National Brands Navigating Amazon’s Challenges- Episode 2
October 19, 2021
Darcy Meier is the Director for eCommerce Category and Customer Development at Newell Brands, the company behind trusted names like Graco, Baby Jogger, Sharpie, and Dymo. Darcy was also Senior Director for eCommerce at Vi-Jon, where she managed the company’s private label relationship with Amazon and developed their multi-year e-commerce business strategy. Throughout her career, she’s also worked at Amazon as a Vendor Manager and Walmart as a Buyer.
Here’s a glimpse of what you’ll learn:
- Why assortment discipline is among the biggest challenges brands face when they sell their products on Amazon
- How to create a sustainable business model on Amazon
- How leaning into frustration-free packaging (FFP) can make selling bulky items more sustainable and profitable
- Darcy Meier talks about managing your overall brand, customer experience, content, and listings on the e-commerce platform
- Amazon’s Brand Registry and Project Zero and how they’re helping companies deal with brand misuse by third-party sellers
- How can brands combat new competitors — and why should they keep their eyes peeled?
- Why brands should monitor reviews and leverage their data to support future innovations
- How national and regional brands can bring their existing offline brand equity to Amazon and other e-commerce channels
- Darcy’s tips for people who are taking new leadership roles in the e-commerce space
- What Amazon’s private label creation can teach other brands about the importance of being more responsive and e-commerce-ready
In this episode…
Amazon provides an open marketplace where anyone can create a listing and start selling their products without a lot As more buyers shop online, e-commerce has become an essential channel for brands to reach more customers and remain relevant in the digital age.
But, as top brands pivot and strengthen their hold in the e-commerce space, they find themselves facing tough challenges. Obstacles like steep competition and brand misuse by third-party sellers can stop new businesses before they even get started. On top of that, companies also struggle to make their business sustainable within the Amazon ecosystem.
On this episode of the Buy Box Experts podcast, James Thomson and Darcy Meier, Newell Brands Director for eCommerce Category and Customer Development, run through some of the biggest challenges brands face on the Amazon platform. Darcy shares tips on how organizations can grow and protect their brand on Amazon. She also mentions ways companies can leverage online data to guide future innovations and help them strengthen their position in the e-commerce market.
Resources mentioned in this episode:
- Buy Box Experts
- James Thomson on LinkedIn
- Newell Brands
- Darcy Meier on LinkedIn
- Amazon Brand Registry
- Amazon Project Zero
- Amazon Frustration-Free Packaging
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.
Podcast Episode Transcripts:
Disclaimer: Transcripts were generated automatically and may contain inaccuracies and errors.
Welcome to the Buy Box Experts Podcast. We bring to light the unique opportunities brands face in today’s ecommerce world.
James Thomson 0:18
I am James Thomson, one of the hosts of the Buy Box Experts Podcast. I’m a partner with Buy Box Experts and the former business head of the selling on Amazon team at Amazon, as well as the first account manager for the Fulfillment by Amazon program. I’m the co-author of a couple of books on Amazon including the recent book, Controlling Your Brand in the Age of Amazon. Today’s episode is brought to you by Buy Box Experts. Buy Box Experts takes ambitious brands and makes them unbeatable. When you hire Buy Box Experts, you receive the strategy optimization and marketing performance to succeed on Amazon. We also support investors with due diligence services. Go to buyboxexperts.com to learn more.
Before I introduce our guest today, I want to send a big shout out to the team at GETIDA, a global leader in Amazon FBA auditing and reimbursements. GETIDA analyzes your Amazon data, reconciles your FBA inventory, and files claims reimbursements on your behalf. To learn more, check out getida.com.
Our guest today is Darcy Meier, director of ecommerce category and customer development at Newell Brands, the company that brings us such brands as Greco, Baby Jogger, Sharpie, and Dymo. Darcy also used to work at Amazon as a vendor manager and Walmart as a buyer. Darcy also used to work at Vi-Jon, where she managed the private label relationship with Amazon, coordinating manufacturing for Amazon’s salema line of products. Darcy, welcome to our Buy Box Experts Podcast today.
Darcy Meier 1:52
Thank you, James. Glad to be here.
