Welcome to a special celebration as Kevin King hits his 100th episode milestone as the host of the AM/PM Podcast. Today’s guest is the incredible Neha Bhuchar, an ex-Amazonian turned seller champion. Together, we’re peeling back the curtain on Amazon’s Pay-Per-Click advertising, providing a deep dive into how a seller’s nuanced understanding of Amazon’s A9 algorithm can catapult their PPC game to new heights. Neha, with her intimate knowledge of Amazon’s inner workings, shares her journey from insider to advocate, bringing to light the distinct advantages of algorithmic savvy and having an account manager who really gets the seller’s perspective.
This episode isn’t just about strategies; it’s about understanding the vibrant tapestry of e-commerce in India, a market bursting with potential and challenges that Neha and Kevin explore with fervor. We’re talking about the synergy between inventory, search rank, competitor activity, and how they can amplify your advertising impact. The conversation goes beyond borders, addressing the logistical and cultural peculiarities, including the widespread practice of cash on delivery and Amazon’s ingenious approach to tapping into India’s e-commerce explosion. It’s an enlightening discussion for any seller eyeing global expansion, especially in one of the world’s most rapidly evolving markets.
Wrapping up, the focus shifts to the precision of data analysis and the strategies that separate the big players from the small. From dissecting Amazon’s A9 algorithm to understanding the critical role of negating non-performers and day parting, Neha and Kevin share their hands-on experience and insights, equipping you with actionable tactics. Whether you’re launching your first product or refining your ad spend, this centennial episode is packed with under-the-radar techniques and wisdom to help you enhance your brand’s online visibility and skyrocket sales. Join us for this journey through the maze of Amazon advertising, where we celebrate knowledge, growth, and the future of e-commerce.
In episode 394 of the AM/PM Podcast, Kevin and Neha discuss:
00:00 – Insider Insights on Amazon Advertising
00:13 – Insights on PPC Optimization for Sellers
01:18 – Experience in E-Commerce and Amazon Ads
07:48 – E-Commerce Growth in India
09:48 – Logistics Challenges in Indian E-Commerce
15:41 – E-Commerce Trends in India and Abroad
20:52 – Automating Inventory Management for Ecommerce
27:42 – Amazon PPC Strategies and Best Practices
34:37 – Factors Affecting ECTR on Amazon
38:19 – Amazon Advertising Strategy and Data Analysis
41:00 – Boosting Low-Performing ASINs
46:24 – Making PPC Fun to Talk About
47:00 – Kevin King’s Words Of Wisdom
Transcript
Kevin King:
This is the 100th episode of the AMPM podcast that I’ve been hosting. I took over at episode 294 and this is edition 394, and my guest this week is Neha Bhuchar. Neha is from India. She used to work for Amazon and now she’s gone to the good guy side and is actually working for sellers. So, we talk about everything PPC. She’s got some fascinating insights on how you should be doing your PPC, what’s working right now and what’s not. So, I think you’re going to learn quite a bit of actionable stuff in this episode.
Kevin King:
Welcome everybody and look who I have. I have Neha Bhuchar here with us today. How are you doing, Neha?
Neha:
Hey Kevin, I’m doing very well. Thank you so much.
Kevin King:
How long have you been involved in this e-commerce space?
Neha:
Yes, so I have been in the Amazon advertising space for over seven years now. I joined Amazon in late 2016, 2017. That’s exactly
Kevin King:
Amazon, actually the company Amazon, the company you joined. Just want to rephrase that you actually worked for Amazon.com actually.
Neha:
Oh, yes, Amazon.com. I was in the India team, but worked very closely with the global team also, and I joined them and I joined the advertising team and this was way before when, you know, advertising was still in the nascent stages and so got the chance to work on a lot of different roles while I was at Amazon I should say Amazon.com, just to avoid any confusion so I’ve worked in a lot of roles while I was at Amazon ads, did product management, led an account management team, led sales so pretty much I’ve been around, understand the inside out of Amazon algorithms, why we do what we do. I mean why as Amazon, why they do what they do and how does it impact sellers, what is the thought process before every different launch. So, I think I literally understand every single thing from there and in around 2022, that’s when I actually started thinking that I’ve seen so many different softwares just missing something and I can talk a little bit more about it. You know missing what and that’s when I actually decided to leave Amazon and start something on my own.
Kevin King:
Now this is. You’re the co-founder, right? Do you have a partner in the company, or is it just you?
Neha:
No, I have a partner and, interestingly, even my partner is ex Amazon advertising, so we are full-on, you know the ex-amazon team who knows ads inside out.
