Cover your Amazon Basics ⎜ SellerApp ⎜ EP 205
Ryan Cramer: What's up everyone? Welcome to my corner of the internet. I'm your host, Ryan Cramer, and this is Crossover Commerce presented by PingPong Payments, the leading global payments provider, helping sellers keep more of their hard earned money. Start that again. Let's start that again without my mic muted. Hey everyone. Welcome back, once again, to another episode of Crossover Commerce. My name is Ryan Cramer, and I'm the host of this show, where I have my corner of the internet called Crossover Commerce, where I bring the best and brightest in the Amazon and E- commerce space. What does that mean for you? If you're an entrepreneur just starting out on your Amazon or E- commerce journey, or you're an advanced seller and you've been doing this for years on end, and maybe looking to sell your business in the next couple of months, this is the podcast for you. You're going to learn from experts in the field, anywhere from starting out on your business, software solutions, all the way to marketing and advertising, sourcing logistics, payment solutions, international expansion, you name it. That's what we talk about here on this podcast. This is episode 205 and, like every episode, if you've never joined us, is presented by PingPong Payments. What is PingPong Payments? They are a solution helping sellers, like yourself, possibly, save more of their hard earned money. That's either sending or receiving their funds internationally. That could be sending money to your supplier manufacturer, your VAs if you have employees working worldwide. It could be a business entity sending them out and paying your VAT or your taxes. You could do that with PingPong Payments in payments, and if you're selling internationally or you're located in a different marketplace than your own, you can actually receive using a PingPong count today. It's free to sign up. All you have to do is just go to usa. pingpongx. com/ podcast to catch all of our past episodes, but then also sign up for free today. Like I said at the top of show, this is episode 205, which means 204 episodes are located there, but I'm excited about today. This is an action- packed week. I call it D week, because all of our guests seem to have D's in their name. With that being said, I'm really excited about going back and touching on the software space, which is where I have been familiar in, as well, in the beginning market. We're going to be talking about the Amazon basics. That's right, going back almost to school, and starting of where to begin your journey if you're looking to get involved into Amazon. You might be thinking," I have a great product," or" Where do I even start my journey?" This is going to be a great episode for you. Without further ado, I'm going to go ahead and bring on co- founder of SellerApp. I won't say friend of show, but the company's friend of the show, friend of PingPong, Dilip. Excuse me. Dilip, co- founder of SellerApp, thank you so much for joining us on crossover commerce today.
Dilip Vamanan: Hey. Thanks, Ryan. Really excited to be here. Looking forward to covering some of the basics. Obviously, it's a very vast topic. I'm hoping that we can cover most of the stuff in the next one hour.
Ryan Cramer: Absolutely. That's a great place to start. It's at the beginning. When you said Amazon basics, a lot of people think," No, not the products that Amazon is selling," We're talking about more of the, if I'm an entrepreneur, and I've heard from YouTube, blogs, or even looking at SellerApp's website, just the notion of selling online is still foreign to a lot of different people. They don't know that it's a concept where you can make and be an entrepreneur in that journey, so let's start from beginning. Maybe give us a quick background of yourself and why you helped co- found SellerApp? And we can get going from there.
Dilip Vamanan: Yeah. I think most of the folks out there, whom I saw, who either built their around software. For Amazon, I think there have been sellers. They come from their own pain point of selling on Amazon. They realize that a lot of things, there are no data to look forward, but I come from the other side. I come from the software engineering background, so I completed my graduation in electrical engineering way back in 2015. Being in the software industry now close to 15 years right now, a decade has passed right now. I worked in around five different geographies. I started in one of the biggest, one of the$ 50 billion software company, way back in 2005, and worked in countries like Japan, Silicon Valley, India obviously, all those geographies. The reason by which I choose something like building a seller software, so before SellerApp, I was actually running another venture, which was into advertising. This was way back in 2014, and where Amazon was still very, very small. Amazon had maybe$ 2 or$ 3 billion in terms of ad revenue, and Google, Facebook, and multiple ad networks out there, they were really huge. But the one thing which was very clear was the growth of Amazon way back from 2013,'14. It has been steadily growing. The amount of money advertisers or the sellers spend on Amazon has been growing. Seeing that trend, I think somewhere around 2017, I partnered with another of my co-founder, Brij, who used to work in an E- commerce domain at that point of time. We both partnered and started SellerApp back in 2017. It's been now close to four years of journey right now, and it has been really exciting. Again, in the last four years, just in front of our eyes, we could see Amazon really, really growing big, the number of sellers are exploding, and the revenue of the third- party sellers on Amazon exploding, so it's really an exciting journey.
