Data Dudes Podcast 25 April 2024
[00:00:00] Will: Welcome to this episode of Amazon Data Dudes. I'm your host, Will Christensen, and I've got Brandon and Nan here. We're the owners of Cellular Labs. Hello. So today we're jumping in on a topic that is like highly debated and something that every single SaaS company, every single seller is currently arguing about to some degree or another.
[00:00:26] Will: Um, and we, we dove in earlier on one of our accounts, um, that was talking a little bit about discrepancies in the data and digging into different things. And what we discovered is, is actually not terribly surprising, but terribly frustrating when it comes to gathering data out of Amazon. So, you know, what it boils down to is here is, um, Amazon has an extreme conflict of interest and the conflict of interest actually creates a disparity in what they report to you.
[00:00:59] Will: So, Non, as an eight figure seller in your own right, tell me a little bit more about what you've seen as you've looked at the data inside Amazon and what you've had access to and what you ended up building yourself. To try to get better visibility into your profitability.
[00:01:15] Nhan: Yeah, that's a great question.
[00:01:17] Nhan: Well, for me as a seller, what I care about is not, uh, what the sales number is, but what is the number that actually matters like actual sales, uh, and then ultimately subtract all the fees and get the profitability. Well, as I investigated into it, I, there's a lot of variables. Like there's the, uh, business reports and then there's the orders API.
[00:01:42] Nhan: There's the transactions is like, where do I, like, what's my source of truth? Because there's also seems to be a variance because for example, some of the variances we found are like cancellations. You count that or removal units or returns or sales tax. Do you include that? If you include it, then, then which Amazon has the incentive to, because then it shows like your sales is really good, a lot more, but like, you're not actually receiving the sales tax.
[00:02:12] Nhan: It's just a pass through to Amazon. So like at the end of the day, that's not really a number I care about. It's just over inflating my, my volume. So that's kind of. The challenge I was facing and I found those discrepancies in there.
[00:02:26] Will: So you're saying that in the business reports, like this is the place that Amazon tells me as an Amazon seller, go, go to this part of seller central to see how, you know, they call it a business report because they want you to go look at your performance there.
[00:02:41] Will: You're telling me that they are inflating those numbers by leaving things like cancellations, sales tax, these things that aren't actually profit or, you know, they're not actually impacting my ability to grow as a seller. In fact, they're things that I'm not taking home.
[00:03:00] Nhan: That's right.
[00:03:01] Will: Interesting. So, I mean, that's an extreme conflict of interest there.
[00:03:05] Will: Brandon, have you noticed that in your experience with the API and looking at the data? Have you seen, you know, different places where, you know, we're running into those sorts of data problems?
[00:03:15] Brandon: I've been a proponent of financial data for a long time because like, and we've probably talked about this on this podcast before is like, there's at least 3 different ways to get data from Amazon and different pages in Amazon.
[00:03:29] Brandon: And the easiest way to get it is like, on the dashboards and stuff, but those are not. The financial data that you actually take home. Like what we're, what we've done at seller labs for years. And then we've had to like, kind of re reinforce that. And we're trying to re, re, re reinforce that again, is like the financial data is the data that matters.
[00:03:48] Brandon: Like, why, why are we, why are people trying to get things to match some. Fictitious number in Amazon dashboards that isn't even right. So like we've gone through an extreme amount of effort to make sure that our data from the financial aspects of data from Amazon is correct to the penny on a daily basis per skew.
[00:04:09] Brandon: Like, wait a minute, hold on. A lot of effort to do that. Like, why does anybody care about any number other than that? Cause that is the best number to use. Let's dig into that a little bit.
[00:04:17] Will: So I believe that maybe it has something to do with data accessibility. So I'm going to throw out an assumption here, Nan, and you validate this for me as a seller in your own right.
