EP084 Transforming Ecommerce - Amazon Insights and Strategies with Nick D. Nichols
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[00:00:06] JOSHUA WARREN: Hi, everybody. Welcome to this episode of Commerce Today. I am super excited. This is Joshua Warren, as always, and with me today is Nick D. Nichols. Nick is going to talk to us about Amazon insights and strategies. I was really excited when I reached out to Nick. He agreed to come on to the show because in addition to working at Amazon, he has experience on the merchant side of things over a decade of experience in e com.

[00:00:29] JOSHUA WARREN: going to have some interesting conversations today, and I know that Nick also is recognized as one of the top e commerce professionals by Business Magazine. So, Nick, glad to have you on the show, and is there anything else you want to share with everybody in way of introduction?

[00:00:44] NICK D. NICHOLS: Not really, I can jump right in.

[00:00:46] JOSHUA WARREN: All right, well, let's jump right in. So, I read some really interesting stuff you did, Recently in your role there, um, at OPTP and, um, kind of, uh, an amazing series of successes with [00:01:00] Amazon. So I guess, tell me a bit more about that.

[00:01:02] NICK D. NICHOLS: So we had a lot of successes throughout my, uh, nearly 10 year career, um, you know, with various brands and a lot of what I've done there is really, um, help brands grow in revenue, increase their profitability and really drive expanded customer bases and market share. And really what that translates to at the end of the day is really Increased revenue, increased sales on Amazon 1P, 3P, and also globally, internationally, as well as some of the European and Canadian, marketplaces, that we've done that, um, a lot of strategies on some of those strategies include really basically, you know, flying the plane and changing the engine in and at the same time, where, you know, we have a lot of cleanup, we have a lot of, you know, You know, strategy development and strategy improvement and really just optimizing for the best results possible, you know, ensuring that no stone goes unturned and really just driving the type [00:02:00] of results that we really want to see on that particular marketplace and really just kind of taking that high level vision.

[00:02:07] NICK D. NICHOLS: Those, you know, things that we dream about late at night and, you know, where we want to see this right here go in terms of, you can be, you know, a health and fitness brand. You can be a food brand. You can be a furniture brand. You can even be, um, uh, when it comes to selling toddler, um, clothing, whatever brand it is on Amazon.

[00:02:26] NICK D. NICHOLS: Um, I really help drive, you know, the type of results and really get into the details and roll up my sleeves. And really hit the type of results and benchmarks in terms of key performance indicators and really get the ball into the end zone in terms of actual results and seeing those results in a very short period of time.

[00:02:47] NICK D. NICHOLS: It could be dealing with product suspensions. It could be dealing with rogue sellers on the platform. It could be as simple as how do we, you know, scale, you know, retail, media, and advertising in a climate where things are, [00:03:00] you know, Is key words are so much more in terms of calls. How do we operate in a more profitable way within that type of challenging environment?

[00:03:11] NICK D. NICHOLS: So I really get that, you know, that ball into the end zone as it relates to that and really drive the type of results that we need to see in order to, at the end of the year. See the type of goals and hit the type of goals that we need to hit.

[00:03:23] JOSHUA WARREN: I have so many questions. Um, I would say kind of the, the two things that surprised me the most out of some of those results, like so often we look at how do we increase revenue? How do we increase traffic? Things like that. But seeing how you were able to reduce the FBA costs basically by. Arguing with Amazon and then seeing the, the, how you were able to claw back so many chargebacks.

[00:03:47] JOSHUA WARREN: Like, I guess tell me more about that and kind of what you have to do to get Amazon to treat you as the brand the right way.

[00:03:54] NICK D. NICHOLS: Absolutely. I'm going to take a step back initially because one of the things that we've been seeing year after year [00:04:00] after year and it's really starting to get ridiculous, but it's just the way that Amazon operates is we start to see FBA fees really increase on that marketplace. You know, they're continuously growing year over year.

[00:04:11] NICK D. NICHOLS: You know, Amazon is increasing those fees, increasing their fulfillment fees, increasing their packaging and. Bees or whatever it takes to really kind of just make sure those products get out to the customer And you know that really hits the bottom line of a lot of those different merchants and a lot of those different brands that really Sell on that platform it eats up at the margin So what I have to do is really kind of get into the details and if you want to call it arguing with amazon Argue with amazon and really in a systematic way and really claw back a lot of those.

