Arlen: Amazon selling isn’t new. But doing it well and profitable has been out of reach for a lot of people. Mike Zagare (zuh-gary) and PPC Entourage have flipped that script, and they’re helping sellers around the world not just make money… but make a profit. Mike is a serial entrepreneur and recovering physical therapist who now helps other entrepreneurial-minded people turn their selling gig into a serious money maker. For anyone who is sick of the 9-to-5 grind, Mike feels your pain. He was there once. Now he’s taking the tools and tactics that helped him escape that grind and turn a 40-thousand dollar a month side hustle into a 400-thousand dollar a month legitimate business.
Mike: Hey, what's up Arlen it's great to be here.
Arlen: Alright, I'm excited to talk to you. And yeah, that's you know, you quite a little background, you know turning that side hustle into really a kind of a little Empire there. And so we're really excited to kind of get into the nitty-gritty of how you did that.
So, you know before we get started and get into the topic of today, which is going to be talking about. Optimizing your papers PPC margins. Why don't you tell us a little bit about yourself and specifically how you got into. What you doing today?
Mike: Right? So the side hustle actually started when I was about 17, maybe even 16.
I was the selling stuff on eBay. I was going and buying tickets and actually scalping tickets on eBay and was like, wow. This is a great way to make some money on the side. But of course High School had to graduate and then pick a subject for school and. Right off the bat. I was like I got to pick something and I pick the physical therapy and I kind of knew right away that this is just something I had to do because it's that time to pick something went through school.
My hair was starting to fall out a super stressed out got out of school started the 925 went through physical therapy and realized that my calling is to own a business and to be an entrepreneur because I would be lit up with the idea of starting a physical therapy business. So I started my first business when I was 25 and I did home-based physical therapy because I had absolutely no money.
This was like the easiest way to get started. So we treated seniors in their homes, and that was where I got some business experience, but I realized that that model wasn't really the best model for me. So one day I just did a ton of some sort of internal work, you know for months and months and months and I was wondering what the next step was for me and then I kind of went back to my roots with the eBay and all that stuff online and selling online.
And that was just my calling my niche. And then I got into selling online. I started with dropshipping. I started with Retail Arbitrage which was a complete failure for me. Actually the post office got shut down because of one of my bad moves in Retail Arbitrage. So there was a lot of mistakes made along the way and then I came to private labeling which is basically coming up with new ideas in the marketplace and having them produced and then starting my own brand and then the rest is history.
We were able to able to establish that brand and then use Amazon sponsored products to scale that brand and. A lot of eyeballs on our brand and then now we help other sellers do the same thing.
Arlen: Okay, great. Great. That's awesome. And that's quite a job going from physical therapy and to selling on eBay and then now just having really kind of mastered what it takes to optimize e-commerce selling across platforms like he Amazon, so that's really amazing.
And so, you know, I know a lot of the people that I've had on the podcast I've had interesting backgrounds as well where they kind of started in a total of one area and then really ended up. You know in the world of e-commerce somehow and. It's always interesting to see how people make make leaps and you know, you really have to go to what you're passionate about.
That's really one of the consistent themes that I've seen and from what it sounds like is the physical therapy wasn't one of your true passions.
Mike: No, it was the business side of that. So I was learning the business side of that and then the trend just going from physical therapy to e-commerce was just basically taking all the business knowledge and applying it to something that I was passionate about which was e-commerce and then it was like a match made in heaven for me and it went from there and I haven't.
Ever treated a patient about three years little over actually. Yeah, three and a half years now. Okay, my license just expired
Mike: okay. My parents were not happy about
Arlen: but they're still in his physical therapy.
Mike: They're like, why do you let that thing expire? Whatever it was if we're not going back.
Arlen: I hear you. Yeah, that's how parents are, you know, they always want to make sure you have something secure and stable and something to fall back on. I definitely know how that goes. Now, you know, a lot of the Roosters on the podcast are in a variety of backgrounds as far as e-commerce you concern many e-commerce.
Sellers selling products or services online and Via different channels. And of course, we do have a fair amount of listeners that are either selling on Amazon or thinking about doing it now, I guess for those businesses that. Have not started selling on Amazon. What do you think is really the first thing that they should consider when looking to enter the world of selling on Amazon.
Mike: Well, it depends if you have a product line that's already developed or you looking to get something get in the game and start something completely from scratch. So if you have something that's already developed and you're not an Amazon. I think you're missing out on potential customers, even if people know like and trust you and buy stuff on your website.
