Planet Amazon Podcast

AI Transformation on Amazon: Adapting to the COSMO Algorithm Era

August 06, 2024 • Adam Shaffer • Episode 21

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Neil Twa, CEO and co-founder of Voltage Holdings joined us in this riveting episode of Planet Amazon. Discover how Neil transitioned from product flipping to mastering Amazon's demand capture, utilizing his expertise from prestigious roles at Sprint and IBM. Neil's journey offers invaluable lessons for aspiring and seasoned sellers alike, detailing how to build and scale profitable brands in the ever-evolving e-commerce landscape.

Neil discusses the major shift from the A9 algorithm engine to the new COSMO system and what it means for sellers. He explains why ensuring accurate product image interpretation by AI is more crucial than ever to avoid de-ranking, and get ahead of the curve with strategies to adapt to Amazon's continuous data collection and split testing efforts aimed at improving conversion rates. 

In addition, Neil breaks down the essentials, from omni-channel capabilities to the importance of trademarks and patents. He provides strategic insights on maximizing growth, leveraging multi-channel selling, and even the powerful synergy between TikTok Shop and Amazon. Plus, he gives us a sneak peek into his latest book, "Almost Automated Income with FBA," which provides a comprehensive playbook for achieving success with minimal effort. Whether you're new to the game or a seasoned pro, this episode is packed with actionable strategies to elevate your Amazon business.

For more information about Voltage, please visit https://www.voltagedm.com/

Want to chat with us about this podcast? Send us a text message here

The Planet Amazon podcast, brought to you by Phelps United, addresses all things Amazon and other eCommerce marketplaces. In each episode, we talk with Brands, Agencies, and Sellers about Amazon news, new features, policies, brand policies, logistics, marketing, issues, and challenges, among other topics.

To watch all Planet Amazon Podcast episodes, visit our YouTube channel.
To learn more about Phelps United, visit our website.

Announcement:

Welcome to the Planet Amazon podcast with Adam Shaffer, where we explore the world of Amazon and other e-commerce marketplaces. Join us as we delve into the latest strategies and tactics for successful selling on the world's largest online marketplace.

Adam Shaffer:

Hello everybody, I'm Adam Shaffer and welcome to Planet Amazon, where we talk about all things Amazon and e-commerce. Today, I want to welcome to the podcast Neil Twa. Neil Twa is the CEO co-founder of Voltage Holdings. Voltage Holdings is a company specializing in launching, consulting, selling and acquiring brands, with a focus on e-commerce channels, especially Amazon, FBA and multi-channel. Neil has more than 15 years of experience selling private label products on Amazon, which is awesome, and Neil, together with Reed Larson I'm assuming that's his partner recently published a book and it's got a little bit of a long title, so I'm not going to shorten it because it's an awesome title. It's called Almost Automated Income with FBA Build a Profitable Lifestyle Driven Amazon Business Exit for Millions, even Without Any E-Commerce Experience. Now I definitely want to know about this, so welcome, neil. Hello, how?

Neil Twa:

are you doing today, Al?

Adam Shaffer:

Love that title man.

Neil Twa:

It is a little bit of a long title now that you say that.

Adam Shaffer:

I was going to shorten it, but I just couldn't do it.

Neil Twa:

Almost automated income with FBA.

Adam Shaffer:

There you go, I'll shorten it for you there you go, but great job in publishing a great new book. And before we get into the book we'll talk about it a little bit. But first and foremost we want to know a little bit more about you and how you got into 15 years of experience on Amazon.

Neil Twa:

Tell us about Voltage Holdings, you and your journey. Yeah Well, I mean, voltage is a combination of both need in the market as well as intent, with a specific outcome for us, which is the acquisition of companies. The merging and buying of brands is kind of really the intent of what's called Voltage Holdings. We have a Voltage marketing and consultancy that does Amazon growth. It's really focused at kind of the higher end, the top percentage of sellers that want to really grow and go fast. You know half a million or more a month, and so it's really focused on what are the strategies and tactics that allow that to occur?

Neil Twa:

Personally, just, I've been in the business for 17 plus years, both offline and online businesses, developing companies in the high tech, info, marketing and mobile space, and then Amazon is technically around 12 years, just to be technical, but that's you know. I feel like I'm an old goat in the years of Amazon these days because so much has changed so fast and so dramatic in the way you do business and take advantage of the opportunity for that channel. But of course, we have expanded, as you said, into additional channels and created holistic e-commerce companies. So I think it's important to make sure we understand the value of that opportunity, especially when it comes to acquiring the companies or being acquired and what that looks like. So I don't know if I'm answering your question or how much more detail?

Adam Shaffer:

No, you're hitting it, man. You're good, and so I guess the thing is, you started out selling. Is that what you were doing before you were buying?

Neil Twa:

Yeah, flipping products for profit on Amazon. It was actually an opportunity to go in and learn the ecosystem initially because I wasn't even sure really what it was about. I was doing mobile marketing online and media marketing for for companies doing Legion and CPI installs for mobile applications all across the world. In fact we were doing it in spreadsheet uploads because there was no systems yet to do that. There was no usable. You know, people complain about Facebook ads and all the complexities of that. It's like we didn't have any of that. We the complexities of that, it's like we didn't have any of that. We literally wrote it all out on a sheet and we gave it to the media guy and he uploaded it to the system. Then we waited for two days to see how close we got. So it was a very different, different world, you know, in that buying media space back in the day.

