Aaron Conant 0:18

Happy Monday, everybody hope everybody's week is off to a great start. My name is Aaron Conant. I'm the Co-founder and Managing Director here at BWG Connect. We're a giant networking knowledge sharing group with 1000s of brands. And we do exactly that, we network and knowledge share together to stay on top of the newest trends, strategies, pain points, whatever it is that shaping the digital space. I connect with 30 to 40 brands a week to kind of do digital strategy sessions as a whole, also get a feel for where the industry is moving, the newest things that are popping up, those biggest pain points. And when the same topics come up over and over again, we host an event like this. So if any, we'd like to have a conversation, you know, any point in time, you know, more than happy to set aside some time to connect. We'd love to hear what's going on in your space. And also more than happy to share, you know, across the industry, what we're seeing as the newest trends and strategies. Couple housekeeping items. As we get started here. Today, we're starting three to four minutes after the hour. And just so you know, we're going to wrap up with three to four minutes to go on the hour as well. We're gonna give you plenty of time to get out of your next meeting without being late. But just know that if you if you're looking at your watch, we're gonna give you plenty of time. The last thing is we want this to be as educational and informational as possible. So at any point in time you have a question. Go ahead, hit star fi, we can unmute you and bring you into the conversation. And if you can't do it that way, maybe you got some background noise, always feel free to email me at Aaron@BWGConnect.com. And we'll get the questions answered that way as well. And that includes an hour after the call tomorrow next week, anytime you have a question in the digital space, anything from Amazon has read consumer to stillness, international expansion, whatever it might be, don't ever hesitate to reach out more than happy to set aside some time to connect on it. So let's go ahead and kick off the conversation today. Like I was just saying in the pre call chit chat. Were a cue for prep already. I don't know where the year went. so far. But we're here. Now's the time to start prepping. And so just talking to a ton of brands and they say hey, what is what's top of mind for everybody across the industry. So here we get to Amazon Q4 practice outlook as a whole. And so we've got some great friends, great partners, supporters of the network over at Orca Pacific. They're their partners do a ton of different brands and network as a whole highly supportive of that over and over again, we do a lot of events with them. And they're just all around great, great friends and partners for a lot of different people until I'm going to kind of kick it off. Rob, if you want to jump in, you know a brief intro on yourself in Orca, that would be awesome. And then we can kind of jump into some of the questions that have popped up and answer questions as they come up from the audience. Sounds good.

Rob Antolin 3:03

Perfect. Thanks so much, Aaron. Hi, everyone in the call really excited to chat with you guys about q4 prep preparedness. A little bit of background on myself. My name is Robert Antolin, I am the Director of Business Management here at Orca Pacific. Previous to my life at Orca actually spent three years internal on Amazon on the retail teams. Managing P&L is related to B2B food service and children's and dining room furniture. I've spent three years on the other side of the table prepping for Q4 internal at Amazon. And I'm hoping to share some of the insights of best practices that anyone can do today to help get ready for Q4, which, as Aaron mentioned is approaching very quickly. I also want to call it up they are the Whitney Heydel and Mike Battista and Whitney, if you can take a quick second to introduce yourself and then hand it over to Mike that would be great.

Whitney Heydel 3:53

Okay, thanks, Rob. Again, my name is Whitney Heydel. I'm an Associate Director of account management here at Orca. I've been an Orca for about five years now all within the account management space. So I spend a lot of Q4 is prepping and planning for, you know, best practices for our clients. So yeah, just excited to talk with you and share my expertise. Mike, I'll pass it to you.

Mike Battista 4:20

Everyone likes to keep it here. I am a senior ad manager here at Orca Pacific. Before my tenure at Orca, I was an account executive at Amazon advertising here in the Seattle headquarters and has been running digital ad campaigns for about 10 years now. My you know, main focus and experience comes from driving top line revenue and incremental sales in myriad industries, and an average Amazon advertising Smee have a passion for teaching on how to tactfully increase returns. And reach for my clients. So that's just about it for me. Nice to be here.

Aaron Conant 5:07

Awesome. So let's go ahead and kick it off. And just a reminder, you have questions along the way, hit star five, we can unmute you and bring you in. So it was the system that I'm gonna kick it off with some questions, I get quite a bit, you know, how will this Q4 stack up against, you know, last year's Q4, a lot of people trying to say, Hey, what is this going to be like year over year? I don't know if you have trends based on what you see Amazon ordering or conversations you're having. But we'd love to hear, you know, how do you see this Q4, stacking up against last Q4. And then I want to spin that a little bit on that side. While I want to hear on the advertising side what you're seeing as well, because I think people are trying to budget right now and what do they do? So anyways, you know, on the on the sales side, how are you seeing this Q4 stacked up against last Q4.

