Monitoring Pricing Across Channels Leads To More Stable Retail Partnerships
September 20, 2020
Here’s a glimpse of what you’ll learn:
- Andrew Schydlowsky talks about how brands have evolved the way they use online channels over the last 20 years
- TrackStreet’s approach to helping brands sell products online
- Common distribution mistakes brands make when creating an online presence
- How TrackStreet helps brands address unauthorized seller activities and price disparities across different online channels
- Andrew’s advice to brands on how to become more consistent and transparent online
- What brands can do to reward their partners who are creating consistent branding for their products
- The strategic ways brands have transitioned to more stable and profitable branding and pricing situations
- How Andrew helps brands create clean channels
- Andrew’s experience in the e-commerce industry and the mentors and advice that have helped him along the way
In this episode…
Some of the most common challenges that brands face when selling online include dealing with unauthorized sellers and price disparities across different e-commerce channels. Not only do these issues have a negative impact on a business’ branding, but they also lead to inconsistencies in pricing and customer experience.
To help solve these challenges, Andrew Schydlowsky and his team at TrackStreet developed a system that helps sellers track unauthorized sellers, visualize price trends over time, and identify who is violating their policies. With this information, brands can create cleaner channels that customers love.
In today’s episode of the Buy Box Experts podcast, host James Thomson is joined by Andrew Schydlowsky, the Founder and CEO of TrackStreet, to talk about the common distribution challenges that brands face when selling online. Andrew shares workable strategies for creating stable and consistent branding, reducing price disparities, and building stronger customer relationships. Stay tuned.
Resources Mentioned in this episode
- Buy Box Experts
- Controlling Your Brand in the Age of Amazon by James Thomson and Whitney Gibson
- Prosper Show
- Andrew Schydlowsky on LinkedIn
Sponsor for this episode…
Buy Box Experts applies decades of e-commerce experience to successfully manage their clients’ marketplace accounts. The Buy Box account managers specialize in combining an understanding of their clients’ business fundamentals and their in-depth expertise in the Amazon Marketplace.
The team works with marketplace technicians using a system of processes, proprietary software, and extensive channel experience to ensure your Amazon presence captures the opportunity in the marketplace–not only producing greater revenue and profits but also reducing or eliminating your business’ workload.
Buy Box Experts prides itself on being one of the few agencies with an SMB (small to medium-sized business) division and an Enterprise division. Buy Box does not commingle clients among divisions as each has unique needs and requirements for proper account management.
Learn more about Buy Box Experts at BuyBoxExperts.com.
Welcome to the Buy Box Experts podcast we bring to light the unique opportunities brands face in today’s e-commerce world.
James Thomson 0:18
Hi, I’m James Thomson, one of the hosts of the Buy Box Experts podcast. I’m a partner with Buy Box Experts and formerly the business head for the selling on Amazon team at Amazon, as well as the first account manager for the Fulfillment by Amazon program. I’m co-author of the book “Controlling your Brand in the Age of Amazon”, and co-founder of the Prosper Show, one of the largest continuing education conferences for Amazon sellers in North America. Today’s episode is brought to you by Buy Box Experts. Buy Box Experts makes ambitious brands actionable and unbeatable. When you hire Buy Box Experts, you receive the strategy optimization and marketing performance to succeed on Amazon. Go to buyboxexperts.com to learn more.
Today our guest is Andrew Schydlowsky, CEO and Founder of TrackStreet. A firm that monitors what’s happening with brands across the internet and delivers actionable market data so brand teams can focus on building strong customer relationships, driving sales and building the bottom line. A serial entrepreneur, Andrew founded several other internet related companies before track St. Andrew brings his nearly 25 years of e-commerce experience to us today, sharing best practices on how brands can track what is happening to their products and branding online. So welcome, Andrew. And thank you for joining us today on the Buy Box Experts podcast.
Andrew Schydlowsky 1:39
Hi, James, really great to be here. Thanks for having me.
James Thomson 1:42
Andrew, I want to start our discussion today by getting your thoughts on how you’ve seen brands evolve the way that they deal with online channels over the past 20 years.
