Aaron Biner, he originally started off selling footwear on Amazon in 2008. Eventually he pivoted to private label and is a current 7 figure seller on the platform. He currently runs his own agency Marketplace Nerd that is focused on helping sellers with consulting and managing PPC.

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

 In this episode of the Ecomm Breakthrough Podcast, host Josh Hadley interviews Aaron Biner, CEO of Marketplace Nerd, to discuss advanced PPC strategies and conversion rate optimization for Amazon sellers. Aaron emphasizes the importance of understanding key metrics like TACoS and ACoS to make informed decisions. He shares actionable insights on balancing PPC budgets, optimizing ad spend, and leveraging data-driven strategies to enhance profitability. The discussion also covers effective pricing tactics, the significance of building strong supplier relationships, and the necessity of continuous product launching. This episode is a must-listen for Amazon sellers aiming to scale their businesses amidst rising competition and costs.

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

Action Item #1: Understand Your Numbers: Utilize tools for SKU-level profitability to make data-driven decisions.

Action Item #2: Test Different Strategies: Experiment with various approaches and analyze the results to find what works best for your products.

Action Item #3: Build Supplier Relationships: Meet suppliers in person to negotiate better pricing and ensure product quality.

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 interview the top business leaders in e-commerce. Past guests include Kevin King, Aaron Cordova's and Michael Gerber, author of the E-myth. Today, I'm speaking with Aaron Biner, who is the CEO of Marketplace Nerd, and we're going to be talking a lot about PPC conversion rate optimization strategies that can help you survive the increased competition and fees on Amazon. This episode is brought to you by Ecomm Breakthrough, where I specialize in investing in and scaling seven figure e-commerce companies to eight figures and beyond. If you're an ambitious e-commerce entrepreneur looking for a partner who can help take your business to the next level, my team and I bring hands on experience, strategic insights, and the resources needed to fuel your growth. If you or someone you know is ready to scale or looking for an investment partner, reach out to me directly at Josh at Ecomm Breakthrough dot com. That's e-comm with two M's and let's turn your dreams into reality. But today I'm super excited to introduce you all to Aaron Biner.

Josh Hadley 00:00:49  He originally started off selling footwear on Amazon in 2008. Eventually, he pivoted into private label and is currently a seven figure seller on the platform. He currently runs his own PPC agency that is focused on helping sellers with consulting and managing PPC. So with that introduction, welcome to the show, Aaron.

Aaron Biner 00:01:05   Thanks for having me. Good to be here.

Josh Hadley 00:01:06  So Aaron will preface this episode by saying, you know, you've actually been working with our team. You've been doing some consulting for us. You know, we have our PPC team that will come to you and ask for your input and ideas to make sure that they're constantly going in the right direction. So anyways, I definitely value your input. And so you've got a behind the scenes look into our business.

Aaron Biner 00:01:26  Yeah. Thanks a lot. Yeah I meet with your team every couple weeks and we go through it. There's I think 4 or 5 members of the team and we look at, you know, how things are going with new product launches, seasonal products, come up, you know, mastermind ways to come up to try to spark sales, look at sales rank, pricing strategies and so forth.

Josh Hadley 00:01:43  Yeah. So with that, I mean, Aaron, you've done a lot of great work, and I think you've got, you know, before we hit the record button, you and I had a really good conversation of things that we could share with the audience that I think can make a significant improvement in their overall Taco's numbers, how to survive amidst the, you know, increasing fees. I mean, we talked about it earlier, but 2024 was probably the hardest year as an Amazon seller. And we'll see what 2025 has in store for everything. But long story short, I don't think it's going to get any easier. I think the degree of difficulty is only going to continue to increase. So with that in mind, Aaron, what are the top things on your mind to help increase conversion rates, decrease or optimize PPC spend to at least maintain profit? Share admits the, you know, the Amazon fee increase.

Aaron Biner 00:02:25  Yeah, it's really important to know what your numbers are. And so one of the big ways we can reduce we can increase our profits is either decrease the amount of money we're spending on our profits, our cost of goods, or the amount of like promotion we're spending to get traffic.

Aaron Biner 00:02:38  For most categories, there's only a certain amount of sessions that you can reasonably hope to get. So if you're selling stationary product, if you're selling a cream, a hand lotion, whatever the case may be, there's only a certain number of customers coming to that particular keyword or the grouping of keywords during a certain time of the year or even year round. And so your job is to try to get the most amount of sessions, the highest market cap. You can get that product and try to convert those people. A lot of sellers have been kind of brainwashed into thinking that they have to shovel as much money into PPC as they can possibly get to get as many sessions as they can, but in a lot of cases, those are sessions they would have gotten any way organically. Frequently, there's a lot of times where we see an organic placement right next to a sponsored placement, and so all that's happening is people come to a term and they decide whether they're going to go to the sponsor one or the organic one, and it's like a visit you would have gotten otherwise.

