Amazon Business is quickly emerging as the top category on enterprise-level B2B eCommerce. In this episode, Brian Beck, Managing Partner at Enceiba, joins Ben as they discuss how Brian and his team help companies succeed on Amazon with a significant focus on the B2B eCommerce. Brian and Ben dive into the importance of having the right strategy, building that strategy, and executing it as they talk about the work Enceiba does with its clients. Understand the need for traditional B2B companies to innovate as Brian talks about the shift brought by the rapid development in technology. Tune in and learn how you can get in front of the opportunity and the changing distribution model.
Welcome to another episode. This show is all about you. It's all about what are you going to do to make yourself better? How are you going to take you and your business and elevate it? I bring a guest on board that's going to help you elevate your game. There are always lessons to be learned, new ideas that come out of things, and things that I learned on the show. This is the number one reason I do this show is to be able to help people be more effective. I get to interview people and learn things and I don't have to pay for it. I've got Brian Beck on the show. Brian does enterprise level eCommerce over Amazon. We're going to sit there and talk to him. Welcome to the show, Brian. I'm excited about this. Let's get into this whole conversation.
Thanks for having me. I'm excited to be here and share the pearls of wisdom I have, and have a good conversation about Amazon and eCommerce in general, and what's happening particularly on the B2B side of things, which is where I focus a lot of my energy these days with my book out and everything. I’m excited to be here.
We'll make sure we mentioned the book because we will get into that as well. First of all, I wanted to give a shout out to Kurt Andersen. He is my de facto PR department and introduces me to some incredible people and you're one of them. I couldn't go into this episode without giving Kurt a shout out. He is the introducer. He's the one that says, “You got to meet Brian.” I went, “Why do I need to be Brian?” He tells me a little about you. I go, “I never thought of this.” I picked up you, we made the handshake, made it happen, and all of a sudden here we are. Thanks for being on the show.
I don't know if you've ever read any Malcolm Gladwell books. I don't remember if it was The Tipping Point or one of those, but he talked about this class of people that he calls connectors. There's classic connectors and Kurt is a connector on steroids. The man has so much energy and a fantastic guy. I'm glad he connected us and I’m super excited to be here. We share a lot of similarities in what we do. Kurt and I do different circles and industries and things. Let's dive in, what do you want to talk about?
Can we get into what you do and why you do it? Let's start off a little bit about you. The company's name is Enceiba. Let's talk about where the concept of the company came from? What you guys do and why the name Enceiba? The name itself says everything about you, but unless you know what it means, you haven't got a clue.Amazon is the great revealer of value. Click To Tweet
The name comes from the Ceiba tree. It is the tallest tree in the Amazon rainforest. Our business is focusing on helping companies to succeed on Amazon, have the right strategy, build that strategy and execute it. We help our clients stand out in the rainforest. Our logo is a tree and the Ceiba tree is where we take the name thus, Enceiba. What's different about it is that we focus on manufacturers of products and companies that make products. We have a very significant focus in the B2B sector. We're aiming for companies that are looking to take advantage of Amazon business in particular, which is the fastest growing part of Amazon.
A lot of companies don't realize this. They already are, but they're going to be more so one of the largest distributors in the world in the B2B category. Why do we start this business? We started it because number one, B2B is a quickly emerging category on Amazon across many different industries. The manufacturers in B2B don't know where to start. They take control of what's happening on Amazon for many years. If they're on Amazon at all, they've let resellers sell their product. It's interesting. Enceiba did a survey and we asked manufacturers, “How many of you are selling your products on Amazon or know your products are on Amazon?” Seventy percent said, “Our products are on Amazon.” We said, “How many of you know who's selling your products?” Seventy percent of them said, “No, we have no idea.”
“We're making a lot of money, but we have no idea who’s selling this.”
They're not in any control of the price. They're no control of the quality of service. They might have 60 or 70 or 80 people. Some of the big manufacturers we work with are these $2 billion, $3 billion, $4 billion, $5 billion companies. They have no idea who's selling their product on Amazon. Why it's selling for half the price that their distributor or Lowe's or Home Depot are selling it for? They don't know how to chase it down. It's a bit of the Wild West. It's where consumer was many years ago and still is on Amazon. That's the reason we started the business, lots of volume, no control, desire to control and real business benefit when they gain control. These are all big B2B, industrial products, MRO, janitorial products, sanitary products, medical products. These are the categories we're working in.