Andrew Schydlowsky 1:51
That’s a great question, James. You know, I started my career selling my own brand online direct to consumers. So really kind of the dawn of e-commerce and I know you go back a long time as well. And there’s just been this evolution. You know, I myself was an e-commerce seller on every channel over the years and moved lots of volume and every channel you can imagine, you know, and I remember there’s a time when I felt like there’s this little upstart named Amazon that came into my space. Now, I felt like I was pounding my fist at the sky, not really knowing what I was screaming about. But you know, there’s this real evolution that I saw, particularly when I was a top seller for many brands. And for a long time, they kind of ignored the internet, they were very retail focused, and then the conversation became, hey, so this internet thing is really disrupting what we’re doing. You guys don’t have any overhead my mile of course, ignoring my huge facility and people running around, but hey, you know, our stores are complaining a little bit. We need to fix, you know, fix this, but they don’t really understand what they need to fix or how to fix it. And so they would kind of choose the person who has the largest flag flying and the case was made. Sometimes they say, Hey, we want you to fix this, but not really understanding that if one person made a change and really matters, because were you in retail, you’re taking 15 minutes to drive from store to store online, takes you seconds to go find another vendor. So it doesn’t feel like this has been this evolution of understanding. So, you know, this is like the early days before maps were real. And people were trying to find different ways putting pressure on their partners to start conforming. And then the conversation started changing and they started understanding that I have certain conversations, okay, the internet most likely isn’t going to go away. So how about thinking about what it could do for you, and guess what it could do what it’s doing to you. And this has been an evolution. So people have gotten more sophisticated and understand more and have started to learn about the possibilities in the internet and incredible marketing machines, right. So the ability to get real time feedback into what you’re doing right and wrong. And driving sales through sales is just incredible. It’s just an incredibly powerful tool if you use it, and people are starting to get it, so they’ve gone from ignoring it, to hoping it would go away, right? begrudgingly accepting it. And now start understanding how to harness it. And that’s where people like you come in, we come in is how do you harness these channels, so that they work in context of your larger sales strategies. And that you own your channels drive acceleration through them in a way that makes a flywheel because they can always just support each other, but they’re just starting to get there.
James Thomson 4:31
So you talked about what the internet does to you versus what you can do with the internet. We’ll talk a lot more about that in our discussion coming up here. But I would argue that there are still a lot of brands that haven’t figured out that the internet is here to stay and they better integrate some aspect of e-commerce into their overall channel management strategy. I’m just amazed by brands that are doing 10s of millions, hundreds of millions of dollars that are still so retailer focused and essentially digging a hole for themselves that will take time to get out of. So let’s let’s transition and you know, let’s talk for a few minutes about TrackStreet. What does your firm do? What approach Do you take to helping brands with map violations? What do you think about unauthorized sellers? What is your philosophy on all of this?
Andrew Schydlowsky 5:18
So for us, it really comes down to the basics. You know, we begin by giving our partners control over how their products are sold. It’s really about regaining control. And there are three phases of how we can talk to people about internet commerce, multi-channel commerce, and it’s really about protecting, assessing and growing. And each of those pieces has some steps within it. But it’s really for us about the basics. Now let’s make sure the right people are touching your product at the right time. Maybe at the right price points, and to know what’s happening really at the point of sale and always so it’s kind of like thinking about what would you What would you want to have happen in the retail world when you’re walking down the aisles here products, what’s there. So a lot of people, a lot of brands think about the retail world, they’ve got great controls in place. But it’s really time to think about digital shelves. So taking what you might want to do in the retail world, but applying it online, it’s actually tremendously much easier online, putting controls in place, but for us, our protect processes not knowing who’s touching your product and where but really ensuring that where it’s being sold your maximize your opportunity to sell, and that could be making sure the images are right, the content is right. Making sure that if someone’s screaming out your product, having an issue next to penicillin in terms of a review that you’re addressing it really easy stuff. There’s a lot of low hanging fruit there. But that’s really where we start, regaining visibility and then control over the channel. And for us, the key to that is not just information but action. How do you go to sleep at night and make sure that computers and systems do things for you so you come to work in the morning and you’re empowered to do what you’re hired to do which is make an impact on your market and not push buttons?
James Thomson 6:59
So first To realistically be in a position that they’re thinking about using your service, what are some of the questions they have to have already worked through in their mind? Or priorities they’ve already evaluated and said, We need to do something here. Yeah.
Andrew Schydlowsky 7:12
So you’re the first they’ve had, they’ve had to make a decision, that internet is not going to go away, that they got to meet it head on, and that you can’t rely upon your resellers to do your job for you. And what it really comes down to is relationships. And this is really about making a commitment to support your reseller network across channels. And the first step is really committing to say, you know what, we are going to meet this internet issue head on, we’re going to get regain control of it and then empower our partners and so thinking about the world of a pie, so we’ve got a pie in front of us, the pie is so big. Now I want to let people just take out their fork and start eating from it. And everybody said Go forth and make as little bites as always people chew into the pie? Or do we want people to help us make more pie? So we kind of reframed the conversation of, you know, who are your partners? Are they added value? And how do you support them so they can help you make more pie. That’s really the first step for us is meeting brands, when they’re ready to make some decisions on them are hard, but putting a structure in place, but we do what we know. When you take control back, put a plan in place and then stick to it. You’re consistent, that Marcus responds really well, your partners come into play, and you do see that sales expand. And so it’s really consistent though but first I was making a decision that you’re going to actively pursue fitness.
