The only thing that’s constant is change. Amazon sellers, brands, and the community need to embrace the idea that change is constant within Amazon. We need to look at change as a positive instead of fighting that change every time it occurs. Amazon brand strategist Jeff Cohen called himself a corporate entrepreneur prior to Seller Labs because although he wasn’t always the one who came up with the idea, he was the one that ran with it. From starting Textbooks.com to launching CampusBooks, Jeff moved into eCommerce and started a software company. He dives into what people should be aware of about Amazon in 2019 and beyond in terms of effective business strategies. He also touches on customer success, getting feedback, and the importance of investing in customer support.
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My special guest is Jeff Cohen. Are you the CEO or the Owner of Seller Labs? What’s your official title?
My title seems to change every week. Now, I am an owner but I am not the founder and owner. I’ve worked for the company for many years now, which is crazy to think about. I run all business development, partnerships, relationships and all that type of stuff.
Jeff, you’re probably one of the most outgoing people I know. Whenever I see you at a conference, you’re talking to large groups of people. We were at Prosper and you came over to my booth and you were giving the FreeUp sales pitch to different people. I want to take a step back and talk to me about your childhood. Were you always that way? Were you a good student? Were you a rebel? I’m always curious where people came from.
I don’t know that I would call myself a rebel, but I definitely wouldn’t have called myself a good student. I’ve always been outgoing. I’ve always had the gift of gab. That’s probably what my mom would say if you ask her. I would say that I’ve been more of an experiential learner than a classroom learner. I’ve learned more by doing and I’ve learned more by conversing with others and understand how they’re doing things. Then taking pieces and bits and parts of those things and integrating those into what I do.
Did you go to college?
I went to college. I followed a pretty traditional path. I went to high school and I went to college. I started working and I got an MBA. I had a corporate job for a number of years. It’s funny when you look at education now, we teach our kids to be entrepreneurial. We’ve learned that whether you work in an office environment or you work from home or you create a startup, the entrepreneurial spirit makes you more successful. The way I described my career prior to Seller Labs was I called myself a corporate entrepreneur. I wasn’t always the one who came up with the idea, but when somebody had an idea, I was the one that ran with it. A great example was when I started Textbooks.com, I worked for a wholesale textbook distributor. I had worked for them for a number of years. They had owned a website called Textbooks.com but had never done anything with it. I worked with the CEO of the company to develop its whole eCommerce strategy. I was the Founder and General Manager of Textbooks.com, but I never owned it myself.
Is that how you got into eCommerce?
That was my movement into eCommerce. Prior to that, the only stuff I had done was focused on building corporate websites and things like that. Back in 2005, 2006, when I started Textbooks.com after that site was launched, we did eight figures in our first year. I was considered an eCommerce guru. It was such a new industry back then that one year of experience allowed you to be that super experienced person.
You started Textbooks.com and bridged the gap between that and Seller Labs. Did you have different jobs in between? How did that transition happen?
When I left Textbooks.com, I went to work for a company called CampusBooks. My first hire was a programmer and his name was Brandon Checketts. I hired Brandon to come work for me and he worked for me for about two years. He is very entrepreneurial and had started another business on the side and it started taking off. He left CampusBooks to pursue that business. That business was a website called BookScouter. It was a site for selling textbooks. CampusBooks worked on buying, like how students bought their books. His site worked on how you sell your books. He left to run that business. A few years passed, we kept in touch. He had started buying books himself and he started buying products at USPS auction and he called me up and he started telling me about going to USPS auction and buying books and selling them online. I was like, “That sounds cool.” I hopped on an airplane. I flew down to Athens, Georgia and went to a USPS auction with him. I started buying stuff myself. I started running around my house with my phone and uploading products to sell on eBay and Amazon. I caught the Amazon bug back in 2011, 2012.
It all comes together. Back when I got into eCommerce, it was textbooks. I tried to sell my books to the school bookstore. They didn’t give me a good price. I went to CampusBooks, they didn’t give me a good price. I was like, “I’ll do it myself.” Then I went to BookScouter, which Brandon owns. That’s how I got into eCommerce. This was back in 2008, 2009 when Amazon was becoming more than just books. It’s funny how our paths intertwined there.