Neil Twa:

but got very good at it understood the market, understood the desire of people's willingness to buy certain things at certain times and got very good at that. On the demand creation side I discovered Amazon, which now I know very much is demand capture and we can talk about kind of the differences when people are thinking this through. But I was just flipping some products just to see how the system would work. I knew about FBA.

Adam Shaffer:

Were these private label or were these?

Neil Twa:

These were actually just yeah, well, there was somebody else's private label. I was just arbitraging initially, just to see how the whole system worked. I was trying to discover what the Amazon FBA was. I knew they had bought their company around 2008, 2009. The logistics company they rebranded as FBA, which is a wholly separate company. It's the sixth largest logistics company in the world now. But that was just how do you play with that system? So we would grab products down from sites we saw discounts and we would pull off a hundred units of that and send it over to FBA and just kind of flip it and see how that system would work. And then we discovered and just in simple terms, I grew up in the digital world.

Neil Twa:

I was actually part of the first team that launched the first mobile phone at Sprint and watched that entire company blow up. From the 5,000th employee it became 80,000 employees in five years. So I got to watch the mobile industry from the inside out at the top. And then IBM picked me up and I went on an almost five-year adventure with them, which was about knowledge management systems, ai learning systems and artificial intelligence and human machine language learning, and we built systems that a lot of the interwebs use nowadays and the frameworks that came out of the Armonk Labs. There they do 18,000 patents, so we were involved in a lot of new creation. Long story short, when I started playing on Amazon and flipping products, I discovered it was a large language learning model, a system that we had controlled in the IBM days, and discovered that it was, you know, running very similar learning systems and the way that it was adapting titles and images and bullet points and graphics and ranking products within the search engine of Amazon, and suddenly realized this was very familiar territory technology. And so then I started to launch private label brands and because I'd figured out over time how the algorithmic system of Amazon was working, because it was very similar to code that we had written and programs we were using in the IBM days they borrowed some of that and created their A9 engine off of it. So at that point it was very easy to rank products on Amazon.

Neil Twa:

I set up a launch process that had been used and standardized. I started to teach people that in around 2014. It kind of got out. A lot of companies sort of decided to use that algorithmic process to turn into ranking engines and all kinds of stuff that many people have heard of today. Search and buy came out of that and all those initial implementations of that in the early days and, you know, discovered it was a giant ranking search engine that needed certain triggers at certain times, it needed to learn certain things. It wanted to know the power of the. You know, this particular set of features on the page, from the image to the title et cetera all had different ranking criteria and over years I kind of studied and analyzed and documented that process until a launch and then we basically would hit page one for every product we launched.

Adam Shaffer:

That's awesome man we were going to actually possibly handle it.

Neil Twa:

We were pulling capital from everywhere.

Adam Shaffer:

That's awesome. So you know the secret sauce of the algorithm.

Neil Twa:

It hasn't changed my man and it is about to right. We'll talk about that maybe in a minute, with Cosmo coming, which I've studied a lot because it is moving into the large language model side, and the artificial intelligence piece which is going to dramatically change from a nine to what will become Cosmo's Amazon.

Adam Shaffer:

So stay with that, because I want to know more about that. So tell me more about that.

Neil Twa:

Yeah, cosmo basically is their answer to the AI question in regards to search engines and in regards to Amazon's way that it ranks keywords, looks at keyword and semantics, the way it works at latent semantics within the actual keywords themselves.

Neil Twa:

At this point it has been programmed and looked at in the A9 engine to be keyword driven based on volumes of searches and demand of volumes, which is in many ways kind of simplistic.

Neil Twa:

But Cosmo has now basically been sucking down all of Amazon's data and you can imagine it's a lot of data for so many years that it has now just been unleashed about three months ago and they actually published a white paper and I put this on my sub stack for anybody who wants to check it out.

Neil Twa:

But basically they published their white paper and the findings of that white paper were that they had changed the way that the engine was looking at keyword relevant data to the listings and using all the signals of things from the social, the web, the television, twitch and prime media and all this stuff that didn't determine the intent of the buyer, but not on their keywords but based on their intent. And because it had so much data, it was able to basically increase the conversions 0.7%, which doesn't sound like a lot, but that translated into like $4.9 billion in additional revenue on only a 10% test of the data. So they tested it on about 10% of Amazon's daily sales and it generated about 4.9 billion in additional revenue. So they proved that on about 10% of Amazon's daily sales and it generated about $4.9 billion in additional revenue.

Adam Shaffer:

So they proved that it was incremental.

Neil Twa:

They proved that it was hugely incremental and they had enough data to statistically justify what's coming next. So, as they're rolling, certain changes are occurring right now with AI constructing the summary sections above the reviews. They're changing the listings and giving you 14 days to agree to the AI changing and if you don't, they will automatically change it. So you got to be paying attention to this, because they'll notify you in your dashboard. Hey, we made these changes. You need to approve or disapprove them. If you don't, you're going to get screwed. What are they telling you? What's the important part of that? They're basically saying you're not optimized for the coming AI change. You need to pay attention to that. Don't just carte blanche accept their changes. Go understand why are they requesting it?