James Thomson 8:42
Okay, so I’m a brand. I’ve decided that, for better or worse. I’ve got to have a presence online. Talk to me about some of the big distribution challenges you’ve seen brands encounter when they first dip their toe in the water and say, Okay, I need to have an online strategy. What are the bad actions they’re taking whatever The bad non actions they’re taking. What are you seeing through the brands that you’re exposed to?
Andrew Schydlowsky 9:06
Yeah, so the first thing I think that people start doing is they start looking at the Internet. And they heard about this thing called map. And they say, you know, we need a map.
James Thomson 9:16
Andrew Schydlowsky 9:17
Because people are doing it. And people want to ask us if we have one. So yeah, we’re gonna have one and they go Google something, they pull it down. And usually it’s GoPros map policy or something along those lines, that great SEO and they put that in place. So first, they select a policy that’s not really there’s it doesn’t fit with their business strategies, and then they put it into the market. But the problem with a policy that isn’t one isn’t yours and you haven’t truly committed to is that you’re now something you said you’re gonna have enforced, you have no way to do it. There’s really nothing worse and so you’re gonna do something and not follow through. So you’re really, really doing a burning trust of all your partners and so what we see is all A lot of times people come to us when they’re done all this stuff committed to things that they can, they can’t really follow through on and everybody’s upset with them and things are freefall. So it’s really about if you are going to retrain your market, and you’re gonna make a statement that your partners matter, your brand value is paramount. And you’re putting a structure in place. And so resale policies wherever you map up an authorized dealer program, resale distribution policies are all a foundation on which your entire sales program isn’t built. So like building a house, if you build it on sand, it’s gonna crumble. it is really critical that there is a policy set of policies in place that foundationally sets you up for success later, that you have legal guidance, gets firm, enforced consistently and proactive. Definitely. You don’t want Want to choose and pick and choose who you call and prevent forgetting who you don’t and wishy washy on it has to be unilateral keeps us out of trouble. But this is kind of their first step. So there’s reasons why you might want a map, or you might want an authorized dealer program. But the whole goal of all of this is to give you the power to make decisions for the best of your brand, and to best support your resale partners who are going to help you make more pie.
James Thomson 11:29
So let’s let’s talk for a minute about the partners that are going to help you make more pie on the Amazon channel. Typically, we deal with two types of sellers, the authorized sellers and the unauthorized sellers. on Amazon. There are a lot of unauthorized sellers. And quite frankly, there’s a lot of incentive for new unauthorized sellers to pile on. Much of the benefit of these pricing policies that have been put in place for authorized sellers. Only look at the authorized seller portion. And so for all that, download it Have a map policy on Google that a brand has done. They don’t yet have a strategy for dealing with unauthorized sellers. Tell me a little bit more about how you help your clients think about migrating from focusing exclusively on the authorized seller activity to addressing the unauthorized seller activity.
Andrew Schydlowsky 12:19
So it’s a great question. And the challenge is, when a brand sells a product, it goes out the door. This product shows up in all sorts of the craziest places you kind of know that the oftentimes you think you’re selling to, isn’t it you’re selling to because they’re selling to their friends, their cousin, their sub distributing it without proper controls, proxies of all the wrong places, including liquidation channels more. In your book that you wrote with Whitney Whitney Gibson does a great job of detailing some of the craziness that happens, right. So there’s some great case studies in there to talk about where product ends up and how to mitigate some of these challenges. But without a Map program and a map policy. You’re right, you’re right, you can you can kind of control to some level pricing, but really for the people, you know, and so if people are popping up on Amazon or other places that you don’t know, they’re unknown to either, they’re just somehow got product of yours, right do a whole lot, you got to yell and scream at them. So what we will do if you even know how to reach out to them, if you do, right, and that’s where having a database meal that investigated people ours is critical. I mean, that’s where companies like Excel, we have an investigation team. We average 335 new seller identities uncovered a day. So we have an in-house team that excels in this with a private investigator-led background. Yes. Yeah, you have to know who people are. There’s no question. But at its core, you’ll be able to differentiate the Go app from unauthorized sellers. goes back to what kind of foundation you have legally. And this is where your foundational documents Matter and are able to be a difference between an authorized and unauthorized seller. Even if the product looks the same, there’s actually a difference based on who they are and how they obtain the product is critical. And so really we want to do is preserve rights for the brand so that we have a function in place. If the seller is unknown or non offensive on a whitelist, as an authorized to sell where they’re selling their remedies available to them, based upon there being differences in the product, as they’re called material differences, might you want to talk a little bit about right, but essentially, these two products look the same, but actually behave differently when a consumer has them in their hand, because that’s based upon that you can go after them in our systems, what we do is essentially, we have essentially like a workflow diagram that based upon who they are, and where they are, our systems can action, the reach out and next steps with this incredible database. But more than that, while our clients sleep, our systems are then reaching out based upon the diagram that may be sketched out in an app. Or their lawyer gave them every part of the way and will take appropriate action to elevate the key of learning them through a workflow. The goal is that one time people don’t know if you have a program in place, if they’re a liquidator, they might not know how they got your product. It’s informing them what they’re doing is wrong. So he has to remedy a situation that really quickly separates the camp who was testing you who didn’t know who was intentional. And as I’m moving down the intentional path, you actually have remedies to get the product back with a mobile marketplace, take other actions, but you’ll have different teeth and avoid chewing depending upon who they are and where they are. But it’s critical that you have that foundation in place. So you can treat unauthorized unauthorized differently, and use some kind of automated way to share how these people filter and separate moving through a process.