Every once in a while on a show, I’ll run into somebody in this industry that I’ve known for ten years. If you go back to the OGs, to the old school people in the space, most of us started in the book business. If you think about Amazon a number of years ago, it was all mixed media and books. We’ve evolved our personal businesses and our software businesses along as space has grown. A lot of us all started back in the book business.
You mentioned the software space. Let’s talk about that. With my Amazon business, I built some software and it was a pain. I’ve always said that if I was a developer or if I knew how to code, I’d be a billionaire. There are so many ideas in my head that I have to figure out how to transfer to a developer. At FreeeUp, I didn’t look at us as a software company until probably about year one. I’m like, “We had this platform. We got to start looking at ourselves as software and invest in that.” What does that from the ground up starting a software company?
It’s the same for us. We’ve been figuring it out as we go along. We knew from the beginning that we were software engineers at heart. Our core was software and software development. While we enjoyed the physical product part of the business, we had a 15,000 square foot warehouse and we were doing $3 million to $4 million a year in sales. All of the operations that we built were driven off of software that we are creating on the backend. We created our own inventory management system. We created a feedback management system. We were building all these names ourselves and then we realized that other people in the space needed them.
A lot of the software in this space, if you go back to its core, was developed for that purpose. Somebody had some need of their own and then they realize other people needed that same thing. We’ve learned a lot. None of us at the beginning had ever run a software business. A lot of it was trial and error and making mistakes. We focused on a few core pieces at the beginning that helped launch our business and put it to where it is now. One was we focused on customer success, customer support. From the beginning, we hired customer support people. We had them locally. We made it a point to make customer support a primary focus of our business. You could reach out and talk to us. People always found it funny when they would call customer support and I would respond to a ticket, but all of us did it at the beginning. I still do it sometimes for fun. I’ll go in and see if I can still answer support tickets.
Ultimately, there are things that you can automate through technology and there are things that you can automate through process.
The second part was that we focused on solving a need that sellers had in the space and we did it at an affordable price. We made it work from a pricing standpoint into something that fits into their business and helps them accelerate their business. Essentially you and I do the same thing. We use software to create outsourcing for your business. You use people to create outsourcing for your business. Ultimately, there are things that you can automate through technology. Then there are things that you can automate through the process. That’s where you decide whether you’re going to go to third-party software or you’re going to go to an outsource. I also think timing has a lot to do with everything. I know you talk about the gig economy and how we’ve grown in this economy of paying other people to do services for us. We’ve also grown in the SaaS economy, which is a Software as a Service economy. Many years ago, most of the stuff that we use now were all on enterprise contracts and they weren’t available to everybody in a very easy manner. Now, they are. We were at the forefront of that world when it broke over the last number of years.
Let’s talk about customer service. You know how seriously I take customer service. It’s one of the reasons we love partnering with you and we know that if we send people your way, you’re going to take good care of them and vice versa. You can’t compete with every single big business out there on marketing and software, but you can always compete on customer service. Some people start with that mindset but as they scale, it gets harder and harder to find the right people that makes that customer service at the same level with twenty people as you had when you were just doing every email yourself. Can you talk a little bit about that and how you’ve been able to hire people that have that same high standard that give the same end result to your clients?
It’s the same as outsourcing, building process training and developing company culture. It’s silly when I’ve read about it in books. We studied Zappos and we studied these other companies where the culture was built around customer success. We’ve built that into our core as well. Our engineers at the time pair with customer support so they hear what the customers are complaining about. We don’t do it as much anymore, but we used to bring engineers to trade shows to hear about it directly from the customers. We train our customer support people, not just on our tools but on how to take information from a customer and turn that into a fix or a feature.
We also train our customer support people how to understand whether a problem is user error or a software error because that’s a tricky thing as well. Customers always want to believe that the software isn’t working. Sometimes it’s the customer who isn’t working or the expectation of the software is different than what they’re getting. By training and retaining, we’ve been able to retain our customer success people. Tyler, who works for me in business development, came from customer support. Caroline, who a lot of people have met at trade shows, came from customer support. One of our lead engineers started as a customer support person. We see customer success in our company as an entry point into all different positions in the company.
