George's Blog

Nov 27, 2024 12:00AM

A drinkware company takes its biggest business risk with a new subsidiary launch. Six critical steps for major business expansion: from picking asymmetric opportunities to appointing dedicated leadership and gathering customer feedback before the product launch.

Mike Beckham | Link to post

I've been an entrepreneur for 15 years. Next week, I'm taking the biggest swing of my career.

It’s complementary to drinkware but such a significantly different product type that we’ve created a subsidiary complete with a new brand, manufacturing, website, Amazon, and ad accounts …

We even appointed a new CEO to run it.

As we move into launch mode next month, I want to share six steps we’ve followed to set ourselves up for success.

I also want to invite you to be one of the first to experience our new product.

So here's my checklist for taking a BIG swing:

1. Pick an asymmetric opportunity
As a business model, consumer products have many downsides, but one major upside is that successful products are incredibly asymmetric.

They can easily be 100x or 1000x returns over time.

Look for opportunities that provide this explosive upside and prioritize them when possible.

2. Nail the product & production
It does not matter how well you do anything else with a launch … if the product is a dud.

We’ve found that the most successful way to develop a great product is to work with a manufacturer that supplies successful players in the vertical you wish to enter.

In this case, we found a partner with two companies that have run rates over $50M in the space we’re entering.

3. Gather customer feedback
The internet makes it easier than ever before to understand what customers want. We have used surveys and focus groups to understand more about the product category.

The worst mistakes we’ve made have always been when we decided to move decisively in a new direction without making sure it was what our customers wanted.

Business is a pretty simple game.

You serve customers; they pay you for it. Don’t get ahead of yourself when launching a new product.

Talk to customers and potential customers to ensure you are funneling your efforts into an area that excites them.

4. Appoint a single-threaded leader
Organizations will always prioritize the cash cow.

This focus can prevent new and disruptive growth paths from growing into their potential.

We set this new venture up as a subsidiary of Simple Modern, but we created a new CEO position for this business unit.

It isn’t always necessary to go to this extreme, but at a certain scale, you need at least one person who is completely focused on the new venture's success.

5. Plot the path to potential victory
It is essential that you have a plan for success that involves more than hope and “good marketing.”

You should be able to point to …

Strategic and structural advantages that will allow you to carve out a piece of the market.

We feel confident that our distribution relationships, existing brand equity, and the number of units sold yearly give us a clear advantage over competitors in this new market.

In addition, you should understand your sales channel plan and have a clear vision of how you will get your first 1,000 customers in your primary channel.

6. Live with the results
Nothing is guaranteed.

You can do all the above steps and still have a product that fails to achieve traction.

But the list above helps you to position yourself for success, and that’s all you can ask for when trying something new.

Now, the invitation …

In next week’s newsletter, I’ll share our entire playbook to our biggest swing yet.

And I’ll offer Trevi at a massive discount to the Operators community.

If you are already a subscriber, all you have to do is sort through the flood of other Cyber Monday emails, open the newsletter, and follow its instructions. If you aren't a subscriber, go to 9operators and sign up.

I can’t wait.

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Nov 25, 2024 12:00AM

Poor Amazon store merchandising costs brands millions in lost revenue. Effective brand stores need clear value propositions, accessible homepages, consistent branding, optimized shopping journeys, and focused product selections to capture the 10-35% revenue potential.

Jason Landro | Link to post

Most Amazon brand stores aren't good because they don't have a merchandising strategy

And it’s costing lots of brands hundreds of thousands or millions of dollars in revenue a year

Because optimized brand stores can generate between 10%-35% of a brand’s Amazon revenue

Consumers are most likely to buy the top 20% of items in your catalog

That means you need to get consumers to those items and categories as easily as possible…reduce friction

At the same time, you want them to buy more by strategically placing complementary products next to your top sellers to build the basket

Yet most brands fail to do this

Below are five actionable steps you can take to improve your merchandising strategy:

