Guest Introduction

With a wealth of experience spanning over three decades, Abe Chomali has witnessed the evolution of sales and marketing firsthand. From his beginnings in 1991 to navigating the digital landscape of the internet and the rise of Amazon, Abe has remained at the forefront of innovation. Today, he is dedicated to helping sellers maximize their presence on Amazon through strategic PPC and SEO management. As the founder of XP Strategy, Abe brings unparalleled expertise, having driven over $1 Billion in sales for both himself and his clients. 

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

In this episode of the Ecomm Breakthrough podcast, host Josh Hadley engages with Abe Chomali, founder of XP Strategy, in a deep dive into the intricacies of PPC and SEO for Amazon sellers. They discuss the unpredictability of Amazon's system and the importance of flexibility in strategy. Chomali emphasizes the use of analytical tools for tracking changes and competitor strategies, and the significance of metrics like TACoS and conversion rates. The conversation also covers the necessity of continual product launches and adaptation to market changes for scaling businesses. Chomali's expertise shines as he offers actionable advice and a complimentary strategy session, showcasing his commitment to helping businesses thrive on Amazon.

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

Action item #1: Prioritize new product launches
Action item #2: Adopt a flexible approach to PPC strategies

Action item #3: Focus on high-performing areas to drive business growth.

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 (00:00:00) - Welcome to the Ecomm Breakthrough podcast. I'm your host, Josh Hadley, where I interview the top business leaders in e-commerce. Past guests include Kevin King, Michael Gerber, author of The E-myth, and Matt Clark from ASM. Today I am speaking with AbeKamali of Exp strategy, and we are going to be talking a lot about the painful story where he learned exactly how ad auctions worked, and then we're also going to be getting his predictions of how only the strong are going to survive in the new game of Amazon over the next 12 to 18 months. This episode is brought to you by Ecomm Breakthrough Consulting, where I help seven figure companies grow to eight figures and beyond. Listen, Abe, 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., I had made bad hiring decisions. I had to take money out of my own personal bank account in order to fund payroll.

Josh (00:01:00) - Because of cash flow constraints, I stressed about whether our brand could survive when Covid hit because we saw a 90% dip in sales. I remember wishing for a mentor and somebody who could guide me through scaling up my business and those obstacles. Someone who had been there, done that. Somebody that could share the secrets to help me overcome those challenges. That's why I've decided to offer one on one coaching and consulting, where I share the nitty gritty cash flow framework, sales strategies, operating systems that have helped me scale my own business. And because I believe in giving each entrepreneur my undivided attention, I'm only working with three clients at a time., so first, in order to qualify, I want to make sure there's a perfect match. So I'm offering a completely free, no strings attached business strategy audit.. It's normally valued at $10,000., and that's for me to just show up and show you how committed I am to your success and see if it's a good fit. So to our listeners, if this sounds like something you're up for, drop me an email at Josh at Ecomm Breakthrough dot com.

Josh (00:02:05) - That's ecomm with two M's. And 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. Today I am super excited to introduce you all to a family with a wealth of experience spanning over three decades. Abe has witnessed the evolution of sales and marketing firsthand. From his beginnings in 1991 to navigating the digital landscape of the internet and the rise of Amazon, Abe has remained at the forefront of innovation. Today, he is dedicated to helping sellers maximize their presence on Amazon through strategic PPC and SEO management. As the founder of XP strategy A brings unparalleled expertise, having driven over 1 billion in sales for both himself and his clients. So with that introduction, welcome to the show.

Abe (00:02:57) - Josh. Thank you for having me. That was,, that was an amazing intro. And, after my long career, when they're doing a roast, I have to have you back to do that again.

Josh (00:03:07) - Well, I am glad you didn't fall asleep.

Josh (00:03:09) - I know that's the one feedback people do give me. They're like, dude, your intro is way too long. And it's like, yeah, but guess what? Somebody that's new,, you know, they want to hear it. And on podcasts, it's super easy to hit that plus 30 button, right and skip ahead. 30s so everybody gets the same spiel.

Abe (00:03:28) - Well, much much appreciated.

Josh (00:03:30) - Abe., I'm going to kick things off here because you and I continue to bump into each other at multiple events, but I'm going to give you the shout out that Kevin King gave you the shout out in one of his recent newsletters. Okay. On LinkedIn, you created a post where you predicted the future of Amazon sellers over the net over the next six months. You said what you believe is going to happen. So rather than stealing your thunder here, Abe, I would like for you to hear your prediction. Maybe there's an update or two that you want to elaborate further on here, but what's your prediction for the seven figure Amazon seller for the next 12 to 18 months on Amazon?

Abe (00:04:13) - Oh boy, I wish it was a rosier picture, but, the response is that it was insightful.

Abe (00:04:20) - So yeah, I appreciate you giving me the opportunity to share it. So for context, Amazon, you know, for anybody who's selling on Amazon, if you are aware of what's happening in your account, you know, Amazon has rolled out two new tiers of fees. So one tier of fees has to do with a change in costs for when you send merchandise into Amazon FBA. And the second group of fees has to do with low inventory. So if Amazon decides that your product sells 50 units a month, if you drop below that, they're implementing a per unit cost as a penalty. And, sellers who. Are in tune with their accounts, including. Many of my clients are seeing those charges as they're playing out. It is impacting their accounts a lot, and we've been having discussions about how to navigate that. And, based on my experience, you know, in selling, we were discussing before the podcast how my experience is in the electronics category, which was, you know, one of the most competitive spaces you can be in for sure.

Abe (00:05:29) - One of the things that we always saw was that a lot of our competitors are not aware of their costs. And I see this in play now with Amazon. Lots of clients I sign up with, or lots of clients that sign up with me are not exactly aware of what their costs are. They're not exactly aware of what Amazon's fees are. They're not exactly aware of how Add impacts their costs. You know, each layer of fees they're not so in tune with. And what ends up happening is when new fees come into play, they don't exactly realize it. So what happens here? Amazon's new fees have such a big impact on sales, or have such a big impact on your batches and on your costs, that if you are not in tune with it, you'll see your batches be a bit lower, but over time, it's going to get to such an impact that if you don't make a change in your pricing for shoppers, you will end up going out of business. You will end up not having enough money to cover your invoices and your payroll and your next batch of inventory.

