Podcast: Scaling Advice From an Amazon and Marketplace Pro
Episode Summary
In this week’s episode of the Free to Grow CFO Podcast, host Jon Blair dives deep into conversations with Tana Cofer, founder of RosieRai an Amazon growth agency. They discuss the challenges and strategies for scaling a D2C brand on marketplaces like Amazon, Walmart, and Target. Tana shares her expertise on launching products on Amazon, including the importance of strategic product selection, review generation, and understanding the costs associated with marketplace expansion. They also touch on the sequencing of channel expansion and the nuances of cross-channel marketing spend attribution. Overall, this episode is packed with actionable advice for brand founders looking to optimize their operations and achieve sustainable growth.
Customer Data Utilization: Learn how to
harness customer data to improve retention
rates and drive more repeat purchases.
Challenges of Scaling: Explore the operational and financial challenges DTC brands encounter during the scaling phase and how to overcome them.
Key Highlights:
Balancing Growth and Profitability: Tana outlines the dangers of pursuing growth at the expense of profitability and shares tactics for achieving both.
Leveraging Financial Data: Understanding your numbers is key. Tana breaks down how to use financial data to inform strategic decisions.
Episode Links
Jon Blair - https://www.linkedin.com/in/jonathon-albert-blair/
Free to Grow CFO - https://freetogrowcfo.com/
Tana Cofer - https://www.linkedin.com/in/tanacofer/
RosieRai - https://rosierai.com/
Glitter Faced - https://www.glitter-faced.com/
Meet Tana Cofer
Tana Cofer is the founder and CEO of RosieRai, an e-commerce growth agency focused on helping small to medium size businesses launch and scale profitably on any online Marketplace. With a passion for driving online business success, Tana leads her team in creating innovative strategies that deliver remarkable results for their clients. She is also a wife and mother of 3 children and enjoys spending her weekends in her jeep out in the Utah mountains.
Learn more about RosieRai and request a free Amazon Account audit here: https://rosierai.com/contact
Transcript
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00:00:00 - Introduction
00:05:30 - Tana's background and experience in e-commerce
00:10:45 - Importance of sequencing in strategy
00:18:05 - Strategies for getting initial reviews on Amazon
00:25:28 - Discussion on different agency pricing models
00:31:25 - The significance of sequencing in strategy
00:36:47 - Common mistakes and misconceptions when launching on a marketplace
00:41:43 - Considerations for upfront costs when launching on Amazon
00:44:02 - Cross-channel marketing spend attribution and challenges
00:50:47 - Final Thoughts
Jon Blair:
Hey everyone, welcome back to another episode of the free to grow CFO podcast where. As you know, we dive deep into conversations about scaling a DTC brand, but it's all about doing it with a profit focused mindset. I'm your host, Jon Blair, founder of Free to Grow CFO. We're the go-to outsource finance and accounting firm for eight and nine figure DTC brands. And today I'm super stoked to have my friend Tana Cofer on, founder of RosieRai an Amazon growth agency. But that's not all. She's an ex-pattern director and has even launched her own brand, which if you listen to our show, you know how giddy I get about actual brand founders coming on the show because when you've got a service provider who has been a founder, there's just a contextual understanding of what it's like to be in your shoes. So I always love to talk to service providers who are also brand founders. So Tana, thanks so much for joining. I'm excited to chat today.
Tana Cofer:
Of course. Yeah, same. I'm excited to be here.
Jon Blair:
So the reason why I had Tana on is because in today's D2C world, there's just so much chatter about how hard it is to scale a D2C brand only. And when I say D2C only, like Shopify or your .com site only. Back in the day when I was scaling Guardian Bikes, what, that was like eight, nine years ago, there were a lot of kind of like D2C only darlings that were kind of like the first to market. They hit nine figures in revenue without having to expand to another channel. that's really hard to do these days. It's not impossible, but I'd say it's the exception and not the rule. So because of that, more and more brands are looking to marketplaces to expand into different channels. Obviously Amazon as a kind of the easiest kind of lowest hanging fruit marketplace to expand into and kind of the most like DTC, but there's, I see lots of brands expanding into Walmart, Target marketplaces. There's even some other interesting up and coming ones. And it's all because it's like there are channels that are easier to bolt on to achieve profitability than expanding into retail. So like today we're gonna talk about marketplace growth strategy. Tana has got a bunch of awesome experience that's gonna be super, super next level advice for everyone listening. So Tana, before we get into chatting about marketplace growth strategy, I'd love for you to just run the audience through a little bit of your background.
Tana Cofer:
Absolutely. Yeah. So hi, I'm Tana. My background is mostly in the world of e-commerce, you know, graduated and went straight into digital marketing, and I worked for a small brand. helping that brand grow online through email marketing, social, new product launches. And then one of my roles actually at that job was to kick off Amazon sellers. I worked for an MLM and most MLMs don't really want to be on Amazon.
Jon Blair:
For sure.
Tana Cofer:
That was part of my role, was actually kicking off sellers. And so then I realized, you know, it was one of those things where I'd go to my director and I'm like, why are we doing this? Because it's another channel that people can learn about the brand. And they're like, well, we just don't do that. And so I realized, okay, I think there's an opportunity here. And I found this really small agency called iServe at the time, who we all know now as Pattern. And they, they were looking for an advertising person to just kind of learn and figure out how to, how to advertise on Amazon and eBay. This is back in 2018 and it was fairly new. And I was like, okay, I want to learn. I think it'd be cool. And so they hired me and rose to the director, managed the team and, uh, was there for five years. And there I helped brands launch on Amazon, Walmart, Target, eBay. and figure out how to do a full marketplace strategy that included their Shopify to make sure we weren't, you know, directing customers away from their DTC. That's one of the biggest concerns we hear from brands is they want to add a channel. They don't want to just move people away from one to the other. Um, and yeah, that's what I did for five years. Then I left end of 2022, uh, really just cause I had three kids at the time and it was really hard to do, you know, the agency life, which we all know is not nine to five. Um, and, And then come home and be with my kids and go to the wrestling tournaments and the dance recitals and it was getting really difficult. So I decided, you know what, I'm going to step back. I'm going to freelance and do my own thing and be with my kids more. And that freelance turned into the agency that is Rosie Ray today, which is great. It was not the intention, but it was just a lot of brands wanted to work with me and I couldn't work with all of them. So I found a way to try and work with all of them. So yeah. And so now I'm here today.
