Matt Synder, Founder of Brands Excel. Today, we'll discuss how Seller Fulfilled Prime (SFP) is increasingly becoming a viable option for more sellers, especially amidst the ongoing rise in costs.

> Here’s a glimpse of what you would learn…. 

In this episode of the Ecomm Breakthrough podcast, host Josh Hadley welcomes Matt Snyder, founder of Brands Excel, to discuss the intricacies of selling on Amazon. They explore the impact of Amazon's new inventory fees, strategies for brands to improve profitability, and the benefits of direct customer engagement. Matt shares insights on Seller Fulfilled Prime (SFP), dispels myths about shipping rates, and provides tips for choosing logistics partners. The episode concludes with Matt offering his contact information for listeners seeking advice on SFP and navigating Amazon's marketplace.

Here are the 3 action items that Josh identified from this episode:

Action Item #1: Prioritize Profitability and Cost Reduction: In light of Amazon's new fee structures, focus on improving profitability and reducing costs.

Action Item #2: Emphasize Direct Customer Interaction: For non-Amazon-first brands, prioritize customer feedback and community engagement.

Action Item #3: Explore Seller Fulfilled Prime (SFP) Opportunities: Demystify Seller Fulfilled Prime (SFP) to leverage its benefits. Understand the requirements, benefits, and considerations involved, including selecting the right third-party logistics partners and technology.

Resources mentioned in this episode:

Special Mention(s):

Related Episode(s):

This episode is brought to you by eComm Breakthrough Consulting where I help seven-figure e-commerce owners grow to eight figures. 

I started my business in 2015 and grew it to an eight-figure brand in seven years.

I made mistakes along the way that made the path to eight figures longer. At times I doubted whether our business could even survive and become a real brand. I wish I would have had a guide to help me grow faster and avoid the stumbling blocks.

If you’ve hit a plateau and want to know the next steps to take your business to the next level, then email me at josh@ecommbreakthrough.com and in your subject line say “strategy audit” for the chance to win a $10,000 comprehensive business strategy audit at no cost!

Josh Hadley (00:00:00) - Welcome to the Ecomm Breakthrough Podcast. I'm your host, Josh Hadley, where I interviewed the top business leaders in e-commerce. Past guests include Kevin King, Michael E Gerber, author of The E-myth, and Matt Clark from ASM. Today, I have the pleasure of speaking with Matt Snyder. He is the founder of Brands Excel. Today we are going to be talking about a secret or not so secret strategy of how you can avoid the new inventory placement fees, the low inventory fees. There's a magic bullet that can resolve that solution, and we're going to save that for the podcast episode. So, stay tuned and learn more about that. This episode is brought to you by Ecomm Breakthrough Consulting, where I help seven figure companies grow to eight figures and beyond. Listen, Matt, I started my business back in 2015 and I grew it to an eight-figure brand in seven years, but I made a lot of mistakes along the way. That made the path of getting to eight figures take a lot longer than it needed to.

Josh Hadley (00:00:42) - There were times that I made bad hiring decisions. I had to take money from my own personal checking account to be able to fund payroll because of cash flow constraints. Covid happened and we watched our business drop by 90% overnight. I remember wishing for a mentor who could guide, who could have guided me along the way of scaling up someone who had been there, done that, and that could share all the secrets of helping me overcome all of those challenges and obstacles. And that's why I've decided to offer one on one coaching and consulting, where I share the nitty gritty cash flow frameworks, the sales strategies, and the operating systems that I have used in order to scale my own brand. And because I believe in giving each entrepreneur my undivided attention. I only work with three clients at a time. But first, I want to make sure we're a perfect match. So, I'm offering a completely free, no strings attached business strategy audit valued at over $10,000. And I do that before we take the plunge. And this audit is my way of showing you just how committed I am to your success.

Josh Hadley (00:01:28) - So to our listeners, if this sounds like something that you're up for, drop me an email at Josh at Ecommbreakthrough.com. That's E-comm with two M's. And then in your subject line say I want to pick your brain. And then let's chat about how we can take your brand to the next level. But today I'm super excited to introduce you all to Matt Snyder. Matt's career began in 2002, where he spent six years with the Dallas Mavericks in 2008. He then shifted his focus to e-commerce by joining Woot.com to lead their third-party e-commerce efforts. Following Woot.com's acquisition by Amazon, the president of Woot and Matt launched eComidate in 2010 to support brands selling on daily deal websites. Later in 2017, he joined Varidesk to spearhead their Amazon Marketplace launch offering. Seller Fulfilled Prime services and after seven successful years there, he then recently has founded Brands Excel, an agency that's dedicated to helping brands launch and scale their businesses on Amazon. So, with that introduction, welcome to the podcast, Matt.

Matt Snyder (00:02:23) - Well, Josh, glad to be here. Thanks for having me. Excited to have this conversation with you here today.

Josh Hadley (00:02:26) - Matt. Super excited to have you on because everybody is panicking about the new inventory placement fees. the low inventory fees. Basically, Amazon has said you have to be perfect with your supply chain in your inventory or else we're going to screw you over and we're going to make sure you pay for it. and so, I think, you know, what you'll be talking about today is going to be very timely. And again, I'm going to keep pushing this out further because we're going to dive deeper into it later in the podcast. because I think there's a lot of value that you're going to be able to share with kind of your expertise. to a lot of our listeners, a lot of our listeners, you know, seven figure business owners, they've launched their own brands on Amazon. They've had success there. But Amazon's kind of like their meat and potatoes. Right? That's everything to their business. You come from a very, very different perspective in the brands that you've worked with where Amazon is not their first sales channel, it's not an Amazon first business.

