Brands often worry about selling their products on Amazon, fearing that it may cannibalize their product sales from more profitable channels. Annalisa DeMarta, the co-founder of Ridgeline Insights, an 8-figure Amazon marketing agency that works with leading outdoor and lifestyle brands, argues that this is the wrong way to think about Amazon as a marketplace. Hear her tips for business that are considering selling their wares on Amazon.
Episode Transcript:
[00:00:00] Seth: Hello, and welcome to the Bad Marketing Advice podcast. This is the podcast where we invite marketing professionals on to tell us about the worst piece of marketing advice that they have ever received. My name is Seth Resler. I’m your host and I am also the founder of Community Marketing Revolution. We produce branded podcasts for organizations.
[00:00:26] If your company has ever thought about creating a podcast to engage with customers, potential customers, clients, even employees go to communitymarketingrevolution.com. We would love to talk to you about that project. That’s something that we can help you with. All right. On the show today, our guest is the co-founder of Ridgeline Insights.
[00:00:44] Ridgeline Insights is an Amazon marketplace management agency that works with leading outdoor and lifestyle brands. I’m excited about this, cuz I know nothing about how an Amazon business works. I’m actually really curious to find out. She also started LONECONE, which is an Amazon [00:01:00] exclusive children’s brand maintains the number one selling kids’ rain boot on the site over the last five years.
[00:01:06] Her companies have earned an ink 500 as well as an outside magazine’s top 50 best places to work and is one of Idaho’s top 10 best places to work. Welcome to the show, Annalisa. Hi, how are you?
[00:01:19] Annalisa: I’m great, Seth. Thank you so much for having me. I appreciate it.
[00:01:21] Seth: I really appreciate you coming on the show. I wanna know how Amazon businesses work. This is look, I order way too much stuff off of Amazon. I’m on there all the time. So I’m quite familiar with how to buy stuff from Amazon, but how do you sell stuff and how do you get into that?
[00:01:37] Annalisa: Well, I think the nice thing is with iPhones and kind of the way that this the great resignation is working, I think more and more people are gravitating to selling on Amazon.
[00:01:44] And for a lot of sellers like myself, it started off kind of as an arbitrage opportunity. You go to a local store, like, you know, Walmart Target, you see the clearance items, you pick those up scan, ’em stick ’em on Amazon. And I think for a lot of folks, that’s the majority of retailing, right? You’ve got some old textbooks lying around, Amazon’s a [00:02:00] marketplace.
[00:02:00] And so you pick up the skew, UPC, you can list your product with everybody else selling that same product. And then at, for me, personally, as I’m looking at this business model, it’s not scalable. It’s not reliable, even though you’re selling things consistently, you’re eating what you kill, so to speak. And so my business evolved into an agency.
[00:02:16] I realized I spent 15 years on Amazon which now sounds crazy. So that’s hard to feel old, but it’s been 15 years on Amazon. It’s got 120 million in sales and I work with a lot of brands now consulting them on their Amazon strategy, kind of in the middle of that too. I founded about my own brand and I’ve just recently exited from that.
[00:02:31] So that’s just kind of like, I think everyone just dabbles into Amazon and then some of us take it more seriously when you see an opportunity.
[00:02:37] Seth: Okay. But that’s a pretty big leap. I mean, how do you go from, Hey, I’m selling my own textbooks to, I’m doing $120 million in sales. You know, my old textbooks go on Craigslist right. But, but seriously, maybe. Do you have to be making essentially a widget making the same product over and over and over again in order to be on Amazon?
[00:02:54] Annalisa: No, you don’t. I mean, definitely it depends each person’s kind of got the nice thing with Amazon. It really does lend itself to kind of [00:03:00] whatever works for you.
[00:03:01] And so working with brands, I work with brands that have single skews. So just one product. I work with brands that have a really wide skew of like backpacks, tents, apparel, footwear. And that could be really, that’s a lot to manage. I’ve had my own brand. I’ve had several skews in a very similar situation. I think it really just depends on what you’re seeking.
[00:03:18] And I think the biggest piece of advice I’d give to anybody who’s looking to sell on Amazon, especially long term, the wider the moat you can build the more successful you’re going to endure being on the marketplace. So the easier it is for you to put your logo on something, the easier it is for your competitor, put their logo on that same product. And it essentially just erode all of the brand building you’ve been doing.
