I like Elliot because he sells stuff that offends people. He's also running a cracking Amazon agency in Clapham, which is a great place to drink.
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In this episode we discuss:
[0:00:00] George Reid: Welcome to us Always Day One. My name is George Reid, a former Amazonian turned amazon consultant. Each week on the podcast you're going to hear industry experts, brand owners and amazon employees share their answers to the basic yet fundamental questions you should be asking yourself bang your amazon business now, let's jump in. Hello ladies and gentlemen, welcome to another episode of It's always Tehran Today we've got Elliot Hawkins come and speak to us about. Actually, don't know, we're just gonna have a little chat more, see which direction it goes in. Eliot, gonna give us a brief background, like I said, no more than 20 seconds, big pressure on you here and then we can rappel in some questions to see which direction we go,
[0:00:44] Elliot Hawkins: okay, thank you. George is great to be here. Um so a brief background on me, I've been involved in amazon in just over five years now, started a gift business on their um five years ago. Through that process, learn exactly how to make a great product on amazon, but also how to have some serious failures as well, really understand the market and how, how to actually what actually matters to to launch product on amazon. Um from there, pre pandemic was decided to build, build this idea of an agency that can support brands do the same. And then of course, Co Covid happened, the world changed and suddenly everyone wanted to talk to me and we've uh built this agent agency no matter off the back of it. Um Now a team of three and we're working with a variety of different brands to help them do amazon better.
[0:01:44] George Reid: May talk to me about some of these failures because I was having a little glance through the brutal def company, some of the birthday balloons, you know, which say you were an accident that really told me uh you got the shankar golf balls. I thought they're brilliant, wanker and
[0:02:04] Elliot Hawkins: toss a and all of them. You
[0:02:06] George Reid: know, there's some great things going on here, which is a little bit different, but talk to you about some of them cock ups you've made. Um, and we'll see where that takes us, shall we? For sure.
[0:02:20] Elliot Hawkins: I think when I, when I, when I first started doing the amazon, think I knew nothing. It was very much just like I need to, I want to, I had a month between jobs and I was like, I'm going to find something to, to sell. I came up with this idea of brutal balloons. Um, actually was originally called balloons against humanity. Um, and it was very similar to a popular guard game, which has a similar name and uh, they within two weeks came after me and I remember just getting this cease and desist letter and being like, uh, you know what, I don't think I'm cut out for this, I shouldn't have done it, this is silly. So, uh, but then I eventually was like, actually I've, I've got 100,000 balloons in my bedroom with rude phrases, I need to do something with them. So I renamed it brutal balloons and, and, and, and I listened on amazon discovered fulfillment by amazon. Then it started to tick and I was um, and I was, and, and after about a year I was making decent revenue selling balloons and I was like, this is, this is really cool. And, and then I sort of remember talking about my Step at a time, he was a bit of a confidant and mental for me and I was like, you know, if this is one product, if I do 20 products and I can scale this. Uh and so I just was like, well I'm just gonna do 20 products, and then I, and so I very quickly thought of every stupid, rude idea I had, and so I, you know, got trying to think of some of them, um anything, anything rude and stupid, but the idea was just taking everyday household products and turning them into rude novelty gifts. And um and I came up with this range of like, root certificates, so you would give them to your your mates just like throughout the presence or when they've achieved certain milestones in life, and they just looked at the pierce. Um Okay,
[0:04:06] George Reid: my most
[0:04:08] Elliot Hawkins: favorite actually was the uh, the vegan calculator, which is a uh it was, it was essentially a calculator, and it was just the vegan calculating so you can calculate how much no one gives a shit uh, that these products, I, I threw them onto amazon, and I knew nothing about listings, I knew nothing about search, I just assumed everything sold on there, and, and, and nothing, and none of this stuff did. So I spent all my money on products, and, and I was like, uh, there's something not right here, and that's when I started to understand, uh, okay, there's actually two aspects of this, there's like, there's a, there's a demand, there's a demand aspects, so is anyone actually looking for this stuff?