Aaron Biner 00:03:24  Anyway. So what we've been doing with a lot of clients is kind of looking at, you know, when they have a higher tacos, it's like ways that we can cut down their campaign budgets. We'll usually do that by looking at the average cost and the average conversion rate. The first thing is to ask is if the budget, if the bids that they're placing are reasonable. Are they reasonable bids or are they just low bidding to get poor traffic? So you want to get the best quality traffic you can get that requires a reasonable bid or a higher bid. that gets that traffic. And then from there, once you find the best place to convert at, typically what you want to do is like if if it's over the average, a cost on the account, let's say 30% is the average for that particular product. And you're, you know, you're spending $100 a day on a particular campaign. It's $1,400 over two weeks. And you're, you know, the a cost is too high. What you can do is, you know, slow down the impact it has on your tacos by lessening the budget on that.

Aaron Biner 00:04:10  So if you're spending 100 a day and you don't like that particular amount that it's, you know, going into your tacos, reduce the budget down to 75 a day. And so what you'll find is that it'll force people to go to your organic placement. Your ads won't run all day. Another thing you can do is day parting as well. If you have enough data, you can look at, you know, the times of the day that you're making the most sales and use a tool like Scale Insight to turn your ads on or off for particular grouping of campaigns related to a product. That's another way to kind of reduce the spend you ideally want to be, you know, making sales when when people are actually on the site. But remember that day parting, you know, it needs a lot of data in order to be able to interpret that data and see if it's if it's something that you won't even want to try. Because like, even if you have ads running at 2:00 in the morning and there's no traffic, there's also no clicking and spending really being made.

Aaron Biner 00:04:55  Another thing people can examine is price reduction. And a lot of people say like, well, I don't have the margin. How can I reduce my price? In some situations, you could be kind of a mid-pack contender. you could be number ten and number 11 or whatnot. And you look at, you know, who's ahead of me, and they're all people with cheaper prices. We've seen some situations where, you know, we had it with one of the products we were dealing with, with your team, where we were ranked number 11 or 12. And the team was like, here's the keywords that matter for this particular product. We're not moving up and down, and we're spending $800 a week on PPC. And I suggested them, well, you're the most expensive option in the top 15. Why don't we reduce the price $3 and stop all PPC altogether, or run very little PPC, meaning take the budgets way, way down. And so we did that. And by the next week we were number seven.

Aaron Biner 00:05:42  And then we're number five. And then it just kind of stabilized where we were in the top, top five, which is a better position than being number 12 and spending $700 a week. We were making more money with a lower price and no PPC than then, we were dumping hundreds and hundreds of dollars in and trying to like, you know, die on that hill of having a higher price, so to speak. Yeah, those are big. Those are big things. And then the number three thing is seasonality. Not all products sell the same year round. If you're selling pool floaties, you're selling, ski equipment. Don't run PPC in the off season. Or if you're going to run PPC run very, very, very little, like literally 5 or 10% of the budget you would normally run. the conversion rates for those products are through the roof during their seasonal time. We had a client that sells camping stuff. I won't go specifically about what the camping stuff was, but it's like, hey, why am I not moving the same amount of camping stuff in December and January and February? Well, because it's freezing cold outside in most parts of the country, in the US, where it was a US market seller and people aren't going on a camping trip there, and we look at the data from like a helium ten or a jungle scout or seller sprite, and you can see, you know, when for the main keywords, camping products, this type of specific camping product and so forth.

Aaron Biner 00:06:51  When are the spikes. You can even look at Google Trends winner people actually going camping. That's when you need to have your ads full. You know, all to, you know, foot pedal to the metal all the way down full. You know, as much budget as you can afford as many sessions as you can get without overspending. And, you know, other times of the year you want to be more selective. And that means dialing budgets way down ten, 20, 30, 40% of what you would spend in the in the on season or the, you know, the real season or, cutting back the number of keywords. If you're running 40 or 50 keywords, maybe just keep a few keywords on in that off season or that slower season. Obviously all products are different. Some products are more seasonal than others. If you sell, things that are could go well at a holiday party, like foods like if you sell peanuts, walnuts, almonds, those type of things. They're a big thing that people put on platters during the holiday season.

Aaron Biner 00:07:41  Your business is going to go through the roof when people start gathering together for the Hanukkah, for the Christmas parties, the New Year's parties. And so with that in mind, that means that people or their wallets are literally open, their conversion is a lot quicker, they're making decisions quicker. And so you have to be aware of that. You have to have the stock to manage that, and you have to just be able to run more sessions when you need to. So just be aware of seasonality. I think those are three major things. At six, seven, eight, even eight figure sellers could see and implement.

Josh Hadley 00:08:09  I love that. So, Aaron, to unpack everything because you just dropped a lot of golden nuggets on everybody here. Okay. So I'm going to jot these notes down okay. So number one you talked about PPC spend and managing your PPC spend to optimize it to say like what is my organic sales percentage versus my PPC sales percentage? You mentioned that oftentimes you need to consider like, are you actually just like cannibalizing your own organic sales that you are going to get, you know, if you're got the number four ad spot and then you've got your organic listing right, right next to it, like, do you really need that ad spot? and I think it varies for every single niche makes such a big difference.

Josh Hadley 00:08:49  so that's number one. Then you went into number two talking about how you need to understand your true profits. So is it more profitable to decrease your price even though it's counterintuitive, decrease your price, see a boost in organic ranking and increase the number of organic sales that are happening while turning down or even turning off your PPC spend, you can.