Neil Twa:

One thing you should know is they're reading the images with AI and if your image OK, no, photoshopped image you've been getting away with for a while that has elements inside of it because somebody compiled it and it's not a real photo, the AI can't read all of that not correctly, and if it dissects that image incorrectly, that is how it's going to rank you. So if your images today do not properly get described by AI, then what's going to happen is you're going to get deranked when this Cosmo goes live because it's going to not just look at your listing and its intent. It's no longer going to look at the value of the keyword structure that's in the current listing. It's going to look at other elements and one of them is the images, so the image.

Adam Shaffer:

it's not like a tag.

Neil Twa:

They're actually looking at the image, they're literally like you could go right now and go to say, claude, upload a photo and ask it to describe what it sees. If its output is not describing your product correctly, cosmo is not going to describe your product correctly, okay. So if you have a guy fishing on a dock and your fishing pole is your product, but it describes the boat, you just missed it.

Adam Shaffer:

What's awesome is like. I play in the Amazon world every day and I had no idea that it was this close. I thought it was years away.

Neil Twa:

No, you're saying, they're actually.

Adam Shaffer:

So you're saying they're actually been in 10%. Maybe they've been using it. Oh yeah, they're going to roll this out and it's going to happen.

Neil Twa:

They're not going to announce it. They're not going to do it. It's on a Monday. Cosmo rolls out. It's not how Amazon ever does any of their changes. They constantly test and iterate.

Neil Twa:

There are times of year we know it's occurring like any pre-holiday set for the first two months prior to Black Friday. They will be doing all these split tests and changes. You'll see it across the board. It happens every year. Some are more dramatic than others.

Neil Twa:

Last year was a little bit more dramatic with some of the changes they were looking to make prior to going into the holiday season. Some people were positively and some people were negatively impacted by those changes as they split test different things, including, you know, how many units were being sold or not being sold and a number of other factors. They were just, you know, displaying as they did those tests and then they locked it in before the holiday period and, of course, people who were aligned to that did very well last year in the holiday. So this is going to occur again. It's going to slowly. It's already rolling out components of the system itself as you see them appearing in the automations and the corrections of the listings and summaries that are occurring, as they're slowly rolling components of this whole thing into place. When Cosmo goes fully live, it's going to be pretty dramatic for some people.

Adam Shaffer:

From my perspective. I mean, it's obviously you got to stay current and you got to understand that it's going down, like you said, but Amazon wouldn't be doing it if it's not going to increase conversion rate, because that's good for them. So they just want more sales. I mean, how could they not? And if you could benefit from them, that's what you should be doing.

Neil Twa:

You should be preparing yourself to benefit from it, because it literally is going to change from A9. You know, everybody talks about A10. There's no A10. There's only A9.

Adam Shaffer:

A9 and Cosmo.

Neil Twa:

There's A9 and all the little bots of compliance they've put in around the A9 engine to deal with fake reviews and all the nonsense that's occurring, but the core engine itself has always been the same If it ain't broke, don't fix it right. But they haven't had enough data to do that. And now that they've got enough data right, they are making, you know, assertions with the data that are becoming more and more specific as they refine how they're going to change this data right. It's looking at feedback. It's looking at other sources. It's looking at your programming from your prime and Twitch streams and your freebie videos and looking and saying, okay, if your intent is to watch a lot of outdoor movies, then you must be interested in outdoors, so we're going to present you with a lot of outdoor commercials.

Adam Shaffer:

It's awesome and scary Yep.

Neil Twa:

It's awesome and scary. Think minority report right, it's going to go to a level at some point here soon where you know it's tracking you around the internet because it now knows that you are, you know, a person who lives in the country and loves to hunt, and so everything it's showing you is hunting equipment.

Neil Twa:

So this is where it's going right and the intent to buy is, of course I'm watching a show about hunting on freebie. And then the commercials are all aligned. Right now they are not. Right now they're display advertising. Right. They will show up and you'll be watching a hunting commercial, and then it's like a lady with a cleaning supply product and you're like well, I'm a dude watching a hunting show. I have no interest in that product?

Neil Twa:

Well, what if every commercial during your prime hunting was all about the different components of hunting and the outdoor tents and the deer spray and whatever else?

Adam Shaffer:

But it's targeted to you Is the woman that maybe is not interested in that maybe seeing a different commercial.

Neil Twa:

That is correct, yeah, so Cosmo is also going to all of that around inside the system too, which means you will not be able to define keywords both on the flat file and the front end of Amazon. The keywords are going to be defined by the engine itself from the content, language and copy and the images and other factors we don't know all about just yet, but a lot of it was disclosed in the white paper that are going to determine your rankability. So what does this mean? Amazon itself knows that 40% of all of its sales come from SKUs that are three years or less in age. Okay, so it's following the social commerce trend right, which TikTok and other systems are all about demand creation. Okay, so it's following the social commerce trend right, which TikTok and other systems are all about demand creation. Okay, virality, demand creation. The products and viral videos that come out create demand and interest. It's a very powerful system of social commerce that's being created.

