In this episode of LeaderShipping, host Caleb Nelson talks to Matt Snyder, Vice President of Online Retail for Vari, about how Amazon sellers can optimize their logistics strategy for Prime Day and beyond.
Prime Day Prep for Amazon Sellers (ft. Matt Snyder)
In this episode of LeaderShipping, host Caleb Nelson talks to Matt Snyder, Vice President of Online Retail for Vari, about how Amazon sellers can optimize their logistics strategy for Prime Day and beyond. Here are some of the key topics covered in the episode:
- Expert tips for Amazon sellers to prepare for Prime Day (Auditing products, identifying discounted products to expand brand awareness, and building shipments early)
- Changes to Amazon’s FBA storage system and new capacity bidding process
- How sellers can improve their IPI score and capacity limits
- Alternatives for sellers with storage capacity limits, such as easy 3PL solutions, long-term FBA/FBM hybrid solutions, or aged inventory/clearance options
- Recent changes in Seller-Fulfilled Prime (SFP) and how FBM sellers can compete on Prime Day
- Utilizing Buy With Prime (BWP) to maximize Prime Day sales and Amazon’s potential as a carrier
- Vari website
- Matt Snyder on LinkedIn
- Caleb on LinkedIn
- Amazon FBA storage fee changes
- Amazon capacity planning
- Seller-Fulfilled Prime (SFP)
- Sifted Unboxed Newsletter
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Matt S., Caleb N
Caleb N 00:10
Welcome back to another episode of LeaderShipping. I’m your host, Caleb Nelson. This is powered by Sifted and Sifted Logistics Intelligence, and thanks always for tuning in. I’m super excited to welcome our next guest, which is Matt Snyder. We’re going to be talking about all things Amazon on today’s podcast, and what sellers can do from a logistics perspective, to prepare for something big that’s coming up, and that’s Prime Day. If you’re looking for an expert on the ins and outs of selling on Amazon, Matt is phenomenal at helping you navigate the backend hallways of Amazon. He serves as the Vice President of Online Retail for Vari – you might know them from their standing desks, and them among some other products that they’ve got and keeps Matt pretty busy. Matt’s been instrumental in expanding Vari’s global Amazon market approach. He’s shared his expertise in numerous speaking engagements and conferences, including something I just returned back from. And that was the Prosper Show – was a killer, killer show for 2023. And you serve on the Board of Directors for that, Matt, welcome to the show! How are you?
Matt S. 01:14
Thanks Caleb, I’m really glad to be here. Appreciate the opportunity to speak and always, always excited to talk about Amazon. Even the, what some people may say is not the exciting part of Amazon: logistics. To me, I actually find it very exciting as well, too. So we can always find exciting ways to make logistics sound fun.
Caleb N 01:30
But you know, if there’s, there’s a running theme with with this podcast, it’s been that we are talking to people who are passionate about what they do. And when you’re passionate about something you can’t help but to let it shine and show that you’re having fun with it. And you and I have chatted in the past, and I have no doubt that that’s gonna be this conversation this time. Matt, tell us a little bit about, about your background. I gave a little bit of intro there, but how did your background put you in a specific – and I would say perfect – spot to revolutionize the way Vari does business on Amazon?