Kevin King:
Let me challenge you on that. When I call up Amazon’s PPC people or support or whatever, a lot of times I don’t think they actually know what they’re doing. So, a lot of times, you know the people that are working at Amazon may know the basics and they’ve gone through some training, but they’re not in the weeds doing it. It’s not their money, like it is our money. There’s a difference when I have my $10,000 budget online versus them. Oh, you should try this experiment, or you should do this. Like you said, you’ve been in the belly of the beast and so what’s the difference? And I’m not knocking this, I’m just saying that. I just want people to understand that there’s two different worlds there, two different perspectives people are coming from. I think it’s a major advantage for you because you know both. How do they actually teach the people? Because when you started on Amazon in 2016, you probably had no PPC experience. I know you have. I think it’s your Chemical Engineer or something. These engineers are always in the math stuff. They’re always into the PPC stuff, figuring things out, but how did they actually train you? Or when you were there, when a new person gets hired on, how do you actually train them on PPC when it’s really not their money? So, you know they screw up. They’re like, ah, no big deal, we’ll do it right the next time. Versus I screw up. I’m like, oh, that was money out of my pocket.
Neha:
Yeah, so I’ll explain. When you call up the Amazon PPC team, you’re probably speaking to a support team. Now, the support team is not your account manager. The support team is talking to 1,500 different brands or whatever 20 different brands in a day, right, they don’t have context. They cannot solve issues in a in a holistic manner. They can give you best practices and they can probably give you some SOP driven you know responses that, hey, you know, we have seen that. You know last time when I spoke to someone. Or we have seen through our SOP that you know if you have a problem A, you can solve problem or you can solve it using a solution B right, so that’s how it will work. Now, if you have an account manager, a dedicated account manager, who is talking to you, let’s say once every week, they know-.
Kevin King:
A SaaS rep or a dedicated PPC manager.
Neha:
Like a dedicated PPC manager, so that person knows your advertising.
Kevin King:
Not a SaaS rep who just handles everything, but actually a dedicated PPC manager.
Neha:
Yes, a dedicated PPC manager. That person knows your advertising inside out. They know what your business is like. Sometimes they might even be talking to the category team about you, right? How do you? How to grow you? Now, this kind of treatment, of course, will be available for only the big vendors or the biggest sellers, but when they get support from the advertising team, who does probably monthly business reviews with them, they get the detailed stuff. They’re not getting just best practices; they’re actually getting customized or personalized recommendations based on their data. So, there’s a difference between if you’re talking to a support team who is looking at your data just for 5 minutes or for 10 minutes. Of course, there’s going to be a difference in how they can explain to you as to what is the best course of action versus a dedicated PPC manager who’s been looking at your data and your growth for months. So, the account management team that I led actually did the latter, which is they actually grew brands from, you know, an X sales to Y sales using PPC. So, they were catalysts in, you know, working with their agencies or working with the brand managers to do that.
Kevin King:
What was an example of someone that came in on your team that maybe they were doing a million dollars in sales and, as a result of what you guys were able to do for them, they’re now at 20 million or something? Was there some example that you can, without naming the name of the company or something, but give?
Neha:
Yeah, so I’m not going to name the company, but the examples that I worked with, or my team worked with, were basically brands in India. In fact, one of the brands actually recently IPO’d in India, so my team was actually taking care of that brand.
Kevin King:
On Amazon India or Amazon US or all over.
Neha:
On Amazon India.
Kevin King:
Okay.
Neha:
So that brand was selling in Amazon India and my team was actually taking care of that brand. So that brand was selling in Amazon India and my team was actually taking care of one of them of that brand, and we used to have or the team used to have meetings with them once every month, looking at their retail data, which is their Amazon or seller central data, vendor central data, as well as their advertising data, matching that data up and then giving them best practices or, you know, personalized recommendations as to what or how should they be improving their advertising going forward, what should they be doing? In fact, one of the things that we devised when I was at Amazon was a holistic method of advertising, and this is exactly what I talked about at the Prosper Show too. Holistic advertising means marrying signals from seller central to your advertising. So signals like what’s happening to your inventory, what’s happening to your search rank, what’s happening to your competitors, what’s happening to your content quality, so on and so forth. You look at those signals, marry those signals with advertising signals and then tell them or give them recommendations on advertising. For example, inventory is low Right now. This product needs to be. You need to divert spends away from this product and put it on some other product, or you’ve been spending too high on your lowest or bottom selling ASINs, which is a problem a lot of sellers do. By the way, it is not funny how many times I have seen this. You need to prioritize the right ASINs better. So, you know we used to do that, and you know we’ve actually helped the brand grow quite as much. I think percentages are probably it’s been a while now, but the brand recently IPO so they grew and they grew mostly on Amazon and one other e-commerce platform which is here in India, so did pretty well and that was dedicated PPC support that the team was giving to them.
Kevin King:
And India? Isn’t the PPC a little bit less competitive than like the States, for example? Or is it super competitive in India and the pricing is a little bit cheaper and stuff too right?
Neha:
Pricing is a little bit cheaper. But I mean, if you’re comparing, you might not be comparing apples to apples, right? So US is a bigger economy too, so the prices are cheaper because that’s what you know the market is used to over here products are cheaper too. Yeah, but then the D2C market in in India is probably going to explode in the next five years. So, it’s this is going to. This is prepping up for being one of the largest d2c markets in the world. The population is the highest in the world, so consumers are mean. You will not find a bigger consumer market than India.