Neil Twa:

Amazon has not adapted it correctly, but Cosmo is going to help them do that, because now it's going to look at all those signals and all the different social signals and it's going to say well, if this product is two to three years older, it's probably more in demand socially. It's more in demand because it's newer, it's more in demand because it's following trends, and products that have been doing well for say, four or five years are going to degrade. The idea that just because you had 10 or 20,000 reviews now makes you the gorilla on the hill and the old goat because you've been there longer. Cosmo is basically going to invert that and change this all around. You're going to have to adapt. You can't just sit on it anymore.

Adam Shaffer:

Well, I'm glad we talked about this, although this wasn't what I thought we were going to talk about, but I am.

Neil Twa:

You asked the question.

Adam Shaffer:

Yeah, I know, but I mean this is great stuff. I mean everybody needs to understand this.

Neil Twa:

that listens to the show. They do Absolutely this is huge.

Adam Shaffer:

So thank you, and you need to keep us all updated as this thing happens, because you seem to be really following it.

Neil Twa:

I love the technology. It's what I did. I love the components of it. I love the systems. I love the automations. I love where it's going. In terms of that, it's scary, as mentioned in other areas, I hope compliance or oversight will keep control of some of that.

Adam Shaffer:

But there's huge opportunity coming for a lot of people but there's a lot of pain coming from those who are not paying attention. You got to pay attention, I mean, and that's the essence of Amazon in general. To be an expert in Amazon means you got to live it every single day.

Neil Twa:

Amazon is like the ocean you can't turn your back on it. It's got riptides you can turn your back on it you'll be sucked under Yep.

Adam Shaffer:

And, like you said, they don't announce this stuff. You got to figure it out, and that's what the community is good for too, because, whether we're competitors or not, everybody it's such a big ocean that people help each other out. Everybody likes to help everybody figure these things out, whether it's a badge of honor or just because people are good citizens, and so that's one of the reasons I enjoy Amazon so much. But, turning to the thing that I wanted to also find out about today from you is how does Voltage go about picking companies that they either want to invest in or acquire? What's the process that you go through? And again, that was originally what I wanted to talk about. So, thank you for the other stuff, but give us more, because so many people invest their lives in trying to develop products and sell them on Amazon. How do they cash out?

Neil Twa:

So here's in simple terms, here's what I'm kind of looking for in the market, and let me preface this by saying that Voltage had a portfolio division. We raised almost $100 million in capital to become an aggregator. That's part of the reason you even know the name is that we came to the market to do all the experience we had and bring it into a system and a process and an aggregator. But we chose to stop that process in 2021 in November and pulled the emergency brake on it once we realized that, as all funds were coming and commitments were being made and we were about to go start acquiring companies and had built a pipeline, the buying of the companies had gone 30 to 50% above market and we were no longer willing to buy at that. So we put everything on hold, okay.

Neil Twa:

So, as it turns out, that was a smart thing to do, because now we are a few years forward and the capitulation, consolidation, bankruptcies and all the crap that I was afraid was going to happen in this very battle-confronted area of product and type and business structure basically just wasn't being operated correctly. Let's call it what it is. So, as we are operators who build and grow and scale, we wanted to see that operational control and we just didn't see it, so we paused. Now fast forward. The market is now right-sized. It's actually a buying market opportunity and we can talk about that. So we're going to be acquiring more companies. We're going under LOI, with five this year in the process. What did they look like? How do we choose them? They must have at least three years of sales history and be more than just an Amazon FBA channel only.

Neil Twa:

They must be multi-omni-channel. No more can you just sell an Amazon FBA business for 3 to 5X. You can sell an omni-channel at that, even if your base is a million in EBITDA. So if it's a million in EBITDA, or preferably seller discretionary earnings, sde, then we're looking for that company. 1 to 3 million or up.

Adam Shaffer:

A million in EBITDA is your starting point. And omni-channel. Is Amazon and Shopify or Amazon and what?

Neil Twa:

Amazon and any other channel that makes up at least 5% currently, or in the process of making up 5% to 10% of any other market share of demand creation and capture of client data somewhere else Could be QVC, could be retail, wholesale, could be a Shopify, a TikTok shop, could be an eBay, an Etsy, it could be all at Walmart. It could be a whole combination of those that are out there, that are new, that are gathering and pulling in customers and data, even if they haven't matured yet. Okay, If they're in the mature DTC side of the world but they have not opened or really exploited the Amazon demand capture aspect, which that's what Amazon is now. If nobody knows what that means, I can explain that in my words. But if they've not done that, we will see that as an opportunity. We won't buy on futures but we will buy on trailing 12 months and notice that they, if they don't have an Amazon channel or they really haven't captured it correctly, we know that's a weakness that we can exploit very quickly in the growth of that company in the first three, six, nine, 12 months. We can go in very quickly and exploit that opportunity for demand capture.

