Aaron Conant  0:18

Happy Wednesday, everybody. My name is Aaron Conant I'm the Co-founder Managing Director here at BWG Connect. We're networking and knowledge sharing group of 1000s of brands. And we do exactly that we network and knowledge shared together to stay on top, the newest trends, strategies, pain points, you know, things that are shaping the digital landscape as a whole, I get to talk with about 30 brands a week, to stay on top of those trends and just networking knowledge share. And that's everything from Amazon direct to consumer, you know, and everything associated with it from drop shipping to paid media to international expansion. anybody on the line today would ever like to have a conversation, love to connect, that's actually where we get the topics for these calls. It's also where we find it kind of the resident experts to bring on to these calls as well. So we'd love to have a conversation with anybody just networking knowledge, share a couple housekeeping items as we started. One, we're starting here three to four minutes after the hour. And just you know, we're going to wrap up with about three to four minutes to go on the hour as well, you're gonna have plenty of time to get on to your next meeting without being late. The other thing is, we really want this to be as educational informational as possible. So at any point in time, if you have a question, you can drop into the question section there the q&a, you can drop it in the chat. And you can always email me questions anytime aaron@bwgconnect.com. That includes, you know, in our f the call tomorrow, next week, never hesitate to reach out, you know, more than happy to get back with you. Usually in under a day. Sometimes it takes a couple. But in those questions or anything or all the digital landscape, including Do you need any partner selection, how it all you can kind of skip the Google search, we've got a shortlist. With that I want to kind of kick off this conversation. I think a lot of people, you know, are trying to figure out their Amazon strategy. And they thought they had one. You know, when the brand's I'm talking to pre COVID, you know, pre pandemic, I should say, the pandemic hits and everything is accelerated. And then we're at a point now where we really need to be strategic, maybe price increases didn't go through avions didn't go well. I mean, Jeff Bezos says right out of the gate, Hey, your margin is my opportunity. He's not hiding that. Now. How do you get more out of Amazon, there's a lot of people looking for that. And just as some great, you know, actually, longtime friends with Samar, you know, as I think you were DMM at the time, maybe GM at HPC when I was at Perego selling, you know, to Amazon, and, you know, great friends, partner, supporters of the network here. And so, you know, I'm going to kind of kick it over love to hear you know, I'll start with Nater if you want to jump in a brief intro on D8a Driven, and then we can kind of go around the horn here is kind of intros. And then you know, just to reminders, we kind of go through kind of the strategy things that they're seeing today. Sure, as many questions as you have, and we'll try to get as many answers as possible. But, you know, Nater, I'll kind of kick it over to you. You want to, you know, intro on yourself and D8a Driven. That'd be awesome.

Nater Youngchild  3:15

Yeah, absolutely, everyone, thanks for being here today. So D8a Driven is an end to end Amazon operating system. Think of think about us as an iOS for managing and optimizing Amazon businesses across both vendor and seller. We use machine learning and automation to operate at scale what humans couldn't do, and then we layer on a human touch to maintain the control of both qualitative and quantitative priorities. When combined together this machine learning and automation and human touch, it allows us to go from data to insights to actions to results really quickly, effectively and efficiently. Today, we work with brands, across over 25 categories on Amazon with a really strong concentration across health and beauty, apparel, grocery, jewelry, and sports nutrition. Most of the brands we work with have grown about 10 to 25x over the past two to three years. Yet most of them have all maintained a steady team, which in today's hiring market is really helpful to help them stay to persevere in outpacing their competition and using D8a Driven to help them do that. That said today what we're excited to talk to you about is our experience of operating hybrid businesses on Amazon and how brands can leverage the power of hybrid to win on the platform.

Aaron Conant  4:40

So to kick it over to Samar. And it's very each up into you want to kind of you know, insure on yourself. Just because we have a great past is you know, if you want to outline hybrid just for everybody, you know, just so we can level set and we want to go do a real deep dive to just level set with everybody you know, hybrid as a whole in how you guys look at it, and you know, obviously background and yourself would be awesome. Y

Samar Parikh  5:05

Yeah, absolutely. So when we, when we say hybrid, what we mean is if you have a vendor central business, maintaining and managing a concurrent seller central business as well, and operating through the marketplace, as well as that direct, you know, wholesaler type relationship with Amazon, and we'll get into sort of the specifics of why. But you know, so So the, the genesis of D8a Driven, is, is based on you know, I spent seven years in Amazon in various leadership positions, including the general manager of HPC. And that I took what I learned there was asked to restructure Scott, which is Amazon's forecasting, inventory planning and sort of, you know, managing the space within the warehouses team within Amazon. And as you know, you know, don't inventory and delivery is great for the DTC side, or it's really good for the direct consumer side. But like, you know, the processes in b2b were just completely broke, right, where someone wants to buy. And we did a little trick where we bought, you know, 1700 items for a, you know, Jeff Bezos does a quarterly meeting, and it came in 1500 different shipments. So, you know, obviously had to restructure Scott, for the b2b side, whereas, you know, Amazon business as a huge priority for them, or was back when I started that. And then, and then we'll move back to the healthcare side, helped launch Amazon's entering healthcare, including most recently pharmacy and CO Packer acquisition.