James Thomson 1:53
So Darcy, Newell sells dozens of its portfolio brands on Amazon, with you managing the Amazon channel relationship. Give our listeners an overview of where Amazon fits into your company’s overall distribution and branding efforts.
Darcy Meier 2:09
Yeah, so Newell is a very large, diverse, you know, CPG company. So Amazon is a crucial partner to Newell and clear focus for us as we continue to focus on ecommerce and how the customer landscape is changing. So strategically important for Newell and obviously Amazon is at the center of that ecommerce.
James Thomson 2:34
How do you use Amazon 1P versus 3P? How do you think about those two different forms of distribution on Amazon?
Darcy Meier 2:42
Yeah, for us, just due to the diversity of our portfolio and our products span across multiple GL that Amazon 1P really is the best solution for us, and managing that relationship with them.
James Thomson 2:58
So compared to traditional brick and mortar channels, Amazon represents a number of unique pressures that brands need to tackle. Tell me a little bit about some of the biggest challenges that you face today, when you put your products onto the Amazon channel.
Darcy Meier 3:16
Yeah, I think you know, I truly think one of the biggest challenges for Newell and probably lots of other vendors as well, whether 1P or 3P really is around assortment discipline. And I think that comes with a lot of internal building, but also working with Amazon. So understanding what your assortment looks like, you know. At one point, right, there used to be a day that we put everything on Amazon. We have this big, endless aisle. But now, there’s a lot more discipline, a lot more focuse on not only the top line of what you’re going to drive in your sales, but also the bottom line and profitability for both you as a manufacturer, and Amazon as they continue to focus on what’s profitable for them, as they can continue to invest in logistics and other things in their platform. So I think that this really is a time that brands need to say, “Hey, what do we have on Amazon? When’s the last time, when’s the last time we even looked at it isn’t the same items we launched five years ago, and we haven’t touched the content or we haven’t touched the assortment.” So I really do think the biggest challenge is around your assortment, because then all of that has downstream impacts to what is happening on the platform. So I think for me and my team it’s something that we review at least once a year. And that way we can say, “Hey, what I used to be have on there, do we by chance have duplicative items that maybe they came in different configurations or packaging, and one is more profitable or advantageous.” So I think, I think it really is around assortment discipline and then a lot of the challenges that you’re facing is around the control and what you’ve put on the platform.
James Thomson 4:57
When you look at some of your lower price point items that you have in some of your brands, how do you think about using ecommerce on a platform like Amazon to sell an $8, $10 item?
Darcy Meier 5:11
Very challenging, right? I think what’s hard with that is, you know, a lot of times when you look at an item $1, $10, $5, you know, there’s a metric always crimes, right? I think at one point years ago, it was a $5 item, and it became eight and it became 10, then I think in some GLs, it’s even hey, it’s under 15. So I think it’s really understanding what that dollar value is first, because I think what happens, everyone goes into that term, traditional thought process, I’m selling you a widget for $5, retails for S10, you have this massive margin, how can you not make it work? And so I think it first starts with, you know, making sure your internal group understands that it might look like Amazon’s making all this money, but it’s just the economics don’t work that way. And so I think you have to understand strategically what’s important that you want to lean into on the Amazon business, and how are you going to do that. But I think you also need to take it a step further. And you need to say, what is the right quantity? So yeah, one widget costs $5. But when the customer buys three, and then all of a sudden, you have an ASP of $15. So it’s really a balance of what is the customer going to buy, and what is going to work in the Amazon ecosystem, from a profitability standpoint. And I think there really is a happy medium there. It just requires extra thought, and a different way of looking at it than you would at any other business. And I think one of the easiest ways to start is, how do you sell the product? So does the existing configuration of the product have an inner pack or a case pack, that is a quantity that the customer will purchase? And if that’s the case, it’s very, it’s a very much a light lift for the manufacturer, because the configuration already exists. If the configuration doesn’t exist in the quantity that the customer will purchase, and that’s where you have larger conversations internally on saying, here’s the value of this item on Amazon, how do we need to invest in it and build in it that we can have a sustainable business model? Because at $5 and $10, right, there’s, there’s no such thing as a sustainable business model at Amazon and a low ASP environment.
James Thomson 7:24
So the flipside is you also sell very large oversized items, you know, car seats and Baby Jogger. I mean, those are big items, large shipping expenses. How do you think about those types of products?