Neil Twa:

If they're just a pure DTC at this point, which could be a Shopify, TikTok or a website that does not have or a large presence on Amazon all right or established a very small presence on Amazon. So we can go both directions, if that makes sense, Okay. And so they need to be at least three to five years old minimum. Why, as I mentioned earlier, Amazon has 40% of all of its revenues are from SKUs that are 3% or less. Right, Three years or less, excuse me, Three years. So that means that SKUs in year one roughly 5%. By the time they get to year two, they'll make up 20% of all of Amazon revenues and then 40% by year three. So it's a maturation cycle that we're looking at a minimum, which is why they need to be three to five years old minimum.

Neil Twa:

And with those omni channels they are poised for growth. With the halo effect of that omni channel presence, it's really easy to exploit those channels into much larger growth, and there's always a larger capital partner that's setting somewhere on the sidelines. We can't deploy in a family office less than 25 million, and there's corporate offices that are like, hey, Neil, we can't deploy less than 100 million, right? So don't bother us until those businesses reach that place where they're going to be acquired at that level. And then there's, of course, PE groups at lower amounts in the three to five to 10 million range that we want to acquire. So again, historical omni-channel private label only. No drop shipping, wholesale arbitrage, any of that kind of nonsense. Wholesaling, if it is B2B with the products and private label going the other direction, okay, when they're wholesaling out the channels, retail or other channels, the private label brand itself, If they don't have any trademarks. We got to put trademarks on If you don't have a trademark, guys you're just not a serious seller.

Neil Twa:

You can't even get brand registry, so you got to have those components in place. If you're DTC, obviously you got to have some component of that or we'll have to be able to get it to open the Amazon channel. You don't need to have patents. But patents are no longer just a luxury in my mind anymore.

Neil Twa:

I am a patent holder in other technologies, but on Amazon, for product-based products that have the capability of design patents, you should absolutely go after that. You can even just get the notice of allowance. Just says I have a high percentage of probability that I will be awarded the design of patent. If you can get a design patent, a utility patent excuse me, a utility patent then go for it. Why? Because if you own that in the product statement on Amazon, you're basically in the most defensible position you will ever be in Any other brand or product in the marketplace that is currently operating in a product type that is very close to yours and you win the brand utility patent. You can go right back to them and say you owe us a royalty fee or stop selling and you can basically dominate the market okay, do you care about the category, the product's in?

Neil Twa:

I do. I don't want. I had a supplement company a long time ago. Do not want any supplements. So nothing on the skin or in the mouth, okay, don't want to mess with that. Don't need the three letter agencies that come with it. Don't want to mess with that. Don't need the three letter agencies that come with it. Don't want any of that hard I guess.

Neil Twa:

I know there's opportunity. Yes, I know it can be big, but I know that there's some very unethical dirty business going on in there and if you think you can compete on a few hundred thousand dollars, you're wrong. You need to go to market with a high six figures, seven figures, or you're simply not going to make the market share by that. So no interest. We don't really do electronics, which is, you know it sounds weird, but we will do electric, but we won't do electronics, and so electric is a huge opportunity, with a higher barrier of entry, to get out of what I call Amazon's mosh pit, which is typically anything below $50 in my mind. So we sell 50 to 200 plus in retail price points of products should be aligned in that inside of the business we're purchasing, or be able to get aligned and elevated to that as a part of the process of evaluation when we go through the LOI. Am I answering your question? Is this good?

Adam Shaffer:

Yeah, no, you're definitely on the right track. That's what I want to know.

Neil Twa:

Yep, they must have that elevated in their brand and retail price. Do?

Adam Shaffer:

you care if it's a subscribe product or not.

Neil Twa:

Absolutely. Subscriptions of subscribe and save increase the valuation of the company, especially in the last 12 months, as they're increasing. If you show an increased subscribe and save over the last 12 months, we're going to consider that as part of the valuation. It is a recurring revenue. If anybody understands what that means, it's the MRR inside of Amazon. So if you get subscribe and save products in there, that's great. The more you get, the more you're acquiring. It's even better. If you take that over to the SaaS world of online Shopify et cetera and you can subscribe and save over there with any kind of subscription business that you can create and are acquiring subscribers and subscriptions in a front end channel with demand creation, like Shopify et cetera, then it's going to increase the valuations quite a lot.

Neil Twa:

Let me just explain what that looks like. If your shop on Amazon and your shop on Shopify both have subscribe and savers and subscriptions on one side and those are continuing to grow as a basis of the whole company, what will happen is the valuation can potentially go as large as 5 to 15x. So we can actually see evaluations for omni-channel subscription businesses on Amazon and off Amazon combined reach almost SaaS level now in terms of their acquisition right. So if you are in a business of building, please keep that in mind, because it is a large thing that we and others are looking to acquire. Is that continuous subscription business, not just the single sales of a physical product, but the multi-sales, multi-diversity of sales and additional sales of higher valuations within the CLTV of the products, as well as subscribers coming back monthly, bimonthly, six months, 12 months, et cetera.

Adam Shaffer:

Cool. That is great news and I think for anybody listening they should really take a look at what they're doing. Is it a surprise product? Is it 50 and above? I imagine weight is important. You don't want to be shipping boat anchors if you could avoid it, even though it's FDA. So you know we try to be careful about that. Although there's opportunity there, you know it's not the easiest thing to manage about that, although there's opportunity there.