A lot of them know like and Trust Amazon. So they'll prefer to shop on Amazon and I think you're missing out. And then if that happens you can start to get some keyword visibility on Amazon and start to get some sales that you wouldn't have gotten before. So it's two separate things. If you already have a product line and you're not selling on Amazon, it could be like low-hanging fruit.
But if you're just starting out and you're wondering like how to get into this game and how to do it, right? It's completely different than how it was a couple of years ago. Now you have to be much smarter early on in picking a product and making sure that you don't have a me to idea because it's much more competitive.
So you have to have some kind of. Value that you add that's completely different to than all the other products that are up there. So it's a little more tricky than it was three years ago. There's much more competition and it's much harder but there's definitely still lots of opportunity and there's also Global opportunity.
So it's really a great place to be
Arlen: and that's that's really good to hear because I talk to Ecommerce businesses all the time and then a lot of the business owners I talked to. Always a wondering is it worth going that route? And is it really worth the effort and what it sounds like is if you like you said if you have a product you thinking about doing it, you're really just leaving some things on the table.
If you don't pursue the Amazon, but I definitely hear what you're saying as far as yet, you have to be a little bit more educated from the jump in order to be effective with selling on Amazon. So what are really some ways to effectively. Manage the direct sales on Amazon, you know just kind of starting out.
What do you suggest a new business? Or business that is just getting into it. What do you suggest that they do?
Mike: If you already have a product line the best way to get started is to really do some good solid keyword Research into setup a good listing. I see a lot of companies that just throw their stuff up on Amazon and they're doing actually some of them are doing pretty well, but some of them could be doing so much better.
If they just either hired someone who knew that what they were doing or took the time to really evaluate. Their competitors and make their listing even better. So if you have products already, make sure that when you do put them up on Amazon, the listing is optimized and there's a couple of ways to do that through your images through your title for your bullet points really have a good presence on Amazon.
It really does go a long long way. But if you're just starting out and you're looking for a new product, there are tools that can help you find products and opportunities. It'll the one thing though that I've noticed is everyone's using those tools. So it's getting a little bit more challenging to find Opportunities through those.
But it is possible. The other thing that's great to do is get your boots on the ground and go out there and find products that are just not on Amazon new opportunities. They're all around there's trips people that go to China and they can go and you can check out all of these different new opportunities in China.
You can go to your you can go to local stores. You can go to local trade shows you could do anything and try to get a new idea up on Amazon, but there's still like a lot of opportunity
Arlen: that's good to hear because. You know when you think about it right now, I'm a huge Amazon user or just about yeah, I would have just about anything you can think of them Amazon because it saves me so much time from having to go to the store and and just you know spend the effort and then I'm like, wow, what don't they have but you kind of chime something in my head that you're right.
There's if they don't have everything and that would be really a good way to start if you don't necessarily have a. That you're selling but you know like you said go to some trade shows, you know, maybe go overseas do some research and find out what don't they have what would really be a good Niche and that key thing one of the things that you mentioned initially is that that keyword research and that research up front is very important in the good thing about it is these days that all of the data is there and available like no other you know, we're at a time where my.
Getting access to a few tools keyword research tools such as our SEO tools such as ahrefs or you name it. There's a ton of tools out there that can help you do the research and then, you know, of course doing your own. Due diligence, you know going out there talking to manufacturers things like that doing your own research.
Of course, you can't get around that but everything is really available. So there's really kind of no excuse for someone not to do their due diligence upfront.
Mike: Absolutely. Yeah, there are so many resources available nowadays even more now than there were like three or four years ago. When I first started an e-commerce, there's just if you have an idea you could there's companies that will help you bring that come that idea to life and they'll help you do everything from finding a supplier to shipping it to Amazon to getting it set up it.
Directly in Amazon. I mean everything can be done for you if you have an idea or I mean there's even other things like if you have if you're running advertisements on Amazon, there's something called the search term report which many of your listeners might be aware of but inside of the search term report you actually get the like know what the customers are searching for because we see the terms that they put into the search bar and then we can leverage that information to potentially get into new product ideas and new product lines, which I find really really helpful because that's actual customer information.
They give you an amount of it. Shins The Conversion rates all sorts of things to make up good decisions on potential future products.
Arlen: That's awesome. And with that goal, we're actually would that be relevant to people that may not necessarily be thinking about selling their own products. But you know these days there's a lot of Amazon Affiliates out there that are Affiliates of you know of Amazon and they promoted their products.
Would that be useful in that case as well?
Mike: It's relevant for anyone who's running advertising and Amazon and who already has some products because then they can dig into these reports. Okay, and then see what other opportunities are out there because one other place where opportunities are hiding because you're.