Matt S. 02:03
Yeah, no, so I kind of got started, to go back several years, I first got into the eCommerce world back in 2008. I had been working at the Dallas Mavericks prior to that, and Mark Cuban kept talking about this new and exciting website called Woot.com. So Woot was founded here, and in Carrollton, Texas, which is where I’m located at as well too. Woot had created this phenomenal experience where they would go out and buy excess distressed inventory. And they came up with this creative way of creative writing and creating this community to get people to come to the site every single day. So I joined the company in 2008, just a few years after it had started. And my role there with the business was to kind of take this model that they had found and proven success with, you know, this daily deal industry, and take it and replicate it across multiple different retail sites. So one of my biggest partners at the time was buy.com then other daily deal sites that are kind of popping up. So we were selling with, with eBay, with Amazon and a number of other places. And part of that role was also not just the marketing/sales side, but it was also, with all these different retail partners we were working with, it was we were drop shipping for them. So I was working with your operations team, your technology team, and then also, you know, your product team. So it was kind of it really gave me that first kind of understanding of the importance and value of how do you make all these different pieces within a business work together? Yeah, because, right, we can be really great at sales and marketing. But if we don’t do the right job on the on the operation side, or have the right connections with our technology team, the business doesn’t work. And so it really was a great time. So that led me into, in 2010, Amazon acquired Woot, so it gave me an opportunity then to kind of work at Amazon for, for three years and really see the different way that Amazon approaches, operational and logistics and taught me a lot. We actually, I left there in 2013, along with one of the uh, he was President at the time, his name’s Darold Rydl. Darold and I have started a business together helping kind of, again, a logistics problem for customers that, where all these brands and distributors were now being asked to dropship so it used to be that, you know, companies like Amazon and everywhere else would would own the inventory. Well, this, as marketplaces are evolving. And as these different retail sites were evolving, now everybody wants you to dropship. They create these whole different problems from both technology, and again, going back to the operations side. So we created this service that helped kind of solve that problem for them. And that led me to meeting the team here, at the time, Varidesk, and they had just started kind of thinking about selling on Amazon and one of the ways that they were approaching it was unique to most sellers and that they wanted to approach it as seller-fulfilled Prime. I was like ‘wow, that’s that’s actually really exciting, like there’s not too many sellers who are doing this.’ And they had done a great job prior to that, being a D2C company, you know, they had built out their operations for direct to consumer shipping, they had a great technology system in place. So that definitely helped a lot of the early kind of lifting of getting us there. So I’ve been now with with Vari for the last six years, we’ve we’ve still operate as seller-fulfilled Prime, we’re a mid-eight figure size business, so we do a pretty good amount of volume. But it’s been a fun ride over the last year, it’s just really getting to learn more about, again, going back to what I said earlier, we have to be really sound really great with our operations on both the technology and the partnership with with our operations team and work with our logistics partners. And really ensuring that we have the right plans in place, processes in place is really what allows us to have the success that we have on Amazon over the last several years. So there’s a little bit about the journey of, of Amazon and how it’s really given me some great opportunities to learn some great lessons along the way related to both the operations and the technology, assistance with it.
Caleb N 06:02
Oh, man, I love that. I think that your, your background, it was probably like drinking from the firehose. And then as, as Amazon comes in, and you’re working for Amazon, at that point, it is a probably a totally different way of doing business, totally different way of looking at logistics and transportation, and probably was a great incubator to do what you’re doing at Vari right now. And not only not only that, but for Vari the amount of growth that has probably taken place since COVID. and people working from home and needing standing desks, I’m sure has completely changed that trajectory of that organization that you’re at. It’s it’s, I’m sure like you’re holding on for the ride.
Matt S. 06:47
Yeah, I know, we, we definitely were well positioned here. Given COVID for the last several years, you know, it really was an interesting shift too, where a lot of our customers before that were business buyers, they’re buying for the offices buying for their staff, to then really shifting to, you know, also it’s the end user. And so it’s it is a shift, obviously, in your marketing, and it’s a shift in kind of your product positioning. There’s also shift in your logistics, as you think about going from all of a sudden, a lot of you know, either, all of a sudden we saw you know, kind of a drop in or LTL shipping, but also a big increase in our residential shipping. And if you’re not familiar, like there’s there’s different charges and costs that goes, that are associated, based on, you know, shipping to a to an office address versus the commercial or to a residential address, different fuel surcharges and these different charges. So those are all different factors you have to take into consideration here, you know, where it’s, you know, it’s not just about the end price on Amazon, it’s all these other factors that goes into it to ensuring that you’ve got a profitable business and, and product.