[00:03:35] Seth: So when a company comes to you, saying we wanna sell on Amazon and maybe company is the wrong word. Maybe it’s an individual or somebody smaller, a full blown company. What does that initial conversation look like? What have they usually already done? And what are you telling them to do?
[00:03:50] Annalisa: Yeah, that’s a great question. So a lot of the clients we work with are typically established brands. So I live with a lot of outdoor brands, so a well known backpacking company. So [00:04:00] they may already have an Amazon presence. They may be trying to either reign that in, balance out their other retailers, right?
[00:04:05] So they may have, they may be distributed REI. They could be in Target. They might have small mom and pop retailers throughout the US. So they don’t want to cannibalize those sales at the same time. They still want to be in the largest marketplace in the world. So how can they still have some great visibility without eroding all the stuff they’ve worked so hard from the building, from the ground up.
[00:04:23] And so that’s typically my client, but I mean, I’ve, we’ve talked and worked with everybody from the guy who’s in his garage. And one of my clients is the guy in his garage. And he’s quit his job and is like three years ago, quit his job, he sells fishing rods, and now he’s doing this full time. But we still manage his Amazon channel because he’s busy he doing other marketing activities and he can afford to pay an agency to manage everything from their supply chain, his advertising forecast demand planning, customer service. So it just depends on each brand strategy, but for us, we try to lean in and really hear what the brand is looking for. And then I think from there, give them a better solution.
[00:04:53] Seth: And so are you helping them scale up the production as well? Is that also part of your role?
[00:04:58] Annalisa: We’ll do forecasting for them, but [00:05:00] ultimately they own their production. That’s their products. They’re trying to figure out where the widgets go, I guess, across all distribution channels.
[00:05:06] Seth: Yep.
[00:05:06] Annalisa: So we’ll give them some great visibility and say, Hey, here’s a 12, 18 month forecast. Here’s what we think the Amazon marketplace can do. It’s up to them ultimately to decide if they have the desire, the cash, the will to fulfill that forecast.
[00:05:17] Seth: And how do you figure that out? I mean, how do you forecast on you sit there and go, okay, I’m gonna put rain boots up. How do we know how many rain boots we can expect to sell?
[00:05:25] Annalisa: Man, if I knew that exact answer, I would be like super rich, right? It’s always more of an art than a science. So there’s a lot of third party program. That are out there that we definitely tap into that will give you some sense of how past performance has worked.
[00:05:38] We also have internal programs that just look at like Oracle performance, similar categories, kind of blend those two together. Like were there weeks of sales or maybe they weren’t in stock. Was there some competitor doing something where customers were more like convert the, a different type of product.
[00:05:52] We try to blend that all together and then you make your best educated guess. And there’s also little things too, of like what sizes sell better than certain [00:06:00] colors. And what season are we getting into? And is it going to rain? That’s always a thing. Like we, for rain boots in particular, we had the farmers on with that was a big part of our forecasting model where like ever wanna pray for hurricanes, but they really move sales.
[00:06:12] And so when you’re looking at a dry year, you’re like, okay, let’s maybe dial this back by 10 or 15% because the demand’s not going to be there.
[00:06:18] Seth: Right.
[00:06:18] Annalisa: And, and fortunately we have a great team. I’ve got several buyers that work on my team that are a heck of a lot smarter. And thank goodness, because I think I would not be here without their brain power.
[00:06:27] Seth: I wonder how similar selling stuff on Amazon is in some ways to search engine optimization. Because really that’s what I do when I go to Amazon is I go in and I search for something I need salt and pepper shakers.
[00:06:40] Annalisa: Totally.
[00:06:40] Seth: Let’s see what we’ve got, talk about that, and what elements are there?
[00:06:43] Annalisa: Oh, 100%. Amazon is definitely a world where it’s pay to play, so you need to invest in advertising. But more importantly, and the nice thing with Amazon, unlike Google, Amazon’s really simple. What you see is what you get. So if your backend keywords don’t include certain phrases, Amazon’s not smart enough to know [00:07:00] if you put the word apple that you meant apple notebook, not Apple MacinTalk, or I guess apple eating apple.
[00:07:06] So you really have to make sure the words that you wanna be searched for have to be present in your copy. And then just like you said, it’s gonna be all the basic advertising to just own those certain keywords, more expensive keywords, the higher up in the funnel, more expensive they are, it is all basic advertising rules.
[00:07:21] Seth: Yeah. Now the one thing you obviously have in Amazon that you don’t in typical, just Google search results is you have those reviews, which I always look at.