Ryan Cramer: Absolutely. First off, congratulations, again. Four years is no time whatsoever. It's a journey that I think a lot of people can say," If they've been around for four years, you've made it in Amazon," but just in the software space alone, that's such a hard journey to get in. You had made that notion of very difficult, and constant education and tweaking. I know very well, it's never a set process. It's not a step- by- step process that you can just rely on every single day throughout the year. Amazon's making tweaks constantly. They can change the access to API and whatnot. What, from your perspective, made it think that this was the opportunity, this is something that we can help the market understand a little bit better, and put our own spin on it?
Dilip Vamanan: I think there were two major signals. The first one is obviously the growth of Amazon advertising, and we could see multiple unicorns companies coming out of building softwares on the top of, let's say, Google advertising or Facebook advertising. There are multiple million- to- billion dollar companies out there, so this was obviously a trend. I think now also, if you look at it, Amazon advertising is still really, really evolving, so that was one major trend. Second thing is lack of access in terms of specifically data for the third- party sellers. If you look at the number of sellers out there, and the amount of data which they can get from seller central, is very much limited. They just get very basic data in terms of their inaudible data, the revenue, or how much ad is spent, how much revenue came. It's a very basic data. When you really look at essentially the most successful sellers out there, some of the top 10 Amazon sellers, you can see that they have developed internally a lot of these softwares. Because they do have that investing power, they can invest millions of dollars, build their own softwares to essentially scale their revenue. But when you look at third- party sellers, the long tail set of customers, sellers, they don't have access to this data, and they cannot really build a software. This was a clearly big trend, the number of sellers out there. Currently, if you look at the third- party sellers, I think I saw some data recently published by eMarket here, and it said that there are more than 10 million Amazon sellers out there. I mean, third- party sellers. The numbers are very huge, so both these strengths, it was already a very, very huge positive signal for us to essentially venture into something like the data analytics for sellers.
Ryan Cramer: Absolutely. Good point. For people who are listening to this and/ or watching this, they might be on that journey, or they might not even know how to start the journey. 10 million that you quoted is a large number, and that's the amount, I believe, of accounts started all the way until obviously, is that active? We don't necessarily know that, but that's total amount of people that have seen Amazon as an opportunity, and that's what I wanted to talk about with you today, is just the opportunity and the basics and understanding of what is that opportunity available? You already mentioned the spending power, the growing power of which Amazon kind of touches worldwide commerce, but then also the ability for a person or an entrepreneur to come onto that platform pretty easily, I would say, to make their mark, and to start selling at a quick and rapid pace. It's almost unprecedented, the rate at which you can launch a business or brand on a platform, like Amazon, is almost unheard of. Let's start from the beginning. Where, as a company, do you try to educate the market before they even come into Amazon?
Dilip Vamanan: Yeah. When you look at the Amazon journey, it is very, very fascinating, because you see a very good percentage of sellers who are coming with a very hard, very strong reason to sell on Amazon. Many of them might be looking for an extra source of income, like they are already working somewhere, and they just wanted to get an additional source of income, or you can actually also see very, very educated sellers coming out, maybe from a retail background. They have been selling retail, offline stores, and now they understand the power of online E- commerce, and they really want to start. I will essentially kind of put it into two buckets. One is very, very learner users, and one is essentially not learner users. As a platform or as a software, we kind of constantly get users from both the buckets. They might have some background on commerce and they started, or there are people who essentially absolutely don't have any background. I think where we start the journey is the first phase where they're looking to even identity a specific category to set. The point is essentially many of them may not have a very strong idea that," Okay. I want to really start selling this product," or" I am very fascinated. I see a huge demand in the market," or" I see a huge gap in the market," and they start selling. It's not like that. Most of the cases, 95% of the time, people just come with that intention to sell. They have an intent. They have a strong intent, but they don't know what to sell. We start seeing people from all the way from that background, who has a strong desire to sell, whom we might need to really start working with even the first or the first product or the category in which they should start selling. We will give specific data points about," Okay. These are the 40 or 45 different categories on Amazon. This is how the trends are looking like," so it may start from there. Now, come to the second bucket of users who already have some kind of product expertise or a category expertise, who knows the product in and out, those people, I think it'll be more about connecting them with how they position the product, and they might have multiple products they're selling offline. Now they want to select which product they should sell online. I mean, identify the cohort of products which they have to sell. That will be the case, where they come, they search for their interesting products. We give them multiple data points related to what kind of estimated sales, how is the category looking, or how much initial inventory you should keep. What kind of advertising expenditure will come, all those data. It will be more of an advanced data, but again, as a software, I think we really need to support all kinds of sellers. On our last four years of journey, most of the sellers comes in the first bucket, where they have a strong desire to sell. They have started seeing the growth of Amazon, started seeing the growth of third- party sellers, and they just jumped on to it. We are balancing both. That's a very tough place to win, but fortunately or unfortunately we need to support all kinds of sellers.