James Thomson 15:53
So we’ve talked a lot in the last few minutes about authorized versus unauthorized. Even if everybody who sells your product is authorized. There is this strange learning that brands eventually go through where they realize that, let’s say on Amazon, everybody’s authorized. But Amazon is actively going out and finding lower prices that some seller is selling somewhere else. How do you help brands think through this question of price parity across channels, regardless of whether the sellers are authorized or not? How do you deal with this issue?
Andrew Schydlowsky 16:29
Well, look, the internet is an ecosystem. We spoke briefly when I mentioned briefly that in retail, it takes you 15 minutes from go to store to store Yes. And online takes seconds. So your internet isn’t just Amazon. You know, the last numbers I saw. There’s a recent report that said 58% of global sales online happened in marketplaces. So globally, which is a huge number and arising as a marketplace model. Shopify is moving towards kind of an interesting marketplace model, TBD, where it ends up going to Walmart or eBay, groceries within the marketplace transitions, like there’s all sorts of things moving in that direction. But there’s also an incredible number of websites. And, you know, Amazon is crawling and looking at all those price points. So is Walmart. And everybody’s looking at each other. And so it’s really critical that you think of the internet as this ecosystem. It’s just, it’s easy to pick up Amazon as you plug your phone and go, look, look what I found, alright. But it’s actually not that simple. You have to have strategies that think about a wider scope. Because I guarantee you that the people you’re selling to you are thinking wider as well. And so we’re all you know, so often we’ll find that clients engage with us, and I think that they have 60 or 70 accounts. There’s one recently 6070 accounts, they had almost 2000 websites selling their products, online websites, not marketplaces. Plus marketplace sellers. It was insane. Yeah. And they were basically rebooting a brand. And you can’t, no one’s gonna take your product until you fix this. And fortunately, we had a really quick solution for them. And we were able to very quickly and it’s been tremendously successful. But it’s a wide world of the internet and it’s extremely chaotic, very dynamic moves really quickly, and you have to have a broader scope. So if you start with visibility, who’s doing what, where, when was it looked like over time, from that you can create strategies and use that’s the first step is Hey, what’s going on? Once you know the depth of the issue, then you can take action on
James Thomson 18:42
So Andrew, you’ve talked about the transparency of the internet. Let’s talk about you know, besides using software like TrackStreet, what else would you recommend brands be thinking about doing themselves to become both more consistent and more transparent with how they choose to operate online
Andrew Schydlowsky 19:01
Look, I think what it comes down to? That’s a great question. It really really comes down to one, having a financial set of documents that applies to everybody. So let’s treat people the same. So what are the rules? Let’s define the sandbox, you control that. And let’s take our best information that we have images, content description, make it easy for partners to get it in clear and create a clear set of packages that people can use to market and brand your product for you. And think about carrots where the incentives for people to be good partners for you, not just pricing, but what other values do they get for helping drive your brand and, and align yourselves with them. So how do you get visibility into their sales and ensure that the sales are happening where they are, but reward them for bringing you new customers, right. I think that alignment across channels is really important. I think looking at engaging experts in Amazon, Walmart and such to optimize their presence, we want consistency of brand everywhere it’s sold. Yes, not everybody has in house experts in some of these areas. So go get the best and create a strategy that you’ll be consistent with across the marketplace.
James Thomson 20:23
So let’s talk about some of these carrots. What are some of the carrots that you’ve seen brands effectively use to reward certain authorized partners who are participating and helping to create consistent branding, consistent pricing and consistent customer experience?
