Podcast: How the Secret Weapon of International Distribution Is Helping US Brands Win with Chad Epling, Founder of Mamenta
February 11, 2020
Here’s a glimpse of what you’ll learn:
- [01:24] James introduces his guest, Chad Epling
- [02:19] What made Chad excited about the nascent world wide web back in college
- [03:05] What is Mamenta and what needs are you aiming to fill?
- [04:39] Chad shares why he decided to start helping brands expand internationally
- [07:20] Exciting things in international marketplaces that US brands should know about
- [11:30] What are international marketplaces that US brands should seriously consider?
- [13:10] The role of brand leadership teams in being more assertive in their management of online marketplaces
- [15:56] How fixing the misalignment in local promotional and sales approaches can help US brands manage their overseas distribution
- [18:55] The most common misperceptions US brands have about international marketplaces
- [22:33] When did Chad realize that he has truly figured out the best way to help brands with international distribution?
- [24:56] Chad shares one of his professional career highlights
- [25:54] The best advice Chad received from his mentors
- [26:51] Chad’s advice for brands who are considering the idea of selling in international market places
In this episode…
For most US brands, thinking of expanding into the international markets can be full of misconceptions. One of the most common misconceptions is that other countries’ marketplaces are as large as the Amazon channel. And according to Chad Epling of Mamenta, just because the infrastructure is there, it doesn’t necessarily mean that people will come to try out your products. There are a number of factors that need to be looked into before deciding which marketplace to enter and this is where his company steps in.
Mamenta works with both local and international brands to help them establish their brand in other international marketplaces. In this episode of Buy Box Experts, James Thomson to talk about the work his company does, other misperceptions US brands have about international marketplaces, and how these brands can manage their overseas distribution.
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James Thomson 0:33
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 business head of 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 the book The Amazon Marketplace dilemma and co-founder of 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 Takes ambitious brands and makes them unbeatable. When you hire Vioxx experts you received the strategy, optimization, and marketing performance to succeed on Amazon. Buy Box Experts is the only agency that combines executive-level advisory services with expert performance management and execution of your Amazon channel strategy. Go to BuyBoxExperts.com to learn more. Today, our guest is Chad Appling, Founder and CEO of momenta, a global platform that enables brands and retailers from every continent to expand their retail coverage internationally. Prior to this, Chad held senior roles in a variety of other e-commerce enablement firms, like one-stop internet, web trends optimize omniture and echo mail. And full disclosure I was so excited about the kind of work that Chad has been doing that I became an advisor and investor in momentum myself. So welcome, Chad and thank you for joining us today on our box experts podcast.
Chad Epling 1:59
Thanks for having us. So
James Thomson 2:01
I’m going to start with a little bit of an odd question for you. In college, you studied what was called electronic new media. Today, we might call that internet and e commerce. What were academics talking about more than 20 years ago that got you so excited about the nascent worldwide web?
Chad Epling 2:19
Yeah, you know, back at the University of Akron, the things that we focused on it was it was really early days of setting up your email and setting up websites and even going as far as creating content and to be distributed on these channels. You know, so I saw some things that were foundational to what is being deployed around the world now. You know, but it was, it was it was it was a good time to get into the game, I suppose. Back in the University of Akron days.
James Thomson 2:55
Fast forward to where we are today with Manta tell us Tell us about momentum, what are the sets of needs that your firm is aiming to sell.
Chad Epling 3:05
momenta helps brands, multinational brands to continue to expand around the world. The opportunity that we’ve seen is large brands. as they’ve grown, oftentimes, they’ve grown brick by brick, which is spun off a number of disparate infrastructure systems. As an example, brands could have multiple SAP instances or their ercp instances where maybe their warehouse positions are living outside of what is their core infrastructure. They may have distributors that hold stock or product in fulfilled by networks. But as brands grow, they grow with the disparate teams and disparate platform systems. What we focus on at momenta is helping to unify this global infrastructure into a single platform. As we pointed our global trade platform Help brands to understand what’s happening globally. Still some of the gaps from an infrastructure perspective, maybe a brand needs to move stock into Hong Kong to service the Southeast Asian market as an example, we help to fill those gaps. And then the end points. What we’re driving towards are helping the brands to sell more on digital direct to consumer channels like marketplaces, in these various regions or countries around the world.
