Dan Brownsher Podcast Transcript
Dan Brownsher joins host Brian Thomas on The Digital Executive Podcast.
Welcome to Coruzant Technologies, home of The Digital Executive podcast.
Brian Thomas: Welcome to The Digital Executive. Today’s guest is Dan Brownsher. Dan Brownsher is a national thought leader in Amazon retail strategy and emerging e commerce trends. He is a commentator on Amazon practices, policies, and technologies, as well as a sought-after opinion source for media quoted by Bloomberg, Forbes, MSN.com, LA Times, Reuters, and key strategist trade and business media outlets across the country. Brownsher has spoken on panels at trade shows, conferences, and industry think tanks, and is President, CEO and co-founder of Channel Key advising everyone from multimillion dollar corporations to fast paced entrepreneurial startups on how to navigate the complex landscape of Amazon retail and the broader world of e commerce in general.
Well, good afternoon, Dan. Welcome to the show!
Dan Brownsher: Thank you, Brian. Thanks for having me.
Brian Thomas: Absolutely. Great to have you on and. Just can’t wait to start into the conversation here again, spending a couple minutes here before we hit records. Always fun getting to know a new person. But Dan, we’re going to jump right into the questions here and as a national thought leader in Amazon retail strategy, how have you seen Amazon’s approach to retail and e commerce evolve over the years, especially regarding its impact on smaller sellers and brands?
Dan Brownsher: Yeah, that’s a great question. And again, Brian, thank you so much for having the honor to be here. So, I’ve been operating on the Amazon platform since about 2010. and in the early days, it was as a seller and so broadly speaking, I think Amazon’s approach to retail in the early days was very much it being a transactional platform.
Thank you. Marketplace, okay, less about brand, less about creating experience and more about having assortment and having a very competitive price and perhaps good fulfillment with prime. But even in the early days, that wasn’t always the case over the years. What I see happening is Amazon is leaning more into brands and brand building, and they’re doing that through content.
They’re doing that through outreach programs. They’re doing that through their advertising business. And in general, the impact on smaller sellers and or brands, I think has been truly unbelievable and revolutionary. And so, taking a bit of a step back Amazon, what it has done is created this landscape for entrepreneurs and small businesses to be.
Successful as well as tertiary or related businesses to Amazon channel key like channel key is an agency and we support brands and help them sell products on Amazon and place media on Amazon. Like, we’re not Amazon and we’re not a brand. We’re a related entity and there’s also software providers that.
Are also a part of this ecosystem. So that’s really cool in my opinion. In addition, they’ve created this marketplace, that has a ton of assortment and a ton of traffic and this environment where brands or brand owners have the ability to affect. Their sell through and their outcome, it’s not necessarily a curated marketplace.
Like, no, it’s you’ve got to well, you’ve got to have high conversions. You’ve got to create a good customer experience and you’ve got to be able to advertise appropriately. So you can determine whether or not you’re going to be successful versus other marketplaces. That’s not necessarily the case. And so, in essence, Amazon has.
Yes. Removed all of these layers, traditional layers of distribution, multi-step distribution. So, historically, if I was a brand and I wanted to launch a product, I would have to figure out how to get into retail. Right or brick and mortar I couldn’t always go deep to see on a website and I certainly couldn’t touch.
All these e commerce consumers on a marketplace because it didn’t exist. Furthermore, if I wanted to sell a product, I’d have to go find a distributor. I’d have to go find a wholesaler. I’d have to go find a broker, right? So, there’s all these multi step distribution layers that Amazon has completely removed.
So, there’s a marketplace. There’s a ton of traffic and consumerism happening. There’s fulfillment and operations and advertising. And I, as a brand, have very little barriers to entry. For launching a new product business, or a new category, a new brand, like, that is really cool. And some of the barriers have never been lower in my opinion.
And for entrepreneurs to launch new companies, new brands, new products. And then furthermore, like, they’re advertising businesses. Going crazy right now in a productive way, and they’re democratizing digital advertising for brands, big brands, medium sized brands, small brands like small brands can run TV ads on prime video right now for not that much money, which is pretty cool.
So, that’s my overview. That’s where I think things are at right now and where they’ve been and where they’re at today.
Brian Thomas: That’s awesome, because I know a lot more and more people are living in this gig economy, right? The inflation and taxes and. Economy, everything’s kind of crashing all around us and we’re seeing and I talk to people all day long, especially on the podcast here about, you know, some of the challenges.
And so, people are, you know, venturing out and doing their own thing and or even a side gig. So, I appreciate that and the evolution and Amazon’s just so powerful. So, I definitely appreciate the share. And Dan, recently, Amazon has been shifting its advertising to be more of a funnel channel marketing platform.
Can you discuss how this impacts the strategies brands should adopt for advertising and brand building on Amazon?