Aaron Conant  6:42

Awesome, awesome. Yeah. And just so everybody knows, like, HPC, we're talking this, it's health and personal care. You know, it's everything from Yeah, you know, household baby beauty. I mean, I was selling across multiple those categories as a whole. But the interesting side for me, just in that category, and we talk about margin as a whole, I know, it's like the second largest, you know, as a p&l on Amazon, but, you know, profitability is a huge, huge struggle across the board. So anyways, super, super relevant. And just a reminder, as we get going at some more people join, you can drop any questions you have along the way, in the q&a, that chat or email them to me, aaron@bwgconnect.com. So awesome. You want to kind of, you know, jump into a little bit. I know, Craig, if you want to do an intro on yourself, and then I'd love to get into some of the data in kind of the thoughts you guys have to share from a strategic level.

Craig Kance  7:36

Sure. Thanks, Aaron. Might not be able to see all of you. Hello, Craig Kance. I'm the VP of Partnerships here at D8a Driven, I oversee all of our client accounts roll up through me in the end, and I work directly with some strategic accounts as well, to help execute their needs. A lot of that has been hybrid of late. And putting that in place. I was the former VP of sales at BabyGanics, and launched and pioneered our Amazon business all the way back in 2008. And led that through our acquisition, we were acquired in 2016. And I was there a little bit past that. And when I left there, the business was on a annual run rate in the mid eight figures, which was, you know, a really, really healthy business and learned a lot along the way. Prior to joining D8a Driven, I was advising advisor for a few private equity companies and helping them navigate through their, through their brands, identify challenges, opportunities, and some execution across some of the categories that have been mentioned some of the most highly competitive health and beauty apparel, household consumables, just to name a few nutrition and sports. And I've just like I said, I've been implementing this type of execution and strategy for some brands of all sizes, enabling them to unlock growth potential while also realizing profitability, or at the very least not losing money to realize that growth.

Aaron Conant  9:15

Awesome. Love it. So yeah, I'll kick it over to you. Nater, do you want to kind of kick us off here? It's kind of the content as we get

Nater Youngchild  9:21

Yeah, Yeah, absolutely. I think I like to anchor us here in this, this slide is that this idea of what you know, what are the common goals that all brands have when it comes to Amazon, obviously, growing bigger, increasing profit and doing more with less, this is a theme that we want to kind of stay true to as we'll take us through the presentation today. As we think about running a hybrid strategy with Amazon, we're gonna look to kind of serve these these three goals as we move move through. Now, while these are the three goals of most brands selling on Amazon, it's becoming harder and harder today, you know, you have goalposts that are always changing algorithms that are changing and Amazon itself becoming less relationship based and not being able to rely on those relationships we've built up over the years, concurrently, we have a competitive landscape that's rapidly shifting and becoming more fierce. As we have this overall shift online, from the pandemic, winning is winning on Amazon is kind of gone from the cherry on top to an absolute necessity for most brands. And so as we think of that competitive landscape starting to shift, we also have the aggregator space starting to heat up, which is empowering a lot of much smaller brands that used to not kind of not be too much, not be too much on the radar on the competitive landscape, starting to be able to aggregate and get together with with strong execution partners and really start to shake up certain categories. So as we see it, you know, the opportunity for growth is expanding exponentially, as well as the competitors. So take us into hybrid. And really what we're saying here is brands need to leverage every single advantage that they can to address their challenges as they move into to this evolving landscape.

Nater Youngchild  11:11

So what is hybrid? I think Samar kind of hit it for us. The one thing I want to make sure and articulate upfront is, when we're talking about hybrid selling our we're talking about when we say one P we're referencing vendor Central, everyone knows that we're referencing three P, we're talking about Seller Central. And the goal here with hybrid, the hybrid approach is leveraging your vendor central business. For the the mainstay of your engagement with Amazon and using Seller Central to support that vendor that that core vendor central business. And so we'll we'll dive into specifically how why, and when we do some of that, but the idea of hybrid selling is selling on both platforms, both vendor Central and Seller Central.

Aaron Conant  11:50

And we might get to this with a question that comes in, says this will likely be addressed if yes, just you know, disregard, but this is our biggest all caps question right now. Why hybrid? Is that double work double resources, you know, need to manage both platforms? Why not pick one side? It's awesome question. Just remind others, you know, drop questions in the q&a, or chat or wherever, and we'll get them answered in so I mean, you guys can tackle that now. Or you can say, Hey, listen, we're actually cover that and slide, you know, four or five, six? I'm not sure. But, um, you know, what does it do for the requirement on resources? I think is a big thing here is the is it worth it? At the end of the day?

Nater Youngchild  12:30

Absolutely. That's a great question. And a great segue in Samar, I'll pass the mic to you here in a second to kind of take us into the tale of two supplier types, which I think starts to pull out the why. But I think ultimately, at the end of the day, evaluating the cost benefit analysis is going to be unique for each for each brand. Right, each brand is going to have nuances. And so there's going to be a cost benefit analysis needed. But we'll get into all of the reasons why you would consider it across one SKU many skews a portion of your skews. So we'll dive into that. The specifics of why but maybe some are, if you can, kind of I think I think it's a good segue if we kind of go into the tale of two supplier types here.