James Thomson 4:28
Where does this vision come from for helping brands expand internationally? It’s a big complicated problem to solve. Why this problem? Why did you decide to tackle this,
Chad Epling 4:39
you know, the the opportunity started to come about as in past lives, running brands primarily focused on expanding their North american.com business. And as I was watching brands expand around the world, they were doing it through. We’ll call it old school ways of transacting often climbs through distributors. So when brands wanted to go into China, maybe they would contact companies like imagine x, or if they wanted to go into India, it could be companies like the Arvid group. And organizations, traditional distributors, oftentimes will take a block of product. And they’ll sell that block of product into traditional brick and mortar channels. But where the brand has a disadvantage, although they’re selling product, they’re losing visibility as to where it’s being sold, who the end consumers are in this particular market, and ultimately what to do next. You know, so they’re, they’re sending product, they’re getting checks back, but it’s, you know, but it’s hard to keep control of the channel. So that was the first opportunity that we saw was a way to disrupt what is a normal distribution model around the world, helping brands to sell more direct to consumer the other opportunities that we found, you know, number of years ago when we when we founded momenta was How digital commerce was happening cross border, there were a lot of technologies that were built, that were built off of a core assumption that somebody in Malaysia or Japan or in South Africa, was going to find a brand.com website, and then complete the transaction through that website. There’s been a fundamental shift globally. And it almost seems like the US is one of the last markets to to catch up to this. There’s been a fundamental shift globally, that, you know, 7080 plus percent of the transactions are happening on these marketplaces first. So the con, the idea of somebody in the Philippines going to a.ph or a.com website doesn’t exist that will go to the Amazon of that region, like lizotte as one example is that is owned by Alibaba.
James Thomson 6:52
So let me ask you this. For a lot of our US listeners, there is not a lot of familiarity with Many of these international online marketplaces, you know the marketplaces that are called amazon.com or ebay.com. Help us to tell it tell us a little bit more about, you know, what exciting things are you seeing in international marketplaces today that our US brand audience may not be aware of, but probably should know a lot more about.
Chad Epling 7:20
So there’s there’s a few opportunities that we see and things have evolved over the years from the time that we that we started a mentor in the early days. We were signing brands that were based in the US brands were based in India, brands were based in New Zealand to sell cross border into into markets around the world. Maybe it’s a US brand that wants to sell with a wanted to sell cross border into Southeast Asia. We would do the work to connect into a branded existing infrastructure, gaining access to the stock position, and then building official stores in Singapore, Malaysia, Indonesia, Vietnam, Thailand, and the Philippines. As an example, to cover the Southeast Asian market early on four or five years ago, the idea of cross border into these markets was was relatively accepted by the consumer as well as by the marketplaces. Fast forward to the last 12 months agreements that we’re doing now with brand, we will require or will only work with brands that are willing to hold regional or local stock, you know, so there’s been a shift of the way that consumers are purchasing and their threshold or maybe their acceptance for four shift times. So I would say this is this is something that is actually becoming more normalized to what we’re doing here in the in the US. The other markets around the world are starting to catch up with this. So Southeast Asia is a good example, when we’re taking product into the market at a minimum will hold it in Hong Kong. Ideally, we’re trying to hold it within the respective countries as I described, but the but the marketplaces are, in the end consumers are at various levels of that spectrum. You know, some opportunities are still valid the ship cross border, maybe from Miami into Latin America, where others again, we’re leading more with this regional or local stock position becoming more akin to what we see here in the in the US on platforms like Amazon,
James Thomson 9:28
we often think about the US as being the center of the commerce universe. And yet, so many of these companies, I guess, so many of these these shopping destinations, retail brands today, these are all billion dollar marketplaces. And we just don’t have the visibility we don’t we don’t hear about them. We don’t realize that you know, in Africa there are billion dollar marketplaces in Southeast Asia There are all sorts of billion dollar marketplaces, the magnitude of e commerce in some of these parts of the world are often quite staggering for an otherwise ignorant us by population that knows nothing about these markets.