Dan Brownsher: Yeah, so, historically. Amazon business has been really 2 things, right? They’ve had their retail business and their AWS business. And more recently, their advertising businesses really exploded in a major way.
And to your question, a lot of what’s happening is they are moving more towards offering upper funnel or full funnel advertising opportunities or add types. Furthermore, they are acquiring various. Yes. Properties or content houses that they can leverage for prime customers. And advertising, okay, so case in point where they bought MGM, right?
They’re creating content. They own freebie. They own prime video. They acquired rights to Thursday night NFL football. And they’re doing that because it’s an opportunity to create scale and leverage for not only their retail business, but also their advertising business. Okay. So, it’s properties that they can advertise on or extract data from.
Okay. So, this move upper funnel. Or full funnel is super interesting and what is forcing brands to do is now consider brand building. Okay. On Amazon and or brand awareness as part of their strategy and actually consider. If they’re not already a full funnel or awareness strategy off Amazon, but now also on.
Amazon historically, the advertising has been related. It’s been very transactional, very bottom funnel. And that is that space is becoming hyper competitive. And in a lot of cases, table stakes, like, you’ve got to index for branded search and went for branded search and hopefully for the most.
Relevant non branded terms for your products at the lower funnel and you have to do that and you never not have to do that, but it’s also getting more expensive. So, for brands that have the ability to layer on a more mid funnel, upper funnel environment might have a competitive advantage. Furthermore, once you move up funnel and you’re doing things like using Amazon’s DSP, you get access to something called AMC or Amazon Marketing Cloud, which, in my opinion, is a game changer because it gives advertisers more data and visualization around how consumers are interacting with their products at various stages of the ad funnel.
So, if you’re a brand and you want to perform and you want to win and take market share. Great, you should win bottom of funnel, but you also need to consider middle upper funnel. Not only because it’s useful and brand building and building awareness for your products, but also you get access to more data from Amazon, which is really cool.
And so, what’s also interesting is we’re seeing conceptually this uncoupling of their ads business from their retail business. Historically ads were geared around selling products on Amazon and now given. This cookie environment, given the environment and the properties that they own, whether it’s twitch or like a Thursday night football or whatever.
Guess what? You don’t actually have to sell a product on Amazon to advertise and guess what? Also, Amazon is the best retail customer data that exists, and they own the data and they can piece it together. They create really strong audiences. That can help attract new buyers, whether that’s a product buyer or a service buyer.
So, the business, the ad business is really changing. 1 of the things I’m most excited about, and it’s less about selling products on Amazon, in my opinion, and more about this uncoupling from the retail business and focus on this much broader, total addressable market, which is upper funnel brand building brand awareness type opportunities.
Brian Thomas: Thank you. I appreciate you unpacking all that. There’s been so much just, you know, with the conversation here with the 1st question is, how has it evolved? And now I just can’t believe I knew I had some of these some of the tactics they were using, quite frankly, have changed and some of the strategies, but you just really.
Open it wide up. I could ask probably another dozen questions just around this particular topic, but we’re going to switch gears, Dan, from your experience as CEO and co-founder of channel key, what are some of the biggest challenges and opportunities you see in e commerce today?
Dan Brownsher: I believe let’s see some of the biggest opportunities are in the ability for brands to reach their audiences and their customers in a very impactful way and a very direct way.
Okay. So, Amazon obviously is impactful and important. And, you know, you know, hundreds of millions of prime members and tons of traffic and ability to, like I said earlier is. You know, the barriers to entry to build a product business are pretty low, but then you’ve got social media. You’ve got tick tock.
Right? And so, the ability to create some level of virality or scale in a very quick way. Is really cool. Like, that presents a ton of opportunities for challenger brands, new brands, big brands. That’s a massive opportunity. But I think there’s a ton of challenges. Also, part of the challenge is too much choice, right?
So, if I’m launching, do I launch on Shopify? Do I launch on social TikTok, Meta, Amazon? What do I do? Right? So, there can be some paralysis around too much choice. Additionally, it’s hard. Like, if you choose Amazon, we’re seeing it every single day. There’s margin squeeze. Everywhere. Okay, so if you like Amazon, you want to sell on Amazon, guess what?
In a lot of cases, you are beholden to Amazon. You got to use their fulfillment. You got to use their advertising. You got to use a lot of their services. Well, guess what your leverage you lack a lot. You lack control. And guess what the cost to use those things they go up every single year. So, there’s always a margin squeeze there with lower barriers to entry.
There’s more competition. So, you’ve got to be better. You’ve got to be a you’ve got to be a better operator. You’ve got to be able to spot trends faster pivot faster because it’s a hyper competitive marketplace. There’s again back to choice. Advertising is getting more competitive. Do I do DSP?
