Everyone loves a great success story. I talked to Don Henig, Co-Founder and CEO of AccrueMe, about sellers and brands that are winning the Amazon game. We discussed:
- An Amazon conference and a chance meeting that led to the very first AccrueMe customer
- How that customer went on to increase profits by over 300%
- Recently, our friend friend Shannon Roddy saved one brad $770 ad spend…IN ONE MONTH (check out the replay to see the reduction in TACOS and what strategy Shannon used
- Why the right ad strategy resulted in a 20% increase in total sales, 34% increase in ad sales, and more (read the replay to find out what wasn’t optimized about the brand’s former strategy, and how the team at Teikametrics helped)
Want to talk to our team about optimizing your ad strategy?
Watch The Replay
Read The Transcript
Liz Downing: Hi everybody. Thanks for attending another Tuesday webinar. I’m Liz Downing, E-commerce Marketing Manager at Teikametrics. I’ve got my good friend, Don Henig, with me today. He is the Co-founder of AccrueMe. Say hi, Don.
Don Henig: Hey.
Liz Downing: Don is one of the funnest people to talk… I’m using the word funnest on purpose.
Don Henig: Funnest.
Liz Downing: But he’s one of the best people to talk to in the industry. He’s so much fun. He’s got such a diverse background. I actually have a video on YouTube of an interview I did with him where you can learn more, and I’ll link to that in the replay that we will send you, which brings me to a few housekeeping notes before we get started today. This session is being recorded. Again, the session is being recorded. So if you have to drop off, I hope you don’t, I hope you’ll stick around, or if you’ve got a friend that can’t make it, the replay will go out to you along with a short recap, and the transcript, if you’re not a video person.
So we’ve got you covered there, along with any relevant links that we talk about, any special offers, all that kind of stuff. We are open to questions. There is a little question section in the GoToWebinar panel. Don can’t see those, but don’t say anything bad about him because I do send them to him afterwards. But we like this to be a free and open conversation. So if you’ve got questions throughout, if you’ve got success stories of your own that you want to share, if you’ve got pain points that you need help solving, that’s what we’re here for.
Without further ado, Don, why don’t you tell everybody a little bit about AccrueMe? I know that you definitely have a lot more exposure in the industry than you used to when we first met.
Don Henig: Yes. Oh yeah.
Liz Downing: Why don’t you give everybody a little bit of an overview of who you are and what you do?
Don Henig: Well, thanks, Liz. I’ve got to tell you, yeah, more people know me in the industry now, and it’s great. I really enjoy that. But a lot of it has to do with just a few people, when I first got started in this industry, that I reached out to. Many wouldn’t even connect with me on LinkedIn, because my background is in so many other industries.
Liz was one of the few people that not only connected, but picked up my phone call, introduced me to others, and helped in many ways. And that’s just who you are. You have a big heart. You just help people all day long, every day. It’s not just me. I know that for a fact. It’s across the board. So I just want to say thank you, number one.
Liz Downing: Well, it’s absolutely my pleasure. I think that what you’ve brought to this industry is something that’s so very special and so very singular, that, I mean, despite you being a heck of a nice guy and me liking you a whole lot, I think that this is something the industry really needed. Why don’t you do little elevator-ish thing about AccrueMe, because it’s so neat?
Don Henig: Sure. Thanks. Reality is that I was retired. Me and a friend of mine from 20 years before, we started looking at the Amazon world, and what caught my attention were all the sellers. And I just love helping people grow businesses. I love mentoring younger people. It’s just one of the things I do and I’ve always done. What happened was we started talking about Amazon. I went to my accountants, asked if they knew any Amazon sellers. They gave me three. I called all three.
I didn’t know what FBA was. I never heard of Seller Central. I knew nothing. All I wanted to do was learn a little bit and ask them, what do they need in this business? All three of them. One was very small, one was very large, and one was just a decent size. Just happened that way. They all finished up by saying, “We need capital. We need money. We can’t grow the business.” One guy had I don’t know how many millions, I don’t remember, in inventory. He goes, “We need money. It’s so hard to get good sources of money.”
So we looked at it and we figured we’d look at the lending options. We looked at the lending options and, truthfully, we didn’t find any that were good for a seller. They were very good marketing. They were great as far as the lenders making money. But they weren’t great for the seller. I’ll give you an example. The first one I looked at said, “Borrow 10,000 payback, 11. It’s that simple.” Sounds great. I mean, how am I going to compete with that?
And then I did the research and I ran the spreadsheet, and I realized that the monthly payments, because it was such a short term, the monthly payments were 1,856. So if you’re borrowing $10,000, you have to have a monthly ROI of roughly 19% to break even. Who’s making money here? Not you. They are. So I’m like, “Holy cow, this is so bad.” And then we did it with every other one that we could find, and every one of them was not good.
And so, we came up with a completely different model, never been done before, and we’re introducing it to the Amazon world. We’re having tremendous success with sellers, and sellers are having tremendous success with us. Basically, what we’ll do is we’ll double their capital, which is more money than they’ll get pretty much anywhere, with no interest. No monthly payments are required. I’ll tell you why we do that, because that sounds crazy. That sounds like, “Come on. Why would you do that?”
So no interest, no monthly required payments, no loss of ownership, no personal guarantee. What we get is we get a percentage of profits for as long as you use our money. We set it up so that the seller can’t lose. I’ll just give you a quick for instance. If we represent 50% of the capital, so if the seller has a hundred thousand dollars and we give them a hundred thousand, you would think we would want 50% of the profits.