Chad Epling 10:05
That’s fair, that’s fair, you know, I would say, a lot of brands has become a bit of their, there may be fat and happy with the, with the revenue that can be generated here in the US. And I believe that as the years go on, you know, when we, when we founded moments, I think we were pretty early in this space. But every year that’s progressed, brands have maybe lost a little bit more control, maybe miss their number of bits on on the on the local us channels, or they’re seeing their brand spread around the world through unauthorized sellers and unauthorized channels. And, and they’re trying to get ahead of it. So I think there’s, there’s a lot of factors that are weighing on us brands to do more than just in the US and ultimately catch up with With what the rest of the world is, has been working on for, you know, at least the last five years, you know, driving business outside of outside of the respective home market.
James Thomson 11:12
So let me ask you to kind of a kind of a little bit challenging question, recognizing the different products have different levels of attractiveness around the world? Are there specific large marketplaces that us brand should be thinking about internationally?
Chad Epling 11:30
So it all starts, in my opinion with where the brand actively has inventory. If we look at that, like, if you look at this, like a hub and spoke model, we should start with where does your brand hold stock? If it’s in the US and maybe in the Netherlands, and maybe in Hong Kong? We can work with the brands to sort out what are the logical spokes or marketplaces in this example, that we should open up from those regions we look at this through the lens of of interest. Tori risk, you know, so instead of saying, you know, this brand, please expand and move stock into these five other locations because we think it’s the right long term thing to do. Although we may believe that we want to start with what they have, optimize those respective inventory positions for those spokes are those those selling channels, and then try and help a brand find a path to self fund the global expansion and step into these markets to be able to maybe test their brand into a new market or take over a market that is maybe overrun by unauthorized sellers. But that’s that’s our general path forward whenever we’re we’re looking at these opportunities with a brand.
James Thomson 12:43
So one of the biggest challenges that our vbox experts team has faced with prospective brand clients is the lack of willingness by senior management to evolve the way they go to market. Now that online marketplaces and unique distribution control pressures for brands are definitely You know, coming into play, how do you see leadership teams of brands coming to grips that online marketplaces need to be managed more assertively.
Chad Epling 13:10
So we’re seeing a rise in more of an overlaid position, a Global Head of e commerce type of a position that taking up the reins of this initiative, and, and pushing the agenda forward. So, again, kind of back to that brick by brick narrative, we’ll see some legacy organizations that have a head of e commerce or a sometimes a head of sales, running one region that’s not speaking to the next region that’s not speaking to the third region, right. So So having a unified voice that’s taking a holistic view of how the brand is being represented. And you know, what we’re what we’re seeing is that, you know, you can cover about 70 or 80% of your brand message is going to be similar. Around the world again, you know, my opinion on this is that a lot of the way these marketplaces are structured now, they’re all children of Amazon, or their children of Alibaba, these new iterations of the marketplaces, when we first founded momenta, there was a large Delta in your brand presence around these channels. We’re seeing more normalization across the system. So having somebody that has that view around the world that can help to tell a unified voice to the end consumer, you know, I think is very important, but it’s it’s not just about making money at the end of the day. There has to be revenue there in order to sustain the business and to continue to invest. But it’s also about cleaning up the channel, and opportunity and easy way for new executives that are looking at this as a potential program. An easy way to identify if there’s if there’s opportunity out there is to simply look at who is out hustling you, you know, so there’s going to be You know, 50 or 150, unauthorized sellers in markets as far reaching as Nigeria, they’re taking your product, putting it in a backpack and selling it without your knowledge. prices may be different, the way the brand is represented is different images, all content reviews all the way down the line. Those are great places to start for a new executive that’s looking at this. And, you know, again, the story should be back to the total organization that we’re entering to secure, to protect the crown, really protect the throne, if you will, in these markets, protect the brand, as well as control some of the distribution. And ultimately, at the end of the day, it’s a money making opportunity, you know, as well.
James Thomson 15:44
So how do you see us brands controlling distribution overseas, when they may have local promotional strategies or local sales teams that aren’t always aligned with each other?
