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Outside Business Journal readers voted Channel Mastery their favorite outdoor podcast in 2019.
We’re kicking things off with conversation with Kiri Masters, the founder of Bobsled Marketing. Bobsled is a firm that helps small brands manage their Amazon channels. We’re excited about this episode because it dovetails perfectly with the big cover package in the Fall/Winter issue of The Voice, which drops this week.
During this 35-minute conversation, Carpenter and Masters cover some key Amazonian topics including the live video trend and managing unauthorized sellers. For any brand that sells on Amazon, this is a must-listen.
Listen to the podcast here.
If you’d rather read than listen, we’ve included the full transcript below.
Outside Business Journal/ Channel Mastery Podcast, #116: Kiri Masters of Bobsled Marketing and The Marketplace Institute
Kristin: Okay. Welcome back everybody to another episode of the Channel Mastery Podcast. I have a very special guest to introduce today. You’re about to meet Kiri Masters, who is the Founder of Bobsled Marketing and The Marketplace Institute. Welcome to the show, Kiri.
Kiri: Thanks, Kristin. Great to be here.
Kristin: It’s awesome to have you. Can you give my audience a little bit of your background and what we’re going to go into today, in terms of the Amazon channel and or marketplace?
Kiri: Sure. So I started my career in banking, and while I was at JP Morgan Chase in New York, I started a little eCommerce business on the side in the crafts category. I really enjoyed running that little shop. It was very much like a weekend, nights and weekend kind of project. Along the way, I launched some of those products on Amazon. This is back in 2012, 2013, where there wasn’t nearly as much chatter or content about how to do all this, so you kind of need to figure out a lot of things on your own.
Some of my clients at the bank were manufacturers, but didn’t really know that we’re doing with Amazon. So I decided to go consult with them and grow my craft suppliers empire alongside that. Turns out there’s a lot more demand for the Amazon consulting than there was for the craft suppliers that I was selling. So that was the birth of Bobsled Marketing, my agency back in 2015. We help brands to manage their Amazon sales channel with operational support, brand protection, marketing and advertising, the usual channel management suite of implementation tasks. So been doing that for the last five years.
Then in 2019, I launched The Marketplace Institute, which is more of a self-serve model, where brands can actually access our knowledge base of processes and best practices that we use as an agency, speak with our experts about specific situations that they have going on, access some good training and up-to-date news and analysis of what’s going on, so they can figure out how to modify their strategy on Amazon. It’s like a self-service membership that brand and manufacturers can join and access a community, access our experts, but ideally, leverage their own internal team to do the same stuff that they’d otherwise be paying an agency to manage for them.
Kristin: That’s fantastic. I feel like your body of work is so relevant to the audience of Channel Mastery. Obviously we serve artisan specialty brands. Many of them have wholesale legacy backgrounds, some of them are direct first and they’re all striving to create a channel strategy in 2020 that best appeals to their omni-channel consumer, their very specific omni-channel consumer. As we know, we’re seeing just an inordinately high percentage, I believe it’s over 70% of all product searches are starting on Amazon. So it’s a very, very important channel in and of itself and obviously the leading marketplace out there.
So before we drop in on a couple of topics here, I also want to say that Kiri has a book as well that she’s authored called The Amazon Expansion Plan and is also a contributor to Forbes. So in the show notes for this episode, I will be putting links to the book and also to several articles on Forbes and you can start following her work there. But she’s just a fantastic resource.
So you’re here today to help my audience, obviously comprised of artisan and specialty brands, really understand kind of best practices for 2020, in terms of how they are intentionally being present on the Amazon platform, as well as addressing how to internally staff or consider a team or an approach as a specialty brand to manage that on a day-to-day basis. But let’s start by talking about any broad sweeping trends or changes that you’re seeing in Q1 2020 on this platform.
Kiri: Well, I think a couple of things come to mind. One is the traditional wholesale model of selling on Amazon as a first party has become less and less attractive over time. Around this time last year, we saw what seems like Amazon moving vendors off it’s one pay platform. They stopped issuing purchase orders, it’s very confusing messaging coming out as to why. A lot of vendors interpreted this as we’re going to get kicked off onto the 3P platform.
So whether that really truly comes to fruition or not, what a lot of brands are discovering is that you get a lot more control on the third party side, and as a general generalization, often better profitability as well. So Amazon’s rolling out a million new features a week for the sellers and the vendors really don’t get a whole lot of love and keep having their margins crushed every year with negotiation.