[0:04:58] George Reid: Um,
[0:04:59] Elliot Hawkins: and, you know, is there, and, and then there's a competition aspects, and then very sort of, it was slowly, it took me a long time to really understand the dynamics of, of how that marketplace works. And it was, and I'm glad it was slow, because it just gave me that, and I had the time to do it. I wasn't unlike some sort of desperate mission to quit a job and start side us and I was like sort of doing it quite patiently. Um, I had to quit, but I will say it was like, again, I've given myself an amount of time to have a crack at it. Um, and so that was, that was, yeah,
[0:05:42] George Reid: yeah, I like that a lot. Getting a cease and desist straight off the bat is fantastic when it's just great work isn't really, yeah, that's fine. I just really just rename it. So a lot of
[0:05:56] Elliot Hawkins: my first season to assist, I
[0:05:58] George Reid: don't doubt it don't got a second. I think with, with your range, you obviously challenged a little bit with, how do you, how do you go about discovering those keywords? Because some of these things, their new products are a little bit different. You have you slowly find a way to go for these inappropriate items, offensive items. There are certain categories that we're looking to position ourselves in and what kind of strategies are using To make that work right now. It's a kind of your normal helium 10 keyword research and going from there and then making a list of these key terms you want to go for the top kind of three for each product. What does that look like for you?
[0:06:44] Elliot Hawkins: I mean for me it starts with actually having the idea and the ingredients of something that you think has future potential. It's not, I'm not trying to um create necessarily always create something. And this is I'm able to play that kind of more patient game because I don't I need my products that necessary to be selling and launching into page one within a certain amount of time because I've been able to have been able to be patient with it. And so for me it's all about finding having something that's funny and relevant and evergreen number one because flash in the pan stuff, it's great. Like everyone last year was like, oh, you should do Tiger King was huge and I'm like, well no one gives is going to give a shit about three weeks. Um, that's the first thing. And so the stuff that's going to be evergreen and, and has potential to get instruction, obviously the actual, for example, golf balls on amazon sell well already. And so really what what was doing was kind of tapping into, you know, I've seen some funny golf balls before. Um, but I didn't know it was gonna be a great seller, but I knew that if I get something in that just in that mark in that market where there is a lot of volume, whereas previously had gone into stuff like certificates right where no one is actually actually and I was actually looking for it whereas in golf course or you know it's uh this is my, one of my more sort of I suppose more well known products is is toilet paper, right?
[0:08:18] George Reid: Where
[0:08:19] Elliot Hawkins: toilet paper, which is a big category obviously last year was a very big category. And and and so you know you you you become you kind of, you kind of tapping into the fact that this hasn't as an exist existing demand category, but you're taking what normal and then making it funny novelty and then it becomes that makes it a gift table and different. And so it's more about the actual yeah, so definitely around you want to see category volume. Um but at the same time, I'm not necessarily looking for one particular keywords here. Oh wow, this is the this is the dream products and no one's ever thought of
[0:08:58] George Reid: it. I like that a lot is quite simple. I've talked to examples before of people in the power band kind of category and warned that I really be like, I can't remember the top of my head or I can see it. A person has gone right, there's a resistance bands for everyone. There's no point in me trying to make another resistance band and he just made one for ballet and dancers or ballet dancers, but kind of two separate things that labeled it, branded it accordingly. Just sent, we're going to talk everything towards ballet. People who need a resistance band and dancers who need a resistance band. We're not even asked about the average jim goa or the person who goes to a yoga class, Everything is towards you. And they just take this big high volume category, take a little slice of it and then position their branding and their message and their voice towards that one or two types of different customer um same kind of thing really applies here. I like gulf, but I don't take myself too seriously. I go to birthday parties, but I don't take myself too seriously. And you just slice on a little corner right and make that work for you and that can work in, you know, whether you go brutal gifts like what you've got or you go into anything just finding that little slice
[0:10:21] Elliot Hawkins: for yourself. Yeah. Absolutely. And I mean that the the that that that that business generally, you know it does most of its year in in three months of the year. Right? And so I I spent nine months of the year looking forward to Q four, but also um shitting myself a bit about it because it's like well what's going to happen like last year was incredibly scary because I was like, I knew this was gonna be a big big year, but I was like how deep do I want to go with inventory and how how much how much risk can I afford to take? And you know, unfortunately, I was in a position where I could take quite a lot of risk and but but then also you livin livin this the fear that okay one day amazon might decide they don't want to sell stuff with with rude phrases on or they don't want to sell. Uh they they might just go actually, no, so I always have that kind of um that always because I get very excited about it, but also at the same time thing, remember there is this God like figure called Jeff Bezos so you can turn you off at any point?