Step 1: Make Your Brand's Value Prop Clear

When a shopper lands on your homepage, they should have a general idea of what you sell based on your imagery and copy above the fold

Step 2: Make Your Homepage Accessible

Customers also shouldn’t have to scroll down more than halfway to be able to see shoppable products

Scroll fatigue is real

Step 3: Ensure Your Branding Is Consistent

Beyond the homepage, it’s vitally important that you also ensure your branding is consistent

Your blocking, fonts, blocking, button placement and size should all be consistent from the home page to the subpages (and even your PDPs)

Before we start any brand store (or creative work for that matter), we do a branding plan for Amazon to ensure that we lock in the brand’s style guide and brand guidelines so that we can be consistent with the branding

Step 4: Design for the Shopping Journey

In addition to ensuring the design is consistent, you also need to make sure you optimize your store for how customers search and shop.

Sometimes this is simple (e.g., you sell men’s and women’s’ shoes) and sometimes it is not (e.g., you sell different types of tools that could comprise 20-40 categories or you sell car parts for a bunch of different models and makes)

Step 5: Don't Overwhelm Shoppers

Lastly, you don’t have to include every single product that you sell on your store.

If you really want to, you can include shop all pages or sub-subpages with all the products for each respective category.

Again, you already know what shoppers are most likely to buy, so your job is to get them there and upsell them along the way

Therefore, feature the products that you know customers are most likely to buy, and bundle those products into macro-level categories

One caveat: rules are meant to be broken if you’re generating a lot of traffic or running a lot of paid media outside of Amazon on specific products

If you’re an established brand and want help taking your store to the next level don’t hesitate to reach out to Nectar or me

Below are homepages that the Nectar team created for various brand stores, including Ninja, Chuckit!, Earth Rated, Gotham Steel, Made In, Vibes, and Hero

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Nov 20, 2024 12:00AM

Spreading ad budgets too thin reduces Amazon advertising effectiveness. Focus on 10-15 high-performing product targets per campaign and maintain exact match targeting to optimize spend and improve ROI.

Himanshu Verma | Link to post

👉 Is your Amazon Ad setup aligned with your Ad Budget?

We've come across Brands having a limited budget but they spread it thin across too many targets/strategies. Recently, we audited an account and found the Brand was targeting a large number of competitor products. This approach simply diluted their ad spend.

Here’s where things went wrong:

➡️ Low Spend Per Target
Each product target received minimal spend ($1–$4), offering little exposure or room for experimentation. Collectively, these low-spending targets consumed over 20% of the total ad budget—while generating almost no sales.

➡️ Missed Opportunities with High Performers
High-performing competitor targets were underfunded because the budget was spread too thin. To make matters worse, over 30 product targets were grouped into a single campaign, restricting control over ad spend for the most effective keywords.

By reallocating the budget to high-performing targets, the brand could have significantly improved ROI.

Further, here are 5 Steps can help drive much better Results:

1. Focus on High-Impact Targets
Limit each campaign to 10–15 product targets. This lets you closely monitor and prioritize the products that convert, minimizing wasted ad spend on underperformers.

2. Launch a Few Campaigns at a Time
Based on your budget, start with a few campaigns. Set a testing period (1–3 weeks) and wait until each product target reaches a certain number of clicks. Use the average clicks it typically takes to make a sale as your benchmark. After the trial, you’ll have a clear idea of what works.

3. Replace Non-Performers with New Targets
Swap out low performers with new product targets from your waiting list or move them to a lower-bid campaign if they still generate some conversions.
This focused approach allows you to maximize your budget and improve your ROAS.

4. Avoid Expanded Targeting
Exact match targeting is generally much more effective than expanded targeting, as it keeps your ads aligned with highly relevant product searches.

5. Structure Campaigns with Defined Budget Allocation
Well-structured campaigns with specific budgets assigned to high-impact targets can significantly boost overall performance.

By keeping your product list small and targeted, you’ll be better equipped to make the most of your budget and drive meaningful results.

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