The person who is our lead strategist for our managed service around advertising started as a customer support person and the person who does sales. We have all these people in our company who grew out of customer support. When you get hired for your first job at Seller Labs and you’re making an hourly wage, you look around the company and you see all these other people who work at the company now, they started where you are. You see a path for the growth of your career and you buy into the customer success philosophy that we have. You see that by doing well in your job, you can grow. Finally, the whole company, every employee in the company is bonus-based off of customer success. We don’t talk about it as one person’s job to do it. We consider every role in the company to be critical to customer success. We have a metric that we follow around customer success. That metric is something that’s part of everybody into your bonus.
I made a Facebook post that customer service is that position where you have to retain people. If you’re turning people over every six months, it becomes impossible to build relationships with their customers. People see other people leaving, they want to bounce. Customer support is one of those things you have to invest in. You have to get out of the mindset of, “They’re cheap people, they are just followers and I’ve got to low ball them and save money there and invest elsewhere.” You’ve got to keep money in customer support and I love bonusing based on that. Can you give people a feel for how many developers you have, how many customer service people you have? Talk a little bit about how they communicate with each other.
One thing about what you just mentioned, which is that our turnover of customer success is people leaving for other positions in our company. It’s funny because John, who runs our customer success, is constantly like, “We hire and train people so well in customer success that within six months to twelve months, they’re ready for another position in our company.” It becomes a feeder system for the company. In terms of how the interaction works between engineering and support, we’re around 60 employees. We’re probably a third, a third, a third. We’re a third around general operations marketing product. Then we’re a third around engineering and a third around customer support. Those numbers all shift in different ways over time, but it gives you a general sense of about where we’re at.
The way that we work together is that both our customer support team and our account managers, they pair with engineering and they pair with the product team. For example, our account managers have a list of feature requests. They wait for that feature request list based off of who’s asking for particular features. Then on a regular basis, I don’t remember if it’s weekly or biweekly, they meet with the product team to go over what the biggest needs are from the market that they see. Customer support does something similar to that and they’re able to bring that more from a bug enhancement standpoint to say, “If we solve these three issues, it will reduce the number of emails that we get or the number of phone calls that we get.”
We look at all of these different channels and we look at how we can use those to improve our product. Finally, we have what we call an engineering escalation team, which pairs with the customer support team on a weekly basis. A lot of our issues can be resolved specifically by our customer support people digging into the software. Every once in a while, we need an engineer to have to go in and do a deeper dig. This happened at the trade show we were talking about. A customer brought a problem to us. We could see that the problem existed, but we needed an engineer to go in and figure out. When a customer tells you a problem or a challenge, they’re telling you what they see.
It’s the customer support’s job to figure out, “Are they seeing the wrong data? Are we presenting the wrong data? Are they interpreting the data incorrectly? Are they trying to do something with the data that’s different than what we intend the tool to do?” They have all these things that they have to go through to figure out like, “Is it a bug? Is it an enhancement that needs to happen? Is it retraining? Is it marketing that needs to change the wording of something because there’s added confusion?” In this particular case, we were able to go and we needed an engineer. The engineer went and dove into the data. We realized that we had all of the data on the backend but for some reason, part of their data wasn’t showing up on the frontend.
If you wait for the product to be perfect, you’ll never bring it to market.
We were able to get back to the customer within an hour and tell them that we understood exactly what the problem was. The data was there, the data was present and we gave them a timeline for fixing the frontend of the problem, which has now been resolved in less than 24 hours. That’s the way our teams pair and work with each other. That’s a prime example. We have somebody on the customer support team whose specific role is taking the information from customer support and translating it to engineering for deeper dives and information.
We’ve built out all these systems and processes as we scaled as a business because it’s easy when you’ve got a couple of hundred customers. When you start getting to thousands of customers, you have to build all these systems, processes, procedures and ways for the departments to interact with each other. When we stepped back and we look at where the company has grown and we’ve matured as managers and facilitators of the growth of the company, that’s the stuff that blows us away. I know how support worked a few years ago when I started and I know that it was a cornerstone of our business. Now, it works in a totally different way and it’s still a cornerstone of our business.
That’s gold, the communication between the support staff and the software side. Even with FreeeUp, we do the same thing. People report bugs or different feedback and if you don’t have that open communication and the actual process to communicate back and forth, you struggle. It took us a little while to figure that out. Let’s go back to year one. I know with a software company, you could spend forever trying to perfect that product before you get it out there. Especially with Amazon when things are constantly changing, how do you find that balance between, “Let’s keep improving the software to let’s get it out to the market and get some feedback and get people using that?”