Darcy Meier 7:37
So I think those types of products, I think, then fall into all the conversations around SciDAC and FFP. Really making sure that one, at the first and foremost, the item makes sense for you. And Amazon, I think that’s where we start. Sometimes the item doesn’t make sense to make the investment in. So first, start making sure that the item is a viable option that you want to include in your assortment on Amazon. And then within the bowl, big and bulky is really leaning into the SciDAC FFP. Yeah, it’s an investment. But it’s going to make your item more sustainable and more profitable in the Amazon ecosystem. And we’ll make a long-term plan for that, that those products and make it in a way that’s sustainable for both parties.
James Thomson 8:22
So you’ve got your full catalog, and you’re putting only a certain chunk of those onto Amazon. Turns out some of those products you don’t sell on Amazon, other people may think they have a wonderful way of making money selling them. And so that leads us into this discussion of how do you manage your overall brand? How do you manage the content on everything, not just the listings that you’re creating, but listings that other sellers, random sellers, may be creating for products in your brands?
Darcy Meier 8:52
I think it’s important to pay attention. If someone can figure out how to do it, I think the question is, why aren’t we doing it? And so I think it’s first understanding what’s out there, really understanding what’s out in the 3P space. I think it’s also self-reflection, I use that term a lot, which nobody wants to hear. But how did the product even get there in the first place? Right? So I think as a manufacturer, it’s very easy to say, “Oh, you know, this 3P person did this or this blame or whatever. I think you really have to come to the root cause of it. So the root cause of saying, “How did it get out there?” And so I think the question, and then how does the economics work? So I think there’s two things right and the only way the economics works is somehow within the 3P marketplace there being much more sophisticated and shipping than Amazon is, which probably isn’t the case. The likelier case is they figured out how, how to ship it in a bundle or a form that makes sense and, or they’ve gotten it at a lower cost. And so the question is how and so I think it goes all the way up within your organization and how your costing structure is laid out. I, you know, I think some, some manufacturers have really gotten ahead of this and understood this, you know, years earlier. But others are still trying to figure out. It goes into, do you sell it internationally? And is that where the leakage is coming from? And what is your, what does it even look like on Amazon? Do you run a highly promotional business, without quantity limits? So I will tell you, in a lot of our businesses where we run promotions, we do attach quantity limits to limit the arbitrage or hopefully, you know, not having at all, because the idea of a promotion is to delight the customer and give them a good deal and not to be the reseller market. And so I think that’s really important for any manufacturer. I also think we do a lot on Amazon business. And so it’s also important to make sure that you’re working closely with them, and what your quantity discounts are there. But you’re also again, fostering a good deal for the customer, and not necessarily fostering a good deal that it can be resold. That’s not the intent of your purpose.
James Thomson 11:14
Let’s shift to the branding component of your responsibility. So we talked about pricing and managing the selection, when we look at the actual product listings themselves, and figuring out not only what content you’re going to put on the products you’re selling, but how do you manage the branding that other people, these third party sellers, are using to represent your brands? How do you keep an eye? How do you maintain high-quality, consistent information? How do you go through that process?
Darcy Meier 11:46
Yeah, I think first and foremost, the human can’t do it. So I think that you, this is really a space that you do need help from a partner, to really monitor that for you. There’s several out there, you know/ I think, I think one of the big challenges that we actually see in our space, in addition to content is just quantities, so maybe we sell something as a pack of one and then all of a sudden, you know, three pieces come on there, two, three, four, whatever. And so initially, it looks like a better deal, but then there’s a shipping cost attached to it or, and again, it’s not creating a good customer experience, because it looks like the customer is getting a really good deal, and then they click into it, and then they’re not and then they think it’s your fault as the brand owner. So I think we use a service that, you know, automatically cuts tickets for us to clean it up. So essentially, that we’re hopefully gonna, you know, wear it out a little bit, but I think it’s important for the customer experience. So in that way, we’re, we’re monitoring variations. But then we’re also monitoring, changing content. And so we’re making sure that we’re catching any kind of changes in content, to make sure that we are, we have a hold of our brand, and what it looks like on the platform. And again, I just, you can’t do it with just the human. You know, I think, I think it’s important that you do, you know, the great term of walking your store. And that also is very much the term on Amazon. You need to walk your store. So I think within your team, there doesn’t need to be human intervention, and you’re looking at items and you’re seeing if there’s anything that looks odd, but at the same time you need, you need that service in the background, helping you and bringing those things to your attention as well.