Kevin King:
The problem with India, though isn’t it that the logistics is still the stumbling block? Because I think when Amazon was, you know it was flip cards, and there’s several other big ones in India, but Amazon, one of the issues has been logistics. I mean, it’s easy in Mumbai or Delhi or some of the other major cities easier, but you have a lot of rural population that doesn’t even have really an address, it doesn’t really have you know, go to the third door, past the second cow, you know whatever. That’s where the delivery is made. So, isn’t that the challenge to India becoming the next big? I agree with you. India has massive potential, and then a lot of people are still unbanked in India too, so what do you think is going to take? What do you think is going to transform everything?
Neha:
So first things first. I think didn’t you put out a post very recently where you talked about Uttarakhand and how Amazon delivered has been delivering stuff to a remote village in Uttarakhand?
Kevin King:
Yeah, I did.
Neha:
Yeah, so actually for the last four years, Amazon has been delivering not just Amazon, actually Amazon and other e-commerce companies they’ve actually been delivering to 99.9% of Indian pin codes. That’s the difference of how logistics are improving in India, and I think the first problem that Amazon faced when they came to India was Indians don’t pay, or they did not trust paying online, and so you know companies, e-commerce companies they devised something called cash on delivery. COD is what it’s called Cash on delivery means that you’ll deliver and the person will actually pay you when you know they, when, let’s say, an Amazon representative is giving you the parcel, that’s when the person pays you in cash. So, they devised it and slowly and steadily, you know, people started trusting the e-commerce websites a little bit more, I think when I moved back to India. So, I was in Canada for seven years. That’s when I was doing the oil and gas stuff. When I moved back, I think e-commerce penetration was about less than 3% and I think it’s about 15-ish to 18% now and e-commerce penetration in India. So, I think it’s about 15-ish to 18% now, and you know e-commerce penetration in India. So, I think it’s growing, and it’s grown really fast. I mean Indian government is putting in technology. You know payment technologies, logistics are improving, so I mean I think it’s poised for growth.
Kevin King:
And in Amazon they’re doing something like something called Amazon Bazaar or something like that too. Right, yeah, they’re spending a lot of money there. They see the potential and I think it’s there too. The COD it’s interesting. You talk about the COD that used to be big in the US. I mean you’re too young to know this, but when credit cards first came out in the 1950s, hardly anybody had it. We were like India now back then and into the 60s and 70s still a lot of people didn’t have credit cards. They were still afraid to give the number over the phone because there’s no Internet. And when I first started my first e-commerce what’s now e-commerce business back then it was direct-to-consumer through the mail, physically sending a flyer or a brochure or something through the mail. We did COD and you would actually attach. We took a credit card but we probably had I don’t know 20%, 30% of our orders were COD and so that we could mark the COD cash only. So that means they had to actually physically give the driver, the delivery driver, you know count out the money into their hand, or it could be a check or we could say certified check. It had to be an official bank check and we used to do that for customers and people would send me stuff that way. So, I had a supplier that didn’t want me to wire the money or didn’t want it. They wanted the money. They didn’t want to give me their $10,000 worth of product unless they knew they had their money in their hand. And so, they sent us. Just a quick little side story here. This is the probably 1995, 96, something around that timeframe. They sent me about $10,000 worth of merchandise and said COD cash only. Cause you know I was a new buyer of this supplier. I get that, the order comes. It’s UPS that delivers it, the UPS driver, you know, I give him the money, he gives me the products, no problem. About two months later I get a not, we have like three. This car pulls up into our parking lot, has no white walls, no white stripes on the tire, which means government tires, government cars. It looks like one of these, you know little Cadillacs. Out come three guys in suits and come up to the door and I’m like, can I help you? Like we’re with UPS Investigations, we’re here to investigate some deliveries. So I’m like, okay, so they come in and make a long story short turns out, the UPS driver stole the cash and made some sort of claim, he kept the cash for himself and so he got in trouble. We didn’t get in trouble, but they were just wanting to get some facts and some information and stuff. So, yeah, so I’m very familiar with the COD system because I made money that way and I paid that way. But it’s the fact that they’re doing that as a precursor to what’s going to happen next, so it basically proves that people are willing to do that. So, the next step is, like you said, people get comfortable and, and you know, they start figuring out. In India a lot of people still don’t have credit cards, but there’s other ways to pay on phone, just like in China, and other ways to do stuff. So I think it’s. I think it’s a huge market. Is it a market that you would recommend western sellers explore? I know there’s certain rules you have to have an Indian, the owner has to be Indian citizenship and there’s some hurdles a little bit. But is it something that you recommend that Western? And it’s hard to get the money out. Sometimes there’s some rules on because Indian wants to keep it, help their economy, not like help some other economy. So is it a market that you recommend people look at from the Western world?