[00:07:29] Annalisa: Absolutely.
[00:07:29] Seth: And I don’t know about other people, but I’m always skeptical of something that has no reviews.
[00:07:34] Annalisa: Totally.
[00:07:34] Seth: I’m also skeptical of things that have nothing but good reviews. Like if you’ve got all five stars reviews, I’m like, that’s not real.
[00:07:39] Annalisa: Definitely suspicious. I’m right there. Yeah, Amazon is definitely the social proof on Amazon is 10 outta 10, and they’ve done such a phenomenal job of really protecting their reviews program. Like just recently, I think they just cracking down all these like fake accounts that were trying to herd people to buy a product and they’ll refund you. So I really appreciate Amazon’s efforts to stay true to the review process.
[00:07:58] When I had loan phone, [00:08:00] one of the programs I put in was a mom advisory panel. It was really for parents, but mom advisory just sounds a little better. And we would have people come in for different activities that we needed, like focus groups.
[00:08:09] And every time we did like a buying exercise, that is the first place consumers would always click. They would, what are what’s the review count? Show me the top positive, show me the top negative. And then from there it’s like, okay, is this worth for me to continue in this journey? So one a hundred percent is definitely something, a reviewer, 100% something that we focus on with our clients.
[00:08:26] Yeah, it’s
[00:08:26] Seth: gotten to the point where I have a Chrome extension that I can actually it’ll tell me how many of the reviews are just fake.
[00:08:32] Annalisa: Wow.
[00:08:33] Seth: Oh yeah. I got a Chrome extension. That’ll sit there and show me the price history over time.
[00:08:38] Annalisa: Camel, camel, camel, or?
[00:08:39] Seth: Yeah, camel, camel, camel. That’s the one I use. I like to think I’m a sophisticated Amazon shopper. Maybe I’m not, maybe everybody does this, but what advice do you give to people when it comes to things like reviews, like pricing, talk about a little bit about.
[00:08:51] Annalisa: So with our clients, because again, they have an omnichannel strategy, so they’re gonna be distributed in your REI, your Walmart, Target and so on. For them pricing, [00:09:00] it’s gonna depend on their unique strategy.
[00:09:01] So for example, maybe they don’t wanna cannibalize their Amazon sale. So perhaps having a higher price on Amazon, but still having a robust page, that’s giving you all the information that’s still conversion friendly, but maybe it’s priced $20 to hire Amazon. Therefore encouraging people to shop local, right. Or shop at a different brick and mortar.
[00:09:16] Similar with reviews. When we manage clients, we always look at how are their sales going but like more importantly, how are the reviews? So we look at those periodically. If you have a couple of negative reviews, is it something coming down to packaging? And then there’s some actionable feedback for clients.
[00:09:28] It’s like, Hey, your warehouse. Is it packaging this tight enough? Is it coming down to, is the products a poor performer? Maybe it’s a new release or just a new manufacturer, just a bad batch. Like those are all things consumers wanna know. Unfortunately, you can’t really respond anymore on reviews and say, Hey, we’re so sorry, reach out to us.
[00:09:44] But we can track people down. I have tracked people down in the past to be like, Hey, you got a bad one. Can I incentivize you to rethink your review if I give you a new one? I think that was just, you know, unfortunately a bad zipper or whatnot. So, but it’s social proof is crucial and everybody who’s selling an Amazon needs to be completely [00:10:00] aware of the review count.
[00:10:00] Seth: Yeah, that makes sense. I mean, cuz I will actually click into one of the lower rated stars. You got three or a four just to see what people are saying. And if it’s a bunch of people who say, Hey, it was broken when it showed up, I kind of write that off cuz I’m like, eh, I can probably get a refund or send it back; it’s not that big a deal. Whereas if it’s something that they talk about a defect over and over again, particularly when I see the same thing repeated by multiple people, that’s really when I pay attention.
[00:10:25] Annalisa: Well the nice thing as a marketer, so the way I look at those reviews those are all areas of opportunity for me to position products.
[00:10:30] So I can look up, let’s say a rain jacket. I would go into all of the five or six competing rain jackets. And what are the things people are complaining about the most? And that’s the thing that we highlight. We’re like, okay, everyone’s saying this zipper is not waterproof, but it’s water resistant and it’s gotta be true.
[00:10:44] But then that’s one of our main images. That’s the thing we’re leading into. And so that is marketing goal.