Into the mind of the person who's actually purchasing.
Arlen: Yeah, that makes sense. And so let's assume some of our listeners that aren't selling on Amazon. They've taken your advice they've gone out they've done their research. They either are selling deciding to sell their own product directly on Amazon or they found a kind of a niche product that they think would be successful.
They get it up and running and it's out there and. What do they go from there as far as because of course, the bottom line is to increase sales increase your Revenue increase your profit. Margin, what are the things that they can do to help increase their profits once they're out there,
Mike: right? So the first thing to understand is that Amazon will fulfill your product for you.
If you do Amazon Fulfillment what's called fulfillment by. And basically they're going to charge a certain fee for that and what we want to know is we want to know the impact that that fee is going to have on your overall margins because that is the highest of the typically for most sellers that has the biggest impact on their margins.
So we call that the FBA fee margin impact which is typically like around 25 to 40 percent and it does happen where Amazon makes mistakes so it's important to monitor that and make sure that they don't make a mistake and then start charging you for all the units that you ship out an. FBA feet so that's the first thing then we want to look at things like your PPC ad spend.
Are you spending a lot of money to Showcase your product? And is that eating into your margins excessively and if that is then you may want to lower your PPC or be more strategic and smart with your PPC. Whereas the FBA fee margin impact is 25 to 40 the PPC ad spend margin impact is typically around 6 to 10%.
And then after that you have coupons you have returns you have various other things and all of these things can chip away at your margins. So it's important to track that and the most important thing obviously is that have a healthy margin to begin with so that all of these different what we call margin eaters don't impact your bottom line to the point where there's nothing left.
There's no meat left on the bone and at the end of the day you want to have about a 30% profit margin left over.
Arlen: Okay, that's good to know. That's a good rule of thumb in I like what you say. It is far as making sure. Actually, you have a good profit margin right in place because there's going to be some things that are like you said out of your control their land eat away at it you like I said Amazon they put make mistakes.
You're going to get those refunds you're going to get returns. There's going to be fluctuation in your PPC ad spend and you know, depending on the cost that you're paying for these particular keyword. So all of those variables are things that are going to be fluctuating, you know, I guess you could say kind of on.
On a day-to-day basis and those are a lot of that is out of your control and you got to kind of play around with that. But up to I guess initially the sellers want to focus on their initial cost. What is it? What are they paying for these products and say they're using a manufacturer. What are they paying if it's being fulfilled by Amazon, you know, what are those costs and just it sounds like you really have to be on top of it.
Really? I would say I guess. On a day-to-day basis, it's not it's not the type of thing where you can I guess you could say set it and forget it and then just expect your profits to roll in.
Mike: No, it's not and I would say the most challenging part of selling on Amazon is Inventory management and that is definitely not a set and forget type thing.
There are tools that can help you like figure out, you know, all that information, but there's so many fluctuations that occur. For example last year, we ordered our holiday order in July and we thought that was plenty of time. We ended up getting our holiday order really late because of the congestion from the Trump tariffs.
People are trying to get in their orders before the Trump Towers hit and it was just like a cluster at the port and that stuff that it was very hard to really manage. And if you don't look at that on a weekly basis, it's really a challenging thing. So I inventory management is something we recommend like doing and it's totally not a set and forget type thing,
Yeah, definitely and yeah that makes a lot of sense now, you know for these sellers are out there that have you know, let's say they decided to go into the Amazon selling their out there and. They have their regular e-commerce shop of course, which is probably where they're you know, maybe they're selling the majority of their their items.
Whoops A good rule of thumb when deciding. I guess you could say how much time and how much money to devote to Amazon selling if you've got your own e-commerce present. So how do you kind of Juggle between the two
Mike: right? So I started the reverse I started on Amazon and then I built out a Shopify store also and then to be you know transparent our Shopify store never even came close to the sales that we did on Amazon.
So we quickly realized that we wanted to stick to what we were really good at and what we're good at is Amazon. So all I can say is that there is lots of. Unity on Amazon and if your Shoppers are purchasing from Shopify, they're probably looking to see if they can find you on Amazon because they're used to that whole experience on Amazon and you could also get other sales.
So in terms of how much time to devote it's hard to really say that that's going to be individualized for each and every person for us. It's 95% Amazon. Maybe even more than that at this point 98% Amazon because it works and then the 2% on Shopify at this point. I mean, obviously there's other benefits you can get your customers build your list all sorts of other things.
You can control the market easier but there's just so much volume on Amazon right now.