[00:04:28] Will: Do you think that perhaps the reason why people are so focused on making things match What's in the business report is because it for me is as a business owner. I want to validate this for myself. I want to know for myself that this is accurate and the only place that they can actually validate something for themselves without having to get out crazy pivot tables or access to this crazy thing called an API.
[00:04:51] Will: The only way to validate that is to download a report and that's supposedly validating it for myself. Do you think it's access to data? Is that why people are so focused on making things match?
[00:05:01] Nhan: Uh, access to data and, uh, the ability to understand what that data means and getting them to match. Like, the business reports is right in front of your face.
[00:05:10] Nhan: It's like when you log into Seller Central and it tells you your sales, that's the business reports. And you click into it, it gives you a nice chart. Which I can show you like this, uh, is, is that this is the business reports. This is the number of people see you, the amount of sales this month and last month.
[00:05:28] Nhan: It's simple. Like you would expect it to be, uh, accurate. Right. Uh, but it's, it's, it's not. It's kind
[00:05:37] Brandon: of directionally correct. So it's kind of good enough for a lot of things. But when we're talking about, like, margins being squeezed and you're getting down to single digit profitability percentages, like a 1 percent different makes a big difference, makes a big difference on things.
[00:05:51] Brandon: So, like, being 1 percent in those numbers is can be make big, can make your profitability as a company be like, 10 percent lower than you expect. I mean,
[00:06:02] Will: when your profitability is 10%, 1 percent is 10 percent of your profit. If your profitability is 2%, that's 50 percent of your profitability. So, okay, so what you're telling me is people are so interested in doing it themselves and confirming these numbers for themselves.
[00:06:20] Will: It, it's not. They, they're not open to, there's kind of a huge analysis, right? I was, I'm trying to think about this. If I'm an Amazon seller and I'm going into an account, I got to download all of that transaction data. And then I got to figure out how to run an analysis of some kind that helps me then connect things to the appropriate settlement and figure out.
[00:06:42] Will: you know, exactly what went up and down so that my profitability actually becomes like, this is actually what compared to my bank account.
[00:06:51] Nhan: Pause there for a second and, and, uh, explain what you just said there. Even so first, they're not aware of the discrepancy. And second, if they want, if they're, even if they're aware, let's say you just said, go download transactions.
[00:07:05] Nhan: There's no where you said, download transactions. You can't. You know, the closest thing you can download is what's called Unified Transaction Report, uh, in the Payments page, uh, and that will tell you row by row that that is transaction data, but it's not called transactions, it's called transactions. The Unified Transaction Report, uh, it's under the date range where like the tab is called date range.
[00:07:32] Nhan: So just the naming of the data where it comes from is already confusing. And when you're saying transaction, that's the terminology from the SPA, the API connection. So it's, it's from multiple sources of data and they're compiled differently. And it takes a lot of studying. I've been studying this for over 10 years and like, I'm still like, still learning new things every time.
[00:07:55] Brandon: I would say the only, the only accurate data on Amazon is that one that you talked about, if you go into the financial section and download the financial reports, those are the ones that are actually what you get paid on. Every other number in Amazon is an estimate, basically
[00:08:10] Will: and the estimate that's. Got a serious conflict of interest.
[00:08:14] Will: I mean, think about that's, I think that's probably the key for me is data sources are data sources and, and just like history is, is written in the eye of the beholder or written from the perspective of whoever was there. If I'm going to go look at history, probably should go look at the history that matches my bank account versus the history that was written by the marketplace that wants me to feel more profitable.
[00:08:40] Will: So I stay on their marketplace.
[00:08:42] Nhan: That's right. That's right. Uh, there's definitely a conflict. Not, not, maybe not intentionally sometimes, but sometimes it is. And then there's the other aspect that Amazon has these two pizza teams, and each team has a different priority, and they present data differently.
[00:08:57] Nhan: And that, that's, and you see the different types of reports.
[00:09:02] Brandon: Well, it comes back to like, again, the multiple teams, like somebody summarized it into an easier to use version inside Amazon. And so everybody else uses the easier to use version. They don't go back to the raw data because the raw financial data is actually very, very difficult to use.
