follow up conversation more than happy to put you in touch with Justin the team there. They're doing some awesome things in this space and industry leaders as a whole. With that. We're gonna wrap it up. hope everybody has a fantastic Thursday, everybody, take care, stay safe, have a great weekend and I look forward to having you on a future event. Alright, thanks again.