Jon Blair:
I love that. We have such a similar story because, so I was, I helped launch Guardian Bikes, a DTC brand back in 2016. We started dabbling in Amazon in like 2017, 2018. So the same time, like I consider that to be the heyday, right? Just like really trying to just figure it out and did that for about five years. And then in 2022 left and started freelancing. Cause I too have three kids that are now five, three, and two. And, When I started Free-to-Grow CFO, I basically just wanted to freelance provide a service on the finance side that I did in the brand for so many years. And it just started catching on like wildfire. And I was having so much fun coming alongside founders and helping them make sense of things that were kind of like a foreign language to them. And I was like, you know what, there's a business here. And that's how we turned Free-to-Grow into a CFO agency, so to speak. Very similar paths and I love it. Going back to those early days of Amazon, it was an interesting time to get thrust into that channel and just try to figure out what was it like just in, like I said, what I think is the heyday, the early days of Amazon. What was it like just getting thrown into that and trying to figure it out?
Tana Cofer:
Yeah. When I went over to what was called ICER, they were like, we're not, we're not an agency. We're like, we're helping brands grow. We buy, you know, Pattern buys the product and then like resells it basically on the platforms. And so they're like, we're not an agency. And so I came in thinking like, I wasn't even sure how to like view this company. And they didn't really know how to like position themselves either as a company. They're like, we're just helping other sellers. And so at first it was more like just trying to figure out what our goal is at iServe slash pattern. Like what is our goal? And then once we kind of identified that, okay, we'll suck it up. We are an agency slash retailer. That's what we are. That's okay. Now, how are we going to grow these brands? It was a lot of, there weren't YouTube videos. Like no one really knew how to do it. So it was definitely like, um, like, and I had done Google and social, so it was like, Hey, well, could I use this strategy from Google and create some ad campaigns with, would that work? And then, you know, we'd have, I'd have times where I would spend the entire budget that I had in a month and like two days because I didn't structure it quickly. And like, you know, you kind of go through all those issues and there were times where, I don't know if you remember some of these times where Amazon, like the budget caps just wouldn't work one day.
Jon Blair:
I know. It was so crazy. We checked the numbers in the morning and we're like, what happened last night?
Tana Cofer:
Yep. And then you look at your sales and you're like, well, I mean, my sales were up, so that's great, but it wasn't crazy high. Then you'd call Amazon to get your money back. There were a lot of those incidents that it was nice because other brands were feeling them too. Other agencies were feeling them as well. I knew it wasn't just me. That's what was really nice was even though I had a manager at Pattern, he didn't know any more than I did how to grow brands on Amazon. It was just like a, here's the budget that we were approved, figure it out. I thrive in that environment. I thrive when I'm given the right tools or the tools available, and they're just like, go. Go, make mistakes, figure it out. So that's what we did.
Jon Blair:
You're bringing back so many memories. I won't get into them because then we'll never get to the other things we need to chat about, but I definitely just remember one story I'll share. I remember this whole debate with the first Amazon freelancer we used to do our ad buying of non-brand terms and branded. If there was actually opportunity to expand into non brand and we spend a lot of money trying to figure that out and it just didn't end up panning out for us. And I'm not saying that there's not a strategy there, but it was like some very valuable learnings about like there's a right and a wrong way to try to figure out how to expand outside of like. branded key terms or or keywords that like make sense like for us like kids bike like versus going for you know kids bike helmet and seeing if we can sell them a bike and so A lot of learnings on the right and wrong way to do that stuff. I want to start with the basics because a lot of the brand founders that we work with, they don't necessarily understand what a marketplace is. Some of them may, but from your vantage point, what is a marketplace and how is it different from just a pure D2C Shopify store?
Tana Cofer:
Yeah. So I would say a D2C shop, there is an intent to learn about your brand and buy your product when consumers are there. So I would say it's more of an intent to discover and learn about you as a brand. And on Amazon, It is not that way. Amazon is a very high, I'm here to buy, buy the best price item and they get it as fast as possible. So what the consumers are looking for is different. For sure. When you look at like the time they spend on the Shopify versus Amazon, they may spend more time on Amazon, but it's not because they're necessarily getting to know the brand and like their catalog. Although we try and move customers to the specific Amazon brand store so they can do that. But it's mostly trying to figure out what are all the different types. of what such and such product, self-tanners, like what are all the different top self-tanners? You know, what are their key learnings? Like that's the best place to go to find all of them. And so that's why I would say marketplaces allow consumers to find a wide variety of different brands within a category they're looking at. And from there, either they're going to buy on the marketplace or they will discover brands and that will then take them to your Shopify and your Instagram and your TikTok to learn more about you and become brand loyal to you.