Josh Hadley (00:03:15) - Instead, you're actually having to convince brands to say, like, getting on Amazon is worth the experiment for you all. It's worth it. It's not going to cannibalize your sales. You're missing out on revenue. And that's a very different conversation than, again, what many of us are used to. And so, I think the unique perspective that you'll be able to bring to our listeners, I think, is going to be literally game changing, because you've seen what other brands are doing very successfully off of Amazon. So, with that being said, Matt, that would be my first question to you if you've worked with a lot of other brands that are not Amazon first. And so, to our listeners that are primarily Amazon first, what are some of those strategies that you've seen working really well with those other brands that you've worked with?

Matt Snyder (00:03:53) - Yeah, Josh, and I think you picked this up really well. And the one I'd just emphasize is if we all kind of look at Andrew Jesse's letter from last week, there were a few things that stood out to me in particular.

Matt Snyder (00:04:03) - And I know a few other people picked up on this, but, you know, talking about reducing their costs and specifically within the, you know, the logistics spaces. And I think the fees that we're seeing coming to sellers now about placement fees and low inventory fees, are directly correlated to Amazon's efforts internally to accelerate the speed of delivery that they have to customers. But those are hard costs. Those costs have to come from somewhere. And while Amazon has absorbed those costs over the last few years, they are now looking to push those onto us, the sellers. And so, we have to get more creative in our approach of how do we? Better improve our strategies to reduce these costs. And I think it all comes down to what we're talking about today comes down to profitability. and I love, you know, we've had a couple great hosts here in the past that have talked about profit first. And I'm a big believer in profit first myself as well too. So, I think these strategies we talked about today, the bottom line we're trying to dive down to is how do we improve our bottom lines.

Matt Snyder (00:04:51) - You're right. So, I grew my career, started on the brand side with VariDesk. And when I joined them back in 2017, they had built this phenomenal product and launched the DTC. And their whole mantra was just to go in and find areas where they could create crazy, crazy fans about the product. They knew that they could get into an office space and get one person to put that converter on top of their desk and listen like I am right now, like stand up at their desk. But also, they look around the office like, why is Matt standing up? And what does Matt have over there that they come over and see the very desk, and then they walk down to HR and say, I need a better desk. Can you give me a bigger desk? Right. That's how the whole business was started and grew this phenomenal, you know, brand and phase of growing their desk as a brand with no Amazon even in the picture until several years later. One of the brands we work with today, a very successful gaming company, got their start by going into Reddit forums and interacting with the fans there and creating an understanding of what the community desired, what was most important to them, and building the brand around those followers and those communities to get their buy and their trust.

Matt Snyder (00:05:48) - And then again, Amazon was secondary. And both these examples, what we found is as the brand develops outside, you know, on the Amazon side, we're often times we're always, you know, so focused on the direct competition and trying to outmaneuver them, whether that be through our image, you know, hero images, SEO, advertising. It's easy sometimes to not have that direct connection with the customer and understand what's most important to them. I feel like that's a much easier or more native type of approach on the DTC side, where these brands really focus on solving a specific pain point of the customer, but also becoming engaged with that community. So, I think these are things that we as brands that are more native on Amazon, kind of pull from the DTC side. You know, again, as we talk with these brands and talk through the opportunities that we have on Amazon and the advantages we have definitely found for them is that being built off of Amazon outside of the city of FBA, you know, they built their own logistics systems using third party logistics or their own warehouses.

Matt Snyder (00:06:40) - And so as they're coming into Amazon, one of the things we've been positioning them with is that this new relaunch of seller Fulfilled Prime is actually a good advantage for them, because they can leverage these existing resources and expenses that they've had to get them launched with Prime services on Amazon. And we can get, you know, more of the details of those benefits, because it's more than just, you know, having the prime badge. There are other benefits to this program that sellers can think through. But again, going back to those brands who started on Amazon FBA has been a phenomenal tool for all of us to be able to grow a brand, grow sales, get that Prime badge, and it's going to continue to be a critical piece for most brands. But with these feeds coming into place, we know that there's going to be additional challenges down the road with FBA. So, we have to always be thinking around what are the other strategies or solutions that we could be exploring, to help offset some of those.

Matt Snyder (00:07:22) - So yeah.

Josh Hadley (00:07:23) - Yeah, I think that it's obviously very timely, but I'm also interested to hear more about like these other brands that are not primarily selling on Amazon. What else has led to their success? Do you see them being on multiple sales channels? They have more of an omnichannel presence or with a lot of these brands that you've consulted for, are they like, oh, I'm really good at Facebook ads. And that's how we've grown our business. Or, you know, with Varidesk, I don't even know what their sales model is. I don't know if it was just like B2B strictly focused or working with HR organizations and firms. I'm curious, tell me more about how many different sales channels do these clients typically have and where are they? Where are they generating sales off of Amazon?

Matt Snyder (00:08:05) - I'd say most generally start with this with just their own DTC. So, whether that be a Shopify storefront that they popped up, they focus here because anytime you're that direct with the customers, where you're going to get the most feedback from the customer in terms of what's working, what's not working, your ability to then to tie in to that community and that community then jumps into your social engagement.

Matt Snyder (00:08:21) - So whether they're being through x TikTok now, Instagram, a Reddit one I think is often overlooked. You know, back in the day, they can go back to my early days of Web.com. The whole success of woot was built around the community. I mean, yes, we had great products, and you always get a great deal on a product, but what really drove the engagement and the stickiness of woot was, you know, this funny story. We'd write about the product and then just the hundreds of thousands or hundreds of thousands of not millions of people who come each day to read that and then engage in this forum around that product. So, I think what these brands have found is that when they off of Amazon, can present their product or brand into a community, whether that be through social, again, Reddit, these different forms, they get that it's a much easier, authentic conversation you can have with a customer versus it's much more difficult to have on the Amazon side. That's generally the fear we hear talking to owners of brands is their apprehension to Amazon, and partially it's the cannibalization that's also the concern of we don't we're going to lose that touch with the customer.