What you’re talking about in software terminology is called MVP versus product-market fit. Your MVP is what’s the basic level of product that I need to bring to market so that I can then determine whether the product-market fit is there.
MVP stands for the Minimum Viable Product.
When we started, we did MVP for a software. Now, we do MVP for a feature. We work in what’s called an agile development process. What that allows us to do is we’re constantly iterating and developing. What happens in a development type of sense is that if you wait for the product to be perfect, you’ll never bring it to market. It goes right back to sellers on Amazon who are trying to keep looking at the data and they’re trying to make it all work for them before they bring their product to market. That’s not the way sourcing products for Amazon or developing software works. You have to bring a product to market and then you have to continue to iterate on that based off of what the market says. Whether they’re physical product or software product, you bring a product to market. As you get feedback from the market, you start to change your persona of maybe you thought that the product was for a 24-year-old female, but then you realize that when you bring the product to market, it’s a 45-year-old female who’s your key buyer. You have to start changing how you do things as you see the market fit.
I heard this from a great restauranteur. I live in Chicago and there’s a guy here who owns a business called Lettuce Entertain You. They own hundreds of restaurants around the city. Somebody asked him once at a fireside chat, “When do you know that your restaurant will be successful? What is the critical point of success in the restaurant phase? Is it at launch? Is it at year one? Is it at year five? Where does that happen?” He said that with an 80% accuracy, he knows that a restaurant concept will be successful within the first 21 days. Now to go deeper into that, the reason he knows that it is successful within the first 21 days is because he brings a minimally viable product to market on day one. He has 21 days to adjust the menu, the decor, the hours, all the things that work within a restaurant business. If he can’t hit product-market fit within that 21 days, then that market concept that he brings isn’t going to work.
What he said and I thought this was interesting because I like taking parallels from other industries and bringing them into mind. What he said was that the restaurants that fail are the ones that launch and expect their concept to work. When they hear the feedback that their concept isn’t working, they don’t want to hear it. They keep saying, “That person doesn’t know this or that person doesn’t know that or they’re not intelligent about this or they don’t understand what I’m trying to do with that.” The person that succeeds is the one who listens to all of that feedback and goes, “They weren’t looking for this to be a $20 entrée. They were looking for this to be an $18 entrée. We should do some pricing menu options and see what this is going to be.”
Our ability, Seller Labs’ ability or anyone’s ability to hear the feedback from the market goes back to feedback genius. We’ll take this back in a loop. Take the feedback that you get from your customers and iterate your product based off of that feedback. If you are getting a bad review, then you should figure out why are you getting that bad review. A lot of people when they get a bad review or when they get negative feedback, they just go, “That person doesn’t get it. That person doesn’t understand.” What we try to do as a business is we try to understand who is that customer? Does that customer fit into our core persona? Our persona is who we’re targeting our software to work for. If you fit inside that persona, the value of that enhancement that you’re looking for becomes more valuable.
If you sit way to the right, which is a stretch goal of who we want our software to work for, we try to not get distracted by that. If you’re way to the left, meaning that you’re not ready for our software just yet, then maybe we look at how we train you up to work for our software? One of the things that have made Seller Labs successful in our ability to grow is understanding who our market is, understanding who our customers and our target customers are and developing our product to work for them as opposed to trying to be the everything for everybody type of solution.
Everyone’s eager to want to try the new things that come out.
Those people that follow me know how important I stress feedback. When you get feedback, you have two options. You can take it personally and say, “I’m right and the client’s wrong,” or you can listen to that feedback and make adjustments. I obviously recommend option two. I can’t let you go without talking a little bit about Amazon. What’s going on in Amazon in 2019? What should people be aware of? I know one of the cool things about you and your company is you have a very close relationship with Amazon. I feel that gives you a little bit behind the scenes look at what’s going on. What can you share with people that they maybe don’t know or don’t think about when it comes to Amazon in 2019?
I think in Amazon 2019, the only thing that’s constant is change. Amazon sellers and brands and the community needs to embrace the idea that change is constant within Amazon. We need to look at change as a positive. A lot of us want to fight that change every time it occurs. I was thinking about this same question coming out of the Prosper Show. I try to look at, “What are the themes that people are more interested in 2019 than they were in 2018?” One of the interesting themes was I didn’t see tax as being as big of an issue and concern as it was in 2018. Sellers have gotten an understanding of tax. They have a better understanding of what tax is and how they needed to do it with their business.
