Andy Splichal:
Welcome to the Make Each Click Count podcast. Today I'm thrilled to host Lee Loree. Lee, a seasoned entrepreneur with over two decades of experience across technology, energy, and financial sectors, and the co-founder of Seller Investigator, Lee has an incredible track record of driving growth and innovation through his expertise in IT business strategies and operations. As a driving force behind Carbon 6, Lee leads a team that empowers Amazon sellers with cutting-edge tools designed to enhance profitability, streamline operations, and scale business effectively. Welcome to the show, Lee.
Lee Loree:
Thanks for having me Andy. Appreciate it.
Andy Splichal:
Hey, you know, I'm always fascinated to hear how industry leaders like yourself identify and pivot into new opportunities. What inspired you to focus on the Amazon ecosystem with Carbon 6?
Lee Loree:
Yeah, so kind of take a couple of steps back from Carbon six because I co founded a business called Seller Investigators with a couple of guys about seven years ago and that business, that Seller Investigators, that business really kind of spawned out of. I had a, I invented a very early stage wearable device that now is pretty rudimentary compared to stuff we're doing now, but was doing that 10, 15 years ago ago and we sold on Amazon and I experienced some of these issues that we help address now kind of in the early, kind of wild west days of the, of Amazon and the Internet. So I guess it comes out of a pain point. My business partner Robert Ferreira is also a seller on the platform and no longer just because of the, the world that we live in now, but when we started the business he had a store as well and he also experienced it. Typically what happens with Seller investigators, we do 3P recovery. And so if you are selling on the platform as a seller or 3P, you know a three piece seller. Amazon is, it's a consignment relationship. So ultimately there are inherent problems revolving around your inventory because they don't own it.
Lee Loree:
So whether they do it, I don't think they do it on purpose but you know, they miscount it, when it comes in the warehouse, it gets moved around within warehouses, it gets lost, it gets damaged for a variety of reasons. You need to, you need to advocate for yourself in order to get Amazon to give you that money back that they kind of messed up within their system. You think of it as shrinkage. If you were doing traditional retail, but in Amazon there's no allotment for that, but within your contract, within seller central, Amazon agrees that there isn't going to be any of it. And when there is some, you can advocate on your behalf or we can advocate on your behalf and you can, you can claw that money back. And it typically represents about 1% of your business. So for my partner and me, it was, he had a bigger store than I did, but, you know, a comparable company to us found 10 or $15,000 for him. And he approached me and was like, you know, gosh, this doesn't seem that hard.
Lee Loree:
You know, I think we could stand this up and do this. So we did. And you know, our emphasis early on was always, let's build a really good mousetrap. We're old men compared to, you know, people building tech businesses traditionally. So we're not going to be good at the marketing side. So let's make sure we do a good job of building a proper business. And both of us were seasoned entrepreneurs, so that part we kind of had a pretty good handle on. So we built that business, grew at 100, 150% a year for the first five years.
Lee Loree:
And then we sold the carbon 6. And carbon 6 is really a software aggregating company. So if you're on Amazon and you think of the aggregators that are doing it with brands, in a way carbon 6 is doing the same thing, but they're doing it with software tools or widgets, whatever you want to kind of call it. And so we came up, you know, we got folded into Carbon six and convince them to then turn around and subsequently buy another business, Charge guard, which does 1p recovery. And between the two of them, we cover all of sales that go on to Amazon and, you know, advocate for clients, you know, to make sure they're not getting shorted by Amazon.
Andy Splichal:
Yeah, I mean, that's great. It's great for sellers that somebody's gone and aggregated all these. They don't really have to look for these different softwares that do so many things. Let's talk, I guess, a little bit more about seller investigators and ChargeGuard. You said typically 1% of inventory is lost for sellers.
Lee Loree:
Yeah, it, you Know, it hovers depend. You know, it's. It's kind of a sliding scale a little bit, where if you're really small, and I say really small, let's say you're doing $50,000 a year on Amazon. I mean, that's a relatively small store, and there are lots of people doing that, and that can be a good, a good business. So I'm not saying it's bad business. I'm just saying it's relatively small. We can typically find at least 1%. Unless you've got like, one ASIN and you're like, you know, in it all the time, you may be able to keep track of it, but when you start getting to a store that is bigger than that, let's say $500,000 or a million or 10 million or whatever number you want to go to, there's a lot of velocity in that store with sales because typically the sales are, you know, let's say 50.
Lee Loree:
Anywhere from $5 up to $100 is typically, you know, where you're going to be as a price point, which means you're turning over a lot of inventory in order to hit, you know, five, $10 million a year in annual sales. With that comes complexity. With that comes, ASIN counts, all kinds of different things. It makes it much more complex to be able to really understand where there are issues. So we tend to be able. I mean, we can help anybody, and we take everybody. We don't discriminate on small accounts. There's some people in the space that don't want to bother with the little accounts, but we think it's important to sort of be able to service the market.
Lee Loree:
And we know that for some people, they'll be less profitable for us. But we think it's important that, you know, we, we help everybody out. And so. Yeah, go ahead.
Andy Splichal:
Well, I was just wondering, so what, what typically are the things that you guys are finding that gets sellers reimbursed?
Lee Loree:
Yeah, I mean, it starts it, you know, from when the inventory actually lands into the warehouse. Some people know this, some people don't. But Amazon doesn't physically count inventory. I mean, there'd be human error if they were counting when you think they have, you know, tens of millions of ASIN counts in a warehouse, there would be errors just based on people having to count, you know, individual pieces as a box came in. So they don't do that. They weigh and measure a unit of, of whatever you're shipping in, and they have that on file because it's already in a bin somewhere in the warehouse. So when your product comes in, you label it in such a way that they know what's in that box, they weigh and measure the box and make an estimate of what's in the box. So it's important from the beginning, for example, to make sure that they know how much your product weighs and the dimensions of it.