Rob Antolin 5:54

So I think one of the themes that a lot of people are seeing right now is there's a lot more uncertainty versus this Q4 versus any Q4 in recent memory. And one of the biggest challenges that a lot of brands are having right now is that we are compensating at the Black Swan event last year during COVID. So realistically, generally, this makes it much more difficult to do things like protect seasonality, take a look at historical trends, because the data, data available to us is one either two years old, for what a normal Q4 looks like. And this Q4 coming up is going to be anything but normal as well, given all the challenges we're seeing in terms of global supply chains, and with sellers and vendors getting a hold of inventory. And as well with both how the Delta varied is obviously going to be affecting the economic reopening as well. So this is really a scenario where we're working with our clients to plan for the best and prepare for the worst. And one of the big beliefs we have is ultimately those people with strong access to inventory positions are ultimately going to be the ones that are really going to succeed given that, you know, some of the largest vendors who work here with Orca are seeing massive delays in getting inventory inventory to the domestic market here and have backlogs of finished goods in the hundreds of containers. And what I'll do is I'll pop over to Mike to speak a little bit more specifically to the advertising side.

Mike Battista 7:20

Yes, thanks, Rob. Well, if if you're no stranger to Amazon advertising, you're you're probably seeing what we're seeing on our end, at least for the last 40 or 60 days or so. And that is kind of a volatile conversion rate, and of volatile couple of months for ad sales, engagement based metrics as well. Obviously, caused by the surge in travel and, you know, also stuffing, Amazon retail therapy for brick and mortar therapy bar and restaurant spend travel spend, and other spend. So think a little volatility there as opposed to last year. But you know, just to echo what Rob said, as well, when you when you couple that little bit of uncertainty with any any number of supply chain issues and uncertainty. I don't think it's it's crazy to have to think, Okay, well, maybe we should back off of our budget for Q4. But I think you know, the fact is you can be very strategic in Q4 this year as we've been with some of our clients during this time of volatility. And that includes being as nimble as as possible, I think with advertised products, and you know, ensuring that inventory. Inventory health is good throughout Q4 to also rely on promotions, we've seen a number of different pieces of literature and research highlighting that more and more shoppers are going to be relying and looking for these promotions over the next 90 days or so. And also don't give up hope. Because you know, I think although they're we're sort of heading into Q4 with some uncertainty, kids are now you know, starting to go back to school people are thinking that travel is going to you know, hit a peak at some point soon as people are going to start being back in the home and, and shopping more. And so therefore conversion rates should be climbing within the next few weeks. In fact, we're already seeing a strong research instant conversion rate over the last week or two. So long story short, I'd say keep your foot on the gas pedal through Q4 and ensure that you are keeping top of mind for your main consumers your target demographics and you know ensuring that you're going to have a nice smooth transition into 2022 as well. But the key is to be strategic. You know, and and be patient with your ad campaigns.

Aaron Conant 9:59

No, I love it. From the standpoint, if you look at last year, you know, there were inventory struggles. And a lot of people weren't leaning into promotions heavily. From the standpoint of a really limited inventory, I think we were in a little bit better position, very few people are back to normal, but still was stimulus tracks, stopping. I think you're you're dead on, the feeling that I'm getting that I'm hearing from brands as a whole is paid, there's going to have to be some kind of discounting more than it was last year. So that on the other thing, when we talk about the inventory piece, I know a lot of brands are setting up fbm. So they're either they're trying to figure out a way to drop ship. So I'm also hearing and maybe you are too it'd be great to hear from me, if you're hearing the same thing, still trouble getting inventory into Amazon warehouses, you know, they have limited, you know, they're they're having staffing issues with getting enough people, you know, to unload trucks now that trucks aren't showing up. It's that there aren't enough people to unload the trucks. And so we see, you know, a lot of people looking for a digital age three PL that can do the backup drop shipping, you know, for them, is that something that you guys are seeing as well. And then Jacob, I see your hand is up, we can jump out to you.

Rob Antolin 11:12

Yeah, so what I'll say Aaron is eager to 100% because the nail on the head there. You've heard me on these calls before kind of talk about the power of drop shipping and direct fulfillment. And it is something that is so important during any time of year, but especially during Q4 given one, as you mentioned, Amazon is still having issues with staffing within their fulfillment centers. So one of the things we're seeing that as PEO rates go up as he received rates are going down because Amazon is struggling to bring in enough people to process all of this inventory. The other place that becomes very powerful during the Q4 period as well, is that at a certain point that Amazon actually generally tends to run its FCS when we were talking, you know, at this 35 period of that Black Friday through Cyber Monday period. There FCS tend to run anywhere between 110 to 120% of capacity. So if you've walked through an Amazon FBA at that point, you are literally see items on the floor in front of the shelves as well, as Amazon tries to handle all the inventory they're planning on sending out. So this can one cause issues with you getting additional inventory into Amazon STS, just given the backlogs and labor shortages. And ultimately, you can't sell something if Amazon doesn't have access to inventory. So having that backup fbm offer or that dropship off of your retail client is something that is incredibly powerful. If you are someone that is seeing those type of supply chain constraints and are having issues getting your inventory from overseas, I would probably recommend that you look at D prioritizing promotions during that period, because the last thing you really want to do is pull your brand, pull your sales board into an out of stock position where you're going to be out of stock on site for three to four six weeks. You know search relevancy is something that is incredibly hard to build on Amazon. And it's very easy to lose once you go out of stock. So if you are in an area if you are looking at a q4 where you're feeling like you're going to be pretty inventory constrained, I would highly recommend looking at maybe D prioritizing some of those promotional and advertising activities given that you will recognize a bump in sales regardless, just given all the extra traffic that's on site.