Neha:
I think it might be too early for a US seller to do this to India. A Chinese seller might do it because cost. So Indian consumer is also very cost conscious. So I think if there’s a US seller bringing in products here one of course there’s going to be a heavy excise of heavy duty on the product which is being imported to India and then the product becomes more expensive and so you know, it becomes very hard to sell those products. I think there’s been a recent trade partnership between India and EU, and was it EU or UK? I’m sorry I’m forgetting, but I think that’s going to make stuff easier for a trade between India and EU as well as back. So I think those kind of things really help if the duties go off, because otherwise the stuff just becomes, the products become really expensive and then a cost-conscious Indian would just now that they travel so much to the Indian US there’s so much travel they would rather just go there and buy it rather than buy it here in India for double the cost or triple the cost. There have been products which are like 6x the cost through global selling. I mean there are still products in India that you can buy via the global selling program, but they’re 6x the price and it just doesn’t make sense. I think in some more time, if these duties are lifted or there is some way to bring the cost down, I think that might be a good time. But I think until then Chinese sellers selling in India that I’ve seen, and that’s pretty common. They normally partner with people here, so people would just get stuff from China and then white label it and then sell it, or privately will it and sell it. But us I have I’ve heard less cases of that happening us or so in India, is there a big?
Kevin King:
is there a big push to get more sellers? I mean, like in the US? You know you have all the guys doing YouTube videos and here’s my Lamborghini and how much money I made and take my course. You have big events like Prosper and SellerCon. You go to China. You have similar things you know with. Every Sunday in cities in China there’s 2,500 Amazon sellers and workers from companies that meet for events. Is any of that kind of stuff going on right now in India? Are young people or not even necessarily young, but are people starting to say, hey, maybe I should jump in here and start selling e-commerce? Are you seeing a trend there, or is it still kind of quiet and just kind of moving along? What are you seeing?
Neha:
It’s pretty aggressive. I think, like I was saying telling you earlier, right, the D2C market is exploding. I think India is going to overtake US in terms of the number of D2C companies that are coming up in India, because I think there’s a way, right, that people are saying that you know we are going to Indianize, you know the kind of brands that are there in US or just come up with more innovative brands that India hasn’t seen before. So it’s a pretty good time to see, to be in India because you know, as a consumer not as a SaaS founder, but as a consumer, because you know there were things that you know you used to only think or aspire for when you would see, you know, a developed country like US or UK, but all of those things are now available. You don’t really have to go and buy it from a foreign country or just and like, if you’re traveling I mean, unless you are really looking for a specific, specific brand you have a lot of it available and those are the things that are being customized to Indian tastes or personalized to how the Indians buy. But, yeah, I think, as a consumer, things are changing. So, I think, and the way we are seeing the projections India is going to be one of the largest D2C markets in the world in a few years’ time.
Kevin King:
So, I know there’s people that are leading sourcing trips to India. A couple of different people lead that but are there big meetups of e-commerce sellers in India like we have here? Is there a version of a Prosper show, for example, or a version of a SellerCon or something like that in India?
Neha:
There are quite a few, but they’re not as frequent right now as, like you said, in China right, they’re not like weekly, so there’ll probably be about four to five different shows. There’s ad tech and there’s a couple more but they’re not as frequent like I said, so they’ll probably be four in a year you said you started your agency, you were doing Amazon India.
Kevin King:
You started helping people in India, or so you’re just helping people in India. Now are you also helping a lot of people in in the US and in Europe as well, on the PPC side?
Neha:
When I was in Amazon, I saw I was helping a lot of brands and agencies. I saw that there was office, but most of the software they were very siloed. They would only look at PPC. So it will probably look like sometimes you know a bid up and down. You know all you’re doing is a bid up and down. The softwares were great, I think. It’s just that I thought that Amazon ads cannot be run in silos. It has so much history from. It has to take signals from. How’s your inventory health? How’s your product quality, your content quality, product quality as well as content quality. What is your competition doing? What is your pricing? Like those signals impact advertising, like there’s no tomorrow. Let me give you an example. Let’s say you have 150 products and you’re sourcing them. Half the products you’re sourcing them from China and half of them you’re getting them from locally. Sourcing them locally. There are three products. One of them is low stock. When I say low stock for product number one, I mean that because it’s being sourced from China, it’s about 50 days, or let’s say 30 days. Actually, let’s not go that high. 30 days of inventory is left. At this point you are probably freaking out because if your inventory doesn’t come on time, you will go out of stock and Amazon does on time, you will go out of stock and Amazon does penalize you for going out of stock. So, the best thing to do is to lower your sales velocity so you don’t go out of stock, and the only way to do it is to pause PPC at that time on that specific product. Now, for such a long, large catalog, you can’t be doing this manually and we’ve actually seen Slack messages being exchanged between brands and agencies saying, hey, pause my product because I’m going to go out of stock because inventory is low. So why can’t this just be automated? Why can’t?
Kevin King:
There’s an argument there on that exact thing that you’re talking about. Is people always one of the ways is like you said, reduce PPC. In other ways, people raise their price to try to slow it down. But there’s also a school of thought that says, no, that’s wrong, that you should actually go out with a bang. You should actually go out. You go out. You want to go out winning the Superbowl, not losing in the first round of the playoffs, for example. So you want to actually maintain. If you can raise your price and maintain the level, by all means raise your price. But you want to go out selling 25 units a day. It’s better to do that and be out of stock for two weeks, let’s say, than to actually lower your sales to 15 a day so that you never go out of stock. There’s two schools of thoughts on that. What does the data show you or what does your experience show you, as which one of those is correct?
