Smart Marketer Podcast

Ezra’s Amazon Launch & The 2021 Ads Decline

by Ezra Firestone

What are the pros and cons of selling on Amazon? Ezra hosts this episode solo to share insight into why — after 9 years and $125 million in sales — he finally expanded his ecommerce brand onto Amazon, including why he always avoided selling on the platform and the factors that ended up changing his mind. Plus, you’ll learn why advertising is expected to be a little more difficult this year, and the other revenue channels you should focus on instead.

You’ll Learn:

  • Why Ezra always avoided Amazon (until now).
  • The challenges of expanding an 8-figure business onto Amazon.
  • Why advertising will be more difficult this summer, and where to focus instead.
  • The platform Ezra would choose if he were starting a new business.

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Timestamps:

0:00 “A lot of the money that was being spent on THINGS is now gonna be spent on EXPERIENCES.”

0:31 Here’s a rundown of the topics covered in this episode.

0:52 Advice From Ezra — You have to keep going!

1:54 Here’s why Ezra tried to stay away from Amazon.

3:25 If Ezra was going to start a business today, he would…

4:46 The challenges of expanding an 8-figure business onto Amazon.

7:08 Don’t be surprised if advertising is more difficult this year. Instead, prepare!

9:07 See what Ezra’s been up to by visiting his Blue Ribbon Mastermind and checking out BOOM! Ladies’ Night.

10:52 Thanks for listening! To share your feedback or get a question answered on the podcast, follow and message Molly on Instagram at @mollypittmandigital.

Transcript Of Episode 47

0:00 Ezra: A lot of the money that was being spent on things is now gonna be being spent on experiences. So, doesn’t mean that e-commerce is gonna diminish, but it does mean that over the summer, things might get a little bit more difficult in advertising. Things might get a little bit more difficult in marketing. And what to do about that?

0:31 Hey. Ezra here with you, and I’m excited to talk about all kinds of stuff: marketing, life, all of it. So, let’s jump right in. What I’m gonna be talking about in this episode is taking my Boom by Cindy Joseph business onto Amazon, why I did it, and what the results have been, and also, what’s going on in the world of e-commerce and COVID.

0:52 Let’s start with Amazon. So, you know, I have this brand, Boom by Cindy Joseph. Been running it since 2010. Took me about five years before I saw any real success with it, and then the last six years, since 2015, has been really, really successful. You know, I think we did somewhere around $33 million last year, on pace for about $45 million this year, so just, like, outlandish success, which is really amazing. And I feel really grateful to have had the lucky breaks that I had along the way and put in all the hard work to make that happen, and I think it’s possible for anybody who stays at it. You know, I’ve now been at this since 2005, so it’s about 16 years in the game, and it took me a long time before I really had any, kind of, meaningful success. So, keep at it if you are going, and, you know, know that it’s not overnight, that you gotta keep at it every day, moving in the direction of your goals with a positive attitude and taking the next step you can take to move your business and your brand forward and, also, not neglect your personal life at the same time. You know, not burn yourself out by only thinking about business and doing business and not caring for your physical body, your mental body, your emotional body, your relationships, your hobbies, etc. But let’s talk about Amazon.

1:54 You know, I had this brand, and I never brought it onto Amazon for a couple reasons. The first is that my supply chain was not very robust, and I was able to fill the demand of my supply chain by running direct response ads, and building sales funnels, and capturing people through my Shopify site. And you would never sell on Amazon if you’ve only got 100 units to sell and you can…I mean, I’m just giving you a random number…but if you only got 100 units to sell and you can sell them all on Shopify, you would never go to Amazon because Amazon, you don’t keep the customer data, right? It’s Amazon’s customer, not yours. You don’t get the email address. You don’t get the address. You can’t remarket to them. You can’t upsell to them. You can’t cross-sell to them, and so that was my big reasoning for a while.