Jon Blair:
Yeah, it's interesting. So like, we tried all those strategies at Guardian. When I say all those, I mean like, you know, what's the strategy for just acquiring customers like on the Amazon platform? Then what's the strategy, like the crafty strategy to get someone to come to the site, or come to the site and buy from there instead, or come to the site after their initial purchase, right? And so we tried things like, I'm just going, riffing off the top of my memory, we tried things like putting certain cards You know, in the bike boxes that would drive them to go register for something on the site and they can get something free or a discount on the site. And that was to get them to buy accessories and buy their next bike on the site. So we did we did things like that. some of them worked, some of them didn't. We tried a lot of different things like in the box like that. And then some other things you mentioned like the price sensitivity, right? Like when you're on your site, you're basically, or when you have a consumer on your site, you're like, you're like monopolize their attention at that point in time, right? And they're not looking necessarily they, they, they, I mean, we know that people go to Amazon and price shop against D2C sites, but in that moment, they're just looking at your site, whereas Amazon is recommending other products like it. There's other people who are bidding on those same keywords that they found you through. And so let's talk a little bit about like, I guess product catalog or merchandising strategy, including pricing on Amazon. For example, eventually, it took us years to figure this out, but at Guardian, we eventually were like, hey, we shouldn't have the exact same products on Amazon as we do on our site, and we should be very intentional about what the price points are and why we're offering that particular product on Amazon versus our site. What advice or thoughts do you have about that kind of a strategy?
Tana Cofer:
Yeah, it's a great question. Um, I have a lot of thoughts, but I would say overall, I would say don't, um, wait, wait, you're likely you launched your Shopify first. Let's say 95% of brands launched their Shopify first. I would say when you decide to go to Amazon, don't just think I'll just download and re upload all of the same products there because then you will have consumers who will move from your Shopify over to Amazon purely for ease of getting it to them within 24 hours, assuming you do FBA. For sure. And then when they do that, you're increasing the likelihood that they're going to compare you to other brands. You're literally putting yourself like right next to them on the shelf as opposed to your Shopify and your Instagram where you can control it. So I would say be really strategic in what items that you believe are your gateway to your brand. Like those top items that really get people to say, wow, you're You know vitamin C is the best vitamin C on the market. I now want to shop all of your products So every brand usually has you know, one to ten of those items that they would do our gateway That is what you want to make sure you launch on Amazon then the next thing is I would say you launch items that go on that go with those, that are adjacent to a vitamin C and a vitamin D, and a multivitamin, like things that can be paired together. Or you could do virtual bundles, things like that, cross-targeting. So that's how I would kind of view that strategy. I wouldn't just think, well we're a brand that sells vitamins, so I want to put all 100 of our vitamins on Amazon so people can shop the whole collection. That's what I wouldn't do. I think it's a waste of a lot of money at first. You can slowly launch more on Amazon as you learn and grow, but I would definitely be strategic with the purpose of Amazon, and that is to discover new brands that are in the right price range for a consumer, and from there, they will then check out your Shopify, Instagram, whatever. Or you could even have an insert that goes in and says, have you seen our other products? And it'll encourage them without saying so, because you can't tell them to go to your site, but it encourages them to try and learn more about you.
Jon Blair:
I love it, I love it. Yeah, so again, we were just figuring it out just like you at Guardian in the early days, and so we eventually landed on, I believe Guardian actually now is not on Amazon anymore, but that's mostly because they just really figured out how to nail DTC growth, and they ended up pulling their products off of there. But for a while, what we did, we had two product lines. We were that we sold the safest kids bikes direct to your door and we had a flagship product line, which was more expensive as the premium one. And then we had an entry point product line. We used to just duplicate the product catalog on both Shopify and Amazon. And then we got wise and we're like, nah, that doesn't make any sense for a number of reasons. And we could almost, we felt like we could prove cannibalization a bit through the data as we were kind of like doing incrementality testing. And so we actually switched to let's only put our entry price point bikes on Amazon. So first off, it was in a price band where it fit in with the price spectrum of competing brands, whereas our flagship bike just stuck out as being way too expensive for Amazon. It was a little more expensive, but it was much closer to the competition. And like if you bought a 16 inch entry level bike, which is, which at that time was our smallest bike. If you love the brand, there's a good chance you're gonna come back and buy a 20 inch bike when your kid gets big enough for it. But if you can't buy that bike on Amazon, and we have won you over as a brand, then you're gonna come back to our site and buy the 20 inch bike. So again, we're no geniuses. It took us many years of not doing that to get to that point. But that's like one example of the gateway product strategy that you're talking about that did turn out to be fruitful for us. Another thing we did eventually was like, when we got overstocked on an inventory position on a given SKU and we needed to move it, we would oftentimes take an allotment of inventory, move it to FBA and try to churn through that inventory on Amazon to kind of re-level the inventory position on that SKU.
Tana Cofer:
Yeah, that's a great strategy as well. You also want to remember when you launch anything on a marketplace, you get a little bit of a bump from Amazon as a new product, like a little bit. But in reality, you want to have reviews and ratings and things on the listing. So I would just say whenever you launch a product for anyone who's like, who will be listening, like the 30, 60, 90 day window is so key to your success on the platform. So make sure you have a really strong presence at the very beginning. and you have a plan to get those reviews, get those initial sales, even if you kind of force them to happen or you make no money because you spend a lot of ads on the beginning, that's what's going to set you up for success and Amazon will serve you more. So that's kind of my other advice. Whenever you're launching any product on the marketplace, when you launch so many, you can't do each individual one intentionally. You're just throwing them up there and then you end up advertising or picking your top five anyway. So just start with those top five. Give those the chance to shine. Then as you add more, you'll be able to move funds and give them each attention.
Jon Blair:
That's actually really good advice and that actually brings up something that I didn't think of in preparing for this conversation which is, A lot of when I think about roadblocks to and your barriers to entry with a lot of the brand founders I talked to one of the things that makes brand founders freeze is like Damn, I'm really nervous about getting that first tranche of reviews, right? Of going from zero to something respectable and it can feel insurmountable at times. If you don't know the right tactics and strategies to use, what advice do you have to like, like you're saying you're, you're, you're actually launching for the first time as a brand, your first allotment of products on Amazon and you have no reviews. Walk me through like some of the high points of your playbook of like what a brand should do to get over that reviews roadblock.