Ryan Cramer: But what's such a beautiful, and almost a very difficult journey for a software solution in your perspective, speaking from experience, when you're talking to a beginner market, there's no established customer base. You can't go to a lead, generate a list of people who are actively searching for a product. It's almost as if you are going, and you have to either create your own set of customers, or you have to find those people who have the intent to potentially even sell on Amazon. That's the difficult nature, which in the crux of which you are talking about of, you have to service the people who are potentially going to be an Amazon seller, but then also have to support people's growing journey too. With that wide, wide variety, it has been and difficult, or almost easier as you're developing messaging, tools, research, functionality? Almost the breadth of which you need to cover all these resources instead of maybe a solution that's down the line, that's helping more of a niche customer base?
Dilip Vamanan: Very, very interesting question. It is obviously very tough. If you really want to support the whole broader range of customers, I completely agree to you, Ryan. What we have taken as a decision somewhere last year, is the beginner sellers out there who just started the journey, absolute beginners who are yet to identify product because they just started selling, who are yet to generate that initial set of sales, what we have done is we have actually launched a premium product somewhere close to inaudible. We made the platform, with all the functionalities, absolutely free for them. We have more than 120, 000 sellers who are absolute beginners, who is yet to generate any revenue on Amazon. They can use our platform, absolutely free of cost. They can just log in. They can start using all functionalities, free of cost. We have also started conscious decision to include functionalities, which are more advanced in nature. For example, I would say that anyone who makes less than$ 10,000 revenue on Amazon, we consider them as beginner sellers, which means the Amazon revenue is not something which they can, just with the Amazon revenue, they may not be able to survive. You make$ 10, 000. Let's say your net profit, net margin is, let's say, 10 percent, which is like$ 1000. You might not be able to survive. What we have done is all the business sellers, they can come use the platform, absolutely free, of course. Now, the next bucket who is essentially the mid- market sellers, the sellers who already started generating revenue, and the bigger brands, the private- label brands, so the D2C brands. You call it as the CPG brands. All of them, we have actually started building more and more advanced features for them. Some of the things I would like to cover today is the advertising automation. We have seen a huge amount of success by launching those functionalities, which are really, really targeted towards bigger sellers. That's a conscious decision we have taken, and now I would say 100 percent of our revenue comes from the mid market and the large sellers, whereas the maximum usage for the platform comes from the beginner sellers, because they're the ones who are actually every day logging in and seeing how," Okay. I just made only$ 100 today. How do I make it 500?", whatever. The usage comes from the first bucket, whereas the revenue for us comes from the second bucket.
Ryan Cramer: Great, which the ultimate balance of any company in the state. But it's a good thing too, because what we've noticed too is, when you're talking to about data and analytics, it's the crux of which, and I use this word a lot, it's the basis of which a lot of people have to make their decisions. To know that the market's there, to trust that which there's going to be that buyer persona, it exists, and you have to trust not just the data, but the company that's servicing that. It can be outdated for any reason. It has to all sense and painted in a picture in which companies like you have to help customers kind of lead them. Again, the horse to water, but you can't make them drink. You can obviously show them great opportunity in this potential segment. You have to figure out what to do with that data too. Making it useful, making it friendly for them to find this information and dip and sift through the millions upon millions of products, which Amazon currently has for sale on their platform. Is this something that you think that is going to continue to be a lot of people entering the market over time, or do you think it gets smarter in terms of which entrepreneurs are entering people who have started that retail business, and they want to built and develop their online business? Or do you think that they'll just be this continuation of people starting a business entrepreneurial journey on Amazon from the get- go? Does that make sense? Do you see this trend as a continuation, or is this something that you're going to evolve as the market dictates?
Dilip Vamanan: Let's look at some very basic numbers here. I think I looked at this number sometime back, and it was saying that around 2. 1 billion people currently buy products online, but if you look at it from the total world population, it is still less than, let's say, 30%, maybe 25% or 27%. 27% of the world population buys online. That's the first trend. The second trend is, if you look at the offline versus online or E-commerce revenue, the E- commerce is yet to touch$ 5 trillions of revenue, and I think the data actually showed that in 2022, it's about to touch$5 trillion. If you really compare, again, this with the offline retail, it's still way behind. The penetration of online E- commerce, even in a country like United States, is less than 20%, so there is a huge runway to go. That's the second trend. The third one is the growth of third- party sellers on Amazon. We know that 10 million sellers are third- party sellers on Amazon, but if you also look at the next trend, which Amazon actually do share, which is actually essentially about the revenue of third- party sellers on Amazon, and maybe if you look at three years back, it was close to 40%, 42% of the revenue comes from third- party sellers. Last year, if you look at the data, it was close to 57%. Amazon is growing. The online E- commerce is growing, and on the top of it, the third- party seller revenue is growing. Everything is positive for us. Point one, tick. Point two is correct. Point three is okay. But still, when I look at 2021 and the kind of difficulties sellers had last year, like obviously they had supply- chain issues, inventory issues, and all of them, on the top of it, the competition is also growing. I mean, 10 million sellers. That means there's a huge competition out there. Again, if you're not really smart, if you're not using the data to your advantage, it's not like 2015 or 2016, where you can automatically just create the product, put it on Amazon, and you are hoping that magically the sales will appear. That time is over, and it's a very, very huge intensive, competitive environment out there. It's not going to be easy, but again, if I look at three or four top opportunities out there for people, I think Amazon is definitely one of them.