Caleb N 07:54
Yeah and there’s so many conversations I’ve had with very smart and capable Amazon sellers and eCommerce businesses that just sell on their own website that are so shocked to see in their own invoicing and data, that they are losing money on particular SKUs because of those fees, because of either they’ve got some monstrously large boxes or SKUs that just are awkward or non conveyible, you know that the industry calls it ‘ugly freight.’ Amazon does a really good job as well as FedEx and UPS, they do a really good job at maximizing their profitability in moving and storing and fulfilling some of those orders that are absolutely massive. You know, it’s one of those things that I think 10 years ago was handled very differently than it is today. Sellers need to be, I would say very smart in the way that they approach it from a by-SKU basis to make sure that they’re not underwater on a number of fees. Namely, from a logistic standpoint, it doesn’t have to do with, you know, your your competitive advantage, it doesn’t have to do with the actual cost of the product. This has to do with what Amazon FedEx or UPS is charging you on a per-SKU basis to, to do what they do best, and that’s fulfill and ship out some of their product. It’s crazy.
Matt S. 09:16
It is crazy. And especially you know, when you find you make those discoveries, and those are on your top selling products, it can be really painful when you when you really dive into the details. You’re like, ‘oh my god,’ like, Yes, this is my top seller. But I’ve also been like, unknowingly I’ve been so you know, either upside down or not nearly as profitable as I thought it was until you really ar e able to like dive into. You’re seeing an unveiling all these these different charges and fees that can can get hidden if you don’t to go looking for them.
Caleb N 09:45
That’s a knuckle biter. For sure. When when you have that realization, it’s like ‘oh, no, what did I do?’ But I think I think that’s really where it comes into making sure that sellers and shippers have a good understanding of what their data really looks Like, in order for them to make better informed decisions, I think you’re, you’re a big, big advocate for that. I think one thing that I’m having conversations with, with shippers and sellers around the Amazon sellers around the country right now on is preparation for Prime Day. And I’m sure you’re asked, you know, quite often, but what are some steps sellers need to take in order to properly prepare themselves for Prime Day? And getting in position for that right now?
Matt S. 10:29
Yeah, great question. And, you know, the response here, I’ll share a couple of things considerations and obviously based on when you’re hearing this will determine what you can put into action for for now, but luckily, there’s always gonna be another Prime Day. So take what we learned today and know that you can apply this down the road to to probably a Prime Day too and later in October, or even peak season Q4, but just kind of based following up on what we just were talking about. Oftentimes, I was I was talking with another seller today over lunch. And they, they tell they sell T shirts. So they when these packages go into Amazon, they’ve already recognized like they’ve got, you know, an inefficient packaging, based off the size. And they know that they can make it smaller. But they also have noticed that you know, there’s, there’s a signficant amount of air that’s still in the bag. And that’s throwing off when they’re shipping when they’re doing the inbound shipments to Amazon is it’s throwing off the dimensions. So what is the actual size and weights and dimensions of the product, it’s getting measured incorrectly when it gets received. And so if you don’t catch that, like also like your not only is it your outbound cost, but like all your costs there are getting thrown off. So there are ways that you can go in and check those. One easy way is if you’re on your detail page, you can scroll down towards the bottom of the page, where it lists the ASIN, UPC, and you’ll see you know, product dimensions and you’ll see shipping dimensions and you should be able to see, you know, the shipping dimensions should be slightly obviously larger than your product. So that’s one way to look at it. Actually, you know, you guys have a great tool we use it. And one of the things I love about it is that I get that data back from you guys through Sifted have shown me like, What does FBA, what does Amazon’s showing what my product dimensions and my weight and demos are? So it’s a great way to go ahead and do that audit. So before a big event, tentpole event, do that pre audit go through and ensure that all your products are accurately being measured by the FBA facilities. And also your team can do that on the back end. And we can go through and we can get these, we can validate that they’ve incorrectly measured or a way we can get those reimbursements back, but highly encourage you, let’s let’s try to avoid those as doing the front end and do a good job of making sure that our products are correctly measured and received correctly. So that’s a, that’s a first one.