Abe (00:06:32) - So my prediction, unfortunate as it is, is that the sellers who aren't aware of their costs are going to continue operating in a little bit of a fog. They'll think that everything is alright during that period while they're operating, and not realizing that they're losing money. The sellers who are in tune with their costs are going to be operating with a high degree of anxiety, because for competitive purposes, you can't raise your prices in an environment where everybody is lower than you. You can't just turn off your sales by being too high. So for competitive purposes, the people who are in tune with their costs have to be price competitive with the people who aren't over the space of a bunch of months, anywhere for three months, six months, ten months. This dynamic is going to play out where the people who aren't aware of their costs lose more and more money without realizing it, and it will come to a head one day when they realize how far of a hole they've fallen into. That's going to end up turning into one of two things.

Abe (00:07:37) - Either they simply close up shop because they can't cover their costs, or they have to demolish all their prices just to get some cash in hand to pay the bills that are in front of them. And that'll just prolong the going out of business. So as that plays out, as those sellers shake out and disappear, that's going to leave the sellers who've been in tune this whole time, who have been saving money and conserving on expenses that whole time. They will be the last one standing, and then they'll have the position to set the stage for future growth. You know, they'll be the last one standing. They'll be able to set prices correctly, and it'll lead to long term success. And that eight figure threshold we love to talk about on the podcast.

Josh (00:08:21) - Yeah, I love that. So the gist of this is that it's only going to get more challenging for Amazon sellers, the increase in fees is basically Amazon saying you better be perfect with shipping in your inventory, or else we're going to screw you with excess inventory or too little inventory.

Josh (00:08:40) - , so you better be perfect at forecasting, which for a single, owner business. Right. That's really challenging. If you don't have an expert that knows how to forecast and demand a plan, you're going to get hit with a lot of these fees. And so I think it makes, you know, Abe, you and I were talking about this before. I think that challenge a lot of people have stumbled on is that Amazon hit seven figures in revenue, almost mistakenly, so to speak, without a team, maybe a couple virtual assistants, and that's about it. But I think that moving forward, if you're going to continue to experience that success and heaven forbid you want to grow, that you're going to need to establish a team and be able to have experts in very specific fields that are going to be able to help catapult you to that eight figures and beyond. Agree or disagree?

Abe (00:09:33) - , I definitely agree with this. I would say two things. I would say, number one, you need people around you.

Abe (00:09:40) - If it's not yourself, you need people around you who understand all of the technical pieces of selling on Amazon. But even beyond that, to a strong degree, you need to be flexible in understanding how each piece of Amazon works together.. There are a lot of people who have a passion for an idea, have a passion for a product, and they just want to bring it to the world. So somebody will come out with,, a new clothes hanger or a new pizza slicer. And they say, this is going to revolutionize pizza slicing. I love making pizzas at home. And this makes it four seconds faster to serve it up to everybody. And they figure that all of the rest of the details will fall into place. Well, if they are not learning about cost of goods, if they are not learning how to time out the payments to their factories, if they're not learning how to cover all of the expenses, if they're not, you know, A to Z. There's a million pieces that work together.

Abe (00:10:35) - If they don't have a good understanding of how those things work together, even with a team, it's going to be hard to succeed. They need to know a little bit about everything and be able to have an educated conversation with the people around them. You know, one of the things I see is that a lot of times when we have to make a decision, both options aren't great. It's simply the case, you know, you have to choose between two not great options. And in order to make that choice, you have to understand the picture really, really well. Even if the person next to you can lay out those decisions, you still need the understanding to be able to help with the decision, if that makes sense.

Josh (00:11:15) - Yep. No, I completely, hear you on that. And I echo those same sentiments. You've got to be you've got to know your stuff enough to be dangerous, but you don't yourself have to be into the weeds of everything. But you do need to understand how it all works together.

Abe (00:11:31) - Yeah. It's like famously within my company., I mean, and I'll tell everybody this, I am not an Excel magician. You know, there are people who know how to pivot and plug in formulas and turn numbers into pictures., I absolutely am not that person. I am more of a top line picture person., more of setting the path and having everybody do the things effectively. So I know that I need to have Excel experts on my team, and I know just enough to drive them crazy with requests that can be done even if they're not easy. So although I can't do it, I know enough to steer the ship.

Josh (00:12:10) - Yeah., that's a great analogy. I love that. Now, Abe, at the beginning of the podcast, we talked about this painful story that you have where you learned how ad auctions work and you yourself being an expert that people lean on as it relates to Amazon PPC and SEO. I'm interested to hear this painful story that you have and how that's kind of shaped the way you approach Amazon right now.

Abe (00:12:38) - Yes. So it's funny when every time I think about this story, I,, I say, thank God it's many years in the past, but I immediately remember it as though it was right away, you know, as though it happened yesterday, so many years ago, well before Amazon, well before even eBay was powerful. The first place to sell was on Yahoo stores, and the first ad platform was overture. It was an ad platform by Yahoo! It was called overture. They were the first auction platform in which you could set your bids, and the bids would lead to where you want your ad to show up. So after a few months of advertising, we were getting a feel for how the system works, and we had a digital camera we wanted to sell. It was expensive. It was $2,000 back then, you know? So if you think about 2001, a $2,000 camera is probably worth $3,500 now. So we said, we want to sell these cameras. We have inventory. We need to be in front of the shopper.