Matt Snyder (00:09:13) - We're going to lose the insight from them. And the CEO of a very will tell you like early days when it was first getting started. There's a lot of different iterations of that product. You know, our hero product being the Pro Plus 36, there's multiple variations to get to that winning product, and we wouldn't have been able to do that at the speed or scale that we the quality that we ultimately got to. Without that direct interaction from the customer initially to kind of tell us we really like this, but if you could add this or make these adjustments that make it so much better. I think those are always advantages that these brands have initially in their start phases, is the direct feedback on product development, but then also being able to get that authentic approval or acceptance from customers when this kind of niche type of categories.

Josh Hadley (00:09:52) - Yeah. No, I think that's it's very interesting to hear that, you know, because it's a different level of how quickly you can reach out to customers and how you can resolve customer issues before they even pop up, because they're going to be going directly to you.

Josh Hadley (00:10:05) - Whereas I would say 95% of the customer service inquiries, we never hear about our products. Yes, we still get customer service inquiries. I'd say 90% of them or 95% are just absorbed by Amazon right in absorbing it. And again, even getting to Amazon's customer service bot is a game in and of itself in order to actually speak to somebody at the end of the day. Right. And so, there's a lot that just goes unheard of. Right. And missed out. And so, I like that perspective. Now I'm also interested to hear your perspective. And you worked on what you saw that got acquired. You then pivoted to another kind of service like servicing other brands selling on daily deal sites. I'm interested to hear your strategy and perspective on that for our audience. Where do daily deal sites come into play? Do you like that strategy overall? is it pretty cutthroat? Is that a completely different business model in and of itself? Maybe shed some light there as to how people can consider daily deal sites for their own strategies?

Matt Snyder (00:11:02) - Yeah.

Matt Snyder (00:11:02) - Great question. So obviously a lot of background history in this channel. And you know, when we left, I left Woot and started eComidate with Daryl Riddell, who's the president at the time. What we saw was this opportunity as Groupon, LivingSocial, Zulily, all these other deals were kind of popping up. The challenge brands had was that as we're kind of they were talking about omnichannel. It was an omni channel back then so I had to go have a platform with Groupon, one for LivingSocial, one for woot and everyone due to dropship products. And so, we saw this opportunity of creating a centralized platform that will allow you to connect your brand to all these various different data deal websites. You know, that's also a pretty big pain point for brands. And, you know, we actually had great success with the story. How I actually got connected with the team of editors was in 2016, our company was part of the SMU Dallas Top 100 Fastest Growing Companies. We came in number seven, and the number one company that year was Varidesk.

Matt Snyder (00:11:51) - And so that's how we met them. But at the time I also saw. The plateau, or maybe the slowing down of the daily deal business as Amazon was just exploding, right? And so, a lot of people, including myself, kind of put my focus directly into Amazon. Now, with that said, what's interesting is that if you were to go and take a look at the top 50 marketplace sellers on Amazon. You'd be surprised to find that woot is on that list. so today is a top marketplace seller. So, in addition to just the daily deal business that they have on their own website and actually source products and sell sellers just directly on the, on the marketplace. One thing that's a little hack or interesting tidbit for your listeners is that a woot actually has the opportunity. If you have added inventory or excess inventory in FBA, you can actually work with the team to go and sell that product. Through their promotions, they get access to different promotions and events, and they can actually transfer that ownership of inventory from your account into their seller account, with the product never leaving FBA.

Josh Hadley (00:12:45) - That's amazing.

Matt Snyder (00:12:46) - It's definitely an advantage that they have, and its advantage is that we have helped some of our accounts or clients within the past. But again, if we get excess inventory or in some cases, we know that they can get a better deal placement than we can than what we can get as a brand. We'll run it through them and have their team post it and sell it for us. And again, it can just flip a switch to go back from their seller account to our source. So again, still very active. I'd say the daily deal business has evolved quite a bit from the time I was there, but they're still very active and have some advantages that you can use when leveraging them.

Josh Hadley (00:13:16) - Yeah. Is it so Matt, walk me through maybe some of the strategies that you, you consult on with your clients when they do come to you? What are some of the different levers you have them pull on Amazon that you could share with our audience?

Matt Snyder (00:13:28) - Oftentimes when we first engage with the brand, they're kind of in two different buckets.

Matt Snyder (00:13:32) - They're either a direct-to-consumer brand who has maybe attempted to try to sell on Amazon, and they realized quickly that this is far more complicated than what we kind of anticipated, or it's much different than our Shopify business. We thought we could just kind of take our learnings and plug it into here and make this work. or oftentimes it may be more of the. You know, they've been told over and over again that they need to be on Amazon, but they're hesitant. They're concerned about cannibalization of their other sales on their DTC site or, you know, the brand awareness. Again, going back to what we said earlier there. So, focus on controlling and experiencing the customer with their brand. To give that control over to Amazon can be a big hurdle to overcome. The other accounts that we've been talking with are vendors who. So, they've been on Amazon for a long time, but they definitely see that there's challenges on the vendor side that, you know, as much as we talk about getting squeezed on the three sides, they're getting squeezed on the vendor side just as much, just in different ways.

Matt Snyder (00:14:19) - But they feel like there's opportunities for them to grow the business in a different way on the marketplace side. And so helping those brands think through that transition and both kinds of scenarios where we come into play is, is our background is working for brands across running media merchandising, but more importantly is the business operations that goes on behind that. Is your inventory planning? It's your finance team, your technology and operations, all these other different departments that exist in brands that are traditionally built through Shopify or enterprise level brands. So, where we can come in with our experience and help them build out the right business operations for each different department, so that these departments work holistically to then support Amazon and then then ultimately then how can we help Amazon improve the engagement for brand awareness with those customers who prefer Amazon to again, then build the awareness and support of the brand on their DTC efforts as well too.