Ryan Cramer: No. That's a great breakdown of which the opportunity presents itself. Let me kind of take a different approach, Dilip, and say with so much data, and there's so much opportunity, I think that a lot of people experience what I call, I'm going to use the phrase," analysis by paralysis," or" paralysis by analysis." I can look at so many different opportunities, and as an entrepreneur, you want to tackle them all, but until I get smart, I can tackle it, and I can find a solution, how do you guys overcome at SellerApp the notion of which to really get focused as entrepreneur and to show them," Hey. Listen, there's lots of opportunity, but use our data to get smart about that opportunity"? What's kind of the pros and cons of which you have to tackle that notion?
Dilip Vamanan: I think the first point is very right. I think too much of analysis obviously leads to paralysis, and we have seen this with multiple sellers. There are lot of sellers who we have seen who really want to get everything right. Until that point, they never want to even make the first product life, and they finally end up not making any product life. But let's put a step back and see what can lead to analysis. First one is, I think, obviously we have seen sellers struggling to identify the first category to sell. People kind of," Okay. I want to sell on Amazon. I know so- and- so is making money on Amazon. Okay. Let me also enter," and not able to make any decision in terms of what category to sell. Then, what product to sell. Getting into it, all the other points, like where do I source the product, which manufacturer which I choose from? I mean, all these things are actually difficult points. But again, what I have always seen with sellers is most of the time, I haven't seen sellers making really huge from the first product. First product is more of a learning step, like you basically try to sell the first product, get the hang of it. You created your first listing, you put this in, you found the UPC, EAN, and all those stuff, and you created the first listing. It may or may not have a good success. Look at this number. I think, again, I had seen this number with one of the third- party website, and there is no way to verify it. Around 60% of the Amazon sellers out there, third- party sellers out there, they don't make consistent revenue. They have some product, or they may not have some product there They may be a seller, but they're not making consistent revenue. Only 42% of the sellers actually make, every month, at least one sale on Amazon. It's a very, very staggering number. Only 42% of them make consistent revenue every month, which means that most of the people have the intention and decide to sell, but they never reach to that next step. I would always say that start with the first product. Start with a minimum budget and minimum spend, in terms of advertising, as well as a product, whatever it is. Learn all the basics. If the product works out, obviously you still have more budget. You can actually expand, launch new products, and expand. If things haven't worked out, you try to learn, analyze, and then you move onto the next product. Again, you are holding onto a product where there is absolutely no demand. The market is not supporting you. There's no point. You're wasting your time, so move on to the next product, start selling a new product, and I'm hoping that you'll find some success there.
Ryan Cramer: Absolutely. That's a surprising statistic that you shared with us, in terms of, you said only 42% of sellers are actually making a month- to- month-
Dilip Vamanan: Yeah.
Ryan Cramer: ...Transaction, which is that the number that you're looking to help people increase that number, obviously? Is that the opportunity of which that you at SellerApp are saying," Hey, listen. We understand that if there's of all these sellers, and only 42% of them, there is a major market of which either people are actively not staying on top of it or their product is stagnant, that needs our help." Is that the number in the point of which is your opportunity, if that makes sense?
Dilip Vamanan: Great question. I think people, as I told you, I think the seller comes to us in all stages. They come in the launch phase, like where they just launched a product. They may or may not be making any sales, so people come at that stage, but our core audience are people who, they launch, they have some success on Amazon. Let's say, in terms of numbers, they're making$ 10, 000,$20,000 revenue per month, and now really looking to scale the business. So people who are essentially in that growth and the scale phase, that's actually our primary set of customers. People who are in the launch phase," We are there to help you. Anything you need help? Okay. You want to audit your listings, or you really want to set up your initial PPC campaigns, or you want to improve your listings. All of them, you can do our platform, use the platform. The platform is there for you," but in terms of a core audience, we really focus on sellers who are already in growth phase or in the scale phase.
Ryan Cramer: Gotcha. That makes more sense. With that being said, where is the opportunity that you feel is where most sellers are going to that instant growth, that low- hanging fruit, if you will? Is that the advertising route? Is that the optimization route? Their listings? What's that initial, low- hanging fruit term of when you and the team look at a listing or the person's looking for growth? Where's that instant lift come from that you're generally seeing?