Aaron Conant 13:20

Awesome. Love it. anybody needs any kind of connections on a digital age? CPL? Somebody can help out with that, you know, shoot me a note after the call Aaron@BWGConnect.com. So let's jump out have a hand up here. We can jump out to Jacob, Jacob, do you want to jump in? That'd be great. And feel free to you know, brief intro on yourself. And then you know, kind of ask away.

Jacob 13:46

Hey, everyone, my name is Jake, the digital marketing manager for Libbey glassware for retail and eCommerce for the Americas. Thanks for having me on. You answer my question actually, toward the latter half of that of your last response, which was, hey, like, if you're having inventory restraints, obviously putting things out promotion causes a faster sell through and that's not a position we want to be in. So I appreciate the additional context there because my in my head as you're going through them, like, the more promotions we do, the faster you sell, the worse of the position we're going to be in won't be able to refill. But I guess Do you foresee Amazon? Of course, you know, with these big conglomerates, they don't really care. But do you see Amazon kind of doing anything on the back end to adjust for this understanding that it's a larger global problem not just on an individual company basis? Are they doing anything to you know, producing, like pre order or anything, you know, extend timelines for companies to be able to sell additional products that perhaps they're waiting on getting inventory in stock, etc.

Rob Antolin 14:48

So what I'll say is Amazon, generally for its larger vendor than those that already having those inventory discussions essentially immediately after Prime Day. Actively I know that's the direct But dominant team in particular has been incredibly responsive at this time of year, given those kinds of activities around around all the issues, they've had the processing inbound inventory as well. So once again, I think Amazon is always going to find you Everything is scale. And ultimately, I don't think they're necessarily going to extend timelines when it comes to their consideration of the overall Q4 promotional period. But you will see additional willingness for Amazon to extend things like chargeback waivers for let's say, if you're a one p vendor for up to confirmation rates and things of that nature, given the challenges that are currently ongoing in the global supply chain.

Aaron Conant 15:43

Awesome. Love it. And, and Jacob, thanks for jumping in there and start five others if you have questions, feel free to hit star five, we can bring you in. So another question that just comes in over email is around? How often is content being updated for Q4 specifically? Should you rephrase it a different way? Are you are you seeing a lot of people jump in and update their you know, their brand stores as a whole? Are they doing anything with a plus content? Is there anything to be done there? Or is it more creating content for paid media, you know, DSP digital ads or something like that? Like, do you see a lot of things being update to make it you know, is it becoming more holiday specific or anything like that? Yeah, I guess Whitney, okay, could you? Yeah,

Whitney Heydel 16:27

I can take this one from a content perspective. So I would strongly recommend utilizing your brand store as a vehicle to update for holiday specific product, you know, different assets, logos, you know, banners, that type of thing that makes it more holiday focused. The brand store is really quick to update, typically, you can push those updates through. And also you can schedule within the brand store module, you can schedule how long you want a particular store live, you can really control those dates. So as soon as you know your timeframe is over, you can make sure that your non your non holiday brand store is serving. Once that key time frame is over. We generally suggest that brands do not attack their content with holiday specific, you know, titles or bullet points, mainly because of the challenges that we see to get that content to stick in the first place. So a you'd be spending a lot of time trying, you could potentially be spending a lot of time trying to get that content to stick. And then who's to say how much longer you might be spending to actually get it moved back to what you want it to be and not you know, talking about Christmas trees and wreaths or whatever. So if a brand wants to use media in order to show more holiday focused content, I would definitely suggest a brand store over detailed page content.

Aaron Conant 18: 03

Awesome. And then I'm going to flip that over to the paid media side. Do you see brands using a ton of you know how they focus messaging in Q4?

Mike Battista 18:12

Well we certainly see back to school messaging come out now but leading into Q4 I typically do see some some strong branded branded content when it comes to Thanksgiving and Black Friday or turkey five as we call it. And also December holidays as well so that's what people are looking for when they are you know searching searching amazon for sales in all likelihood so although those keywords and and taking that approach may be a little bit more expensive. It certainly does cast a wider net to a very large audience and is usually very successful at serving a high number of impressions and and a high number of detail page views as well.

Rob Antolin 19:13

There are some basic blocking and tackling that anyone can do for Q4 that we kind of highly recommended as last Whitney just to walk through that a little bit in terms of what can anyone do whether they're working with more specific or on their own running their Amazon business a Whitney has some kind of great tips there in terms of what are a couple of shout boxes every everyone should be hitting on Amazon.