Samar Parikh  13:14

Oh, you're on mute Samar. Sorry about that. Yes. You know, when I started at Amazon, back in mid, mid 2012, there really was a very big distinction. And it really had this feeling of a tale of two suppliers. And vendor Central, which is, you know, the traditional wholesale model used to have lots of advantages, and there was a lot of attention, there was teams upon teams that were helping manage that, what but whether that be from the negotiating perspective, in the in the merchandising side, to the, you know, inventory management and space management side, sort of positioning inventory, so on and so forth. But over the years, things have really changed, right, and Seller Central got little to no attention. And if we were lucky, if within a GL there was one person that was managing the literally 10s of 1000s of sellers that were in that category, you know, in HPC, we had two people because it was such a big space. But, you know, most other teams, they were lucky if they had one or they were sharing with another GL. And so over the over the over the years now, the seller central teams are just as big, they have almost as many capabilities as vendor central does. And there are you know, we know that there are several known benefits on the on the on the vendor side, but there are tons of benefits on the seller side that I think some of which we're aware of, but they come with, you know, as you mentioned, there are some operational loads that that comes with, but if you strip away like let's say we didn't have to worry about the operational, those become more massive benefits, and a lot of them are obvious but a lot of them are not. And I think several that go on notice, as well.

Aaron Conant  15:06

Oh, no. Yeah, I want to just a couple quick questions that come in. You know, the first one is around, you know, there is a Amazon was indicating that seller central would roll up underneath vendor Central. Is that still a plan that you see happening? Or has it happened already? And so I think that's just a thought from a few years back that Amazon was trying to align everything quarterly underneath one is that still the case comes in. And then the next one is just around? You talk about vendor or seller central benefits? You know, we'd love to have you highlight some of those.

Samar Parikh  15:41

Yeah, so I think on your first question, it was called one Amazon was the program, actually, one of our board members was the, what ran that program. So they've since I don't want to say they've abandoned it fully, but they've really abandoned their initial approach, which was to put it all together. And then Amazon decides which of the two platforms you get to play on. And, you know, within some of your agreements, that that is that still exists, that the clause still exists, but they've really abandon that because they, you know, many, many folks are probably aware, it came with a lot of negative press, it came with a lot of challenges, and they lost a lot of selection during that time. And, you know, so So one of our board members, as I mentioned, that ran it also then went back and shut it back, or they ended up shutting that program down. I wouldn't say the thing that is happening a little bit more as a more better coordination between the vendor and seller side. And we'll get I think NATO will cover this a little bit, but we're at one of our, you know, one of our clients is they're actually one of the top five largest CPG companies in the world. And there are, you know, moving to a hybrid strategy, you know, well, full transparency between the seller side, the vendor side, and sort of coordinating that across both organizations. In terms of, you know, the the, some of the unnoticed benefits, I'll turn that over to Nater. I think he's going to go into that here now. Next.

Nater Youngchild  17:13

Perfect. Yeah so yeah, let's jump right into them. We have pricing and profitability is a huge bucket when we think of the benefit in leveraging a seller central business. So on the onset in Seller Central, you get to set the prices of your raisins to the end consumer. So this opens the door to a plethora of value ads, whether it's vendor central ASINs with artificially high prices that we want to bring down. price matching influencing can be used to stabilize market pricing, which will support demand levers, it can also support supply levers by stabilizing Amazon's vendor central profitability on ASINs it can also open the door to crap out asin so ASINs that Amazon won't buy anymore through vendor Central. And that gives us the ability to put those units to put those items back into the marketplace, and really tap into this price elasticity that exists on Amazon. Sorry, Samar. Were you going to jump in?

Samar Parikh  18:08

No, go ahead, keep going. Okay.

Nater Youngchild  18:15

Um, in addition to that, we an example I had jotted down for us around leveraging this kind of back and forth between vendor and seller, we had a vendor that had submitted cost increases, they experienced very sizeable raw material cost increases throughout COVID. Amazon's, the vendor manager was was was not willing to accept it. And so POS went to zero, and they had to just POS kept coming in at the wrong costs, they had to not accept them because they couldn't afford it without the cost increases. And it we were in a race to the bottom. So what we decided to do was we said, let's just take these items, sell them on Seller Central at the higher ASP the higher price to the end consumer and let the Amazon system see that the price of this item is going to be higher when it when they bring inventory in. And sure enough, four months later, Amazon's POS automatically started coming in at the higher costs. So there's a sizable way, sizable ways and leveraging this lever have pricing and profitability that we can use depending on the nuances of each branch business.

Samar Parikh  19:18

So I think just just just jump in here for a second. I think when we think about the price elasticity, this isn't just a COVID phenomenon, right? Where people didn't want to leave the house and they're willing to pay a little bit more, despite the fact that it was you know, more expensive. You know, we've experienced this for several years now, where, you know, if you increase your price, you can still manage on the seller side, we're seeing about a 2121 to 25% price increase allows you to still maintain about 90% of your sales, but that's huge from a margin perspective, right. So 15% on on retail price. Increase maintaining 90% of the units that you're selling, you're actually getting a 30, 25 to 35% increase in your overall profitability.

Craig Kance  20:09

Yeah, I would just add in just touch on that the example that Nater was giving. And he had said that, you know, lo and behold, four months later, Amazon starts ordering again, vendor Central. The the part about that was the most amazing was that, then the brand itself had the ability to have all the leverage and choose, do I want to accept these? Or do I want to continue to work in my seller central business, which had a higher, higher profitability rate for them. And, you know, as opposed to being dictated by Amazon as to where and how to do business. So it gave them the choice, which is just the overall feeling that the benefit of an overall high level benefit for hybrid is giving you giving brands leverage and the ability to choose and navigate, as opposed to be told what to do driven to one way in one direction with no, no ability to move or be agile in any sort of way, when dealing on just one platform?