When you and I first started talking about it going, “Janitorial products, oil drums, medical products on Amazon?” You think about those things as traditional, B2B relationships that are sold through purchasing manager, with large purchase orders, where things come into a warehouse. You order them and 90 days later, they ship out the door. That world has changed. The smart manufacturers are realizing it, but the problem is manufacturer's mentality.
People tell me manufacturing as an industry is ten years behind everybody else on average in terms of how they sell. Being able to bring those people up to the 21st century to get them into understanding social selling, getting them to understand the Amazon ecosystem is opening their eyes up to something that they truly absolutely don't understand. What's the first step because you have companies that sit there and say, “We've always done it this way. Business is fine.” How do you get people to understand that it may be fine today, but somebody is going to be eating your lunch if not tomorrow, the day after that or the day after that?
There are lots of reasons why I wrote the book about eCommerce. How do you get someone to understand this? Where does it start? It starts with leadership. The top has to understand something has to be done and it's everything else too. It's understanding of the world has changed. The customer expectation has changed. For example, 75% of the B2B buyers by 2025 are going to be Millennials. That's formed between 1980 and 2000. Where do the Millennials do all their shopping? Amazon. Almost 100% of Millennials use Amazon for at least part of their shopping. They buy more online than they buy offline. This is your customer, guys. Where does it start? That traditional B2B company is very conservative.
They have sold a certain way for many years. They're terrified of channel conflict. They're scared of the salesforce getting disintermediated. The salesforce might fight against this because this is my relationship. It is still a relationship. It's just changing. Amazon is used on online channels all the way through purchase process alongside the salesforce. There was a great study done by Gartner that showed that it's not a handoff. You're not saying, “The website's going to generate a lead and hand it off to the sales team.” What happens is the website generates a lead or the sales team does, but then they work together all the way through to the close of the sale. Even after the sale, there's digital interaction working together with the sales team.
This is not one and the other. These need to be complementary. How does Amazon fit into it? Amazon is a place where a lot of people are doing research. They're accommodating the business research and buying process in a way that a lot of traditional distribution isn't. You got your big guys that have done a lot of investment into eCommerce. They've done some investments. There's a whole swath of companies particularly in the mid-market that haven't done anything, and they're the ones that are at risk. Everybody's at risk of the shift but as a manufacturer, I strongly believe Amazon business is an opportunity. You can get in front of it. It's a shift in the buying preferences and research preferences of customers. It's something that's an evolution of your selling channels. The distribution model is changing. For manufacturers, they need to embrace that. It takes some while to get there.
Your sales process is still going to be amongst your salespeople to the purchasing order. Where the process changes is in the distribution model. A lot of what you're doing traditionally remains the same, but it's the fact that distribution, how things are purchased, how their things are shipped and all that stuff changes through using Amazon as an intermediary. Is it things far more complex than that and I'm oversimplifying things?In the eCommerce world, your virtual salesperson is the website. Click To Tweet
You're hitting on elements of it. In my book, I highlight the changes in the traditional value chain. Let's go back 50 years, the manufacturer made a product, sold it to a distributor, that distributor sold it to the end user. The distributors value is selection, maybe price, but selection. Maybe it's also some value around how does that end user use that product and helping them to use it with other products. That's a straight line relationship. That's 200 and 500 years of doing business. Now, that end user has more choice and there's so much disruption happening in the middle of that. You've got distributors that are eCommerce enabled. You've got pure play eCommerce distributors and resellers and retailers. You've got marketplaces. That's Amazon, Alibaba, niche marketplaces, it's all these different marketplaces in the mix.
Then on top of that, you've got manufacturers selling direct to the end customer. What does this do? It shifts just like we saw in the consumer marketplace. Think about Sears and JCPenney and Macy's. All those businesses that had the same business models, the distributor, a lot of parallels there. Look at what happened. The consumer has more power now than ever. The business buyer now has more power than ever. What I mean by that is they have multiple choices on where to buy. They have more product information than ever before. They have more price, access, and transparency they've ever had. I love this analogy. I have it also in the book. It’s the same with self-promotion, but one of the analogies I like to make is to the car industry.