James Thomson 13:25
Talk to me about situations where you’ve had your brand hijacked, or you’ve had people misuse the branding of your products. How do you find those and you talked about certain services. But once you find those ugly problems, now what?
Darcy Meier 13:39
You know, I think, again, it’s you know, like as Amazon, everything is complex, right, but I think it’s being a part of Brand Registry as well. So obviously, if there’s a clear violation, that you’re running the tickets through Brand Registry, and then as part of Brand Registry, right, then ensuring that you have all your brands as part of Project Zero, which would be the next level of Brand Registry. So and then transparency. So I think that in certain brands that we need to be very protective of, we have either started or launched processes around transparency. So then that way, the things that you really need to protect and put the investment in, you can through the transparency program. But I do think if you know, that’s really the first step to go and then, you know, because of our relationship on Amazon, we do have quite a few direct lines to Amazon. So anything that gets extremely serious, we’re definitely escalating to a person at Amazon as well, but we’re still doing that supplemental to the Amazon processes as well.
James Thomson 14:49
So let’s shift gears. I want to talk about some of the constant barrage of competitors that I’m sure you’re facing within some of your brands where you wake up one day, and the, a slew of companies we’ve never seen anywhere other than Amazon. And they are aggressively going after the same customer. How do you deal with these new markets of competitors that, as I say, only exists traditionally on the Amazon channel?
Darcy Meier 15:18
Yeah, it’s a, it’s a challenge, right? I think it’s a challenge, because there’s immediate customer feedback, right? If you were shopping in a store, and you saw some brand you never heard of, and it was a lot cheaper or didn’t quite have the same features and benefits, you might make that decision on the shelf. But you’re probably going to go with the one that you know. The difference on Amazon, right, is there’s always customer reviews attached to it. So as long as there’s enough positive feedback, the customer doesn’t really see the friction is gone. And so the customer says, “Well, this is cheaper,” or “This looks like it has different features and benefits, and everyone that’s bought it loves it. So I’m going to try it out.” So I think it’s a huge challenge for brands. And I think, again, something that shouldn’t be taken lightly. You know, I think when you know, Amazon started getting serious about private label, or even as you saw additional of these brands come in the market, people kind of brushed it off, I think. And I think you can’t do that. It might seem small, and it might seem small at first, but they gain traction so quickly. And they also tend to be more nimble companies, right? They tend to be maybe less resources, which is an advantage and a disadvantage. But they also can make changes quickly or add additional content, or there’s no, there’s no hierarchy to go through, right. So they tend to do things quicker and faster, depending on how the customer is reacting, which can also be a very big challenge for brands. So I think it’s for, for a branded manufacturer, I think it’s really important to really monitor those brands. And I think it’s also important to educate your organization that, you know, hey, we think that competitor, you know, we know competitor A is our biggest competitor in the market. And as an, as someone that’s on the Amazon account, you say, wait, full stop, it is everywhere else. But by the way, your biggest competitor on Amazon is not competitor A, it’s actually competitor Z all the way at the end of the line that has one shelf placement at the bigger retailers. And so I think it’s very important within your own organization that you’re having those conversations so people know where to focus. Because if not, they’ll just think that everything’s okay because you’re crushing competitor A, when all of a sudden competitors Z has been creeping up on you the entire time. So it’s something you have to monitor, I think there’s tons of way to combat it through, you know, whether it’s promotions, or marketing, or content when monitoring what’s working on there. And like I think, again, that’s self-reflection. What do you or don’t have that they do? And then what are customers saying in the reviews? And is your content reflective of what the customer is looking for? So I think there’s great learnings there, but you do have to pay attention to what’s out there?
James Thomson 18:17
How have you seen large national brands use all that feedback and all that customer engagement that’s happening often on some of the smaller brands, but use that so that you can evolve your positioning and your product selection on a channel like Amazon? Is it realistic to expect this big billion-dollar collection of brands is going to be in a position to adjust and, and provide products that will be going head-to-head against some of these smaller sellers?