But what we did was we cut that in half. So whatever percentage of the capital we represent, we cut it in half. If we’re 30% of the capital, we get 15% of the profits. But let’s go back to the 50/50, and then I’ll shut up for a minute. But if you have a hundred thousand, we give you a hundred thousand. Now you just doubled the size of your business. You’re going to get so much more profit as a result of that. We are going to not get 50% of the profit. We’ll get 25%.
So basically the way that it works, the way the math works, is you keep a hundred percent of the profit on your money, and you keep 50% of the profit on our money. So this way the seller can never lose. There’s only one way a seller can lose with us, is if they take our money and just leave it in the bank. Then they don’t get any benefit. But if they’re using it to buy inventory and grow their business, they can’t lose. That’s the way we set it up.
Liz Downing: It’s a pretty awesome setup. I tell people, yeah, he doesn’t take an interest in your business. Doesn’t take a piece of that. You don’t really have monthly payments. It’s like borrowing money from your very rich uncle with the very best-
Don Henig: Exactly.
Liz Downing: … terms available. That’s how I talk about you. I hope that’s okay with you.
Don Henig: It’s exactly right. I actually did a PowerPoint called Your Rich Uncle, because if you went to your rich uncle and you said that you wanted this deal, they’d probably throw you out of the house. If you went on Shark Tank as an Amazon seller and said, “Look, I want a hundred thousand dollars, and I’m going to give up 5% of my business,” the first guy says, “I’ll give you the hundred thousand, but I want 25% of your business.” The next guy says, “I’ll give you 110,000, but I want 30% of your business.”
Then Mr. Wonderful comes in and says, “I’ll give you the hundred grand. I’ll give it to you as a loan at 15% interest for a year, and I want a dollar on every product you sell forever.” And then, AccrueMe comes in and says, “We’ll give you the hundred thousand. We don’t want any interest. We’re not going to take any ownership in your business at all. In fact, you don’t have to make monthly payments. You’re going to pay us when it’s right for your business. If you see opportunities, you shouldn’t be making monthly payments. You should put all that money into the opportunities to grow your business.
If you are flushed with cash because you’re slow, you should pay us. And that knocks us down, and we get a smaller percentage as a result. It’s in your best interest.” We would get thrown off the stage in with Shark Tank because nobody else would ever do a deal with those guys. That’s what we created.
Liz Downing: And it’s working. One of the reasons that we’re here today is to talk about some success stories that we’ve both been seeing. Obviously, you’re in the helping people grow. We’re in the helping people grow in a different way, in that we’re helping them optimize their advertising. We’re trying to give them marketplace insights so that they can make better decisions about their ad spend, make better decisions about their strategy, and all that kind of stuff.
And then I live in that weird limbo space where everything else I’ve ever learned in the industry comes to the forefront and people ask me like crazy questions. If I don’t know the answer, I know somebody who does. So I live here too.
Don Henig: You definitely do. You definitely do.
Liz Downing: Why don’t you tell me, you have this great case study that you have been sending around. I think it speaks to the success that a seller can actually realize when they’ve got enough money to buy the inventory they need. Why don’t you go first and then I’ll go after you?
Don Henig: All right. Because I know the amount of success stories from Teikametrics is off the charts. From huge companies to small companies, you guys just knock them dead. Everybody I know, because advertising’s so big right now and so important and so critical to the business, everybody I know that goes to Teikametrics just comes back and says, “Oh my God, this is like being on another planet. These guys are so much better.” Anyway, I give you all the kudos in the world. It’s just the truth.
So yeah, I’m going to tell you about our first client, our very first client. What’s interesting about this is you know my background. I believe in starting businesses without knowing everything, that you jump in, that you start. My term is starts stupid, because you’ll never know everything. And so, we started this business. We didn’t have a system. We didn’t have underwriting guidelines. We had nothing.
We went out to a conference, an Amazon conference, and just started talking to sellers and telling them what we’re doing. Out of that, we got a few accounts, and we literally gave them money with no way to even follow up on it. We gave them the capital that they needed. Our very first clients, husband and wife team, retired and their retirement was just falling through. They had started an Amazon business in 2018. Yeah, it was sad. But hey, look, they picked themselves up and they went and they started a business.
In 2018, they had revenue of $90,000 and profit of $9,000. Okay, good. They came to us and we signed up with them in March of 2019. Their revenue shot up to about $400,000 because they had the capital to grow now. Their profit grew to over $40,000. And they were only with us for nine months. The following year, they took even more money from us and it grew to roughly $700,000 in revenue and over $120,000 in profit, during that period of time. So now they’re with us for little over 18 months at the time.
Not only did they make that much money and grow the business that much, but they also took out $115,000 to live on during that period of time. They took, you would think, all the profit out. But because we were replacing that with capital in the business, they were able to keep growing. The most interesting thing is, and this I think sellers will be shocked by, they didn’t make a single payment for 18 months. Not a single penny. Nothing. They just used all the money to grow, grow, grow. They took out what they had to because they had to live.
They were concerned, and others ask me all the time, “Well, what if I don’t make payments for six months? What will you guys do?” We’re going to pat you on the back. That means that you’re growing and you should be growing and use all the money to grow. That’s what finance should do. If I was to come to you and say, “Hey, you’re growing right now. You have an opportunity to buy more inventory and grow even more,” and tell, you, “No, make a payment to me instead,” that’s not in your best interest.