Chad Epling 15:56
You know, I think that that is the big battle. It’s the one P versus three p that you see a marketplaces, that same battle happens within the brands. And oftentimes, the one p or the sales team has more control or has a large amount of control because if a brand hasn’t made that digital transformation, then still most of the sales may be coming from a one p by cell, you know type of a model. So, you know it, I believe it comes down to some restructuring or maybe some education that has to happen within the organization, that if we can control the total voice of the brand, you know, all the ship will run all the ships will rise, if you will. As we expand awareness in these markets. We’re also seeing these one p you know, sales folks working with the distributor partners that they have in place because it doesn’t have to be all or nothing. You know, when we, when we evaluate, we oftentimes will do this for, for these larger multinational brands that have done distributor deals in Poland and Germany and Southeast Asia and so on. Not all distributor partners are created equal. The older distributor partners are still more movement of pallets, and there’s less of a b2c component, maybe they will have the internal capabilities or functionality supported folks that fall into that bucket, you know, may or may not last in the in the future, depending on how the organization wants to move forward. But there are some distributors that are becoming a bit more savvy, and the stock is already sitting in country which is which is part of the battle. And that distributor has the ability to ship B to C, which means organizations like momenta can tap into get access to local stock position, so we can work with the distributor and the brand to start to light up these local markets. So, you know, it’s not a complete black and white end game, you know, from one country to the next, depending on the infrastructure that a brand has. And, you know, the partners that they have in place, we may be able to enhance or or enrich those partnerships to turn on more channels. But you know, at the end of the day, it’s really it oftentimes will come down to credit for those sales. And there’s there’s still going to be some battles internally within organizations as to who gets credit based on where the stock came from. But those are oftentimes country by country conversations that will happen within the brand.
James Thomson 18:39
So when you talk to us brands about international marketplaces, what are some of the most common misperceptions that you have to work through with those brands, your world of opportunity, and they have a different set of expectations.
Chad Epling 18:55
Yeah, I would say not not every country and more marketplace within that country is going to be as large as your us Amazon channel, you know. So we have brands that will come to us that will want to open up a small niche market, small market, maybe a small niche marketplace. and expect as soon as you turn on the official store that will generate $100,000 or a million dollars, you know, right out of the gate. Just because the infrastructure is built, doesn’t mean people will come, you know, and so we do a lot of work ahead of time to vet out the countries and to work with the brands on the rationale as to where they should go. And there’s a there’s a couple easy indicators that we can all publicly look at. And then some that will drill down in through some of the relationships that we have with the marketplace to get a sense of where we should go. The easy one that everybody can look at is that unauthorized seller list you know, so simply Going to a channel doing a search for your product and sorting out how many people are selling your product is an unauthorized way. That’s an easy path, you can get a sense of if there’s a market there. And the the actions that are taken are more about diverting traffic initially to our official presence, and less about creating traffic, although that creation process will, you know, will happen so that that’s the first piece the next thing that we looked at, and this information will vary from one marketplace channel to the next. But it’s more focused on branded versus non branded keyword searches. So if there’s a high volume of branded keywords or some people are searching JBL or honest noxee Beverly Hills or dove, so obviously there’s intent that we can capture the but the trend is we see it. Our brands are very important. If you’re a well known global brand name, that branded keyword search logic helps a lot. But the other piece where we’re finding ourselves tunity is more about things that brands can do. And that’s more focused on the non branded keyword search. So if it’s teeth whitening or weight loss, or whatever the case is, and that, that non branded way, we can look and see if people are searching for products like yours in the market in order to in order to optimize it. And then and then one last piece that we find that we found to be successful over the years, sometimes it’s not as important to try and build your brand up in the market as it is to build up a specific hero skew within your portfolio. And what do I what I mean by this is there may be a specific flavor that is organic, that can go head to head against the main player in the market. So we’ll focus on taking market share and a skew level to introduce this brand or to get it out to a bit of a wider audience. And then we follow up with more brand building exercises. So it’s almost more of a tactical individual skill level and we need to do a bit of research with the brand in order to execute that brand plus the the local channel that we want to sell into.