Josh Hadley (00:15:05) - Fascinating. How much do you see if somebody else already has an omnichannel approach? They've primarily been selling on Shopify, like, how is it easier to launch on Amazon because they've already got brand recognition outside of Amazon? Or do you still see it just as challenging as somebody that's like, my brand's only on Amazon is the only thing.

Josh Hadley (00:15:24) - I just continue to launch product after product only on Amazon. Are there advantages of being omnichannel and pairing it with Amazon and tell me what those might be?

Matt Snyder (00:15:32) - Yeah. So great question and a couple different ways to answer that. So, it can be easier in the sense that they usually have a good existing product that they've got some history and other channels to know like what's going to be their hero products, what's going to be the best drivers for them. Maybe they have some brand awareness already on Amazon. Customers are coming to Amazon looking for them, not finding them. Maybe they're buying another product or they're going back to the DTC page. So, in those cases, like at least, that you have some type of, brand affinity or product history to, to build on as well as you usually have a level of creativity and understanding of marketing that's going to at least lead into that early success. The other side of that, though, is where it's more problematic that we find is that when you take Amazon and the way that it operates specifically around FBA, and you throw that into an existing business model that has been built around other third-party logistics or other types of business operations.

Matt Snyder (00:16:17) - It's highly disruptive. And that's where our team really specializes, is being able to come in and help them kind of bridge the gap between, okay, here's how Amazon operates and here's what the requirements are for your inbound shipments or your product listings, your variations and everything else. How do we help take your existing best practices for your Shopify business and model that out to then fit for Amazon? And the other way here's how I'm going to work. Let's help you build this into your system. So it's not as disruptive as it was before. So, a lot of brands we've chatted with are, if they've attempted they found out all kinds of systems internally and they need help understanding. Okay. If we're going to make this Amazon channel work, help us think through. Yet the operations of FBA and other services. And again, going back to we kind of started the conversation with Prime. That's been a big benefit as the program has been opened up and new sellers are now kind of jumping into it.

Matt Snyder (00:17:05) - As we're talking with these DTC brands, it's really reduced the friction point specifically around operations and logistics, as they explore Amazon, because now they can kind of, again, leverage those existing strengths that they have on their direct-to-consumer shipping. Yeah.

Josh Hadley (00:17:18) - Yeah, I love that. So, let's get into the meat and potatoes here. Which is this. Right. How do you avoid Amazon's newest inventory placement fees? Amazon's low inventory fees. And you're telling us, Matt, that the magic bullet here is a Seller Fulfilled Prime. So, to our listeners, why don't you walk through what is Seller Fulfilled Prime. How easy or hard is it to get? What are the requirements? The details? Obviously, you're an expert in this space, so walk us. I am new to this mat. So, you're talking to me. I know very, very little about Seller Fulfilled Prime. So, give me the basics.

Matt Snyder (00:17:50) - Excellent. Happy to do so. So, we all know that the customers on Amazon if you're prime eligible the likelihood of a customer seeing your product on the detail page or getting your detail page is much greater than if it's a non-prime product.

Matt Snyder (00:18:01) - so we can all agree that having prime eligibility is one of the most critical things to success for sellers and Amazon going back to when, so Seller Fulfilled Prime, often referred to just as SFP. Amazon always has all these acronyms. Right. so, Rishi started back in 2017. It was a beta program. Veritas was one of the few brands that kind of got into this initial phase with Amazon quickly kind of closed it, because what they were finding that sellers were just having a hard time providing that the same level of quality service that you would get out of a using FBA and knowing that Prime is it's a brain Amazon. Right. So, they want to ensure that when customers buy something that's Prime listed as Prime, that's going to be the 1- or 2-day delivery that customers are accustomed to expecting. We know that during Covid that'll change, right? I mean prime even today like prime water going to 3 or 4 days. You know, one of the advantages we had during that time was we actually were able to maintain that same level of service during the period of time.

Matt Snyder (00:18:53) - So when customers are looking at a, at a product and comparing, they're looking at delivery times. If our time is an SAP seller, we're actually in some cases showing faster times than an FBA order, right? We actually saw improvements from our conversion and our sales through that period of time. So fast forward now also today things are a bit more balanced around FBA and SFP. So, with the program recently reopening, back in October, they reopened the program to new sellers, and they made some pretty big changes to this. And it's definitely a signal to sellers that Amazon sees SFP as a long-term solution. But there's certainly certain products or categories where it favors those over others. And so, we can kind of talk through some of the details. But in addition, you know, as we kind of talked about earlier, is this connection with you with your customers, we talked about customer service a little bit. Those are other things that within the SFP program are other highlights I would call out is, you know, you do get some customer information when we're shipping to them.

Matt Snyder (00:19:44) - That helps us kind of see the gap of like this customer also engaging with us on our DTC site. Right. What are the other touchpoints we have? We also get some levels of customer connection with them. So oftentimes the first contact comes to us as a brand where there was a slight crack on the corner desk. We can offer a 10% savings or something like that, and we can reverse that return that we would have gotten through traditional FBA. So those are a few, just the early kind of winds that you can get as a brand. But the considerations here are advised. Brands first to think about is doing some cost analysis around the program to understand what works for you, because it is quite a bit to stand this up. Most brands who are native to Amazon have been built around FBA, and so they don't have where they can go back to DC. They built up their own three PL programs. They have their carrier relationships; they have the technology. These are all things that brands are going to have to work through in order to make SFP work.

Matt Snyder (00:20:36) - So in terms of, you know, kind of early considerations, I usually kind of tell brands there's kind of three different categories that are kind of easy evaluations to see if it may be a fit for you. And that's if you're a high-priced product. So, anything over $100 generally would be something of consideration if you're a large, bulky product. Definitely consideration, which was why it was a great fit for a very long time. And the third would be seasonal. You know, Amazon has made some easier ways for this for some sellers. But if you think about sellers, where 90% of their sales come within a three-month period, it's really hard to maintain the right inventory levels that you need in FBA to really maximize that. And so leveraging SFP during a period of time can be a way to ensure that you never because you never get a stock with your Prime eligibility products. So, if you don't finish those threes, not to say that the SAP can't be a solution for you, but those are generally kind of three easy indicators to think, okay, maybe we should be a fit in some cases.