So that’s what we did with them. They’re still growing. They’ve started making payments. In the 18th month, they sent us $2,000. Then they sent us 3,000. Then they sent us five. Then they sent us 10. And they haven’t made any more payments since, because now they’re starting to get ready for Q3 and Q4. So they’ll probably come back to us and say, “Hey, look, we need another 20, 30,000 dollars, which will be in their account in an hour. Just fantastic to see.
Here’s a couple, again, that were retired and lost their retirement, and now they have a nice business that’s throwing off great cashflow and they’re able to live. They work hard. They work really hard. We get the benefit of that and they get the benefit of it. But they get the benefit of our capital. We get the benefit of their knowledge and their hard work. And it’s a great team. That’s what we’re doing.
Liz Downing: That’s an awesome story.
Don Henig: It’s great.
Liz Downing: It gets me thinking about all the planning it takes to go into running an e-commerce business. Okay, first you get the money, but are you making good decisions on your inventory? How do you know? Are you tracking your metrics correctly? Are you weeding out the items that you’re not that profitable on? Are you doing things to make you more profitable on ASINs that might not be performing as well? Are you running enough ads on your ASINs to make sure that your sell-through rate is good enough that you actually have your whole supply chain running the way you’re supposed to?
I mean, it all talks to each other. Having a good strategy, it’s so key. There are people all over the industry that have all the advice in the world. I’m having Chris Fryburger on next week to talk about some actual horror stories that we’ve both heard, because we were both into… He’s the Amazon Matchmaker, and I’ve always been so jealous of that title because like, “Why didn’t I think of that?”
But that’s what he does for a living. And so, he helps connect people with… I told him actually that you and I were going to be on today and he’s like, “Don’s such a great guy.” And I was like, “I know he’s a great guy.”
Don Henig: That’s nice.
Liz Downing: But knowing which tools, and which providers, which advice givers are the right people to listen to is always super hard. It’s a big industry, but it’s a little industry, you know?
Don Henig: Yeah.
Liz Downing: Definitely. That’s-
Don Henig: Well, I’ve got to tell you-
Liz Downing: Go ahead.
Don Henig: I don’t know a tenth of that. I really don’t. I’m blown away by all the knowledge that Amazon sellers need to have and all the education that is never ending, that you have to keep learning and you have to come to experts because… I don’t know about anybody else, but I know if it was me, I can’t do everything. I can’t be an expert in everything. When it comes to advertising and all of that, I would much rather go to the experts and let them run it for me. I mean, it just makes all the sense in the world.
Liz Downing: Absolutely.
Don Henig: Yeah. Just does.
Liz Downing: I mean, or at least work within a platform that gives you insights into what you should do, because if you’re just fooling around in Seller Central, in the ads panel, it’s a lot harder to do things.
Don Henig: Yeah. Absolutely.
Liz Downing: Before I have one of our own success stories, I was talking to Shannon Roddy this morning. He just called the check in because he does that sometimes. He’s the Head of Marketplace Seller Courses, which has this wonderful course called the Amazon Brand Success Academy. If you ever wondered what a brand has to go through or what a seller has to go through to do it right on Amazon, this very extensive course that is probably the most comprehensive, complete, A to Z, everything you need to know, course I’ve ever seen…
I was just talking to him about how we were going to have this talk today about success stories, and he said that he started working with this company in March, and it was a small brand. They had a consultant that basically told them that they needed to lower their price in order to be profitable, which is never the first thing you do, is cut your margin. He determined that their conversion rate was fine. Their merchant-fulfilled products were actually converting better than FBA and said, “Keep your prices where they are. Don’t reduce your prices. The advertising structure is all messed up.”
He’s just one person, but he just took a look and realized that the consultant had put multiple products in ad groups. They were advertising against value and using general search terms, and that was just all wrong. It’s pretty much always wrong to do that. And so, he launched automatic and manual campaigns for every individual product with highly specific and relevant search firms in all match types.
That allowed him to control the bid for every keyword based on how his product converted. So he was able to save that client $7,700 in ad spend.
Don Henig: Wow. Per month?
Liz Downing: In one month. In order to-
Don Henig: Wow.
Liz Downing: … achieve the same $34,000 in advertised sales, and $58,000 in total sales over a 30-day period. He reduced the TACoS, which is total advertising cost of sale, from 40% to 13%.
Don Henig: Holy cow.
Liz Downing: He’s a partner of ours. So this is before he gets them ready for Flywheel, which is our platform. He has to get their strategy right. Has to get it working and it’s proof of concept. And he is able to do that in one month because somebody advised this brand incorrectly and they were losing money like just water running through a hole at the bottom of the bucket. I was just like… Can I talk about that? It’s not my own, but I’ll just…
Don Henig: Well, it’s a little late now. I think you just did.
Liz Downing: Well, and actually, I have a friend that’s a brand on here, and she is based in the UK. She had the same experience. Told to reduce cost. I don’t know who out there is telling everybody to drop their prices. But trust me, if that’s the first piece of advice that you get from a consultant, you need to get a second opinion because that’s usually not the right answer.
We have a question that came in almost right as soon as we started, and I’d like to address that. I think that this person must know about my previous life in this space, because it’s about Amazon reviews. Chad asks, “Amazon recently took away responding to customer reviews. This doesn’t allow us to help the customers who have issues with our products. Is everybody else frustrated with this new change?” Feel free to chat in or raise your hand if everybody’s frustrated with that. I know it’s awful. And Chad asked, “Do you know if Amazon is looking at adding this feature back?”