[0:11:33] George Reid: What are, sorry? Yeah, right. Personally comes in and shut you down, ruins all your income. How do you, how do you think about managing that ongoing challenge that amazon themselves, shutting you down is a threat or that you could have some chinese knockoff, which could certainly be something you have experienced or would likely to experience of my friends has experienced it as well. How do you think about as a business owner, what you should be doing to prevent that destroying you? Whether it's a block, whether it's a suspended I use and whether it's a competitor, what are you doing to build that moat? I guess.
[0:12:17] Elliot Hawkins: Yeah, that's a good question. I don't I don't worry too much about a chinese competitors trying to trying to do something that if you take this extreme right? For example, they could literally by by one of my products and just copy every aspect of it now. Yeah. Yeah. I mean the brands and trademarks, so they've got that kind of protection in place from a brand level. They couldn't use any of those keywords. And look, my products do now have their own kind of branded search. So um so that they could come in and they could copy of product life like and then suddenly, so you've got like a duplicate on on amazon, right? And it's then it's launched zero reviews and it's you know, can they really um copy to copy the copy like for like what they, are they able to um I think the customers becoming smarter too, what's the legit product versus what's what's not? I think, I think that's some aspects of it that there is. Yeah, I don't know because I spend so much time in the marketplace, I can spot one of these, one of these competitors from our way, but maybe the average customer can. And so yeah, I mean, look, it's the it's the thing that everyone is worried, worried about is getting, getting copied and that does, is going to die. It's gonna always dilute your business. But I think it's the same in whatever market you're in, right? So, um, you know, what can you do? I I I mean if there are better ways of protecting against these guys and I'm
[0:13:57] George Reid: yeah, I guess, I guess some of it is obviously looking after yourself off of amazon and creating a source of income for your own website through other other channels and just splitting, splitting your, your distribution channels of revenue a little bit and Charles talked about that in the last episode recorded yesterday, just going what you can't rely on, what you should never rely on one. Um always having kind of another stream because amazon could get, you know, many, many friends of mine have gone, it's been suspended for a week. It's like hurt me a little bit, it's just really tedious. Um always having a kind of backup. So just pivoting, pivoting a little bit. I wanted to talk about, you know, small brands like yourselves, where you've built up some great products. How do you then got to that point where you're thinking about, okay, there's aggregators, maybe I want to flip this, remember what your thoughts around this whole aggregator thing going on at the moment. Anyway.
[0:15:00] Elliot Hawkins: Um I think, I think it's fascinating how quickly it's blown up and suddenly it feels like there's a lot of people doing it with a lot of money very quickly and you're thinking where has, how has this happened, where is always come from? Right? And it's almost um you know that there are some some great stories of brands get getting bored and I think from a as a on the business owner side where you've got, where you've got the products and it comes down to it depends it depends on how how we structure if you're just a for example, brutal gift companies kind of is me and I have people who helped me but not not full time team, but there are people, there's lots of third party companies involved that helped make everything happen, whether it's in America or here. Um and it comes down to the question like, are you making good margin out of this business? And do you like having it? Do you like running it? Is it do you are you okay with the stress of it? Right. So you're like, you know, because amazon definitely affects my sleep, it really does, going to, going to sleep every day waking up and the first thing I do is check what happened in the US. Oh the sales are down, did a listing get suppressed? Like, you know, all these things are like they just keep you up at night, the other things and the first thing to wake you up in the morning and then um so so the aspects of like can you handle it? And is the, is if you're if you're fortunate to be doing well on it then if you're, you know, is it worth it? And then um and then and then on and on the aggregator side, I think it's just mad interesting how they just, they just jumped in and they just buying everything and anything and um and I'm like, you know, whether it's and I'm really intrigued as to what it is they're buying because like, we we spent some time doing, doing, doing due diligence on some some brands within the agency of like, okay, these are great, we want to want to buy, buy business,
[0:17:09] George Reid: they've come to you and they've gone, Elliot, give us a hand, we're scaling too quickly, we just need someone to come in and look at these brands and be like, is it a good bye, basically.