[00:04:43] NICK D. NICHOLS: Um what I call wrongful Pricing increases. Sometimes you deal with chargebacks and Amazon, you know, issues those chargebacks basically an expense or a cost free to you or to a particular brand. You know, you could have packaged this wrong. You could have had [00:05:00] label, put this label on that palette wrong before you actually ship that product.

[00:05:04] NICK D. NICHOLS: Particular amount of inventory out to Amazon. I had Amazon, they charge for anything these days. So really what I do is really kind of claw back a lot of those, uh, returns. And like I talked about early improved profitability, because when you claw back those, Those calls that we actually are able to get back, you know, a lot of revenue that, you know, we don't want to just give away to Amazon or things like that.

[00:05:28] NICK D. NICHOLS: So I have to work with Amazon and I always say dealing with Amazon is like walking into a blind room. A dark room with a blindfold on your face, and you're trying to get to the other side of the room without bumping into anything. So when I'm trying to, you know, work with Amazon in order to get a call back a lot, that's what the process is like.

[00:05:46] NICK D. NICHOLS: But at the end of the day, I've seen a lot of good results with, you know, clawing back a lot of those wrongful, um, charged banks. But in addition to that, I dealt with a situation where in multiple cases where, you know, Amazon was [00:06:00] holding over, you know, millions of dollars. You know, Amazon UK, Amazon Canada, and what, and they was holding it for nearly two years, so I had to come on board and say, hey, okay, well, Amazon, you've been holding this, these dollars for a little too long, and they're sending us through, you know, through the runarounds.

[00:06:19] NICK D. NICHOLS: I'm like, Okay, let's get straight to the point. I have to deal with Amazon like I'm and the reason that I'm able to deal with Amazon So successfully I think like Amazon and uh, you know, and I it really just kind of, you know Train myself to be like Amazon and in that particular way and we was able to claw back of several millions of dollars in terms Of revenue that it was holding wrongfully, you know for nearly two years It was able to do that in less than four months Just kind of due to, you know, my experience, you know, I, I just spent a lot of time working with Amazon.

[00:06:50] NICK D. NICHOLS: Dealing, it hasn't always been easy. I dealt with a lot of challenges and a lot of pain points, but I never gave up when it came to, you know, dealing with Amazon. [00:07:00] Because when you see a lot of people see barriers and, You know, and roadblocks, and I see that too, but I also see if we can get to the other side of that, there lies opportunity, there lies revenue growth.

[00:07:15] NICK D. NICHOLS: So I don't give up because of that simple fact that if we can get past whatever the challenge, whatever the pain point, and problem solve it successfully, then we can reap those rewards. In a very good way,

[00:07:28] JOSHUA WARREN: So you mentioned, uh, a couple of times, you know, 1P, 3P, domestic, international, a question I get a lot is like, should we sell first party or should we sell third party? And then kind of beyond that, should we sell only on Amazon. com or should we look at the international marketplaces of Amazon as well?

[00:07:48] JOSHUA WARREN: How what's your advice to brands that are trying to make those decisions?

[00:07:51] NICK D. NICHOLS: my advice is, and I'll just be very transparent. There is pros and cons to doing business on 1P and 3P. So that's seller [00:08:00] central 3P, um, vendor central 1P. some of those pro and one example of those pros and cons is you have less flexibility on price. One P and whereas on the three P side, you know, you'll see revenue growth, but you won't see it as much as that on the one P side, because the one P side is a machine.

[00:08:22] NICK D. NICHOLS: Amazon cuts those PO's and If you're really good from the brand standpoint, you'll fulfill all of those POs and don't leave any revenue on the table. And, um, really maximize that revenue. So there's pros and cons to both. And, um, you know, and my experience, you can really, you know, some brands take advantage of the hybrid approach where you can sell on 1P and sell on 3P simultaneously and really see success on both marketplaces.

[00:08:51] NICK D. NICHOLS: And then really kind of say, hey, if you're having some You know some hiccups with products because not all products are you know, you got to make sure that it's profitable You got to [00:09:00] make sure you have you know You you're running positively in terms of margin and sometimes you can't do that on 1p But you can do that on that 3p.

[00:09:09] NICK D. NICHOLS: So when those pros and cons is essential and then when it comes to you know looking at Okay, where do we go next? You know, how do we expand? How do we grow? We look at, you know, marketplaces overseas. A rule of thumb, and I'm going to say this right here very, um, very directly. If you don't sell internationally with your particular brand, someone will.