So vendors listening to the show who’ve just come out of their vendor negotiations, probably feeling the pain a little bit. That’s one trend where there’s sort of more brands are either establishing themselves on the 3P channel right from the beginning or migrating over, if they have the levity to do so from Amazon.
Then the other one is we started to see, in 2019, a lot of push from Amazon to start doing live video. I think that that’s going to continue in 2019. It’s an interesting channel for discovery, and the fact that Amazon pays for all this bandwidth and hosting for this very expensive video infrastructure and allows brands to go live whenever they want to and have these live stream videos, really tells us a lot about video on the platform and how meaningful it is to Amazon. So, those are two things that I’m thinking about this quarter.
Kristin: Wow, live video on Amazon. So that’s a little bit of a diversion from where I was thinking we were going to go, but I’ve never done an Amazon episode where it’s actually followed a plan, just so you know.
Kiri: Yeah, well, you got to be prepared to rip up your plan with Amazon every month or so and start over.
Kristin: It’s so true.
Kiri: I’m used to it.
Kristin: Yeah, and so this live video, let’s talk about that. Because in my world, I think a lot of the brands, I know that Verde serves, they don’t necessarily have a marketing team touching Amazon, especially if it’s a legacy wholesale brand, right? That marketing leader is already up to his or her neck in managing the wholesale channel, meaning brick and mortar retail and online retail derivatives, if you will, of that. But now it almost sounds like, as we’re talking about a team internally at a brand, that we don’t want to have any silos with, ultimately we’re where everybody needs to be 100% focused on being remarkable to that end consumer, Amazon is a very important channel for that.
So I feel like what you’re talking about with live video, it almost brings marketing and sales in a live video package. But I can tell you a large number of the sales leaders that we work with are not comfortable with live video. That would not be something they would do, it would be something they would partition over to marketing, I’m guessing. Can you talk a little bit about how you’re seeing brands staff for that or take advantage of that or even anticipate that?
Kiri: Oh, that’s a great question. So live video, there’s two types of live video on Amazon.
There’s live where you’re in the Amazon studio and they’ve got the professional hosts with the good hair and has the whole QVC thing going down, very professional. In their studios, like I said, that’s a placement that you pay for. What I’ve seen brands do there, if the original founders are still involved with the company, the founders will go and do the spot. It’s a great way to tell the story of the cause or the affinity side of things. That can be a really great placement, but it’s sort of invite only and it’s paid, like I said.
So that would be a relatively easy one for a brand to identify, their original founder or the spokesperson or someone senior who has a lot of gravitas that they can go and do that. Then you’ve got live stream, which is an on demand, you get an app on your phone and you can go live anytime you want, basically. It’s very much more of a homegrown feel. So people are doing demos of their product, tutorials, unboxing style videos.
So I think what you’d want to think about is Amazon put this platform out there, started prompting brands to go live whenever they wanted without any real oversight, really. So the feeling when you go onto that live page and you’re watching these videos from brands is the camera is a little bit shaky. It’s not scripted, they don’t have graphics that show up. It is very much a Instagram Stories kind of feel. It’s real life, things go wrong. There’s some pauses and it’s a real live video.
Kiri: So I think, actually, that can work for you if you’ve got an authentic something to show people, which is educational, showing people how things work, some of the features. It can be a really great discovery platform.
Kristin: Oh, absolutely. I think that obviously we’ve seen Instagram and obviously Shoppable. Instagram really become a priority to all of our brands this year. The audience is there. Are people able to … you know how you can, this is a little bit of a granular question. Dear audience, just bear with me for one moment. But is there a way to actually broadcast to multiple platforms including Amazon or do you need to actually have Amazon as a standalone livestream?
Kiri: Yeah, so if you use the app, it’ll just go to Amazon, but there are third party software providers out there. One’s called Social Live. That’s one that I’ve actually tested, where they integrate with Amazon, YouTube Live, Facebook Live, Instagram Live, all of the platforms. You can schedule a live stream, get it all set up and they’ve got very extensive features in their app. So you can have one person go live and then switch to another person and all these graphics and stuff like that. So you could create a really great streamed video that goes out to seven different platforms all at once. It’d be very efficient with your time there.
Kristin: Kiri, for specialty brands, this is actually super interesting and newsworthy, because I think so many of our clients have kind of boxed with, I mean, like in a boxing ring, boxed with the problem of people going to Amazon looking for price and assortment, and they’re trained to look there almost with a bit of a commodity eye. It sounds like this offering, I’m imagining as part of Amazon marketing services, is intended to really create a brand presence there that’s completely under your control and that’s super interesting to me.