Neha:
Anyone who is saying that might have their own experiences, but I’ll talk about mine and I’ll back it up with data. So, there are studies that we’ve seen and also real-time data for example
Kevin King:
Your studies or studies at Amazon?
Neha:
Studies from a company called Profitero. I hope everyone knows about it. So, they actually have done studies which tell you that when a product goes out of stock for, let’s say, one day, it takes two days for it to come back, regain full sales volume. Once you’re out of stock and then you come back into stock, you’re not going to be at full sales volume on day one itself. It’s going to take two days. When you’re out of stock for four to five days, it’s going to take you six to seven days to regain full sales volume, and if you are out of stock for more than a week, then it’s going to take you even more time. So, this is an actual study where they’ve done I think they’ve analyzed about a million ASINs, low stock ASINs, and they’ve analyzed how do they perform when they go out of stock and then when they come back in stock. In fact, not just that, we’ve also seen you know the curve is not. You know you go out of stock, and you come back in stock and your sales is back. The curve is always, always, you know, very slow and steady coming back to, you know, full sales volume so um, I just think that you don’t lose one day of sales when you go out of stock for one day. You lose, uh, two days of sales because that’s the time that amazon is taking to actually, you know, test and test waters and ensure that you know they can show your products on search rank number one. The you lose start losing search ranks when you are out of you ranks, when you are low stock already, because Amazon is going to take more time to deliver the product, so on and so forth. So those are the kind of impacts, the soft impacts, that start happening to your product when you are low stock and then just to regain that back it takes you even more time. So, isn’t it just better to reduce your sales for some time? You could do it from by increasing prices. I have just seen that. I’ve just read. I don’t know about increasing prices right now. I have read this, so I’m please take my words with a pinch of salt, but I’ve just read a lot of people talking about increasing pricing may not be the right thing to do and I don’t even understand their reasons, probably at the time, because I mean there are very conflicting views that I read, but I just thought that and I think that’s what we understood that you know when you are reducing your PPC I’ll just completely pausing your PPC. That’s when you know you keep your stock intact, don’t go out of stock. As soon as you restart PPC when you’re back in stock, you actually don’t take time to regain sales volume. You’re back in the game on day one and we are actually going to show the graphs which show that you know you reduced your or completely stopped your PPC when you were low stock and as soon as you were back in stock, you switched on your PPC back and you were back to full sales volume on day one.
Kevin King:
Who was the company that did that study of the million ASINs again?
Neha:
Oh, it’s called Profitero.
Kevin King:
Profitero.
Neha:
Profitero.
Kevin King:
Oh, Profitero.
Neha:
Okay, Cool so that’s the story about using retail signals to run your advertising more efficiently. And it also makes sense, right? Amazon itself is retail aware. Amazon does pause your ad when you are out of stock. It doesn’t show your ad when you’re out of stock because at that point it is protecting the customer’s interest, because it thinks that a customer clicks on the ad and they go there and they don’t have anything to buy. So let me protect the end customer’s experience. I’m going to pause your ad when you’re out of stock. I’m going to pause your ad when you don’t have buy box.
Kevin King:
Let’s explain to people. Some people don’t really understand how the PPC algorithm works and so, since you’ve been on both sides of it, you have an intimate knowledge of how it works. So, a lot of people just think that if I bid the highest, they’re going to show my product and I’ll just buy my way to the top just by bidding the most. But it doesn’t work that way. It’s based on the amount you’re bidding. It’s based on sales history, your conversion. Amazon’s looking at the total big picture when can we make the most money and satisfy the customer and what’s that balance? And it may be the guy that’s bidding in the middle. He may be like the 10th biggest bidder and he’s winning most of the time because he’s actually converting. And when Amazon ads in there, 15% plus the cost of the ad, happy customers. Those customers also. I don’t know if this plays a factor, but I’m suspicious that the type of buyer that clicks the ad, based on their average sales volume, actually might play a role as well. They’re sophisticated enough to know that if Kevin average order cart value is $82 and your average order value is $31, if I put this cart in there and I know that these other products are going to show. I’m probably going to ask Kevin’s going to add a couple other things to his cart, or maybe there’s something already in his cart or whatever it may be. I think there’s a lot of things like that. But from your experience, how does this A9 actually work and what are the probably the three to five biggest factors? Is it bid? Is it inventory level? Is it past history? What are the biggest factors that are going to affect? Is it your conversion rates? I know Aaron showed Aaron Cordova showed a way to actually see how your conversion rates compares to the median conversion rate for the category. What are the three to five biggest things? How does A9 work on advertising and what are the three to five biggest things that affect PPC?
Neha:
Yeah, very good question. Actually, I got so excited when you were talking about this. I was like, yes, yes, this is amazing, I love it. So I’ll tell you. You are very right in saying, Kevin, that where or when your ad will be shown does not only depend on bid. Basically, the formula is bid multiplied by ECTR. E stands for estimated CTR. Okay, so bid is basically defined on what?
Kevin King:
What is CTR oh?