Neil Twa:

It's not the easiest thing to manage. Well, there's opportunity in the profit. It just changes your expectations of whether you're locked in vanity metrics of how many units I move every day and how much revenue I'm making. Where I'm locked into the profits and the ability to move multiple product lines, even if only one sells 100 units a month, I'll get 10 of them and expand out into that market until I own it with the higher profitability.

Adam Shaffer:

And I think the Shopify or Shopify Plus channel is great. It does play kind of nicely with Amazon if you want to use it as your 3PL and you can control your own destiny a little bit more. It's just there's a cost to that too.

Neil Twa:

There is a cost, of course, with demand creation, which is why I prefer to take my Amazon sellers to TikTok shops first. The halo effect creates almost 30% spillover to Amazon. Okay, right now. So any brand that we're lifting up on TikTok shop is being lifted up on Amazon almost three to five X larger on Amazon and even products that are closely aligned on Amazon that we don't have on TikTok shop, we'll see.

Neil Twa:

We'll see spillover too. So if a product over on TikTok shop is going really well and it's not ours, we're actually picking up and capturing the demand of that product on Amazon because we're outranking the competitor whose product was on TikTok shop. So if you're an Amazon seller, you should really be looking, because it's a search engine. Now it is on TikTok. That's changed so you can actually get into the search results for your brand. If you go to tiktok and search for your brand and find it and you're on amazon but not on tiktok shop, there's an indicator you need to get on tiktok shop okay.

Adam Shaffer:

Does voltage help brands?

Neil Twa:

we do we're an omni-channel brand management uh growth company. So while we may start people on Amazon or help them grow and maintain their business to a higher level within that channel, they should, at a predefined time within their numbers, open another channel. And we have a very good expert who's had a million person account and ran hundreds of thousands of millions of dollars through that TikTok shop who helps?

Neil Twa:

define open and move them into Omni to capture both sides of the house. There is way more demand capture between those two platforms and their search results and the affinity of the buyer type than there actually is on Shopify. And that sounds sort of strange, but it is again people moving in flow on a platform looking for products and already have purchased something on Amazon and if they don't trust TikTok shops, they purchased something on Amazon. If they don't trust TikTok shops, they end up on Amazon and so there's this huge crossover between those two platforms organically that you don't get through the Shopify.

Adam Shaffer:

I mean, and that's what you get from Amazon. You get trust, right. So that's why conversion rates are usually a bit better and people feel confident, so it's not a bad place, even for your own Shopify site. There's still probably better conversion rates on Amazon, as long as somebody else isn't Every time we ran large amounts of traffic through Shopify stores for ourselves and our clients.

Neil Twa:

It ends up spilling back at least 20% over to Amazon. So you will see that halo effect occur dramatically. And if the account goes down or certain ad sets go down over here you'll notice it on the Amazon side because that demand goes down, account goes down or certain ad sets go down over here you'll notice it on the Amazon side because that demand goes down, which just tells me again, the Amazon, being the organic engine it is, has a rankability inside of it to this day.

Neil Twa:

For anybody who's listening, that is much, much more valuable than any offsite Amazon. Things you can do and I constantly preach this because people miss it and they go talk about well, all the things you need to do off Amazon to get Amazon to love you more, and that's actually wrong. The effect is, if Amazon doesn't love your product more than the other products in the system, no offsite Amazon marketing engine is going to allow it to continue to grow organically. Once this stops over here or something fails, you'll watch it fail backwards on Amazon. So you need to be able to understand the system of Amazon first, organically, get it into a maturation with your business so it absolutely loves you, and then watch what happens when you do off Amazon marketing.

Adam Shaffer:

It takes a lot less effort to watch on Amazon marketing go really fast. That's great advice, but I think there's a ton of brands doing the Google back to Amazon right now, doing off Amazon to Amazon.

Neil Twa:

They're doing a lot of things to try to manipulate Amazon to love them, when in actuality they're not organically ranking well enough against market share competition on Amazon. Yet here are the factors that play into that, because it has to do with the exit, it has to do with our looking at the ACOS and TA cost of the businesses that we're going to acquire, because if they got some aspect of that wrong and have done it long enough in the Amazon system, they will be penalized. Even if your solar health account is all green, there are other metrics Amazon's considering and they will be penalizing you. And then the question becomes how hard is it for us to regain position and market share that had been lost by its historical data setting there for six and 12 months in a negative position? Right, Because then you have to retrain the engine and get it to believe you're back up here, and that can take a long time with the engine, especially if the data has historically shown that it's not in that position.

Neil Twa:

If you are not the higher USP percentage above the market share competitors, you will not overtake their position in time If you are not inventoried above the top 10 percent of market share currently in your, and you should all know what a node is on Amazon. Then you will not overtake their position because the algorithm simply won't allow you. It won't allow you to stock out. You will stock out the business. Therefore, it will throttle you and you'll never manipulate it into getting you up and keeping you in that top market share by any off Amazon activities. You will simply not make it. So how do we overcome that burden Pro tip you got to put in more inventory. You have to put in inventory levels that check in on AWD or Amazon FBA, above the inventory or at the inventory levels of your top market share. Competitors in your space or Amazon will simply not let you sell more.

