Hidden Costs When Selling on Amazon With Mike Ferone - Episode 196

INTERVIEW WITH MIKE FERONE

DESCRIPTION

This week we are joined by Mike Ferone of Full Circle Brands. We will discuss some of the costs/overhead that Amazon places on brands that don’t exist in other channels or are more legible in other channels, like co-op fees, chargebacks, and prep fees. Do you want to know what kind of things your 3PL does or how to identify partners in the marketplace - you’re in the right spot!

Make sure you tune in to find out more!

Mike Ferone is the eCommerce Business Manager at Full Circle Brands. Mike has been in eCommerce for 12 years, starting in performance auto parts on DTC and eBay, leading eventually into Amazon as well. For the past three years, he's been on the brand side working in Vendor Central (Boska Food Tools & now FC Brands). He’s managing 2 DTC businesses, Amazon Business, and a few pure-play eCommerce accounts (Full Circle Home and Soma).

“With Ecommerce, customers don’t stay in one place. In traditional brick and mortar, you know that customer is coming back to you pretty often, but online it changes by the minute, by promotion, by the deal.”
— Mike Ferone

KEY TAKEAWAYS

  • Chargebacks, co-op fees and prep fees, and packaging requirements are some costs/overhead that Amazon places on brands that don’t exist in other channels or are more legible in other channels.

  • Everywhere else, co-op fees include marketing costs.

  • VC chargebacks like PO accuracy and carton labels can be tough.

  • It is important to have a3PL that’s very experienced with VC operations. 3PL might be on top of putting pressure on logistics providers who don’t show up on time and understand the implications of a broken link in the chain, downstream effect. Making sure carton counts are accurate. Anything on carton labels that would be missed.

  • Find a balance between eCommerce-specific packaging and sustainability goals (no unnecessary packaging - challenging with breakable items).

  • Use PLA compostable bags, not plastic bags.

  • ROAS or ACOS could be manufactured to be as low as you want it, and the more important thing is to understand the business objectives first before identifying what metrics need to support them.

  • Have a partner who knows the issues that can go wrong, the chargebacks that can happen. Having a partner is an extension of your team and not something that is keeping you apart. Find somebody who's going to be able to treat your business as if it's your own.

  • Make sure carton counts are accurate.

  • Be really proactive, see what new options are offered.

  • Effective Amazon marketing/advertising channel will impact off-Amazon sales. If you're running a Facebook ad campaign to your DTC site, you might see a jump in Amazon sales and vice versa.

  • Change the structure of your team so that the sales & eCommerce team come together rather than being siloed - have shared goals.

  • Customers are not stuck to one channel.

  • Shopify continues to integrate into many areas - the Facebook ecosystem, with more of a one-click shop experience purchasing, or purchasing directly on Facebook and Instagram are becoming more commonplace.

  • Try to understand what Amazon customers are buying, and make sure that those products are very well represented on the site. There is a dichotomy that the products that sell really well on Amazon aren't necessarily our top sellers on the website and vice versa.

  • Meet the customers where they are.


MENTIONED IN THIS EPISODE


SPONSORS

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Thanks, Payoneer.

Season 3Kiri MastersComment