Aaron Biner 00:09:09  I want to preface that with. Sometimes when you lower the price in a price sensitive market, what happens is if you were selling for 1399, you may have had a conversion rate of 12%, and then you go to 1199 and now you have an 18 or 19 or 20% conversion rate. So you're just going to get more rank by getting more sales organically. So that's why you're moving up.

Josh Hadley 00:09:27  Yeah. Yeah. Exactly. So it's a you know it's ultimately finding the price elasticity. Absolutely. Right. And where do you ultimately make the most profit. And then last but not least, you talked about seasonality. And one thing that we didn't touch on, but I think we'll go deeper on is like how do you manage the inventory? Right.

Josh Hadley 00:09:42  you know what, if you have excess stock, you know, I think it's very judicious to spend while it's in season, but then really cut back when it's out of season. And so Aaron, with all of that said, here's what I think is the underlying question that sellers need to know or they're going to be interested in asking is like, okay, so how do I track all of this? This sounds great. but how do I actually get to skew level profitability so that I can actually see this was my organic sales percentage. This was my PPC sales percentage. Is it better for me to turn off ads and lower the price? Or, you know, all of these factors that you just talked to us about, great ideas, but they all need to be data driven like decisions. So what data sets are you using and how you make these calls?

Aaron Biner 00:10:22  I'm using scale insight personally. you can track tacos, which is the most important stat on Amazon on a, on a parent level, on a skew level, I know some people also use using Microsoft, right? You can create a system where you can, you can pull in data from all different places.

Aaron Biner 00:10:38  What's that system called again? Josh, the power BI. Power BI, that's really for more advanced people. And you really have to know how to use filters and so forth. But I like scale inside. Some people too, are using cellar board, I believe, to pull that data in, but I'm really a scaling guy to be able to tell you the truth, as long as you input your Cogs and you have a reasonable estimation of your freight, it should be completely accurate.

Josh Hadley 00:11:00  I love it. So there's there's some great tools that you recommended there. And we had on the podcast a few episodes ago, was the CEO of intent wise. Now, again, not a cheap solution, but this brings in five different data sets, especially through Amazon Marketing Cloud, that can help you make more informed decisions. In my recommendation on that, one was, hey, if you're selling like a supplement or something that you have like a subscribe and save or there's a high repeat order value, you need to have the sophistication to know, yeah, I'm willing to lose money on the upfront my first sale, because I know I'm going to make it up on the LTV to the customer.

Josh Hadley 00:11:34  And, you know, Amazon Marketing Cloud can help you diagnose that. They can track the entire purchase journey, which is really cool.

Aaron Biner 00:11:40  Yeah, I think the, the, the, the products that have the consumables in particular, it's a completely different game than someone who's selling you a shelf or a desk or a chair, a one time seller, or maybe the best they hope to get you on a mail. Add your name to a mailing list, or they might sell you something else down the road, but it's limited with the consumables. The CPCs for the PPC tend to be way higher. People are willing to spend like crazy to get that, get that lifetime value, a lifetime lifetime value customer. And so people will spend through the roof to do that for sure.

Josh Hadley 00:12:11  So Aaron, let's let's back it up and go to step number one again. Let's talk about those PPC optimizations. Lowering budgets to increase profitability to make sure that we're not, you know, cannibalizing our organic sales. Can you give me a few case studies here, whether it be you don't have to call out specific brand names, but from your clients that you've been working with, what have you seen working there? And do you feel like this is kind of a tried and true strategy?

Aaron Biner 00:12:34  Well, before I go into the example, one thing I want to say is I'm not a proponent of lowering bids.

Aaron Biner 00:12:39  Most people say, oh, I have a high eight cost, but at my great conversion rate I'll lower bids you can lower bids to some extent, but the idea is you want to pay. You want to bid as low as you can, low can go and get the highest conversion rate. Amazon's a conversion rate and total sales on per keyword driven platform. If you have a product like, I don't know, box cutter or something, whatever it may be, Amazon wants to see that whoever they're giving a top spot to is the best converting product at that keyword. They want to see that you're making the most number of unit sales or total dollars generated on that keyword. And so it favors anybody who does that. So you need to try to do is bid reasonably find the best conversion rate, slowly inch up bids. When a cost gets a little bit out of control, you can start to like nudge those bids down a little bit. Keep the keep the conversion as high as possible. You can look at adding insights and planning in your, ad console to see what the average is for for a particular, niche.

Aaron Biner 00:13:32  Like if you're selling box cutters, there's usually a subcategory. You can kind of see what the average median is with the top performer in that category is. And so try to keep bids at a level where you're keeping that type of conversion rate roughly going. So when you find things that are converting, great. But it's not like within your budget because the cost is like way higher than what your margin is dialing back the budget is a great way. So your ads essentially don't run all day. You're pumping as much air into the hot air balloon as you need to pump in to keep your rank high, but never pumping in too much. What you can do is you can measure week to week the amount of sessions and the amount of units that you sold for a particular parent listing, or even just for the entire. For a skew. It depends on how many variations you have, but I like to look at the parent because I believe that there's halo effect. So if you run ads to the blue version of your product because it's the best seller, there's also people who will come to that and then go and buy the red or the yellow and the white.