Abe (00:13:44) - We need to be at the top of the search. So what we realized is that as long as we have the highest bid, we get the first position. And we also realized that the system takes one penny more than the next highest bid. So if somebody bids $3, we pay 301. What did my partner do? My partner set the bid for $100. He basically said no matter what they bid, we want to be right above them. Well, he said it that morning. He forgot about it. And he came into work the next day with a bill for thousands of dollars for that one product. What happened? The competitor realized that no matter how they were raising the bid, we were still in front of them, and they nudged their bid all the way up to $97. So we paid 9701. But because the third place person was only bidding $2, they paid 201. So that's it. They pay 201. We paid 9701. And, it was very painful. There was a lot of bad language being yelled in the office that morning.

Abe (00:14:52) - And, we resolved to never make that mistake again today on Amazon, it's a little bit different because it's not as simple as the bid. You also have to be relevant for the product. The product sales history goes into it. There's a lot more in effect than just setting a bid high and getting a position you want, so you can't really duplicate that exactly. But understanding how your dynamic connects to your competition, that is the lesson that has lasted.

Josh (00:15:20) - Yeah. No, I think that that's super important. So I mean, you've generated sales over $1 billion,, throughout your career, which is quite impressive with all of your clients. So to your clients that are coming to you now and needing help on Amazon and just improving sales. Can you walk me through, like, what are the strategies and tactics that you're employing to help these other sellers grow their sales and improve their listings?

Abe (00:15:48) - Sure. So we go through a lot of things. As you can imagine, there's a lot of moving pieces on Amazon.

Abe (00:15:54) - We try to understand how a brand is doing with all those moving pieces, and we try, of course, to help the brand improve all those pieces., our, our area of focus is PPC and advertising. But of course, everything connects to how well that does the quality of the listing, the conversion rate, how often people come to the page and then end up buying it, as opposed to how often they come to the page and leave the page, etc.. So there are a lot of moving pieces, but of course we have to look at the picture and give a plan of action for growth. Almost always, that plan of action at the beginning when I start with a brand is prioritization is needed. So what I typically see is a brand will have ten SKUs, 50 SKUs, you know, many, many more SKUs than that. And what they're trying to do is make every SKU a winner. When in reality, if you look at their business report, you will almost always see one, two, five SKUs that are driving almost all the sales and a very long tail of products that are selling much, much less.

Abe (00:17:03) - So we explain to the brand that if you're selling 225 pieces a month now, or 22,000 pieces a month now, it is much easier to get from 225 units to 400 units, which represents 175 pieces extra than it is to get from 8 to 50, which is only which is only 42 pieces extra. The 175 is much easier than the 42. And then multiply that hardness of work by the top few SKUs and by the bottom 80 SKUs. So prioritization is number one. And what we do is we try to give them a framework that lets them focus on their business., I call it the four buckets. So bucket number one, your top sellers, you have to make sure that those top sellers are always being given love and that they're always being pushed as hard as possible. So they keep being your top sellers. You don't want to take your eye off the ball. The next group is the top sellers. Everybody has SKUs that are almost top sellers. They're all right. If you gave them maybe a little bit more attention, they could be.

Abe (00:18:15) - And we identify those and give them a harder push than what they're getting now. The third bucket realistically, is all the rest understand that they are all the rest and don't dedicate a lot of your attention to it. Maybe not zero, but for sure not a lot of your attention. It's not worth most of your time realistically. And then, of course, the fourth bucket, which sits outside of your current inventory or launches a product launch, is something where you don't have any history. You have the expectation, the anticipation, the goal of being a top seller. So we drive it hard at the beginning for a certain amount of time until we figure out where it lies with the rest. And all of that goes towards prioritization. That's like number one towards growth.

Josh (00:19:01) - Yeah, I love that breakdown. I love that you have those four buckets. You know, it's taking that 8020 principle and saying, all right, 20% of my assets are generating 80% of the revenue, right? How do I focus on those and give them a little bit more love? So I'm interested to hear your perspective on this.

Josh (00:19:20) - A because I feel like as we've been testing this on our own,, account right now, we're seeing mixed results with PPC. We are seeing that just because I want to spend more on that ad, I'm seeing that, you know, it's just cannibalizing a lot more of our organic ranking. And I'm just losing profitability. I've also seen cases where, again, we have 1400 different SKUs. So I could go on for case study after case study. Right. But,, I've got other SKUs where, you know, we have a PPC conversion rate that is above the market average according to brand metrics. Right. But yet when we push PPC and we do top of search placements, it doesn't move the needle organically and we're just still stuck in the middle of page one., so I'm interested to hear what do you see working? Not working., and I even have a scenario where for one of our product categories, we turned off all ads, reduced the price by 30%, and that thing ranked all the way up to number two, number three spot overnight.

Josh (00:20:30) - And it's been there ever since with no ads., and it's still crushing it. Sure., so I'm interested to hear your perspective because it's a challenge for every Amazon seller.

Abe (00:20:41) - So yes. So what you said is.

Abe (00:20:44) - An interesting thing. And, it connects to my overall theory of Amazon. So the overall theory of Amazon is that Amazon is not going to tell us exactly how their system works, and their system does not work the same in different spots. So,, you described 3 or 4 different scenarios in which the standard action gave you different results. So you drive PPC. Sometimes it cannibalizes organic sales, you drive PPC. In general it does drive sales, you drive PPC. It has no effect at all. Not cannibalizing, not standard, not any result. The price is the lever. All of those things happen, and probably a few more that if we took enough time to look through our histories, we'd find a few more scenarios. And that leads me to the overall theory that there isn't one unifying system, there isn't one unified idea, there isn't one unified set of actions where you do as it leads to be don't think that, and you won't drive yourself crazy trying to understand why it's not happening.

