Latest / Reframe First / Jason Boyce, Founder & CEO of Avenue7Media | Scaling Amazon Brands & AI-Driven Growth
Transcript
- Oleksij Rak: Hey guys, welcome to another episode of Reframe First. I'm Alexey, the host of this podcast. And let me welcome our today's guest, Jason Boyce, founder and CEO of Avenue 7 Media. So, hi Jason, it's great having you here. Jason: Thank you very much for having me, Alexei. Nice to see you. Oleksij Rak: Yeah, nice to see you too. Thanks for joining. So from what I learned about you, built your own business. You're one of the ⁓ Amazon FBA players on the market. You built your own FBA business, you sold it. And nowadays, you built an agency that's helping other businesses succeed on Amazon and also on Walmart that you mentioned. you say it on LinkedIn, we feel profitable Amazon growth for both challenger and economy brands as their AI enabled strategic business partners. So could you tell us a bit ⁓ about Avenue 7 Media and AI business partnership and all this kind of stuff? Jason: Yeah, you know, absolutely. Alexi. Um, you know, I'll start at the beginning. I, um, I was a Marine and I was getting out of the Marine Corps, went home to have dinner with my brother and he was telling me he was going to start drop shipping basketball hoops on the internet. This was 2002 and I was about a month from getting out of my four year term in the Marine Corps. Um, and I said, I'll be out in a month. Let's do it together. And we started super duper stupid, super duper hoops.com together, which is, Oleksij Rak: Yeah. Jason: The basketball hoop website, we were drop shipping basketball hoops from the factory directly to our customer. After we sold them, ⁓ we were all over the internet. and then, ⁓ we, you know, we, we'd been introduced to a company that invented pay-per-click advertising in Pasadena that later got bought by Yahoo. And then there was a whole court case there between Google, Yahoo sued Google because they, they, they, they did not invent pay-per-click advertising. They stole it from, from company that we were working with. So we were all over the top. Oleksij Rak: . Jason: of search results for basketball hoops all over the country, long before Google was the master of search. then Amazon called a year later and said, we want you to sell your basketball hoops on our website. And I was like, what are you talking about? I just bought a VHS tape from you. You're in sporting goods now? I didn't even know they had launched a sporting goods marketplace. And so we were, I think the first company selling basketball hoops on Amazon, even before they were. Oleksij Rak: . . Jason: ⁓ We built that, we expanded into many categories. We were a reseller to start with and then developed our own brand, became a top 200 Amazon seller for about 17 years. Sold that business and then started as a consultant. The one thing that I'll tell you about the difference between being a Marine and being a big Amazon seller is that the Marines was easier. I ⁓ more time off in the Marines. Oleksij Rak: You Jason: it was, it was a, it's not always on, know, the Amazon never closes its doors. And so it was just a constant challenge, especially in those early wild west years. ⁓ I was working long hours, long days for a very long time with my brothers. And, you know, so was happy to have that exit. I decided become a consultant on Amazon because it's really challenging for brands to understand. It is a, I say this all the time, e-commerce is deceptively complicated. Oleksij Rak: Yeah. Jason: Amazon e-commerce is 10 times more complicated. It seems like the easiest thing in the world, Alexi, but it is very difficult. And so I decided to become a consultant. I had a couple of clients. I would give them 45 things that they needed to do before our next call. They're busy people. They couldn't get to any of it. So I was a bad consultant. said, just forget it. Just give it to me. I'll build the team. I will do the work for you. Oleksij Rak: Yep. Jason: I'll be an extension of your team. And that's how Avenue seven media was born as a full service agency where we did everything. ⁓ from, for, for, from there, there was a point about a year and a half into the agency where I myself was account manager for like 26 clients. took off like crazy. ⁓ I brought in an executive team, Dale Dabs and Angela Murphy from, ⁓ a company called Sontic that had just had a big exit from, with, one of the big credit union companies and they'd built. Oleksij Rak: And then, Jason: They didn't know anything about Amazon, but they had built a best in class, like identity protection company. had the best world-class customer service built on a tech enabled platform. And I, I was friends with Dale going on over a decade now. And when they exited, he was trying to retire and I pulled them out of retirement and had them come join our team. He watched me do my brand growth strategy with some of these clients on zoom calls, you know, kind of like we're doing on Riverside right now. Oleksij Rak: Mm-hmm. Yeah. Jason: And, um, he said, Jason, if we don't pull that brand growth strategy from between your ears and put it into a repeatable process, we're never going to be able to scale this agency while maintaining quality of results. And so, um, that began like a year and a half long process of developing what we call the seven avenues strategy. And, um, you know, we tried to get it down to three avenues, but e-commerce is complicated and Amazon is 10 times more complicated. So. Oleksij Rak: Mm-hmm. Jason: The most we could pare it down to is a seven step process for growing a product brand that is truly an e-commerce strategy. We've been vetting that with our clients now for about five years. It works beautifully. It simplifies and takes chaos and turns it into clarity. And more recently, Alexi, we have been productizing that seven avenue strategy into a software tool called Av7Lift.ai. Oleksij Rak: Mm-hmm. Jason: And so we have built the first avenue, which is the presence avenue, which is if your product can't get searched, clicked on and added to cart, you have a presence problem. You either out of stock suppressed, your listings, broken. Something's happening to prevent you from getting maximum benefit and the potential on the Amazon or Walmart platform. And, it's been just a wild journey, especially