Darcy Meier 18:49
Yeah, I think, I think that is the challenge because I think it goes back to that the smaller sellers tend to be again more nimble, make changes quicker adapting to the market probably faster. I think it does start, you know, with probably the team that’s monitoring the Amazon account and then that your, your setup again. I think you, you can have a blend of staff and additional services that you’re paying to help you support. But I think you know, at minimum you should have someone monitoring your reviews, and that data should be trickling, trickle through your organization and talk through at the R&D level, the product development level to the account management and marketing level. So do I think big brands will be able to adjust quickly? No, probably not as quick as anyone would want them to. But I do think there’s a lane that they can actually have. You know the thought process and the, the drive behind additional or new innovation that also can combat it. But I do think, in the moment, you do need to monitor reviews and content and change everything that you can that you need to, that the customer is looking for. And then you need to use that as larger conversations throughout your organization, as you’re thinking about future innovation. You need to be using all those data points so that your, your new innovation is competitive to, again, not just the big competitors that you traditionally think of, but again, all these other competitors that are popping up in the ecommerce space.
James Thomson 20:24
When you look at the things you’ve done within larger brands, have you seen your current employer, past employers, have you seen companies actually make adjustments to their overall line of products, because of feedback that they’ve specifically received from what’s happening on Amazon–changing the packaging, changing the types of products, changing the pricing, changing some aspect that fundamentally, people say, well, that’s just for Amazon? And yet, it’s actually something we should have done a long time ago for all customers and all channels?
Darcy Meier 20:58
Yeah, I love to say, you know, in some of my past life early on, I would say, when does the Amazon dictate the organizational changes, right. And I think I repeat that a lot, because I do think exactly what you’re saying, like, not only should you be looking at this in the Amazon space, but is there actually an opportunity to scale and be more efficient as an organization, if Amazon drives those changes throughout your entire organization, right. And I think there is, there’s a huge opportunity in the people that have figured that out are being successful not only in the ecommerce space, but within their broader organization. And those are the folks that have a more profitable Amazon business, that have a more profitable structure and their own manufacturing process, because they’ve scaled things in a way that the customers want. Because Amazon is one of the few places that you get free feedback directly from the customer. And if you are not using that as an organization, then you are missing a colossal opportunity for growth, innovation, R&D, everything, not only on the Amazon platform, but the total market. And I think, you know, as, as folks in the ecommerce space, it’s important to drive that message up, it’s not being driven down. But once you prove that out once or twice, the message I have seen then is flipped the top down and like, Oh, this is actually pretty useful stuff. We should talk about this sooner than later.
James Thomson 22:30
In my 15 years working either on Amazon or with Amazon brands, I’m constantly surprised how national and regional brands expect that when they start selling on Amazon, somehow they’re going to convert their existing offline brand equity into some sort of immediate Amazon market share. And lo and behold, it doesn’t work that way. So I’d love to hear your thoughts on how do you fight the good fight on Amazon to protect and leverage decades of brand equity that, that you built outside of ecommerce and how do you bring that to a channel like Amazon and want to say, secure your market share, secure your place on the shelf, but but being in a position where the fact that you’ve been around for decades and decades as a brand actually stands for something meaningful on Amazon?