[00:09:31] NICK D. NICHOLS: So why leave revenue on the table? But, you know, most brands are like, well, how do we go overseas? How do we get, how do we start selling? Because it's, it's, it's, it's easier said than done, but I believe having the right strategy when you're going over there to those, those international marketplaces for Amazon, you know, IE, UK or Canada, or some of those other ones as well, you have a strategy in which you, you plan out before you actually go up there.

[00:09:57] NICK D. NICHOLS: You know, the type of strategies that I used [00:10:00] in the past, and I'll give you one. Instead of going over there with your entire catalog, which can be very expensive and require a lot of legwork to do, go over there a little bit more strategically. Do the research in advance and say, Hey, what amount of products, what set of products that I want to go over there internationally with?

[00:10:20] NICK D. NICHOLS: Instead of going over there with the entire catalog, let's go over there with the right products. Out of the catalog, whether that be 10 to 20 and let's start there with that type of approach and then let's scale those products and then take a step back and say, hey, what do we do more? Where do we go next?

[00:10:39] NICK D. NICHOLS: And look at it from that approach. And I think that's more of a middle of the road type of approach. and most brands can really handle that from a, uh, execution standpoint, instead of trying to go over there and really, you know, launch all of your products. And that's more of a heavy lift.

[00:10:54] JOSHUA WARREN: So true. I mean, like so many times it's easy for people to hear, oh, there's, there's money to be made [00:11:00] expanding on Amazon. So they just, it's almost like a single line item in their plans for the year, for the quarter launch on Amazon UK. It's like, well, there's more than just one thing you got to do there.

[00:11:10] JOSHUA WARREN: Like it's, it can be a heavy lift for sure. So we joke sometimes on these episodes about just how much I like to talk about AI and that an episode can't go by without mentioning AI. So, um, there's been a lot of stuff and I saw even this week kind of some, some more news out about how Amazon's going to be using generative AI in listings and just obviously I've seen the way they use it with the summarizing reviews.

[00:11:35] JOSHUA WARREN: what sort of revenue impact do you see generative AI having on both the 1P and 3P sellers on Amazon?

[00:11:41] NICK D. NICHOLS: Well, Generative AI, um, I call it Amazon Intelligence versus Artificial Intelligence, but it has already begun. Uh, you know, when it comes to Amazon has already started, um, inserting in Generative AI into different products. points of the actual product detail page, and one of those [00:12:00] key points are, you know, whereas brands used to come up with their product title on their own with a mix of keywords and really what describes the actual product, now you're able to get with some brands actual suggestions from AI to say, hey, this is what you should list your product.

[00:12:19] NICK D. NICHOLS: Title as on Amazon for your particular product versus you coming it up with it yourself Because Amazon is a data driven platform and in order to be successful on that platform. You have to be data driven So versus trying to you know, do that yourself AI is already starting to say hey This is what your product title and what that does that increases, you know the amount of time that you can really launch those products, and really takes more, takes less to really, get everything up there started when it comes to that.

[00:12:51] NICK D. NICHOLS: But in terms of the revenue impact of that, you know, when you have generative AI, it's looking at a lot of different data points that Amazon is [00:13:00] really, you know, defining in the background. You really, uh, have the opportunity through generative AI to insert the right keywords that's relevant to your particular brand and what that does behind the scenes.

[00:13:14] NICK D. NICHOLS: You know, Amazon will never tell you this, but I'll tell you, uh, and what happens behind the scenes is, you know, you gotta all those different secretive, you know, Amazonian, um, algorithms, that's really, you know, saying when a customer types in. A particular key word, uh, what you know that is doing is getting those, the right customers to your particular product and driving as much traffic to your particular product as possible.

[00:13:42] NICK D. NICHOLS: And, you know, outta all the e-commerce platforms in the world, Amazon has the more, the most traffic and the importance of traffic is traffic translates into sales, more traffic that you have. the more sales that you get and the more revenue that you're actually able to drive. So, it's [00:14:00] one little, uh, drop in the ocean that, you know, really helps brands with making sure they have the right data points inserted in the right places on there because the product detail page is the most important place on that, uh, Amazon.

[00:14:14] NICK D. NICHOLS: so you have to have the right keywords in the right places so that you can get the right customers to your particular brand. And then they start to incorporate, uh, generative AI in other places, like advertising. And it all works together. It doesn't live in silos where one component works over here and that component works over there.

[00:14:33] NICK D. NICHOLS: No, no, no, no. On Amazon, it all works together, um, to really drive the type of revenue that you want to drive. So what Amazon is doing, they're starting to expand on that. They're starting to get better with it. Now let's just, you know, take a step back because, AI in general is still, it's the new baby in town.