in the age of AI. When you've got these billionaire, Oleksij Rak: Yeah. Jason: founders out there talking about how AI is going to ruin the world while their stock price goes through the roof. so we've been building on top of some base models for a couple of years. It's been a very interesting, exciting journey. And I'll just summarize it by saying, I think there's a lot of hype around AI. It's magnificent, but it's like, you know, these founders did a good job of raising money, but they didn't do a good job of building a product that you can become a platform. Oleksij Rak: So we've been building on top of space models for couple of years. been a very interesting and exciting journey. And I'm just so excited say that there's a lot of new things that we've seen. Yeah. Awesome. That's a great story of ⁓ early FBA, being approached by Amazon to put your product ⁓ Amazon. That's huge. ⁓ Jason: Yeah, that was, that was a fun call. My brother who's like super calm and like low anxiety. He was like, we were, we were having a team meeting and, we'd finished all of our agenda for the day and we were about to leave and go grab dinner together. And he said, one more thing. Amazon called today. I'm like, what, why didn't you lead with that? How do we not start with that? Tell me everything. And so, yeah, it was very exciting to be able to ⁓ get, in the front row seat to watch Amazon. Oleksij Rak: Heh. Jason: on its march to e-commerce dominance, is certainly what they have now. Oleksij Rak: Yeah, absolutely. nowadays from what I see Amazon is flooded with Chinese goods. It's a price game for most of them and you can go to AliExpress and buy it two or three times cheaper. again, the brands you're working with, they're still in the same categories, but somehow you manage to position them and price them like 20, 30 percent, like more, make them 20, 30 percent more expensive. How do you do it? Jason: Well, Alexi, I'll tell you. a great question. Yes, the Chinese have flooded the market, but there is very much real potential for really good brands who have a great value proposition. It with the product avenue. That's the sixth avenue of the seven. And, you know, the creative ⁓ is ⁓ fifth You have to be able to build your brand and justify a premium price. Here's the way ⁓ none of our Oleksij Rak: Mm-hmm. Jason: None of our clients, we've got 70 some full service clients. have even more clients that come to us for one-off work. None of them are the lowest price in their category, but they all have best sellers on their catalog. And how do we do that? That what's beautiful about Amazon today versus, you know, even three or four years ago is I start by saying, let's just say there's 300 million customers on prime. Oleksij Rak: Yeah Jason: You know, there's about a hundred million of those on the bottom tertiary that are never going to buy your product. They're going to only buy the cheapest price. The audience that we're going to target on Amazon and frankly, off Amazon and bring them on Amazon or to your website the group that's like my wife who's on the top 100 million of that audience base who will never buy the cheapest product because she doesn't trust it. Right. And so you're not going to be able to sell to the entire. Oleksij Rak: Mm-hmm. . Jason: audience base on Amazon, but think about that. There's still 50 to a hundred million consumers that want to feel something about a brand that want great quality and are willing to pay more for a product that's not junk. And the key in the traffic avenue, which is our third avenue is to make sure that early on when launching or when we take over an account for a brand. Oleksij Rak: . . Jason: We find who that audience is and we can do that in a data, the best data clean room, I think on the market, it's called Amazon marketing cloud AMC. So we find your audience as early as possible. We layer PPC advertising on top of just that audience. We're only serving PPC ads to just your audience. And then we move upstream. call it the stair step to the cloud into DSP. do display. Oleksij Rak: Mm-hmm. . Jason: online video all the way up to CTV. we get the messaging, right? We identify who those customer personas are. We put the creative together so that that audience that we've now identified sees themselves in the listing and the messaging and the copy. And we only serve traffic to them. They convert higher. They become more loyal and you know, it's a great way to grow and build a brand that not only succeeds and thrives on Amazon. But meets our mission, which is to make our brands famous or our brands that are already famous that we work with defending their position against, you know, other guys. So that's, that's the game. And quite frankly, Alexi, we could not do that five years ago on the Amazon platform. We still managed to, you know, price high and justify, and we did well, but our ability to laser targeting on exactly that audience that meets that has the right buying behaviors. Oleksij Rak: So that's about it. . Jason: and the right demographic per brand, per client, per category has allowed us to really drive growth and success for our client base. Oleksij Rak: What has changed over these five years that made it happen? Jason: Well, the Amazon marketing cloud to be able to access the, what I think is the largest database of customers a transparent customizable way that Amazon has presented has made all the difference. You know, the ability for us to, mean, look, one of the old sayings way back in the day from Amazon, ⁓ say meta knows what you like. You know, Facebook knows what you like. Oleksij Rak: Mm-hmm. Jason: Google knows what you search. Amazon knows what you buy. Amazon has more buying behaviors of the largest audience group anywhere right in Amazon marketing cloud. So if you go to Google DSP, that is a black box. have no idea. It's all algorithmic. You have no idea. can't do SQL queries. can't like zero in, customize your audience to be able to do what I described previously. ⁓ Amazon, who historically has been kind of a black box company, really has created Oleksij Rak: . Jason: magic in a box in this AMC Amazon marketing cloud. the most transparent. It's the most customizable. And it helps brands ⁓ are not Chinese manufacturers selling on price only win on that platform. And then of course, you know, we