Dilip Vamanan: Amazing. I think, so maybe one year back, Ryan, if you had asked me the same question, I would obviously told you," Get all your basics right. Get the reviews. Get your good listing. Make sure that you have a good listing quality. Get those 15 reviews or 20 reviews, and then start the advertising campaign." But I think probably this game has changed in the last six months, and now anyone who's launching a product, we actually suggest them to start with advertising, because it's very, very difficult for you to essentially be discoverable without advertising at this point of time. I think we have seen bigger and bigger brands, like including CPG brands. We work with some of the top- 500 CPG brands out there. I think maybe 2020, they never had a budget specifically for Amazon. 2021 is the first year where we saw bigger CPG brand allocating, let's say, 20%, 25% of the overall marketing spend on Amazon. Currently, even if you're launching a product, you are just starting, you have to start with an advertising budget. I mean, after getting all the things right. Make your listings good, your keywords optimized, all of them, but start with advertising.
Ryan Cramer: Sorry about that. Starting with advertising. Best and easiest way to do it, obviously get your product and your listing out there. If you're not on page one, obviously this can help you be visible on page one. Like you said, if you're talking about a year ago, or even if we talk about two-and- a- half to three years ago, Amazon's algorithm, if you search for anything, majority of those products listed were organic products. Now it's switched, and it's become majority are paid advertising listings. It's almost impossible to not click on a paid listing if you're searching on the buyer's side of things, and coming and bringing to the fruition. With trends and data, and I would say, again, like we were talking pre- show, always follow the data in the capacity of which don't let data skew what's right in front of you. Where does this, if you said, a year ago you're looking at this, what does data look like for a beginner seller in 2022? What is it pointing to of? Is it more difficult to sell? Is it that the opportunity still exist? What are the initial data points that you and your team are really focused on in 2022, whether surprising or not? It just needs to be told to all the potential sellers out there.
Dilip Vamanan: Let me see if I can actually bring up one slide.
Ryan Cramer: Sure.
Dilip Vamanan: Okay.
Ryan Cramer: We're an interactive show here, so for those listening too, I will also be more than happy. We can point to the YouTube videos so we can go back to which the slides are, but if you share your screen or share your slides for our viewing audience, we can obviously talk through and walk you through it.
Dilip Vamanan: I hope you can actually see my screen.
Ryan Cramer: Yeah. There you go, right there.
Dilip Vamanan: Perfect. Let me go to the search. This is essentially the journey of every E- commerce seller out there. You start with a search journey, where you are identifying the first product to sell, where you're really, really looking at. I think you had Amy as one of the speakers recently in your podcast.
Ryan Cramer: I did. Yes
Dilip Vamanan: I am a big of Amy. One of the things she actually talks about is, I think, if you go to YouTube and search for her previous sessions, you'll see that. She actually talks about listening to the customers just from the social media, and very, very interesting topic. What in her video she's actually talking about is really, really looking and understanding the actual customer demands out there. A lot of customers, a lot of sellers actually end up selling product, which no pain point is there. Nobody has that pain point. Nobody searches for that product, but you are fascinated with that idea. That's why you try to sell, but finally you end up losing money on it. The first point is obviously to start identifying a category, and then identifying a product, which is a real customer need. This can be from your pain point, or it can be actually a pain point of someone you have spoken and whatever it is. The second thing is you really need to sell a product where you can really make money. There is something called Power of Thirds. You really need to keep one third of your price of the product for the sourcing, and it's generally landed cost. You source from a manufacturer, ship it to the Amazon FBA warehouse. This should be within the first one third of the cost. The second one third is actually for the Amazon profits. Amazon charges, like Amazon do have multiple things like the storage fees, the fulfillment fees, and there are multiple fees which are involved from Amazon. The last one third is actually for your profit, So profit margin is something which you really, really have to look forward when you're actually shortlisting the product and selling the product. Again, the common missteps which people do in this case is sometimes, I'm not saying seasonal products are not good, but again, you understand that it has a specific shelf life. You are trying to sell something, which is used totally in the summer, so you know that," Okay. In the next, June to, let's say, three months. June, July, August, September, you may get sales, and you may not get sales after that." Again, as a beginner seller, we will never suggest you to sell a seasonal product, but try to sell a product, which has a yearly demand. Again, there are a lot of data out there, especially in dashboards like SellerApp, where you can understand the kind of CPC trends, cost per clicks trends, how difficult is it for you to rank on that product. All the data points are actually available out there in SaaS dashboards. Once you overcome this and start selling the product, I think the main problems is we have seen people making success on their product, which means they're able to make good sales, but when it comes to the restocking the inventory, or when it comes to getting more inventory for your product, either the manufacturer kind of goes away, or you're not able to find multiple options. That's, again, a problem which we have seen. Ideally, you need to keep the options open and keep at least two or three trusted sourcing agents or the manufacturers for your product. Again, when you list the product, you may or may not get the sales as in the beginning days, so you might need to try with different listings options, try with various keywords. You might run automatic campaigns. Understand what's working for you, what keywords are working for you, and then make changes based on that. Again, there is no golden bullet out here, but again, having a right pricing and learning more about the customer behavior, that will really help you in this case.