Abe (00:21:55) - When you sit, when you work with the framework that different things are going to happen in different situations, you just flow with it without driving yourself crazy over why it's not working the way it usually does. And what we do is another form of the 8020 rule. We run our standard advertising systems. We know that it's going to work most of the time. We work to hit our metrics and goals. We work to hit our ACOs. We work to hit our tacos, we work to hit our overall sales numbers. And as long as those numbers are hit, we won't worry too much to drive into the 19th level of data. Hit your numbers. Do it effectively, use your time efficiently, and then when it's not working, we will try one of three, five, eight different things to try to make sales happen. And ideally one of those things will work. We won't try to overanalyze why. The other thing isn't making it work as usual. So simple as that. Go with them.

Abe (00:22:55) - The shortest way to say it is to go with the flow., but it definitely goes against the idea that there should be a system that works all the time. There isn't a system that works all the time. Knowing that gives you the head space to be flexible.

Josh (00:23:12) - Yeah, I love that. And I think that so many I think that's a really big mindset shift that people need to have. Because if you go ask 100 different Amazon sellers the best PPC strategy, guess what? You're going to get 100 different strategies.

Josh (00:23:27) - Maybe 1 or 2, right?

Josh (00:23:30) - And you're going to get just different perspectives and opinions. And I like what you said. I don't believe there's one right way. There's only one way to move products on Amazon. There's a lot that goes into it. So. Hey, I'd be interested to hear your thoughts on this. Let's say you've been trying your standard PPC approach, right? But let's say the game is changing on Amazon and it's no longer working for you.

Josh (00:23:59) - What are some of those, you know, you rattled them off., You know, 8 to 10 different things that you could try to go with the flow to see, like, well, this didn't work. What about this then? What about that? What about this? Can you give me just some of those things or different levers that people could pull? If things start to go in a direction they don't want it to be going?

Abe (00:24:22) - Sure. So there's.

Abe (00:24:23) - Two, I.

Abe (00:24:24) - Guess there's two things and they're sort of flavors of the same thing., number one is try to identify the thing that changed, within my agency. We have one specific tool which gives us a comparison time frame over time frame on every single detail within the account. So every single keyword conversion rate, placement modifier, every single detail, we get it in an enormous, like a 16 megabyte spreadsheet, which, you know what a 16 megabyte spreadsheet is. And,, it'll cover two different time frames and we can see what changed from one time frame to the next.

Abe (00:25:05) - We can identify the biggest impacts. And from there the investigation goes. This is number one. Number two is really the tried and true simple thing of looking at the competition. At any point in time. There is a concept called benchmarking.. Hopefully you've heard of it. Benchmarking is the simple idea of looking at the top competitors, seeing what they do, copying what they do. And before you try to be innovative, at least do what the top guys are doing. So we have tools that give us keyword ranks these days for all of our competitors. Look at the competitors, drive down into what's converting for them, where they're spending their ad dollars, and most of the time we will find a hole that might have been tiny six months ago, but it became an impact point. So there might have been a keyword that had very few searches at the beginning. It didn't. It wasn't worth a lot of focus, and month over month something might have happened, there might have been an influencer video about it, or it might have been a seasonal keyword, or, you know, any one of a thousand scenarios.

Abe (00:26:15) - That single keyword turned out to be impactful. Well, when we look at our competitors, we see what that impactful point is, and then we can lean into it and find that hole.

Josh (00:26:27) - I love that. What tools are you using? Maybe these are internal tools. Like what tools or software are you using in order to track a competitor's organic ranking? How are you tracking what keywords they're advertising on or not? Because obviously you don't have access to the back end of their ads. So how are you learning all of that? Yeah.

Abe (00:26:48) - So we typically use two tools., number one is Data Dive, created by Brandon Young. That gives us a very clear snapshot of what the competition is doing. And it adds in some of their own ideas about how words influence those positions. So besides giving us the position of all the keywords against our competitors, it will give us an idea of how changes to the content might influence that keyword ranking. So that's number one. And of course there is the tried and true, the quick and dirty but effective helium ten.

Abe (00:27:25) - , helium ten is,, the gold standard for most keyword research. We use it in our system., if you go all the way to the top level of helium ten, which is called elite, you actually get historical keyword data. So we can go, I can see not only what the status is today. I can rewind to three months ago and pull that data. So that's an amazing piece of,, it's an amazing layer of information that helps us make decisions. Those are definitely the top two.

Josh (00:27:57) - Awesome. And does helium ten show you,, what keywords your competitors are spending.

Josh (00:28:04) - On that have?

Abe (00:28:04) - , one if you use Cerebro, one of the columns is sponsored rank. So you see what their sponsored position is for that keyword. And that tells you obviously that they are spending on that keyword.

Josh (00:28:16) - There we go. Yeah. Awesome. Awesome insights. I love that.

Abe (00:28:20) - It can drive you crazy sometimes, because there might not be a correlation between what they spend on and what they're ranking on.

Abe (00:28:27) - But obviously we try to analyze and interpret the data effectively.

Josh (00:28:33) - So I would be curious to hear your thoughts on the overall market then. Right now, what are you seeing working right now?, for PPC and with all of your clients, is there a better strategy that seems to be working? Well right now, is it top of search? Bid adjustments seem to be doing really well. Is it auto or broad? Campaigns are getting a little more love from Amazon. Any quick hitting like PPC wins.

Abe (00:29:00) - So the biggest.

Abe (00:29:01) - Things that someone can do, of course we have the quote unquote strength standard strategies. We can spend an enormous amount of time talking about what standard includes, but the things which I see many sellers not taking care of. So if we're looking for things that the average listener can optimize, the things that I see many brands not on top of are number one placement modifiers. If you open up any campaign in Amazon before you get into your ad groups, on the left side are the settings for the campaign, and one of the settings is your placement modifier.

Abe (00:29:39) - So they'll give you data about how your campaign is doing at the top of search in the rest of search and for product pages, and they give us the ability to spend more for the placements that work best. Leaning into that is a really effective way to drive sales. If you are making the most sales and the most profit and the best ROI at the top of search. Adding a modifier to tell Amazon hey, I see Amazon. I see we're doing great. On top of search, you can take even 10% more than what my bids are. As long as I show up on top of search, you can take 2050. You know, you can go to hundreds of percentage points in terms of what you'll allow Amazon to take over and above your standard bids. Leaning into that is definitely a piece of growth., the second thing goes back to the prioritizing that I spoke about earlier. One of the challenges, especially with people that sell more products, is the number of campaigns that are in an account could become overwhelming and hard to manage.