[00:09:18] Brandon: Honestly, it's a pain in the butt. Nobody's like, we're the only company I know that's like done a good job of like actually, actually like. Parsing that and storing it and using having an easy to access version of it. So interesting. So,
[00:09:33] Will: I mean, at its core, what we're trying to tell people, and I, and I think, you know, a question comes up for the seller labs, customer service team sometimes, and they say, Hey, this data doesn't match the business reports.
[00:09:44] Will: And I think what we're trying to say is it shouldn't, um, you don't want to
[00:09:47] Brandon: match that garbage. We won't even want to try,
[00:09:49] Will: right? We're we, we want to match what's in your bank account. I mean, if that's what you would like to match, that's what seller labs does. Yeah. So, so we want to be different than the business reports that seem to have a skewed conflict of interest that include things that don't actually make you as profitable and as effective as you can be as a seller.
[00:10:10] Nhan: That's right. And again, the things that we found to cause that difference is they include cancellations or removal unit or order units, third party unit sales or returns or sales tax. They just add things in there that they shouldn't have.
[00:10:27] Brandon: Gift wrap, like does seller ever get paid for gift wrapping? No, it's included in the report.
[00:10:33] Brandon: Interesting.
[00:10:34] Will: Uh, that sounds inflated to me. I think, I think we've nailed it. I mean, you know what, you can only dig it up so, so deeply, but, but I think that really sums up why at Seller Labs, we know it's not going to match the business report and in fact, we're proud of that. Um, we're proud of the fact that this is going to match your bank account.
[00:10:54] Will: All right. That's it for this episode of Amazon data dudes. Thanks guys. If you're aware of any other random weird reports or you want us to dig deeper, use our analysis of multiple accounts to get an idea for some other discrepancy that you're seeing out there in the world between the business reports and what's going on in your bank account, let us know.
[00:11:16] Will: We're happy to dig into that. That's all for now.
[00:00:00] Will: Welcome to this episode of Amazon Data Dudes. I'm your host, Will Christensen, and I've got Brandon and Nan here. We're the owners of Cellular Labs. Hello. So today we're jumping in on a topic that is like highly debated and something that every single SaaS company, every single seller is currently arguing about to some degree or another.
[00:00:26] Will: Um, and we, we dove in earlier on one of our accounts, um, that was talking a little bit about discrepancies in the data and digging into different things. And what we discovered is, is actually not terribly surprising, but terribly frustrating when it comes to gathering data out of Amazon. So, you know, what it boils down to is here is, um, Amazon has an extreme conflict of interest and the conflict of interest actually creates a disparity in what they report to you.
[00:00:59] Will: So, Non, as an eight figure seller in your own right, tell me a little bit more about what you've seen as you've looked at the data inside Amazon and what you've had access to and what you ended up building yourself. To try to get better visibility into your profitability.
[00:01:15] Nhan: Yeah, that's a great question.
[00:01:17] Nhan: Well, for me as a seller, what I care about is not, uh, what the sales number is, but what is the number that actually matters like actual sales, uh, and then ultimately subtract all the fees and get the profitability. Well, as I investigated into it, I, there's a lot of variables. Like there's the, uh, business reports and then there's the orders API.
[00:01:42] Nhan: There's the transactions is like, where do I, like, what's my source of truth? Because there's also seems to be a variance because for example, some of the variances we found are like cancellations. You count that or removal units or returns or sales tax. Do you include that? If you include it, then, then which Amazon has the incentive to, because then it shows like your sales is really good, a lot more, but like, you're not actually receiving the sales tax.
[00:02:12] Nhan: It's just a pass through to Amazon. So like at the end of the day, that's not really a number I care about. It's just over inflating my, my volume. So that's kind of. The challenge I was facing and I found those discrepancies in there.