Neha:
sorry.
Kevin King:
Click-through rate. Just to explain to people yes, it’s click-through rate, okay.
Neha:
It’s click-through rate. I’m so sorry. I think this Amazonians, I think they acronymize every single thing they do. And we forget. I understood you, but.
Kevin King:
I just want to make sure everybody listening understands too, okay.
Neha:
Absolutely. Thank you for calling that out. So when you’re bidding on a specific keyword, whether or not your ad will show up it depends on two parameters only. One is bid and the second is ECTR, which is estimated click-through rate. This bid depends on what you are bidding on that keyword. This estimated click-through rate, it depends on the parameters that you just talked about. It depends on the history let’s say this is an old campaign then it depends on the history of what is the current click-through rate of that specific keyword. It depends on what is the current click-through rate of your organic product. It depends on your delivery timelines and actually click-through rate depends on all of those things, right, Like you know delivery timelines, the product picture that you have, you know the product quality, reviews, ratings, all of those things, and sometimes even geography, by the way. So you can’t, just so. I think the easiest example is that you can’t be a diaper company and bid on the keyword shoe. If you, as a diaper company, are bidding on the keyword shoe, your diaper ad will not show up there because you’re not satisfying a very important criteria, which is relevance or estimated ECTR. Your ECTR is going to be super low and Amazon doesn’t want to do that. Why would it serve free impressions and not earn money? It would rather show the ad of another shoe company where it is actually going to earn money from a click right and actually also because you know a bad customer experience. The customer is expecting shoes. Why will it should see diapers, right. So, the relevance is the part that people completely forget, um to uh mention when it comes to whether or not my ad is going to be shown and where is it going to be shown. This relevance may depend on a lot of other factors that you specified, and the list is endless. The AI actually determines which parameter is going to be higher, but history is one of the highest the history of that keyword and that ASIN that you’re advertising, the relationship between them. That is one of the highest weighted parameter. Other parameters may include what is the browse node in which your product is mentioned or is housed, right? So that’s the reason why sometimes you see Amazon changes the category or the browse node a lot of times. I don’t know if you’ve heard this problem statement. So, they will change it, and then you will suddenly hear that a seller is saying hey, my ad used to come on this keyword just three weeks back, but now I’m not getting any impressions. That’s probably because either Amazon has changed your browse node or something else has happened right. So those are the kind of things that impact your relevancy, because as soon as your browse node changes now Amazon doesn’t suddenly it starts feeling that you are probably not relevant or as relevant to that keyword as someone else.
Kevin King:
So what’s the best way to launch a new product with PPC? What would be your advice to someone that I’ve got a brand new product? It has no reviews, it has no ETCR, amazon doesn’t know what it is. How should I go about? Should I start with, like lower level keywords, like more long tail keywords that don’t have as much search, and work my way up? Should I start with a big thing? Should I bid high? Should I bid ten dollars a day and see what happens? You know, there’s all these different theories. What’s your recommendation for that?
Neha:
I think some time ago. I read somewhere on the on LinkedIn do you know Jeff Cohen? Uh-huh, I think he mentioned somewhere. You know Jeff Cohen?
Kevin King:
Uh-huh, very well.
Neha:
I think he mentioned somewhere you know, in one of his interviews that there’s no PPC question that cannot be answered by it depends. And so it depends. It depends on what is your objective. If you are, you know, a Lenovo or a Dude Vibes, right, you’ll go all in. I mean, people do all sorts of things when they come to uh, you know, when it comes to a new launch, when it’s a dude, wipes would not have probably that those many SKUs. But you know, if you are, you know, or a Huggies or a Pampers, you would probably go all out for a new launch. You would bid high, you would bid the highest. Actually, you would ensure that you are getting all top of search uh placements. You would ensure that you are on sponsored brands and the new product is tagged beautifully along with the existing bestseller so that customer thinks it is an amazing and already existing beautiful, high quality product. So you would do all those best practices that a big company would do. If you are not a Huggies or Pampers, that’s when you need to start looking at how much budget do you need to, or do you have to, put in on a new launch versus you know, the existing bestseller products, because a new launch cannot really take away the share of sales from you know existing bestsellers that you have. So for a smaller seller, definitely it has to be a small percentage of budget. Test and learn, test and learn, test and learn. So you test, you see whether you’re gaining any steam, you make changes to your strategy, test again, learn from that or take feedback, and then that’s when you scale up versus if you’re a Lenovo or a Huggies. You just go at it in one go.
Kevin King:
Based on all your experience with all your clients and working at Amazon, what do you see helps that ETCR the most? When someone comes to you and like, oh, our ACoS is this, you know, we need to get this down. Well, you’re not converting like you should be and you make a recommendation do this, this and this to your listing, or do. What would you recommend people do to get that ETCR up? Is it? Maybe you got to lower your price? Is it? Change your images? Is it? What do you see moves the needle the most in helping you get the PPC rocking and rolling?