Andrew Schydlowsky 20:38
Yeah, so sometimes it’s as simple as that can be special markup units for people only available at a certain tier to be really successful, it could be certain bundles, right? That could be a certain product, it could be swag. It can be certain kinds of branding or logos those clients can use on their websites or in store as ever. Though no more than an authorized dealer badge, but a level of that. It could be included on where to buy on their website? Yes. It’s all the things that help them sell more of your product for you. It could access things like videos and educational, it could even be a technical support line that only customers of your Platinum program seller can access to, which is awesome, by the way, so that it can be integrated into your foundational documents or have an authorized dealer network. Those are things that signify to your partners that you do care, because that’s what really asking like, do you really care about us? I thought you love me? Yes, yes. But I
James Thomson 21:44
care about you only so much as you care about me at the same time. And if we both care about each other, we’re better aligning our incentives, then yes, but but you know, the struggle that we see as there are so many brands that historically have said but we’ve always worked with these retailers and we can golf with these retailers and we love these retailers, while at the same time those retailers are playing the games behind their backs, sourcing products or sorry, distributing products to other folks and so on. Getting people getting brands to break through that mentality of why am I so focused on my retailers, when ultimately I have to create consistent experiences for customers, that’s something that brands that don’t have direct to consumer experience, often struggle extensively with.
Andrew Schydlowsky 22:28
I don’t think there’s ever been a time when brands have been further away from their customers. And they are now I think, as a huge challenge. And I think particularly the times we’re facing at the moment where a lot of retails being closed, and is in transition that has been eliminated. And so I think you raised a great point, like how do you align with your channel so that you get closer to the customer? It’s not your turn to take the customer, but you want to participate in that conversation with the customer. And how can you drive brand loyalty through your partners is really the question
James Thomson 23:01
So let me ask you this. Buy Box Experts, we consistently are surprised how many brands aren’t working to control their pricing across sellers on Amazon, let alone other websites, that there’s still this perception that somehow online isn’t that big a deal because it only accounts for a small percent of sales. These brands are focusing their sales efforts almost exclusively on brick and mortar, without a clear understanding of the negative impact that pricing discrepancies and branding discrepancies online can create for their overall business. What are your thoughts on that? And how do you get these brands to wake up and realize, okay, actually, we have been completely ignoring a rather big problem.
Andrew Schydlowsky 23:42
I think all brands will get there. The question is, do you get there when there’s still time to save yourself? Mm hmm. One price is a determining factor. People are people buying your product or not. That’s what’s driving it. And unfortunately, without some kind of program in place, that’s what happens. Just drag race to the bottom in places like Amazon. What happens is there’s this incredible downward pressure on price across all parts of the channel very quickly. Brands realize that not only do we want to buy it for so much less they can afford to make that same quality product. But they can’t make it. We have to cheapen it. But then they can’t do r&d on the cool new product they want to market. And all of a sudden a perception in the marketplace that that really amazing $200 product, actually is a $100 product. And it can be $100 products that might have price controls, but they’re different classes of product. Right, right. And so all the work the brain has put in to create their place in the market and the pride they’ve put into what they build because it’s awesome as he wrote it, and it’s a terrible place to be. And so, you know, I think as retail has transitioned right now we’ll continue to I think people have gotten a pretty rude awakening. The internet is going to matter a lot more. Is that I mean? And it’s I think it’s mattered. Now they’re starting to get it. And there’s a scramble to figure out what that means. But we find that most people are not using technology to do anything on the internet yet. They’re really just like, very slowly figuring it out. And the internet’s super complicated. It changes all the time. It’s really complex. And the problems you face managing the internet aren’t well addressed by putting lots of people in a room on them. And so there’s a learning curve, and there’s technology needed. And not only the experts know what they’re doing, but you usually need to give them bugs to take care of things for them. But usually, what we’ve seen is people come when their retailers have made enough noise, they started screaming enough. So they’re reactive. I think what’s going to happen is the people screaming aren’t current inside the organization. And those are the warning signs. And the question is, you know, are you listening internally of where the markets really headed? And are you able to see The shifts online and the reaction and the behavior online, be radically different.
James Thomson 26:04
So let’s shift gears here for a minute. Andrew, I want to talk about when brands decide to finally do something about controlling their pricing, stabilizing prices across channels, there’s a lot of stuff that has to happen within the brand organization. And that period of transition is one that, quite frankly, a lot of brands are scared of, you know, three to six, three to nine months that they may have to deal with. Retailers either being cut off or retailers having to adjust to no longer being able to sell online. Talk to me about some of the clever nuances you’ve seen brands use during that transition period, to be able to move from the chaotic situation to one of stable situations where everybody understands the rules, and everybody is to some level abiding by these new rules. Talk to me about that transition period and what you’ve seen companies do.