Aaron Conant  21:05

Yeah, I mean, I think the other key point, too, is I think, the, the timeframe, right? It's not instantaneous, right? It was four months, I always, you know, the set expectations for people as a whole, you know, it's not automatically going to switch. But it is possible. And then you know, me, pricing is the hardest thing that to discuss with Amazon, because they won't discuss it with you, right, and in reality. So, you know, a couple of things that pop up here. And I want to make sure that we get to, you know, the inventory planning management forecasting piece, because so many people struggle with that, but a couple questions that come in. Recently, Amazon appears to be enforcing vendor agreements, Terms of Service for brands running hybrid, you know, are you able to help brands stay within their terms of service and not risk either vendor Central or Seller Central? Or how would people balance that?

Nater Youngchild  22:01

Yeah, absolutely. I Samar. Do you want to jump in on that one?

Samar Parikh  22:04

Sure. I think that, ultimately, if, as I mentioned, we helped some of the largest companies that are selling to Amazon, maintain a hybrid business or move to a hybrid model. And I think ultimately, it comes down to positioning it as a win win. Right. From a consumer perspective, you know, they say Amazon is very consumer obsessed, that's the most important thing. You know, I think there's there's reason to debate whether that's actually true or not. But ultimately, if we can position it from a consumer when we argue it as a category when I think we can make that happen. And that's how we've approached it. Right is how does this work out? Well, for the consumer selection is generally a big part of that. How has this worked out for the category, some of their critical KPIs Fast Track being a huge, huge one? And if we can impact both of those positively, and maintain sales through other other items, that I think that's that's sort of the approach that we've taken. Now, would there be a road vendor manager or DMM, or potentially even a general manager, I think, generally, by the time it gets to the general manager level, it's, you know, most of these things, you know, don't become a big issue, because I think they see the bigger picture, because the GM is responsible for both the categor the vendor side, as well as the seller side, and managing the entire p&l versus the BMS, you know, they're looking out for their p&l, p&l, and I can understand that their their perspective is, oh, you know, I have to win, not my colleague over there down the hall. So I think that that's the other approach is, you know, who are you really engaged with? And as you make this transition, right, because just as much as the VM wants to win, the, you know, the other side, the person managing the marketplace also wants to win. I think that's been another strategy that's helped us succeed as well.

Aaron Conant  24:04

Awesome, so what trends do you see for you know, CPG industry, you know, on three P, you know, are you seeing manufacturers selling themselves as three P as a hybrid, or partnering with existing three P sellers out there. So there's, there's the two sides to it, right, is actually going hybrid, or finding a strategic partner that you would sell wholesale to and they would resell? It? Is there advantages one way or another? Do you see a trend one way or another?

Samar Parikh  24:32

I think our perspective has generally been, you know, hybrid, you know, when you start out, obviously, the balance of business will be very much in favor of vendor. Over time, that can become a meaningful chunk of your business. And so the idea of giving up full control through a reseller to us seems kind of mind bogglingly crazy. That's not to say that it's not right for everybody because I think there are some restrictions, or there are some, you know, sort of infrastructure challenges within some companies that just want to cap whether it be from an accounting perspective, or a inventory management and shipping perspective, they just can't make it happen. And it takes them a year to two years to get internal alignment to go execute on that. And so if during that time you're you know, acting as a wholesaler to a reseller, that may make sense, but from our perspective, giving up that kind of control to a third party who is not buying your product, and essentially acting as you know, as a, as a retailer, seems kind of crazy for a few reasons, right? One is, there is benefit to having really good KPIs on your seller account, there's benefits to maintaining really good inventory. And so that that comes with, hey, now you're, you know, let's say two years from now, you decided that that wasn't the right partner, maybe even six months from now, you haven't gained any benefits in terms of the like the learnings, you haven't gained any other benefits from a KPIs of your accounts, that helps you with your IPI that helps you with the amount of inventory and how you can how quickly you can launch products, how quickly your products will be received within the where within the FCS. So there's a lot of benefits that you want to be able to drive in your own account, because you want that we want that optionality. Now again, coming back to if your company, if your organization just isn't ready for that, is there an opportunity to work with with with a third party who will manage everything end to end? Sure, our perspective is, you know, set up the accounts and then work with a third party who will manage that account on your behalf, versus buying inventory and doing it all through your their accounts.

Craig Kance  26:40

Yeah. And just to be clear, also, in case it's in case, it's not, there are advanced there are later started to take you through and we'll take you through some more there are benefits to this and benefits to the seller side. But it's not an all or none. There's reasons, there's various reasons as to why a company or a brand might start the hybrid model. And it might not be to realize all of the benefits at once it might be to tackle it issue, a specific issue, it might be for just a small subset of their catalog, for example, and the needs are different for each situation, it is not always just take an entire catalog and replicate it. And that's your hybrid it is case by case basis, ie by the basis for brands. So it could be you know, a very small portion and a very much smaller project to do. So for one brand where it could be migrating an entire business over and eventually the end goal to be off of vendor central for that particular brand. So it does change. So, you know, I don't want to get I don't want to be like a this is the way your holistic covering everybody type the answer because each each brand and and, and business has different needs and challenges with their own.