Neha:
ECTR definitely depends on so people will click what they like definitely depends on the image that you are, that you have the main image. Now the main image has to be mobile optimized because, like at this point, 60% of the sales, or the browsing at least, is happening on mobile screens. We’ve actually seen cases where people are driving a lot of you know, even though they’re driving high bids, they have high impressions on specific keywords, their CTR is so low that they’re low that people are not clicking on those ads because the product looks this small on mobile. And this happens more frequently than we can actually imagine. So ECTR will depend on how the product looks. The delivery timelines people are expecting one day, two day shipping. So, if your delivery timelines are higher than that, then the chances that they’re going to click on it and check the product out are very low. And also because now Amazon shows the delivery timelines on the main image itself Pricing how competitive your pricing is versus the competitors, and I think this is one of the things about Amazon right, why Amazon versus D2C? There’s just such a big jungle with so many different competitors that you are competing against in terms of pricing and delivery timelines that you’ve got to stand out on both of those. And, of course, the relevancy of what you are targeting. How long tail is it? So of course long tails are going to have much higher CTRs, because the customer is really looking for just that. Or if it’s very broad, then of course you’re going to have lower CTRs. So the relevance, the delivery timelines, the images one of the things that you can’t control and you really have to fight with Amazon I know a lot of sellers have to do that is the browse node. So where is Amazon placing you in? The browse node, which is their internal noding structure? Which subcategory is it placing you in? It actually makes a lot of difference to the CTRs according to the keyword that you are targeting. So, I think those would be the few that I would talk about.
Kevin King:
So, my product is ranking really well organically. It’s in spot number one or number two organically. Should I stop running PPC?
Neha:
I think it depends on what is your objective. Is your objective profitability? Then yes, you need to stop running BBC, because you might. You are cannibalizing your organic sales for sure. Is your or objective sales or share of voice? Then by all means you should be. If your objective is sales and share of voice, then you should be running five different eyes for the same product. Basically have different variations or something you know, have it like you know. You should have a sponsored product video also for that same product and same keyword. You should have a sponsored brand, you should have a sponsored product, everything just plastered. Your share of voice is how much you know. This is the market share that you will have for that keyword, right. But if profitability is what you’re chasing, then absolutely not, and I think, yeah, that’s what we try to put in. Or give you some functionalities so that you can use those functionalities and avoid PPC cannibalization on Amazon.
Kevin King:
When you take a look at someone’s account or you see a new person whether that’s when you were at Amazon or now with what you guys are doing and they turn over their account to you and you dive in for the first time, what are the things that raise your eyes? You’re like, oh my God, holy cow, what are some of the things you’re. I can’t believe this. They’re not paying attention to this or this is way out of control. What are some of the things that you see that are common among sellers who think they’re doing everything right?
Neha:
But I think from my experience at Amazon, when I used to look at vendor accounts or seller accounts, two, three things that come to my mind. One is as simple as negation. I mean, you know, it’s like a filter that you can just put in and say if my spend are greater than X or if my clicks are greater than Y and if I’m still not getting sales on those keywords like it’s a very simple activity why can’t we just do that and negate keywords which are not performing? I don’t know. I almost feel bad when I’m saying this, because it’s so such a simple activity that you can do Like. You can do it on Amazon, you can do it on, you know, through a software, but I think this is one of the most heartbreaking things that I’ve seen. A software, but I think this is one of the most heartbreaking things that I’ve seen. I do see um, inefficient spends, you know, and you know where. You know a cost is high, very bad bidding strategies, but one of the um, most, one of the what is the word that I have to use? Uh, most underused. Is that the right phrase? Or least under
Kevin King:
Is that the right phrase? Or least underutilized or underused. Is that the right phrase? Or least used, underutilized or underused?
Neha:
Yes, most underutilized strategy that I have seen go wrong is the product skew that is being advertised and, sadly, no one talks about it. So what it means is that you are focusing on your advertising with your bottom selling or medium selling ASINs, so you’re spending more on those versus your highest selling ASINs. Did I make sense or did I confuse you?
Kevin King:
No, you’re putting money in something that has less of a future runway, a future opportunity, than you are. You’re better to put it in a higher selling ASIN. You may not be at the top yet. There may be a much more market share and much more sales that you can gain by focusing there, versus on a middle one, where the gains are going to be smaller and incremental. I think that’s what you’re trying to say.