[00:02:26] Will: So you're saying that in the business reports, like this is the place that Amazon tells me as an Amazon seller, go, go to this part of seller central to see how, you know, they call it a business report because they want you to go look at your performance there.
[00:02:41] Will: You're telling me that they are inflating those numbers by leaving things like cancellations, sales tax, these things that aren't actually profit or, you know, they're not actually impacting my ability to grow as a seller. In fact, they're things that I'm not taking home.
[00:03:00] Nhan: That's right.
[00:03:01] Will: Interesting. So, I mean, that's an extreme conflict of interest there.
[00:03:05] Will: Brandon, have you noticed that in your experience with the API and looking at the data? Have you seen, you know, different places where, you know, we're running into those sorts of data problems?
[00:03:15] Brandon: I've been a proponent of financial data for a long time because like, and we've probably talked about this on this podcast before is like, there's at least 3 different ways to get data from Amazon and different pages in Amazon.
[00:03:29] Brandon: And the easiest way to get it is like, on the dashboards and stuff, but those are not. The financial data that you actually take home. Like what we're, what we've done at seller labs for years. And then we've had to like, kind of re reinforce that. And we're trying to re, re, re reinforce that again, is like the financial data is the data that matters.
[00:03:48] Brandon: Like, why, why are we, why are people trying to get things to match some. Fictitious number in Amazon dashboards that isn't even right. So like we've gone through an extreme amount of effort to make sure that our data from the financial aspects of data from Amazon is correct to the penny on a daily basis per skew.
[00:04:09] Brandon: Like, wait a minute, hold on. A lot of effort to do that. Like, why does anybody care about any number other than that? Cause that is the best number to use. Let's dig into that a little bit.
[00:04:17] Will: So I believe that maybe it has something to do with data accessibility. So I'm going to throw out an assumption here, Nan, and you validate this for me as a seller in your own right.
[00:04:28] Will: Do you think that perhaps the reason why people are so focused on making things match What's in the business report is because it for me is as a business owner. I want to validate this for myself. I want to know for myself that this is accurate and the only place that they can actually validate something for themselves without having to get out crazy pivot tables or access to this crazy thing called an API.
[00:04:51] Will: The only way to validate that is to download a report and that's supposedly validating it for myself. Do you think it's access to data? Is that why people are so focused on making things match?
[00:05:01] Nhan: Uh, access to data and, uh, the ability to understand what that data means and getting them to match. Like, the business reports is right in front of your face.
[00:05:10] Nhan: It's like when you log into Seller Central and it tells you your sales, that's the business reports. And you click into it, it gives you a nice chart. Which I can show you like this, uh, is, is that this is the business reports. This is the number of people see you, the amount of sales this month and last month.
[00:05:28] Nhan: It's simple. Like you would expect it to be, uh, accurate. Right. Uh, but it's, it's, it's not. It's kind
[00:05:37] Brandon: of directionally correct. So it's kind of good enough for a lot of things. But when we're talking about, like, margins being squeezed and you're getting down to single digit profitability percentages, like a 1 percent different makes a big difference, makes a big difference on things.
[00:05:51] Brandon: So, like, being 1 percent in those numbers is can be make big, can make your profitability as a company be like, 10 percent lower than you expect. I mean,
[00:06:02] Will: when your profitability is 10%, 1 percent is 10 percent of your profit. If your profitability is 2%, that's 50 percent of your profitability. So, okay, so what you're telling me is people are so interested in doing it themselves and confirming these numbers for themselves.
[00:06:20] Will: It, it's not. They, they're not open to, there's kind of a huge analysis, right? I was, I'm trying to think about this. If I'm an Amazon seller and I'm going into an account, I got to download all of that transaction data. And then I got to figure out how to run an analysis of some kind that helps me then connect things to the appropriate settlement and figure out.
[00:06:42] Will: you know, exactly what went up and down so that my profitability actually becomes like, this is actually what compared to my bank account.