Tana Cofer:
Yeah, perfect question. So I'll share exactly what I did for Glitter Faced when we launched. Our goal was to get 100 reviews as soon as possible and we were able to do it in less than two months and here's how we did that. So we had five variations of our glitter, so five different colors. So I launched them all as five different listings at the very beginning and I rolled each one in what's called the Amazon Vine program. Oh yeah, we did that. you pay to have Amazon give a few consumers who are in this buying program free product in exchange for a review. They don't have to write a review, but 80% of them will write a review. And I don't know all the details for that. So you can do up to 30 for each one. I think we We did the 30, I believe, for all of them individually. And then after we gathered those reviews, we then merged the listings together. So then consumers won all the reviews that went out together. And then consumers could then shop blue, green, gold, shimmer, and pink all in one listing. So at that point, we probably had maybe 70 reviews that all came in from Vine. However, they're all Vine customer reviews, which means if you go to the review section, it says Vine customer review. It says so so, you know as a shopper. Okay, these people received free product right there of you It's still a great review people can still be honest But you also know they probably were a little kinder because they got it for free So they'll give me a five star instead of before so the next thing that we do is We do like what we call search find buy and basically you ask people who are already loyal to the brand And you you said like an email out and say hey You know, go check us out on Amazon, things like that. Remember to search our top keywords, and you tell them to search edible glitter for drinks, things like that, so that you have them search the keywords you want to rank on, and they'll buy on Amazon, because they're already loyal to you, they'll support you, and they'll write a review, and that helps you get the review and get the rank increases. The last thing I would say to do is leverage your brand and your presence on Instagram, whatever, to provide Like promo codes, discounts, things like that, if they prove they wrote a review on the platform. Amazon will ding you if you get too many reviews within the same zip code or in a certain period of time. because they know, okay, you probably paid for those reviews, right? And that's not what you're doing. Essentially, you just are asking your current loyal customers, hey, we're live on Amazon, check us out, here's a promo code for you to get 25% off if you buy on Amazon. And those people are more likely to write a review, because they're already loyal to you. So that's what I would say at the beginning, is use the Vine program, and use your current loyal customers to encourage them to check you out on Amazon, And a lot of brands don't like to do that because they're like, well, I don't want them to know we're there. And it's just like, it's 2024. They know you're going to launch there. Get over it. Just get over it. But don't put all your products there. Just put a select few, at least in the beginning. So you're just asking them, like loyal brands, to help you out. Go see. Go buy there. Walk through the experience. You're going to have some kinks. Maybe they get the wrong color. And you want the people who are first buying to be loyal to you So they don't give you a negative review because they got the wrong product. They would actually email you right? That's what happened to us the beginning Some people got product that was like did not work like it was melted or things like that They didn't write a review because they knew us or were loyal to us. So they emailed us I'm like, hey just so you know this happened. We then can reimburse them figure it all out without them just being all negative and so then we had to figure out that situation. So there's a lot of kinks you want to work out in the beginning with people who are a little more understanding.
Jon Blair:
So I just got to say, if you're listening to this episode and you're thinking about launching on Amazon and you're worried about getting your first hundred reviews, Rewind this episode and take copious notes on what Tana just walked you through. Cause I'm, I'm telling you from personal experience, it took us years to figure that out at Guardian. So like what she just laid out for you is going to save you years of time. And I can validate what she just went through is exactly what we figured out at Guardian bikes, but we figured out the hard way on our own, just making mistakes. So, um, that is, that is fantastic advice. And as I'm sure, you know, from where you sit in the marketplace, like It's a common concern of DTC brand founders who wanna move to Amazon, but they're like, I don't know how to overcome this roadblock. But that's another reason why you should consider, when you're moving to Amazon, find an expert like Tana or her agency or the like, because look, it's gonna save you a lot of money and a lot of time. It's really, really important. I know very few brands, and I'm talking big brands that do 50, 60 million in revenue, they're not doing their Amazon ad buying in-house. It's more common for me to see them doing their paid social and maybe their Google PPC in-house, but Amazon is largely being outsourced to freelancers and agencies who are just experts in doing that over and over and over again. So I highly recommend it. So I kinda want, oh go ahead.
Tana Cofer:
I was gonna add a quick plug-in to my agency. We have three different models that we actually do. One is an hourly. You tell me what you can afford and I'll tell you how many hours I can give you based on that and what I would do if I were you. I love that. I do that because I specifically help brands that are like sub 100 million all online. And I even do ones who are just launching on Amazon, like fairly fresh brands, just like I was earlier this year. For sure. And I want to do it in a budget that makes sense for you. You just make it less of my time. But hey, you're going to get it. We're going to do it right, right? For sure. So I put on that one model. The one that's more popular is my monthly retainer model based on percentage of your sales, yada, yada. And then my last one is I actually do a commission-only model. where if I'm helping you grow, I will also receive the benefit of that, but there's no monthly retainer. So I have these three unique, well, the middle one is less unique, but other unique options for brands to really help them launch and launch correctly and not be too worried about the upfront budget that it is. Cause a lot of agencies charge percentage of ad spend or like a very large, like 10, 15 K flat fee. And you won't get that with me.
Jon Blair:
Yeah, I mean it's, I'm seeing more and more agencies who are starting to go away from the percentage of ad spend model and it's just, you know, even percentage of revenue like as a commission is much different than percentage of ad spend, right? I agree. It truly is, that's more of an aligned metric in terms of incentive with the brand, right? Like increased ad spend is not always a good thing. No. Sometimes it is, sometimes it is not. I'm seeing that actually more and more brands are unwilling to work with a percentage of ad spend model. That's good. I'm not saying that if someone out there runs an agency and they do it that way, that it's wrong. There are good agencies who have that model, but I am seeing more and more pop up that don't do that. and I'm seeing brands, especially the, I'd say the brands that are under 10 million in revenue, the six and seven figure brands, like the percentage of ad spend model oftentimes just doesn't fit with their cost structure. It yields a fee that just like, they might as well actually hire someone in-house to just work on their brand 40 hours a week. So anyways, I think that's really smart what you're doing, especially with the six and seven figure brands. So I want to, there's this interesting thing that I'm seeing happen out in the marketplace. Like our CFO agency, like we work primarily with, we work with seven, eight, and nine figure brands. We have a big concentration in eight and we have some nine figure brands that we work with. But what I'm seeing is that like, D2C brand founders generally tend to know a decent amount about scaling on Amazon because it's a very common marketplace for brands to expand into after like getting some traction on D2C. But Walmart, Target, I'm even seeing like some Nordstrom and there's some other marketplaces like they're really starting to emerge more and more. And I'm seeing more and more brands consider moving on to them. Like what's your take on the opportunity in these other marketplaces and maybe what are some of the other ones, are there any other ones that I didn't mention that you think people should take note of?
