Amazon Advertising Strategy (Danny McMillan 2 of 2) - a podcast by Michael Veazey

What is the difference in Amazon Advertising Strategy between a seller with 100+SKUs and a seller with 1-2 SKUs?





Danny started Data Brill with Ellis, one of the guys behind the very successful Jungle Scout algorithm



It’s very hard to manage Amazon advertising strategy with 100s SKUs (product lines).



There is software out there for Amazon ads management, but it’s rules-based.  They are very inflexible - because it’s a one size fits all solution. Danny doesn’t work that way. He has in-depth conversations with the clients they work with.



Another problem is that the more you expand, the higher the costs.



Data Brill solves that issue by having a fixed-price service which does not go up with an increasing number of ad spend.

So what kind of clients does DataBrill work for?

They serve sellers with 100s of SKUS -



1 client does $30m a year; another, $10million a month.



Most clients have 200+SKUs - all in different categories: some are commodities; some are in home and kitchen; some are in competitive categories etc.  So one size definitely doesn’t fit all with their Amazon advertising strategy.

Do you just purely work on Amazon advertising? 

No, because PPC has your amazon Advertising strategy needs to fit in with your strategy for your whole business.



Danny sits down with the client and goes over everything and anything: storage fees and Long Term Storage Fees on Amazon; new product development; launches; packaging; inserts; etc. etc.

Do you just have Amazon advertising cost data?

Again, this is another key difference between Danny’s approach and most amazon ad management systems.



If you just rely on the Ad API, all you can see is the Amazon ad data.



Data Brill use the AMS system, so you get a lot more data including crucial metrics like the turn of stock and sales velocity.

Liquidating underperforming stock using Amazon ads

Danny had a client who wanted to get rid of a lot of stock in Amazon FBA. They calculated the cost of getting stock out from Amazon FBA warehouses, vs. building sales velocity and selling through stock.



The main tactics for selling through are simple:  drop the price greatly, run PPC, then try to rank higher and gain sales velocity, so you  can sell through the stock on Amazon.

How do you choose what stock to cut?

It’s important to review all of your data across all your SKUs.



You need to compare Return on Investment and profitability across your different product lines.



You also need to consider how long it will take to sell through a product.



Say you have 100 products - maybe the top 20 are best performers. The other 80% are tying up cashflow



So if you consider your ROI over time, you may cut some of the underperforming products and reinvest that money in the more profitable/higher ROI products.



Ellis runs a seller’s whole account through their system and gets those metrics so that Danny can talk these things through with sellers.

How do you deal with stock that basically isn’t going to sell profitably?

There are 3 main alternatives: get it destroyed; remove it from FBA and sell in bulk; sell through using PPC and low price.

Removal and liquidation via external sources

Remember that if you use a removal order from Amazon FBA warehouses, It comes out in dribs and drabs.



What does it look like to remove it from FBA to put in Craigslist as a bulk listing? Especially in the USA?

Selling via PPC with low price

Just drop the price really low, run Amazon ads at a high bid. Ideally, you’d aim to come out at breakeven but in reality, you may accept a loss that is smaller than it would be via other methods.

Further episodes of Amazing FBA Amazon and ECommerce Podcast, for Amazon Private Label Sellers, Shopify, Magento or Woocommerce business owners, and other e-commerce sellers and digital entrepreneurs.

Further podcasts by Michael Veazey

Website of Michael Veazey