Chad, I have no idea. Obviously, I’m not in that space anymore. And I always defer these questions to Becky Trowbridge at eComEngine, which is my alma mater. But I remember that when people were saying, “What do I do when I get a negative review?” And I was telling them, “You need to respond in-line in the comments,” I had so many people come back at me and say, “That doesn’t do any good because the person who got the review doesn’t get an alert about it.”
And I always said, “Well, but it’s still good because other shoppers that are looking at your reviews see that you’re taking a proactive approach, that you’re answering questions. They’ll see that if that person had an objection in their review, that there’s a way that you have addressed it.” It was a really great way for future customers to learn from reviews and for you to be able to chime in on your reviews, and to be able to say, “Hey, Reviewer, since you’re not allowed to contact reviewers, you’re not allowed to see their names or have their contact information, which is what happened a long time ago.
This is just yet another way that you’re missing an opportunity to provide great customer service. Unfortunately, I think Amazon probably did that because people were gaming it, like people game every part of their… I mean, people are gaming up-votes now and up-voting negative reviews, so that they’re at the top of the reviews for their competitors. It’s just awful. I do think that Amazon is working hard on trying to figure out what to do about reviews.
They’re so important and they weigh so heavily on so much of your performance on the marketplace that I do have the highest hopes that they are looking at how to clean up because the reviews still need to be cleaned up a whole lot. But I think that we probably won’t see a return to being able to respond to reviews, but there might be something in the future that will make it easier, I hope so.
In the meantime, if there’s a way you can update your listing to deal with the biggest objections you’re seeing and negative reviews, that’s probably what I would do. It’s not a great solution. But do analyze your reviews and do ask the team at eComEngine what they think about that because they’re in it every day and they’re a really good… The FeedbackFive tool’s a really good tool. So yeah, I just wanted to address that.
Yeah. Oh, Kathy says, “One bad rating has killed my business.” Kathy, I hope you’re proactively soliciting reviews in a compliant way, because getting more reviews, positive reviews, can hopefully help with that. Actually, if anybody has huge reviews, I will introduce you personally to the team over there. So I’m just going to pop my email address in the chat real quick, send to the entire audience. This is my personal… Well, not my personal, but it’s my work email address. It goes right to me instead of the info app. Just shoot me an email and I’ll introduce you. We’ll get you sorted out. Don’t worry.
All right. What else are you seeing going on? What else is working for people right now? I know that you’re giving people money and you’re not necessarily learning what they’re doing in terms of maximizing their supply chain or anything like that. But you are talking a lot more, you’re on a lot more podcasts. But you’re listening more. Are you doing the whole Clubhouse thing? I’m asking everybody if they’re on Clubhouse.
Don Henig: I’m on Clubhouse, but I’m not really doing it. There’s just only so many hours in the day. So, no, I’m not really doing that. But I will tell you what I’ve seen some things happening with our sellers, is I’ve seen sellers starting to source their products in Mexico, as opposed to China. Not easy to do, but when you do it, it’s a game changer. It’s a total game changer.
The second thing I’m going to say that I’ve seen successfully done is private label sellers mixing in some wholesale model type business in with their private private label, because the private label, we all know what the supply chain is doing and how long it takes to get the products in. And with wholesale, it can happen very, very quickly. So, from a cashflow standpoint, they’re supplementing their business where their private label is going up and down and up and down.
The wholesale is staying pretty level throughout the year. So their cashflow is continuing all the time. Now they’re able to make money in months that they wouldn’t have made money. Then the private label hits and they’re making that much more money. They’re trying to keep their inventory in stock, but it doesn’t always work. So the wholesale combined with private label is really helping some sellers that I’ve seen. Well, so those are two quick things.
Liz Downing: Diversification, and whether you’re doing private label and you maybe started out a wholesale and you want to dip back in there, and you know the new challenges that wholesale sellers are facing. Or if you’re a brand and you’ve only been doing FBA, consider doing some merchant-fulfilled stuff. You also get more insight into who your customers are when you’re merchant fulfilled.
I was talking to the ShipBob people and they were talking about the packaging freedom you have when you merchant fulfill. Although, I’ll tell you, I have a brand of protein snack. It’s a chicken snack that I like a lot. They merchant fulfill, and I kept getting shipped… I got a shipment, it was just not good. And so, I didn’t want to leave bad feedback because I know what that does to ODR. I’m on the inside now.
I contacted the seller directly and one of the brand representatives through Amazon, so Amazon passed the message along, and then they said, “Sorry.” And I was like, “Why aren’t you on FBA?” They were like, “Well, we’re a small brand and we’re just doing it like this for now. I’ll replace your order. Don’t worry about it.” I was just like, “Do I just call these people up? Because I could help them.
Don Henig: Yeah. Exactly.
Liz Downing: Or is that totally inappropriate? Is Amazon going to take my account away if I start just giving out advice to sellers on their platform?” I don’t know. But if you merchant fulfill the right way, and you can do it where it doesn’t kill your profit, and it doesn’t completely squash your margin, we’re seeing a lot of our brands that we work with that are diversifying their fulfillment methods and really-
Don Henig: Definitely.