You're about buying a car now versus twenty years ago. Twenty years ago, the car dealer got a lot of margin from selling the car. Something like 20% or something on the sell the car. What's happened with all the transparency related to car costs, which you should pay all the details, compare it to everywhere, online ways to buy it, offline ways to buy it, combination ways to buy it. The consumer has more power than they ever have. Guess what happens to that margin at the car dealer? From 18%, that’s 3% now. Where do they make their money? What are the successful car dealers doing?
They're doing other things. They're embracing the digital aspect. They're providing service. They're adding value beyond the sale of the car. They're doing things like introducing new products like their warranties. They sell you so hard on the extended warranty. I'm a sucker. I buy it every time. That's where they make their money. The entire value chain has shifted and the successful ones that have recognized it and they're are doing fine. The ones that didn't recognize it, they’re out of business. That dynamic is coming to B2B. It’s already here.
It's interesting because 70% of a buying decision is made before you even contacted a sales rep. Before you even walk in, take the dealership situation. By the time you get onto the car lot, you pretty much decide which car you want, what model you want, whether you want V6 or V4, leather seats or dog leather seats, Apple play or Microsoft sync, or whatever you're going to want. What are the things that you want? By the time you get to the dealership, it's all about the experience. It's all about, do you know, like, and trust this particular sales rep? Unless you're buying this 1974 classic car that only this lot has, and only has one of them, you can go on seventeen different lots.
The truth of the matter is you can buy it online anywhere across the country and have the car shipped to you. Where the value add is in customer reviews, customer experience, after service market. Those are the things that bring people first of all to you, and second of all, keep them coming back to you. The product itself become commoditized with a lot of our product. We shouldn't but we have. If we can sit there and realize, “This is where Amazon shines. This is where Amazon can fit in and be able to not only grease the wheels and be able to make the process easier, but also free us up to do the things that we do well.” It becomes a far more effective relationship.
I like to call Amazon the great revealer of value. If your sales team or process or traditional channels are not adding value, or as a business, you're not adding value. Amazon will challenge that and we'll reveal it to you. As a manufacturer, you need to be on Amazon and you need to be well-represented, even if it's not your entire assortment. You need to take control of it. It's because it's a place where customers go to research product. Even if they don't buy them there, they go there to research it and understand it. Getting back to the car example, after I go to the car dealer, if I haven't closed a deal, I'm going to go back online and look at the car and look at all the different places to make sure that it’s exactly what I want before I close the deal.
The internet and Amazon interplay with the physical sales process. Amazon, what we see happening is a lot of products where there's not a lot of value needed in terms of a consultative sale. Meaning, if there's not a lot of application knowledge, things need to go together certain ways. There's not a lot of installation or other things where there's a lot of consultation involved in the sale in B2B categories, A lot of those products are natural fits for Amazon, because think about of what Amazon is great at. It's about removing all the friction in the process, getting you the right information, getting the transaction done and getting it shipped to you quickly. It’s the best in class in the world with that.
Those products that are minimum are great fits for Amazon. If you don't have your own eCommerce yet as a manufacturer, Amazon is an easy way to relatively low capital intensity, very fast time to market. If you have good data on your products, you can be live on Amazon in a month or two with a very low capital investment. Whereas if you're launching your own eCommerce as a B2B manufacturer. It's months or year or year-plus, and it's a much more significant capital investment.
Probably a far more painful experience, because you're starting from scratch where Amazon has a plug and play model. You can sit there and say, “Here's the template. Here's everything. All you need to do is put your material in this particular template, go.”The companies need to realize that Amazon is a search engine and you should be there with your brand. Click To Tweet
It's a little more complicated than that but yes.
It’s a lot easier than starting from scratch.
The order of magnitude difference. I've done both for many years. The order of magnitude difference is significant. I will say though that Amazon, in my opinion, doesn't live in a bubble. You needed a broader eCommerce strategy. It's not just about Amazon, Amazon Plus, what are other marketplaces? What is your own eCommerce strategy? How are you enabling your channel partners? Let's say you're selling at Ferguson, Home Depot, Lowe's and Grainger. All those companies have a very sophisticated eCommerce operations that you as a manufacturer needs to support through great product content, data, insights, analytics, other things about your product.