Caleb N 12:51
Yeah, it’s amazing to kind of go through, you know, conversations I have with sellers who really have a belief that Amazon is so large, that they don’t make idiotic mistakes, but they absolutely do, like on a regular basis. And that, that dimensionalization is is a really interesting one because we see it in the data all the time, where you send them the same product, nd they’re scanning it at one day at 10x10x10, which is accurate. The very next day, same exact product, same box, you send it to them in originally and it’s now 18x10x12, it completely messes with the dimensionalization, and it completely throws a wrench in the mix of things in terms of your pricing you’re paying them a substantial amount more not just on like you said outbound shipping costs but on fulfillment storage fees, all of that it’s pretty crazy
Matt S. 13:44
Yeah. So you know one other just idea that I throw out there to people is you know, begin your inbound shipments and creating those early. You know generally kind of right now this time what we’re seeing is generally it takes anywhere from five to eight weeks on average for for Amazon to fully receive your shipments. So you know we’re kind of anticipating Prime Day being in July you know, you’re we’re talking kind of late May early June here where you can be getting those shipments out. You know one of the problems like challenges I’ve been hearing from a couple of other sellers too is when they’re creating their shipments. They they’re getting some, so for us here, based in Texas you know we have quite a few FC’s around here and all of a sudden a lot of sellers are caling me about ‘man, I used to always get to Texas and now I’m getting sent to Georgia, or being sent to some other place,’ and it’s ‘man my costs are all of a sudden jumping up here.’ So this I’m not gonna say this works all the time. But here’s a little hack you can try and I’ve seen it work a number of times, so go ahead and create your your first unit, say we’re sending in you know, 100 products 100 units of a certain product. So create that first inbound shipment and it’s probably going to you know, assign each of that a location that you’ve been trying to avoid. So wait about 24 hours the next day go through create another shipment for the exact same products, same units and everything. And what we’ve seen is actually now that Amazon is showing that you already have those units going to that first facility that you didn’t want to go to, they’re not gonna send another 100 units to that same facility. So they’re gonna go to the next facility. And oftentimes, what we’re seeing is like, that’s the one that you really wanted to get to. So go ahead and create the second shipment for the for, for the preferred location, and then go back and cancel the order from the first one. So little little hac, and tip that I’ve seen worked a number of times, I’m not gonna say it’s 100% foolproof, but definitely works a good percentage of the time.
Caleb N 15:28
That’s a really smart, that’s really smart suggestion. Any Amazon seller needs to needs to pick that up. I think. I love that hack, actually. And I Yes, I bet it doesn’t work 100% of the time, but I think for the majority of sellers out there, that is a great trick to have in your back pocket. So one interesting thing that’s taking place is Amazon’s change to their FBA storage system and a new capacity bidding process. Tell us a little bit about that. And tell us how it really is going to impact Prime Day this year differently than other years in the past.
Matt S. 16:02
Yeah, so kind of a quick overview here, what Amazon has shifted here around is is that where your ability to gain additional space was heavily driven by your your past sales performance. And so obviously, the more high volume, you’re able to turnover than Amazon favorite, those those sellers and those products were would give you greater space, you know, where I really saw a lot of pain points for sellers, again, being that we are selller-fulfilled Prime, I get contacted by a couple of different brands, usually around this time as well, to who they’re very seasonal. And so when they would come in to you know kind of right now being peak season, and their their sales for the past three, three months or two quarters have been really low. And so as they’re coming into pre Prime Day, as well as also then peak season, man they’re really at a disadvantage, because they they’re not able to get that that full inventory into Amazon. And so we’re, you know, I’ve seen, I’ve heard conflicting, you know, like, man, this is, this is this really sucks, and Amazon’s making us go through this, this bid process. But for some sellers, like like seasonal sellers, I really think it’s a great opportunity, because it allows you then to get to bid on that space to guess you’re gonna be paying for that space. But what the way that Amazon set this up, though, is that you know, as long as you actually have the volume that goes through and you’re selling through that product at the rate that you do, for forecasted to be, then you can get those get those funds back. And I’ve seen kind of the opposite side of this. And this is I think, where it’s what’s driving this is I’ve worked with sellers who they they feel like they have a homerun and rather than following the advice of most seasoned sellers of start small, put in, you know, 50 units, put in 100 units, they go all in and they put 1000 in. And they’re selling one unit a day, right? So it’s really going to penalize those sellers. And if you are on the opposite side of that of your seasonal or you are you’re you’re really gaining momentum, it gives you the flexibility to go in and obtain additional space. And then guess what you do pay it down upfront, you have the opportunity to kind of gain that back. So I see that I see some positives with this as long as you you know, you approach it right and don’t to overestimate your your homerun winners by putting too much in there. And we can definitely see I’ve definitely seen where some sellers have gotten some serious problems with those long term storage fees if they’ve overshot their their performance.