Liz Downing: Well, plus, also, when you merchant fulfill, you can offer something different. So like a different bundle option or a kit, like a two-pack and you usually only sell a three-pack, or whatever. We’re seeing a lot of people that are seeing success with that. Phyllis asks, “What is Clubhouse?” clubhouse is this new app thing that’s only available for iPhone right now, and you need an invite. It’s like a big group phone conversation in rooms. So it’s really old school.
You’re not on video. If you’re going to talk to a group, you need to be taken up on stage. It’s still mainly in beta, but I have a couple of invitations to give out if anybody wants one. Just email me to that email address I put in the chat. Hopefully it’s not a whole lot of you because I only have like five invites. I’m happy to get you on there if you want to check it out. But I’m not real good at it yet. I’ve just done a lot of listening.
This is a good question. Kathy asks, “When you talk about these companies growing sales, are you talking about resellers? Because I have my own brand with a niche product. Can I grow my sales as well? Can I take my sales from 90,000 to 200,000 or 400,000?” I don’t think you discriminate, right?
Don Henig: No. Not at all.
Liz Downing: As long as somebody is selling on Amazon, Amazon.com, then good to go.
Don Henig: That’s it. Your product, if it’s a good product and has the ability to grow, and all you really need is money to help it grow, or you need to do it in another color, or another size, or something similar that you now have done the research and you know that’s going to take off, then why wait a year to do that? The other way I look at it, and again, I’m an outsider. I’m a business guy who’s built many businesses. I look at this industry and I see a home run for so many sellers and is seeing it every single day.
However, I think everybody needs to recognize that it may not be here forever. I guarantee you things will change. I guarantee you that two or three years from now, when we look back, we may all be looking back and say, “Okay, remember when there were a million or two million sellers, and now there’s six?” We might be looking at that market. We don’t know. Nobody knows-
Liz Downing: Well, with the-
Don Henig: So if I’m seller right now-
Liz Downing: With the aggregator and the roll-up thing going on too, it’s like, are they all going to be owned by one company or by a handful of companies?
Don Henig: Exactly.
Liz Downing: I hope not. I hope it stays a big, free, crazy place because-
Don Henig: I agree with you. But if I’m a seller, what that would do is basically light a fire under my ass that I’ve got to build my company fast. I better get my company to here as quickly as I can. And this way, if I’m going to get acquired, I want to get the most amount of money I can for my company. So build and build and build now. Don’t wait. That’s-
Liz Downing: See, we had a brand, talk about success story, that absolutely did great during COVID, and is in a position where they’re being quartered by their aggregators. But serial entrepreneurs, what I’ve noticed, is a lot of them that are considering selling one brand, have another brand in their pocket, or they have another brand that they want to start, or they’re going to buy a brand from somebody else that doesn’t want that brand anymore.
So I have a lot of faith that the industry is going to stay Wild Westy like it is now. And we’re going to have a lot of entrepreneurial brands out there. That’s what I’m hoping. So, Kathy, that’s what I’m hoping for you.
Don Henig: I hope so too.
Liz Downing: If you wanted to talk to Don, it’s firstname.lastname@example.org. They’ve got a great website that’s got lots of information. Kathy, if you want to talk about anything else, about promoting your brand, email me because I love to talk to people with niche brands. It’s my favorite thing ever.
Don Henig: Yeah. Liz does exactly what I do. We just help people grow and do things and help them any way we can, all day long. And it always-
Liz Downing: Plus, I love to hear the stories.
Don Henig: It’s great. I love it. Yeah.
Liz Downing: Well, because we both got into this industry for the same reason. You were like, “Wait, people can sell on Amazon? Now, how can I help them?” I was like, “Wait, people can sell on Amazon? I want to try that.” And then I did. I was like, “Maybe I’ll just help people instead,” because I arbitraged. Speaking of arbitrage, and you will have the answer to this better than I do, because I’m working mostly with all different sizes of brands right now.
But Alejandro asks, “Which model have you been seeing a higher success rate in with your customers, Don?” Is it the white label people, the private label people? Is it arbitrage? Is it wholesale? Is it combination? Who’s kicking the most butt right now?
Don Henig: It’s very interesting, to be honest with you. And I was a little surprised by it. The private label sellers, all of our private label sellers… I don’t want to say all, because there’s a couple that are just treading water, if you will, and we’re trying to help them. But the rest of them were doing very, very well, but they’re struggling because of the supply chain issues.
The wholesale sellers, I’m telling you, they seem to be consistently doing well and growing. One I was talking to the other day, he’s selling $500,000 a month and he’s all third party. It’s all wholesale. Pretty impressive and just wonderful business. And then, I’ve got to tell you, initially, we thought the arbitrage model would not work for us. We thought it was probably not the best thing to do.
Well, we took on a few, and every single one of them has killed it. Absolutely killed it. I’m going to give you some numbers. I know, I was surprised. I’m going to give you numbers, because I just looked at one right before we came on. So I have to look at the numbers. This guy started with AccrueMe in August of last year. So just seven months ago. His profit in August when he started was $2,500 for the month.
His capital, how much money he had invested in business, was $15,000. Now we’re seven months later. We gave him a good amount of money. We matched his investment dollar for dollar, and we kept giving him more money along the way. Just this past month, no different. He’s been going up and up and up and up. This past month, his profit… Remember, it was $2,500 just seven months ago. And it was 19,000 last month, net profit.