do things like if you've got a Shopify site on your brand, ingest, we anonymize and ingest those audiences into Amazon marketing cloud. Oleksij Rak: . Jason: We see what the overlap is and we can exclude audiences. So there's no cannibalization. We're literally building incrementality of audience, bringing new to brand customers that are more likely an Amazon customer. And we can even drive it to your own.com right from that AMC with the SP. It is really great. mean, DSP, I wrote a book called the Amazon jungle in the traffic, in the traffic chapter. talk about DSP as being a failure. Oleksij Rak: Uh-huh. Yeah. Jason: At the time I wrote that in 2019, 2020, that was true. is no longer the case. DSP with demand side platform, static video and TV display combined with Amazon marketing cloud is a truly magic experience for brands looking to win on that platform. And our brands don't come to us and complain about the Chinese competitors because we are differentiated and we're meeting the customer that doesn't want Chinese goods. Oleksij Rak: I see, so it's about building a proper brand and working on your funnel. Jason: That's right. mean, look, there's two ways to grow your brand. You could sell more products to your existing customer, or you can, you can go find customers that have the same buying characteristics of your current customers who don't yet know who you are. And if you can introduce your brand in a meaningful way with your value proposition, talking about the benefits of what your product brings, and you bring good feel and branding components to that audience, they will buy from you. And then you're, growing your audience. You're growing your loyalty. Oleksij Rak: Yeah. you Jason: and you're growing your brand. That's the magic. you know, historically Amazon has been sort of this demand capture platform, but it is very much demand generation platform now because of AMC and DSP, ⁓ my opinion. And we see it live in action every day here at Avenue 7 Media. Oleksij Rak: Awesome. You mentioned you're working with 70, customers in parallel. That's... Probably quite a lot of operation. How do you handle that? Jason: Well, we, ⁓ it's not easy. We're also fully remote. So add that in there to add a little bit more complexity. you know, I'm, calling in from Portland, Oregon, but we've got about 30 % of our head count. We're about 85, 90 strong ⁓ in the United States. We've got, about 20 % in Philippines, 20 % in Pakistan. ⁓ And the rest are smattered in Costa Rica and Europe and all over the world. And so, being able to manage a big team. Oleksij Rak: Yeah. Jason: in a very complex like e-commerce and Amazon and Walmart in a remote environment is a big challenge, but we have made it work really, really well. It starts with our people. You know, we, borrowed from Patrick Lincione. ⁓ We've people who are humble, hungry and smart. We teach them the AB7 way. We teach them the seven avenues. And then Oleksij Rak: Yep. Jason: kind of our processes are we're constantly evaluating our people. And, you know, kind of like ⁓ pillars ⁓ our structure and our organization is when you get the right people and you apply their ⁓ and big brains and willingness to learn on top of processes that can become the best in class. And our seven avenues, in my opinion, is, ⁓ know, the best brand growth strategy ever created for e-commerce. ⁓ I created the initial step, but our people, Oleksij Rak: Hmm. Jason: perfected it for me. That will drive ⁓ and technology, which, know, Av7lift.com has been born out of that to help leverage our team, but also to introduce it to other brands who don't maybe want an agency. That drives client value. If you're focused on the right outcomes, you will drive client value. And then when you have client value, that drives financial value for your company. So that's kind of like our... general scorecard that we're constantly evaluating our people, our processes, our technology and what we're driving in client value. And for us, client value means we're profitably growing these brands and we're reinvesting those profit dollars that we're growing back into more incremental growth. And then, when you can accomplish that, and by the way, we're year seven now and Avenue seven, it's kind of a magic year. I just... ⁓ Oleksij Rak: Yeah. Jason: I just came back from Amazon Prosper show, which was the very first Amazon conference ever. My, my, good friend, James Thompson founded a Prosper show. We did a booth for the first time in seven years. We've just been growing via word of mouth. And I was telling our team after the event, I was standing in the booth and you know, my feet are still sore, but it was great. we had just constant stream of conversations with brands, with agencies. And I said to my team, I, yeah. you know, as a founder of the agency and of course the tech, know, really for the first time, I felt supreme confidence standing in that booth that no matter what problem the brand brought to us or the agency or the other tech partners brought to us that I had supreme confidence that our team could give the answers. There's just literally not anything we can't handle right now. And that feels really good because it was a long time. mean, seven years, man, Alexi, that's a long time. Oleksij Rak: I know. I know. Jason: And, and, and, and to be able to do that in a remote environment where, geez, we've lived in some crazy times over the last seven years, starting in COVID and God Oleksij Rak: in a long environment where, geez, we've lived in some crazy times. Jason: mean, it's just been insane. And to be able to thrive in that kind of environment and build a culture, with a great team has been, you know, I think it's, you know, I'm, peak leadership now. I'm having the time of my life. It's taken me 24 years of entrepreneurship to get to this point, but I feel really good about where we're at. I'm real proud of our team. Oleksij Rak: Awesome, With regards to these seven steps, could you name them? Jason: Oh yeah, sure. So the first is presence. And that's the tool that we've productized already. If your catalog isn't clean, if you're getting suppressed, Amazon will tell you most of the things. Walmart will tell you most of the things, but not everything that's wrong with your listing. Our team looks for 234 things that can go wrong with your