The big concern right now on the first party side is, “Will first-party still be there for some of these brands and do they need to be considering a third party?” That probably doesn’t affect third-party sellers as much as it affects first-party sellers. I think it’s a 2019 theme. Advertising continues to be a 2019 theme. Amazon released five or six features through Q4 around Amazon advertising from bid controls to product ad targeting to new auto campaigns and targeting within those. Sellers are trying to understand what all these new features are. I talked to a seller at the show who said, “That didn’t work for me.” I said, “What did you do?” He goes, “I took my existing campaign that was working and I started doing product ad targeting on it and it stopped working.” I was like, “You can’t take something good that’s working and then change course. You’ve got to have a strategy. You’ve got to have KPI metrics that you’re looking at. You have to have a testing period. You should probably start a testing campaign. Don’t do it in your existing campaigns.”
Everyone’s eager to want to try the new things that come out. Advertising is going to be releasing even more of them in the future because Amazon’s generating a ton of money from advertising right now. The other big theme for 2019 is going to be logistics and profit. I think they’re going to go hand-in-hand. Logistics are everything surrounding your product and warehousing and shipping. While shipping your products over from your manufacturer and getting them into the Amazon warehouse isn’t going to be the crux of that, sellers are going to start looking at 3P options.
Sellers are going to be looking at inventory management options that allow them to maintain inventory somewhere close to an Amazon facility. Think about this. Long-term storage fees are gone. This concept of being charged twice a year for long-term storage fees, they’re now being charged monthly, which means if you keep that inventory in Amazon over 180 days, your bill starts to go up. What else happens in Amazon? On October 1st, all of the fees in Amazon go up considerably. If you’re used to shipping in three months’ worth of inventory at a time and you’ve got a 90 day turn on your inventory, there’s nothing wrong with that nine months of the year.
As you start looking now to Q4, you better have a strategy for how you’re going to send your inventory in. If I hit the dock on September 1st with 90 days’ worth of inventory, what happens to my fees in October when I have 60 days’ worth of inventory? Then in November when I put another 90 days, my fees for November and December go up dramatically. There are going to be some shifts of strategies and philosophies around logistics in terms of how I send in 30 days’ worth of inventory and how much inventory I hold there and where I hold that inventory in the meantime. I’m not a logistics person. That’s not my thing but I know that’s going to be a major theme as we move forward.
Jeff, where can people find out more about you, contact you and tell people a little bit more about Seller Labs?
SellerLabs.com is our website. You can find me on LinkedIn. That’s probably the best place to converse with me personally. I like to use LinkedIn for business, Facebook for my personal life. You can connect with Seller Labs on our blog. We have a lot of great content that we put out there. For those that aren’t aware of Seller Labs, we’re software that provides reputation management, advertising, management and listing optimization. We do it for you through a managed service. We do it with you through our software or you can do it yourself through training and self-service. We have a lot of different options that are out there depending on where you’re at, how much time you have and all that good stuff. Thanks for having me on.
Thanks for coming on. I’m so impressed because you must have talked to twice as many people at Prosper than I did and I’ve lost my voice. I’m struggling now and you seem like you could talk for the next five hours.
I’m going to be drinking some hot tea.
Have a good rest of the day, Jeff.
As a versatile revenue generator and brand entrepreneur, I have leveraged my strong skills in leadership, creative resources and problem solving to deliver greater market position, higher brand awareness and more positive outcomes for industry leaders. I have smoothly managed numerous large-scale projects to improve profitability, piloting marketing campaigns and provide unique e-commerce platforms. I offer a collaborative approach that involves working closely with revenue cycle teams and multiple departments to resolve operational issues and initiate optimal solutions within competitive market spaces.
As a self-starter and team builder with a strong desire to succeed in whatever I do, I have an inherent ability to quickly identify and remove barriers to operational excellence. In addition to my deep abilities to develop and implement workable solutions that fuel business success, I have a proven record of harnessing technology to meet changing business needs and market requirements.
One of my best accomplishments has been to spearhead the entire launch lifecycle and achieve dramatic success with new websites: CampusBooks.com and Textbooks.com. Throughout my career, I have earned a solid reputation for always meeting the goals and objectives of any organization with which I am associated with.
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