[00:10:48] Seth: Yeah, that’s smart. That’s really smart. All right, so I know that we are here to ask you the worst piece of advice that you’ve ever gotten. And it’s obviously directly related to what we’re talking about. Tell us what the worst piece of advice you’ve ever heard [00:11:00] was.
[00:11:00] Annalisa: Don’t sell on Amazon, that is it.
[00:11:02] Seth: “Don’t sell on Amazon!”
[00:11:04] Annalisa: You got it, right. You have this brand, you build this brand and Amazon’s got a lot of flaws, right? So the first thing is that most people don’t realize is unlike your Shopify site, you don’t get your customer data. That is Amazon’s customer.
[00:11:15] So I can never reach out to customers, like an email list. I can’t solicit them. I never have any demographic information. I don’t, so I’m decade the entire time of who my customer might be. I can get zip codes and stuff and kind of make some really good educated guesses, but I don’t get that information. That hurts.
[00:11:31] Amazon also has always been known to be like the low price point. So is that going to dilute your brand value? So you’re spending all this time building up this brand, trying to sell something for $30. Well, someone can put your same product on Amazon for 22. And there goes all of your hard work.
[00:11:44] Seth: Right.
[00:11:44] Annalisa: And I think a lot of brands also struggle with like, well, where do I distribute? And the biggest thing that I’ve learned with Amazon is it is the largest marketplace in the world. It’s the Google of product research, whether or not customers are going to choose to convert and purchase on Amazon, you should still have your presence on Amazon.
[00:11:59] And so for me, I [00:12:00] was fortunate enough. I grew LONECONES to about $5 million. And that’s been amazing that was Amazon only. There’s a ton of opportunity for LONECONES to grow outside of Amazon, but for us, and for me, it was the one marketplace that I was really confident in. And I give so many people credit who grow their brands elsewhere.
[00:12:14] Like I have no idea how to distribute wholesale. I have no idea how to have a Shopify site. Those are talking about SEO. I know enough about Google to be dangerous. Those are all really intimidating, but I think any brand or anybody selling a product. Having some presence on Amazon, cuz if you’re not on there, somebody else will be.
[00:12:31] So at least owning that consumer touchpoint, putting the same amount of effort you put into as your website, like you should make your page look just as pretty. That is such a great opportunity for you just to market your products and market your brand. So I would tell anyone, don’t listen to that advice, put your products on Amazon, but you can do it in a very smart way.
[00:12:47] Seth: Yeah, it sounds like you’re saying definitely be there because everybody else is, or at least a sizeable number of people are. But there’s different ways you can be on Amazon that you don’t necessarily need it to be your main focus. [00:13:00] It could be something where you’re kind of experimenting and doing some product research or.
[00:13:04] That’s interesting. The overcharging and the hopes of driving them, not overcharging, but pricing it higher.
[00:13:09] Annalisa: Yeah, yeah.
[00:13:09] Seth: Because there are people like me who, I’m not gonna lie, I’ve been in Home Depot and I’ve whipped out my phone and I’ve looked it up.
[00:13:15] Annalisa: Totally, we, I mean, we all do that. Which again, that’s even solidifying more so if you’re at home Depot and you’re trying to compare like a black and Decker to a Greenworks chainsaw, you’re gonna read the product reviews on Amazon. So Greenworks was like, we don’t wanna be on Amazon. I would say, well, you just did yourself a major disservice because you’re not going to the home Depot customer service rep and walking around the aisles.
[00:13:35] You’re your own customer service rep and you’ve just educated yourself. And if you saw that, that same product was $50 more expensive, of course you’re gonna buy at Home Depot.
[00:13:43] Seth: Right. No, that makes a lot of sense. Tell me a little bit about what you learned with LONECONE and making the rain boots and selling them on Amazon.
[00:13:52] Annalisa: Man. I learned a lot. I think when we first launched, I mean, I bought enough inventory what I thought I bought enough inventory doesn’t last me all [00:14:00] of a quarter. It lasted two weeks. So that was a testament to advertising that like, there was nothing special about it. It was advertising, marketing merchandising.
[00:14:08] And so I’ve learned a ton of best practices, man. I’m trying to think. I mean, at the end of the day, like you’re right reviews are everything.
[00:14:13] Seth: Yep.
[00:14:13] Annalisa: So build those up for real. There’s a lot of shady practices, but I really encourage people to build them up the old school way of just hope and pray. And there’s a vine program. Merchandising is everything. So really understanding, like what is a customer looking for? Keep tinkering with your product pages. Customers look at the first three images. They will kind of obsess about them.