Andrew Schydlowsky 26:58
Yeah, so think there’s a couple pieces here. And first of all, what can people expect of this period? What comes out the other side? Without question what we see people that commit to a program, my commit, I mean, there’ll be times when it feels like it’s not working. And this is a bad bit of bad decision that is getting through that stage. We all know sometimes making change is hard. Yep, you gotta get through the dirt. But we see every single time that the end result is increasing profitability. So for example, we had one company in the pet world go through this process, and it was not pretty. But what we saw in the end was that they added a 60% increase in retail sales. So meaning that one is the stores they dealt with, widen their product and deepen their product, which is a huge win. And they got accounts that wouldn’t take them in often and took them in all of a sudden because they believe that they actually do love them.
James Thomson 27:55
Andrew Schydlowsky 27:56
And we actually saw that their Amazon sales were at a higher price. Points tripled. Right? So that’s what came out for these guys. It was millions of dollars worth of revenue. So that’s what you want to get towards. How long does it take? It really depends on the brand we’ve seen within a week’s 92% decrease in authorized sellers and map violations. Right? Like that’s an example of one recent brand we took on tremendously effective. Now the process is clear communication throughout. You want people to know what’s coming, you are now proactive. And it’s about consistency, proactiveness , indication it’s pulling the line. And this isn’t about punishing people. This is about rewarding your partners. This is good for them. It’s good for you. And the ones that are complaining and making the most noise maybe aren’t your partners. And so, you know, stars if you go through distribution, communicating what’s expected with that channel, so hey, we’ve got a program place. Here’s what it is. If you’re walking an authorized dealer program, it’s very possible that some of these rules may say, store and sell our product, but no one has our popular internet, anywhere, no one even buys it from you distributor, let’s run our whitelist. If you don’t know whitelist, they’ve got to go apply to be on that whitelist from us. I know it’s inconvenient, I’m sorry, these are the new rules, it might be uncomfortable, or the process of communication what’s expected by the distributor retailer, you tailor and you have to make some hard choices. You want to be consistent in that. And as you want to communicate what’s coming ahead of time, begin the process and roll it out. It’s staying consistent throughout with the messaging as being proactive, unilateral in your responses, meaning you’re not picking and choosing. You are actually following through people now. It doesn’t mean that you have to take certain punishments. You actually do have some room and some of these policies to make decisions and based upon what’s happening and where, but you want to have consistency. And what we see is a one to many how much supply the market, it might take him time to dry up places that are leaks. And so you might have a bit of time where people are just simply liquidating, so prices may drop, you’re gonna figure out the market. It’s um, yep. But it’s holding strong. But what happens is most people clear out, you separate the world is the filter process. You’re pulling the onion, who were the good kids were the bad kids. Your mom is looking out the window, they’re gonna start jabbing each other with sharp sticks, but they stop jabbing each other when they know that mom’s watching and that’s your job. Maybe our job. A great
analogy. great analogy, mom watching the kids. Yeah, it’s little kids and puppies. I mean, in the best way because we love them. We’re doing what we’re doing because we care. And so you go through this process. You separating them, seeing consistently what we started seeing them as one price may stabilize. Generally, that’s the goal, we’re stabilizing pricing, meaning we increase margins or preserve the channels. And you may have a short term dip in your sales mix, sometimes you don’t. So as inventory clears out, you will see that adjustment of inventory, but the pie hasn’t changed. Your pie is still the pie. But what’s happening is you’re changing who’s eating the pie. Right, right. And so that will all of a sudden you start seeing pull through and generally markets expand because all of a sudden your partners that care about helping you sell because you’re protecting them, and their pie actually increases.
James Thomson 31:42
So let’s talk about protecting your, your, your partners, there are a number of companies out there that are in this business of helping to remove unauthorized sellers. And one of the challenges that I have seen with this approach is companies saying well, I got one 80% of your unauthorized sellers. So look at what a great job we’ve done. The problem is the 20% that are left behind are big, sophisticated gray market sellers, their lawyer up, they know how to source product 10 different ways. So getting rid of 80% of the unauthorized sellers simply moved around who had a piece of the pie, it didn’t get rid of the fact that a lot of the pie is still being served by the wrong kind of companies. How do you help brands think through how much of a clean channel they need before they’re going to start to see positive benefits that consistently will remain in place.