Nater Youngchild  27:52

And if I could add to two things to that Aaron as well is and Craig was a great lead in here. And that is when leveraging a hybrid strategy brands need to stay they need to have the ability to be nimble. That's the whole point of the hybrid strategy. And so there you lack that nimbleness when you're becoming reliant on an additional third party who has additional cost brought into the supply chain, additional complications brought into the supply chain. That's that's one complication there. And then two, we've actually seen brands that have become reliant on large third party seller accounts for their the quote unquote, kind of offshore their hybrid strategy. We've actually seen Amazon and that third party account, how they put this have issues together. And every brand that is now lumped under that seller central account is now falling victim to those issues. Those issues that have come up I have never come up with a single one of our clients ever that is running their own that has their own Seller Central account, even if they have an expert managing it. So there's a risk that's probably not worth taking in offshoring it to another seller central account outside of the benefits of having your own.

Aaron Conant  29:06

Yeah, I think there's probably two 3 party resellers I would trust and if anybody's looking for one, you know like you just literally can do it on your own. Shoot me an email aaron@bwgconnect.com and more than happy to kind of say like, Hey, everybody, these are the two that was actually taken on your brand because I completely agree with you. You can't just do it with anybody and you can do it with five different people, then there's no incentive to advertise. I do want to get to this inventory planning and management piece because if there is something that people long for, right I mean, we can get Amazon paid media, you know, there's tech tools that are out there, you know, people can go solve for it right? You can hire people, you get agencies, inventory planning management. If there was a forecasting tool that was even 90% accurate, people would love it. So love to hear you know this He's right here.

Nater Youngchild  30:02

Yeah. And maybe I'll pass that that maybe Samar you want to hit on the inventory management percentages wise comment Aaron's comment there, and then I can jump into the value.

Samar Parikh  30:10

So that's the risk of I don't want to be too self promotional there. But, you know, when you when you talk about the 90% accuracy, so we have inventory forecasting and inventory management tools for both the vendor side as well as the seller side. And when working, you know, working in the Scott organization, we were plus or minus 23%, globally. And that's therein lies part of the challenge is that Scott is doing forecasting inventory planning at a global level, we are doing inventory planning and forecasting at a vendor or client brand level. And so our accuracy is plus or minus 7%. And with with 95% confidence, we hit plus or minus 7%. And it's not because we are much smarter than the Amazon, it's because we are fundamentally optimizing for different outcomes. Amazon is operating and managing their inventory from a what's best for Amazon, how do I minimize my risk for stock or for 60s? And how do I minimize my risk for Overstock, right, they're not optimizing out of stock or I'm managing Overstock, right? Because ultimately, they bought the product, and then it's gonna sit in their warehouse for and they've already paid for it. And they're not getting recouped. And so I think fundamentally, if you're optimizing to be not Overstock, you're going to generally under buy number one. Number two, Amazon has a plethora of backup offers, right? Whether it be on the seller side, or more likely from a another brand, right? So if you think about something that, you know, especially in the consumable side, or the apparel side, that is, you know, commodity bass, whether that be bath tissue or bad bedsheets, you know, it doesn't have to be a white bedsheet can be almost any brand, so on to meet certain criteria, same thing on the Bath Tissue side. And so if they run out of Sharman, while they've got Quilted Northern, or vice versa, and so they're always they tend to under buy. And that's why they're optimizing for a category level optimization versus a brand level, versus we optimize at a brand level and say, how do we take advantage of there is a billion dollars of opportunity in this category, how do we win almost all of it if we can, right? And so when you're optimizing from that perspective, which is why we're able to get as accurate as we are. Because we ultimately we won't be able to compete with literally a building full of folks in the Scott organization. It's because we're optimizing for different things. And we're leveraging ml. Similarly, they are to make it happen at the scale that we can.

Nater Youngchild  32:49

And So Aaron, we're happy to follow up with anyone that wants to kind of dive deeper into that. But let me let me kind of

Aaron Conant  32:54

Yeah, for sure. That's what I was thinking. And then I want to I want to cruise through this portion. And then yeah, there's a couple more things that are coming in that I want to make sure we get to. But yeah, awesome. No, I love it. I mean, I've got 15 questions just on that, but maybe it's a separate call.

Nater Youngchild  33:11

So hybrid strategy, inventory planning and management, what's what's this big benefit that we're getting out of it? Number one, we all of a sudden have a lever to step outside of the irrational or extremely volatile POs that we can get from Amazon from time to time, let alone the Amazon doesn't serve my seasonality Well, or they don't grab my upticks in q4 fast enough, or whatever the topics are that probably a lot of folks on this call have experienced in their their POS through vendor Central. When you have Seller Central, you simply have another way of getting units into the Amazon fulfillment network to offset some of these misses from Amazon's vendor central POS system. Now, aside from all of that, we also have what I mentioned before crapped out, so items that just simply aren't coming on to anymore that we want into the actual Amazon Marketplace, we can bring them in through vendors, through Seller Central as well. Looking through a few more so the other one would be? Well, Amazon has built new tools such as Born to Run to help us deal with launching new items. Sometimes Born to Run is full or doesn't have enough capacity, or you're not able to get enough units for a really large product launch that a brand has Seller Central gives us the optionality to have that backup. Now, aside from all of that, you also have, like I mentioned, and Craig was mentioning, you have these nuances. I think Craig was mentioning it, certain brands need this, certain brands need that. But there's also this level of certain ASINs need this certain ASINs need that and so we're able to start to leverage this secondary mechanism of bringing units into Amazon's affiliate network by eighth and serving the needs of that individual asin outside of just being reliant on Amazon's POS, that's the kind of big opportunity that lies there within it. inventory side. Next,

Samar Parikh  35:03

sorry, one more thing to add, I think I think that that goes back to this concept of do you do it? Or do you know, do you partner with, with someone who is going to manage your account for you? Or do you sell to another reseller? And I think, you know, giving up that control to a reseller and managing, you know, they're based on their IP is based on their ability to get it right, feels like a really big piece of the puzzle to give up and not managed in house, especially given that there are a lot of automated tools that can allow you to scale to both platforms, with very little operational overhead.