[00:14:31] So make sure whatever point of friction that you have answered that immediately, they know exactly what they’re going to receive, how big it’s going to be, how it’s going to perform.
[00:14:37] Seth: Does Amazon give you any sort of, AB test tools or any ways to test things?
[00:14:42] Annalisa: Yes. I always kind of find these things personally, paralysis analysis. Like if you’re really questioning like something that might be a little bit more extreme, I would encourage AB testing. But sometimes you’re like, okay, do I want the font here or here?
[00:14:55] It’s like, I can just look at sales too. I could put ’em in blue, put it in black. And let me just [00:15:00] evaluate my sales. I don’t need to sit here and look at, because oftentimes the data’s like, okay, four more people click through. It’s like, that’s not even, yeah. There is tools and definitely tools that I don’t wanna diminish them. There’s a time and a place for ’em. I think for us, it’s more of intuition. It’s just like, let’s just try this and see.
[00:15:13] Seth: Got it. Were there any mistakes you made that, you know, might help other people to know? Don’t do this?
[00:15:18] Annalisa: My gosh, I have made so many mistakes. Where do I begin? I think the biggest area that I focus in given my background, I focus a lot of compliance and like regulations. And I think there’s a ton of cheerleaders out there of, buy my e-book, buy my course, I can be part of my mastermind group, pay me all this money and they’ll be your biggest cheerleader.
[00:15:37] But no one tells you that the dark side of running a business, which is like regulatory compliance. So like, are you paying sales tax? Did you get your product safety tested? Are you registered? Like I have another brand that stuffed animals. You’re three stuffed betting laws in Pennsylvania, Massachusetts, and Ohio.
[00:15:53] You have to register with them once a year and tell them how many units you’ve sold. Like those that’s really obscure information, but there’s fines and penalties if you don’t. [00:16:00] So my biggest piece of advice is kind of know what you don’t know and surround yourself with consultants. Even though they seem like, man, I don’t wanna spend this person like 800 bucks for their time pay the 800 bucks, like a ounce of prevention. Right. So that’s where I lean in is just know what you don’t know.
[00:16:13] Seth: Yeah. That makes a lot of sense. And that leads right into my last question, which is for somebody contemplating an Amazon business, where would you tell them to start? If it’s just an idea in my head right now, where should I go?
[00:16:23] Annalisa: Yeah, you should just start. I’m the person who likes to just put my foot in the water, kind of come up with a loose plan. Like, what are your expectations? Like how much inventory ?You don’t want, the worst thing in the world is getting some momentum and being out of inventory. So what are you hoping to gain? How long are we gonna sell this for? What’s it going to cost?
[00:16:37] Kind of tinker with it like, don’t be afraid to just like spend a little learn a lot.
[00:16:41] Seth: Okay. Very cool. Look, I could talk to you about this for an hour, cuz this is fascinating to me and because way too much of my disposable income goes to Amazon.
[00:16:49] Annalisa: I feel that.
[00:16:50] Seth: I, I wonder I might even own like 10 pairs of your boots for all I know. But if people wanna learn more about Ridgeline insights, where can they go? What’s the website.
[00:16:58] Annalisa: Yeah. [00:17:00] ridgelineinsights.com. We’re also on LinkedIn. So just look us up and I’d love to chat. If anyone has small questions, big questions, always happy to give some words of wisdom.
[00:17:07] Seth: All right. Well, Annalisa DeMarta, co-founder of Ridgeline Insights. Thank you so much. This has been fascinating. I really appreciate you coming on.
[00:17:14] Annalisa: Same I appreciate the opportunity.
[00:17:16] Seth: Once again, I’m Seth Resler. I’m from Community Marketing Revolution. We produce branded podcasts for organizations. If it’s something that you’ve been thinking about, please go to communitymarketingrevolution.com. We’ll talk to you next time.
Seth has produced and hosted eight of his own podcast series, including CES for Radio, The Worldwide Radio Summit podcast, and Bad Marketing Advice. Seth is the Vice Chair of the Michigan Association of Broadcasters Foundation.
Seth regularly speaks about podcasting and industry conferences around the country. He has spoken at The NAB Show, Podcast Movement, Podfest, The Radio Show, The Worldwide Radio Summit, The Nielsen Audio Client Conference, Morning Show Boot Camp, Talk Show Boot Camp, and numerous state broadcaster association conferences.
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