And then also, with Amazon, it’s very volatile in that, you know, people can negatively review you. They can attack you. They can steal the Buy Box from you. They can pirate you and impersonate you. Really, there’s just a lot of nastiness that goes on on Amazon that I didn’t wanna be a part of, and then, of course, there’s the logistics of it. You gotta offer the free shippings, the margins aren’t as good. It’s just, kind of, a nightmare, but it is much easier to be successful on Amazon than on Shopify because on Amazon, it’s both your traffic source and your sales platform, whereas on Shopify, you gotta build out the sales platform and technology and email marketing and analytics on tracking, and then you gotta go drive traffic. On Amazon, you just set up a listing, send your shipments into FBA, and set up ads on Amazon, and optimize your Amazon listing, so it’s just a much simpler business model. I still think it’s the best place to get started.

3:25 If I was gonna start a business today in e-commerce, I’d start on Amazon. Way easier to get sales. And then, I would expand onto Shopify, and the reason I would expand onto Shopify is not to try to build a Shopify-based business. Of course, that’s always my goal, but if I had a Amazon brand that was successful, I’d expand onto Shopify to increase the value of the business. And what I mean by that is, you know, a lot of people run their businesses for the cash flow that the business kicks off. But if your goal is wealth creation, then you should be thinking about selling the asset that is your business because wealth creation is generated by asset liquidation, not by cash flow businesses.

You know, you look at my parents’ generation. What they did was they took their 401Ks, they invested it into real estate…asset…and then they let that real estate appreciate, and then they sold that asset. They liquidated that asset for more money. Well, I build businesses and buy businesses, and those are the assets that I invest in. And then I work on them to have them appreciate, and then I sell them.

If you have an Amazon-only brand, you’re gonna get a three multiple on your profit. If you’ve got an Amazon brand that has 20% of its revenue coming from Shopify, you might bump that up to a five multiple. So, if your business makes $100,000 a year in profit, instead of getting $300 grand for it, you’d get $500 grand for it. And by the way, a business that makes $100 grand in profit probably does about $600 grand a year in revenue, and that $100 grand, as the owner of the business, you can’t take that because you gotta put it into inventory and so on and so forth. So, you know, the idea is you should be thinking about selling your asset one day.

4:46 Okay. Back to why I’m on Amazon now. So, I think it’s hard. I think Amazon brands have a bunch of downsides. You don’t keep the customer. Amazon can backdoor you to your supplier. You can get all these negative reviews. You can get attacked. Blah, blah, blah. But there does come a certain point where, as you scale, if you’re a Shopify site, you really wanna be there because, you know, 49 cents out of every dollar spent online in America is spent on Amazon. It’s fricking huge. There’s people who literally only buy on Amazon, and if you’re not on Amazon, you will miss out on the incremental scale that is allowed by going onto Amazon. There’s gonna be people who will only buy from you if you’re there, whereas they’ll see your ads on Facebook, you know, they might be interested. They’ll go check Amazon. You’re not there. They won’t buy. They’ll buy a competitor. And for me, I got so big that there was all these knock-off brands, these parasite brands that were bidding on all my keywords, mimicking my products, and just, you know, sort of, living off the fat of my brand’s search volume on Amazon.

So, I decided all right, I’m gonna go on Amazon. I’m gonna get rid of these parasite brands that were trying to, you know, take over all my brand traffic on there, and I’m gonna get some incremental scale. And I was worried about cannibalization on my direct-to-consumer platform. So, you know, people who would have bought from me on Shopify are going over and buying from me on Amazon. And that definitely happened to the tune of about 25% of people who would have been buying on my Shopify site now buy on Amazon. But because of the, you know, extra volume of the people who would only buy on Amazon and getting in front of people who didn’t know about me who would only shop on Amazon, it’s still worth it for me.