listings. And then we monitor them on a daily basis. Oleksij Rak: Yeah. Jason: we've in our tool, we're auto correcting some of those with our AI systems right now. So that's number one avenue. Financial Avenue Dale Dabbs, our president and I, we always have this fun argument. He thinks financial should be number one, but I'm like, if you can't, if you're not present ⁓ appropriately and know, your listings aren't clean so that they feed the algorithm, there is no financial opportunity. There's none. ⁓ And so started that. ⁓ Oleksij Rak: Nobody will buy anything from you if they don't know about you. Jason: That's right, Alexi. like, you know, it's the non it's the least sexy ⁓ but it's the most critical. is foundational. ⁓ ground zero for success on Amazon. So that's number one. Number two is the financial Avenue that includes P and L statements. Really hard to figure that out on both of these platforms, skew analysis. And we monitor if any of those margins dip below target. And then forecasting, forecasting and setting goals. Oleksij Rak: Mm-hmm. Jason: in conjunction with our client partners is really critical to our success. If you don't look down the road 12 months, two years, three years and shoot for those goals, you will not succeed. I'm a firm believer in that. It took me many years to understand that. But you know, I think I figured this out a few years ago here managing so many different brands. Those targets are critical. So financial avenue is number two. Number three is traffic. Traffic is the life's blood of success on Amazon. It's the oxygen. It's the, it's the bloodstream that brings oxygen to the brain of growth. And so we do full funnel, including SEO, including AIO. call it most are calling it GEO for listings on Amazon. And then also full funnel, paid traffic, everything from search keywords all the way up to TV. So that's the third avenue. Fourth Avenue is customer. And this is where AMC sits. And this is where some of our AI sentiment analysis and customer identification, customer personas it lives. Oleksij Rak: Yeah. Jason: We identify who those personas of your customers are so that in the next avenue, the creative avenue, we make sure that those people show up on the listing so the customer can see themselves in the listing. click through rate. drives conversion. and then of course the product avenue is next after creative. If you don't have a good product, if you've got a three star product, our system will do review sentiment analysis, customer return analysis will give you the feedback. So you can go back to your. Oleksij Rak: Mm-hmm. Jason: product designers and your factory and improve on that product to make it a four and a half star, five star. You must have that in today's day and age. You just can't have a low star product and have any success. And then the final avenue, and the final avenue is the one most brands and frankly, Alexi, most companies sleep rivals. We want to be able to communicate to our clients all the time what the rivals in the space are doing, not just the big guys that they're looking to eat market share from. But the little guy, especially on the Amazon platform and Walmart, the little guy that nobody's ever heard of that's cracked the code on a new product in their category that's growing 1500 % year over year. He may be small now with a minuscule market share, but if you don't pay attention to what that guy or gal is doing, they're going to eat your lunch. And so the rival's avenue is very important. ⁓ We identify share of voice. Oleksij Rak: Yeah. you Jason: in a category, share a voice for targeted keywords and then market share for our clients brands within their addressable market in their subcategories. So that's the seven avenues. Alexi, if you're losing or ⁓ of those seven avenues is not green and it's in the red, you got a problem. You are not maximizing your potential as a product seller. Oleksij Rak: Yep. They're kind of multiplicative. Yeah. Jason: It is, it is, they're interdependent among each other. You must be firing on all of them. we have vetted this process ⁓ for years and now we're productizing it in the SAS. Oleksij Rak: It sounds like a lot of operations and like all of these pieces that you mentioned, like each of them, like driving traffic, PPC, optimizing for SEO, GEO and so on, and then like paying attention to competition, to rivals. It's a lot of work, so like what out of that are you productizing in SaaS and how do you approach it? Jason: Well, we, we start with, you know, the most important one, which is making sure that the solid rock foundation is laid in presence. And, our tech stack is ⁓ as complicated as the seven avenues that the first layer is the data layer ⁓ God bless Amazon, but their data layer sucks. we have to hear an enormous amount of modeling of data. Oleksij Rak: Yeah. Good. you Jason: and we spent the long, I mean, we've been doing this since 2020. We've been, you getting, ⁓ we have about a dozen different data sources just for Amazon that we pull in, we model it and then stored appropriately so that our service layer ⁓ and our UX can actually make sense of the numbers. we have both a deterministic code system and we have two types of AI that we deploy. One is a backwards chaining inference engine, which is like 1980s, 1990s technology that just works great. We have certain workflows where it's perfect. It doesn't hallucinate. It's cheap to run and it works beautifully. but then we also have LLMs ⁓ can do, you know, we, we, we deploy LLMs on top of our stack for things that LLMs do really well. LLMs do great job of synthesizing data, summarizing data. It does a great job of identifying multi-step processes. ⁓ It does a great job of communication. And it does a great job of ⁓ workflows. But I will tell you this, after ⁓ in weeds on large language models for the last two years now, they are not what big tech is selling. In order to make an LLM work, you can't, ⁓ I, Oleksij Rak: Mm-hmm. Jason: You know, I think a year and a half ago, I said, everything is going to be built on an LLM platform. LLM is going to be the new platform. I was dead wrong. After working on these systems for two years, it is clear to me that LLMs provide outstanding features, but they cannot be platform. You must have old school tech stack. Oleksij Rak: Yeah. Jason: ⁓ and in order