Arlen: Yeah, that is true. And yeah the good the main thing that you mentioned that Amazon opens up, even if you have your own e-commerce presence. You may already have customers that are let's say they're purchasing from you directly.
But nine times out of ten those same customers their Amazon customers as well as purchasing other things from Amazon and these days people are just so comfortable with the whole experience with Amazon. Most people are Amazon Prime members. Their information is stored their credit card all of their shipping preferences.
Literally, you can check out within a click or two and without any problem. So so many people are so accustomed to doing that. If you open up that Avenue for your particular business to be there, that's just I can definitely see how. There can be a huge bump in an increase because that's where people are.
You know, they maybe they're still dealing with you directly, but they're buying other products directly from Amazon. So they're already there. So you might as well go to where where the customers are already at. So, you know, that's a that's definitely something to keep in mind. Now, you mentioned one of the main factors as far as what a business should focus on and one of the things that really can help.
You know determine your profit margins is its Inventory management I cuz I know I've always heard that that you have to work on managing your inventory and especially if you're selling out of multiple channels your direct site as well as through Amazon. What are some. Resources are tools that you would recommend for Amazon sellers to help them manage their inventory.
Mike: Alright. So first off the first thing is to make sure you manage it on a weekly basis. We the very beginning we didn't do this and we ran into a lot of snags where we just because the worst thing you could do on Amazon is to run out of stock. It is probably the worst thing that could happen because then you lose keyword ranking that you built up over time and it's kind of challenging to get that back.
So having stock is like rule number one. Keep in stock. We've. Out of stock and it's very challenging to get back to the where you were before so weekly meetings is like truly important. And then right now we found the best way to do it is through a spreadsheet. We actually use a tool which is our tool called margins and then we look at the velocity the sales velocity and then we forecast how many days we have left in stock and then we have sort of like a timeframe that we use in terms of our lead time and we use a hundred and ten days of lead time just in case it's really around 90 days, but we have 20 days of wiggle room just in case something happens because.
Of experience we found that stuff does happen. So we have a hundred 810 daily time and we just do the calculations every single week and we keep on top of it. There are tools out there. We used to use a tool called for casterly, which was good. And I know there's another one that's coming out called so stocked which I think a lot of sellers are enjoying right now, but we're doing the old-fashioned way right now.
Arlen: Okay. Gotcha. Gotcha. That's good to hear and. It sounds like if you do run out of stock, you really get almost penalized for that. Is that a fair assessment?
Mike: Yeah, because Amazon looks at sales velocity and they look at the history. So if they automatically they see that for this eysan all the sudden you went down to zero sales.
It's very hard to they kind of incorporate that what week or two that you had zero sales into your overall picture and now you're not doing as well as your competition now that I'm making as many sales. And you have to maybe do something to get back up to where you were before in terms of a coupon or a launch or a relaunch or whatever the case may be and that's just not an optimal thing.
So it's like an engine and you want to build that engine over time and think about it. You have all of these different ways to say the same thing. So we call them customer Search terms. And there could be hundreds. If not thousands of these long tail customer Search terms and if you lose if you go out of stock, then you lose ranking for almost all of those long tail customer Search terms.
So it's not easy to like right away get back to the velocity and then you can get into an issue where now you've ordered a lot of stuff but you're not selling as much as you used to so bottom line is getting going out of stock is a problem that sometimes is not avoidable. But you try to have to try to avoid it at all cost.
Arlen: got you. Yeah really sounds. It's a how Google treats sites if it's lights go down because I know that's part of their algorithm is your overall up time of a site. So it's like, you know for site goes down and it's down for you know, let's say hours or it could be days or whatever the time is.
All of that is factors into Google's algorithm. So let's say your ranking particular keyword today, you know this of your site goes down and it's down for let's say five hours and then when it Google goes back, it does like we assessment so it sounds like Amazon is similar in the fact that when your inventory hit zero then yeah, it's their algorithm really looks at that and then that that.
It sounds like it's really hard to recover. Once that happens.
Mike: Yeah, it's not impossible to recover. I mean, it really depends on the skew and if you have a lot of reviews and all sorts of other factors, but it makes it more challenging.
Arlen: Gotcha. Now, I'm one of the things that I've actually I might I'm curious on my own personally as far as Amazon is concerned because it's you mentioned reviews and reviews on Amazon are huge and I don't know too many people that.
Purchase anything from Amazon that don't look at the reviews and you just blindly purchased once a business is out there. Is it particular strategy that you follow that you sent recommend to increase your reviews? You know, how do you get your customers to take the time to write those detailed reviews?
Especially the satisfied customers?