Tana Cofer:
Yeah, there are a lot of marketplaces that are now really focusing on the growth of their online, which I think is great. I would say the additional ones that I just don't want to go unnoticed are probably Wayfair, Bed Bath and Beyond as well, and Ulta. I say these three because they are partnering with a lot of the ad tech that's out there, like the Criteos and the PackViews, to allow for agencies and for even brands to be able to advertise on those marketplaces. I think that when a brand is willing, or when a marketplace is willing to invest in making their marketplace so good that other people would want to advertise on it, I think that that is something to look for and to make sure that we're all just aware of. And with my experience with those platforms, they're still fairly new. They're not, none of them are as sophisticated as Amazon, even though I wouldn't really call Amazon super sophisticated. But they're not as sophisticated as them, but they are a lot of those smaller brands like wafer and a wafer Especially I would say is really surpassing Walmart and targets offerings right now and I think that's just having to do with their focus and And that also could just be my experience, because I work with a lot of home decor brands that we want to move to Wayfair, and that makes more sense than other platforms. But there are other ones that I wanted to make sure we talked through. However, I would just say if a brand is wanting to launch, start with Amazon first. It's the most opportunity. I would actually then say after that, do Amazon Canada and maybe even UK. There still is a lot more sophistication there, more capabilities, more opportunities, and it's a lot easier to move into those because all you have to figure out is labeling and your inventory movement because you're already on Amazon US. All you have to do is figure out that step within them and it's fairly, depending on your product, it's fairly easy. Some products, their current label, you're able to advertise. on Canada immediately when you launch the US. So I would just say, look at that first. And then I would then look at the other marketplaces, probably starting with Walmart, Target, Wayfair, probably the ones that I would recommend you start with, depending on what makes sense for your brand. All of those, Wayfair and Target, you need to be approved But you can just apply online. And Walmart, you can just do. Walmart Marketplace, you can just upload online. Right now, anyone can sell on Walmart Marketplace. So that's what's also fairly nice about launching on Walmart. You don't need the additional approval.
Jon Blair:
You know, the advice that you just gave about the sequencing is really important because the more and more that I am involved in helping brands scale, the more that I realize that strategy, good strategy, successful strategy, is so much about sequencing. Not necessarily what you do, but when you do it. And doing things in the wrong order is oftentimes, especially when you talk about channel expansion, expanding into channels in the wrong order can really cause super big problems and so I'm like really glad that you went through kind of what you see as a best practice for sequencing because that's, I think sequencing from a strategy perspective, I think brands, I think just people are good about talking about like what they think they should do and there should be far more conversation about like what's the order that makes sense? Because getting the order wrong can really screw things up as you scale in a number of areas in your business.
Tana Cofer:
Yeah, and I think a lot of people, they think, okay, I'll just get my products up on Walmart or somewhere, and then I'm just going to run a lot of ads and tell a lot of people and our brand and send emails to everyone who currently buys and say, we're on Walmart. And that is not a great strategy in my opinion, because Walmart and Target One thing to think about is those are marketplaces that are online and in-store. Because of that, the product type and category you are in is extremely important at the beginning of your setup. If your cell phone accessory was accidentally put into just like a I don't know, just electronics and not actually cell phones. All of your keywords, your SEO, all of that is focused around your relevancy in electronics. And so your ads will all serve differently. This is different than Amazon. It will serve differently than if you're sitting in the category of cell phone accessories. I had a brand that I worked with when I was in the baby section. You know, nose pickers, nasal aspirators, things like that. We tried to advertise for like three months on Walmart and we were really struggling. And I was like, what is going on? On the call with the rep, they said, Oh, did you know that your product is in the nail clipper? Like the baby nail clipper section. And I was like, no, but, but I was like, no, but why does that matter? This is like two years ago. I'm like, why does that matter? And they're like, well, when consumers are searching on Walmart, you have to remember they're also searching like for in store too. So like if they're searching nail aspirators, that algorithm is going to serve them things that are best in the nail aspirator aisle and category. And if you're not in that category, then the Walmart algorithm doesn't know to serve you. So I'm just saying, when you initially set it up, on every marketplace, but especially ones that have a brick and mortar, you have to get your organic strategy and that initial upload right before you even put any ad dollars in. And that's one thing that I really focus on when I launch brands is we have a full SEO strategy, organic, even an influencer strategy before we even run ads. Because I think those things and content is so important and it's key for conversion. So it doesn't make sense to just like, okay, I'll just spend 10K this month trying to drive traffic there. And it's like, well, you have to actually have a good listing with everything you need and be set up correctly in order to do that.