to make those LLMs work, the reason why you can go to chat GPT and ask it a question and it can give you a good answer is not only because of LLMs. The reason you can go to Gemini and get a really good answer is not only because of LLMs, they have a massive amount of deterministic code infrastructure to keep those things off honest because they hallucinate. They're like my, my 11 year old. ⁓ they make up these profound, great stories all the time that are not based in reality. You must not allow that to be delivered into your SAS tool because you will lose trust immediately. And then the second part that I think a lot of people who aren't working directly with don't recognize yet. Tokenization is freaking expensive. If everything that we've built was only on LLMs. Oleksij Rak: Mm-hmm. Yeah. Jason: We would have to charge such a high price to cover our costs that our average seller or brand couldn't afford our sass. I mean, the tokenization is outrageous. not like in the old open source software days where you could go get an open source library. You could bring it in, you could put it in your host hosted environment, whether it was local or, you know, ⁓ on cloud and really cost effectively, you can make a lot of money. got, you know, your costs are very low. The tokenization, the power hungriness of the current models of LLMs makes it unsustainable, I think, as a platform for any company, except companies that can raise trillions of dollars and burn cash like it's never going to end, like OpenAI. Oleksij Rak: Okay. Awesome. In terms of technology in the OSIRIS, what are you working on right now? So what is there in production? Jason: So we've got live now the presence Avenue. So, um, our workflow is we sign up a client, we download their catalog, we do an analysis and show them all of the holes in their catalog. Like one product on Amazon has a thousand fields that you have to enter data in 200 of those are required because of AI that's more than at any time in the last 20 some years I've been an Amazon in the Amazon game. So They're requiring more and more required attributes. They're not telling brands that they have to fill out those values because they use it for AI for Rufus. Walmart uses it for Sparky. They need more data and more attributes. And if your product doesn't have all the required attributes filled out, it will never win. And so we start there. We developed what we call a source of truth. have a PIM, a product information management system where we store your products in terms of what good likes, what you want in the front end on Amazon and the back end. And then every day. We're comping that source of truth against what's live on the front end and the back end. Any breaks, our system automatically fixes it. Additionally, anything that if you get suppressed, which is a big problem with Amazon, if your listing gets taken down, if you have a compliance issue that could drive your account to suspension, we're identifying all those things ahead of time, we're calculating the financial risk, and we're delivering root cause analysis and guidelines to fix it. Or you can connect to our agency. through a ⁓ click to fix button and our team on a one-off basis will fix it for you. Now that product is live. We're in a closed beta right now we're welcoming a good chunk of brands that are good fit for us to test out the product and provide feedback. Next is the financial avenue ⁓ ⁓ gonna keep adding avenue to avenue. ⁓ Financial is next. We're already doing some rules in ⁓ traffic avenue. Oleksij Rak: So you're kind of building avenue by avenue. Jason: One thing that happens on Amazon all the time, if you have a presence issue, your product can become ineligible for ads, but you're still spending money on it. so ⁓ alert brands that, this product has a problem. You might want to downbid your campaign until you fix the problem and then you can upbid it when it's fixed. so we're just going to keep going through and productizing, like I said, every single avenue. And we'll use AI as sort of the orchestrator to take a look at the biggest priority. That's. either impacting your business negatively or positively, be able to synthesize that data and present to you in any form you want, written, audio, whatever, what you need to be focusing on as a brand owner today. is, as far as I know, Alexi, there's never been a brand growth strategy tool created for product sellers. And we're the first. Oleksij Rak: Awesome, awesome. That's a good one. terms of like, yeah. Jason: Not easy, but it's fun. We're having a good time solving these problems that make brands pull their damn hair out. Oleksij Rak: Yeah, for sure. And are quite valuable insights for the brands. ⁓ terms of traffic acquisition, ⁓ works most in your experience nowadays? Is it Amazon PPC ⁓ SEO, or whatever? ⁓ What the best traffic acquisition channels nowadays? Or customer acquisition channels? Jason: Yes. Well, I think it's all the above. If you're a product brand, you have to be on Amazon and you have to have a DTC site. Even if you're a big B2B brand, like we've got Fortune 500 companies that we work with. The majority of their sales come from the B2B environment. They're shipping container loads to big retailers. But even those brands who come from B2B in order to survive and thrive in the next decade or two, I believe strongly they must have direct sales channels. And that includes Amazon, which is half the market here in the U.S. Oleksij Rak: So. Mm-hmm. Jason: as well as DTC. And they need that to get that product avenue information, that creative feedback, that direct feedback from a real customer with a credit card, some buyer who's an ⁓ who doesn't really truly understand the feedback that his customers have on a product that he buys. And so I think the first of all, you got to start with direct. It doesn't matter how big you are, how big, how small you are. And if you're small, you got to start direct. That's pretty much how, how most of these brands get into stores. They build a big brand following. ⁓ next you must have a strong SEO SEO is not dead. ⁓ with AI marketing abilities, you can build up really good AI. I call it AIO, but it's there's like three different letters that are floating at GEO is, you know, AI, need to pop up an AI. Oleksij Rak: Yep. Yeah. Jason: And you need to be