Darcy Meier 23:18
Yeah, I think, you know, I think it’s great, because I do think there’s a lot of companies, Newell included, that have a ton of brand equity and customer trusts and you know, there’s tons of brands Newell has that people know and love and want to buy. And when you have it on a platform like Amazon, and they can get it in two hours or one day or same day, I mean, there’s a huge advantage there. But you are, you know, you’re up against the some momentum that you won’t traditionally see in the brick and mortar space. So I think you have to have a cohesive plan at Amazon that support the brands and again, combat all the things that are out there on the Amazon space. So I do think, you know, you have to have a marketing budget that is realistic to driving your brand on Amazon. And I think sometimes that’s a hard pill for people to swallow. Because depending on how they’re structured, maybe it’s part of a digital media plan or a national media plan. And then you’re like, Okay, I’ll give whatever book to Amazon. Like you, you have to have specific funds for Amazon. And again, you need to flip the conversation. And Amazon, depending on whether you invest with Amazon advertising or just within search alone, you can actually get some really good insights that prove to your organization that yes, you’re benefiting Amazon, but you’re also benefiting your brand as a whole. And so I think there’s a, there’s a huge opportunity there within the marketing space, and then again, feeding that information back. But I think it also goes back to monitoring and not taking for granted any of these regional or smaller digital native brands that pop up. You need to take them all seriously. So going back to my comment that, you know, you can’t build your entire marketing strategy on the defense or even the offense of competitor A. It needs to be maybe competitor A, and then X, Y, and Z down the road, because those might be some of the folks that are, you know, eating your lunch on the platform. So I think you, you have to think about it more broadly. And you have to have a dedicated focus on how you’re driving your brand and your awareness on Amazon. And then you need to feed that data back up within your organization on how Amazon is helping the brand itself not only on Amazon, but within the total market.
James Thomson 25:41
See, you’ve been involved with the Amazon channel for many years, both in your current role and in past roles. And I’d love your thoughts on, you know, tips and tricks that you would offer to someone new in the role of being a director of ecommerce managing the Amazon channel. Tell me about some of the external issues that you have to face. If you’re going to deal with the Amazon channel, you’ve talked about some of the internal issues as well. I’d love your thoughts on how do you take someone who’s green around the ears when it comes to Amazon and get them ready for the battle they’re about to walk into.
Darcy Meier 26:16
I like that, the battle days is a good, that’s good one. I think, you know, there’s three things that I think when you go into, you know, a leadership role in the ecommerce space, you know, it’s, it’s prioritizing, and I know people say that no matter what job you have, or whatever, but it’s the number one need that you need of yourself and your team, because you’re in a business that operates 24/7 that literally changes by the minute. Policies change by the day. And so if you don’t understand what to prioritize, it’s very easy to get overwhelmed. Or on the flip side, you just run into major burnout, because you only have time to do 10 things in a day. And there’s, you know, probably 500 to do. And so you have to understand which ones are meaningful to the business, to the relationship, and to your overall organization. You have to hire good talent. And I think sometimes people, I think it’s been interesting, really post-COVID, I think there’s been some more openness into what good talent looks like. Because, you know, obviously, the need for good ecommerce talent is, the demand is much higher than the supply. But I think within good talent, you, you shouldn’t pigeonhole people in a box, right? They don’t have to come from Amazon. They don’t have to have ecommerce experience. They don’t, they need to be able to prioritize and operate at scale and be it, you know, a machine that business analytics. And if you have some of those key components of the folks on your team, you’re going to be able to have a much better conversation with Amazon. And so I think that that’s really important. I think when you get to the director level and above, in my personal opinion, you do need to have some Amazon or some pretty solid ecommerce experience. But I think anything below that, I think there’s really an opportunity based on what the customer, what the individuals’ experiences are that the ecommerce piece or Amazon-specific piece can be taught. And I. that’s all dependent on creativity and drive right, both with for the director role, and then people within the team. I tell people, oftentimes, Amazon is the most complicated customer you deal with, but they’re also the easiest, and it sounds silly, but it’s true. Sometimes the solutions to the Amazon problem are actually some of the most cost-effective solutions as a manufacturer. If you think about new packaging, you know, really all you need to ship something to Amazon is a brown box. You don’t need colored ink, you don’t need a real pretty package. It’s going to sit on the shelf. You need an efficient package that’s going to go through the logistic network at the lowest cost possible. And so in a lot of ways, that can be the manufacturer’s lowest cost as well. So I think you have to be yourself, be creative and think differently. And really, really understand how you can support this business in a way that’s sustainable for both yourself and your business with Amazon. You know, I think the solutions again can sometimes be much easier, they’re just very different than what maybe you’ve experienced or even anyone in your organizatio. So it’s telling them like, “Hey, we could do this and Amazon will actually like it.” “Well they will? “Yeah, they will, like, let’s do this” right? So and I think you, you have, you know when you people, people often get concerned, going back to your comments around branding, right like you know the, no brand manager wants to hear that you’re going to ship their item in a brown box. But you have this glorious detail page and all these marketing opportunities to tell everybody about your brand. And so I think, really educating people on what, that what’s out there and what tools you have, and just thinking about them differently and how you build the business. I think working with Amazon, you know, you know, on both sides of the table, I mean, it’s, it’s fun. I love working with Amazon, um, being outside of the Amazon building, because it really comes around, it’s much more direct, much more mathematically based. And so there really isn’t a lot of like, “I like this.” No, it’s actually all this data says, our customer wants this, this is the cost structure of it. And let’s figure out how to make it work together. You know, I think sometimes it’s challenging, together can be very loosely tied to your relationship with Amazon. So there is a little bit of risk. I think sometimes as an organization, that there really is not necessarily the level of partnership that people would like to have with Amazon as it translates to other retailers. But I think if you operate within the, the system of Amazon, and you have the conversations with those at Amazon that you have access to, and you feel confident in what you’re doing, and it makes sense for your organization, is a huge opportunity to really drive and grow your Amazon business within the system of Amazon.