Neha:
That’s exactly what I’m saying. So when I was at Amazon, we used to do this thing, this activity. So we used to divide all of your catalog into three different bands. Band A is your top 50% by sales, band B is your next 30% by sales and Band C is your bottom 20% by sales. You know the 80-20 rule, so 80% of your sales. We used to actually break it down into two, which is top 50% and the next 30%, and then the bottom 20% remains, as is 50%, and the next 30%, and then the bottom 20% remains as is, and so the expectation was that you should be spending more than 60% of your spends on Band A ASINs, and then it should trickle down into Band B and then very, very little spend on Band C. What I see, sadly, is that people think that my best-selling ASINs they’re doing great. So now let me try and push the other. You know the ones which are not doing well, but there’s a reason why they’re not doing well, right? It’s very, very similar to what used to happen with me. I was an Instagram nano-influencer some time ago, Kevin and I used to put, like you know, cooking videos on Instagram, and I used to sometimes, like you know cooking videos on Instagram, and I used to, sometimes just to gain followers. I used to run Instagram ads. I’m not very proud of it, but I used to do that. So, I and I saw this that when I used to promote a post which was organically doing great like, the followers would just trickle in. They’d be like, you know, in one day, you know just spending about you know less than $10, I would get I don’t know some 700 followers. And then I would try to promote a post. You know, just to look good, that, oh, you know what, I have these many likes on this specific post too. I would post, I would try to promote that, you know, not organically doing well kind of a post, and that would not gain anything. Hardly I would spend so much and it would hardly gain any likes or followers. That’s the exact same thing that happens to Amazon sellers too. Right, we have this in mind, that everything should perform well. I had that in mind when I was doing my Instagram. All my posts should have at least 500 likes. But it’s not like that. Right, there will be some organically well-performing SKUs and that’s what we need to focus on and sadly, this is not discussed as much. It is probably not even shown as much. You know. I think Amazon should show it and be short on Adam 11. But I think it should be shown somewhere that you know this is how much you’re spending on different kind of SKUs, so people actually pay. What is measured as gets improved right, so people can take proactive actions on it.
Kevin King:
It should be. Yeah, it should show what you’re spending versus what the future opportunity is. I mean, I don’t know if your tool does that, but it would be cool if there was like okay, you’re spending this much, here’s the future runway. Like, you only have 2% market share. Based on our data, if you spent X amount more, you could have 7% market share. Is it worth it have 7% market share? Is it worth it, is it? You know that would be some kind of cool kind of stuff, and you mentioned earlier, at the beginning, you want to talk about something about PPC. That was in the Billion Dollar Seller’s newsletter or something. What was that?
Neha:
Oh my God, that just made my day, Kevin. So we actually submitted. We wrote a. No, first we recorded a video and then we posted a blog post on our website about day partying, and this was the first time someone had actually used maths to show how to do day partying the right way. It was, I think, an hour-long video and then a pretty long blog post. We actually even shared ChatGPT frameworks or, sorry, a prompt to use the hourly data that Amazon provides to find out how to set up day partying and I think, the day partying strategy that we posted. So many people have come back to us to ask about it, and this was a genuinely mathematically proven showing you your data, using your business data as well as your seller central data, as well as your own hourly data how to set up day partying the right way. Because until now, what we hear is that people set up day partying saying I’m going to pause my ads at midnight and then start them in the morning, and we showed actual data to say, for example, this seller, midnight is the highest converting time. Why should he or she reduce their ads or stop their ads at midnight? So, if you’re not looking at Amazon marketing stream data. Don’t use day partying. I mean, that’s better than just setting up a wrong day partying on your account. So I think that was just amazing, and after that, I think a lot of people came back and asked about this on how we set up, and so we are now kind of trying to improve on how we show the data on our day parting. So I want to really thank you for bringing that up.
Kevin King:
You’re welcome. Yeah, I’m always looking for good stuff to share. That’s out there and I was like, all right, this is a good one, I’m going to share this and it’s a good audience. I mean, I capture a lot of the top people in the space are on the newsletter. If you’re not on the Billion Dollar Sellers newsletter, it’s billiondollarseller.com. It’s totally free every Monday and Thursday, so I personally write it and lay it out every issue, and so some of it I actually write and then some of it features, like your product or your stuff, when I come across other people that are doing a good job, and I feature them just so that make sure that people are aware, because there’s a lot of smart people in the space and you’re one of them. So if people want to reach out and learn more about what you guys do, or about you or follow you or your company or anything, what’s the best way to do that?
Neha:
The best way is to follow me on LinkedIn. I do a lot of content on LinkedIn. That is one. We do have a YouTube channel, but that’s less interactive, you know. It’s more like getting the information.
Kevin King:
So how do they spell that? People are driving right now, they’re working out, they’re listening. How do they actually find you on LinkedIn?
Neha:
Okay, so there’s only one, Neha Bhuchar, in the world. You got to spell my name it’s N world. Uh, you gotta spell my name out it’s n-e-h-a and then b-h-u-c-h-a-r. So as easy as that and I am super responsive. I think you can ask people who I talk to. But yeah, I think those are the two easiest ways to reach me and always happy to answer questions awesome.
Kevin King:
Well, this has been fun. Yeah, this has been. Uh, this has been great. Thanks for coming on and sharing some really cool stuff. So that’s how you make everybody’s favorite topic, PPC, fun to talk about. Great, great discussion there with Neha. It was really fun to speak with her and to get some cool tactics and some cool techniques on her thoughts on how you should be doing your PPC. Hopefully this will help you in your business. We’ll be back again next week with another great episode. Hopefully you’ve already subscribed to my newsletter, billiondollarsellers.com. It comes out every Monday and Thursday. It’s not a promotional email. It’s actually full of actionable, cool stuff in the Amazon and e-commerce world. Before I leave you today, I’ve got the traditional words of wisdom you have to let go of being good in order to be great. You have to let go of being good in order to be great. See you again next week. Have a great one.
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