Ryan Cramer: Absolutely. I love this breakdown too. It's very easy and straightforward in terms of how to understand and just how to grow that business. Would you consider that it's more difficult now too, as an Amazon seller? It's more difficult now than it was maybe, like you said, four years ago? Let's even take a notion when SellerApp just joined. Is it more difficult now to sell on Amazon, or is it actually easier now with all the tools, resources, and services out there to help people along that journey? What would be your initial response to that?
Dilip Vamanan: I think it's kind of both. I won't be able to comment whether it is easier or difficult, because four years back, obviously there was no softwares out there which would've helped you to essentially optimize or identify the user search keywords or even plot that demand graph of your product. That absolutely never existed, but now if you look at it, there are at least four or five different softwares, including SellerApp, which is there to help you out. In terms of computation, definitely that has increased. The number of sellers are very high, but at the same point of time, the number of buyers coming to Amazon also has increased. If you look at it, it's like close to 40%, the E- commerce sales of online sales comes through amazon. com. I'm just talking about States. It's almost common in all geographies. When we look at essentially data from Amazon Japan or even Amazon India, the growth is phenomenal. Amazon, itself, is growing over 30%, 40% year on year. The competition has definitely increased, but since you have access to all these softwares out there, it helps you to optimize your listings. The first version of your listing itself is really optimized. Then, you can run your advertising, and then you can actually drive the traffic to your page and see how the customers are behaving for your product. The time which will take for you to understand whether you are a product will make or break, it's very easy right now. We have seen probably three to four months. Right now, you can really understand whether the product is going to do good or not do good. Earlier, it might have taken like a year or six months to one year to figure out.
Ryan Cramer: Right. With the notion that Amazon is really leaning to building brands now on Amazon, instead of just selling product, how has that of changed SellerApp in terms of the messaging, or just maybe even the tools? Has that changed just core functionality of which you need to pinpoint sellers from a beginning perspective of, hey, from the get go, it's important to understand the brand voice or just the branding nature of which you're going to start to develop your journey on Amazon, and it's easier to start that way instead of change mid to three years down the road, and switch over your entire structure of your business. How has that affected how you have to teach new sellers?
Dilip Vamanan: Great question, again. I think, even if you are listing your first product or you are selling only a couple of products, I think it's very, very important for you to think Amazon is a very, very long term. Let me just put a quote from Brian Tracy. I think he actually, sometime back, said that like," Excellence is not a destination. It's a continuous journey that never ends." Amazon, essentially, the day you list your first product, the journey is just starting. You should always keep that brand in your mind. Let's say, I have only one product right now, or I may have only two or three products right now, but when I have multiple products, maybe in the same subcategory or in the same category, how is this going to look like? What does that, which creates a lasting impression for my customers? Starting from all your branding, coloring, colors, the text, how your product, how do you show the benefits of your product, everything. It's very, very important for you to think from the day one about building a brand, about creating a long- term game. It's not a six- month game, or it's not a one- year game. It's a very, very long term game of, let's say three- to-five years, and keep that in your mind, even when you start with your first product.
Ryan Cramer: Absolutely. I guess, in the few minutes that we have left with each other, is there any more focus that needs to go off of just Amazon instead of the just- one solution component of selling only on Amazon? Have you guys thought about the education in which direct- to- consumer is important and how to support or even be in that lane as well? I know Amazon itself is its own dragon, if you will, but knowing that lots of sellers are going to start to have that pivot function or that supporting factor, if you will, of building a brand or having just an externalized focus. It doesn't have to be the major revenue source. It can be a supporting function, but has that become part of the framework on which SellerApp helps people get going or helps them understand the importance of?
Dilip Vamanan: Definitely. I think most of the sellers out there, like at least for all the people who are at least in the growth and the scale phase, like growth means, let's say, someone who's making$ 100k or$ 200k per month of revenue on Amazon. What we have always seen is, I think we did a recent survey with all the mid- scale sellers out there. Amazon is one of the channels, and they might be selling in multiple channels like Amazon or, let's say, Walmart, Ebay, or other platforms. Amazon is a very, very stronger, bigger channel, like where maybe 30%, 35% of the revenue comes, and they might have their own website, like maybe a Shopify, a Magento, or a WooCommerce website, where they're generating another 30%, 35%, and all the other channels put together, maybe the rest of the last third of their revenue. Amazon is a major channel, but again, at the same point of time, it's very, very important for you to be diversified. All these channels will have its own way of you optimizing it and gaining the use. Also, one more point is you may also see different customer personas coming in different channel. The users who come to Amazon might be very different or the user type may be very different in terms of the people who might be coming on Walmart. Once you get your initial sales momentum, and you are already in that growth phase, it's very important for you to be very active on at least three or four different channels, depending on your category of product and be active, because it's always good, and it also kind of de- risks yourself. Something happened. Let's say some product is taken down for a couple of days, a couple of hours. You still get that sales from the other channel, so it's very important for you to be, not in the beginning, okay? You are identifying the first product to sell. Don't go to five channels and try to sell it. It's very difficult, so you focus on one channel, get that initial sales momentum, get into the growth phase. Then, now concentrate on three to five channels.