Jon Blair:
See, that's actually one of those things, just like the sequencing thing that I just mentioned, that a brand could figure that out on their own, but how long will it take and what would be the cost of figuring that out? And that's one of the advantages of working with service providers that are very narrowly focused on whatever it is that you're trying to do, whether it's a marketplace growth professional like yourself or like it free to grow. We just work with Econ Brands. That's all we do all day long. And so, you know, actually, you know, this is actually a little like insider story like at the beginning of us scaling free to grow. I used to think that our value prop was like you get you get what you need from a CFO But at a part-time price, right? Without having to take on the overhead of a full-time CFO. But what we actually started finding is that we provide more value than a lot of full-time CFOs who are not e-com experts. Because all we do is e-com. So even though we're only working on your business part-time, We've seen all of these issues and made the mistakes for you, right? Collectively across our team of e-comm CFOs many, many times. And we've seen other brands make mistakes and we can like, we can, we can save you a ton of time and send you in the right direction because we've just seen things over and over again. We're like, just don't waste your time there. We need to do it this way. Just like the setup that you're talking about with that initial product upload, as well as like. the sequencing of channels and so I just want to call that out because that was a surprise to me honestly even as the founder of free to grow like I used to think that we were it was about providing enough value at a part-time price but like oftentimes we're finding we can provide more value than someone full-time because if if you're on a budget as you're scaling you're not gonna necessarily be paying for the best of the best e-com CFO, right? You're maybe paying for a talented finance person, but this may be their first stint really getting a chance to be an e-com CFO. So they're making the mistakes and figuring it out like me and my team did when we were inside brands in the early days. So we got to make the mistakes on their dime, and now we're here to efficiently give you a lot of valuable insight. for a very competitive price. So anyways, I think what you're walking through here is a couple examples of how you can actually, if you find the right marketplace growth agency, for their fee, they're actually delivering far more value than a full-time person could. That's not always the case. There are agencies that don't pull that off, but that very much can be the case if you find the right one. So what I want to chat about next is what are some common mistakes and or misconceptions that you see DTC first brands make when they go try to launch into a marketplace?
Tana Cofer:
Yeah, I would say, I mean, some of the mistakes, you know, we already shared, which was launching your entire catalog there. I would say one thing that DTC brands make a mistake on is they also, I've had some who want to launch on Amazon, but they want to launch their products 25% higher, like the price point higher because they want to. incentivize people to come back to their D2C. And I've walked them through, I'm like, help me understand how that would work. Like, as a consumer, I see an item at 25% more on your website, so likely it's higher than the other competitors. You know, as a consumer, they're likely not even gonna consider you. So I don't think you're getting, I don't think you're getting what you want. Like, it's just one of those things where, like, I just hear that a lot. Like, I wanna onto Amazon.
Jon Blair:
I see that all the time. Yeah. I see that constantly, actually.
Tana Cofer:
Yeah, and so that's one thing where I don't understand. Maybe it's just me, but Amazon also scrapes sites. I know your GDC may not have a bunch of traffic, but at some point they'll scrape you and then they'll totally deactivate your account. and you have to deal with all of that because you're not allowed to do that. You have to give them the best price. I don't see a benefit to that strategy. Those are the biggest ones I see. I would also probably say I get a lot of people who come to me and they say, I want to launch on Amazon and I want to be profitable right away. And I'm like, I love that. You don't come to me then because there's a lot of upfront costs at first, right? Like that would be awesome. Let's have a goal, let's have a strategy, but let me know, like let me know your profit margins so I understand what that looks like for you. But there are, there are FBA fees, like when you do at least the FBA route and shipping and stuff. And your product at the very beginning, if you're going to be on page 10, you're going to have no rank. And so I will focus on your organic strategy and getting you those reviews for as little money as possible. Absolutely. So I won't recommend you use tools that you pay like $200 for a review because those exist. I won't recommend those. However, I would hope that you would say, I want to launch an Amazon Marketplace, and here's the test budget that I have to do so, and my goal is to break even after three months and make money at six, or whatever that is. Let's be realistic. That's the other thing I get a lot too, I would say, is they want profit immediately. That would be really cool and sometimes it does work but we need to be realistic with what it takes to grow in a marketplace.
Jon Blair:
Besides investing and getting your ranking up and reviews, are there any other upfront costs that brands need to be thinking about as they're putting together their budget to launch on Amazon?
Tana Cofer:
Yeah, I would say the biggest cost is that FBA fee when fulfilling, your storage fee if your product sits for too long, so we need to be strategic on how much product we send in, and then what's called the referral fee. And that's basically the fee you pay Amazon, but they're cut of your product sales. And for every product, it's a little bit different about what that is, but you should budget like 10 to 15% for that just to be safe. So I would just say those are the fees to be aware of outside of any advertising, marketing, the deals, promotions, any of those. Those are the fees to be aware of with your product. What I will say, a lot of brands that come to me assume their D2C will be more profitable to them than their Amazon. And some brands, that's correct. That is correct. It's cheaper for them to fulfill on their own. However, We've done a lot of research and for a lot of brands, the FBA fee and the speed at which consumers get it and the quantity that you can sell within a day because of all those things. actually could make your profitability higher on Amazon than it is on your D2C. And think about all of the staff you pay for to fulfill, all of your current products, that warehouse you're paying for, those storage fees. I would just make sure you do the math and you really think through the cost to sell a single unit within your current Shopify model, and then we can run the same analysis for Amazon. And likely, it's very similar. And a few brands that I started working with, it's actually cheaper for them to do Amazon FBA. So they even added the plug-in on their website that does buy with Prime to actually try and move customers to buy on Amazon because the fulfillment was cheaper for them. So that's one thing I would also say, a lot of DTC brands come to me assuming some things with Amazon in terms of like losing profit and such. And that's just one thing I would just say, let's do the research before we make that assumption, because you would be surprised.