[00:06:51] Nhan: Pause there for a second and, and, uh, explain what you just said there. Even so first, they're not aware of the discrepancy. And second, if they want, if they're, even if they're aware, let's say you just said, go download transactions.
[00:07:05] Nhan: There's no where you said, download transactions. You can't. You know, the closest thing you can download is what's called Unified Transaction Report, uh, in the Payments page, uh, and that will tell you row by row that that is transaction data, but it's not called transactions, it's called transactions. The Unified Transaction Report, uh, it's under the date range where like the tab is called date range.
[00:07:32] Nhan: So just the naming of the data where it comes from is already confusing. And when you're saying transaction, that's the terminology from the SPA, the API connection. So it's, it's from multiple sources of data and they're compiled differently. And it takes a lot of studying. I've been studying this for over 10 years and like, I'm still like, still learning new things every time.
[00:07:55] Brandon: I would say the only, the only accurate data on Amazon is that one that you talked about, if you go into the financial section and download the financial reports, those are the ones that are actually what you get paid on. Every other number in Amazon is an estimate, basically
[00:08:10] Will: and the estimate that's. Got a serious conflict of interest.
[00:08:14] Will: I mean, think about that's, I think that's probably the key for me is data sources are data sources and, and just like history is, is written in the eye of the beholder or written from the perspective of whoever was there. If I'm going to go look at history, probably should go look at the history that matches my bank account versus the history that was written by the marketplace that wants me to feel more profitable.
[00:08:40] Will: So I stay on their marketplace.
[00:08:42] Nhan: That's right. That's right. Uh, there's definitely a conflict. Not, not, maybe not intentionally sometimes, but sometimes it is. And then there's the other aspect that Amazon has these two pizza teams, and each team has a different priority, and they present data differently.
[00:08:57] Nhan: And that, that's, and you see the different types of reports.
[00:09:02] Brandon: Well, it comes back to like, again, the multiple teams, like somebody summarized it into an easier to use version inside Amazon. And so everybody else uses the easier to use version. They don't go back to the raw data because the raw financial data is actually very, very difficult to use.
[00:09:18] Brandon: Honestly, it's a pain in the butt. Nobody's like, we're the only company I know that's like done a good job of like actually, actually like. Parsing that and storing it and using having an easy to access version of it. So interesting. So,
[00:09:33] Will: I mean, at its core, what we're trying to tell people, and I, and I think, you know, a question comes up for the seller labs, customer service team sometimes, and they say, Hey, this data doesn't match the business reports.
[00:09:44] Will: And I think what we're trying to say is it shouldn't, um, you don't want to
[00:09:47] Brandon: match that garbage. We won't even want to try,
[00:09:49] Will: right? We're we, we want to match what's in your bank account. I mean, if that's what you would like to match, that's what seller labs does. Yeah. So, so we want to be different than the business reports that seem to have a skewed conflict of interest that include things that don't actually make you as profitable and as effective as you can be as a seller.
[00:10:10] Nhan: That's right. And again, the things that we found to cause that difference is they include cancellations or removal unit or order units, third party unit sales or returns or sales tax. They just add things in there that they shouldn't have.
[00:10:27] Brandon: Gift wrap, like does seller ever get paid for gift wrapping? No, it's included in the report.
[00:10:33] Brandon: Interesting.
[00:10:34] Will: Uh, that sounds inflated to me. I think, I think we've nailed it. I mean, you know what, you can only dig it up so, so deeply, but, but I think that really sums up why at Seller Labs, we know it's not going to match the business report and in fact, we're proud of that. Um, we're proud of the fact that this is going to match your bank account.
[00:10:54] Will: All right. That's it for this episode of Amazon data dudes. Thanks guys. If you're aware of any other random weird reports or you want us to dig deeper, use our analysis of multiple accounts to get an idea for some other discrepancy that you're seeing out there in the world between the business reports and what's going on in your bank account, let us know.
[00:11:16] Will: We're happy to dig into that. That's all for now.