Abe (00:30:43) - You can easily get dozens, hundreds, even thousands of campaigns in an account, and they're all needed. None of them are really extra. So what becomes super important is a good way of organizing them. And when we start with a brand, a good amount of the setup is simply organizing the ads that exist., we do the organization in two ways. Number one, we set up portfolios. So the portfolios are essentially a folder system in which you can put groups of ad campaigns. Sometimes we'll group them by individual product, sometimes by a group of products, sometimes by a type of campaign that has a special goal. Each account has its own needs and we'll set it up. But that lets us look at groups of campaigns and see whether they're achieving the target for what that group should be doing. So that's number one. And then of course, is the,, campaigns and group names themselves. There are a lot of details. And the more you know about a campaign, when you look at it quickly, the better you're able to tell if it's doing what you want it to, and the better you're able to make adjustments or see the points that need adjustments.

Abe (00:31:53) - So within an account, you might have certain campaigns where you think you should be running at an 8 or 10% a cost, like for the campaigns that have to do with your own brand name. And you also might have campaigns where you're trying to take sales from your competition, where you work with their brand names and their assets. But because you know that that's an uphill battle, you will tolerate a much higher ACOs. You'll tolerate 20 or 30, sometimes even 50% or more. Knowing that you're spending a bit less, you're chipping away at the competition. It's part of the picture, as long as it doesn't take up all your money. But if you just look at an account and set a filter for 5% or a filter for 50%, one way or the other, those two get lumped together or filtered out, and you can't immediately tell where something is not working as expected. By putting your target across right into the campaign name, you can see right away if that, if that cost is not matching what you want.

Abe (00:32:51) - And there's, you know, within the campaign names that we work with, I probably have 9 or 10 different points of identification. We'll put where the keyword came from. We'll put the target cost, we'll put the date. The campaign has started. Because even though Amazon tells us the date in one of the fields, having it inside the campaign name is important when you download reports. So I can tell if a new campaign is performing not where I want. I'm more tolerant than I am with something that is 18 months old and every single field has its own value, but it lets me make decisions quickly and at scale. I can look through an entire long spreadsheet with hundreds of campaigns and every single one. The metric that I want to look at, I can tell whether the campaigns are hitting it effectively or not.

Josh (00:33:42) - Yeah, I love that. I think that the campaign naming structure that you just shared is literally. Game changing. I think that makes so much sense, having, you know, the start date in there, having what your target acres are and what are your goals.

Josh (00:33:57) - Is it top of search for these particular keywords? Is it not? It allows you to optimize a lot more efficiently, like you talked about. So I think that that is something very easy to overlook because it's like,, it's just a naming convention. That's not fun. Exciting. Come on, Abe, give me something sexy with some PPC hack. But it's the simple stuff at the.

Josh (00:34:20) - End of the stuff is.

Abe (00:34:21) - Not just simple, but it is. It is difficult if you're not, if your brain is not wired for it. You know, one of the things you mentioned, of course, the goal for placements. But one of the things that we put in our campaign names is whether it's an experiment or not, a lot of times we test things, and if it's an experiment and I label it as an experiment, I'm willing to tolerate all kinds of crazy things happening with that account in order to see what that thing does. But I also know when I have an experiment plus start date, I shouldn't be seeing any data 60 days in.

Abe (00:34:52) - Why? Why hasn't this experiment from five months ago stopped yet? You know, hopefully I don't yell that too often.

Abe (00:34:59) - It's like.

Abe (00:35:00) - , but that's a data point where you know the purpose and the start date gives you guidance on what you should be looking at.

Josh (00:35:08) - Yeah, I love that 100% echo that. I think that's a brilliant idea and something that I hope people are taking notes on . Go back and rewind. Listen to how Abe literally just spilled the beans of everything, of how he sets up his naming convention and why. And I mean that that's 80% of the work right? There is just understanding,, which campaign is doing what? Abe next question here, what with your clients? We've heard a lot of different mix things. People say back in the day, five years ago, it was all about ACOs. What's your ACOs? Give me your cost number. Your account should average around x percent. Right now everything seems to have flipped and everybody's like, oh, don't pay attention to ACOs.

Josh (00:35:55) - Pay attention to tacos. Your total advertising cost to spend. So. Abe, which metrics should people be caring about? And then my next question on top of that would be what are the average market averages that you're seeing right now? And I know it varies based on every category you're in, but just something that people would like, maybe like pinpoint to and be like, wow, I was at 50% tacos. It's way too high, right?

Abe (00:36:21) - So tacos is number one. Of course, that's the ad spend that goes towards the product. And when you know your margin on the product, you can set your tolerance for what your marketing cost is. That's the last cost after everything has been factored in. That's where you have discretion. So tacos are super important because it ties to profitability. The second thing that we look at, which is the primary point of data, is conversion rate. It's as simple as that. Our work in terms of advertising and marketing is to put the product in front of the shopper when they might not have seen it otherwise, so that they learn you exist and it will lead to sales.

Abe (00:37:03) - But if they are not clicking on the thing you show in front, the ad will stop showing. If they are not buying after they click, you will stop showing. It is super important to have a listing and a presentation which is appealing to the shopper and makes the sale as soon as you get the chance. If we give you the chance and you don't make the sale, this is a spiral that just goes more and more downwards. So the conversion rate at each layer is the super important thing. Those are number one and two. They tie to each other. Everything else trails behind it.

Josh (00:37:39) - How do you determine what's a good conversion rate versus not?