Do I do sponsor display? Do I do sponsor product ads? Do I do AMC? Do I drive traffic to Amazon? Do I drive it off Amazon? Oh, what about buy with prime? Right, I want to put the buy with prime widget on my Shopify website and drive traffic. Or extract inventory from my, you know, the Amazon warehouse. I want to drive the traffic to buy with prime or vice versa.
Like, it’s like, man, there’s all these choices and there’s all these different tool providers. There’s a lot of agencies. There’s a lot of tool providers. Which 1 do I choose? And so choice, I think is hard right now. Hyper competitive, a lot of choice. And ultimately, the end of the day and this is, I think, true for any industry.
It’s like, the good operators are going to win. The ones that know how to operate, pivot, scale, reduce costs and be nimble that have a good product. Those are going to be the winners.
Brian Thomas: Awesome. Thank you. Some great pointers here for entrepreneurs in our audience. We have a lot of those. So, I do appreciate that.
Dan, last question of the day in your view, how is Amazon influencing brand discovery and shaping customer experiences in the e commerce space?
Dan Brownsher: Yeah, so I referenced this earlier Amazon. Historically, my opinion has been a transactional marketplace and less of a brand building marketplace. I think that’s changing a bit more than half of all product searches right now are starting on Amazon.
So, inherently Amazon is a brand discovery. Platform and a lot of consumers, they search by brand. They come to Amazon and search bar. They’re not browsing right or doing a category search. They’re using the search bar and a lot of customers do branded search, which is great. I’m the brand that’s the cheapest traffic.
I’m going to get highest conversion rate. Fantastic. But there’s a lot of consumers that aren’t searching by brand. They search by product type by category by some search term that is relevant to whatever they’re looking for. And so, they’re browsing, and they have maybe no brand affinity, no brand loyalty, Okay.
Except for their loyalty to Amazon, the trust in Amazon. Okay. So cool. I’m searching. I’m a new dad and I want to find I don’t know a toy for my kid and I don’t know who the toy brands are. So, I’m going to search for a toy sport toy or some toy. And I have no affinity to any brands, so I’m searching and I’m listening or I’m observing and I’m learning based on what I’m seeing.
So, I’m just, I, me as a new dad, I am finding new brands that I may or may not be loyal to in the future. Okay, because so, because of the volume of search and the fact that a lot of that traffic is not brand related. You can always discover new brands or new loyalties. So, that is absolutely happening.
And that’s as a brand seller. That’s how you win, right? That’s 1 way. When you take competitive market share, your conquest you want to win for non-branded search terms. Furthermore, Amazon is leaning into brand building opportunities historically, all transactionally based. Okay. If you were a vendor to Amazon selling wholesale, maybe you had more brand building opportunities, but sellers.
Now, leveraging seller central and a lot of cases have better brand building tools on Amazon than vendors to Amazon do. Okay, so building out rich content video in your carousel video and advertising brand stores that are searchable and indexable. Amazon posts, I mentioned by with prime and the ability to drive traffic off Amazon.
And so. There’s just generally more ubiquity, more search, more volume and more ability for brands to create the brand experience for customers on Amazon, even though they don’t necessarily own the customer. They don’t get the customer data, but they can tell the brand story through use of content and other ways.
To create loyalty and affinity for folks that are browsing and searching for new products or new brands. And a lot of that also those brand building opportunities. A lot of that is happening because of their advertising business and on the back of their advertising business and on the back of this.
Concept that Amazon owns the customer data. They own the property. They own Twitch, right? They’re collecting all of that data that they can lend leverage and package up to sell to other types of advertisers. So, it’s very much a virtuous cycle that they’ve created. They’ve leaned into brands. They’ve leaned into assortment.
They’ve leaned into ads. They’re allowing for the traffic to and a lot of pieces go off Amazon right now. So that with that combined with the sheer amount of volume and traffic and fulfillment. Is it is absolutely a brand discovery platform and that will continue. Okay, but what’s interesting is not all amazon customers are very loyal So they might just shop on price quality reviews, but hopefully you get a customer for life.
So that’s my take.
Brian Thomas: I love it. I really do. I felt like I just got educated on the whole Amazon platform and how e commerce works all in one. And I love it. I really, really do. Dan, the Amazon is so powerful these days, obviously they leverage so many different tools, technologies, and of course they’ve bought out.
Some platforms like Twitch, et cetera, and that’s made them really a powerhouse. So, I appreciate the share tonight on that. And Dan, it was such a pleasure having you on today. And I look forward to speaking with you real soon.
Dan Brownsher: Brian, it was my pleasure. Thank you so much. And we’d love to come back whenever you’ll have me.
Brian Thomas: Absolutely. Bye for now.
Dan Brownsher Podcast Transcript. Listen to the audio on the guest’s podcast page.