Andrew Schydlowsky 32:32
There are lots of people that claim it can ruin sellers for you. But you have to be very careful. What we don’t want is someone filing false counterfeit claims on your behalf. We don’t want his people going into the Brand Registry and hammering removal orders for people based on trademarks. You know, they may be tools that appear to be used for something but the reality is that’s not removing authorized sellers. If you do have a counterfeit confrontation as a true counterfeit with a test that would go through Brand Registry, that’s where you could do it. But if you keep on pushing these buttons for the wrong reasons they stop working. If you are filing false claims through the Amazon portal, you do expose yourself to huge liability. people doing that for you it could be causing a huge problem. So there is a difference between counterfeit products in authentic products that are not right based upon being sold by the wrong person with material differences all based on the foundation of your documents. But you want to be careful what you’re doing here and so when someone says I’m going to kick people, you ask a lot of questions. You know, that’s it should be a warning sign if they’re guaranteeing a certain removal rate. Watch out right, he’s really biting later. But Awesome. Well, yes, you want to get rid of the low hanging fruit and you’re going to clear up some of the cap some of the some of the market but yes, it looks great. It’s really part of the problem and It’s a cleaner report to show your boss. But have you saved? You know, we really addressed the problem of not getting there.
James Thomson 34:06
No, no, not at all. You’re not
Andrew Schydlowsky 34:08
you haven’t. And so you really don’t need to look at your supply. Right is how are people getting products? What are your reseller requirements is their sub distribution, how you start cutting off source you’re gonna go back to your foundational documents, you have audit rights of who you can sell who people have been sold to, your ability to track and trace your product. There’s interesting ways of doing that. Now, we’ve met some interesting companies lately that have some interesting technologies where we can kind of see where things come from. But this is where it gets more complicated, sophisticated, you are going to do some investigative work. You just testified. You need to maybe use your auditing rights. You’re going to work backwards, your channels, you might want to evolve some legal in this because diversion is tough. And those of us have been in e-commerce while men have been doing it at some point in time, too. Yeah, there gales I
James Thomson 34:59
I can speak. You know, between having helped recruit unauthorized sellers in the past and having been an authorized seller myself at some point, you know, I learned a lot about how leaky these channels were and how leaky these brands let these channels be. And quite frankly, it’s kind of scary when you see household name brands, who literally have no clue what their salespeople are doing, in terms of, you know, bastardizing process products and letting anybody have access to it if they have cash. It’s really crazy how some of these sales incentives that are put in place, motivate all the wrong kinds of behaviors. The brands don’t realize they’re creating problems for themselves long term.
Andrew Schydlowsky 35:37
I can’t remember I can’t even count how many times I was a big e-tailer. Call me at the end of the month at the end of the quarter hander. I need a big order. Yep. Well, what can you do for me? Yep, well, I’ll give you an extra 30. Great, well, I’ll take 80 Grand 100 grand on that product, and I’ll take this of that, and what else but what How about if I order to Under grant, what do you do? Well, hold on, I’ll get back to you. They go to their boss, they come back like Know what? Give an extra rebate. Okay, well, where’s the pot going to go? Well, they didn’t care. They’re chasing their number. You’re absolutely right. Then it goes 15 directions, right? chasing numbers is dangerous. But this is hard when you start getting to the more sophisticated sellers they are sourcing from masa people. And you know, when I was a seller, Amazon used to try to get products from me. Maybe it was you back in the early days, trying to get transfers from us, I don’t know might have been. And so yeah, this is where it gets complicated, but the job is to peel the onion. If you know, the safest city or town in America still has crime. Mm hmm. You have to stay on it. And you have to be proactive. You’re gonna peel the onion. And but you can get to the core. It’s amazing how effective you can be if you’re consistent and diligent and you decide as an organization as a priority also means you think about how you incentivize your salespeople. If you reward them for compliance, our channel is really clean. You guys get a bonus So yep, yeah, aligning with partners and internally as well.
James Thomson 37:06
So Andrew, let’s, let’s change gears here for a minute. I want to talk a little bit about turning points for you professionally, whereas when you were building brands and working with brands, when did you realize you were good at working with brands to help them with their online shopping oversight? Hmm, let me let me put the question a little bit differently. One doesn’t just say, Hey, I’m going to build a software company that specifically looks at identifying unauthorized sellers and violating sellers. How did you think about getting into space and how did you identify that, you know, this is something where you thought you could be successful?
