An AMZing time – Amazon sellers AMA panel with Liran Hirschkorn
Special guest Liran Hirschkorn, founder and CEO of Incrementum Digital, joined us at the 8fig offices for an expert panel along with 8fig co-founder and CEO Yaron Shapira and CEO at Top Dog Global and Amazon consultant Tomer Rabinovich. The panel, which was moderated by 8fig’s VP of marketing and growth Avishai Sam Bitton, discussed tips and tricks to grow and scale your eCommerce business on Amazon.
Following their introductions, the panel jumped right into questions that were sent in by audience members and carefully selected for the event.
The experts responded to a question that is on every seller’s mind in the current economic climate: how can eCommerce brands respond to inflation? Liran started us off, reporting that he hasn’t seen too much of an effect on Amazon sellers. He clarified that ultimately sellers may have to raise prices to offset higher advertising costs, but was optimistic that a recession can actually help businesses improve. This is because they’ll have to be more attentive to how they spend money and tighten their business processes. He then highlighted the ways in which a recession can be a good opportunity for Amazon sellers.
Yaron added that as long as sellers really understand the unit economics of their business, they will be able to overcome any challenge. Tomer recommended treating your business as an aggregator, meaning taking a fresh look at your business and reevaluating aspects like suppliers, freight forwarders, and price points to find ways to make more profit. He also encouraged sellers to launch products that are better differentiated or have a higher barrier of entry.
They then moved on to discuss the contributors to better ROAS (return on ad spend) performance on Amazon. Liran said conversion rate is the main contributor, and followed that up with a recommendation to “get granular” in your campaigns. He suggested choosing very relevant keywords with high conversion rates. Tomer said he advises clients to look at their competitors and evaluate if they are better than competitors in every aspect of their listing. PPC (pay per click), Tomer said, is the last element you should look at.
Avishai then asked the panel what to do when you’re running low on stock – raise prices or stop running ads. Liran said that there are different philosophies. However, it’s better to run out of stock with a good BSR (best sellers rate) so you’re in a better situation when you come back into stock.
Yaron answered the next question, regarding how to best manage inventory. He advised running in shorter cycles. Instead of ordering in bulk so inventory will last a longer period of time, he recommended ordering smaller batches more frequently. This increases flexibility and allows you to adapt to the changing reality of eCommerce. Tomer agreed, explaining that he creates more shipments every year in order to maintain flexibility. The only disadvantage, he added, is that some suppliers may charge more for smaller orders, but there are ways to offset this cost such as paying in advance.
Liran jumped in to ask Yaron a question that 8fig clients ask frequently: 8fig offers equity-free funding, but when should an eCommerce brand accept funding in exchange for equity? Yaron said that as long as the brand just needs working capital, they shouldn’t give up equity. Equity is the most valuable asset in your business, he asserted.
The panel addressed managing remote teams, a particularly relevant topic for those running a business post-pandemic. Each panelist gave their opinions on hiring, day-to-day management, and when to let remote workers go.
The next question addressed how eCommerce sellers can move their businesses from 7 figures to the next stage of growth. Tomer answered that this is the time to grow your team and your systems to support your product launches. Liran seconded that sentiment, telling business owners that they should hire people with expertise in the areas that they are lacking. Yaron recommended using 8fig as a solution to solve the problem of complexity. A growing business requires sellers to be more agile. 8fig helps you map out and track your business plan and plays the role of a CFO to help you manage the complexity of a larger business.
Tomer also stressed the importance of putting systems in place to prevent you from burning out. Instead of launching more products, for example, hiring more employees might be the wiser choice. He mentioned that many sellers have the goal of selling their business in mind, and it’s important not to burn out before you reach that point. Liran gave his input on exits, arguing that most sellers make their exit too early. Yaron cautioned business owners not to start with an exit in mind. He advised sellers to focus on building a real, solid business instead of focusing on their exit.
Following this discussion, Avishai opened up the floor to questions from the audience.
The first audience question was how eCommerce brands on other platforms can enter Amazon’s marketplace and succeed. Tomer started off by asserting that different products succeed on Amazon and Shopify, and most products don’t fit both. Besides, if selling on Amazon won’t make a huge difference in revenue, it may not be worth it. Liran added that your price point is very important. Amazon has more competition, so make sure you can compete in terms of price. Additionally, brands that do well on Shopify often have branded searches on Amazon. If your brand shows up on the branded searches, it’s worth selling on Amazon. Understanding the balance between price point and searches can help you decide if it’s a good idea to expand to Amazon.
Next, the panel addressed the most important aspects of a product listing. Without hesitation, Tomer said that every aspect of your listing is important. Liran added that it depends on your situation. If you have no traffic, improving your SEO is most important. If you have traffic, your images are really important. Yaron recommended spending time testing to see which changes can improve sales.
The next question was about which non-US country will be the next big market for Amazon sellers. Tomer said that it depends on what you sell. Not every product will work in every country, so check where your customers are and what your competitors are doing. He went on to say that he usually advises his customers not to expand to other countries. Liran mentioned that the easiest markets to break into are Canada and the UK, but agreed with Tomer that if you’re successful in the US, there’s no big need to expand.
A brick and mortar retail seller asked how to start selling on Amazon. Tomer reminded the audience that Amazon works based on searches – if nobody is searching for your product, you won’t do well. Liran advised gaining a deep understanding of Amazon and the business before taking the plunge.
The panel ended with a brief discussion of the importance of A/B testing ads.
At the end of the Q&A session, Avishai thanked the panelists for their honest and practical answers.