Abe (00:37:43) - There are standard metrics. So for conversion rates the bottom floor is somewhere between. I'm sorry for the click through rate. The bottom floor is somewhere between 0.2 and 0.3%. If you are below 0.2% or even at the bottom of that, there's a serious issue with your listing. People are seeing that little postage stamp sized thing. They're seeing your title, they're seeing your price.

Abe (00:38:10) - They're not even interested in clicking over 0.3%. You are at a minimum good enough. And of course, as you get higher, it shows that you are a market leader. Market leaders can have conversion rate click through rates anywhere from 0.9%, which is triple that baseline. And I've seen them as high as sometimes 1 or 2%, depending on how relevant you are. If you're Diet Coke and there's a search for Diet Coke, it's probably 40%, not even a fraction of a point. It's like 40%. So those are the standard metrics for click through rates, the standard conversion rate for, for the purchase. When somebody gets to the product page and there's a session and they make a purchase, that standard rate is somewhere in the 15 to 18% range lower than that. Something is off. They're coming, but they're not buying higher than that is ideal. Again, if you are what the customer is shopping for, or you have a great thing that as soon as they see more about you they want to buy, you can be as high as 30 or 40% or more in the exceptional cases.

Abe (00:39:21) - , this is a spot where there is a lot more variability than in the click through rate. So in this space, if it's a product like apparel, where people will click on many different versions of a, you know, of a Green Day t shirt before they decide on the print they want, conversion rates and click through rates will be lower because they're clicking on a bunch of different options before they decide. But there are reports in Amazon Search query reports that will tell you what the top people are getting in terms of click through rates and in terms of purchase rates. So you can get baselines from there in terms of where you want to be.

Josh (00:39:57) - Awesome. Yep, it makes a lot of sense. I love those kinds of thresholds that you gave us and just kind of like general market averages. And obviously I think the one key thing is that even with our products being very design based, we see conversion rates a lot lower than what you had talked about, similar to apparel. Right? Because it's very brown centric.

Josh (00:40:16) - I'm looking for the right design. So Abe, any what's a ballpark metric for tacos and ACOs?

Abe (00:40:24) - , depends on margins of course. But the most common settling point these days for the quote unquote average brand is somewhere between 9 and 18%. Usually in the low to middle teens is where we're seeing Taco settle.. There are products in which margins are very tight, and we have to get tacos below 5 or 6%. We are often able to do that just by structuring everything to be low bid and low spend. You get there. But the most common situation in which you are actively driving for sales is in that low to upper teen space.

Josh (00:41:06) - Okay, awesome. Good point of reference. Do you pay attention to Acos at all?

Abe (00:41:12) - , we have to because that is the first metric, you see. So when it's ugly, that leads to wondering why it's ugly.. Also most commonly and ugly, Acosta does lead to an ugly tacos. The situation where an ugly Acosta has fantastic tacos is the exception more than the rule.

Abe (00:41:33) - So I might not use it as the exact measurement of how it's doing. But a good Acosta typically correlates with good tacos. A bad cost typically correlates with tacos. That's not what you want either.

Josh (00:41:46) - Yeah. Makes a lot of sense, I love this. All right, Abe, you've already shared a ton of wisdom with all of us. Is there anything you feel like you haven't touched upon? Knowing that our audience or seven figure sellers, they're trying to scale to eight figures and beyond. Any other PPC tips or SEO or optimization strategies that you think you could rattle off?, for these sellers, that could be action packed and something they can do.

Abe (00:42:13) - I think about it.

Abe (00:42:14) - Comes to PPC and the SEO and the marketing area, I think that the best tip I can give is to rewind this episode because we covered a lot. But the other thing that I can suggest in terms of getting to eight figures is always be adding and launching new products., if you look at any company and I haven't seen your business, but I, I imagine that you're going to see this as true, a significant portion of your sales comes from things you've launched in the last 12 months, and things that have been around for years become a smaller and smaller portion of your sales.

Abe (00:42:51) - New products are vital to growth, and you should always be looking to expand your product line. Always be looking to identify new winners, and always be looking to clean up those products that are losers. If your product mix looks the same as it does two years ago, you almost definitely are selling less than you did two years ago.

Josh (00:43:09) - 100%. Why is that Abe?

Abe (00:43:13) - .

Abe (00:43:14) - Amazon and shoppers like things that are new. That's really as simple as that.. Certain kinds of products you want are the tried and true thing when it comes to Lysol, I don't need the pumpkin spice Lysol that was introduced this year. I want my standard Lysol, my standard Windex. You know, I want my standard T-shirts that I buy all the time. Those are all fine. But when it comes to most things that are design based, that are innovation based, that are new entrants to the marketplace,, people like fresh things. We live in a world which is constantly moving, and people want things which are new and are better if in no other way that they got into our mind recently.

Abe (00:43:58) - Yeah.

Josh (00:43:59) - No, I 100% echo that same sentiment out of anybody that I talked to,, or coach or consult or provide any advice to. I tell them the number one lever for any brand owner is launching new products. And the best way to come to the best analogy for all of this. Take a look at Apple. Okay. What does Apple do every single year there's a new iPhone? Is there a lot of,, fanfare and a lot of,, I don't know, a lot of updates to every iPhone at this point. Debatable, right? Probably not a whole lot. But they're coming out with new computers, new chips. They're coming out with a Vision Pro headset like it is constantly evolving. And my other favorite thing is the story with Steve Jobs, right? Apple was leading the MP3 player space with the iPod back in the day, right? He had the idea of this revolutionary iPhone thing, right? And people are like, dude, you're already the king of the MP3 player space.

Josh (00:45:04) - Like, why would you want to go cannibalize yourself with this iPhone? People don't want that. Like keeping your market share. And we all know what happened, right? He went and disrupted himself and I think he disrupted himself. And now that iPod market share has only expanded massively. Right. Because now it's the iPhone. There's no iPods anymore. And so similarly, right to your point, if you're just relying on those sales from your old products two, three, four, five years ago, you need to be thinking, how am I going to disrupt myself? How can I create my own iPhone that's going to replace this five year old version of a product that I've just been leaning on for way too long? Because if you don't do it, guess what editors will?