Andrew Schydlowsky 37:43
So I think like, like many stories, there’s not a straight line. There’s lots of ups and downs and twists and turns. I think the bottom line is at heart, I’m a marketer. I’ve always loved applying technology to hard problems. That means solutions. And I think we people like to talk about superpowers, right? We all have something that we think really makes us. Yes. And mine has always been that I can walk into a room and figure out what’s missing, and solve it. And so, in my last businesses, we reimagined how to acquire customers and how to drive growth using technology ways people hadn’t before. And as I was talking to all these brands, seeing that the future was right in front of them, but they weren’t really seeing it. And they were running another direction from it. There’s an incredible opportunity to help them move along the lifecycle to re empower them and drive incredible growth because the internet is the most incredible machine if you utilize it right. And so I got really excited about how we create new ways of bringing brands closer consumers educated across communities, driving knowledge and transforming sales, based on value. And communication not based on price isn’t the lever. But how do you make a flywheel? And that’s what gets me really excited. And I saw there’s an incredible opportunity to build things that hadn’t existed yet to take some of what I built previously, and commercialize it, scale it up, but work closely with companies that were really good at helping them understand where to go, but also incrementally how to get there. So how do you connect the pieces so that you can go through a journey of incremental steps to creating a machine that starts flying? And that for me was really exciting and seeing our customers get it? Even in conversations all of a sudden, their eyes light up when they get that they could do this and how to get there. incredibly exciting. So for me and for us, we think about our first step: how do we look at the pain points that our customers face every day and rank them in the hierarchy of pain? And how do we solve them? They go to bed at night, to work in the morning and the world’s better place. And that’s super exciting. And that’s really about empowerment. And for us, it’s a core. But our driving success for people that use our systems and people we talk to on a basic basis is really exciting. So it really started clipping in, you know, and really in my last company, but every time we had a conversation where people’s eyes lit up, and they just got it. We know we’re on the right track, I think, for all of us who are in e-commerce now must have been in a long time, but we’re still in the infancy of what we’re going to be. But the path is accelerating. And so it’s incredibly exciting and fun to be part of this journey where we’re starting to ramp things up very fast. And you know that knowledge transformation is incredibly important, but we’re gonna have to connect the dots faster than we ever have. That’s a really good place to be. We’re all gonna be thinking about e-commerce very differently in four or five years.
James Thomson 40:54
I want to ask you one one final set of questions. For our discussion today to talk to me about Who were some? Or who are some of your professional mentors? And what kind of advice Have they given you? That has really helped you focus to do what you do today?
Andrew Schydlowsky 41:13
You know, I made the mistake in my career of being a lone wolf. Far, Far too often. You know, I had to take, you know, a very rocky road and learn some hard lessons because I was just too stubborn to be listening. The last several years particularly, I’ve had the really good fortune of having some incredibly successful and smart people guiding me. And I think through my life, I’ve had a number of mentors. But often my ears weren’t ready and weren’t open enough. Interestingly, my grandfather was probably the first and he would say learning is earning. So keeping your ears open and paying attention around you is a man who dropped out of school when he was eight. self taught, you know, in so he was hugely influential, you know, as are other members of my family but professionally, you know, in the last number of years particularly, I’ve learned a lot from people who have taken an idea and grown it and scaled it in the software space specifically, as you know, it’s really thinking about customer first. Now, how do you measure success, and really think about keeping vision intact, but making sure that throughout the process, you’re focused on the success of the customer that drives everything. And so, the interesting thing about software in e-commerce is it moves much faster than other industries. So while I was using mobility technology, last thing I did that you know, they were retail etail, they’re very different. Soccer was much faster. So I’ve been very fortunate to have people within our company, some of our investors have scaled large companies in the software space. So thinking about how we put the parts together and main customers customer centric And build systems that keep us accountable and transparent. It hasn’t been easy. And we’re still I’m still kind of looking and building those mentors. But I think every stage of business you go through, you find new people that take you to the next level. So I’m still in that process. But certainly our last investment or venture capital backed and funded and have been really incredible investors that have built some large e-commerce platforms in the world previously. And each of them have one on one by one helped guide me through how do you build a sales process? How do you build the customer success process? How are you dealing with customers and transparency and in brand consistency, we have to protect our brand, just like we protect our clients brands, we have to communicate the value of what we do in a way that is kind of universal and thinking about what’s next without getting too distracted. And so yeah, that’s about it. evolutionary process just like everybody we work with, we’re all growing and learning. But very, very fortunate to particularly last number of years have people around me that have really been tremendously helpful? keep me on track.
James Thomson 44:11
Andrew, I want to thank you for joining us today and sharing your insights with our audience. For those of you interested in learning more about Andrew’s organization, please visit trackstreet.com thanks for joining us today on the Buy Box Experts. And now to finish today’s podcast I’d like to share some final thoughts. For third party sellers to be successful on Amazon, a critical lever will be soliciting feedback from customers. We at Buy Box Experts are really big fans of the team at eComEngine, and it’s tools that help Amazon sellers to simplify the process of messaging customers of Amazon orders. To learn more, go to ecomengine.com. And with that, I want to thank you for listening today and I look forward to joining you next time on the Buy Box Experts podcast.
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