These things all work together. As much as on Enceiba we focus on Amazon as a channel, it needs to be part of a broader strategy in our opinion. The good part about launching on Amazon program early as your first step is it builds your muscle. You get your data ready for Amazon. You start understanding what it means to merchandise on a website and market on an eCommerce fashion without all the overhead of the infrastructure you need to build to launch your own.
As a neophyte or a manufacturer or whoever that comes to you right out the bat, or comes to you because they've done it wrong, what's the number one thing that you see people either having misconceptions about starting the process or do wrong time and time again when starting the process?
I spent a lot of my time talking to mid-market and large manufacturers about those exact issues and some of them have. There are a couple of categories where companies will often go wrong with Amazon. One is that they say, “I have a product catalog of 5,000 or 10,000 products.” I'm going to launch one product on Amazon and I'm expected to do hundreds of millions of dollars. There are individual products on Amazon that do millions of dollars in sales. Let's set that expectation, but if you're going out with one product, the chances of that one product succeeding even if it's a good seller are very low. You can't build a whole program on one product.
The number one mistake I see is a company don't think broadly enough about Amazon as channel. You need somewhat of a reasonable service. You don't have to put everything there. That's one issue. That's one challenge. The second issue I see is that they're not understanding the nuances and importance of content and great content, because they're used to selling through commercial channels. They're used to giving the product to a sales team that goes out, and the content is the salesperson talking about how great the product is, or it's a brochure and that expertise. In the eCommerce world, virtual salesperson is the website. Content I often find is lacking. It’s the number two mistake. The third major mistake I see is they don't understand or want to take control of the channel.
What I mean by that is they're not willing to necessarily stomach the channel conflict implications of going out to the channel with it and internet in general, with a good policy that will help them control the overall resale market. Some are over the hump with that. Ultimately, what arrives above all this is you've got to have the senior leadership has to be aligned with this and pushing for it. If they're not, you can be the eCommerce director or whatever you are in the company, but if you don't have that leadership, you're not going to succeed because you're not going to get the things necessary. This is a change of mindset. Whether it's Amazon or your own eCommerce, it's a change of mindset in approaching your business.
Those people who are successful need the leadership and need to be open-minded about the shifts in mindset and want to learn. If they're not, in that mindset, they won't succeed. I've seen it time and time again. The ones that are open and have leadership, they can succeed. They're doing millions of dollars on Amazon. They're in control of the channel. The ones that aren't, they don't succeed. They put up one product, don't do good content, don't align the channels. They don't get millions in sales and they go, "Channel doesn't work.” It can work. You're doing it wrong.
Let's break this down to something that's simple. I need a 40-foot by 40-foot tarp for a particular purpose of it. I figured, “I'm going to go up on Amazon.” I went to Home Depot online. I went to Canadian Tire online and I ended up on Amazon. I found this manufacturer that had 55 different sizes and thicknesses of tarps. The question is, did you want your grommets 3 feet apart? Did you want 17 millimeters? Did you want 8 millimeters? They had a wide variety. Within the 40-foot by 40-foot tarp, they had 3 or 4 different versions of the tarp based on the quality at different price points.Trust is important in business. Click To Tweet
It was easy for me to sit there and say, “We've got a budget of X. We're only going to be using this for six months. In a year of this tarp falls apart, it doesn't matter.” Therefore, we're going to go with them or we have more cost effective solution, but somebody else has sit there and had different needs, had the option to go from A to B to C from the good, better, best. That put them in a capable position because I'd never left their page. I sit there and go, “They've got a 30 X 20. They've got an 8 X 8.” If I ever needed another tarp, I’ll bookmark it, I can find these buys again. The other thing is I sit there and say, when you're talking about content, the one thing that I'm seeing that lacks on Amazon for content is video. My question is, is video starting to be seen as valuable both by Amazon and also by the retailers? How are you advising your clients on the use of video? I find that video captures my attention far more than 1500 words ever will.