Kiri: Yeah, I think that what Amazon’s historically been really strong is at the bottom part of the funnel, the transaction part of the funnel, and they haven’t been so good at discovery and browsing. When you go to Amazon, just think about the way that you shop yourself. You go to Amazon, because you’re searching for something. I’m looking for packing cubes. I’m going to search for packing cubes and then I’m going to start my process from there. But previously, I might not know what packing cubes are or that they would be really helpful to me, until I saw a video on Instagram from an influencer showing me how they pack their suitcase for a short trip.
So that’s where I think some brands, especially those that have innovative products and specialty products, get caught up potentially, is that by the time someone’s coming to Amazon to search for your brand or your products specifically, they’ve done their research on Pinterest, in stores, talking with other people, and they’ll come to Amazon and they’re ready to buy. So it skews things a little bit, because you’re not sure exactly which channel people use for various stages of their buying journey. Every channel is in its own box.
So Amazon doesn’t share any information with Facebook, and so we can’t see the end-to-end customer journey. It’s very, very limited ways to access that information and put the puzzle together. But I think that that’s where there’s a little misconception about how effective Amazon can be as a channel, because, yes, people are going there when they’re ready to buy. They could have spent three months trying to figure out what barbecue they should buy. They decide what they want to buy, they go to Amazon and they buy it. If you just looked at that behavior on Amazon, it would look very strange, but you don’t necessarily know all the different touch points someone has had with your brand, including in stores up until that point.
Kristin: I know, that is the $64 trillion question. Also, even when we kick off a relationship with a new client or we start a strategy window with an existing client, we do try so hard to put together that puzzle. It’s so, so important for us to understand where that target consumer discovers is engaging, how we nurture them and then ultimately, how we convert and get them to stay in our nurturing sequences. So it’s just such a mystery, and I feel like there’s so much innovation out there, it feels like there should be a way to track that.
Kiri: Right. Yeah, absolutely. Well, we were talking before the call as well about how often someone’s stated behavior is not the same as their real behavior as well. So even if you’re serving those people and asking how they discovered your brand and where they purchased and how they made that decision, they’re not always going to recall really accurately what they did.
Kristin: For sure. So much of what we rely on with the companies that we serve and the specialty brands we serve is the story telling and the emotional connection, and getting them to really want to belong to the brand. So two brands I wanted to ask you about have that with their following and their consumers, and that’s Patagonia and Birkenstock. I brought those two companies up specifically, because they have made a pointed statement, a directive, that they don’t want to sell on Amazon.
I wanted you to kind of share any feedback or information or insights you have on that decision for a specialty brand. What are they setting themselves up for? I understand their stake in the ground supports their brand position and that’s ultimately what bolsters emotional engagement with their following. However, it does seem like it’s a double-edged sword in a huge way. So, can you share your insight on that?
Yeah. So when someone’s ready to make a purchase on Amazon, they’re doing so because Amazon’s convenient, they’ve shopped there before, their credit card details are saved there, their shipping address is saved there. They might be a Prime member, which half of all US households are, so it’s a good chance that they are a Prime member. So they want to make the most of that membership that they pay every year as well. So there’s a psychological block in effect when someone’s a Prime member.
So they’re going to Amazon expecting to find whatever they’re looking for, because that’s what Amazon customers have been trained to know, is Amazon’s a place where you can buy anything. I can buy Dior perfume, I can buy toilet paper, I can buy cat litter. You could buy absolutely everything there. So when a customer goes to Amazon, they’re searching for Patagonia vest, they’re just expecting that they’re going to be able to find it and that whatever they buy is going to be authentic and not counterfeit.
So that’s just behavior that’s been ingrained from hundreds of trips to Amazon. So when a customer goes to Amazon, they search for a Patagonia vest and they can’t find one, there’s 200 other manufacturers lining up bidding on that keyword with their ads, Patagonia fleece vest or whatnot, waiting to capture that shopper if they cannot find what they’re looking for, they can’t find the size or the color or whatnot.
Two other issues come into play. One is when you have unauthorized sellers on your product listing, they could be selling authentic inventory that they got through a distributor or just picking up in a store on clearance and flipping it on Amazon. So, you may or may not have an issue with that. A lot of brands do have an issue with that, because it creates potential channel conflict if those resellers are selling below map.