Aaron Biner 00:14:22  So it's like to me it's like, what is the total parent generating in terms of unit sales? What is the generating in terms of total sales. And then so if if you're at a 30% a cost and your tacos is a bit high, like it's at 20 and you want it to be between 10 and 15. Go find the campaigns that spent the most money that were over 30% a cost, and figure out the total amount that you're spending per day average, and go look at your budget and take that number down 25 or 30%, because it's having the most effect on your spend. If you take it down, then it should, in ideal force people to buy from your organic. At the same time, you want to use tools like a data dive, like a data rover to track the best keywords for your product. You don't have to track every single one track the best 10 or 15 and see where that's going. There's a color code on each of those programs that go from like red to yellow to green, and you want to keep your keywords as high as you can.

Aaron Biner 00:15:12  If you're if you're spending lower and it's affecting that you're going the wrong direction, you might have to increase it. And so the idea is to try to like walk this tight wire between profitability, keeping key ranks, keyword ranks high and not overspending and try to get your tacos within whatever the level of suitability is. Obviously for every seller. They're they're sourcing it different, different margins. And so for some people they might sell an expensive product. And they're like, we have to be in a tacos of 5 to 7%. Another person, they might have a humongous margin of 60 or 6,070% after all fees. And they might be like, I'm cool with having a 2,025% tacos. And again, another thing that comes into play is are you in launch mode? If you're in launch mode, you may be willing to have a really high tacos if you're trying to get more customers for subscribe and save. You may be willing to sacrifice that to to get more customers that will eventually allow you to have this like reoccurring income.

Aaron Biner 00:16:02  So I think those are all big factors that you have to consider when figuring out whether you want to cut budgets or not.

Josh Hadley 00:16:07  Yeah. Aaron.

Josh Hadley 00:16:09  You gave so much for the listener to kind of chew on right there. And I would encourage the listeners to go back, push the rewind button and slow this down to one. I know I always listen to my podcast on like two x, but go slow on here because Aaron shared some very actionable strategies that you can implement here. But before you just blindly, you know, start cutting budgets like do what Aaron said. Like you've got to be measuring the data. Yeah. I mean, step number one is you've got to make sure, like you can see causation or correlation with whatever you're doing. And you can only implement one test at a time. Is that the way you kind of approach things and it's not like, well, we cut budgets. Then we also changed our main images and I don't know your thoughts.

Aaron Biner 00:16:46  I definitely think that when you mess with price or content on page that you like, let's say you launch something that's not performing well.

Aaron Biner 00:16:54  there's a time and a place to make what I like to call wholesale changes. Like I'm going to change the images, I'm going to change my PPC strategy, I'm going to change. That's kind of a like throw it at the wall Hail Mary kind of approach. And so if you launch something new and you have a ton of stock and it's sitting in Amazon's warehouses, you might have to try that. You might have to do that. But otherwise if you're a stable product, if you're mid-pack or of your top ten, but you're not in the top five and you're trying to get to the top five, maybe those are the places to make the subtle little changes changing your main image, changing your secondary content, or the second and third, fourth, fifth images, changing your product video. Those will have less effects. So making little changes and measuring week to week with seasonality in mind. If your product is seasonal and and other things in mind too, is an important thing. I think what people don't understand, and this is kind of like what my background was a long time ago.

Aaron Biner 00:17:38  I used to race radio controlled cars, model cars on a racetrack, asphalt and off road. When the temperatures would change outside, our cars would behave differently. We have to make changes to suit the track to suit the conditions. That's what Amazon sellers don't realize with their ads. They have to make changes like they're an F1 car to the track conditions. When you see F1, do they run the same tires in the rain? No. Do they run the same tires in the heat and the cold? They're constantly changing what they're allowed to change within the rules. Amazon's allowing us to change all of our content. They're allowing us to change our placement modifiers, allowing us to change our bids. The number of keywords, the types of ads. There's a lot of things you can make changes on. There's also a lot of ways you can throw your money in the in burn your money on fire, like making those changes. But I think the really key thing is like in it's bare, like in the, you know, it's it's really simple.

Aaron Biner 00:18:26  It's just sessions and conversions. You want to throw quality sessions at your product detail page quality, meaning keywords are actually like applicable to your product traffic of audiences. That actually would be interested in your product. You don't want looky loos. You don't want window shoppers. You want buyer ready people, the highest converting people. Amazon's keeping track of positive and negative conversions. There's a thing called the hunger score. The keeping track of the hunger score. How much people are hungry for your Asin versus other Asians versus other Asians on that keyword. They're keeping track of how many times you clicked on a picture, how many times played your video. Like all that stuff goes into play, and not just over one day they're keeping track over 14, 30, 60. As long as it's going, you need to do things to throw quality sessions. People are actually want your product. When you low bid, you put a ten cent bid. You're saying, I only want a fish at the bottom of the sea.

Aaron Biner 00:19:18  For the people who don't want my product, you want to put your ads at a quality level. Now, if you can't afford to run those ads 24 hours a day, so be it. But you want to get conversions. You'd be surprised when you run an ad for $1.50 a click. It might take 6 or 7 clicks to make a sale. You put $0.20 a click. It might take 40 clicks to make a sale. If you add that up your way, you come out way ahead, bidding higher and then just trying to keep your rank higher too. Because if you're taking 40 clicks to make a sale, Amazon's going to say, like, this product isn't a very good converter, it doesn't belong in the top ten. And they're going to put you down in the page. And so now you've hurt yourself and didn't even know it. So I would say putting a reasonable bid for the category is really big and you know, trying to maintain rank. And so that's yeah, that's my best thought.