Ryan Cramer: Absolutely. In 2022, what's that next thing that is the major top of the priority list for either you, the team, or to make sure that sellers are supported in that function? Is it PPC? Is it just fine tuning the tools? Is it going into a completely different topic that we discussed today? What's those initial focuses to achieve here in 2022?
Dilip Vamanan: We are surely doubling down on PPC, Ryan. I think the importance of PPC is more than ever. I think if you are a beginner, you're a big guy, you are a big brand, you need PPC. Amazon is also kind of innovating so much. I think that advertising has changed a lot. Amazon itself has come up with a lot of functionality, so I think PPC is something which we are doubling down. One of the core features which SellerApp right now provides is the automation functionality. We have built two directions. One is essentially, let's say you want the SellerApp to do everything for you that means you just specify," Okay. This is my ad budget, and this is what I'm trying to achieve." The platform automatically does that for you, so you don't need to learn what happens inside. It's like a black box. You define your input. You also define what you want. The platform automatically does it for you. That's the first thing. Second thing is we have also built lot of advanced features using insights and automation. Automation means you are an advanced user. You really want to understand what's working. Let me just bring in another slide, which will help you to get it. I hope you can see my screen.
Ryan Cramer: There you go.
Dilip Vamanan: Perfect. The first thing is, it's a very simple math problem. You just launch your product, and you have just one campaign. You have one ad group, and let's say you have 50 keywords under that ad group, and you are a smart person. Let's say you take 20 minutes for you to optimize a campaign every week. In a month, around 80 minutes, one more than an hour you're spending, which is okay. But when you start scaling up, you have multiple campaigns. In this case, like 10 campaigns, and you have, again, the same number of ad group and keywords. What will happen is it actually increases your time taken from 20 minutes to 3 hours. 200 minutes. I mean, 3 hours it actually takes for you to essentially optimize your campaign. Let's assume that you have a couple of products, and your multiple products in maybe, same category, same subcategory, or in different categories. At that point, this actually increases very significantly. From three hours, it reaches to three days. Even if you are hiring a person dedicated for managing advertising, it's not going to help. That's a reason what we have done is, depending on your phase of the journey, the automation can really help you in different ways. One is it can obviously help you to save a lot of time, which means that you can define the inputs. You can define the strategies, give it to the platform, and the platform can automatically create insights, or it can automatically make the changes on behalf of you. The changes technically comes under around four different buckets. The first one is, again, all these things are working purely based on some of the variables, like orders, number of orders, number of clicks which happens. What does it cause you to get? All the impressions, so you can look at all the variables, and you can create all these kind of different automation rules like," Okay. I want to save money." Any keywords, any search terms, which essentially have more than X number of clicks, but no conversion, mark it negative. The money saver rule can actually work in that way, or it can be," Okay. I want to get a target, a course. Let's say, I want to go to 30% a course, or I want to get into 20% a course," so you might have different. The first thing you really need to do in this case is to have a good campaign structure, but if you have a really good campaign structure, you can specify that," Okay. For this particular campaign, I really want to get into a 30% a course, so a 20% a course," and the platform can actually make those changes on behalf of you. The next one is essentially the keyword harvester, where you really want to increase the visibility you want. You want to understand what all things are actually working for you in the automated campaigns. Identify those keywords, mine those keywords, and then create more visibility for your campaigns. All these are different automation rules, which will really, really save you the time. We have seen both advanced, as well as the beginner sellers, using these rules very effectively to save the time, to create the strategies, and let the platform do it for you, all those things. Again, this is one functionality, which we really feel now no seller can actually live without it, because the time you are taking to run the campaign, optimize the campaigns, have actually really multiplied. You need really a system like this to essentially automate the ads for you.
Ryan Cramer: It makes sense for automation, and I 100 percent agree, again, and this is what PingPong is all about too, is at scale, saving time, money, and effort in that capacity of your investments of your time has to, the greater time you spend into something is it's going to suffer somewhere else. If you can invest and automate in certain aspects of which it's inventory or, like you said, ad management, I think certain aspects of ad management can really help you with that lift and help you grow your business substantially. It'll be interesting to look in the future and how you can help and save that time aspect, which again, leads to money and effort in other areas as well. Very cool. Dilip, we covered very high- level basics aspect of where to start, what it's looking like for a beginner seller right now, and as they're scaling. In the final couple minute or two, what's got you excited about 2022, as compared to the last couple years? Is there going to be significant growth, or are you excited about different tools that Amazon's giving access to sellers? What's kind of that excitement level for you here in the new year?