[0:17:20] Elliot Hawkins: Yeah. Yeah, exactly. They want uh an inside kind of understanding of like the positioning of brands and markets, which is def like, which is what you if you were buying a big business transaction, they have consultancies on either side presenting the businesses are away and in the same thing on amazon, You know, these these aggregators promising that we're gonna turn you turn this purchase around in 40 days, right? We're gonna we're gonna, you know, we could bite me being a million pounds, that could be, you know, ВЈ5 million, but we'll get the deal done. It's like that. I totally understand what these guys are, the big three Ceos, big big brands are doing and what the transceiver, but it's it's almost like, okay, sometimes it feels sounds a little bit too good to be true. Like what how quickly you can buy a business or is that or are we just in this new world where everything can happen really quickly?
[0:18:22] George Reid: I think, I think it's a new world. Like speaking to SAm old SAm, They've turned people around in 45 days, like it's literally happened from that first conversation to here's the money in your account in a very short period of time and I think you can really tap into something that not enough people probably talk about is how amazon affects your sleep. I've actually heard that one before, it was the first thing I check, well I'm shitting myself, I go if I lose an item overnight and is continuously just burning away not enough people are thinking about that, which then reinforces my previous point about not having that single point of failure being amazon itself, would you sleep a little bit better going, I don't fucking care of amazon goes down overnight, like obviously it's irritating, but I'm not going to like have an absolute breakdown about it because I've got 2, 3, 4 channels that are also pumping pretty well for me and it splits evenly across. Obviously depends how you run your business. Whether it's like a high stress business or more like me which is a bit more relaxed you could argue. Um But with the with the aggregator thing um like jobs and obviously yesterday there's a lot of money going into it. I'm fast. It's the first time I've heard someone say I've been asked by an aggregator for advice on okay what do you think about this brand? Because I've spoken to kind of four or five of them now and obviously speaking to lots of consultants in the space saying kind of kind of get your advice and this kind of get your thoughts on this. Can you help us with this because they're growing too quickly. Right. It's very interesting that kind of bringing people in in the U. K. As well as Australia and the us to go we need someone else to look at this. Um Which is kind of early signs of the growing stupidly quickly. And they've just got money to burn because no one ever charges a small price to doing consulting like that his finger in the wind stuff isn't it? This is my price. I'm just going to double it for my hours work And you know they've got 40 million invested. So I just it's quite interesting.
[0:20:33] Elliot Hawkins: But yeah but I think that if you actually ask yourselves how many people in this world are available who have sort of started successful amazon businesses and actually have the time. And the like maybe also the analytical ability to look at look at our businesses as well. And then there's actually not that many people out there who have that like intrinsic amazon understanding of the market so that very few people out there, I think that they can they can actually go, I mean, they can go to age agencies, of course, who have they follow um processes of like and they use all the tools, but actually the availability of people to understand those tools and then also be able to tie it into some kind of almost a financial um give us sort of financial understanding of the positions business and and the defense, defense ability of those businesses is um I think that could that could be hard to find. I think that's gonna be the challenge of these guys because they, you know, they will grow incredibly fast. Everyone understands the finance of that, like the finance, if it all makes sense, we buy 10 businesses and we operate we operate them like an agency, in which case, because essentially, that's what they are, They're agencies with a load of cash, can, can realize the profit of what they're doing because obviously you've got the normally agency, what is like maybe like a management feel there might be a commission model, but actually, excuse me, um the these guys are going in and they all the finance makes sense, but then it's like, okay, well, we need the amazon talent now to make sure that we cannot see, We'll understand if there's upside in what we're looking at because upside is going to be key because otherwise they're just consolidating revenue and then squeeze, squeezing a sponge, they gotta be able to improve these businesses.