James Thomson 31:31
Okay, I got to take a I got to take it aside here is it for the hundreds of people we’ve talked to in the podcast, we’ve never talked to anybody who’s been involved in the private label business at Amazon. So you had the opportunity to work with Vi-Jon, which is one of the suppliers to some of the Amazon private label products. I was at Amazon until about eight years ago that there was no private label business time. So a lot of this is fairly new. I’d love to hear a little bit more about specifically, I’m a brand executive. I’ve got my own products. I’m selling them on Amazon, maybe I’m not selling on Amazon. But here’s Amazon aggressively building its own brands. How worried should I be that Amazon can launch competing brands to go after my brands?
Darcy Meier 32:17
I think worried. I do, I do think, I think you know, they came out strong. And there was a lot of, you know, things that were happening that you know, they backed up a little bit. But I think there’s a huge focus. There’s a huge team that’s focused on private label and Amazon-owned brands. No surprise, right, brick and mortar retailers have been doing it for years. They find their top items in their space, and they’re like, “Oh, I need to gain some margin, and I need to launch this under my own space.” I think the thing with Amazon is no surprise. Amazon is fast, I will tell you. We launched the first 30 items of Filippo in two months, unheard of absolutely unheard of, for a manufacturer. For, for a retailer, I mean, you’re talking something that takes you know, six months to two years, maybe in a traditional format. And so the fact that they can launch so quickly and test things and then say, “Oh, it doesn’t work,” or “Oh, we need to expand this,” they’re, they’re really at an advantage. Kind of going back to what we were talking about with some of the smaller brands, if you’re not watching them, all of a sudden, they might take off and you private labels the same as some of the smaller brands, you know. Amazon has changed over the last few years, depending on how aggressive they’re saying it’s their brand or not their brand, you know, they don’t make it totally easy for the customer, which is surprising, because a lot of the brands that are on Amazon are not sure that they’re even Amazon-owned. And they’ve tested different ways in shouting that all the way to the, to a homepage takeover to “Okay, maybe we shouldn’t be so loud about that, maybe go back.” So, you know, sometimes the customer doesn’t even know so they might just bucket them in that. You know, smaller brands but great customer reviews. So the process stays the same: monitor, read the reviews, what are the customers like, you know, what does the pricing look like? But the team operates quick, they test and learn fast. And I think that they could, they’re really going to build something there as they figure out what private label should look like to the customer and how it should look like as the Amazon, right? They have tons of brands across different GLs. And I think they need to figure out a way that it’s more easy or easier for the customer to understand what the Amazon owned because there is a lot of trust between, with the Amazon brand. And so I think, I think it’s going to evolve. You know, I still think in a lot of ways they are, you know, in the infancy stages of it, you know, obviously outside of like Amazon Basics. But I think, you know, when you think about private label, I mean, Amazon Basics is all over the board from a quality, from an item selection. And so I think that’s where this, you know, focus of different brands kind of came out where we could kind of separate them and test and learn. Obviously, Amazon Basic Care going into the healthcare space, you know, so I think there’s, there’s a lot to watch. And I don’t see them taking their foot off the gas, because just like any other brick and mortar retailer, you know, it’s definitely a good margin play for them. I think the challenge that Amazon has is just everything like we talked about from the economic standpoint. So if you want to private label a ton of consumables products, it’s going back to that, that conversation of what’s the pack size? What makes sense? And how do you, how do you sell something that’s traditionally a lower ASP in a pack size that the customer wants to buy?