Aaron Conant  35:43

I mean, I think that addresses kind of that, you know, that what are the tools that are available? Because you know, that the literally the first question, right is, is that double work double resources? You know, double the amount of people that manage both platforms?

Samar Parikh  35:59

Yeah, no, it's not, we'll get to that here in a couple of slides as well as how to execute.

Aaron Conant  36:06

In everybody, you know, keep dropping the questions in the q&a and or chatting them in or emailing them, to me awesome questions.

Craig Kance  36:12

More often than not, you know, getting outside support, or, you know, agency level support on on these types of things, the cost of that is typically, if not always, far less than it is to give up margin to a seller, and what they need to make to sell your product at a certain price. So it is always a lower cost to have somebody manage the business, rather than sell the product, you lose control your price, you lose control of a lot of things on Amazon, letting other people sell it. And the cost you're paying in margin is always I've never seen it be a lower number than what it cost to have experts run your business, or that piece of the business.

Nater Youngchild  36:55

And that that's a good segue to into. I mean, it's, it's a the elephant in the room here for most folks that are on vendor Central is you know, three P sellers can be and probably for many of us have have been a nuisance on Amazon. And quite typically, the more your brand grows on Amazon, the more the problem grows, you know, three P sellers can clutter your variations. They can confuse customers, they can play games or buy boxes, they can hack UPC variations of the same item. And so vendors that have their own Seller Central account, are empowered to combat these marketplace challenges. We can start to win the buy box on UPC variations that we don't have in vendor Central, we can enter Craig, I know you've you've you've dealt with this a lot with some of your your brands that to get rid of the problems.

Craig Kance  37:45

Yeah, I would say you know, in an effort to also help us get through as much of this as possible, because I know that we have a lot here, the easiest way or the high level way of saying this is these third parties, sellers, they've been using this forever, like, like Nater was saying, for vendor central brands, just being able to be a seller yourself and have a third party listing yourself enables you to see what's going on to play in that game to see what they're doing. What is their price? How is their price being matched to yours? Are they doing it automatically? Are they randomly coming in and doing things, finding out what the games are that are being played, and a lot of the information can be found or discovered by being a third party seller yourself, when you are in vendor Central, you just don't have any visibility into that third party world, or the ability to impact it by making changes to listings by changing pricing and various different hacks that are available. So it's not necessarily that you remove them, but you at least start to get visibility into what's making it happen and what's doing it. And then you can start to maneuver around it.

Aaron Conant  38:47

I mean, we literally just did a call yesterday on it, we'll probably do six to 10 dinners on it next year as a whole. I mean, you can remove on authorized resellers, you have to do it step wise, you have to do it legally, you cannot just file a counterclaim counterfeit claim unless you 100% know that it's counterfeit. So we did we did an event on it yesterday, if anybody wants more information or needs a, you know, just wants to get a video of it. Just shoot us an email and we'll get you you know, a copy of that for sure. It can be done. But I completely agree with you. They're a nuisance, and you have to get rid of them. But you have to do it legally. And you have to do it in a stepwise fashion. So anyways, more than happy to chat with anybody, you know, post-event post-call today

Nater Youngchild  39:35

So, but awesome. Thanks, Aaron. So a little bit more about now, you know, why do it we can you know, we can get super detailed here. I want to be cognizant of time. So we'll we'll go into it, but what kind of I want to move us more into kind of the how to do it. So probably not realistic. We can cover all of this in depth though happy to follow up with folks. But, you know, ultimately, the the benefits vary, you know, across kind of critical operational areas. We have them kind of called out here in the middle of this, this grid. Most importantly, though, I want to highlight here that we're not advocating for one platform over another forever for all ASINs. Vendor Central is designed to crank large volume in line with Amazon's priorities and where there's a conflict with those priorities. A supplemental seller, Central Business empowers brands simply to be more in control of their future on Amazon. That's, that's the takeaway, it's this idea of going from I'm by either in my business is either at the mercy of how and when I fit into Amazon's priorities. And or I can take that and add in my own priorities and add in this level of control and freedom to move, move your business on Amazon the way that you want to, outside of the times that it doesn't fit Amazon's exact, exact priorities. So, when we think about how to do it, you know, as you start to prepare your organization, and again, to the to the kickoff question, at the start, you start to prepare your organization to think through about about this hybrid strategy, you want to ask yourself these questions before kind of defining what are the what are the best next steps for you? So one, is my organization prepared as a business to operate as a retailer as opposed to a wholesaler? There's differences in terms of taxes, supply chain customer support. And so we need a yes or no there that takes us down a different path. how agile how agile is my organization, regarding the supply chain and operational processes that we would be looking to change or add into the mix? Do I have the necessary internal resources to operate a second Amazon channel? The question at the top as well? Do I have the expert experience to do this? Well? And if I don't consider a hybrid strategy, what will happen to my business? I think this last one, I'm sorry, Aaron.