Whitney Heydel 19:35

Yeah, perfect. Thanks, Rob. So aside from you know your advertising strategy or anything like that, I think anyone should do a couple of things just to make sure your brand is ready for this upcoming timeframe with increased traffic. First, I would suggest to walk your store right like make sure you check your your high profile detail pages. Make sure that your content is where you want on it, you have all your images, you know you have enough assets to really make sure that your pages stand out. Same thing with the brand store, make sure you where you want it to be imagery is up to date, just so you look so forward as that additional traffic comes through. Another thing I would suggest would be to review and subsequently resolve any items, depressions. Obviously, you can't sell any product that's not live on this site. So whether that that an item that thing crapped out due to profitability, you know, researching that, is there a brand health issue, because the pricing is, you know, has a page been taken down because of a negative customer experience. All of those things happen and continually. So I would just suggest keeping an eye on those and tackling those early to make sure that your heavy hitters first and foremost are back on our back on site. But it's just important to make sure you have all of your aces ready to go. So as soon as that influx in traffic comes, you're ready to tackle it. And the last thing I would say, is have a good pulse on what you want to do from a marketing and promotional strategy, similar to what Mike was speaking to earlier, you can review what has worked in the past, both during peak and off peak periods. Specifically during peak periods, we typically suggest focusing on your higher velocity ASINs, really just to drive more traffic specifically during that timeframe. But one thing that I would also suggest is just be okay to be willing to experiment. Being nimble, you know, if you get something, if something isn't working, we have the opportunity to start right away and start something new. Specifically, in those scenarios, be more of a coupon or price discount or a best deal. Obviously, if you have you know, a big lightning deal or deal today with Amazon, those are more locked in. But we do have the opportunity for smaller deals to really just you know, keep keep your finger on the pulse, make sure you know what's going on. And then be quick to you know, if something isn't working, that's okay, stop that move on. Find something else that might work. If your margin is to constraint for deals to do in addition to advertising, make sure that your advertising dollars are really being spent the right way to make sure that you are really focusing on all of that extra traffic from Amazon.

Aaron Conant 22:36

Awesome. Love it. We have another hand up. A couple more. Karen, I'll jump out to you first. Karen, if you want to jump in. brief intro yourself to be awesome. And then ask away the joy. I can see your next. So Karen, you might be on mute.

Karen 22:51

Hello, try it again. Oh, yeah, there we go. Yeah, infinity instruments. We do a wall decor, mostly clocks and mirrors. I'm just wondering, are there any discussions on the effect that the all these bottlenecks, the increased transportation costs are having on the cost of goods and therefore the wholesale prices the suppliers need to now charge in order to survive this period, which is projected to last through 2022 and possibly into the following year? Are there any discussions about how to push these cost impacts all the way through to the customer?

Rob Antolin 23:27

Yeah, so hopping in here, we're widely hearing the same thing that from speaking with our largest vendors, and with Amazon as well, we don't expect supply chain issues to kind of resolve themselves until after after Chinese New Year 2022. What's kind of sitting in active conversations with Amazon right now about getting cost increases through to several vendors, given that a lot of international freight is not currently honouring contracted freight volumes or freight rates as well. How you can get this to ultimately reflect on the on Amazon is one as a third party, third party seller, you obviously do have the ability to raise that price to the end customer. And then within the one p marketplace as well as making sure that if you are getting these, if you are putting cost increases in that they are going through to every channel because ultimately at the end of the day, Amazon's pricing strategy is that they are a price follower. They believe that given everything else being equal, if they are at the same price with two day free delivery, they will win more often than not. So as you know, having a channel management strategy to make sure that you are seeing those prices go up across all the other marketplaces that you sell on is going to be something that is very important to maintaining those making sure you have healthy margins on Amazon as well. Given Amazon, one will follow those prices even if it goes down to below their product costs from certain key competitors. Sorry, certain key competitors. Alternately, you have the Sorry about that. Ultimately, it's really about making sure that you are aggressively managing those channels to make sure that those costs are going through every channel. Awesome.

Aaron Conant 25:17

Yeah. And thanks, Karen, for jumping in another quick note just on that. So I'm just hearing from, you know, a lot of brands right now that Walmart is actually open to, you know, listening to price increases, they're going to try and consolidate and they want to have them all in by, I think it's December or January of this year. Now, that's not a they're accepting everything that comes through. But they realize that this is a reality. So just a heads up there, if you're putting together for Amazon, just like was being stated there, all the other channels as well. And some of them are actually being open to it. And next, jump out to Joe. Joe, thanks for hitting star five others. If you have questions, hit star five. And just a quick reminder, we're halfway through a great conversation here with the team over at Orca Pacific. They're an Amazon focused agency, great friends partners to not only the network, but a ton of different brands and as well. And so just helping q&a here anytime you have a question. Don't hesitate to hit star five. Joe, if you want to jump in. That'd be awesome.