James Thomson 22:09
Very interesting stuff. Chad, let me let me shift gears here a little bit. I’d love to understand what what was a big turning point for you, when you realize that you were good at helping brands with international distribution. Was there a certain point where you said you know this this global thing? You know, I’m starting to get this figured out, you know, a mentor has evolved to a point where we feel comfortable talking about all parts of the world.
Chad Epling 22:33
You know, the the turning point for us was well, I don’t know if it’s a turning point it’s been it’s been it’s been a slow build over the last over the last five years. But I but I think the really the catalyst is we started in the hard to get to markets. We started trying to tackle taking brands outbound from India to sell it into the Middle East. Taking food product honey product out down from New Zealand, the set into Singapore, you know, so we were intentionally living on the fringes, because we knew if we could own these hard to get to markets, it would be easier for us to take on some of the more well worn path. So it was a, it was a strategic decision for us to take these things on these harder to get to market on, you know, early on. And then we started to be able to show that the pipes would work, not just taking brands in to a market but taking brands out. And I guess if that that would probably be the turning point. When we, we realized the vision of this evidence flow, taking product into a market like Brazil, as well as taking Brazilian brands out to sell into the US and Japan and China. You know, so I would say that’s a big piece. And then also, when we started to solve problems that are more akin to the enterprise client Like the ability to stitch together those disparate infrastructure systems, you know, so that that concept wasn’t something that we were thinking about early on, early on with mentoring, and it was more of a cross border thought process. And what I’ve come to realize is, you know, again, cross border doesn’t really work in the ways that, uh, that a lot of maybe folks even like myself thought it would early on our focus more isn’t, you know, more now in line with holding that regional and local stock and again, getting existing infrastructure systems to work in this new global e commerce way, as opposed to having to rip everything out and starting over to build to build platforms. So So Chad,
James Thomson 24:46
tell me a little bit more about a moment you’re particularly proud of professionally, where you saw a big success or you saw career highlight
Chad Epling 24:56
over the last couple years, as we’ve As we sign these larger multinational brands, launching into new markets for them, that maybe they weren’t able to crack internally with their groups, or taking over some of the existing channels they have in place, and the momentum teams, you know, our collective teams were able to take and, you know, in some instances 10 X the sales of some of these brands on some large market like, like the US, so, you know, really, I think it’s just the general execution of the plan, you know, overarching and and helping these these brands make money along the way, has been, it’s been a really positive thing for us here.
James Thomson 25:46
Tell me what best was the best advice one of your business mentors gave you grow your career.
Chad Epling 25:54
So this this goes back to the University of Akron. The advice that I received from from one of the professors at the business school was always let people know you’re a player. So, you know, getting out there and beating the personal drum, beating the business drum. And letting the brands know that there’s an opportunity to open up these markets around the world would be a real life manifestation of that of that early advice. You know, it was let folks know that there’s an opportunity to do things and maybe a different way than then they’re currently looking at the world.
James Thomson 26:38
What one final question for you, Chad. A lot of brands listening today, I’d love to get your single piece of advice that you would give to brands that are looking to leverage best practices online today in terms of going international.
Chad Epling 26:51
So I would say don’t wait. You know, we we hear a lot of, you know, we’re going to wait till next year. Or next quarter, or whatever the case is, it doesn’t necessarily have to be a massive Big Bang operation, you can test the waters through systems like momentum to turn on these various channels around the world to see how things work with with not as much budget as maybe you would have had to put into place in the past to spin up a local website and payment systems and customer service and these types of things. There are ways to enter the market in in 90 days which may have taken nine months before at a at a fraction of the the fraction of the of the cost of doing it the old way. So I would say you know, test early and and get in and understand the markets you’re going into, you know, but but I would say you know, starting with maybe your top 10% of your skews to see what type of traction and action your Receiving is a great is a better indicator, in my opinion than spending, you know, maybe months and months of evaluating a market in that time we could be up in live and in getting real data as to what’s happening in the market. So I would say, you know, move as fast as you can that that natural and in testing learn into these new markets that you that you want to enter.
James Thomson 28:26
chatted like thank you for joining us today. For those of you interested in learning more about Chad’s international distribution platform momenta visit momenta.com. That’s ma MEN ta.com. Thank you.
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