James Thomson 36:02
So Darcy, you’re the CEO of a large national brand. And you’re looking at what Amazon is doing with its own private label products. You talked earlier about big brands having to become nimble. How do you learn from what Amazon’s doing here, building out its own private little business? How do you incorporate some of those learnings into, into a larger portfolio of brands that may not be moving as quickly? How can you adjust your own organization to be more responsive and be able to not necessarily compete with Amazon’s private label brands, but be in a position to be able to move more quickly and be more, shall I say ecomm- friendly, ecomm-ready?
Darcy Meier 36:44
Yeah, I think I think that’s what a lot of big businesses, you know, big organizations have to figure out. And I think, I think it’s the evolution of ecomm, right, I’m a big component, depending on your maturity of your company, in ecomm, as you know, ecomm needs to build its own island and town first and have the right capabilities. Because especially depending on where you’re at, as an organization, you probably don’t have a lot of those skill sets internally that you need, or you need to shift roles or responsibilities to focus on, you know, total ecomm with, you know, really Amazon being your North Star. Just like you would in typical retail, where you’re really leaning into like what’s Walmart doing, and then I need to follow that for brick and mortar. So I think, you know, I think you have to evolve as an organization, and you have to make sure that the ecommerce town and Island is developed, and then you have to phase it back in your organization. And then that’s where I think a lot of the friction comes in saying, “We’re not moving fast enough,” or “We don’t have the right capabilities.” And you really need to speed that through your organization. Hopefully, from the top down, right? Hopefully, there’s a conversation saying we need to invest in ecomm, what do we need, these are the tools, these are the people, this is how we need to be structured. Because those that move slow, like the space is only getting faster, and so you have to move smarter, quicker. And the big with like everything we’ve talked about between private label and some of the smaller brands, you know, the brand equity is still there for a lot of brands, but there’s more options for the consumer with more feedback from the consumer than there ever has been before. And so I think it’s really an aggressive push, hopefully, again, from the top down saying, we really need to focus here. And we need to go back to my other favorite comment, like how does ecommerce, how is Amazon driving decision making in our organization that allows us to scale and still service our other customers? And so I think that’s crucial. And we have to figure it out. We have to figure it out or we’re not going to survive. I mean, truly.
James Thomson 38:54
Darcy, I want to conclude our discussion today by asking you about some of the aspects of the Amazon marketplace that have surprised you the most, whether as an Amazon employee, or an agent working outside of Amazon. Tell me about over your experience working with, with Amazon. What what has surprised you the most?
Darcy Meier 39:16
I mean, I think, you know, I think what’s surprising is at the heart of it all the basics are the same, right, all the basics haven’t changed. But I think the total market place the, the growth, right? I don’t know if anyone I mean, when you were at Amazon, when I was at Amazon, I remember you know, when we saw 200, 300% growth, and you’re like, how in the world is this gonna keep going, right? Like, you’re just like, there’s no way we can keep growing at 200% and 300. You know, and you’re and so I think just the sheer growth of Amazon and the marketplace is fascinating to me, because the numbers are just massive. And I think, I think with that comes all these challenges, right, and it comes all of these hungry business owners, right? Whether manufacturers, or I mean, the 3P group, I mean, they’re just getting more and more sophisticated and smarter and people, people like yourself and your organization and the people that are helping, you know, the organizations, and the total marketplace just live, right? The customer has more options than they’ve ever had. And people want to get into that space. And so I think it’s just that constant change and just the continued heightened interest in the platform and the growth. I don’t know if anyone would have predicted, I don’t know, maybe probably Jeff Bezos would have predicted, but you know, I think it’s fascinating because it’s just not slowing down. And so I think with that comes all these challenges, all these policy changes, all these things that just really happen quick. But again, it’s just like, you know, is it ever gonna slow down? I just don’t think it is, you know,
James Thomson 41:05
Darcy, I want to thank you for joining us today. For listeners interested in learning more about Newell Brands, check out newellbrands.com, and be sure to join us again next time on the Buy Box Experts Podcast.
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