Matt Snyder (00:21:26) - We actually see brands who look at this as it's a hybrid approach. We're not all FBA or all SFP, but within our product catalog there's a mix of products. They're going to work better for FBA, and those are going to work better for SFP. And so all of these, we kind of when we first kind of engage with brands who are interested in the program, just kind of sit them down, do a product analysis of what's going to kind of fit within those easy criteria points, and then kind of walking through the models of different considerations of three plus technology, internal kind of teams and systems as well too. So that's usually a good place to start.

Josh Hadley (00:21:56) - Yeah, there's a lot, Matt, and you're definitely an expert. So, you know, your stuff with SFP and I think to a lot of Amazon brands, that are Amazon first, this is kind of like a world that they don't normally play in. But with the new inventory placement fees and the low inventory fees and everything in FBA fees only continuing to go up because Amazon is adamant that it's like we're not getting we're no longer funding stuff for our partners.

Josh Hadley (00:22:20) - Right. It's kind of like they're now knowing that they own e-commerce. And like, if you don't want to sell on our platform, that's all right. There are millions of others that will. So, if you choose to leave that's fine. So, with that being said, this operational efficiency is getting extremely important. And then being able to understand that, like you should be running your business profit first, then that's where this SFP needs to be considered. And so, I love this. Here are my questions for you. So, let's assume you kind of met those criteria. You have a large bulky item. It's above $100 but everything's an FBA right now. You know who are the types of like, do I need to go build my own warehouse and then need to pay for overnight shipping with UPS, which could get really expensive? that's always at least been like the mental blocker in my mind is like, how in the world can I compete with Amazon's extremely low shipping rates? You know, that's the advantage.

Josh Hadley (00:23:12) - That's why FBA makes sense, because they have that leverage and really low shipping rates. Honestly, for an everyday brand you don't get those low rates. So, dispel maybe some of those myths with me and how that might work.

Matt Snyder (00:23:24) - Absolutely. Josh. And I would say for most brands, especially if you're kind of more native to Amazon versus a DTC brand, you're not going to have a warehouse system. And we would not advise you to go out and try to spin up a bunch of different warehouse locations and staffing and everything that would go with that. With that. So, we would say, you know, sourcing the right partner is essential, and not all three partners are going to be able to meet this level of performance in terms of just some, some high-level metrics. And, you know, Amazon breaks us down into two different performance measurements that they have once your speed performance. So, what this is based upon is the shipping settings that you have. So just like if you're doing any type of merchant fulfillment, you have a shipping typically that you create.

Matt Snyder (00:24:01) - And in this example we would be telling Amazon all the various different locations that we are shipping from. So, Amazon is using that information to determine when a customer comes to our detail page. Where do we have inventory at, what carriers are we offering. And was the speed of the carrier services that we're offering. That's what determines the speed delivery speed that's displayed to a customer. And then Amazon has certain performance metrics that we have to meet based upon the product size standard oversized and extra-large. So, within each of those kinds of tiers, we have a metric to hit of one day, two day or greater than two-day delivery services. From there, we have to deliver on time at 93.5% for each week. And the other requirements that have kind of dropped off as there used to be by shipping services. So essentially what this is, is you can use a seller that can still leverage Amazon's rates. It's not going to be the same as FBA, but it's better than what you would get as an individual and by your carrier shipping solutions through.

Matt Snyder (00:24:51) - Then you can also use shipping services. But bill it to your third party. And this is often what we do with our accounts because we had really good rates because it wasn't just Amazon, it was our DTC was our corporate sales and B2B sales. Everything else. We had really good rates. Some of the people that we work with have really strong rates as well too, and we can leverage those rates and still use the buy shipping services through Amazon. And the benefit we always tell brains there is just like if it's an FBA order, you get some protections in terms of the customer support claims different, you still get the same type of support from Amazon. We used to buy shipping services, but the key one really is that 93.5% on time. And it's less than a, I think, a half percent cancellation rate. So the key is going to be 93.5%. And so finding a three PL and then ensuring that your carrier settings are going to allow for that type of service.

Matt Snyder (00:25:41) - And we've got a handful of three plans that we have kind of vetted on our own to ensure that they can meet this level of delivery. And even within these three pillars we work with, you know, they're not the right fit for every brand. So really, it is going to each brand and their product mix and understanding what type of specialties that they're going to require, and then pairing them with the right three partners. The other other kind of piece that's not always looked about or thought about is the technology, right. Because of the speed of this, we got to get orders out of Amazon and to your seller account and then out to your warehouse quickly. And so part of what we've often done, work with teams, is helping them think through what the right technology or software systems that we need to automate all this so that we get orders quickly into the hands of our people. And then the reverse is to get the information back from our three PL and to back to Amazon.

Josh Hadley (00:26:22) - Yeah, there's a lot that goes into this.

Josh Hadley (00:26:24) - Matt, do you have a list or maybe could you rattle off a list of those three players that are kind of like prime, eligible or very familiar with the program that can meet the really high standards that Amazon has set out?

Matt Snyder (00:26:35) - Yeah, there's two that might kind of stand out right now within the space. the first being, you know, where to go, which is a company actually, they're a subsidiary of UPS. So they were kind of built within these ecosystems. And they were one of the first ones to provide some SFP services and some advantages. There is you, you know, you get some carrier support. It's owned by Amazon or owned by UPC reps. I'm sorry. The second is, and one where we've done quite a bit of work and have really been impressed with their services, the DaVinci micro fulfillment. And what's unique about them is, is, they're kind of since modeling the FBA approach where they've got, I think, eight locations now across the US, and what they're going to do is they're going to have smaller quantities around each of those locations.