If you look at the top selling product in many categories on Amazon, they have video. If you look at a lot of the product that does well on Amazon and in the apparel category, for example, there's video that's playing by default, showing the drape, etc. In B2B categories, video can be enormously impactful. Our bestselling and highest converting products from our clients in general have a video attached to them. Amazon has accommodated that, not only in the product listing itself where if you look on Amazon, you'll see a bunch of images usually for good sellers. You often see a video somewhere in that list of products and you click on it and see the video, but also even in the brand content. If you scroll down on an Amazon page, you see something called “enhanced brand content.”
It's from the manufacturer. It's all about, “Why buy this product from this manufacturer?” Video is in there too oftentimes. It's a best practice that as you’re building rich content on Amazon, video should be in there. It's not to say it can't sell without video, but video helps to bring it to your life. This is your digital salesperson. Video is a great medium for that and people are increasingly expecting it. If you look at companies that you may have even heard of on Amazon, the brand before, but if it's a rich content there's video there, you're more likely to buy.
Let's take it to the point, all of a sudden, you're in somebody's bathroom at 2:00 in the morning and you’re scrolling. You're getting their attention in ways that your competitor is not.
One of my favorite things to do, I did this with a billion-dollar industrial tools manufacturer, is go online with their senior people and look at Amazon and do a search on their product category. This was like abrasive tool, like a grinder or something. We searched on the general term. We're looking at the top selling products. Some of them are generating $2 million and $3 million a year on one product. They're going, “Who is that manufacturer? Who are these people? I never heard of them.” Traditionally, they are like, “Here's my 5 or 10 manufacturers I compete with. I know who they are. I know what they do. I know how they sell.” All of a sudden, there are all these millions of dollars going to these brands they'd never heard of. These are brands created for eCommerce. These are digitally native brands that have used Amazon and their own websites to capture customer dollars.
What's happening with COVID, you've got 50% of buyers buying things from companies they've never bought from before and making purchases online because it's the only place they can go. Those traditional companies are losing share right now because people are shifting their behaviors and they have to go online. These companies are showing up on the top of general searches on Amazon, and they've got great listing quality. They're doing everything right. They got videos and they got everything. There are prime eligible products. The traditional B2B companies are getting their butts kicked by these new brands.
With that, do you see that brands are creating Amazon-only SKUs or Amazon-only sub-brands to test the market? To be able to sit there and say, “We want to test this new category. We usually put 100 in a box. We want to put 200 in a box and be able to have it as a separate brand name.” If it dies, it dies and it doesn't affect the actual brand itself.
We do see that. The challenge with that approach, creating unique products brands, bundles and pricing for different channels has been used for years in B2B and it should be using Amazon. It's a good strategy for Amazon. That said, the companies need to realize that Amazon is a search engine and you should be there with your brand because people are going there and they're discovering other companies, not you. If you're not there and you're not represented well or were represented poorly, that's the impression they're getting of who you are. That's a good strategy that you mentioned, but it's one that I think is complimentary. One mistake I see companies make is being very timid about this. That's one way they're timid. They are saying, “We’ll launch this little brand here.”
Let’s dip our toe in the water.
You're ignoring what's happening when you do that. I give you lots of numbers that show what's happening and it's not office products. It's happening in all kinds of product categories, industrial medical, dental. In 2019, Amazon did $2 billion in dental products. They have a whole series of criteria that allow a licensed dentist or doctor to buy through Amazon. You need to submit a license. They get the credentials. These dental offices are buying through Amazon and they're buying not only the over the counter stuff like nitrile gloves or other things, but they're buying class-two medical devices.
Amazon has created a medical device establishment license warehouse, a bonded warehouse or whatever they need to do to be able to establish the protocols for the medical industry?
That is in process. They're building that. They ship it from the manufacturer. We have several clients in the dental and medical field, Cardinal Health and a couple of others, that are shipping products. Some of it are over the counter, but some of it is regulated and used in the mouth in dental procedures. These are regulated FDA products and that part of their business is growing. It's because the office manager at the dental office or at your dentist office, they want to buy their products through Amazon. They do it every day for themselves. They want to go on Amazon, “Look at the way I spend management tools. I can see how much I spent and where I spent on Amazon. They make it so easy. I get it in day. It's Prime eligible. This Prime is cool.” This is happening. I can also stream music in my dental office from Amazon Prime. Amazon is doing a lot of things right to capture the business buyer.
