Marc Goldberg is a contributor for the Trust Web Times. Marc is also the Principal at Stages Collective. Stages Collective helps companies at different life stages in a variety of ways. Business Development, go-to market strategies, Landscape analysis and as an additional recruiting resource.
Andrew Pancer is the Founding Partner of Big Red House Services.
We exchanged emails for this interview and it has been slightly condensed and edited.
Marc Goldberg : Tell us about your journey?
Andrew Pancer: I started out as a CPA in the early 90s.
MG: Like cost per acquisition?
AP: No like Certified Public Account.
MG: So not at an ad tech acronym. Hmph, The more you know.
AP: So I Hated it. I mean really hated it. That’s about all that needs to be said. Found my way into our industry around 2000. Loved it and spent the better part of 20 years running companies in a variety of roles. CFO and COO of About.com (now DotDash), founding COO of Dstillery.
By 2017 I needed a reboot. In January I launched an Amazon business with my wife. She designed the products. I focused on our listings. It was great! The strategies required to be successful on Amazon would be familiar to anyone in our industry (SEO and SEM). Flash forward a couple of years and we had grown the business globally and were generating millions in annual sales.
In 2018 I met a couple of guys who had the idea to start buying Amazon businesses in a roll up strategy. I helped them set up their due diligence process and then led due diligence on a bunch of their early purchases. By 2020 they had grown into a huge business, selling over $1B of products a year on Amazon. Following their success, an entire category of “aggregators” developed. I reached out and now work with a handful of them performing due diligence on their acquisitions.
MG: So what are you doing now?
AP: I spend the majority of my time 1) running my Amazon business 2) helping “aggregators” buy Amazon businesses and 3) recently I branched out and now run the Amazon business for several brands in the US.
To date I have handled almost 100 deals, buying everything from pet products to kitchen goods. It’s been a lot of fun.
MG: So you are selling product on AMZ? Like what?
AP: Last year I sold my kitchen products business “Big Red House”. We sold Oven Mitts, Pot Holders, and Dish Towels on Amazon and Walmart. In June of 2022 we launched a new company focused on Wine Accessories. We are on Amazon in the US and plan to expand to Europe in 2023.
MG: Google is the biggest search engine, then I think Youtube. Is Amazon three? What is the importance of search engine optimization in the AMZ ecosystem?
AP: Amazon is, first and foremost, a search engine. Google (primarily) helps you find information. Amazon helps you buy products. For eCommerce it is the most efficient platform on Earth. Most businesses we look at have a 30%-40% conversion rate, meaning for every 100 visits to a listing, 30-40 wind up as a sale. Name any other platform that even comes close. I have not seen it.
But to get sales you need visits. And most people do not search by brand on Amazon. Sure people will look up Apple or other household brand names when they know what they are looking for (such as an Iphone case). But in most categories people search generically. I work with a pet food company. They have a fairly well known brand and get a decent volume of people typing in their name. But the volume of searches for generic terms such as “dog food” or “cat treats” is much higher. In order to get scale on Amazon you need, similarly to Google, to be on page 1 of search results, preferably in the top 3 rank.
When you and I worked at About.com it was a very similar situation. No one was typing in “pets.about.com”. But millions of visits to our pet sites happened because we were optimized for so many relevant keywords and showed up on page 1.
I speak with globally recognized brands who are getting their asses kicked on Amazon by companies that they did not know existed. The 1st reaction is always “well we get a ton of people typing in our brand on Amazon so it does not matter”. Their 2nd reaction, after I share sales data on how those competitors are doing and how small their market share is, is “oh shit!”.
Again, this reminds me of our time at About. We had quietly built up one of the largest and most profitable destinations for content on the web yet no one knew the brand. There were many who saw that as a flaw in the model. I always felt differently. There is absolutely a place for brands. But there also are, and will continue to be, huge opportunities for unknown companies who can get their product in front of people through relevant search queries..
MG: What do you say to people who want to build their own website to sell products? Isn’t that more “valuable”?
AP: I liken this to opening a niche mom and pop store on Main Street vs selling in Target or Walmart. Which do you think has the better probability of performance? In the niche store you can get a small number of loyal customers and that is great. Who knows? You might strike lightning in a bottle and grow this into a huge success with many stores around the world. But that is very unlikely. Or you can have your product inside the most visited retail stores in the country. If, and this is important, you are great at getting your product seen in Target or Walmart (eye level, premium shelf placement), you have a very strong chance of success.
Amazon is just like the retail example above. You just need to be good at getting your product in front of relevant shoppers. Amazon brings the foot traffic.
MG: You are Living in London now, miss the states? Would you ever move back?
AP: Never. Not even a question. Life is so much better outside of the Tri-State area (and without getting into politics, outside of the US these days). You should give it a shot. The pubs are awesome.
MG: I like my pubs in Glen Rock New Jersey. So rumor has it you are headed to Octoberfest. Any concerts in your future?
AP: I think the only downside to London is that Phish does not come here. But they do have a robust live music scene and I’ve gotten to see a bunch of bands that I have loved for a long time but never cross the pond to the US. And yes, Oktoberfest was amazing. Everyone reading this should come next year. 1st round is on Goldberg!
MG: Yes, to everyone, I will buy first round, Andrew will buy the next six rounds. See ya there!