Josh Hadley 00:20:04  Brilliant strategies. Absolutely love those Aaron. So let's now move over into kind of like profit optimization I think there's there's a software tool that people have been talking about which is prophecy. but ultimately how have you found the best way to balance and find like the true price elasticity to say no ads, but a low cost gives me the best organic ranking and more profit for the business. How do you go about this and maybe give me some case studies or scenarios here?

Aaron Biner 00:20:31  I just think you have to experiment with it. I'm using scale insight and you can you can see what the contribution profit is for like a particular period. So you can make changes like we talked about lowering a price and then seeing like what the contribution profit is for x number of days prior to that change in the next number of days after that change. I think that's the best way to do it. other people are going to have other ways, but I would really say another thing you have to play into role is like how much stock you have.

Aaron Biner 00:20:56  if you have low inventory, then that means Amazon's not going to have many of your inventory in all the warehouses across America. That means they're going to rank you lower. You can only really run tests when you have a good amount of inventory. And so if you're measuring your profitability at a time of low inventory, you're probably going to have low, a higher number of days for delivery. And so a lot of people are going to walk away and your conversion rate is going to go lower. And so you're going to get more clicks and not as many sales. So in order to really test your profit, you have to make sure that you're comparing apples to apples. And I think you have to make sure that you're comparing times of having at least 30 days inventory to other times of having 30 days inventory. And that's a valuable thing to to know.

Josh Hadley 00:21:31  I think that you just touched on something right there where the inventory distribution, I think becomes extremely important. Tell us how you identify like, hey, what's my delivery time? Maybe on the East Coast, first West coast.

Josh Hadley 00:21:41  any reports that we can pull in Amazon to find out where our inventory is?

Aaron Biner 00:21:44  Unfortunately, that was not, to my knowledge, is not really any reports that you can use for that. Maybe there are. But like what I typically do is just go into Amazon. You can use incognito and you could put in different zip codes. I usually start with a West Coast zip code and I say, okay, is this ace and deliverable and x number of days, usually two being the like threshold. I think if it's deliverable more than two days, a lot of people will walk away unless there's a holiday like if people understand it can't deliver on Easter. So they might be like, well, it can't come till Tuesday, but if they see it, it's coming Monday. Like they're more likely to pull the trigger. So there's some reports in Amazon that show the like, like conversion rate at delivery time, like one day to more than two days. I believe there is that or a number of units sold with certain delivery times.

Aaron Biner 00:22:25  And so I think the best thing to do is just use zip codes. But a Texas zip code in East Coast zip code in, do you see generally that it's, you know, it's spread out. If not, you might have to think about lowering budgets, not launching that VPC yet for a new launch. one thing I love to do is portfolios. So I like to put all my ads, all the sponsored product ads for a particular product detail page in a portfolio and label it. And so what I do to turn off ads is not go to all the campaigns and flip them all off. The reason is I won't remember which ones should be on and which one should be off. If I have ones that are mis performing, I like to turn them off one at a time. But if I have a low inventory situation, I go into my portfolio and instead of it having no budget, I put a $1 budget and a date range like today's date. And so after it spends a dollar, which is easy, the ads will just shut off or not deliver.

Aaron Biner 00:23:15  So it's a good way to just toggle all the ads for a particular detail page. I think that's important to do. If delivery times are slow.

Josh Hadley 00:23:23  Let's say you're going out of stock. This is a this is the age old debate. Let's say you're going out of stock. Do you go out of stock at your highest velocity possible Or do you?

Aaron Biner 00:23:32  Yeah.

Josh Hadley 00:23:33  Let's pull down the ads. Maybe go down slower. At least those are profitable. But you ain't getting inventory for another, let's say four weeks.

Aaron Biner 00:23:40  Okay, so running off a cliff strategy is like I'm going to keep my ads going. I'm going to keep my price the same. I'm not going to lower the price. I'm not going to increase the price. I'm just going to run it off a cliff. Right. so that's great. You're showing Amazon that you can, well converting product, but what happens when it stops being in every warehouse in America now you have low you have slow delivery times. So now you're going to get a lack of conversion from it not being available in two days.

Aaron Biner 00:24:03  I think there's a point where you're like, you should have 30 days worth of inventory at minimum 28 days to not avoid them not having that low inventory fee. But there is a point where it's like it's down to like ten days worth of inventory. We are probably at that point best off turning off PPC, because there'll be a lot of warehouses without inventory, and then you're going to get that like five, six, seven day delivery time because they've got to send the product from Seattle to Maryland. And they're going to Amazon is going to charge you that low inventory fee. And it's not it's still not going to deliver in 48 hours. So there's a point where you have low, low delivery time. That's probably the point when you should consider taking your budgets down or using the portfolio solution I mentioned.

Josh Hadley 00:24:45  Great. Great insight I like that. Now what about when you come back in stock. What would you recommend in stock.

Aaron Biner 00:24:50  There's a few things you can do. Number one, you can pump up your bids to try to get more impressions.

