Amazon F'ing with listings b4 BFCM

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_{💰 AMZ AGGREGATOR CONCEPT ISN’T DEAD}

The concept of Amazon aggregators, especially as Thrasio prepares to file for bankruptcy, isn't dead.

Thrasio was founded with $500,000 from friends and family in 2018 by two guys with multi-decade track records of building & scaling businesses. They focused on acquiring under-optimized but profitable Amazon FBA businesses, mostly with top line revenue under $5 million. 

They grew rapidly, building proprietary software and acquiring over 500 Amazon businesses, hitting $500 million in revenue with 1,000 employees.

They also spent like billionaires, including $75,000 sponsoring events with as few as 25-30 sellers attending, and hundreds of thousands on a lavish party at the Mayfair Supper Club in the Bellagio during the July 2021 Prosper Show.

Thrasio had access to as much as $3.4 billion (the spigot was probably cut off before it was all used). In 2021, Thrasio considered going public via a SPAC, but faced financial audit complications, rising interest rates, and a post-pandemic decrease. A change in management was made, but it was too late.

Down markets reveal strong operators - which Thrasio is not. Thrasio's bankruptcy filing can be attributed to several factors. The declining COVID bump, the creation of knockoffs of highly-rated products, and Amazon becoming a direct competitor impacted Thrasio.

Thrasio also overpayed on multiples due to high competition. I remember one executive from Thrasio claiming on Clubhouse in 2021 there was an endless supply of good Amazon businesses to buy (I strongly disagreed).

In their approach, the company's lack of focus on both customer and seller needs ultimately led to their downfall. Decision-making solely driven primarily by the interests of shareholders and board members, with an eye towards an eventual strategic sale or "flip" of the business, proved to be ineffective.

The McKinsey-style management consultancy approach with inexperienced Harvard and MIT MBA’s know-it-alls also doesn’t work in this business.

Additionally, Amazon’s total fees increased by 30%, slashing margins and making unit economics unviable. Thrasio's lack of a distinctive brand and the drying up of funding sources further compounded their troubles. Plus, they added little value to most of the brands they acquired.

Amazon entrepreneurs excel in their operations, tailoring their business strategies to maximize rapidity and income generation. In contrast, aggregators have been structured to function similarly to conventional consumer packaged goods (CPG) or retail businesses.

Implementing the necessary transformations to achieve this, while preserving the products’s ranking on Amazon, is not a swift transition. Numerous aggregators have recognized this reality and have been evolving.

Thrasio, like many of the 100+ aggregators that have emerged, has no choice but to to concede defeat. Establishing a strong defensive barrier is essential. Brand building must be prioritized over commoditization.

Thrasio's portfolio includes several underutilized brands, presenting attractive acquisition opportunities. One seller in the private BDSS Whatsapp Group (a highly active group only for those who have attended a live BDSS event) says he is considering repurchasing his brand to revitalize it.

Another member who sold to Thrasio recommends prioritizing cash at closing, even though buyers often view high immediate cash payments as risky. Seller financing tends to be more stable than relying on performance-based payouts.

What’s worse, many sellers who sold to aggregators have never received promised stability payments or additional earn outs. Lawsuits have been filed.

Despite Thrasio's struggles, the aggregator model still has potential. Good aggregators (which possess more funding than is generally known) are quietly rebuilding and adapting.

Amazon is taking measures to regulate the diverse and unbridled marketplace that developed between 2019 and 2021 by altering fee structures, processes, and standards to enhance their network. While these changes are likely to benefit larger, more sophisticated sellers, they could be detrimental to smaller, offshore, and part-time sellers.

Additionally, Amazon is making efforts to become more accommodating to sellers. This shift is particularly advantageous for aggregators, as their size and influence are likely to gain Amazon's attention and support.

Such support from Amazon could address some of the systemic inefficiencies faced by aggregators, such as managing multiple seller central accounts and handling separate inbounding processes for a portfolio of brands.