Caleb N 18:30
Oh, man, it can be extremely painful, extremely painful. And I think a lot of sellers can sometimes swing for the fences. When it is a ‘hey, look, I just need a good single or a triple and be in a good spot that I’m not overextending myself.’ If sellers do find themselves in a limited, you know, capacity limit, what are some alternatives they can explore to ensure that they are really prepped and ready for Prime Day?
Matt S. 18:57
So obviously, your your storage capacity is tied to your your IPI score. And so, you know, there’s a couple of different things to kind of look at so we’re what’s going to be causing your IPI score to be lower, do you have aged inventory, is there products that are moving slowly? So these are things that you know, there’s different levers that you can pull to try to improve these, whether that’s running promotions, or increasing your advertising towards it, you know, it’s gonna look a little different. But the thing is, we want to look at is the oldest product, we need to be clearing those out. And then the opportunities we have for our top products, can we accelerate even sales on those? So doing that through promotions are doing that through increased advertising, clearing out the aged inventory, increasing the run rate of our of our of our winners, both of those are going to help lift up the IPI score and the more we can lift up the IPI score, the more inventory opportunities we’re going to have with this. So obviously, you know, running Lightning Deals is one way we found I’ll see ya actually running like coupons, we really like Prime exclusive discounts, those seem to work the best for us. Sometimes we’ll have double-sack with the using both the Prime exclusive discounts as well as a coupon really seems to kind of juice the sales for us. So those are a couple of ways to kind of think about, identify what’s really causing your IPI score to be to be pulled down, and then pulling the right levers to help move that inventory out.
Caleb N 20:27
That’s smart. I think you’re sharing some extremely valuable golden nuggets for a lot of Amazon sellers who are listening right now. And we’ve talked a lot about FBA, I think has been a big portion of this. What about FBM? What with the recent changes on seller fulfilled Prime, how can FBM sellers really compete on Prime Day and take advantage of it?
Matt S. 20:50
Great question. So I’ll kind of address this a couple different ways. So if you are a seller fulfilled Prime, I realized there’s not a lot of us out there. But for for those of us who do have the access, one of the great additions this year is Amazon has made Prime Exclusives, the promotions available to SFP sellers. So if you if you are one of these SFP sellers, and you’ve never used the Prime exclusive discounts, it’s a great tool. So I would highly recommend those as a as a lever to pull here for Prime Day. Oftentimes, that’s where I was kind of helping those seasonal sellers in the past was they realized that we gotta get FBM set up, we’ve got to have at least some way to supplement our FBA business. So we’ve we’ve actually found in a number different ways, or opportunities with other brands I’ve worked with as well too is they’ve also found ways to actually improve the profitability by leveraging both FBA and FBM. So one of the ways that we’ve done this is that we use their hero products to lead the way with with our FBA listings, and then a lot of the supplemental products that we that they have. So a couple examples we have is on the Vari side, we will lead in with our core products. So our sitting desk converters, or our electric standing desk, as our as our Prime products. But you know, on the FBM, or on our non-Prime side, it will be some of our accessories. So we can actually improve our p&l by ensuring that we you know, we’re not having to provide second day and overnight services on those on those products, we can send those just on ground. But we know that a customer who’s likely to buy, our core product is going to be highly likely to buy one of our accessory products as well. So it’s a way to kind of improve our overall p&l by kind of leveraging the Prime and non-Prime. So you kind of take that same model and apply this to if you’re an FBA seller, of leveraging FBM. to again go back to the capacity limits if you’re if you are having this capacity limits, you know, here’s another way of using FBM as that kind of hybrid approach of we want to have FBA as our primary. But then if we run out of inventory, or if I want to put school back to the 80/20 rule, let’s use that apply that here. Let’s put our top 80% what drives sales 80% of that to FBA and the other 20% that is often that’s what’s gonna be driving down your or pulling down your IPI score or increasing your storage fees. Generally speaking, what we can see is you can actually reduce your overall cost by finding that right FBM partner, 3PL, or there’s a couple other services out there that I’d be glad to recommend some people to that carry that other 20%, can carry the excess inventory for your big tentpole events. So we’ve definitely come across different several different opportunities or ways where we’ve I’ve worked with other brands to either you know subsidize their their or increase their their ability to grow sales on big tentpole events when they’re limited by FBA capacity, if they’re seasonal and they don’t have the capacity or if they have products that were not not the core products, and they want to try and look for ways to improve the profitability point kind of having a hybrid of FBA and FBM has been really successful.