[00:14:50] NICK D. NICHOLS: So, um, it's still growing, it's still developing, um, it's not perfect yet, but it's getting there. And I know, you know, the CEO of, uh, [00:15:00] Amazon is really, really driving that for, he's a really good guy. And doing a lot to really implement that throughout Amazon and have, and have Amazon really be a, a leader in the, in the AI universe.

[00:15:11] NICK D. NICHOLS: And I, you know, and I always say Amazon is the best and in order to be successful Amazon, on Amazon, you have to be the best as well.

[00:15:19] JOSHUA WARREN: So true. And I never thought about it that way. It's so often that, you know, e commerce brands were always trying to figure out how do we hack the algorithm? What's the secret of the algorithm? Whether it's Google, Amazon, eBay back in the day. but with Amazon, with what they're doing with the AI, I never thought about the fact that their generative AI has access to their algorithm.

[00:15:37] JOSHUA WARREN: So it is optimizing for you using information that Amazon would never share with the public or share with you. So yeah, that's a, that's a really smart insight, a key reason to be using those generative AI features. so yeah, I think we've already covered some of this, but, um, you know, we've got a few minutes left.

[00:15:55] JOSHUA WARREN: I'm just curious if a brand is looking to expand their market share on Amazon, they've already [00:16:00] done kind of some of the basics, what'd be the next things that you would look at to help them grow their market share?

[00:16:06] NICK D. NICHOLS: Well, you know, it's not a one size fits all type of approach. And I think, you know, for each individual brand, you're going to have, you know, different strategies that you take, but in general, I would say that, you know, looking at what your competition is doing, looking at what your competition is not doing, you know, I would say, you know, You know, when I was growing up, we used to have a Sears catalog in our house, and it was essentially, you know, you would order products from the catalog and you have them delivered to your house.

[00:16:38] NICK D. NICHOLS: Well, Amazon is the same thing. It's just a little bit more update. You know, I would say. commerce is the digitalization of the catalog. And Amazon is the leader of that. And I would say, um, in addition to that, you know, when it connects to that and actually, you know, growing, is looking at what your competition is doing, looking at what your competition is not doing, [00:17:00] developing the best strategies, making sure that there is no rock, Unturned and really taking the time to understand and learn how to understand the data that you because you get a ton of different data points from Amazon from different areas on Amazon.

[00:17:18] NICK D. NICHOLS: But, you know, and I see a lot of, you know, softwares out there as well, but you still have to have the subject matter expert behind the scenes that can interpret that software that can interpret that data and say, what do we do next? Where do we go next? How do we actually grow? So the way to actually grow on Amazon in any fashion is having a data driven approach to everything that you do.

[00:17:47] NICK D. NICHOLS: and really looking at those, those, those data points, those key performance indicators and looking at where do you grow, you go next and paying very close attention to your customer bases because, you know, customer search habits [00:18:00] change. Why do customer search habits change? Because customers change.

[00:18:04] NICK D. NICHOLS: You know, I would say here in the U. S. particularly, the U. S. economy is 70 percent consumer driven. So, you know, when those customers search habits change, it's going to really change the course of your brand. So you really have to stay on top of, uh, what the customer is actually doing and adopting and adapting to those particular changes.

[00:18:27] NICK D. NICHOLS: So that you can really drive the results that you need to see. Is it easy? No, but is it possible? Yes. And I see so many people get frustrated with, you know, you know, the ins and outs of Amazon and I too, but guess what? Like I said earlier, I never give up on it. I keep going. I keep finding ways on how to get better, how to be better, how to optimize and how to take a brand to a new level.

[00:18:53] NICK D. NICHOLS: In terms of increased revenue growth, increased profitability, and increased market share.

[00:18:58] JOSHUA WARREN: Well, with that, uh, [00:19:00] we do try to keep these episodes nice and short, but impactful. So, uh, I'll go ahead and start closing things up. I will say that Nick's LinkedIn profile will be linked to in the show notes. And then I will also, uh, link to anywhere else that I need to so people can find you, Nick. I would definitely encourage y'all if you're not already following him on LinkedIn or, uh, Connecting with them.

[00:19:19] JOSHUA WARREN: Otherwise, please do so. Um, I have learned so much about amazon just through our few chats that we have had So thanks everybody for tuning in to commerce today, and I will see you next week

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