able to online provide enough data either on Amazon or on your own direct channel that answers the questions most consumers ask when they determine which brand or which product category you go to, to find a product that solves their need. Right. You've got to do that. We live in a pay to play world. You must have PPC advertising. You must defend your brand terms at all costs. There's a lot of. Oleksij Rak: Mm-hmm. Jason: debate out there, people that say, I don't want to defend my brand because already have organic search for my brand. I think it doesn't work because if you don't defend your branded keywords, your competitors will steal your branded keywords and then your ranking will fall, whether it's Google or Amazon. So you must defend your brand. And then you must find your audience and PPC ads ⁓ to in new to brand through PPC. You must have display. And I think. What's exciting about traffic right now, Alexi, and what I'm most excited about what Amazon built with their full funnel advertising channel with TV, know, full funnel PPC ad all the way up to TV with closed loop attribution. You can run television ads cheaper now than you'll ever be able to again in the history of the world. It is akin to 1946. when everyone, all the big brands, like nobody had ever heard of Procter Gamble back then, but they were doing radio ads. They moved all their ad budget from radio to television because people were getting TVs in their living room for the first time. And they jumped all in with super cheap TV to the point where they grew their business. And that became like a moat for them. We are in that moment of time right now for, for, for connected TV, for, for, you know, Amazon TV, the streaming TV channels are super cheap. are running. TV insertion orders on connected TV that are cheaper than meta display and video ads on mobile. And it gives you an opportunity to find millions of people who look like your customer you only serve TV ads ⁓ just that customer. We say we don't even care what streaming channel they're on. We don't care what television program is on. It kind of turns that old paradigm on its head. Oleksij Rak: you Jason: We just want to make sure that whoever's watching that show where we're serving your television ad is your customer. We don't care which channel they're on and we can do it on all of them through the Amazon platform. mean, I, you know, our mission is to make brands famous. I don't think there's been a time in history except for 1945 where it is inexpensive enough to truly build a brand for the next 100 years that it is right now. It won't last. Oleksij Rak: Mm-hmm. Jason: But this is the moment right now. So we're trying to get every one of our clients through that. Stair step to the cloud all the way up to TV. We, we, we optimize for search engines first. Then we optimize bottom funnel DSP, then upper funnel DSP. We test creative. Once we land on the best performing creative and we've really zeroed on the audience, then we put television ads in front of those customers. And that is the way to become famous for the next ⁓ hundred years. ⁓ we're in a special moment in time right now, Lexi. Oleksij Rak: Yeah. Well, why is this streaming TV so cheap nowadays? Because all the platforms try to monitor it. Jason: Well, it's so new. It's brand new. And that's part of it. But also look at the economics to the way it used to be. If, uh, you know, I'm dating myself, if you want to run a television ad on Seinfeld, you know, you're dependent on an intermediary company that says, yeah, your customer is in here, but your customer may be in there, but your customer that's watching the Seinfeld episode that you're running a TV ad, maybe 20 % of the audience. Oleksij Rak: Yeah. Jason: You still have to serve it to the other 80 % that's never gonna buy from you anyway. So you're paying for awareness campaign, you have no way of knowing whether it works, and you're serving your ad to people who don't give a crap about you in the first place, right? Now, fast forward to CTV now. That 20 % of the audience on that television show is your customer. We're only serving impressions and we're paying by video impressions to that group. Oleksij Rak: Yeah. Jason: We are excluding the other 80 % that are not part of your ideal client profile. We're not going to serve and add to them. We're only going to serve and add to your customer base that has your buying characteristics. So that alone lowers the cost. Secondly, there's a lot of inventory available. The second that inventory becomes, once there's a shortage of inventory, according to the law of supply and demand, when there's less inventory, the costs are going to skyrocket. Get in now. Oleksij Rak: Mm-hmm. Yeah. Jason: If you're listening to this podcast and you're a product brand seller, if you're not doing CTV, you are missing the boat, right? Like the boat will pass you by the train will leave the station. If you don't get in there right now and start doing this. And I'm, ⁓ I'm very passionate about that because I've seen it work with my own eyes the efficiencies and the cost savings and the ability to reach millions of people. In terms of incrementality, I just, I've never seen that. I wish I had that tool. when I was still a brand, would have had a much better exit. Oleksij Rak: Awesome. with regards to all steps, all these avenues that you mentioned, what does take for a brand to ⁓ get through these steps? Well, for instance, I have a great product. I don't, but ⁓ let's assume do. What does it and how much does it cost me to build a good brand? and to build my brand and to start selling. Jason: So, so start, start. Yeah, yeah. Look, start, start up is rough, right? Starting up a brand new product, with a brand new brand is a long ⁓ ⁓ you, in, in the old days, back in 2003, you could launch a crappy product with terrible listings and have to pay for traffic and you could win. ⁓ Those are over. Those days are over. Right. ⁓ Oleksij Rak: Yeah. Yeah, and Amazon could code. Jason: And so you do need some capital. You ⁓ launch brand on Amazon. I would stay very focused on the product avenue, do as much rival research as you can to make sure whatever product you're introducing provides a real differentiated offering. If you're just doing an also ran and you don't have a brand, you're competing on price