AUXO eCommerce

AUXO eCommerce is a boutique Amazon consultancy, helping brands manage their Amazon channel or exit their business for 7- and 8- figures.

Core Services include:
-1:1 Coaching
-"Hands Off The Wheel" Amazon Account Management
-M&A Advisory

Founder

Forum Brands

Forum Brands is an Amazon Aggregator, buying Amazon FBA businesses and building them into world-class consumer brands.

VP of Brand Growth

Director of Brand Growth

Amazon

In this role, I was part builder, part operator, and part general manager, responsible for setting the strategic direction for my product family and executing against it by coordinating with internal stakeholders and partnering with third-party merchants.

Key responsibilities included:
-Account Management / Merchant Success
-Business Development
-Customer Experience
-Merchant Recruiting
-Operations
-P&L Ownership
-Program Management (Certified Refurbished, Seller Fulfilled Prime, Voice of the Seller, Warranties)
-Strategic Planning
-Subject Matter Expert (Customer Trust & Fraud Prevention, FBA Operations)

Head of 3P Marketplace, Consumer Electronics

Senior Category Manager, 3P Consumer Electronics

KPMG US

In this invite-only, Center of Excellence (COE) role for top technical members of the Economic and Valuation Services practice, I worked side-by-side with the most senior Partners in the firm to parse complicated tax issues and provide technical support to customer-facing teams on large and complex projects.

Key responsibilities included:
-Research & Thought Leadership
-Learning & Talent Development 
-Knowledge Management 
-Technical & Economic Support for Complex Engagements

Manager, Washington National Tax

In this customer-facing role, I served as a trusted adviser for multinational enterprises in a variety of industries including Diversified Industrials, Financial Services, Food, Drink & Consumer Goods, and Healthcare. I managed a portfolio of 10+ accounts, and exceeded my annual revenue targets by 200%+ for 3 consecutive years (top revenue producer for 2 of 3 years). My customers were CXO/VP/Director level executives, and this role required that I translate complicated tax issues into operational considerations to help my customers make trade-offs between risk, tax savings, and long term sustainability.

Key responsibilities included:
-Account Management & Customer Success
-Business Development & Strategy
-People & Project Management
-Sales

Manager, Economic and Valuation Services

Senior Associate, Economic and Valuation Services

Associate, Economic and Valuation Services

Gaming Laboratories International

Technical Administrator

University of North Carolina at Chapel Hill

Undergraduate Teaching Assistant, Department of Economics

BEST@AMAZON NEWSLETTER --> https://bestatamazon.ck.page/

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* * * * *

Hi, I'm Jon and I'm a builder. 

Over the course of my 15-year career in management consulting and technology companies, I've built teams, I've built processes, I've built products, and I've built businesses (the 10-figure kind). I'm at my best when I'm in a role with scope and significance, and my superpower is consistency.

Some things I'm GOOD at include dealing with ambiguity and making good decisions in fast-paced, uncertain environments. Some things I'm *GREAT* at include obsessing over customers and developing my people.

Follow me here on LinkedIn if you want to hear my thoughts on Amazon, building great teams, or the current state of Chicago sports.

* * * * *

CLIFTON STRENGTHS
Harmony, Achiever, Learner, Positivity, Ideation

DOMAIN KNOWLEDGE
eCommerce, Marketplaces/Platforms, Valuation 

FUNCTIONAL SKILLS
Business Performance Measurement, Category Management, Data Analytics, Digital Marketing, Financial Statement Analysis, Lean Six Sigma, P&L Ownership, Strategic Planning, Team Leadership, Written Communication

TECHNICAL SKILLS
Amazon Seller Central, Bloomberg, Capital IQ, Microsoft Office, SQL, Tableau

I listened to the recording of Amazon's Q1-2024 earnings call at 4am today so you don't have to. (I'm a Dad and Amazon nerd; I do weird stuff at weird hours)

Here are 3 takeaways:

1️⃣  Amazon is shifting its CapEx focus from its fulfillment network (which has been the bulk of CapEx spend since ~2017) to AWS infrastructure.

Key Excerpts: 
-"Still relatively early days in generative AI and more broadly, the cloud space, and we see sizable opportunity for growth. We anticipate our overall capital expenditures to meaningfully increase year over year in 2024, primarily driven by higher infrastructure CapEx to support growth in AWS, including generative AI."
-"And I think what people sometimes forget on the AWS side, it's a $100 billion revenue run rate business, that we're still 85-plus percent of the global IT spend is on premises. And if you believe that equation is going to flip, which we do, it means we have a lot of growth in front of us, and that's before the generative AI opportunity, which I don't know if any of us have seen a possibility like this in technology in a really long time, for sure, since the cloud, perhaps since the Internet."

2️⃣  Investors are getting antsy for dividends, but Amazon is holding firm.

Key Excerpt: "So, as far as dividends or buybacks or any other capital structure moves, we don't have anything to share with you on that today."