Caleb N 24:09
Yeah, I think that’s extremely important. One thing that I’ve been noticing or or watched since January of this year was Buy with Prime. That’s such an interesting play from Amazon. And I think it’s extremely smart. Super smart on their part. There is a major question that is being floated in, in the logistics industry with Amazon and that is will they ever be in a competitive situation with FedEx and UPS where they are acting as a carrier? You don’t need to sell on Amazon, you don’t need to have anything fulfilled on Amazon, but they will do final mile delivery for businesses around the United States no different than FedEx does, where they come and pick up or UPS does where they come to pick up at your location. This Buy with Prime is really interesting and I think you can take it in, in a couple of different ways. I look at it more of kind of through the scope of is this a step in competing, a first baby step, I would say and competing against FedEx and UPS? And I’d love to know what your take is on it, I think some of those shipments that would have gone out normally through an FBM process or on a customer’s own website that they’re just selling on from, from an eCommerce standpoint, those shipments would have gone FedEx or UPS. But now with Buy with Prime, it allows for any buyer to link and pay in there in that shopping cart, on a website, that is not necessarily an Amazon website, to be able to link and pay with your Amazon account. And know that those shipments are going to be delivered in an in an Amazon Prime, like experience through Amazon’s own network is really taking volume away from FedEx and UPS in those extreme situations. What’s your take on that? And I’d love to know, you know, how sellers can, you know, be able to maybe take advantage of this Buy with Prime?
Matt S. 26:09
Great question. Yeah, so this has been an interesting developments. And it’s been hearing about this for several months kind of leading up to it to now you know, kind of more the bigger the out of the beta launch and the full launch here in January, talked with a number of different brands who’ve participated, I’ve talked with Buy with Prime myself, even for we’ve kind of explored it here at Vari as well too. A couple of different just to kind of observations or insights. You know, I think that there’s still a lot of hesitation by some brands, you know, there’s always this, you know, this, you know, whether it’s warranted or not of like, what am I what, what data am I going to give Amazon and if I if I give them this data, like what are they going to do with and how are they going to compete with me? And obviously, you know, we have seen where Amazon has has competed with brands, whether it be Amazon Basics are different there, we definitely have seen where Amazon has taken data to compete with with with sellers. And so I think there’s some valid points there but at the same time,I think Amazon’s really positioning this as to what you’re kind of speaking to is one trend to address the market share shifts that they were seeing with Shopify, but then also to position themselves with the carriers. You know, with, again, going back to some acts here, the, I actually had heard some sellers who said that they were signing up with the Buy with Prime service on their D2C like their Shopify page, just so that then you know they would actually get access to the additional warehouse space or FBA space. Because so when you put that inventory in, you’re getting space now for your Shopify page as well as your Amazon business, but the inventory is merged so you can actually have it shipped either to each or either channel. So they are actually using this not so much to get the to actually use the services on their Shopify page, but to actually get access to expand their their FBA business. So not quite the intention that Amazon had. But you know, I think that Amazon has obviously built up a lot trust with customers. And I see, I think that there’s, there’s a real opportunity here for some brands to leverage that trust as well as the infrastructure that Amazon’s built up. And I would definitely agree that I think this is positioning them for to take up not just the market share from Shopify, but also from from carriers like FedEx and UPS and I don’t know, I have heard rumors, maybe it’s more like, you know, whispers like was this the position, is Amazon positioning itself to actually acquire someone like, like FedEx, like, I don’t know, I’d like to, like to hear your take on that. Is this a potential like decision for Amazon to make a bigger move?