His capital grew from $15,000 to $96,000 in seven months. But I have to tell you that AccrueMe represents $40,000 of that. So his capital grew from 15,000 to 46 in seven months. He’s a retail arbitrage guy. He’s working his ass off. Nicest guy in the world and loves what we do for him because he hasn’t been making any payments. He’s just growing and growing and growing and he’s killing it. And so are we. We’re doing great as a result.
Liz Downing: Do I know him?
Don Henig: But it’s…
Liz Downing: I bet I know him. I bet I do.
Don Henig: I don’t think you do.
Liz Downing: Oh.
Don Henig: I don’t think you do.
Liz Downing: You should introduce me.
Don Henig: Tiny guy. I will. I’ll be happy to.
Liz Downing: I’ll get them on the Cool Kids episode.
Don Henig: Yeah. All right. Yeah.
Liz Downing: I think that-
Don Henig: It’s a great idea.
Liz Downing: … as the community, there are obviously different types of sellers, but everybody has to deal with Amazon, right?
Don Henig: Yeah.
Liz Downing: Whether you’re arbitrage, whether you’re a wholesale, whether you’re a brand, whether you’re a little brand, whether you’re a great big brand, everybody’s got to deal with Seller Central. Everybody’s got a deal with Amazon customer service as it were. Everybody’s got to deal with the thought of suspension. Everybody’s got to deal with advertising competitors’ possible attacks. I did that scary webinar with Cynthia, from eGrowth Partners about her book, Dirty Seller Tricks, because people are still just doing awful things to one another.
Don Henig: Wow.
Liz Downing: But everybody is playing in the same arena. It’s just that there are different sports going on, I guess, or different bats.
Don Henig: Yeah. One has a baseball bat and one has a hatchet.
Liz Downing: Well, and one has… Yeah. Yeah. I’m not sportsy at all. Actually, this is so cool. Travis is also a niche brand owner and Kathy, he’s hoping to connect with you. So if that’s okay with you, then I can give you guys each other’s email addresses. Just pop it in the chat or pop it in the questions. But he wants to try to exchange knowledge on successful habits for niche brand owners. How cool is that?
Don Henig: That’s great.
Liz Downing: Well, it’s the collective mind. We are all better together, and there’s so much room in this industry. There’s just so much space. Kathy gave me her email address. So Travis, I’ll share that with you after the webinar. I just love that. That’s just great.
Don Henig: That’s great. How about a success story from Teikametrics?
Liz Downing: Oh my gosh. Okay.
Don Henig: There’s a million of them, but come on.
Liz Downing: I know I’ve only been here since August, but I’m blown away every single day by the stories that I’m hearing from our services team. And we’ve got people on the self-serve because obviously we’ve got a SaaS tool that’s sexy tech. But we’ve also got managed services. You either have the self-serve and you manage it yourself, or you’ve got somebody here that can help you.
But I went to the services team to just be like, “Okay, just give me some wow stories.” And I was just like, “Okay, I can’t handle that many.” There’s a footwear brand that we have in the March sponsored ad sales on Amazon. We’re up 461% year over year, just with a refresh strategy. I can’t get my head around that kind of amazing number. But-
Don Henig: That’s fantastic.
Liz Downing: … we’re just seeing so many people who are advising improperly about the fundamentals of good advertising strategies and then actually paying enough attention to what kind of ads you’re running and what your actual strategy is, what your spend is. Sometimes it’s not just a play to reduce your A costs. Sometimes you’re there to grow and you’re there to spend more money.
We had a lifestyle and gift brand that kicked off with us in early of November 2020. They, again, had this really muddy strategy. Some products were featured across like 10 or more sponsored products’ campaigns, and most often redundantly, while other of their products were like barely featured at all, and 85% of ad sales were from branded search terms with little or no strategy that was focused on new customer acquisition. They were just going after low-hanging fruit.
What our team is there to do is implement strategic segmentation and targeting types, devoting campaign types and budget toward new customer acquisition, because that’s what causes growth. So over a four-months period, we were able to increase their year-over-year top line in ad sales while leaning up on the ad spend. So spending less money, but making more money.
Don Henig: Wow.
Liz Downing: The numbers are great. I mean, total sales were up 20%, ad sales up 34%, ad spend down almost 16%, ACOS down almost 40%. ROAS up by almost 60%. And it makes me so happy. I obviously wouldn’t be here if we weren’t helping people. Our whole goal is to help people. It is a pay-to-play place, Amazon is. I mean, you can’t by if you are a brand without an advertising strategy that works for you. And that’s what we do here.
Don Henig: It’s very hard to complete a sentence while you’re reading a comment, I’m sure.
Liz Downing: I love the people that are here because we have another niche brand donor. Kathy and Travis, if you’re cool, I’ll hook all three of you up and you can form your own little mastermind, and you should invite me sometime so I can learn from you. But yeah, I’ve just popped that in there if you guys are cool with that.
Don Henig: That’s great. I love that.
Liz Downing: Yeah. Travis said yes. That’s so cool.
Don Henig: I love that.
Liz Downing: So cool.
Don Henig: That’s the way it should be.
Liz Downing: I did want to talk just a little bit about, again, strategy and how you think about your business holistically. I think that this is important for anybody, any type of seller you are. That is that you have to understand not only the steps you have to take to be successful on Amazon, the steps have to take to be compliant on Amazon, because there are a lot of ways you can get yourself in trouble.