But the more concerning issue is potential counterfeits. That’s exactly what happened in the case of Birkenstock, where the counterfeit issue just got completely out of control and Amazon didn’t rise to the occasion in their opinion and really do enough to stop the counterfeiting. So that’s the second issue.
Then the third issue is if you don’t have a presence on Amazon and these third parties are just creating the product content for you, then they may not be representing your brand how you want it to be represented. That includes content, just having accurate content with on-brand photos.
We had a client who is a specialty food manufacturer and they make condiments and things like that. When we took over their account, some resellers had completely inaccurate product information. It was for a different flavor then the UPC barcode was for, and so people were getting the wrong seasoning for their order. It was creating all kinds of mayhem with product reviews and things like that.
So in the case of those two brands, what they’re leaving ourselves open to is inaccurate information, off-brand content, and an off-brand experience, potential counterfeiters and driving shoppers into the arms of competitors who are pretty eager to jump on your brand keywords and bid for those with ads or organic SEO.
Kristin: Right. I feel like Amazon is taking steps right now to almost become more human, right?
I’m seeing executives tweeting, I’m seeing Jeff Bezos, obviously, in the news in good and bad ways, I’m seeing carbon neutral initiative. It’s almost like if Patagonia and Birkenstock are trying to make a statement about not selling there because they can’t control the resellers, et cetera, I feel like that may appeal to their brand following. But with all of the changes on Amazon, it almost feels like it won’t be such a villain in the future, perhaps. You know what I mean?
Kiri: I think they’re doing the best they can to get around some serious reputational issues that they have right now. Very serious reputational issues. Yeah, to add to what you said, they’ve rolled out these small business awards, where they just awarded, I think it’s Nutpods and some other brands, they’ve got the small business award that was rolled out. Anyway, they’ve got anti-trust issues, they’ve got massive issues with fake reviews, they’ve got massive issues with counterfeiting and they’re starting to bleed customer trust with those issues.
I’ve got my own cross to bear with the unauthorized sellers, because we work exclusively with brands. 99% of brands, and there’s some notable exceptions, 99% of brands don’t want to have resellers on their products on Amazon, they want to be the sole seller of their products. Amazon’s view is, “We don’t have a problem with resellers, we only have a problem with counterfeiters.” But from a brand’s perspective, they don’t want the resellers, because the resellers degrade the pricing model and you can’t control what inventory they have and things like that.
It’s just control issues that brands get very nervous about. But Amazon doesn’t care about that, they only care about counterfeiting. I can say that 99% of Amazon’s counterfeiting issues would go away if they got rid of resellers. That’s just the reality. All the problems with the fake reviews and things like that are driven by them opening the platform up to international sellers and making it very, very easy for manufacturers in China to do what they want and that they’re setting up hundreds of accounts.
There’s crazy, crazy stuff going on that’s really repelling brands that Amazon needs to seriously do something about. I think that the PR efforts around, “We’re so great for small businesses and we’ve got these awards, and so many of our products on Amazon are sold by small businesses.” But it’s really a bandaid over a wound that needs to be stitched up properly.
Kristin: Right. Hopefully we’ll continue to see that and tap into you as a resource on that as things continue to unfold. So, let’s go into some of the resources that you’ve created and why you’ve created them. Because I feel like you’ve probably created some of these resources, because you work with brands that are literally trying to manage a moving target. It’s hard to allocate head count, especially very experienced seasoned sales leaders, for example, who just happened to have to manage this channel and have valiantly for years, right?
When is it time to consider either outsourcing or building a team or sharing the burden of that internally? Because Amazon is only going to continue to become an important channel, I think, as more and more people continue to access it as a search engine.
Kiri: Yeah, it’s a great question. I don’t think there’s any particular threshold where it makes sense to do this or that way of staffing. The truth is that lots of different staffing models work. You can have a fully in-house team that functions really well, you can outsource everything to an agency and that works really well. The thing to keep in mind is the different functions required to manage an Amazon channel.
So you’ve got the operational side of things, which is inventory forecasting, auditing your fees, managing the relationship with Amazon or case history, managing exceptions that come up. Amazon will flag your product as a hazardous material and then you’ve got to go down this whole rabbit hole for two weeks of proving that it’s not hazardous and things like that.
A lot of this administrative/operational side of things needs to be handled by someone who has a brain that works that way, and then also a lot of experience in that area, because these things that come up are very contextual. You need a lot of information about how this generally works, how to manage cases with Amazon. When should you close a case and open a new one versus just waiting? Because there’s so many unwritten rules with Amazon and so many best practices that aren’t obvious.