3️⃣  Amazon continues to show tone deafness to the deteriorating economics of selling on Amazon for 3P sellers

Key Excerpts:
-"Another prominent example is our efforts to revamp our US inbound fulfillment architecture to allow for better inventory placement closer to our customers. This will be an iterative process throughout the year as we work with sellers and retail partners." (💡 Jon Note: "work with" is quite a euphemism here)
-"...third-party sellers find high value in us being able to manage those components for them versus having to do it themselves and they save money in the process." (💡 Jon Note: Again, the actual on-the-ground experience for sellers is that Amazon's supply chain services have increased seller costs)

***
#amazon
#retail
#ecommerce

Jon Derkits

I haven't been able to talk about this publicly, and it's been eating me up inside.

Mostly, because I'm giddy with excitement. Here's why... 👇 

Over the past 18 months, I've been on an M&A journey in the agency space.

It started with AUXO eCommerce 🤝 The Master Agency.

It continued with The Master Agency 🤝  Color More Lines.

And, there's more to come...

But make no mistake...M&A is HARD. It's a grind. It's a series of highs and lows.

Some target businesses look great on paper, but when you dig in, you discover they are held together by chewing gum and duct tape.

Some target businesses look awful on paper, but are truly hidden gems.

You have to kiss a lot of frogs (h/t Josh L. for that phrase) to find the perfect partner. 

And that's what I've been doing. 

Are my lips a little chapped from all that frog kissing? Yes.

Was it worth it? ABSOLUTELY.

***
#amazon
#amazonfba
#amazonadvertising

Morgan Newberg

Amazon CEO Andy Jassy released his 2023 Letter to Shareholders today and, if you're a brand selling on Amazon (either 1P or 3P), it's an ominous sign of what's to come. Here's why 👇 

In the letter, Jassy uses the phrase "cost to serve" SIX different times.

And, make no mistake, he's talking about AMAZON's cost to serve; not yours, as an Amazon seller or vendor. 

In physics, the Law of Conservation of Energy states that energy can neither be created or destroyed -- only converted from one form of energy to another. 

There's an equivalent "law" in retail:

👉  Costs can neither be created or destroyed -- only borne by a different party in the value chain.

Jassy is singularly focused on reducing Amazon's cost to serve. 

But, those costs have to go...somewhere.

Four months into 2024, 3P sellers are learning that those costs are increasingly going to get pushed to them.

Amazon is more keen than ever to wield its tremendous power as the only eCommerce marketplace that matters (FYI: Amazon will capture more than 40% of US eCommerce sales in 2024) to push costs to 3P sellers and 1P vendors.

And this is just the beginning...

***
#amazon
#amazonfba
#amazonsellers 

One of these products has a Click-Through Rate on Amazon that is 6x greater than the other.

Which of these has a higher CTR?

Let me know your answer in the comments 👇 

(I'll reveal the answer later today)

***
#amazon
#amazonfba
#amazonsellers

🛑  Stop what you're doing and read this 🛑  

(If you plan to drive off-Amazon traffic to your Amazon listings in 2024)

*

If you're going to drive off-Amazon traffic to Amazon, start with Search-related channels.

Back in 2022, the Amazon Ads team analyzed over 11 million clicks related to Amazon Attribution traffic. They found that, of all off-Amazon traffic channels, Search yielded the highest downstream sales.

***
#amazon
#amazonfba
#amazonadvertising

This week's news about non-competes has me thinking about this epic Steve Jobs email...

Last week, Amazon fired a warning shot across the bow of sellers that have been using software to circumvent the new FBA Inbound Placement Fees.

But...there is *still* a way to avoid these fees.

And I'm not talking about:

-Amazon Warehousing & Distribution (AWD)
-Amazon Global Logistics (AGL) + Amazon Managed Placement (AMP)

As far as I can tell, it is 100% effective.

I can't take credit for figuring it out. I actually discovered it in the dark abyss of Twitter.

But, I'm shining a spotlight on this "hack" for my newsletter subscribers this Thursday. 

I may or may not make this issue public, so you'll have to be subscribed in order to read it.

Subscribe here: https://lnkd.in/emxe_3Ni

PS: In this week's issue, I also do a deep dive into 3 new, under-discussed metrics for product and market evaluation. In case that's more your speed.

***
#amazon
#amazonfba
#amazonsellers  

OK, let's run it back.

One of these products has a Click-Through Rate on Amazon that is 9x(!) greater than the other.

Which of these has a higher CTR?

Some additional details:
-A has ~50% less traffic than B
-A is ~2x the price of B

Let me know your answer in the comments 👇 

(I'll reveal the answer later today)

***
#amazon
#amazonfba
#amazonsellers

Some people agonize over movements in stock prices.

I agonize over movements in media metrics.

We are not the same.

***
#amazon
#amazonfba
#amazonadvertising

Amazon just introduced a bunch of new Brand Awareness metrics.

I like them, but I need a frame of reference, not just a trend.

What's everyone else's Branded Search Ratio? (Tell me how woefully inadequate mine is)

***
#amazon
#amazonfba
#amazonsellers


In Seller Central, sellers can react to Amazon announcements with 👍  or
👎 , and Amazon shows the tallies of each.