But you also have to think about what your competitors are doing, even when they’re following the rules. We’re not talking about competitor attacks. We’re not talking about ASIN and stealing and The other horrible things that Cynthia talked about, people putting porn up as your product images and just awful, awful stuff. But you need to know… Can you believe that? I just couldn’t believe it.
Don Henig: That’s unbelievable.
Liz Downing: She said it again during the roundtable that we did in March. She said that it was so bad because the minute they would get them taken down, they’d pop back up again because whoever was doing was using multiple Seller Central accounts, just jumping from-
Don Henig: Unbelievable.
Liz Downing: … one to the other, to the other, to the other. And she said, it was just really nasty stuff.
Don Henig: It’s sad, but it’s hysterical at the same time. You can’t imagine.
Liz Downing: It’s just awful. It’s just awful. Oh, Alejandro says that he would like to connect and help out his US colleagues. If you have objections to meeting the other people that have joined this webinar today, let me know. Otherwise, I’m going to just get you all hooked up. He’s living in Guadalajara and Amazon Choice Seller since 2018. That’s pretty rad.
Don Henig: Beautiful.
Liz Downing: I liked what you said about alternate sourcing locations too, because I’ve been talking to a lady that I’m hoping will want to come on a webinar one of these days. I think you’ve been talking to the same person.
Don Henig: Yep, yep, yep. She’s great.
Liz Downing: The opportunity there is so awesome because what they’re doing with the Mexican manufacturers are making sure they understand an Amazon seller’s brain and what it takes to be successful on Amazon, what it takes to make sure your product is unique, if you’re a private label, for instance. These factories are going to be taught the questions to ask, to make sure that you’re making good decisions about the products that you’re sourcing and that you’re having created. I’m excited for more news to hit the industry about that because that’s just a-
Don Henig: I agree.
Liz Downing: … a game changer-
Don Henig: Total game changer.
Liz Downing: … altogether.
Don Henig: Yeah. I totally agree. I’d love to see more products being developed down in Mexico. It’s good for everybody.
Liz Downing: Well, and, I mean, your lead time is so much shorter.
Don Henig: It’s like two weeks.
Liz Downing: Yeah.
Don Henig: It drives over the border. I mean, it’s not a big deal.
Liz Downing: We post these e-commerce dad jokes on Instagram every week. I can’t remember, but there was one about the ship that got stuck in the Suez Canal, and Sarah Whedon, who’s our awesome Senior Content Manager here, said it during a company all-hands on Monday. And I just cheered because e-commerce dad jokes are… Dad jokes are bad enough, but the e-commerce ones…
Don Henig: Hey, what’s wrong with dad jokes? Come on.
Liz Downing: You should follow us on Instagram, so you could at least see that.
Don Henig: I will.
Liz Downing: And learn all of the… Because Don knows more jokes than anybody I’ve ever met. I tried to tell him a joke one time and he finished it for me. So I’m never telling him another joke ever again.
Don Henig: It’s sad. When you know so many jokes, that’s one of the problems.
Liz Downing: Well, you also know magic, right?
Don Henig: I used to do magic. Yeah. It was a lot of fun. Houdini.
Liz Downing: Houdini. You can learn more about Houdini. I’ll definitely link to Don’s Cool Kids Of E-commerce episode. Back then we were calling them fireside chats.
Don Henig: That’s right.
Liz Downing: But yeah, we changed the name. We have somebody that wants to see if they’re fit for collaboration in the future. Priscilla, I’ll get those two email addresses over to Don, to reach out to you. So ou’ve got somebody-
Don Henig: Terrific.
Liz Downing: … who wants to talk. That’s awesome.
Don Henig: Beautiful.
Liz Downing: I don’t-
Don Henig: You can always email me directly if you’d like, just email@example.com. Very simple.
Liz Downing: I’ll put that in the chat for you guys.
Don Henig: Sure.
Liz Downing: firstname.lastname@example.org.
Don Henig: And if you want to check me out and understand my background, go to LinkedIn and it’s my full name, Donald Henig, H-E-N-I-G. I’m happy to connect.
Liz Downing: You’ll learn that Don knows a lot. Oh, Priscilla wants to learn more about Teikametrics. I can handle that, Priscilla.
Don Henig: There you go.
Liz Downing: I’ll email you right after this webinar.
Don Henig: Beautiful.
Liz Downing: Which is super. Well, sometimes we stop at the top of the hour. Sometimes we stop about 10 minutes to give you some time back. If anybody has any questions, now is a good time to ask them. I did want to say a little bit about Flywheel 2.0, which is the next frontier for Teikametrics. We are looking to create the absolute everything-you-need solution. Part of that story is right now marketplace insights.
It’s so cool, the kind of data that we’re able to access and that we’re able to share with you so that you can make better decisions about how to run your business. I’m not going to talk real long because we had another question that’s a follow-up about AccrueMe. I’m just going to share this slide real quick. It’s just got the… Not new slide. It’s got the URL that you guys need on it. Can you see that?
Don Henig: Not yet.
Liz Downing: Yeah, there you go.
Don Henig: There you go.
Liz Downing: The way to see the marketplace insights right now is to sign up for early access to Flywheel 2.0. You just go to… I don’t think that that’s right. You know what? I’m going to stop sharing my screen and I’m just going to send you guys the email address. And how do I stop sharing? Stop showing screen. That’s how.
Don Henig: You did it.