Matt Snyder (00:27:14) - You can still leverage their tech stack in order to get your orders in and out of their systems from Amazon and yours, you can leverage their carrier solutions. And then thirdly, as we're talking about, again, trying to get ourselves off of so much dependency on Amazon, whether that be through FBA or sales channels. So they can plug you into Walmart, you know, targets if you have direct retail sales as well too. So one of the other added benefits is that you're not just getting the support of Amazon, but as you're thinking more broadly of your omnichannel expansion, your DTC, Shopify page, Walmart.com, target.com, both of these deals can help you support those channels as well too.

Josh Hadley (00:27:47) - Awesome. Yeah, I love that. And I'm glad you called out DaVinci Micro Fulfillment. We actually had Corey Apirian as the CEO of DaVinci Micro Fulfillment, so you could dive into that episode and learn more about how they have things set up. And that's great to know that they are very accommodating with the SFP requirements.

Matt Snyder (00:28:06) - He's one of the smartest brains I've met in this space. And, you know, it says a lot when they were one of the first three players in the space to get approved by Amazon as an SFP provider. So I think this is quite a bit. And he's got some pretty good people behind him that really help that business accelerate to where they are today.

Josh Hadley (00:28:21) - Yeah. Awesome man. I'm out. Seriously. I'm interested. You know, I recently purchased a couch of all things on Amazon. All right, so this came over as Prime. Okay. It showed up as prime, but the delivery window was like, like 7 to 10 days, but it was still prime, right? Which is like what prime means if it's 7 to 10 days, like that's standard normal e-commerce shipping times in my opinion. So that would be my question back to you is like, again, this is a huge, large, bulky item, right? It was delivered in a massive amount on pallets, right? It was delivered on pallets.

Josh Hadley (00:28:54) - And so that'd be my question to you is like how do I assume it's through SFP that they're getting this prime badge because it wasn't like Amazon Logistics that reached out. Like they had a company that then scheduled the drop off and everything with me. So tell me more about how that would have worked.

Matt Snyder (00:29:09) - You know, in this case, when you made the purchase, was it sold by Amazon or was it sold by another seller?

Josh Hadley (00:29:15) - I'm gonna have to go look it up. I think it was a third party seller, though, like it was a yes, I know it was a third party seller because I looked at their storefront and everything to see, like and where they were based out of, they were out of the US. So Amazon.

Matt Snyder (00:29:27) - Has launched. So this is a great question. We during the time of Vari we actually had a period of time where we were offering LTL services. We actually paused it because the challenge we were running into was kind of the second piece you mentioned there, the carrier being able to get the right information to then go to the customer and schedule a delivery time and ask the questions of where should we park and write all those things you need before you show up? And that's always been with the times with Amazon, right? Is getting the right customer information, phone number or email or something that we can communicate with the customer appropriately.

Matt Snyder (00:29:56) - We always find challenges with getting the right information.

Josh Hadley (00:29:59) - Well, yeah, because of that brand, they had to reach out to me just through Amazon messages. Right. And that was good, great. I get so many Amazon messages. Half the time I'm just deleting them all the time. I'm lucky.

Matt Snyder (00:30:08) - You can tell it.

Josh Hadley (00:30:09) - Exactly.

Matt Snyder (00:30:09) - So Amazon has recently opened up a new program as a beta program specifically for LTL, and so we have not launched it yet. Vari was one of things we're still kind of exploring, but that's one of the solutions they're trying to solve here and within the Prime service as well. To again with that, because to be considered the extra large would not require 1 or 2 day services. So it's greater than two days. So it would fall outside of the traditional prime delivery. I have not personally yet tested this one, but that's from what you've shared. That sounds like that's the program they're using for LTL. Adds a whole nother layer of complexity to this because of what we kind of discuss with the communication.

Matt Snyder (00:30:41) - But through this beta program was what Amazon was focused on. Trying to correct is the ability for us to communicate well. So protecting the customer's data information to schedule those types of appointments.

Josh Hadley (00:30:52) - Yeah makes a lot of sense. So obviously I think that what you're sharing makes a lot of sense for somebody else that already has a DTC presence. They've already established a lot of those three PL relationships. And they could work this in. What about Amazon First brands? Do you encourage them to consider SFP and how they should weigh the pros and cons of taking everything out of Amazon and going and going somewhere else?

Matt Snyder (00:31:16) - So for those brands who are natively born on Amazon, they've been dependent on or used FBA 100% of the time. Generally speaking, these brands are also bulk. Their sales are always on Amazon. So what I would encourage them to think about in thinking through SFP is kind of twofold. One is around the cost. So understanding that FBA is going to continue to have different fee structures or changes to it, there are certain things we've done with our brands that we work with. How do we just change packaging or make adjustments to account to accommodate for those fees? But sometimes you can't.

Matt Snyder (00:31:42) - You gotta go beyond just making adjustments to your packaging or products based upon the evolution of FBA. And that's where I would recommend that to consider. SFP, for one, is the cost control. And as I stated, it's not necessarily the right fit for every product, but happy to work through and help a brand kind of walk through. What would that exercise look like to evaluate the cost of a three PL, the carrier expenses offsetting that of what FBA is. And as we talk like the second piece would be omnichannel. And one of the advantages we discovered through this on going back to very was it also reduces your overall inventory levels. So as you think about as a seller, you have to have available to sell product your replenishment stock. And in between that you have that delivery time from your warehouse or inbound to Amazon. You got that window or that inventory is unsellable. So if you can eliminate that inventory or that time period, because as soon as it hits your dock, it's sellable now and I don't have to worry about it.