Aaron Conant  41:52

No, I mean, I want to get into it. But the question that I get a lot, you know, is around, you know, the retail to the question, how do I escalate the conversation above the VM? Right? A lot of people are concerned, I'm going to irritate the retail team, I finally got a vendor manager, I don't want to irritate them and have them, you know, go cold against me for the next, you know, you know, six to eight months. You know, how do you handle you know, those conversations with people you're actually helping?

Nater Youngchild  42:27

Absolutely. So, So oftentimes, we get asked, Can you really given the relationship you have on the vendor side? Can you really do this? So outside of the times in which we have specific exclusions that we that have that we've signed off on? If we take that out of the conversation for a moment? I can't tell you how many vendor central businesses today have great relationships with their VMs and simply run a seller central business for the times that the VM fall short. And there's no conversation about it. There's no permission. There's no we did this. We didn't do this. We simply keep running the vendor central business, the vendor manager relationship is going strong. And we supplement it with the seller, central business, Samar maybe want to jump in on on how that's received on the the vendor manager side from from your roles at Amazon.

Samar Parikh  43:12

I think it goes back to one, there's an element of, you know, what does it take to become noticed, right. So if you just, if you have an account, if you have a seller central business office, it's going to get a unnoticed now for some brands, where you will start doing a meaningful chunk of your business there. By definition, you're now starting to get you know, sort of retention both in the VM as well as the the, the marketplace manager as well. And so now you got a connection on both sides, then you can leverage the relationship that you built on the VM side with the relationship that you're building on the marketplace side as well. So I think in terms of like, you know, would you advise getting permission from the VM? Would you would you advise getting a separate business entity? I think the answer is, unfortunately, it depends, right? What is that relationship with the VM? What is your what is your what is your history on selling? If you've had a history on the seller side, and your accounts been shut down? Or, you know, some negative attention brought to it? Yeah, you know, set up a separate entity. On the VM side, as I mentioned, every, every brand, I think minus one of that we work with, has a hybrid strategy. And it's and it's sort of very The answer is varied from brand to brand, a little bit based on again, the type of relationship that you have, you know, this, you know, like the top, you know, one of these largest world's largest CPG companies, they're doing it with full visibility. And part of the reason we were able to do that is we weren't just talking to the the GM on the vendor side. We were also talking with the GM on the marketplace side. And so you know, now we're sort of engaged on both sides, going back to this concept of you're engaged on both sides, and now you're creating friction between the two of them. And you're and you're able to sort of leverage that on the one side for the other and vice versa.

Nater Youngchild  45:12

And the one place that we've seen brands go wrong in doing this is partnering with a really, really large seller account. And that is when Amazon's vendor manage vendor management side has gotten wind of oh, this is not just some new seller account that I don't even it's not on my radar. No, it's literally my biggest seller in my category is now all of a sudden selling one of my key brands. That is when we've seen it rise to the top of causing issues. And so when you don't choose that path, you don't, you don't open that door of potential issues that you'll have to deal with. That's one I wanted to address.

Craig Kance  45:45

And then also sorry. And also, just to chime in. Also, you do have to realize that in a lot of these cases, brands are doing this to get the ASP hire due to the deprecation of the price that's gone on over years, or months or for whatever reasons from controller distribution. So if you think about it from that standpoint, if if moving over to seller to sell some subset of ASINs at a higher ASP on Amazon, in the end, that benefits the p&l on the vendor side. Because once they do decide to bring in that product, they're back to selling it at a higher price where they should where they want it to be selling it the whole time. You know, there's a misconception that Amazon brings down price, but it's not. They're just matching based off of what they're seeing out there that's in distribution and available. And they're matching it because they want to honor the promise to consumer of lowest price. So that's how price comes down over time. So if you're moving over to seller, because you can no longer operate it either vendor Central or you can no longer operate at that ASP. In the end, it will benefit the vendor side. So they wouldn't be bothered by that if they're able to sell the product again at a at a at a better margain.

Aaron Conant  46:50

And Jimmy, I want to get this, this question that comes in. Because at the start, he said, you know, you like iOS for an Amazon business, like an operating system. But there's also this huge consultancy piece like you guys are awesome. Like, you know, the A or there's no sales pitch, but we have people like generally saying, like, what is this? What D8a Driven? Are you so are you a SaaS based service? Is it consultancy, would love to eat? If you want to take a few minutes and just kind of explain how you guys step because it sounds like you're you're doing both you're like guiding as well as in hybrid.

Craig Kance  47:25

We’re hybrid.

Nater Youngchild  47:28

Oh, gosh, that's not confused. Yeah. Yeah, absolutely. Thank you. So yeah, at the end of the day, we're we have a SaaS platform, which is our D8a Driven platform that pulls data identifies the insights and then takes those insights and turns them into actions. So we go from the data and identify what can what is happening, what's driving it. And then we say, what are we going to do about it? Now in the what are we going to do about it that oftentimes can be can go from, hey, we told you, you need to go do X, but you might not be able to do X or X might be complicated, or we might not have a conversation about why should we go do x. And so the consulting for us comes in at the state in which we're identifying this is why the data told us to go do this. And this is how we go do it together. And so that's how we kind of go from the SaaS over and blend into the the human side where we're where we consult with brands to make sure that they are executing what's right for every race, and every day, across all core functions one and two, that they actually have the resources to do it or we can supplement them to help them pull it off if they don't have them in house.

