Podcast transcript
James Dihardjo
Scott, thanks so much for making time to chat with me, man. I have no idea what time it is where you are, but I'm assuming it's very late or very different to where I am.
Scott Needham
So it's just 3:30 in the afternoon, so it's all right. We're good.
James Dihardjo
Cool. So I just wanted to kick off by getting you to introduce yourself and tell us about what you do and a bit about your background.
Scott Needham
Yeah. I got a degree in computer engineering and I thought I was going to work for high tech, big companies, you know, interviewed at Google and Facebook and all that. But my brother started selling on Amazon and I joined his business and so I've kind of become an Amazon software developer where I kind of geek out on all the technical things and that's led me to be involved actually in about six different Amazon businesses.
James Dihardjo
Wow. It's a very extensive experience in the space then. But just on that point though, I know you are wearing a SmartScout shirt there. So tell us more about that. I mean, I've had to play around with it. I think it's really cool. But give us the nitty gritty in the, in the gist of it.
Scott Needham
Yeah. You know, some of those businesses have been exciting and some of them, have been less exciting. And I mean, I'm being like completely transparent, like SmartScout I'm the most excited for. It was an idea that came through. So, when we were doing some wholesale of just like trying to capture the entire Amazon opportunity and to find the best opportunities.
So, it's turned into a market research tool. So we're probably in the same category as Helium 10 and Jungle Scout, but we don't have any of the same features. Right now, there’s not one thing that we do that they do because we're just taking a different approach to what ultimately is product research where we, it's, it's market research. So it's very top down, you know, If you want to explore and understand market share, between brands and in niches where you can see what brands are dominating a niche and how. So we take that approach to research in the market and like really like handy filter so like the 1.4 million brands that we're tracking, in the US market alone. At the snap of a fingers, you could find any of them that fit this certain criteria.
James Dihardjo
Interesting, and are you able to tell us about what's the profile of your typical user? Are they just brands? Are they big brands, or what are they?
Scott Needham
Well, there hasn't been an aggregator out there that we haven't been able to convince to use us, so we pretty much have all of them because there's a very, specific M&A use case where we're tracking sellers as well. So we got those. I would say almost half of our users, I come from wholesale so I could speak their language really well. And, about half of our users are in the reselling model, whether that's arbitrage or buying from wholesalers.
Then, probably about 30% of our users are private label and we're building more use cases that assists that. That's kind of like the market research component. And then about 20% are, are service providers, whether they're wanting to market to sellers or if they're talking to a seller to understand them. And so, or even sometimes, some agencies will even do product research as well. So we kind of hit any Amazon professional. There's something in there that you might find interesting.
Scott Needham
Yeah. Fantastic. Sounds like you've just got the widest addressable market in the whole industry, man. That's great. But yeah, into my next question for you. So, it's 2022 now, what are your top predictions for this year in this space?
James Dihardjo
Well, I can already give something that I've seen just today is that the cost of getting goods from China to the US is going down dramatically. The quantity restrictions have eased up. So, I guess it's not a prediction, but like, it was a, a big question. Oh, even to even a few weeks ago, everyone was wondering what's going on and I really think that getting goods into Amazon is getting significantly less expensive compared to 2021 and a little bit easier because we're now able to utilize more capacity.
So, that's like a good news and so we could expect at least some counters to the inflation that that's happening. Then, if there's like a big macro level of what's going on Amazon is brands through brand registry, like they're getting it. They're doing more seller central themselves and investing in advertising. Just yesterday, I was at a show and I was telling someone that was selling on Vendor Central. I was like, get to Seller Central, here's why: Boom, boom, boom, boom. And I was like, let's have a call. Like I won't charge you at all. You wanted a opinion like, no, no, no. Like, I just want to like understand it.
And so Seller Central is being utilizing by more brands and I think that's a, a really positive thing for the space.
James Dihardjo
Cool. Oh, that's very, I mean, it's all going in the right direction for you and I, I suppose that's a good thing. Next thing, what are your thoughts on channels outside of Amazon, Scott? Because I know a lot of people were talking about Shopify, talking about Walmart. Like what's you’re thinking on that from any perspective?
Scott Needham
I'm Lukewarm on Walmart. I know that like it's there, but like everyone I've talked to that's like really invested in it, they're just not the same as like Amazon Prime shoppers, Walmart shoppers, they're probably a little bit more like eBay, they take a little bit more time and they want like the deals. So you're seeing less margin there and less volume. But Shopify I think is kind of like a holy grail of its own that like if you succeed there, it has like long-term success because lifetime value of a customer is really high if you get them converting on your own website.
So I'm big on Shopify for brands and to figure that out. I honestly, I should start interviewing Shopify experts so I can really understand, how to do that. Because yes, we have some successful brands on Amazon, on my private label, but like the Shopify is like, you know, a handful of sales a month. And so if we could scale that, then I think it actually increases the value of the brand. So if you're looking to diversify, Walmart's probably the easy thing to do. Shopify's probably the smart thing to do.
James Dihardjo
Get it, get it. Interesting. Final thoughts, Scott. Global selling on Amazon, a real value add or a distraction? What's your thinking?
Scott Needham
It comes to, it just depends the phase that you're at. I've spent a lot of time looking at international and it's not easy if you're like a CEO just like trying to do a little bit of everything. It takes time, even if you're working with a service provider that simplifies it. And you should work with a service provider. You should have people that are like, shipping your goods, getting it across the border, managing the compliance. And so if you're not able to like afford those types of things, it's probably going to be a big headache. But that said, once your brand hits maturity, it's a low hanging fruit. Because your listings will launch those new marketplaces, at least the new Amazon marketplaces with the review count. And so, you know, you, you can really, make a splash in those spaces.
James Dihardjo
Cool. Interesting, interesting perspective. Well, look, I'll leave it there. I'm just trying to get it short and sharp. But, look, thank you again for making time and looking forward to seeing you in the US and, and chatting more. Thanks again, Scott.
Scott Needham
Thank you James.