Abe (00:45:50) - That's like I said, it's it's it is the number one, one of the number one ways to grow. You can extract more sales from what you've got. That'll give you X percentage. But it's not multiples. Almost always it's not multiples.

Abe (00:46:05) - The multiples come from new products. Yeah.

Josh (00:46:08) - Agreed. Abe. Before we wrap up, I want to go back to the electronics example that you were talking about. You talked about how electronics back in the day were. What is the current, you know, supplement space where it's super competitive, super cutthroat. What did you end up seeing in the electronics space where there were a bunch of people just pricing things even lower and lower and lower, and you're like, I have no idea how you're making money. What ultimately happened in that marketplace? Did you exit it? Did you hold on?, because I think that may be a foresight of what's to come here on Amazon for a lot of different reasons.

Abe (00:46:47) - Though, the peak of that business model was in the 2000, you know, 2000 to 2009 or so when we were selling on our own website, and it was always in flux. We were always trying different ways to adjust our website to make our position look better. We would try to have a website that looked better than our competition.

Abe (00:47:10) - We would try to have language on their website which made us seem more trustworthy. We would have accessories at lower prices, even if the main product itself might be slightly higher., we would sometimes lose money on the product in the hope of selling a bundle or selling enough of a ratio of bundles that the overall is strong. So it was always in flux. There was definitely not one thing, but the end point ended up being that Amazon took over the space completely. So two things happen. Number one, Amazon took over the space. Everybody here knows if you're bringing a brand to market, if you are starting to sell on the world of the internet, all the sales are on Amazon. DTC is not the space it was before. And for sure, DTC is not a space for selling commodities because those people all want to go to Amazon. Even if there's 15 people on a listing, anything that is strongly branded is making their sales on Amazon. So one shift was the shift to Amazon, and the other shift was gating.

Abe (00:48:15) - A lot of the manufacturers of expensive electronics started gating products to the point where they limited sellers to very few. That created a space of strong winners and people who were suddenly completely locked out of the place where the sales happened. You know, we know that if this is if this podcast is happening in the mid 2020s, everybody is talking about,, gating in beauty and gating in other categories. The original gating happened ten, 12 years ago when Canon and Nikon were the first ones to get Amazon to gate things. They were far and away years before anybody else did. They got gating to happen and nobody even followed right afterwards. There's a gap between when they got it done and when Amazon would do it for anybody else. So that was sort of the natural evolution we were able to we were able to be gated for some things, other things, we were gated out and we had to evolve our product mix.

Josh (00:49:14) - Yeah, yeah. Makes a lot of sense. Well, you're always adapting.

Abe (00:49:18) - If you don't.

Abe (00:49:19) - Write.

Abe (00:49:20) - You know, the simple saying is adapt or die.

Abe (00:49:23) - Yeah. I'll give you a story. By the way,

Abe (00:49:25) - You were talking about,, all of the things that you experienced when it's totally unrelated to all the other questions. But, as you were starting the podcast and you were talking about how you experienced all of the things and paying payroll out of your pocket and doing all of those things, it reminded me of a saying, and I had to get it out of my mouth. So what's the difference between the employee and the owner? The employee takes office supplies and brings them home. The business owner takes the office supplies from his house and brings them to the office.

Josh (00:49:57) - Yeah I love that saying. Love that. Well at the end of the day I think it requires a lot of hustle, a lot of grinding and a lot of adapting for sure. And that's the world that we live in. Hey this has been a fantastic episode. Love this.

Josh (00:50:13) - Thank you for your time. But before we wrap up, I love to leave the audience with three actionable takeaways from every episode. So here are the actionable takeaways that I have noted. Number one, we'll start with the first thing. And I reiterate this on numerous podcasts, but this is something you should always be launching. If you've gotten complacent and you're wondering why your sales are struggling. It's probably because you haven't launched a good winner as of late, because the multiple on new products is going to be a lot higher than those other ones. It's hard to resurrect a product that's three or four years old. And so it's important always be innovating, always be bringing something new to the market because you don't know when you're just one inch away from striking that goldmine, right?, but it only happens if you're willing to put some, you know, skin in the game and invest some money on into inventory, launch the product and see what happens. So that's action item number one. Double down on your efforts and build your team around.

Josh (00:51:17) - Launching new products. Action item number two. Getting into the world of PPC. My biggest takeaway from this, Abe, is there's no one right way to execute PPC strategies, and I think that's a mindset shift that I hope as an action item that people take away, that it's like, hey, just because you heard Abe crushed it when he,, did a 900% taco or top of search increase on some of his ad campaigns doesn't mean that that's what you need to go roll out. I think that one of the big takeaways that I noted is that you yourself, even as an agency owner, you're testing and experimenting with new ad types, with new campaigns, and new targets on an ongoing basis. And then in the campaign name, you're saying experiment. And guess what? We're going to see what happens. And you're constantly adapting and adopting and changing with the game because Amazon is changing and Amazon advertising is changing at a very rapid pace. And so you've got to just continue to adopt those changes. So there's no right or wrong answer.

Josh (00:52:24) - I would say it is a test experiment. And, as long as you're trying exactly.

Josh (00:52:29) - You're making.

Josh (00:52:30) - Progress.

Abe (00:52:31) - That was two I think though.

Josh (00:52:33) - All right.

Josh (00:52:35) - , that was what I liked. I like to give.

Josh (00:52:37) - Lots of action items in those. So here's my third and final action item., a is to prioritize when it comes to whether it's just running your business okay, or whether it's PPC management or optimization. Prioritize working on the things that are going well for you. Ride the winners. Double down on those. Utilize that 80 over 20 principle., Abe and I talked about the book. It's called The One Thing.. Make sure that on a daily basis you prioritize the most important things. It's so easy to get caught up in the thick of thin things where if you have thousands of ad campaigns, you don't need to waste your time with the small spenders, right? Focus on the ones that are moving the needle on your best sellers. Double down there. Double down on your business goals.