Mike: Well, we are in the pet space. So we specifically we sell to we sold cat products and people who do people just love their pets and they love to leave reviews. So we've actually never had a big problem with getting reviews. We have thousands of reviews, but we do use some systems and have systems in place to get.
Those reviews there's one thing we use as an email follow-up system, which is getting a little bit more challenging a couple of years ago. It's through Amazon's internal system. So people can now opt out of getting those emails and so not as many are delivered as there used to be like a couple years ago, but it still works and people get like a follow-up email and anticipation email and then like a kind of subtle ask for their honest opinion in that email sequence.
So that's one way the second way is to really have a good insert. And then sort of ask them if through you could settle we asked them for and their honest opinion or you can you can have them go to a website and register their product and then ask them for their honest opinion. There's different ways to do it through insert cards and the Third Way is through like following up with them on like Facebook and various other places where you can then suddenly ask them for a review or have them.
Go through a sequence that leads to an Ask of them reviewing your product. So those are the three best ways that I know of right now that work really.
Arlen: Well. That's some great advice because I know that's a that's really a big thing these days and I know personally I kind of have my own general rule of thumb when I'm looking at a product.
I I look at the four of the five star reviews and then I kind of say okay does that equal to at least 80% of the. Overall reviews and then if so, then you're actually go forward, you know, there's always some exceptions, but I know I'm not the only one that you know, puts a lot of weight on those reviews, especially if you're looking at a product that has like you said in your case, you guys have thousands of reviews when you see something like that and then you see, you know, the comparable product where they may only have.
20 reviews or 50 reviews, you know, it really makes a big difference.
Mike: Yeah, it makes a huge difference and it's like you see those High reviews. It's automatic for me. I'll buy it right away. But also the most important thing is to have a really great product and amazing value. So if there's any way to like.
Just hit people with Incredible value. That's more than what they expected. I think that's going to go a heck of a long way and that could come in so many ways shapes or forms, like nice packaging a nice insert a warm like welcome message or whatever the case may be to make people feel like you went above and beyond great customer service, whatever that is.
People are more likely to leave a review after that.
Arlen: Yeah. Yeah for sure. Well Mike, I definitely appreciate all of the info you've given us today on Amazon selling and increasing your profit margins on Amazon. I know for those listeners that aren't out there on Amazon. I hopefully they take your advice and get out there because you definitely seems like it can't hurt to at least try it and see where it goes and because otherwise, you know, you're leaving something on the table because.
Amazon for share is here to stay. They're not going anywhere. It's only going to just continually grow get more and more Prime subscribers and it's hard to say where the end is going to come to for Amazon. If it does come that I think they just going to continually grow and grow and so it's just an awesome platform.
Now, I'm you know, always like to kind of shift gears here my last question just to kind of. Pick your brain on another topic, but just one fun closing fun fact and what is one thing that our audience would be surprised to know about you just one fun fact.
Mike: Oh, yeah fun facts. So I spent about eight or nine years not traveling at all because my physical therapy and career and business was not doing well at all.
So after Amazon, I've been traveling and I love going to Europe. I've been there like three or four times in the last couple of years. So it's kind of like feast and then from famine to feast and you know, now I'm going and traveling so that's one fun fact. I absolutely love to get out there and travel.
I just got back from Barcelona Spain and I'm going to Amsterdam for a conference in a couple of
Arlen: weeks. That's awesome. Yeah, I definitely know how it is. You know when things are lean. You gotta stay put that's one thing it is not cheap to travel especially, you know, if you want to have decent accommodations and you want to have a smooth and pleasant time.
You gotta gotta have a little bit of money in your. It for sure so I know how that goes. And Barcelona is definitely on my list of places to go as I haven't been there. I've been to Amsterdam and it's a great place. I know you have a great time there. I would love to go to Barcelona as well and I gotta brush up on my Spanish.
It's one thing. I know I got to do a little bit but I'm not fluent in any way.
Mike: Yeah. I'm well, I made it through without it knowing any Spanish so you'll be good.
Arlen: Okay, that sounds great. What great Michael again at like I said, we would love having you here on the e-commerce marketing podcast. But before I let you go, if any of our listeners would like to get a hold of you and pick your brain any more on Amazon selling and increasing their profit margins.
So what's the best way for them to get in touch with you?
Mike: Sure. You could email me at Mike at PPC Entourage.com or we have a Facebook Community called the Entourage seller community. And I that's where I hang out. I'll answer any questions that you guys have.
Arlen: That sounds great. Again my for joining us today on the e-commerce marketing podcast.
Mike: Thank you.
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Founder of PPC Entourage