Samar Parikh  48:27

I think also like a lot of our clients start out as a consulting engagement, right? Like, here's a three to six months to help build the playbook or the roadmap to what is our three to five year strategy. That's often where we get engaged, hey, we're trying to build a three to five year, you know, Amazon and eCommerce strategy. Can you help us with that? Great, yeah, we can do that we engage for three to six months, sometimes a little bit longer. But what ends up happening by the end of that engagement generally is, wow, this is a lot. You know, similar to I think that sentiment a lot of folks have, how can we leverage and get attain these results, because they're, they're generally extremely aggressive, while not having to hire a second team or having to double the team size. And so I think that's where the SaaS platform ends up coming in is, you know, is hey, when you there's a million things to do, how do you get all of that done? Generally, it's not, you know, if you can't just do it with humans alone, right? You can't do optimizations and changing pricing all that on an hourly basis with humans. And so that's where the SaaS platform come in.

Craig Kance  49:32

And we'll also have, you know, limited term engagements for helping you navigate the hybrid strategy that needs to happen for your brand, and what it entails and building the roadmap to executing that. Let you know if you plan to do it internally or not. We can help build that for you as to what that looks like and identify help you guys identify the needs and the resources that would be required to build out that plan based off of this specific needs for the brand itself.

Nater Youngchild  50:04

Awesome. And I’d like to bring us here to a close, I want to kind of bring us back to that theme that we started out with around, you know, the common goals of an Amazon business top line growth, bottom line growth, efficiency use of our resources. These are three case studies of real brands that we worked with. And I wanted to kind of call all of them reaching these success stories across leveraging the hybrid selling model. The first one was simply able to activate ASINs that Amazon crapped out. So they were able to bring ASINs back into distribution that didn't, that that weren't, weren't in existence weren't contributing to revenue. And all of a sudden, they were able to experience sizable revenue growth by bringing them back in, again, tapping into the price elasticity that exists on Amazon.

Samar Parikh  50:43

When you say size, that was 508% year over year growth. Absolutely. That's one. And that wasn't during COVID, by the way. That was pre Covid.

Craig Kance  50:57

So 1,000% Now

Nater Youngchild  51:00

The next one was able to take their cost increases that Amazon would not accept. On vendor central over to the seller central model, as I mentioned before, empowering vendor central to Stevie's ASP rises, that eventually drove the acceptance of the cost increases and into p O volume back onto vendor Central. And I wanted to pause on that and just call out, that did not take a conversation and email a meeting a JVP, nothing with the vendor manager, the system simply just started, they didn't stop vendor central did not stop trying POS at a low cost they tried every Monday, every Monday, every Monday, every Monday, then all of a sudden, the next Monday, the same po came in for this relatively same amount they've been trying over and over. And it was just at the higher cost. And so the system is is is built to work a certain way. And you can nudge the system to work in your favor without having to get all of these permissions or conversations through vendor managers. The systems are there to use if you if you if you choose to do so. And then lastly, efficiency use of resources here. This is where we broke up the catalog into the agents that were best served by vendor Central and the ones best served by Seller Central, we leveraged PPC advertising on both platforms, we use some expert management service here a D8a Driven. So we were kind of making the big one here was making sure that they weren't bidding against themselves. That's a big one. If you if you're not an expert, you can find yourself taking your vendor central business and have spending money bidding against your seller central business. And we're able to drive a pretty large increase in efficiency of their advertising expense. Now, to close on check, yeah, so one minute here, the big thing I want to just call out here really is you know, resting on one's laurels is a dangerous practice anywhere in life and in business. And that's becoming more and more evident for Amazon vendors. The world is changing fast on Amazon. Amazon vendors that embrace the hybrid strategy will be poised to continue for growth drive profitability improvements, and operational efficiencies. And the ones that don't are taking a pretty big risk, especially depending how their competitors in the space and the categories that they're in. Choose to take action or not. I'll maybe pause there. I think Aaron we’re at time.

Aaron Conant  53:10

Yeah, we're right there like literally perfect timing. You know, Craig, Samar, Nater, thanks so much for your time today. Again, great friends partners support as the network known for a long time. And I think you know, if anybody wants any follow up, I think right there, Craig, get D8a Driven, we'll send a follow up email as well. Connecting everybody, we're setting 30 minutes on the calendar, see what they're doing. They're helping a lot of cool people out in the space and they're doing something that's completely different. So encourage anybody have a follow up conversation with the team here. With that, we're going to wrap it up. The last question is, will this deck be available? Are you able to share this if we connect you with people

Nater Youngchild  53:50

you know, we can do is connect with people and we'll we'll take them through all the topics and more. Several more slides as well

Aaron Conant  53:56

Yeah, awesome. Right. And so with that, I think we're gonna wrap it up. Hope everybody has a fantastic Wednesday have a great rest of the week. Look for a follow up email for me, I'd love to have a conversation with you as well never hesitate to reach out with any pain points and or if you need help finding different service providers, Amazon space team here D8a Driven, they're awesome. With that, we're gonna wrap it up everybody. We have a, I guess a half day event tomorrow. If anybody wants to sign up for it. Just shoot me an email. Take care and we'll be in touch. Thanks again. Everybody, everyone.

Nater Youngchild  54:28

Thanks, Aaron.