Matt Snyder (00:32:38) - Maintaining a certain inventory level, low inventory fees and vendor placement fees. Shipping to eight different locations across the fee warehouse. Yes, you're replacing it with some other complexities with an SFP. But then what you gain in addition to maybe even if your cost from FDA to S&P was flat or the same, the advantages you gained by reducing the overall inventory you have to carry and then being able to reinvest these investment, you have to now build out Walmart.com Shopify page. Right. Going more omnichannel. To me, those are really the value ads that you gain out of this program, in addition to just helping control the cost on your own FBA.

Josh Hadley (00:33:11) - Yeah, I like that. I'm interested for you, maybe Matt, to walk me through, like how you would strategize and develop a plan around a brand that is primarily Amazon first, but they want to grow on Walmart and Target. And the challenge is Walmart definitely does not want you sending any packages from NCF and targets the exact same way. So in order to do that, you do have to have it set up.

Josh Hadley (00:33:36) - You're either using Walmart WFS program. Target plus doesn't have theirs, at least as far as I know. So now I think the complexity is great. So now I have to divide up my inventory to Amazon and to Walmart. And it's one thing if you have, you know, a handful of SKUs, if you have 1400 SKUs, like me, I'm not going to like inventory everywhere, because then I'm just going to have stale inventory sitting in all sorts of warehouses. So walk me through how, you know, how we should consider, you know, rolling it like, where do we place our inventory? Should we be all in on Amazon and try to use as much as we can as far as we can go until we definitely need to pivot? Walk me through your thought process.

Matt Snyder (00:34:14) - Great question. And you know, I think Amazon's made attempts to help sellers solve this omni channel. Problems or challenges out there. You think of Buy Prime. So Amazon launched this program specifically for Shopify accounts who can now put all your inventory on Amazon, and then I'll ship that across your DTC page or Amazon.

Matt Snyder (00:34:31) - And certainly, you know, no brands that have used this successfully. And it's worked out great. But again, you're getting back to you're putting all your control and your fee structures within FBA. And that's where going through the exercise of doing a cost analysis helps you understand. Is FBA going to be the best solution? And very for a lot of brands that will be. But for some brands it won't. And that's where again, thinking through we know that feels right. It's going through the cost analysis of having a few exploration calls with some people understanding their pricing structure. Going back to DaVinci is one of things I love about them is they have a very unique pricing structure I think can help brands overcome that initial barrier. and they'll be able to leverage those, those carrier fees and technology. Those are usually the big costs upfront for brands. So aligning with the best partner that can help you reduce those fees also helps you then be able to better cost analysis or build that model to understand truly what is the true cost comparison.

Matt Snyder (00:35:23) - So that's the initial step. But then going to layer deeper than that would be, how would going into an SP platform help me better reduce my costs, not just on Amazon to get me to Walmart or allow me to get my my BDC page launched and the savings I have over on those sides help to offset my overall cost on the Amazon side. Again, going back to the profits, the more we expand, the more complexity we add, the harder it is to control those costs. So the more that we can centralize all of those into a single source of inventory and shipping. And the easier it is to measure and make adjustments and improve those expenses versus trying to decentralize and have inventory in every single different channel that we're going into. Yeah.

Josh Hadley (00:36:02) - I love that, Matt. This has been fantastic. Is there anything else that you haven't shared that you feel like our listeners need to know about SFP or their logistics strategies? With the ever ongoing evolution of FBA fees that are only going to go upwards, they're never going to go downwards.

Matt Snyder (00:36:17) - Well, I won't sugarcoat and say that SAP is a simple solution or a quick fix to everybody's FBA fee challenges, but I would encourage brands to consider it work through the analysis. Understanding what the value adds. Pros and cons of both channels are. One of the things I always love about this community is that we're always willing to help other sellers, so I'm happy to work with brands. If you just have one to do an initial conversation to help me understand. These challenges or these potential considerations. We are happy to help think through that. But what I'll leave you with is that yes, it is a complex problem to work through. But so is Amazon FBA and the complexity there just continues to increase. And so you as a seller have to make that decision at some point as. Where am I going to be able to gain the most control over my cost? And as I think more broadly of where I want to sell my products across other platforms, what's going to help me best position not just for Amazon, but also for these other retail channels that I want to push my products into.

Josh Hadley (00:37:11) - Yeah. Well said Matt, definitely something for our listeners to consider. So, with that being said, I have my three actionable takeaways for this episode. action item number one, my recommendation is that you need to be a profit first company. So, in e-commerce, things are getting slimmer over and over again, right? The Amazon that we once knew in 2018, 2019, is gone. It's history. That was Amazon as a seller. That was your most profitable time that you could have been selling into. Right. And now from here on out, it is going to get more challenging. Amazon is going to continue pushing more costs on you. Now here's the advantage of this right. Because it's not all doom and gloom. The good news is the moat is getting bigger and bigger for somebody. A new brand to just launch onto Amazon. Right? I think those courses are going to be hard to find in the next five years . Hey, make a bunch of money on Amazon, sit back, kick back and relax.

Josh Hadley (00:38:03) - Because of the immense amount of operational complexity that will be required in order to begin those brands and to ship them in. Unless you just hit the nail right on the head, you're going to get your lunch and bite. Amazon and Amazon's always going to come out as the winner. And only a very few select brands will. So, with that being said, lean into the difficulty. Don't try to say, oh man, this is too hard. How do I exit this business instead? Say hard is good because it's going to make my competitors, the weak ones, are going to fall away, and you either have the opportunity to be one of the weak ones and to say, this is too complex for me, I'm out or this is your time to double down and be like, okay, we got to get better operationally and operate with profit first in mind, and it's going to be tough for the next couple of years. But you know what? We will be a lot stronger and better for it at the end of the day.