[0:22:29] George Reid: I think it's surprisingly more that agencies, they may be being approached by, agencies aren't being approached the whole and just going, you've already got the team there, why don't you just do it? You're the people leaving it, because it's ultimately what happens. They, people with money can find someone or someone has the idea and they've got connections and they can get the money. But invariably what happens is they haven't got the expertise to do it themselves. So they need to go find those expertise and hire and pay a premium, pardon me, Just thinks, would it not be easy if you've got the dollar to go to an agency and go, okay, like your name as a, you've got a three person agency, you've got someone doing PPC, someone doing content, someone doing whatever. All right. What? You've only got two sets up there. So you would then go get the merger and acquisitions person who's got experience in that industry and that's a big tick. Um, but you know exactly what you're doing to begin with, which is analyzing amazon business, whether or not it's good bye because anyone in acquisitions can give you an idea and the finances, which is important I get. But seeing it from amazon lenses also important as well, like how quickly could this fail? Worst case scenario, you know?
[0:23:44] Elliot Hawkins: Yeah, I I think that is definitely the easy way to go if you wanted to do this really quickly. If you if you had the ability to raise ВЈ100 million Amazon business and you would just have just had finance um then then you you could definitely go get an agency, the team of people and just pay them say right I want you to exclusively run these 10 businesses I'm going to buy. I guess the issue is that you then suddenly have no internal I. P. Of what you own the businesses, but you really have no ultimate control of the process or the know how and what's going to become in the long term attractive for the seller of the business. So I want to know that this is going into good hands okay? Um and I want to know that um Yeah, but also as I want to know that I can I can actually scale my own operations and I can probably raise more money and do my acquisition. But you know I look at these companies like horatio phenomenal marketing like incredible that how their brand has got out there so much and they are you know, they are selling the F. B. A. Dream. You know
[0:24:51] George Reid: people, yeah,
[0:24:52] Elliot Hawkins: it's always marketed about the entrepreneur and the F. B. A. Dream and how they started from their garage and all these things. But you know they're not they're marketing almost the person before FDA which I find really fascinating but at the same time, you know, it's scales so quickly, you know, for what? It's probably about billion dollars now in finance race. It's like how in a short period of time that it must be absolute chaos. Absolutely. I can
[0:25:20] George Reid: only imagine what it's like internally, like at that scale. How do you even higher that quickly? I think they're making loads of cock ups, There must be and there must be paying some monstrous fees to external consultants to help them. But I reckon they're hiring stupidly fast and probably making mistakes. Could, you can't take on that many people that quickly in the amazons face and nail it and that many brands that quickly have a system in place. It just seems to message.
[0:25:47] Elliot Hawkins: Yeah. Like I totally understand the consolidation. I mean, look if they've got one inventory system with one set of warehouses and everything suddenly just gets moved in and it all makes sense and then they own that entire supply chain, I'm sure that it's probably there, that plan, but you know how, how quickly and how, because I don't, I don't, I don't, I know nothing about about it, but all I know is that, you know, I've been a big, I've worked in big corporate before and you know, and they're chaos. Um and so a big corporate that's evolved in it in a year or two years, presumably is gonna gonna be chaotic. Um
[0:26:27] George Reid: so thinking, what, what are the things that they will obviously be providing is a lot of, a lot of scalability. So they'll look to make operational efficiencies, They look kind of utilize their teams to make it better content rather than small brands would have to go pay a few 1000 to grow their content. They'll utilize all sorts of things from shipping to everything um and all of this important amazon because everyone struggles with those amazon fees that the FBI fees referral fees squeezing margins. What are your thoughts around that kind of topic of the dream that people have around what amazon is and what the reality actually is when it comes down to looking at your your margins, particularly with how aggressive advertising is becoming now, which chopped into even more.
[0:27:18] Elliot Hawkins: Huh? I mean the reality, the reality of Amazon is that you have uh if you if you compare it to 20 years ago, 30 or whenever it was, you know, if you wanted to start start a business that did on online, So let's go back even as far as having your own server and all this stuff for your storage and all like now you literally have this, you've got this team that scales for you when you need it, right? So, and you have to, you don't have to pay for it at all. You know, you just pay for it when it happens now, that business model effectively. Yeah, amazon fees are, are high. You know, you're, you're looking at, you know, I don't know the defense depending on the product between 30 and 40 40 five potentially in FBFS, then everything that happens underneath storage or the all the other stuff. And when you look at that and you're like, um, oh, this doesn't make sense, not making enough money, but actually when you really think about it, they, they do everything is happening for you. Your, your job is to get the products there. And, and when you realize that actually actually want one person can build one building, can build one person can build a business on Amazon very, very well and not have the over and not have no overheads. And that's always, that's always been the attraction. That's what's built this world of people selling this, like dream of, you know, six figures in six weeks, you know, and it's uh, you know, it's, but then the other side of it, it's incredibly aggressive. It's also bloody hard if you if you if you don't know what you're doing. Um, and it's yeah,
[0:29:08] George Reid: are you seeing you having lots of conversations with even more successful brands realizing that the margins are getting squeezed really tight? And what are you advising around that at the moment to to navigate that challenge? Because you work a lot of the consumable space, right? For clarification?