Jon Blair:
Yeah, I mean, that's one of what you're bringing up is one thing that we do is like the bread and butter of what we do as e-com fractional CFOs at Free to Grow. So what we're doing is in our projection models, we're building out the unit economics or the margins for DTC, right? And then when a brand wants to go to Amazon or they already have both channels, we're building out a separate P and L in our projection model and in their actual historical financials. And we're looking at the margin differences and there's a complexity that I'm going to turn our conversation to in one second. That is like honestly a lot of debate around but what we find is that There are some brands where like, well, first off, generally speaking, and there are exceptions, it's not all like this, but generally speaking, advertising is cheaper on Amazon, right? And then when you add in the 15% referral fee, then think of it as a marketing cost, because it effectively is. It's still, for most brands, including the 15% referral fee, tends to be cheaper than what it costs to acquire a customer on D2C. There's a nuance because it depends. If you're a consumable, you might have a really crappy first order profitability on your website, but loyalty will bring that profitability up over time, so it totally depends. But what we often see is shipping is a little more expensive on Amazon, although there are products where it is Amazon's more efficient and it depends on again on your scale because if you're really big on DTC maybe you've got killer discounts that you've Negotiated with your 3PL or with carriers and that's why it's more efficient on DTC, but for newer brands oftentimes Amazon's pass-through cost can be less than than your cost because you just don't have sufficient volume on D2C to negotiate those costs down. So the bottom line is you have to look at the whole P&L including marketing to really understand the contribution margin, which is the true profitability of each channel. And that's something that we really help our clients understand so they can understand where the next marginal or incremental dollar spent can actually produce the most profitability for them. So that's definitely a very important call out that you made there. And now here is the debate. It's cross channel marketing spend attribution, right? Then you're spending heavily on meta and Google and you're also, you also have an Amazon store and Amazon, you know, is benefiting from some of that top of funnel spend. So the tacos looks really, really good. The marketing efficiency looks fantastic on Amazon. but you know you're driving at least some of it from your millions of dollars of meta spend. I'm sure you deal with this dilemma all the time and who's accountable for what in the different channels. Walk me through some of the challenges that you see there and maybe even some of the ways that you advise brands to navigate that challenge.
Tana Cofer:
The answer that everyone's looking for is how do I know? How do I know it's coming from here and here and there? Well, the best way to know is to do whatever you can to add an attribution tax, right? That's the answer. And then you'll see, we'll actually be able to see as best we can where everything is coming from. And for Amazon, Amazon has provided Amazon attribution tax. They've had them for years now. And a lot of brands are nervous to use them because they assume if I add this tag, that means I'm directing traffic from my meta over to Amazon. And I just want to say on this call, that is not how attribution tags work on Amazon. It is literally tracking if Because your meta ads are going to take them to your Shopify. If they then go to Shopify, and they then go to Amazon, that tag will tell you. That's what that tag is for. It's trying its best to help you just figure out. It's a tag. It's not a URL. It's not directing them anywhere. And it's trying to help you see, OK, where did they come from? Where did they buy? The other thing is your attribution links. If you track a sale, you also get a kickback. 5%. So if that is happening, if you're like, I think we're receiving $10,000 a month in sales from our meta. Okay, well, let's add the attribution tag, figure that out and get some of that credit back. Because Amazon wants you to do that. Like Amazon is incentivizing you to do that. That's the first thing I would say is try to find out if that's actually true and add the tags to see. The next thing I would say is, One, in my opinion, that doesn't matter where they buy. At the end of the day, the price is the same, your profit, you've done everything you can to make it similar. Your marketing strategy, every channel should help all channels, right? And that's how it works. As you're running TV ads, Facebook ads, people are going to then look you up on their preferred channel, right? Mostly Amazon, but it could be Target, it could be Walmart. They're gonna look it up on their preferred channel, so we will see an overall lift. My goal as a background, as a marketing director, that kind of thing, my hope is that you would say, okay, that was a win. It'd be nice to know exactly where it came from, but that was a win. Let's do it again. Now, let's maybe do it on a different channel or something to try and diversify it. Unfortunately, I don't have all the answers. All I know is that marketing spenders- Why not, Tana? All I know is marketing spend in one place will benefit the other places. That's why I would recommend adding the tags to try and see if we can get some data. And in my experience, you will see those sales are coming from Google or from Meta or wherever to Amazon Attribution. And the Amazon Attribution, the way I've set it up, but I'd recommend you do, is you have different tags for each channel. So that you are essentially like, here's my Google Attribution tag. So if people are going from any of my Google ads and they're going to Shopify and then they're coming to Amazon, it'll track right here. And I have one for email, and I have one for SMS, and I have one for this and this and this. Does that make sense?
Jon Blair:
Yeah, I mean, and look, I think what your point is, I'll put this in more kind of conceptual framework terms, like, there's no purpose, there's no single attribution method, whether you're talking about using triple whale, or using the tags you're talking about, or using some of these other like media mix model modeling, yeah, you know, you know, AI software is like, None of them are perfect. What my general advice is that you have multiple tools, right? And what you just mentioned in the tags is a tool. You use multiple tools to try to figure out what the attribution is, right? And some of it is, so like for example, and none of them are perfectly right, right? But like if you've got like, I think of it as triangulating. So like at Guardian Bikes, we did some of the tags that you're talking about. And then we also used Google Analytics. We also used post-purchase surveys. And then we also had inserts in the box to try to drive post-purchase surveys. we used all that data to try to triangulate what the trend appeared to be. And it's not perfect, but when you look at it from multiple angles, you can get at least a sense of the trend, right? And then additionally, we're always tracking what appears to be the trend. the marketing of MER on Amazon, the MER on Shopify, and then the blended MER, right? So like, the MER on Amazon, which is the inverse of Tacos, is like, it always, it will, if you spend heavily on top of funnel, like on Meta, it will be artificially low, right? And your, if you allocate all Meta and Google spend to your Shopify store, the MER will be artificially low, But if you look at the blended MER cross channels at the same time, if you see that remaining stable or even going up. you know that, like you're saying, the tides are rising across all channels. So again, none of those are perfect attribution or performance measurement methods in and of themselves. But if you look at it from multiple dimensions, you can triangulate if things are getting better or worse, right? And go from there. We're still generally fans of saying, use the in-platform attribution to make changes to ads, right? Yeah. at the tactical individual ad level, like use what the platform is telling you is working. But take a step back and look at some of these other ways of looking at aggregate attribution to assess if your overall marketing mix is profitable or not. That's kind of how we advise clients.