Adam Shaffer:

That is awesome, man. Wow, my head's going to explode. This is some great, great information. So thanks, neil. This is awesome. I'm going to change the topic and let's talk about the book. I know we don't like to plug too much, but I think it's a fascinating idea. And so you created this book, and I'm just going to use the short name, almost Automated Income with FBA, and it promises a kind of a profitable, easy I'm ad-libbing a little bit, but easy lifestyle. Can you just explain more? Easier, okay, easier, so can you?

Neil Twa:

explain Easier than a lot of things I see people doing now.

Adam Shaffer:

So can you tell us about why the book and what we're going to all learn by reviewing or reading the book?

Neil Twa:

So, in simple terms, I featured 15 different experts that came on my podcast in the year prior to that volume. We're compiling a new volume from podcast experts that will come out next year. So it was 15 people who I know resonate and understand the same principles of business that we train in different areas of business Focus, from finance to product or research to development, to image and graphics, split testing. Folks like PickFu and stuff are in there and interviewing them in the different areas of their expertise and unit session percentage and conversion rates and all the other things that are very important to this model. Each of them align with my product launch playbook that we developed in Voltage, called the 5x5 Playbook, and so, as I went through the podcast and as I digested the information and I had a conversation with them, some of them are extremely good at what they do and so we featured them in the book. So each chapter and the 15 experts are featured in there, along with our playbook strategies and our client results and case studies that focus on the outcome of those things, because we're good at a lot of things and some things we're not experts in.

Neil Twa:

Everything Nobody can be and so that book then became the culmination, and in the process of that, the goal was to understand what the strategy and tactics should be and how to create systems of automation using not just FBA but their other systems, as well as software and technologies and warehouses and infrastructure systems that are all around us. That do free us up to be multi-seven, eight-figure operators with virtual people who aren't even employees and no warehouses and operations to hold us accountable to, because it's all managed outside. So that leaves us up to do 15 to 20 hours a week of work managing a multi-seven eight-figure business right, and so that is the systems and processes and the people that are inside of that were all compiled in the book to basically give you that strategy, along with some of the tactics not just for myself but other experts that work this every day, week and month and compiled it into a book together, and everybody helped promote it, because they were all part of the process.

Adam Shaffer:

Is it focused more on people that are just entering the market, or is it focused on those later stage ones that you like to look at? It's actually for both.

Neil Twa:

It's for both. So we covered the initial five steps of this, first being you know what the heck do I sell, which is the process of conditioning and learning, product research and identifying good products at price points and certain metrics you should pay attention to, and not all the vanity metrics that most people end up in what I call Amazon's mosh pit. So it will help you define a product base that is in demand, that is elevated above that and has the profitability requirements to allow you to both profit yourself as well as build those systems and get those people in to support you while still making a good business. Build those systems and get those people in to support you while still making a good business. Right, and it also teaches you not to run by gut feel. So we have something. We go through the numbers process of what that should actually look like, including all of the fees and other things that are stacked in that process. So we take you through that. So we also talk about the branding and what it means to brand versus to sell products.

Neil Twa:

Selling products is what so many people are focused on with Amazon, but I don't actually sell products, adam. I sell listings to an AI engine and once you change your strategy and understand the difference, you understand as an Amazon seller, you are a direct response marketer okay, that happens to sell physical products through an automation engine. Once you understand your place in that, okay, the invention is not the key here, innovation is the key. And you understand that you're a demand creation innovator of product and awareness and perception of value, then the products will fall in line with that. Now, of course, we're not going to sell me to products and we talk about that in the book.

Neil Twa:

How to create a grand branded product that's in demand is not complicated. People overthink that and overengineer it and spend way too much time lamenting over the possibilities of the product but never answering the question what the heck do I sell? And sales fixes everything. So if you're going to understand the market and demand, you will fall in line with the products. Just don't create me-too off-the-shelf products. Create good products. That's not too hard. You know what a good product is. You're a consumer, so don't create a crappy product just for profitable reasons. It will backfire on you. In this system. You will not grow a great brand.

Adam Shaffer:

So it's not too late. It's not too late. It's not too late to start a product. It's never too late. No, no, no.

Neil Twa:

Because if you're an existing seller, even doing six figures or so, like Daniel LeBlanc came in and Daniel and David LeBlanc two people, sorry, I just slammed their names together Then you will understand what it means to create the strategy and go back out of the weeds and understand what you should be doing daily, weekly and monthly in your strategy so that the tactics become more important. They become more revenue generating activities. A lot of people are still focused on growth hacks and all this short-term stuff and they're actually damaging their opportunity, and those are for existing sellers. I work with many sellers who are stuck in the process of trying to launch another product and failing at a few tests because they never actually learned how to run the business first. And so we teach you and talk about that in the book how to run the business first so that the products and the solutions to the brand fall in place. And it does take that two three year timeframe. I will not ever tell anybody different. This is not a two to three month opportunity. This is a two to three year opportunity. Amazon will mature you in the product process, as I mentioned earlier. When you do it the right way, your opportunities will really explode in year two and three with the work you do right in year one, and that's a lot of what we talk about for new and existing sellers who need to turn around.

Neil Twa:

David came in for six months and ran another thing, a course program, et cetera.