Here's how the voting looks, for some select announcements over the past year-ish: 

-2023 Fee Increase (Nov-2022): 88.3% 👎 
-Introduction to Supply Chain By Amazon (Sep-2023): 21.4% 👎 
-2024 Fee Increase (Dec-2023): 89.1% 👎 
-Lower FBA Fees with SIPP (Feb-2024): 13.2% 👎 
-New Coupon Pricing Requirements (Mar-2024): 82.4% 👎 
-Changes to Dietary Supplement Policy (Apr-2024): 32.6% 👎 

If you're a senior leader at Amazon, and you see this Voice of the Seller data, what do you conclude?

***
#amazon
#amazonfba
#amazonsellers

In case you didn't know, the FDA actively monitors 3P products sold on the Amazon marketplace.

They perform test buys, they scrutinize labels and inserts, they send Warning Letters.

If you're selling products that make health claims, and want to de-risk your business, a good FDA attorney is worth their weight in gold.

***
#amazon
#amazonfba
#amazonsellers

Amazon's new Returns Processing Fee goes into effect on June 1. 

Are you ready? 👇 

Don't know what I'm talking about? 
👉  Read my newsletter

Know what I'm talking about, but don't know how to reduce your return rate
👉  Read my newsletter

Know what I'm talking about, but don't know if your return rate is bad? 
👉 Read my newsletter

Know what I'm talking about, but don't know if return rate impacts your ranking? 
👉 Read my newsletter

Know that I write an Amazon newsletter for the Top 1% of Amazon sellers, but don't know where to find it?
👉 Here's my newsletter: https://lnkd.in/emxe_3Ni

***
#amazon
#amazonfba
#amazonsellers

This is the third time in as many months that I feel compelled to talk about Amazon's protections under Section 230. 

Context 👇  

Amazon has historically avoided liability for defective third-party products through protections afforded to Platforms (er, "interactive computer services") under Section 230 of the Communications Decency Act.

But here's the rub...when a company tips from Platform to Publisher, that liability shield goes away.

I am not a lawyer, but I can't help but think that, by *participating* in the transaction between 3P sellers and customers, by way of a discount that Amazon funds, Amazon is risking its status as a "Platform." 

Maybe I'm wrong though...

*

My previous posts on this topic (if you want to go down the rabbit-hole):
-The US CPSC is coming for Amazon: https://lnkd.in/grBbtWKg
-Amazon is deploying AI to automatically "improve" product listings for brands: https://lnkd.in/gvxwUtRA

***
#amazon
#amazonfba
#amazonsellers 

Several people were shocked to know that I had been searching for the right agency M&A partner for 18 months(!). Well, here's why 👇 

*

My approach to M&A in some ways mimics that of Warren Buffett and Charlie Munger, who have both commented in the past about how there are no "called strikes" in investing. 

Munger has gone on to say that their approach is one of waiting for "fat pitches," in the style of Hall of Fame slugger Harmon Killebrew.

If you've never heard of Harmon Killebrew, he played for the Washington Senators, Minnesota Twins, and Kansas City Royals over his 22-year career and was famous for his ability to put fat pitches deep into the bleachers. 

The Hall of Famer hit 573 career home runs, which ranked him fifth on the all-time list at the time of his induction into the Hall of Fame in 1984.

Killebrew's success (and that of Buffett and Munger, I suppose 🤓) is a reminder that the keys to successful investing are simple: 

✅  Preparation
✅  Discipline 
✅  Patience
✅  Decisiveness

*

In my case, I looked at A LOT of agencies over that 18 month period. 

I let a lot of pitches cross the plate, without any called strikes.

Eventually, there was a "fat pitch"; an opportunity to join forces with Color More Lines.

And I took a big swing. 

***
#amazon
#agencies
#mergers

I read this years ago, and not a day has gone by that I haven't thought about it 👇 

Sales is a lot like golf. You can make it so complicated as to be impossible, or you can simply walk up and hit the ball. 🏌‍♀️ 

***
#amazon
#ecommerce
#leadership

I want to give a suggestion for Amazon that will solve a major problem that keeps coming up in ASGTG and seller forums. 

Here is the Problem. Hijackers or Counterfeiters list against a Brand-Registered (BR) item. Eventually, they get removed, but in the meantime, many knock-off versions get sold, and those knock-off versions accrue negative feedback. It becomes a hassle to get those removed even when its obvious the reviews are not authentic (Bogus).

Solution. Allow the BR admin to flag reviews as "obtained from a knockoff version." Amazon can easily verify this and take action as needed (removing the bogus reviews)

Can this work? Jon Derkits

In my B@A newsletter today, I explain:

-How to measure and mitigate PPC cannibalization (h/t Neha Bhuchar)
-How to benchmark your CTR against competitors
-What I would do if I had hair

Head over here to subscribe, or read back issues: https://lnkd.in/emxe_3Ni

***
#amazon
#amazonfba
#amazonsellers

HYPOTHETICAL:

You're a digitally native DTC brand, and you've scaled to $10mm annual revenue on your Shopify channel. 

You see significant branded search volume on Amazon, so you decide to launch there.

Here's the question... 👇 

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