Lessons from Thrasio's experience suggest the importance of experienced Amazon operators, a focused acquisition strategy, prioritizing brand-building, strengthening product development, and robust supply chain management. 

There are aggregators out there who are expected to successfully navigate the current challenges and re-emerge stronger in the next 18 to 24 months. They might be the one buying your business - so start preparing now.

AMAZON is F’CKING with LISTINGS with AI

Fe Soutter from Australia says she recently got the notice below from Amazon.

When she logged in to check her listings, all of her keywords had been stripped and Amazon had replaced them with what she called ‘SHITE.”

Her bullets had been reduced to one sentence, and her important keywords were nowhere to be seen. All the product benefits were gone too. The listing looked like it has been written by a drunk monkey.

Be sure to keep an eye on your listings and stay on top of notices from Seller Central, cuz Amazon ain’t playing and be f’ing around.

🙋 USE Q&As to SIGNIFICANTLY BOOST RANK

Previous BDSS speaker and ClearAds partner Matt Altman recently shared how you can use customer Q&A’s to significantly improve your product's keyword ranking on Amazon.

He advises you research commonly asked questions about similar products or relevant search terms, then ensure these questions are associated with your products.

For example, if you’re selling jeans with specific features like a button fly and boot cut, it's beneficial to include questions like "Do these jeans have a button fly?" or "Is the cut of these jeans bootcut?" in the Q&A section.

Answering these questions in a simple 'Yes' or 'No' format can enhance the product's visibility for those keywords. He also recommends you answer these questions from your actual seller account for added credibility.

LITTLE KNOWN BONUS TIP: Use Amazon Comprehend (bet most of you have never heard of it) to plug your questions into. You can access Amazon Comprehend document analysis capabilities using the Amazon Comprehend console or using the Amazon Comprehend APIs.

💡 AMAZON CREATIVE INSPIRATION

One of the biggest roadblocks that Amazon sellers run into is knowing how to properly guide their creative team or agency when building their product listing.

Now you can tap into Mad Lemon Media’s Ginourmous Internal Swipe File filled with thousands of curated examples for you to grab inspiration from! 

All categorized by niche (everything from automotive to baby) and creative asset type (main images, A+, etc.).

🕵️ TIKTOK AD SPY TOOL

Discover your competitors’ ads and the best viral TikTok products fast.

PiPiAds analyzes tens of millions of TikTok ads to discover what’s working. Access all the latest products and creatives working right now. It’s the largest library of TikTok ads in the world.

Modeling your content after similar viral videos can get you a lot of free exposure.

🖥️ BUILD YOUR OWN CUSTOM ChatGPT

In last Thursday’s newsletter, I featured Steve Simonson’s eCommerce Mentor Chat GPT bot. It was quite popular, and a lot of you asked how you can create one for your company.

GPTs are custom versions of ChatGPT created by OpenAI users. All you have to do is tell the GPT builder, in plain English, what you want to create, and the builder will take it from there. 

Load it up with all your technical manuals, SOPs, podcast transcripts, trainings, FAQs, customer support docs and more. Then watch the magic happen.

Here’s a great step-by-step guide on how to do it.

🔬 AMAZON KEYWORD RESEARCH TRAINING

Propel your products to the top of page one. Learn which keywords hold the key to Amazon sales success!

Tomorrow, November 21, Bradley Sutton will be sharing all of his best keyword research strategies for 2024. He’s holding nothing back.

• ​Improve rankings

• ​Craft better product pages and campaigns

• ​Discover the true ‘backbone’ to every successful business on Amazon

• ​Find buyer-relevant keywords and attract the right customers

✌🏼 See you again Thursday …

P.S.

Mark your calendar for November 30 and December 7 for two special FREE webinars I’m hosting: #1 Ninja Hacks contest and #2 How to Crush it with a Newsletter for your e-com biz.

The answer to today’s STUMP BEZOS is
$100 million dollars