Neil Twa:

He lost $200,000 and was about to shut the whole thing down, took a chance on us and I said give me five months to show you what we can do differently. And he listened and he was trainable and he was willing to be coached and in five months we took him to 200,000 in profits. He just emailed me this weekend it's the 4th of July weekend, as the time is going on he emailed me he's going to do a second podcast soon, so it'll be on my podcast, the High Voltage Business Builders Podcast, part two of his story, and he is now half a million a month as of June. Okay, so he completely changed his strategy and understanding, is now buying back his time by pulling in resources at operational level, and he will be. He's on vacation in Italy when he wrote me and he's super excited to get that built up. So that's an existing sellers that need to change and understand their strategy. And if you think you can't learn anything new, then maybe you haven't been paying attention today, because there's a lot.

Adam Shaffer:

Most people don't understand growing scale on amazon like I said, I wish I met you a few years ago. You would have saved my butt. But uh, you know, at least I met you now and I'm learning.

Neil Twa:

This is great no such thing as a coincidence, my friend. There's all in good time yeah, yes.

Adam Shaffer:

So with that we're gonna start wrapping things up and um other than you should go out and read or buy your book. What, what, what words of wisdom, what's your final thoughts to the audience today? Um, either motivational or um, anything.

Neil Twa:

Well, both. I guess motivation is fun for those who are paying attention, but, again, if you're not motivated by yourself, nothing I'm saying or we'll help you do will ever motivate you beyond your own drive and desire. Right? Because we are literally at times victims, uh, to the goals we set or the systems that we put in place, and sometimes we get locked into those and we think there's not a better thing or a better way to do it. And there's always somebody at a bigger dog status Trust me, there's bigger dogs than me on this who go and can do it at levels you don't necessarily comprehend yet. So, really, I always want people to remember that your opportunity begins at the end of your excuses.

Neil Twa:

If your excuse is there's not enough market on Amazon, you're wrong. There's 8,600 units a minute. 8,600 units a minute. Your market is on Amazon at scale. You're just not there yet.

Neil Twa:

Well, neil, there's not enough money? Well, money is transitory. It moves around. It creates inflation. It moves like a river. It changes directions, it changes paths. There's areas it's moving away from right now, like real estate and others, but guess what? It's moving into business, e-commerce and technology, ai and those systems, and if you're not moving with it, you're going to be victimized by it.

Neil Twa:

So don't be a victim. Take action on the things you're doing. And, by the way, you can't gain the knowledge without action. I know so many people think that they're just going to learn that one trick that's going to turn everything around, that stupid growth hack, that whatever. But you don't get to the wisdom without the knowledge, and the knowledge does not come without execution and experience. You must execute and experience, fail through the process of learning and earning as you grow, and the knowledge will come. And from knowledge will be the wisdom to do it the right way and understand what you did wrong, and then, hopefully, you're willing to learn from it, because we all make mistakes and we want to learn.

Neil Twa:

So the last thing here is just to remember that we are all on the path that we are on. We got to stop comparing ourselves to the social media gurus and commerce world and all this other crap and start saying I'm right, where I need to be and where do I need to go next. Shut off all that other noise, put your head down, like Jim Collins says, and good to great and become a hedgehog If you really want to get successful in three to five years and make a life changing opportunity with this business model. It will require you to do that. If you're willing to do that, I will tell you.

Neil Twa:

The rewards are huge. My four girls and I live here with my wife and we have a 50 acre homestead. We homeschool everybody. We do really what I want to do. If I don't want to have any more calls today, then I'll just move all my calls because I can, and if you want a lifestyle that leads that, that is ultimately where, in 17 years, it's taken me to get to this success. I help people do it in two years, so I think that's a pretty good trade-off but don't give up.

Neil Twa:

It's a huge opportunity out there, even if it may not feel like it for you right now, it is there. Trust me, it is huge and most people don't necessarily see it at times. Maybe today you saw a little different viewpoint and maybe that helps you out.

Adam Shaffer:

Neil, I mean first of all, thank you. I am motivated from your final thoughts, so this is the best final thoughts I've ever had on a podcast.

Neil Twa:

So thank you for bringing that to us. My pleasure. I'm honored.

Adam Shaffer:

Thank you, and if people do want to get in touch with you, how can they do it?

Neil Twa:

All over social media, the S. My last name is Twa, it is three letters. You can Google me and find me on the interwebs, everywhere you meet in whatever social platform is comfortable to you, or go to my website at Voltage DM. That's VoltageDigitalMarketingDMcom. Check it out, see what you see, check out the presentations of free trainings and workshops and if anything resonates, just feel free to hit me up directly. There's no sales team, it's just me for qualifying those who we work with and if it's an interest, then have a conversation. That is awesome.

Adam Shaffer:

Well, Neil, you rock and I really, really appreciate it and we all appreciate you joining us today. Thanks for the talk, the pep talk and the knowledge Thanks for having me on, Adam.

Neil Twa:

It's been an honor. I appreciate it. Thank you.

Announcement:

Thank you for watching another episode of the Planet Amazon podcast, where we talk all things Amazon. If you want to learn about how to accelerate your sales on Amazon, visit Phelps United's website at phelpsunitedcom.

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