I had a hard time with my A+ product listings. I had a hard time with, you know, FBA and fulfillment and support and all kinds of stuff. It was madness, but we figured it all out now, and we’re successfully on Amazon. And we’re happy, and we’re running, you know, Seller Central search ads and video ads, and we got the A+ product listings, and we’re doing all that good stuff. So, happy to answer any questions, but long and short of it is that you can write in to support, and we’ll answer them on the next episode about what happened to us on Amazon and why we’re there. But long and short of it is we’ve expanded onto Amazon, and about 15% of our revenue is now generated on Amazon, and it’s going really well, and we’re gonna keep working on it. And we’re only putting one product on Amazon, which is our Hero product, and the rest of our stuff, if you want to buy it from us, you have to come get it from our website. So, we’re really using Amazon as an incremental scale arm, not as a core business model, and I think that’s probably the best way to do it for a brand like ours that’s already established outside of Amazon.

7:08 Switching gears now to the COVID summer. So, here we are, you know, summer of 2021. Pandemic is raging. Obviously, it’s still not over, but there’s a vaccine, and things are starting to open up, and people are starting to feel a little more comfortable. And what that means for e-commerce is that a lot of the money that was being spent on things is now gonna be being spent on experiences. So, doesn’t mean that e-commerce is gonna diminish, but it does mean that over the summer, things might get a little bit more difficult in advertising. Things might get a little bit more difficult in marketing. And what to do about that, right? Like, basically, some of the money that has been allocated into the marketplace that people are spending on buying things, right? We had this big COVID surge. E-commerce grew all crazy. Everyone was spending money online. Now, we’re gonna see that same surge in experiential spending. People are gonna go out to events. People are gonna start traveling again. People are gonna buy backpacking trips and camping trips, and they’re gonna start spending money on experiences.

And so, what we can do as e-commerce merchants and online marketers is we can double down and focus on our products. We can be developing products, creating new products, optimizing the products we already have, creating better sales funnels, optimizing our email sequences, optimizing our product pages and sales pages and presell articles, optimizing our email flows. We can really double down on marketing. Now is the time to double down on marketing. He or she or they who tell the best story wins. He or she or they who makes the best product promise wins. The goal of the product is to live up to the promise that you made, but the best promise is what wins in the marketplace. So, you know, over the next several months, while some of the money that was being allocated towards buying physical objects, now, people are gonna start spending on experiences, it’s important that you double down on what brought you to the dance, which is product, marketing, and support. So, work on your product, work on your marketing, and work on your customer support. That’s all I got for you today.

9:07 Oh! I got one more thing. I just went to Blue Ribbon Mastermind. I just hosted a Mastermind down in Florida. It was really phenomenal. We had 75 people come out. We COVID tested everybody before they flew. We had two people who popped hot, and so they couldn’t come. And then, everyone came down there. We had an opening night party, and then we COVID tested everybody the morning of, which, by the way, probably shouldn’t have had a party before we tested them in the morning. But anyways, tested everybody. Nobody popped hot, so that was good. And, man, people were so happy to be back in person. People were so happy to be networking and hanging out and learning. And just, like, it was really fun and really amazing and really cool to see that you really can do an event in a safe way.

And I think that it was more evidence that people wanna get back to living a normal life and more evidence that, you know, if you can offer anything experiential, whether it be a Zoom class, whether it be you get an opportunity to go somewhere, anything that involves a group of people and some kind of activity. If you can work that into your business model in some way… Like, we do these Facebook Lives, and they just keep growing. We do them for Boom, a Facebook Live once a month, and it just keeps getting bigger because people want things to do with other people. And maybe, you can work that in through livestreams.

You can go check out Boom Ladies’ Night to see how we’re doing it. Go to the Boom by Cindy Joseph fan page on Facebook and look for Ladies’ Night, or go to our YouTube channel and look for Ladies’ Night or our blog. But, you know, bring people together around activities. It’s really beneficial. It will keep your community tight. So, with that said, I’m gonna sign out for this week. Thanks for listening. I hope you enjoyed that, and I’ll catch up with you on another episode of the “Smart Marketer” podcast.

10:52 Molly: Thank you so much for listening to this episode of the “Smart Marketer” podcast. If you enjoyed this episode, please leave us an honest review on whichever platform you are listening. Thanks again, and we’ll see you next time.

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