Aaron Biner 00:24:54  Even if you're going to wind up overpaying, you're going to wind up paying for your mistake for your supply chain. Mistake number two, you can find the main keywords for the product. You can create top of search campaigns, set specific single word campaigns, or maybe even 2 or 3 keywords specific to your product. Put a low bid and put a high multiple 400 500%. So let's say the bid is like, you know, normal bid would be $3 or something. You could put like a 25 cent bid with a 500% multiple for top of search. Assuming top of search is where you perform the best, most products, it is some products like summer, you know, dresses, footwear. It's not always top of search. It does better. Sometimes restless search is better because it could be a clicky category where people click around a lot. Card games being a great example as well. yeah. So you want to utilize the top of search. You want to use utilize low price if you're normally selling at a certain price, let's say $17 puts your product down to with a slash through to 999.

Aaron Biner 00:25:46  Use a coupon. You could use a 1799. Use a coupon if you can qualify for a lightning deal or best deal, use that, although that won't be likely to be implemented. Like right away. It might take 30 days. It might take a struggle of a three month period to get you back up to the right rank. some people use outside traffic or a list. If they have a list, they can email to get people to go to Amazon to buy it. You can get a brand referral bonus from that as well. If you are organized enough and have that figured out how to do that, which could give you a little bit of a rebate. basically anything to get conversion back up. So if you were converting before at 15%, you want to try to spark conversion at 20%. anything to get more sales. I'm trying to think what other things people use to buy to get one, buy one, get one free or discount 50% off anything that would get additional sales. Ultimately, you're trying to reprove yourself to Amazon.

Aaron Biner 00:26:37  It's a proving grounds when you come back in the stock. It also depends on how long you've been out of stock. Is it two weeks? That's not as serious as two months or three months? if you're selling a product, highly seasonal pool floaties, Christmas decorations, don't worry about this so much. Everyone's in the same boat. So if you were out of stock of your Christmas ornaments and you got a, you know, pallets and pallets of them in October 1st, don't worry about all this stuff. Just start PPC again and just start rolling it out again and try to improve like you would normally. Everyone's in the same boat. Halloween products, Easter products, 4th of July products, those type of products, they're so highly seasonal that everyone's just thrown into a blender. And you want to try to recapture the previous year's magic. It's a it's a whole new game every year.

Josh Hadley 00:27:22  Yeah, at 100% like anything that's highly seasonal where like sales literally like start and then like fall off a cliff.

Aaron Biner 00:27:28  I think of demand. That's what I like to call it. Yeah.

Josh Hadley 00:27:31  When you have that stuff happen, I think Amazon, they've changed their entire, you know, FBA fee tier structures to penalize you for keeping anything in stock over 180 days. Right. And so what once upon a time, you used to be able to be like, okay, we purchased a little bit of extra inventory for the season. We'll sell it through next year. Yeah. We'll take the, you know, the long term storage fee, which is what it was back in the day. We'll take that. And it's you know it's not overly significant now. It's super significant. And I do think like the strategy is like sell out, sell out, maybe even a week before, you know, the season actually ends. Call that a win. Chalk it up as a win because the alternative is like you have excess inventory. And if it's an FBA and then you're paying a removal fee, which is at least a dollar a unit, you could lose all of your profit just on the removal of that inventory.

Aaron Biner 00:28:16  I had a friend that was selling solar eclipse glasses, and he wound up with a few thousand left. But then, like a lot of people from the solar eclipse. They use the glasses and then they return them to Amazon's terrible right. Like they buy these things. The event comes. It's only for an, you know, for 1 to 1 day. And then they start returning it before, you know he has 20,000 solar eclipse glasses. And then there's not another solar eclipse for like 40 years or 75 years or whatever, right. At least in the US today to remove these things because there's no other way to sell them. Right? It's not. So there's for one event. You have to. So he would have been better off selling out. He would still have the returns either way. Like you're going to have the returns and then you have to pay $0.80 to remove them or whatever they're charging, you know. So yeah. So for the 20,000 units, you don't have to spend a lot of all the profit you made selling them.

Aaron Biner 00:29:04  You're going to lose removing the however many units. So yeah, that's that's a big deal with with the seasonal products.

Josh Hadley 00:29:11  Yeah. So Aaron on the note of I'm curious like what are the conversion rate or I guess conversion levers that you've seen make the biggest change or increase in somebody's conversion rate? Maybe some unknown, you know, or some hidden gems that you've discovered along the way. I mean, you talked about the buy one, get another free offer. I think that's a creative strategy. Have you seen that to be fruitful? You know, coupons have changed. Are those worth it. Like what are you seeing. Like, hey, this this is my go to, right? If I only have 2 to 3 levers to pull to increase my conversion rate, here's what I'm going to. Here's my bread and butter. What would you say?

Aaron Biner 00:29:45  I think price is the biggest thing. And if you can get this last through price, which could be tricky. that's the biggest thing. I haven't found cute clickable coupons to be as effective.

Aaron Biner 00:29:53  The reason is, is like it's just sitting there like below the title and like under your brand name and like, people forget to click on them. They don't always use them. They don't always know they're there. they can be tricky to like. You can either do them as a percentage or a dollar amount. I prefer the dollar amount. It's more intuitive for people to just say like, oh, it's $28 with a $5 coupon. That's easier math than like, say, 15%, you know? So I think price is the biggest thing. the honestly, the one about the buy one, get one half offer free. I haven't really used that, but I've heard of other people using that. Especially consumables, I think. So I think price is the biggest, the biggest go to because, look, things are as we record this, like a lot of people are complaining about the economy. we we will have a new president soon. when this comes out and, you know, there's a lot of people having different views on the economy, where it's heading, where it's been.