[0:29:26] Elliot Hawkins: Yeah, I mean, but what's and always, I think one of the biggest challenges that I have with talking to the brands I work with is that we, a lot of these brands weren't built from starting on amazon, so they weren't selling a few quid a day on amazon which suddenly scaled up and then they were like actually we've got a business here, we can roll out, we could go to we could go to another e commerce platform, we could go to another market but it didn't grow. Concentric out of amazon. Amazon has been an afterthought. So when you build a business that has a team of people and has a channel like sanitary shop fire away. You know your own that you know a lot more of the margin. Yeah. And um yeah amazon kind of has eaten into that margin because you're sort of expected to offer free shipping now and all those other things. But when when you're looking, when you go to amazon with, with your product that you sort of can sell direct to consumer and such to make a profit, um you go thomason and it's like, oh, that's just the margins are tight. You know, we're going to have, we're going to have to scale incredibly quickly. And, and, and, and so for a lot of brands that I've worked with, it's about understanding that making sure we're clear on the reality of, you know, what, what's possible on amazon because if you, for example, if you're in the food and beverage space, right, the margins are just really tight. I think your actual, Because the cost of goods relative to the sale prices tends to be a lot higher than if you're selling a plastic phone case, right? Which you can jazz up and make a 10 x mark up
[0:31:08] George Reid: on.
[0:31:10] Elliot Hawkins: But, and then you go to amazon and suddenly it's like maybe, you know, you know, sometimes single figure percentage point profit, you know, sometimes a bit more. And then they're like, well, so they need to be, you know, they need to be doing 2025 grand a month in sales to justify maybe having an agency and taking a little bit of profit from that. Um and then there's getting, getting to that point a lot of investment and then does it stay for long term? So it's just understanding what the objective is of amazon for a brand, what do they actually want from it? Is it just to get more, more products in people's hands, more people to try. It is it is it just a giant Drinks tasting platform that allows people to surround because and what what I, what I love to show to these guys is like look 80 of your sales. Uh this this month came from people that were searching for a generic thing like you know, healthy, healthy tonic water, you know, and that's quite cool because so if you've you've persuaded that person who had no idea to buy your products in short period of time with that, that's really powerful I think.
[0:32:17] George Reid: And I think what I like about it most is that that new to brand metric in the consumable space. It must, you know, we work with a lot with the accounts that we manage, particularly like the grocery ones because you can continuously show them they are the new customers that you've acquired this month,
[0:32:36] Elliot Hawkins: Your
[0:32:36] George Reid: repeat purchases you've got this month. It's really nice to see. And obviously then what you can do is go we have an amazon offering which may be a certain quantity than a slightly different one on our own website. So you're not getting your hands slapped the buy box removed for having different pricing because you're offering a slightly different on your own site and slowly look, just move people across there just through brand awareness. You know, whether it's join our facebook group, um, in in the insert and that gets people in the group. You've then got your community and your sharing the website deals that you're doing um, as their exclusive members, these sorts of things. But you've got that person from amazon Because what, 30 40 of sales online at the moment, I made an Amazon. Imagine that number has gone up in the UK. Now, if you dig just into consumers of category, probably gone up even more. Um, so it's it's a customer acquisition channel for them. One of the things I'm interested to hear your thoughts on this that I had, I don't understand why more brands don't do Most people selling them symbols, let's say protein bars. They always have to sell the pack of 12, 14, 20 for whatever it is, right? Because there's no margins selling a single unit Barca had this theory of selling the smallest possible side. You could do knowing that most people are looking to discover something and they don't want to buy 12 protein bars because y
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