Caleb N 28:48
It’s been, it’s been interesting, I, we, I had never considered that until some major problems that FedEx went through this last year, that if anybody that they would be positioned to, to buy it would be FedEx. And this is really a monopoly of FedEx and UPS. It’s a duopoly they’re acting like a monopoly in this in this situation. So there’s not a lot of you know, options out there. I don’t think FedEx would ever really allow that to happen, to be honest, I think. However, it really was interesting given the fact that FedEx went through some major turmoil this last year, both on the labor issue side, as well as just the influx of volume they just did not do a very good job handling a lot of volume going through their system due to the COVID rush. I’m a big bigger believer or advocate that that Amazon themselves is building a network that is it’s being built really to rival FedEx and UPS while taking advantage of they’re not just in it for the final mile. They want to take over warehousing they want to take over fulfillment they want to take over pick pack they want to do storage fees, they want to do a lot more than what FedEx is willing to do at this point or UPS is willing to do at this point. But, you know, it’s, it’s interesting, I think, when you start to see a slowdown, and I think we are poised to see a little bit of that, and more normalization from COVID. A lot of people think, ‘Oh, this is an economic major disaster we’re going through, or we’re on the precipice of,’ I think what this is, is more of a normalization of, you know, COVID was an anomaly. And it was a black swan event that put shipping really on the map of testing that how flexible your supply chain is, and how flexible and transportation is in general. And guess what? It’s not very flexible. It’s one of those things that I think as things start to normalize, Amazon’s going to have more capacity in their network, FedEx and UPS, there’s going to have more capacity in the network. And the question really is, if Amazon has a lot of capacity, a lot of room in their network, because things have slowed down a little bit, how aggressive are they going to be at filling that capacity? Are they going to be willing to go after FedEx or UPS just to put those shipments on their, on their planes, in their trucks, in their warehousing, just to try to keep that capacity at full? It’s gonna be really interesting to see what they do.
But even going back bit before Buy with Prime was was announced and launched. And they’ve been doing testing and modeling of this, this specific service for a while now. Even you know going back to pre COVID, we had we were in conversations with with Amazon about, you know, beta program that they were calling, you know, On Site, Prime On Site. So as a seller-fulflled Prime, where we actually would have like a dedicated portion of our of our 3PL warehouse, that they would come in and help us actually set up like it would be an FBA fulfillment center from the hardware. And the processes, you know, we didn’t move forward with it. And the goals also, ultimately, the the program was shut down. But we also talked with them about, you know, their own shipping services at the time, where, again, using, you know, instead of the FedEx truck coming up to our dock, it’d be the Amazon truck, pulling up to our dock and from end to end. So they’ve definitely been testing this for a while, I think, Buy wit Prime is kind of the next evolution of that. But I think, you know, all these all signals kind of point towards Amazon wants to control that, the entire experience, because, you know, for us, when we get dinged for our seller-fulfilled Prime metrics, it’s generally not because our warehouse has made a mistake, it’s generally has to do with that with that carrier. And there’s been years where, you know, customers, Amazon, customers have not received packages in time for major events for holidays. And so it’s a really bad customer experience and that’s the last thing Amazon wants. Amazon doesn’t want to give any control to an outside service that’s going to impact their ability to grow and scale. So again I think all these things kind of give signals to Amazon’s definitely looking to solve that, that solution. And I don’t think they’re gonna be relying on UPS or FedEx to solve that for them. So I expect to kind of see additional development around this, and Amazon makes some big moves related to the full service carrier.