Joe 26:17

Hey, guys, I'm Joe, with MyTime Brands. And you guys hear me? This picture? Yep, loud and clear. Awesome. All we are fun purveyors of non electric kitchen tools, gadgets and home decor. Those are probably the best way I can specifically describe what we do one party. So we're a first party vendor only we got kicked out of three p because they said hey, you can have both right? Oh, so I'm one of those. I am one of those vendors that have to go through what's called the ASB program for the last 12 months. Nice. Not a lot of fun. Right? So this is kind of coming off of the the marketing talk. Right? I know there's a lot of there's a lot of options. So I'm sure we all go through our DMS our you know, our insert your category major events, deals and stuff like that, right? Um, my question is to even the rest of the team here, you guys and maybe the other vendors, they want to speak up and everything. Has anyone tried tried to cry? Has anyone tried Amazon business? And is anyone in a beta where you could do ams on Amazon business? I don't know.

Mike Battista 27:19

What I will say is no matter what product category you're in, there's going to be different things that work and don't work and what really what the key to being successful is being willing to try and experiment and figure out what works for your specific product group. You know, there are some categories where receive Lightning Deals can be a primary business drivers during turkey buys, and other ones where we see almost no pickup. So realistically, I always recommend to any clients I work with is to be very, very open to experimenting on multiple different multiple different promotional avenues or channel types that figure out where your sweet spot is going to be with Amazon, whether that's looking at loading in things like everyday low business pricing or quantity pricing on on a be looking at leveraging the Amazon treasure truck program, working to get in Amazon's four star or four star stores. There are obviously a almost infinite different paths to work with Amazon, and they're always rolling out new experiences. So if you haven't necessarily built that playbook of what's going to be the most effective for you. My biggest recommendation is be willing to test figure out a good measurement programs that then evaluate the effectiveness of that test and use that to drive your promotional and marketing strategy going forward.

Joe 28:37

Awesome. And just a added thing on everyone's net, we're all in the same boat, right? With ocean freight logistics challenges, you may want to consider direct import as a viable option with Amazon just throwing it out there to everybody.

Joe 28:53

Direct import is one of those options you can take. Additionally, Amazon is showing some willingness right now to take temporary or cost increases related to ocean freight as well. Generally working have a little bit more luck getting those increases through as if you're willing to split the difference or take on some of those costs as well. Rather than saying my freight costs are up 20% Amazon I needed 20%. raising my product cost is generally going to be a non starter. But if you have a VM contact and you're willing to bring those, those price increases as being temporary in nature and agreed to a regular review cadence on them. You'll tend to find that your VM contacts are a little bit more receptive to these cost increases than they would be otherwise.

Aaron Conant 29:35

Awesome. Love it free. But yeah, other thoughts Joe? Other questions? No, I'm on here. Awesome. Oh, Love it. Love it. Well, thanks for jumping in. Was jump out next to Matthew here on mute your right now. Thanks for hitting star five. If you want to do a brief intro on yourself in the company. That'd be awesome. And yes, feel free to ask way.

Matthew 30:01

Awesome, thanks. Can you hear me okay? Yep, sure again, my name is Matt. I oversee I work for Team footwear. We're a global manufacturer of hiking boots, sandals, work boots, we sell to Amazon one p globally in nine countries around the globe and then three p in Australia. My biggest question, I want to go back to direct fulfillment and in the process of my process of executing this, hopefully in Q4, if not Q1, but I was curious to learn from you that Orca team or anyone on the call if anyone has gone through that fulfillment, and from a one p vendor central point of view, what are some of the biggest roadblocks or hurdles or, I guess headwinds, you're up against while executing some of this, especially when it comes to fulfillment capabilities with your own warehouses as you're coming to channel conflict with your direct to consumer business, etc. So I'm just trying to mitigate I see the potential, especially with getting challenges getting inventory into FBA. I'm just trying to prepare our internal teams of what what are the biggest roadblocks we're up to experience against when we go through this integration over the next three to six months.

Rob Antolin 31:11

So what I will say is, with direct the film is one of the biggest challenges is always going to be metrics. So with direct fulfillment, your lead time metrics that display on site are going to be the result of what how effectively you're able to ship at a 90% SLA. Amazon's best in class drop shippers have their agents classified as guaranteed delivery. And what that does is that provides your agents with what Amazon refers to is retail Fast Track messaging, which is by the product in X amount of time and get it by this date. And that is tend to tends to be where you see the highest level of conversion. Every time you get with direct abdomens, because you're alive is 90% SLA, you are missing those metrics for guaranteed fast track, what they will do is you are constantly being evaluated on a 14 day basis for how effectively you're shipping. As you can see the lead time lead times upgraded dynamically upwards or downwards enter tends to be a 10 to 15% impact in your sales velocity for that lead time because Amazon has really made today free shipping is table stakes. So where we see a local vendors tend to struggle on the director of human side tends to be in terms of one deeply understanding and managing those metrics. Additionally, if you don't have strong in stock positions with Amazon products, it can be that you are going to see a lot of direct fulfillment orders, which can crash or slow down your operations which are going to result in downstream impacts of those downgrades as lead times. What I will say for direct at the moment is it's always great to really be able to maintain this in a hybrid model, which is what Amazon prefers as well. So it's not necessarily your primary method of fulfillment. But it acts as essentially a backup so that when you do run out of stock within Amazon's network, you have the ability to then transition to that DTC model.