with China and you cannot win that game. That's a losing game. Oleksij Rak: Yeah. Jason: If you can, it starts with that product avenue. starts with that research. Can I introduce a product and then layer on a creative brand story around that, that differentiates myself and my brand from everyone else. You need to have that. you're well funded, you don't have to have that. And we can use data on the Amazon platform or on, you you can use your Shopify results and customer feedback there in order to evolve to that place. But it's always better to start there. If you have that, can, I don't want to say organically grow because that's not true. You have to have some ad budget and it all depends on which category you're in and how much the traffic and competition is. If you're in a low trafficked category, you know, maybe you need 10 grand, maybe you need 20 grand. you're in a very high, if you're trying to launch a brand new collagen supplement on Amazon, you're going to need significant funding, right? Because that is a highly saturated, uh, Oleksij Rak: Yeah. Jason: category with rivals in there who know how best practices on the Amazon platform work and they're expert at it. So that's really tough. But if you're inventing a new category, that's kind of new on Amazon, it doesn't exist as a decent amount of volume, you can launch a product very inexpensively. So, you know, I'm kind of bouncing around your question. It's highly dependent on the seven avenues, right? I mean, Oleksij Rak: Yeah. On what exacts. Jason: I hate to put it that way, but you got to start with the rivals in the product and see if you can differentiate. I would not in today's age launch a product that is not differentiated. Like in the old days, you could go to China, you could go to like Alibaba, you could find a product and you could just do an also ran. You can't win that way anymore. You must innovate and you must differentiate. If you can do that. You can build a brand and you can do so cheaper now than you could since 1946. Oleksij Rak: Is dropshipping over already or is it not? does it work only virally on some TikToks? Jason: What? So I have a lot of mixed feelings about drop shipping because I started as a drop ship. I was drop shipping basketball hoops all over the country and LTL, right? Like big heavy shipments. We're talking 500 pound basketball hoops, 72 inch glass backboards with six inch steel poles, right? So the drop shipping game is the reason I am where I am today. technically on Amazon, drop shipping is no longer an allowed fulfillment option, but there's folks that do it. you can certainly drop ship through a direct to consumer channel. Oleksij Rak: Yeah. Jason: It's a much harder game now than it was when I first started. And I, I frankly. Oleksij Rak: Yeah. Jason: Here's the good use case to use drop shipping. If you're passionate about a category and you wanna learn more about what the competition is, go find some of the manufacturers, see if they'll drop ship for you, see if you can get some incremental sales for no other reason other than to learn that category and those products inside and out. tables, we did that. We drop shipped foosball tables, that was another expanded category we had. We learned everything we sold from every foosball table manufactured via Dropship that would allow us to. We learned what our customers that were buying from us liked about them and didn't like about them. We took that intelligence. We developed our own product line, put our own logo and brand on it, and then developed best in class foosball tables. That's a good use case for doing Dropship today. it as a research tool that won't cost you money. And if you're lucky, Oleksij Rak: Mm-hmm. Jason: And you can some cashflow to the bottom line that you can reinvest in the learnings and developing your own product. I think that's a, I still think that that's a viable model. it as easy as it was in 2003? Hell no. But is it still viable? ⁓ think it could be. ⁓ you know, that's I started. I wouldn't be here without dropshipping, right, Alexi? So, you know, even though Amazon doesn't allow it, I know there's dropshippers on the platform, but. Oleksij Rak: Yep. Okay. Jason: You just got to be smart about it. It's not an end all be all. Don't be a dropshipper forever. Use it as a tool to get to your own brand. Find out the weaknesses there and develop something new and exciting that's differentiated. Oleksij Rak: On every show over the market, what is the cost split over goods acquisition, goods cost, fulfillment costs, and marketing costs, probably. What are the costs? Jason: Okay, so like if you're selling a hundred dollar item, again, the shipping cost depends. If you've got a small goods item, small package item, like something that can go on a FedEx or UPS truck or Amazon truck now more recently, those are flat rates. And so, the more compact it is, the cheaper those flat rates are. If you can be somewhere in the 10 to 15 % in terms of shipping cost of your hundred dollar, if you could spend $15. depending on your cost of goods, then that's a good place to be. If your margins are good, if your cost of goods is only like 15%, then you can spend more on shipping. So it's a balance in there. Your marketing costs, if you don't have a brand, you need to be spending 15 to 20 % of that hundred, you need to use $20 a sale on marketing, on paid traffic, I should say, not necessarily marketing. Oleksij Rak: Yeah. Jason: So you got your retail price at a hundred, you're given 15 % plus or minus, depending on a category. If you're an apparel, it's 17. If you're 9.99, that's 7%. It's anywhere from seven to 15%, but most are paying 15 % referral fee to Amazon for the right to sell on their platform. Then you got shipping costs. It could be anywhere from 10 to 20. Your cogs, if you're over 30 % cogs, you can't make any money. Oleksij Rak: Okay. Okay. Jason: Not only Amazon, I don't think you can make money on a direct to consumer channel because that cost of acquisition on your Shopify website is much more expensive than the cost of acquisition on Amazon. You can't do it. You need to find that cogs at 15, 15 to $30, anything over 30, you're in big trouble. You can't make any money today on direct channel. And you know, ⁓ on your product line, you you want to keep your returns low. Like when