Caleb N 33:19
I think if one thing is sure, there’s going to be a lot of change. One thing that has been really massive within transportation is that it’s an it’s an industry of complete change. And every, you know, five to six years, we see some major change or major, either technology or major player enter this space. I am, you know, watching very closely with Amazon to see if that’s going to be a major disrupter to that change. And I personally think it will I I’m excited to be able to see how that is. I think it ultimately is a great thing for shippers around the country. I think you know, anything to break up the duopoly to kind of help shippers provide another option of diversification, I think is extremely needed. Matt, this has been a really interesting and fun conversation. See, man, we made it fun! This is good. I think what what you shared is some some of the most amazing hacks I’ve heard for Amazon sellers to take on. And some really golden nuggets – this has been a hack attack from you, man. It’s been really fun.
Well, I’ll leave you with one more just because it’s one of my favorite tools on your platform. So again, for those who haven’t checked out Sifted, you guys have this phenomenal tool, like, data system that gives you the insights from a seller to see exactly where is – where my customers like, where all my packages going to, where am I shipping too, but also like where’s it shipping from? You’re going back, we’re talking about the 3PL services earlier on. And one of the things that often some sellers can get wrong is they get their product in the wrong locations, or their 3PLs are not close enough to where their hotspots are. And what I love about your tool is like, you can get all of Amazon’s data from warehouse locations to the to the final shipments. And you can get that as a seller to then help you build out the right operations and logistics for your for yourself. So if you guys are looking to build out your own 3PL system or your own FBM, Sifted has a great tool that does help you navigate and reverse engineer what Amazon has already figured out.
Caleb N 35:30
It is a reverse engineering process. That’s exactly right. That was that was the the goal when it was originally developed was to ‘okay, how can I reverse engineer using this? You know, my own information from Amazon to make better, you know, decisions so that I can jump and be more flexible. So I’m not just just tied to that.’
And you can take it and use it for geotargeting on your social media.
Caleb N 35:54
Yeah, run some targeted ad campaigns. I love it, spot on. Well, the floor is yours, Matt. What, you know where can people reach out to you tell them what you’ve got going on right now that is important for you? Where can they connect for you with you? And what’s what’s the best, best way to reach out to you if they need to?
Yeah, obviously I’m very active on LinkedIn. So I’m sure we can we can put my LinkedIn address here in the show notes. So definitely contact me there. What I love about this Amazon community is as big as it is, it feels really small because Amazon sellers like to help each other. So I am always willing to you know, jump on a call or help another seller out what I’ve found as much as I can help somebody else they’re going to help me out even more down the road. So very active in the community. So definitely find me on LinkedIn, let’s connect and we’d love to set up a time to have a conversation.
Caleb N 36:47
Awesome. Thank you so much, Matt, for being on.
Matt S. 36:50
Thanks for the invitation. Caleb really enjoyed it.
Caleb N 36:53
Hey thank you so much for watching this episode of LeaderShipping, powered by Sifted’s Logistics Intelligence team. This was a great conversation. In the upcoming episodes, we’re going to be covering a number of topics such as contract negotiation, making sure you’ve got optimal pricing as well as making sure that you are prepared for peak season. Yes, it’s just around the corner. It is crazy. We’ve only got a limited number of days until Q4 starts and shippers around the United States need to get prepped and ready to make sure that this peak season is their best one yet. Make sure you can subscribe to this podcast. You can look for us on any major media outlets that host podcasts such as Apple, Spotify, even on YouTube where we upload these recordings and you can make sure you subscribe to not miss out on future episodes. Thanks so much for watching. We’ll catch you on the next one!