Matthew 33:09

That's perfect. Thank you. And yeah, that's the way we're doing about it kind of a failsafe backup option. And one follow up question to that understood on the 14 day trailing, had a dynamic flex from an SLA perspective, we've been told that there are no type of financial implications if you don't hit those SLA, as you just kind of get evaluated on that 14 day window. Is that what you're hearing from your side as well? what you'd expect?

Rob Antolin 33:37

Correct. So just a little bit of background, I'd actually lead dropship for the furniture team, while I was at Amazon at a point that Amazon was doing one out of every three, when the printer comes in one every three dropship dollars across Amazon. So first off, guys, you mentioned there, there are no associated charges for missing those metrics. That's one of the things that I really love about the direct billing program is the only chargebacks that really exist are for filter errors and cancellations. So if you do miss those delivery metrics, if your operations are starting, are starting to cost lower. The only real downstream impact you get from that is getting a downgraded lead time, which does slow your sales velocity but you still have the ability to fulfill on inventory you wouldn't otherwise for those customers who really really want your product. The other some other key benefits of a dropship as well is it also helps you to state any kind of sign off related chargebacks as well because items are never hitting Amazon's fulfillment centers and helps you avoid traffic related chargebacks as well. And it also makes your overall profitability look better with Amazon's one p teams because you are able to escape some internal Amazon allocations related to fixed SC costs and FC labor as well. So the last benefit I really want to pull out there too. Is that As a vendor your trade allowances if you have a freight allowance, Amazon is only meant for inbound freight to Amazon. So Amazon actually doesn't deduct that off of your direct to them. So you will see the will say, a couple percentage points, whatever, if you have a four and a half rate a lot, four and a half freight allowance for instance, you will have four and a half percent less than deducted from your Amazon invoices in those cases, which can also be a win for your teams.

Matthew 35:26

Perfect. And under said, appreciate the clarification. Thanks for the Thanks for the advice.

Aaron Conant 35:30

Awesome. And, Matt, thanks for jumping in there. And thanks for the kid sandals. I've got four kids and they all warrior. Yeah. Yeah, so yeah, there's usually no sales pitches on these calls, but anybody has small kids that keen sandals are fantastic. So, you know, I just want to highlight that point just a little bit, because this inventory piece, you know, and I know Joe brought up and Matt here just brought it up, the ability to be able to ship because what we're going to see happen is Amazon's facilities will become full, and they will not have the people to restock them, because everybody's going to be picking is going to be the same situation as a lot of people hit last year, which is you're just going to it's not that you're going to be out of stock, it's that is going to be sitting in a tractor trailer, you know, in the in the parking lot, and it's not going to get unloaded. And so this ability to do, you know, to fulfill by merchant, in an actually what I have a lot of brands do is they don't want to have inventory locked up at Amazon, they will actually reduce some do so as not to gamble as we get further and further into Q4 closer to Q4 and then into Q4 is actually hold more in their own if they have the ability to individually pick pack ship these items out. So just just a thought there that we're we're seeing you know, people in different strategies that work last year and able to compile those and kind of pass them on to brands for this year. So again, if you need you know how, you know, finding somebody that can fit that need, just, you know, shoot me an email Aaron@BWGConnect.com are there. And then, Joe, I can see your hand is back up. I can jump back out to you real quick here. Joe, I just unmuted I didn't know if your hand went back up. He had something and jumped in with again, but more than happy to have you join the conversation.

Joe 37:29

Yeah, no, I mean, just trying to be helpful to the team here. Right. When it comes to direct performance. I'll probably probably stated this way, guys, which is you're doing it, you got to do it. If it's not for any points that, you know, you guys have actually outlined all the benefits when it comes to directed filament, right. The key is back the backup, as mentioned on the call before it's very easy to lose sales, relevancy, because why if you run out of stock, what if you have direct the film enabled? that's by far number one reason why you want to do it is if Amazon runs out of their seats, and you're in the backup ready to go. You never lose sales, relevancy. It's worth every single iota of pain. And I will warn you guys throughout the film is not easy, right? Don't get me wrong, but it is worth every pain point that you can imagine that it entails. So that's kind of my my two cents.

Aaron Conant 38:25

No awesome. Love the job. Yeah, for sure. I think I completely agree with that. And you don't have to worry about scaling back. paid media, you don't have to worry about scaling back your merchandising efforts, either, right you can get because you always have it in stock. Now, so is there. So a question that comes in, hey, I'm just starting Q4 planning. Am I too late? Here's another, you know, question that comes in. So, you know, I'll kick that over to the Orca team, you know, it's never too late. But if they miss, like, where they should be at, we'd love to hear your thoughts there.