I was selling game tables, if I got a game table return, I couldn't resell it. But if it's apparel, you can resell it. So you got to play the, you got to understand that returns and refunds game. You know, if you can keep returns under 10 % on apparel, you're doing great. Um, if, if, if the stuff that comes back is not returnable, like my foosball tables, you need to be in two or 3%. And then you can make some money. If you can, if you can starting out, if you can net 10 % on Amazon. Oleksij Rak: Mm-hmm. Jason: to start, you can grow that to 15, 20, 30 % over time. The more volume you get, your cost of goods comes down. The more you build your audience, the more efficient your ad campaigns can be. The more you work to work with your factory to minimize shipping dimensions, the lower your shipping costs can be. But it's also not crazy to just break even, right? If you want to start, as long as you have a path to getting Oleksij Rak: Yep. to get him better Jason: between 10 to 30 % net margin after all your fees are paid. Oleksij Rak: Awesome. the last one would be, what you think about the future? So where does it go and what your bets are and what you're building towards? ⁓ Actually, building your avenue by avenue, but in general, your bets about the future? Jason: Come on. Well, I'm an optimist. the future is very bright. I see this in my team all the time. I've waited my entire career for a moment like we're in right now. We talked about the full-fundamental advertising and the ability to build brands ⁓ for clients. We've talked about the technological components and that new that LLMs provide with amazing features that we've never been able to do before. And so I think on the... I don't buy into a lot of the doom and gloom that Sam Altman and those knuckleheads are talking about to raise the price of their stock. do not buy it. I've swallowed that crap hook line and sinker two years ago. And now after getting my hands rolling up my sleeves and getting my hands on these systems myself, the LLM models are not the future. There's going to have to develop new models. I these fears that people are going to be replaced by AI entirely are false. The new model, the current models cannot do that. You still need more than ever humble, smart, hungry people in order to win in whatever business you're in. And that won't change. I think these AI tools and technology will just be enablers for them. And, you know, topic that might be worth us unpacking a little bit is this idea of agentic shopping. Oleksij Rak: Yeah. Jason: ⁓ you know, chat, GPT just shut down there, some of their division there. Amazon has Rufus and they're even for the first time ever. I never thought I'd see this in 24 years of being in that platform. Alexi. I never thought I would see Amazon use AI to go find products off of Amazon and allow their customers to leave Amazon and go to a brand website. ⁓ crazy. I don't know how long that's going to last, but they are, think trying to eat market share with this agentic shopping. Piece. Oleksij Rak: Mm-hmm. Jason: And I was, I was, you know, I'm talking to a company about potentially being an advisor that that's big in this agentic shopping space. They're a big believer in it. It's coming. It's going to happen, but here's the problem. everyone came out and said when open AI and, ⁓ entropic and some of these guys were building these agentic shopping tools that Amazon was going to die. I heard the exact same thing 15 years ago from Google. Oleksij Rak: Mm-hmm. Jason: and Facebook when they were talking to me about how they could build an online marketplace. And their marketplaces are terrible. Google and Facebook, and they've tried of different leaders, tons of different iterations, and it still sucks. Right. And here's why. Two reasons. They don't understand the presence avenue and they don't understand the importance of catalog and getting the data sets right to deliver a clean, authentic Oleksij Rak: Yeah. Jason: great experience for a customer. That's number one. And number two, they cannot deliver to your door tomorrow. Amazon cracked the code on this. When they went from whatever the shipping delivery date was, when Amazon went to whatever the shipping delivery date was to two days, their grew 40%. When they ⁓ go two days to one day shipping, it grows 70%. Now, They're testing one and two hour deliveries. The increase in volume with those in the metro areas right now are up a hundred plus percent. Instant gratification in delivery of goods bought online is the magic elixir. And until open AI invest half a billion, you know, maybe half a trillion dollars building a logistics network that's comparable to what Amazon has done to deliver fast. They will not beat Amazon. And so I think we're going to see a lot of the same over the next years and 10 years where Amazon continues to remain dominant. of the agentic shopping guys that invest heavily into figuring out logistics networks, maybe they'll partner with Amazon and that will work for them so that they can deliver fast. But ⁓ they understand that presence Avenue and the importance of it and delivering good, they're not going to kill Amazon. The Amazon killer has not been born yet. as far as I can see. the, that's what I would say about the future. I'm optimistic. I think the future is bright. I'm really excited to be living in this day and time with so much innovation and ⁓ and all this stuff. But I think there's a lot of hype around it. And if you can cut through the crap and get to what's great about these tools, you can really build a great business. Oleksij Rak: Yeah, yeah, for sure. Awesome. That was a great discussion and we came to a great end. The is bright and the is bright. So thanks a lot ⁓ for this ⁓ Is there else before we wrap it up? there anything else you would like to add? Jason: I mean, Alexi, thanks for inviting me. I love talking about these topics. I'm really passionate about them. And so I jump in an opportunity to talk to interesting people like you on this great podcast. And so I appreciate the invite. ⁓ know, hopefully we can do it again sometime in the future. Oleksij Rak: for sure. Let's reiterate how it goes with your avenues CS. Awesome, awesome, Jason. Thanks a lot for the discussion and the of luck for you. Jason: Thank you, same to you, Alexei. Oleksij Rak: Yeah.