Josh Hadley (00:38:50) - So that's action item number one. Action item number two is doing a cost analysis with SFP. So, Seller Fulfilled Prime. I think, Matt, you walked us through this. And this is not an easy button by any means. And you alluded to that this your entire consulting practice is based upon the amount of complexity that has to go into this. But I think that this is an enlightening thing for people to look at, to say, do I have a big bulky product? Is it over $100? And if so, and especially if I'm selling in any other channels already, does it make more sense for me to maybe do SFP rather than doing FBA right now? So, it's a cost analysis and that would be my action item for that. And then my third and final action item would be this. If you're Amazon first only again, I think that it's only going to get more challenging on Amazon. And the importance of scaling out your business on multiple brands or on multiple sales channels is going to become extremely important.

Josh Hadley (00:39:43) - Go back and hit the rewind button and listen to the first part about this episode, where Matt talked about all the other brands that are finding success off of Amazon, that are ecommerce brands. You know, they have. They're into the Reddit forums and they have a raving fan base, or they have really good data or a B2B side of their business. Right. And so, if you take a page out of their playbook, that can be ways to differentiate your business and allow you to compete in other ways that, honestly speaking, the oversea sellers can't and don't want to touch. they're only going to focus on Amazon. So those are my three action items. Matt, did I miss anything? Anything else you would add to those?

Matt Snyder (00:40:17) - No, I think you did a great job summarizing that and especially the last piece. You know, the advantage we brands can take is that Amazon is going to be a phenomenal place for us to grow sales and build brands and products. But you're right, the most we can get is building that brand even off of Amazon, where we're not going to have the same level of the sellers that we battle against on the Amazon front and, and candidly, more control over improving your profits.

Josh Hadley (00:40:41) - Agreed. Love this mat. At the end of each episode, I love to ask each guest the following three questions. So here we go. Matt. What has been the most influential book that you've read and why?

Matt Snyder (00:40:49) - Well, you kind of team you up, almost like I'm cheating with this answer, but it really is the most impactful for me as I started my agency. My friend Robin Johnson referred me to the prophet first and the team over there. I know you've had the team has been your podcast as well, but for me, that book has been instrumental because I'm starting my business thinking through just as an Amazon seller, but also as a business owner of How to Think Through Profit First and making sure we have the right principles in place to ensure that we actually are profitable. so that's definitely one, I'd say the one be on that one, which was my second was, was, traction. Again, thinking through how we build a strong business that has processes in place and so that using the EOS system has been instrumental for me as I.

Matt Snyder (00:41:25) - On this journey of launching a business 100%.

Josh Hadley (00:41:28) - Those are great book recommendations. All right. Question number two. What is your favorite productivity tool or a new software tool that you've recently discovered that you think is a game changer?

Matt Snyder (00:41:37) - So this is an Amazon tool that our team absolutely has been leveraging. And I'm excited for some new developments. They have but related to FBA, we're talking about fees and everything that's going on that changes all the complexities of it. There are some great services out there that help you with your FBA reimbursements. There's actually a tool that we've leveraged that even brains themselves can leverage called sifted. They're actually they actually just are probably at the end of this will have a different name. They're just gone through some acquisitions. But what I love about the platform is it allows me as a brand to actually own my control, my own reimbursements, so I can go and use the tool myself. I collect the full reimbursements of those FBA fees, but what's really unique about them is they actually have a tool that allows us to see the shift from point to the endpoint of, of our orders.

Matt Snyder (00:42:19) - So as we're talking about thinking about expanding to SFP or doing our own fulfillment logistics, the tool will tell me exactly where Amazon is shipping from to my customers. So, I can kind of see those hotspots of where we Amazon spends a lot of my product? Or where are we shipping a lot of products to help us kind of answer some questions around the logistics and warehouse questions we would have.

Josh Hadley (00:42:37) - I have not heard of this tool and I'm looking at it right now. Matt I'm interested. How else can somebody use this tool?

Matt Snyder (00:42:42) - So I do have an offer link for this that will get you a free trial for a period of time. So, I will share that with you. And then the show notes.

Josh Hadley (00:42:49) - Okay. That's awesome. Love that. Thanks for being willing to share that. That's a great tool. All right. Third and final question. Who is somebody that you admire or respect the most in the e-commerce space that other people should be following and why?

Matt Snyder (00:43:00) - This is the tough one because there are so many.

Matt Snyder (00:43:01) - But I would say one of the areas that we have really been trying to lean in as an agency, helping brands who are investing a lot of money into Amazon Media, as well as maybe investing a lot into social and other retail media, is helping them understand how this is all working together. And so Srinath Reddy with the team over intent wise, they've done just a phenomenal job of building out a platform along with AMC reporting. So, Amazon Marketing Cloud to really help brands for the first time be able to answer these big questions of, how are my media dollars really working for me? What's incremental? What's getting wasted or burned, and how do we make those efficiencies? And so, he is definitely one of the smartest people I've met in this space. If you've not followed him, he puts out some great content on LinkedIn as well as some webinars. So definitely check out Srinath Reddy and the team over intent wise.

Josh Hadley (00:43:43) - Love it sounds like we need to have him on the podcast. Yes, we.

Matt Snyder (00:43:45) - Should.

Matt Snyder (00:43:46) - We can make that happen.

Josh Hadley (00:43:47) - I love it. Awesome. Well Matt, thank you for all the great information you shared today. if people want to reach out to you, they'll take you up on you, your free offer of helping them do that analysis. How can people find you?

Matt Snyder (00:43:59) - So easy to find me on LinkedIn? if you search for. I know we can put my link here in the show notes, but it's for Matt Snyder on LinkedIn. Easy to find me there. You also go to our website brands.com. Hit the contact information there and get connected with me. But my email is also mad at brands like sale.com. So, feel free to reach out however you prefer.

Josh Hadley (00:44:17) - Awesome! Matt is an SFP expert, so if you want to go through that analysis, I encourage you to reach out to him. So Matt, thanks again for coming on the show.

Matt Snyder (00:44:25) - Thank you Josh really enjoyed it.