Rob Antolin 39:01

Like you said, it's never too late to start playing four to four. I think this question does ultimately come back to your supply chain. On if you are manufacturing domestically, you're at a big advantage versus people manufacturing overseas with Amazon largest vendors, we tend to start cubieboard discussions immediately after Prime Day. And that's just a result that even during the best of time, when you're talking about direct import, you're looking at about a three months lead time to get inventory inventory in that season as well. Amazon also obviously does have certain cutoff dates that needs me to get those inventories into that inventory into epcis to ultimately when it comes to q4. I mentioned early in the call, I think the big winners are going to be the people who managed to have inventories could be a great opportunity to take advantage or grab market segment share away from your competitors given that not only on Amazon but a lot of Other merchant partners, we're seeing that demand as far as to being supply available given all the issues with global supply chains right now on so if you have products that are higher margin, or that do not suffer from high ship cogs, I would highly encourage some people to really consider air freight as a potential option, as it's something that can make sense for your company. That being said, those same things that Whitney pointed out earlier, being able to walk the store, looking at dealing with depressions, those things are all important to be sure planning doesn't really fall into your past Cyber Monday. There are so many variables that go into being successful on Amazon, and just keeping a very close eye on what we like to call your your input metrics, making sure that your aces are viable, making sure that you're driving good, high quality traffic in the place, making sure detail pages. Those are things you can do now, and continue to do all the way through Cyber Monday as well.

Aaron Conant 41:00

Awesome. Love it. You know, is there anything that came up that comes up with you regularly as well that you thought would be asked today that we didn't get to? We'd love to hear your thoughts, there are different things that you have seen popping up? Are there any categories that are you know, that you expect to over perform or underperform? You know, I kind of throw that open question out there and just reminded others, if you have questions, hit star five or keep emailing them to me Aaron@BWGconnect.com.

Rob Antolin 41:32

So what I'll say is, you know, when you're talking key promotional periods on Amazon, this lesson, we're talking Prime Day, Prime Day as Black Friday, Cyber Monday that Turkey guy period, big ticket door cross items are some of those things that we always tend to see do very well. So your consumer electronics, your furniture, higher, higher ticket price items really do benefit a little bit from that hyper focus that we see from consumers. As well as the fact that a lot of people tend to D prioritize it and go into a window shopping in the couple weeks before Prime Day to really take advantage of that. That means that customers are shopping for deals as well. So if you have the ability to offer very aggressive deals, those things are going to really help you stand out at the end of the day to shoppers on site. So I know sometimes it may not always make sense from a P&L perspective, definitely discount items at 3040 or 50%. But you can consider that as a longer term marketing investment. And things like search rather than be would be a way I really encourage a lot of our clients and sellers to consider the same like yet this may not make financial sense in terms of a one off basis. But really how we look back and evaluate the overall effectiveness of deals is not only how much do we sell at the given promotional period? And what was the return of the initial return there. But what were the benefits from the halo effect after the fact, given that Amazon search closes? He tends to be driven on what are people looking at what are they buying? What are they reviewing and having aggressive deals allows. One tends to drive traffic, drive sales and drive reviews as well. And what you'll often see is when you're very successful, these key promotional periods, you tend to have a new kind of irregular plateau or runway in the first couple of weeks after your after your promotion. Given all of those benefits from circle, the team already called out kind of taking effect and accelerating that Amazon flywheel.

Aaron Conant 43:33

Yeah, awesome. I love it. Another question that comes in around advertising. And you know, what's happened over the you know, q2, q3 of this year. And we expect the same in q4. So essentially, you know, conversion rates start to fall CPC starts to rise in Q2 and Q3. Is this a trend that you see happening through Q4? Is it going to get out of hand? We'd love to hear your thoughts on advertising rates as a whole.

Mike Battista 44:00

Yeah, yeah, it's, it's been it's been really tough to nail down within the last 90 days, that's for sure. I would, I would, I would prepare for the you know, prepare for the worst and hope for the best to be honest with you. It may take a little bit of time to normalize CPCs as First of all, in increasing amount of advertisers are still coming on to Amazon and recognizing the eCommerce as a strong source of value for them. So and therefore that's going to drive higher CPC and more and more competition. And then you combine that with some of the volatility happenings from our shoppers here, where they're, you know, engaging with the ads but not necessarily converting their window shopping as we like to call it within the last couple of months. as well, so I would, again, you know, ensure that you have your, your promotional, your promotional bullet points all mapped out for Q4, we really do believe that this is going to be the key, or at least one of the keys to increase conversion rate and increase more eyes on detail pages and be able to convert those customers. But certainly do, I would say plans for the next couple of months to continue to see higher than average dpcs, I would say at least until at least until Q1 of next year.