One last major question and we're going to have to settle this down. There's so much information here that my mind is exploding. I want to talk about good reviews and bad reviews, and what are the things that you're seeing that companies are doing wrong when they're seeing both?
That's a loaded question because Amazon had a challenge with fake reviews, with people who came in the system with reviews for years. When we talk about reviews, number one, it's important to have a long review on Amazon. Reviews are enormously important for gaining visibility in search on Amazon. There are 600 million products on Amazon, almost a billion products. Search is important. You've got to stand out. You got to be on page one. One way to stand out is to make sure you have a lot of reviews and good reviews. What some companies are doing wrong. In some cases, they're trying to game the system. Don't do it. It's not the long view. If you try to send it off to India or something, or try to get someone to write reviews for you, where you're giving away product or other things, it’s not a good idea.
There are tools within Amazon to help you build review content, and those should be used. Listing reviews after the purchase is okay. The program's called Amazon buying. There's an early reviewer program. There's a number of other programs that help companies to solicit reviews through Amazon using what we call “white hat tactics.” That's the path to follow. Don't fall for the, “We can get you 300 reviews in two weeks.” Amazon is under so much pressure to clean this up. They're doing everything they can, just like they are with counterfeit sellers and other things. They're making it harder. Amazon has an enormous task in front of them. You're talking about millions of reviews and lots of sellers and all this other stuff.
It's a big task and there's bad actors that will slip through. At the end of the day, my advice is to take the white hat path and take your time with it. Understand it's going to take some time to build review content. Build products that are going to live on Amazon for a while. That's the other thing, the longer your product can live on Amazon, and this is true in many B2B categories, the more chance you have to build that review content. If it goes in and out of stock or is seasonal, it's harder. You can still do it but it's harder to build a lot of review content.
I look at it from a personal point of view. I've written two books on Amazon. People come up to me and says, “I can make you a number one bestseller on Amazon.” For $3,000, anybody can be a number one bestseller to Amazon because these guys have got 150,000 persons list. They put your book on sale for $0.99. They say, “You have to buy the book within 24 hours in order to qualify for this pricing.” All of a sudden, you get this huge bump in sales, but it means nothing. You're a number one bestseller for 30 minutes on Amazon, but you can put it for the rest of your life on your book That you're a number one bestseller because you have the number one bestseller badge. There are many different ways to game the system. None of them lead to long-term relationships or reliability, or be able to build your relationship with your customer.
It maybe different for some other companies, but a lot of our clients have been in business for 100 years. These are blue chip companies that they have a long review to begin with. If that's your business, if you're not an opportunist, you wanted to look at, “What does Amazon's going to be 5 or 10 years from now for us? A channel, a distribution partner. How does it work with our other channels? Let's get some honest and quality reviews in there as we build.” It will come. It's like building another channel, like opening a plant or opening a distribution center or new selling channels. It's the same mindset. You want to think about this as an investment if you're a legitimate seller product, whether you're a distributor or manufacturer.
Everybody can grab your book. You're going to be able to get a hold of Brian and his book, which I'm assuming is on Amazon. This has been absolutely phenomenal. The last question I ask everybody, as you walk out of the meeting, as you get in your car and you drive away, what's the one thing you want a client to think about you when you're not in the room?
I have to say trust. People feel like I'm telling it straight, you can trust what we're telling you that I'm not going to sugar coat things, “He'd be very straightforward and transparent.” To me, trust is important in business and it gets back to what we were saying earlier about the traditional B2B business approach, which is largely about relationships and trust. I believe that that's still very important even in the world of Amazon because it is about trusting who you're buying from and trusting that when you get a product on Amazon, that it's going to deliver for you. That's one of the things I love about Amazon is that you get those product reviews. You get transparency on what people think. If I'm walking out of a room and ten minutes later, they said, “Brian knows what he's talking about and I can trust him.” That's most important to me.
Trust is how we all build long-term relationships. It's not about the sale. It's about the sales that are going to go on for weeks and months and years and hopefully decades. Thank you for being an amazing guest. Thank you for dropping some incredible knowledge.
Thank you, Ben. I appreciate the opportunity. It's been fun.
Love the show? Subscribe, rate, review, and share!
Dive straight into the feedback!Login below and you can start commenting using your own user instantly