Dilip Vamanan: Obviously, the growth of E- commerce is amazing. The last year, we saw the E- commerce adoption really growing across geographies. One thing I'm really looking forward to is I'm really looking forward for a lot of those small and medium based sellers, medium scale sellers, to really become essentially more to the growth phase. We saw a lot of people who are actually launching very, very interesting products in Q2 and Q3. Unfortunately, Q4 was not that great for them because of all the supply issues and all the things, which we're aware of.
Ryan Cramer: Yeah. Are you going to fix the supply chain issue for us? Is that something you're going to work on? Just kidding.
Dilip Vamanan: Unfortunately, we crosstalk. At least this year, we are hoping that, I think, people have learned from it. I hope that there are no more issues this year. But again, we are hoping that a lot of sellers who started working the last year, I think many of them have started becoming matured, and they will essentially move to the growth phase. This year, we are really, really looking forward. So last year, in terms of advertising, again, we actually managed close to around$ 320 million of ad spend last year, 2021.
Ryan Cramer: Wow.
Dilip Vamanan: And this year, at least the internal target, which for our team is to at least reach to inaudible, and from all the geographies. We see enormous growth happening from geographies, such as like middle east markets, Amazon Japan. Amazon India is obviously a core market for us. I think they are really growing, and we are working with most of the top sellers out there in Amazon India. It's going to be really exciting. Advertising is something which you have to watch out for. Again, we recently are about to expand a couple of other channels, which you should be seeing the announcements very soon.
Ryan Cramer: Oh, very nice. Nice little tease there at the end of the episode. I'm excited to hear and see. You guys are growing so quickly, and that's what's really crazy, scary. I'm going to say it for you. It's probably very scary, but also very exciting at the same time, and the support level of which your tools are helping people develop their businesses, grow their offerings, and then also just being able to reach worldwide, I think that's what every entrepreneur wants to do. It's really cool to see another business like yours. Again, congratulations on success over these past four years, to many more years of success for you and the team in the future. Hopefully in 2022, we'll be seeing you guys in person and not virtually like this, but we'll hopefully be keeping an eye out for those announcements here coming soon. How can people reach out to you? I just want to quickly, if people like what they hear and they want to learn more, what's the best way to get in touch with you or the SellerApp team?
Dilip Vamanan: I think you can just drop me an email directly. It's dilip @ inaudible. com, or just go to SellerApp. There is a scheduled demo option. I think one of our team will be happy to talk to you.
Ryan Cramer: I was going to say you probably built it out so they can come to you directly via the website. Hey, thank you so much, Dilip, for coming on Crossover Commerce today. Now I'm going to call you a friend of this show, so you're more than welcomed to come back on. If you have more slides to share or just more thoughts and notions and data points, you're talking to the right crowd and the right host here, so you're more than welcomed to come on anytime and share your insights here on Crossover Commerce.
Dilip Vamanan: Yeah. Thanks, Ryan.
Ryan Cramer: Yeah, no problem. Thank you so much, and thank you everyone again for joining me and Dilip of SellerApp today here on Crossover Commerce. This is episode 205. If you liked what we hear, give us a thumbs up. Go ahead and give us a review on social media or on your favorite podcast destination. Again, we're on all the different podcast channels: Amazon Music, Spotify, Apple Podcast, wherever you might listen to your podcast. Go ahead and subscribe to Crossover Commerce with Ryan Cramer today, and be notified of future episodes like this one that we had today. Thank you so much again, Dilip of SellerApp, and all the team there. Fantastic people to work with. Again, everyone, I come from technology before I joined Crossover Commerce and PingPong Payments. Such great functionality that their tools are bringing. Again, it's really hard to create great tools that are continuously evolving with sellers. This is one of those great companies, so you want to check them out. Again, go ahead and check them out. SellerApp. com. Just mention Crossover Commerce or PingPong Payments when you talk to the team over there, but otherwise thanks for tuning in live on Crossover Commerce. Again, we have an action packed week ahead of you. I'm going to throw up some different episodes we have. Inaudible is going to be with David Perry of Carro. We're going to have Dillon Carter of Aura. As you can see, there's lots of Ds happening this week. Episode 208 here Thursday, with our friends over at Perch, the trends of 2022 and what to look for in the tech talent and turbulence of 2022. Finally, rounding out our week with Valentin Radu of Omniconvert. Customer lifetime value in E- commerce. All those great topics and episodes are coming at you this week. Just go ahead and subscribe to us on our channels on social media to be notified when we go live on our social channels on LinkedIn, Facebook, YouTube, and Twitter. I'm Ryan Cramer. This is Crossover Commerce. We'll catch you guys next time on another episode. Take care.
Ryan Cramer of Crossover Commerce talks with Dilip Vamanan of SellerApp one on one as they discuss covering your Amazon Basics in 2022.
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