Aaron Conant 45:39

Awesome. So the next question that comes in is around building relevance and carrying on growth into 2022. So I think at this point in time, I mean, everything is moving and changing, people are adjusting, but they're also having this broader, more strategic view than they've had, I think that we started to get there and then COVID hit right. And it was kind of this this crazy time to figure out last year. But now this strategic view of how do I methodically grow my business on Amazon, and continue to grow quarter over quarter and carry this, you know, Q4, into maximizing what's going to happen in Q1 of next year. Any thoughts around that, whether it's whether it's content, or it's paid media, or its merchandising, we'd love to hear your thoughts there.

Rob Antolin 46:31

It's about execution. Right? At the end of the day, you will often hear people, whether it's your Amazon contacts directly, or people that companies like Orca Pacific, talk about retail readiness. So part of that is just making sure you are regular looking and looking at and refreshing your detail pages given that Amazon will constantly updating offering things like new detailed page experiences, whether it's rolling out AR AR views, or 360 views within your product category, offering new programs, like, subscribe and save quantity pricing, business specific discounts. It's one, that willingness to make sure that you're going in exploring all these new offerings that are brought up by Amazon. But then making sure that you're you're having that sharp content that you're making sure you're in stock, you know, where we often see a lot of a lot of our clients struggle is they view advertising, sometimes as a silver bullet to all of their problems. But one of the things is your advertising effectiveness is massively impacted by your out of stock rate and issues like your by box percentage, or your loss by box percentage, whether you're on the SDS, the dollar center, or the vendor central side. So making sure that you take the monitor those things that have them under control, is always going to be important. And also just understanding that zooms a little bit more simpler one key vendors is Amazon's view is the vendor manager working with ultimately always want to sell 100% of your catalog, because they're given very lofty, top line growth goals by Amazon. So figuring out ways you can creatively partner with Amazon to keep those ASINs live, whether it's by opening up new fulfillment channels, whether that be direct fulfillment, or di providing funding for aggressive price matches, and doing those supply chain optimization activities that are made sure Amazon's margin looks good. As well as to make sure that you're going to stay in stock and live on site, ultimately, is going to allow Amazon flywheel to take over and your own organizations to start remember realizing those economies of scale as your business grows as well. And pursuit helps increase your own profitability.

Aaron Conant 48:39

Awesome. Love it. Did you have thoughts in there as well?

Mike Battista 48:43

Well, you know, I think that was well said, Rob. Yeah, I the only other thing that we focused on from a paid media standpoint in in regards to increasing organic rank, and, and therefore increasing relevancy is, you know, a few of the things that we know about how to trigger Amazon's algorithm correctly. And I think it was, again, just to echo what Rob just said, I think a lot of a lot of advertisers look at advertising as the silver bullet without any other foundational needs, you know, sometimes and and it is very, very important that content is is you know, reflecting a plus. And secondly, it's important that we're continuously driving traffic to detail pages. Amazon's main goal is to ensure that the end user or the end customer has the best possible experience. And so they are going to help index listings to page one that are going to serve that need and fulfill that need by proving that, you know, we have rare very, very strong reviews, that we have a high star rating and that we're getting a lot of traffic on the details. All pages, you know, with with probably a few more things that are impulsive Amazon's secret sauce to their algorithm. But those three specific things from a paid media standpoint are also very, very important to recognize in terms of trying to increase your organic ranking.

Rob Antolin 50:17

Yeah, awesome. Really, Amazon, you've probably heard a lot from Amazon. I know it's something highschool that people I work with regularly. There is they like to joke around with the best place to bury a dead body on Amazon is on page two of search results. And that's because 70% of their customers never make it past page one because Amazon is so effective. And surfacing those surfacing the right products to the right shoppers at the right time. So having that strategy of one, how do you build your organic search trying to organically get on page one? And then what can you do from a sponsored search perspective to make sure you're showing up there on relevant keywords? while you work together, that organic ranking is ultimately what's going to set you up for long term success.

Aaron Conant 51:01

Awesome. Love it. And I see we're pretty much right here at time today. So Rob, Whitney, Mike, thanks for your time today. I also want to say a quick thank you to everybody who dialed in all the great questions. If you're looking for any additional information around Amazon eating help with this, you know whatsoever across the board, the team at Orca Pacific great friends, partners, supporters have a ton of different brands in the network 100% worth of follow up conversation with them. If you're looking for any other kind of service provider in the digital space from like we talked about, you know, a digital age three PL that can help with direct fulfillment on Amazon, but also all the other marketplaces that are out there. looking to expand internationally, anything with your direct consumer site, don't hesitate to reach out we'd love to have a conversation with you. And with that, I think we're going to wrap it up here. Don't forget it. If you want to, you know, find any other content, anything else we're doing. You can also visit our website BWGConnect.com, you can go into the event space, and we're trying to get as many of these recordings uploaded there as possible. So you'll have a library. But with that, again, you know, thanks to the entire Orca Pacific team, you need any help. They're more than happy to make a connection. And hope everybody has a fantastic Monday, a wonderful rest of the week and everybody take care. Stay safe. Looking forward to having you at a future event. Alrighty, thanks again. Thanks again, everybody. We'll be in touch. Thanks, Rob, Whitney, Mike. Take care everybody. Bye bye.