Aaron Biner 00:30:47  And so people are very like they're uncertain about the future. And so they they're not going to spend a dollar more than they have to to get whatever they need for their Christmas party or birthday party or whatever is coming up. They want to spend as little as possible. And so price is the biggest thing when most of us, if we look at our customer insight, if we have a brand, brand analytics, you'll see that like at least with my products, like the average household income is like under 50, $50,000. So, you know, I sell a lot of products under $20. It's going to make a big difference if it's 21, 99 or 1999, like they're going to, it's going to be a huge difference. The conversion, and that's going to result in more sales of more conversion.

Josh Hadley 00:31:25  Great points Aaron. What else have we not talked about that you feel like our listeners should hear?

Aaron Biner 00:31:31  Sourcing. Sourcing is big. Like the the money on Amazon is made in the sourcing. obviously if you sell a product you can source in the US and you're selling in the US, or if you're selling in the UK and you can source it in the UK, that's great.

Aaron Biner 00:31:43  But man, most things are not made in the US anymore. Most things are made in China and India and Bangladesh in Vietnam. I know I'm missing other countries and so get on an airplane, go to a trade show, meet suppliers, take a leap of faith, try to go to factories, have tea with the, you know, the the boss. There was a there was a factory I went to just recently and I wanted to buy a particular product and I was like, how much is this? And they said, it's this much. And I said, well, I did the math with Amazon fees and stuff. I was like, like right in front of them. I pulled out the helium ten calculator. It's like, we're not going to make any money here. You can see right here. And I was like, what if we put two shelves together because it was a shelf product and they're like, well, now we make a little bit of money, but it's still really no money.

Aaron Biner 00:32:26  And then the the boss came walking in like the owner of the company and he's like, what's going on? And luckily he spoke good English. And I was like, we don't make any money with the pricing that you're like, salesperson is giving us. Here's why. Here are the fees. And he looked it over and he's like, well, we have another big order from like a European customer. And if we like piggyback your order with their order to save on, like, production cost. You know, if we save on, the total raw materials that we can, we can make your products for $4 instead of 583. So $1.83 saved off of $5, it's an incredible amount of savings. So we're going to source that product. by the time this airs, we might be selling that product and we'll know the results. But it went from a no go from a red light to a green light just by like going to the factory. And so, you know, a lot of times to you do that you build a relationship in Asian societies like that's really big, like face to face meetings.

Aaron Biner 00:33:22  They don't really trust you. Otherwise you're just somebody buying on Alibaba or buying from sending them an email or WeChat or whatever. It's not as like they don't trust you as much. And trust is a big thing as, you know, like relationships haven't been great between the US and China. And so for them to put actual like face with the name and meet you in person, it plays a big role in you want to make partners, you want to have partners in business. You want to, as I think Reagan said, like, trust but verify. That's really important. Like with them, they want to verify that you're real business person, and you want to verify that they're going to give you a quality product. And if they're willing to work with you on pricing, on terms, making things easier on you that they're in the same. You're all in this together. And the only way to do that is to actually do face to face. Go to mega show in Hong Kong, go to Canton Fair, go to, you know, other fairs, obviously in other countries as well, depending on what it is that you're selling and make money in the sourcing because, you can't just PPC your way to the top.

Aaron Biner 00:34:18  You can't just Alibaba to the top like you have to try to source as little, give people as much value as they can, and look at your packaging. How can you make it lighter? How can you make it more compact in the packaging without it breaking? How can you give people honestly the least amount you can give them and sell it for the most amount you can, or at least source it for as low as you can? that's that's really important.

Josh Hadley 00:34:39  Yeah, I agree, you're preaching to the choir here, Aaron. love these strategies. So, Aaron, as we wrap up, I'd love to leave the audience with three actionable takeaways from every episode. So here are the three actionable takeaways that I noted. Number one, you need to understand your numbers. And so if you don't already have a tool that you're utilizing that allows you to see SKU level profitability, that is probably one of the biggest things that you need to implement into your business. First and foremost, I would go back and I would relisten to the episode I recorded with Srinath Reddy.

Josh Hadley 00:35:07  He's the CEO of intent wise. He went into the number of different strategic decisions you should make on your business based off of data alone. And so he talked about how to aggregate that data as Amazon becomes more complex and and competitive. The people that are going to win are going to be the more sophisticated sellers. And so what worked back in their, you know, 2017, 2018, I promise it's not going to work when it comes to 2028. things are getting changed. Things are changing. So that's action item number one. Know your data, have a data resource and then utilize the data. Action item number two is to test different strategies. I think you listed off a plethora of strategies that people can implement here, Erin, from reducing your overall just campaign budgets on PPC to reducing your price, turning off PPC, to increasing your bids, and so much that you talked about. And at the end of the day, every product category behaves very differently. And so you're going to need to test and see what works and then go take a look at the data.