So that’s sort of the operational side of things. Now can a person in-house do that job?
Yeah, they definitely can, especially if they’re tapped into some good resources. That’s also an area where a lot of brands choose to outsource that to a freelance or consultant or agency that has a lot of experience there, because it is necessary to have that toolkit. So that’s the first area.
Second are is marketing. So this is content, A+ content, storefronts, Amazon SEO, running promotions. Those are all things that are … a lot of brands will run internally if they have their own graphics team or their own writers and things like that. It’s relatively simple to figure out how to make a good Amazon product listing content-wise and give that to your internal team. That’s fine, as long as you’ve got the resourcing there.
Then the final piece is advertising, which is primarily talking about pay per click advertising here. Although Amazon does have a display network as well, but that is also a very sort of an arcane area way, where you’d want to have someone running that who has, not just Google and Facebook PPC experience, but actual Amazon experience, because it is very specific, again.
So those three areas, yes, each one of those could be run internally or externally. I think you need to look at who’s in your company currently, what kind of experience do they have, what skills do they already have and plug the gaps. But more broadly than that, you need someone who’s actually accountable for that channel, thinking about the strategy, holding either the internal or the external people accountable for that, and just has a good general sense of what should be happening. You need that person and that role to be filled, regardless of whether you’re doing an internal or external staffing model.
Kristin: Right. Talk about the new membership that you’ve launched in 2019. Obviously that’s relatively new, but it sounds like a really great fit for a company that might have a super lean team, right? And needs to tap into resources and also peers who are now getting similar changes. So can you talk a little bit about the resource? Because I don’t think I’ve seen anything like it out there.
Kiri: Yeah, it is pretty new. It’s that there isn’t anything really like it, which makes it exciting and a bit of a challenge at the same time. So it’s called The Marketplace Institute. At my agency, Bobsled Marketing, we spoke with a lot of brands who hadn’t had a goal or an immediate need to have an Amazon team internally. The challenge is it’s a relatively new platform, and so there aren’t a whole lot of people out there who you can hire and bring on who know exactly what to do right off the bat. So a lot of companies need to train someone up or bring someone in who has some related experience, but they may not have Amazon specific experience. So they want to bring someone else internally over to the Amazon team.
So, I’m on a dynamic channel that you can’t sit down and train someone for two weeks and then they’re off and running and know how to handle every situation. There’s just this crazy stuff that happens, there’s new programs, there’s changes to algorithms, changes to rules. Just things that happen so quickly, that being plugged into a bigger network and being able to access experts who have more context over what’s going on on different accounts and different categories, is really essential to properly managing a Amazon channel.
So The Marketplace Institute membership is access to community of peers who are all branded manufacturers, access to our experts at Bobsled Marketing when you’ve got questions that are very specific to you, and then also a knowledge base of all of our processes and best practices as an agency, training. We do weekly office hours sessions, where we’ll talk through a specific challenge that a member has and workshop that a little bit.
So it’s really a package for an individual or a team within a company to get the best of both worlds, which is access to a lot of analysis and contextual information of what’s going on with other accounts, at the same time as keeping that Amazon channel management internal, so that you can benefit from institutional knowledge, potential cost savings, et cetera.
Kristin: That sounds remarkable. So where can my amazing audience learn more about this?
Kiri: Yeah, so we’ll have a link for you, Kristin, that we’ll set up, that people can go to on the site. But you can also just look up themarketplaceinstitute.com, if you want to check it out.
Kristin: Awesome. So obviously that’ll all be in the show notes and I’d love to … just anybody who has questions about this, Kiri’s made herself available to connect and there’s lots of information on the site, et cetera. So I just think this is a really, really important resource to have to keep yourself ahead of the curve as much as you can around this always changing and very important marketplace and channel. I feel like 2020 is going to be a really interesting year for a lot of brands out there on Amazon. This sounds like an incredible resource.
So I’m actually really, really grateful that you’ve launched it. I’m sure it was a ton of work. I also just want to quickly say that Kiri’s also on RetailWire’s panel of retail experts, and co-hosts her own podcast called eCommerce Brain Trust. We’ll have links to all of that in the show notes as well. It’s just been fantastic to connect with you here today and I most certainly would love to have you back on as a regular guest discussing big changes in evolution on this channel that never seems to sit idle.
Kiri: It’s a lot of fun. I would be happy to. Thank you for having me, Kristin.
Kiri: Thank you.