Tana Cofer:
Yeah, no, I think that totally makes sense.
Jon Blair:
So, unfortunately, we do need to land the plane here shortly, but before we do, because at Free to Grow, as I mentioned, when I started the business, there's a big personal life aspect to it, right? And much more missional. in terms of our reason for existence. And one of those reasons is that we want to give accounting and finance professionals an amazing place to work where they can be challenged and have fun, but not sacrifice their personal wellbeing. So because of that, because that's near and dear to my heart and to our company's heart, I always ask a couple of fun personal questions at the end of every episode. So I actually gave you one to prepare for, but I thought of a second one that I'll throw out there. as a curveball, but first off, what's a little known fact about you that you think people would find surprising?
Tana Cofer:
Yeah, I would say the most surprising fact about me is that I am a trained bodybuilder.
Jon Blair:
Nice.
Tana Cofer:
So, most random fact about me, I did a competition in June, took fourth place. Yeah, so I spend two to three hours in the gym most days.
Jon Blair:
So funny enough, I did not know that about you and my mom is as well. Um, so my mom, she's 67 and she competes a few times a year. And, uh, yeah, she's, uh, she is, uh, quite, I mean, her workout regiment, whenever she comes and visits, visits me, we're out in Austin, Texas. She's in Southern California. She somehow, I don't know why she does this to herself, but she somehow always schedules her trips out here during what she calls peak week, where she has to, you know peak week, right? And we have to buy, when we go to the grocery store, we have to buy this whole list of stuff. We're eating chips and salsa, and she's eating carrots and celery and salsa, and peak week, Every time she does a peak week, she always says, this is my last competition. I'm never going to do this ever again. I'm like, yeah, right, mom. That's what you said last time. But anyway, so I actually know about that. And I think that's very, very cool. So my surprise question was about being a mom of three, because as a dad of three, I'd say that I have learned far more about life being a father and trying to straddle being an entrepreneur at the same time than like any other kind of like balancing act in my life. When you think about being a mom, but also being an entrepreneur, maybe if you could share just a little bit of a thing or two that you use as a hack or a guiding principle to just like try to keep that balance as best as possible.
Tana Cofer:
Yeah, those are great questions. So I work a more unique schedule so that I can spend the afternoons with my kids. Because of that, I get up earlier in the morning, like 5.30 or 6, and I do a lot of the emailing and some of the stuff that isn't as strategic that I can do right when I wake up. I'll do some of that in the morning, then I'll spend breakfast with them, get them off to school. Summers are just insane. I don't know how anyone you know, survive.
Jon Blair:
My house is insanity. My house is insanity right now.
Tana Cofer:
I'm ignoring the summer months when I say this, but that's kind of what, you know, that's what we do. And then I get them off to their preschools or high school. Like I have kids with a variety of ages, so to the schools. And then I work until basically one or two and then I'm done. I'm done. I will, might open up my email or my computer once the kids are in bed, but I don't work the afternoon hours. And a lot of, I only have two people on my team, a very, very small team. And they also, I'm like, what hours work best for you? What can you do with me? Some of them are like, Oh, I like the afternoons because my kids do afternoon kindergarten, like perfect. Right? So we make it work so that everyone, everyone on my team, including me can live the life and the lifestyle that we're hoping for. And so that's what I do.
Jon Blair:
I love it, it's super important. We didn't do this on purpose. We have a small team, there's about seven of us full time. But it has turned out to mostly be parents of small kids that were on the brand side and decided to leave the brand side and wanted a little more flexibility but still wanted to do something challenging and fun. And I think one of the coolest things is that there's seven of us that all have little kids And we're just so in the same season of life. And there's a couple people who aren't, and that's totally fine. They still fit into the team well. But they also have kids, they're just a little more grown. And so we don't hide that like, hey, I was up all night because my kid had a fever. I've got to take my kid to get their blood drawn. And I had to bribe them with taking them to the museum. And so do you mind if I do that this morning? I had someone I was talking to last week who had to do that, and I'm like, dude, 100%. Because at the end of the day, here's the stupid thing. If you say no, guess what? They're going to do it anyways, and then they're going to just feel like they're hiding it from you. And it's just like, let people be who they are. If they do good work, and they're good people, let them be who they are. It's just – it's a virtuous cycle that just like really creates an amazing work environment and it's one of the things that keeps me going every single day here.
Tana Cofer:
I agree. The two people I've hired are stay-at-home moms. I just feel like they're the ones who want this unique lifestyle. They want it and if we can help some of those people get it, then we should. 100%.
Jon Blair:
We have three stay-at-home moms on staff so I'm right there with you. I love it. Well, before we end, where can people find more information about you, your brand, and your agency?
Tana Cofer:
Yeah, so RosieRai.com pretty easy to find. You'll learn more about me and what we do and what we offer. and then glitter-face.com. You can also find both of those on my LinkedIn, Tana Cofer, T-A-N-A-C-O-F-E-R and those are probably the best places to find me. I'm also on Instagram, you can see my bodybuilding pictures if you don't believe me there and yeah.
Jon Blair:
I love it. Well, this was an awesome conversation. I'm truly thankful that you came on. This is a topic. Of course. There's just a ton of advice here that I think is gonna be super helpful for our listenership and even some of our clients that listen to the show. So if you guys are interested in getting help on the Amazon or Marketplace growth strategy side, definitely hit up Tana. And don't forget, if you want more helpful tips on scaling a profit-focused DTC brand, consider following me, Jon Blair, on LinkedIn. And if you're interested in learning more about how Free-to-Grow's D2C accountants and fractional CFOs can help your brand increase profit and cash flow as you scale, check us out at freetogrowcfo.com. And until next time, scale on.