Josh Hadley 00:36:08  that's all that we've done for our own business is constantly test test test, test test, review the data and then make further changes and adjustments and that's just the nature of the business moving forward. And then last but not least, I would recommend, you know, going back to your sourcing aspect, I would say the biggest thing that you can do is go meet your supplier in person. I do agree that as things get more competitive, the people that will win are going to be the people that are sourcing the products at the cheapest rates they possibly can, while providing a quality product that allows them to actually generate a profit margin. When profit margins on Amazon are decreasing, it's more and more important that you're sharing that with your manufacturer to know that, hey guys, we're partners. If I can't make a profit, you're not also making a profit either. And I'm going to take my orders away. Essentially, having those conversations are going to make all the difference in your business. my prediction I've said this over and over again on the podcast is that Amazon is going to become a marketplace similar to what you see in a grocery store, where everybody that's selling into these grocery stores or grocery stores themselves are operating on single digit profit margins.

Josh Hadley 00:37:07  That's where we're heading. That's what Amazon wants. They're incentivizing why we talked about decreasing your price. And that's going to increase your conversion rate, which is then going to increase your, overall, you know, organic ranking Amazon, their their algorithm is incentivizing you to bring your lowest possible price. So if competitors continue to bring cheaper and cheaper prices, then guess what happens. Margins are only going to continue to erode. So which goes back to do you know your data. Sometimes it may be worth taking that product and shooting it behind the barn because it's no longer making you profit. so the more data driven that you can be, the better. Erin, anything else I missed here?

Aaron Biner 00:37:43  Yeah, I think ABL always be launching, always be launching. And what that means is always be launching new, new PPC strategies, trying new things, but products always be launching new products. Don't be afraid to take a chance. Be careful. Don't borrow too much money that you can't pay back. Like obviously do it within reason.

Aaron Biner 00:38:00  But I think always be launching. and that's that's the way to find it. Remember each new product you launch is a new stream of revenue potentially. And so like you said, the ones that don't work, take it out back and shoot it in the barn, like you said, to give that analogy, because it's not working, but always be looking for another one that you can put out and then carefully evaluate it. Is this product easily breakable? Is it going to get a lot of returns, like is this, you know, is the amount of storage and the amount of freight worth the profit margin be making? What are the risks involved and so forth?

Josh Hadley 00:38:29  Yeah, I echo that same sentiment. So Aaron, this has been awesome. Now as I'd love to ask each guest the following three questions. So here we go. Number one, what's been the most influential book that you've read and why?

Aaron Biner 00:38:40  I'm not a big book reader. I'm a big podcast listener. I like I'm just a nerd, Amazon nerd.

Aaron Biner 00:38:44  I like to listen all the Amazon podcast, series sellers, seller sessions, for example. I've listened to, like your biggest podcast. I've listened to just a lot of the podcasts. I'm just a big podcast guy.

Josh Hadley 00:38:57  I love it. All right. What is, question number two? What's your favorite AI tool that you've been using and why?

Aaron Biner 00:39:03  Maybe just ChatGPT to tell you the truth. And so how I'm using it a lot of times is like, if I'm having a hard time, like trying to figure out, like, we sell a lot of toys and like figuring out a theme for a particular age group. I'll be like, what are some themes that like 5 to 7 year old boys are into? And it'll give you the themes, and then you can use those to kind of go back and decide how to like, make a product like what you should target. So, you know, if you're like, well, what kind of like science toys do, like nine year old boys.

Aaron Biner 00:39:29  Like it'll tell you, give you like, oh, they like to mix chemicals or they like to do, you know, make a lava project or whatever. So you can use that as like, data to go out in the marketplace and like, see what kind of things are out there, like a trade show and that could, you know, fit fit that demand.

Josh Hadley 00:39:43  Yeah. Love that. All right. Last question. Who is somebody that you admire or respect the most in the e-commerce space that other people should be following and why?

Aaron Biner 00:39:50  I admire and respect you. You've gotten you've built a paper empire and that's pretty great. people like Stephen Silcock are great because they're not just preaching about Amazon, they're preaching about other things like selling to gift shops and retailers and about like sourcing and how to become a stronger negotiator. RE2 Java is great in the PPC space she makes. She tries to explain it very delicately, like what's going on in the Amazon VPC space. I think she's you know, she's a she's great to listen to as well.

Josh Hadley 00:40:16  Those are some great recommendations Aaron. So, Aaron, if people want to reach out to you, they want to follow you more. They maybe want to hire you for some consulting. Where's the best place that people can reach out to you?

Aaron Biner 00:40:24  You can reach out to me at Aaron at Marketplace nerd.com. That's Aaron at Marketplace. Com you can also go to Marketplace intercom and contact me through the contact form. You can reach me on Messenger or Facebook Aaron Biner. Pretty easy to find. Just look me up. You'll see my mug. Instagram I am Aaron B 1105. Yeah, that's what I am. Aaron B 1105. It's ARONB1105. You can reach me there. message me there. You know, I'm at all the I'm at a lot of the Amazon events. The prospers and the accelerates and AMC united and a lot of that stuff. Come talk to me there. Sometimes I'm even a speaker at some of the events, too.

Josh Hadley 00:41:05  Aaron, this has been awesome having you on the show.

Josh Hadley 00:41:07  Thanks for dropping all your wisdom with us today, and thanks for joining.

Aaron Biner 00:41:09  Thanks for having me.