Josh (00:53:30) - If your goal is to expand into retail over the next 3 to 5 years, what are you doing on a daily basis that's inching you closer to that goal? Because if you don't and you just get caught away with the email, reading the latest newsletter and then getting distracted by a new shiny object, and guess what? Those three years are going to pass by and you're going to say, oh, I'm nowhere closer to my goal than I was when I put that down on a piece of paper exactly three years ago. There's probably a lot of action items there. Anything else that I.

Josh (00:54:01) - Missed at all?

Abe (00:54:02) - I think we got it all for today.

Abe (00:54:03) - Yes.

Josh (00:54:04) - All right. Part two. It sounds like.

Abe (00:54:05) - We need a break when we get to it. Yes.

Josh (00:54:07) - All right, Abe. Well, let me ask you the final three questions. Which are these? What has been the most influential book that you've read and why?

Abe (00:54:15) - The most influential book I think I've read is, Discipline Equals Freedom by Jocko Willink.

Abe (00:54:22) - Jocko is a former Navy Seal, and he's done all of the things, and he writes a lot about business, but he frames it in a military and disciplined time,, you know, headset and reading that book and reading a book about doing the things every day and about being prepared and about understanding that if you don't do the things every day that your competition is going to do it and they will beat you. That is a mindset which is super valuable and super driving. It's a little bit scary, but success requires work and it definitely requires a big piece of paranoia and aggressiveness. Nobody achieves big success casually. You know, there was another book which is not part of the list, but,, only the paranoid survive is, is another book. And,, the concept is simple. You need to be always watching your competition, you always need to be aware, and you always need to be focused on growth. So discipline equals freedom is the mindset book that gives you laser focus.

Abe (00:55:29) - It's a quick ish read, and I read it at least once a year.

Josh (00:55:32) - I love that fantastic C look at you. You're dropping multiple nuggets in there. All right. Question number two A what is a new software tool or productivity tool that you've recently discovered that you think is going to be a game changer?

Abe (00:55:47) - We are always testing and trying and using tools. This is, you know, not special to us. But I have to say that,, it's not a new tool, but it's a tool which I neglected in implementing it was clickup. So Clickup is a task management tool. Basically all the things you do every day get placed into this system. They get due dates and they get completion dates and they get notes. And organizing the business with a tool to make sure things get done has been a game changer. We implemented it about 18 months ago, and I continue to be amazed at how it makes sure things keep getting done. So a thing that has to happen every Monday.

Abe (00:56:33) - Every Monday, that task magically appears in each PPC specialists' to do's and it gets done because all of a sudden, if they don't get it done on Monday, it goes to late midnight Monday. So putting all of the things you need to do, whether it's small tasks or big tasks or projects, having them all, is absolutely a game changer. Get yourself a good task manager and live inside of it.

Josh (00:57:00) - I echo that 100%. One of our first key hires has been a project manager, and we implemented Clickup, and all of it was to do one thing that was to support our one thing, which is launching new products. All right. Last question here, Abe, who is somebody that you admire or respect the most in the e-commerce space that other people should be following in my.

Abe (00:57:24) - That question is for sure a hard one. I know lots of people. I like lots of people., and picking a favorite is like picking a favorite kid. Everybody gives you something different than a little bit in a little different way.

Abe (00:57:36) - But if I had to pick one person, it would probably be Kevin King. So Kevin is a friend. So there is a person I like to recommend to him. But besides that, Kevin is a person that understands more about the mechanics of how Amazon works than anybody I've ever met. He understands how all the pieces work together, how the gears turn, and how one action leads to another thing working. Right., a few years ago, when I first met him, it was because someone said, hey, do you want to come to this session with Kevin King tonight? It's $400, and I'm, like, $400 to see one person talk. He's like, yeah, it's going to be three hours plus, and Kevin is worth it. I said, you know, I'll try it. If this person is telling me to come, I value that person's recommendation. We went and the first thing that Kevin said was, guys, make sure you go to the bathroom before we start because we are going to talk about a lot.

Abe (00:58:42) - And he gave us something like 4 or 800 slides that he went through in this course of 4 or 5 hours. It was more information than I've ever had in one spot before. And in the years since I've met him, I have always continued to learn new things from being around him and from being part of, you know, from being next to the content that he puts out. So that is my number one person, I think.

Josh (00:59:09) - I love that.

Josh (00:59:10) - I echo those sentiments as well. Big fan of the Billion Dollar Seller summit, his hat contest that he does., and obviously his newsletter,, that he's recently come out with. So exactly. I would recommend that as well. Abe, this has been awesome. If people want to learn more about you, they want to,, get in your mind of PPC strategies, maybe use your agency where some people find you.

Abe (00:59:32) - Look, for me, it's as simple as a family on most of the social media places.

Abe (00:59:37) - I spend the most time on LinkedIn, but you can find me on Facebook and Instagram and Twitter, etc. so that's way number one to find me., way number two is to look up my agency. If you go to XP Strategy comm,, you'll be able to see the things we do, learn a little bit more about us. You'll be able to contact us with the forms there. And one thing that we do for brands is we offer a complimentary account evaluation and strategy session. So if you are unsure of how your business is doing, or if you're sort of sure that you could be doing better and want to pinpoint the spots, reach out to me. I'll be happy to help. Take a look and tell you what I think.

Josh (01:00:20) - Awesome! Love that. A very generous offer to you. I would encourage anybody to go take him up on that offer. Get Abe's mind on your business. And that as you can see, he's helped influence over $1 billion in revenue through it with his clients.

Josh (01:00:36) - So he knows what he's talking about.

Abe (01:00:38) - Hey, Josh, thanks so much for coming on the show, I appreciate it.