Liz Downing: I did it. I did it. Yay. While I’m looking this up, Don, we had somebody that joined a little bit late and they don’t quite understand. This actually goes to an earlier question we have too about what makes AccrueMe different than… I think they said the greedy moneylenders. But Kathy asked, “What do you do beyond lending money?” But I think that the way you lend money is what you do beyond lending money. So if you want to recap for everybody-
Don Henig: Sure.
Liz Downing: … AccrueMe’s model, that would be helpful, I think, to the people who joined late.
Don Henig: Yeah. As far as the big greedy lending, it’s funny, but it’s true. I was in the lending market and the lending field my whole career, pretty much. But I have to tell you, lenders never lose money. And when they lose money, it’s a very, very, very small percentage. Tiny, tiny, tiny. With us, we also take the risk with you.
We are not lending you money. We actually invest in your business without taking any ownership in your business, which is obviously unique. It’s never been done before. We’ll give you that money without charging you any interest, without requiring monthly payments. And what we do that for, so this way, when you’re ready to grow and you see the opportunities to grow, why take money out of your business instead of leaving the money in the business and growing your business? It makes no sense. It makes no common sense at all.
You should take all the money and leave it in the business, as much as you possibly can, and grow the business when you have the opportunities. And then, when you’re flushed with cash, those slow months, you’re going to want to make a payment to us. And that knocks out profit share down. We set this up so that you can’t lose. You can only lose if you leave the money in the bank and that’s it.
Remember last year in April, when you could only send in essential products? How many private label sellers in particular lost money as a result? I know a bunch, and I can tell you flat out, some of our sellers were very concerned because they were not making money and they were losing money. They literally spoke to me to say, “What are you guys going to do?” I said, “What do you mean what are we going to do? We are here with you. We’re supporting you. You don’t have to make any payments.”
We earned zero money as well. They are nothing. We are nothing, zero. And they were blown away by it. One of them said to me, when he joined AccrueMe, he had paid off an Amazon loan for about a hundred thousand dollars, if I remember correctly. He said to me, “Don, if I had to make payments right now, I would be out of business.” He would literally be out of business, and he would be.
So think about it. Nobody expected what happened last year to happen. And we don’t know what’s going to happen down the road. But no lender ever would say, “I care about what happened in your industry.” No, they don’t care. You still have to make the monthly payments. That’s different with us. We’re not about that. If you’re not making money, we’re not making money.
Liz Downing: The term she used was greedy merchant cash advancers.
Don Henig: I can’t argue with them, to be honest with you. But the problem is, is most people don’t understand what they’re getting into. They enter into a deal like that. They don’t realize that they’re being charged on their revenue instead of their profit. They don’t realize what the real costs are. We have no fees. We have no pre-payments. We have none of that crap. This is just plain and simple.
I don’t remember the person’s name who asked the question, but everybody says the same thing to me. It sounds too good to be true. And it does sound too good to be true because in lending and in finance, it’s always tipping the scale towards the financier, towards us. In this case, we do very well, but only if you do very well. If you do poorly, we do poorly. It’s never happened before. So that’s what we do.
Liz Downing: I think that’s rad.
Don Henig: It is rad.
Liz Downing: Don’t you guys think that’s cool? I think it’s super cool. I found that link for you guys. If you want to check out the marketplace insights part of Flywheel 2.0, I’m super, super impressed by this. That’s not it. I need to be careful with my copy and pasting. I’m going to pop this in the chat. I promise if you do this, it won’t get inundated with emails, but you will be on the early access list, which is cool because then you get access to new features, should you choose to use Flywheel 2.0.
The market intelligence stuff is giving you a deeper look into what’s actually going on with your product category, with your competitors. Talks to you about your share of voice. Gives you insights so that you can make better decisions, not only about your advertising, but about your inventory, about, I mean, even your listing, because if you’re not showing up for the right keywords, then obviously there’s something wonky going on with your listing.
It’s just rad, so I wanted you guys to know about it. We’re going to be producing a lot more content about it, and with the Prosper Show coming up, I think that that’s what we’re going to be talking about with a pre-Prosper webinar. I don’t know if you guys are going to that, but if you’re planning to and you want a coupon code, I have one. So email me. Again, I’m going to pop my email address into here. If you’re looking to go to Prosper, but you want to save some money, let me know, because I’ll be there. Are you going?
Don Henig: Yeah, I’m going. Looking forward to it.
Liz Downing: Look out, Las Vegas.
Don Henig: Can’t wait.
Liz Downing: Yeah. It’ll be nice to see people again, won’t it?
Don Henig: Yeah, exactly.
Liz Downing: It’s crazy.
Don Henig: Yeah. Looking forward to it.
Liz Downing: Well, listen, Don, you rock so much. I do encourage everybody, if you’re a little like, “Ah, I don’t know.” I mean, just check out the website, accrueme.com. Check out Don on LinkedIn, Donald Henig, H-E-N-I-G-
Don Henig: Very good.
Liz Downing: … on LinkedIn. I know everybody wants to put that extra N in there, don’t they? Hennig. It’s not Hennig. It’s Henig. But yeah. I encourage you to… He’s a good guy and he’s just doing good for the community, and that’s what we all need. We need people that care about your business. That’s what these webinars are for. If you guys have any questions, just pop them over to either one of us. Both of our email addresses are in the chat. Until next week, I am Liz Downing. This is Don Henig, and goodnight.
Don Henig: Hey, thanks, Liz.
Liz Downing: Thank you, Don.