Lee Loree:
So we have a service that does that as well within seller investigators that we give away to people to try and to mitigate the, the inbound errors. But Amazon is never going to give you credit for 54 units when you ship 50, but they very likely might, you know, give you 47 instead of 50. So that's like an example of a point of leakage where, you know, things get lost. They let's say you mentioned earlier you're from Lincoln, Nebraska. So let's say that there's a warehouse in Lincoln, Nebraska. Forgive me, I don't know if there is, but let's assume there is for a minute for purposes of exercise, that you ship a bunch of product into Lincoln and then they need some in Kansas City. So they intra warehouse ship it between the two warehouses in order to position your inventory in more than one warehouse. That doesn't always go perfectly.
Lee Loree:
They put it in trucks, things get lost, it gets stolen, it falls out the back, who knows, whatever. But if Amazon loses that inventory, that's their fault. That happened when it was, you know, under their wing or under their roof and it's your inventory. So we go in and we help find things like that that gets run over by a robot and is no longer sellable. You know, there are a variety of different categories where, where we find leakage and you know, for different players it's different based on, you know, are you a wholesaler, are you an aggregator, Are you somebody that does, that does arbitrage? I mean, everybody's got a little bit of a different problem on the platform. Cell investigators, we ingest the data from the API, which is how everybody who does refund recovery does it. So that's not special from us, but we ingest the data from the API, we look through it and we identify where there are problems. And from that point forward, everything is done by a human.
Lee Loree:
And the reason that we do it that way is it's within terms of service, it has to be done that way. And you can't file cases with, you know, just blindly sending them in. It has to be peer to peer. There are all kinds of rules around how to, to do it. And you know, with this being our Seventh year in business. You know, we, we have gotten, you know, we've been good at it for a long time, but it's only gotten better. Carbon Six buying a couple of years ago, we've grown in the neighborhood of about 1400 percent in two years. Yeah, it's been remarkable.
Lee Loree:
Again, I said earlier that we had a good business but we didn't necessarily have a good marketing arm just based on our age and sort of the things we're good at. And one of the things, carbon 6 is very good as the distribution model and the integration. But it's really, you know, about the distribution model and when they put the distribution model, the sales vehicle, the people, the bodies, the customer service, back end, all of those things that they do very well, our business really flourished and you know, it's been remarkable.
Andy Splichal:
So let's talk about when you started, I guess and if I'm thinking out of here, if I'm a seller and you said somebody else was doing this and you're like, hey, we could just do this.
Lee Loree:
Yep.
Andy Splichal:
What keeps a seller from saying hey, I could just do this, opposed to buying a service like yours.
Lee Loree:
Absolutely. Seller can absolutely do this for themselves. And I was, you know, I mentioned earlier it's easier if you sell a fifty thousand dollar. If you have a fifty thousand dollar store that has one or two asins, that's not a particularly complex business to keep your eyes on. But if you've got a 3 million dollar business that does 1500 units a month through 13 ASINs in different colors and SKUs and blah blah blah, and whatever complexities your business has, it just gets much more difficult. You can catch the big errors which is, you know, like say the inbound shipments where they miscounted it or something like that. But when you start going into the onesie twosie stuff, you really need to be able to cross reference a number of sales reports, which we have a system that does, to do that manually. You could do it, but it would be pretty tedious, especially if your business had any real volume in it and.
Andy Splichal:
The API connection, you are able just to get access to a seller's account and then hooked into that.
Lee Loree:
Yeah. So as part of the signup process you give us access into your API or you know, into your data feed from the API, basically your seller central login credentials. And we don't get into all of your seller central stores, so we can't make changes to your store, we don't see banking, we can't move money, we can't change the listings we can't do anything like that. We have no reason to have that. We don't care about that. We are interested in being able to view and edit sales reports, ingest them, and then to be able to file cases on your behalf. So those are really the only access points that we need.
Andy Splichal:
I mean, that sounds great. We've also talked, I mean, but that's, you know, once you're selling. Right. That's a problem. You're selling. Now I know that you guys and carbon6 has a bunch of other tools and, and more of them that are, that are for advertising such as PixelMe and DSP. How do those fit in and you know, tell us a little bit about those.
Lee Loree:
Yeah, so I would say within the carbon 6 umbrella, you know, PixelMe is a great example of how the business has pivoted and isn't just a one trick pony saying doing refund recovery, which seller investigator was when, you know, when we were running it as an independent business. So what PixelMe does, the. The simplest way to describe it, it's a marketing tool. It helps attribution, which if anybody is on the platform and does any sort of PPC pay per click, let's say you're on Amazon, pretty straightforward. They have a DSP hook in. So you know, you're advertising on the Amazon platform the same way you would on Google or met any of the others. And we have a chair on that Amazon dsp. So we can help you with your advertising on Amazon.
Lee Loree:
We can basically manage those, manage your, your PPC within Amazon. And that's what the DSP does. And most people know what a dsp, the people who are doing dsp because it doesn't make a lot of sense if you're relatively small. But as you get bigger up, you have a complex business. If you're doing dsp, you know what it is and it's applicable. And we have got a great offering because we have a. We do it. It's somewhat commoditized.
Lee Loree:
DSP is by just the nature of what it is. Certainly there are some secret sauce in it, but we have a seat that allows us to do it at a pretty significant discount to most opportunities that you'd have. So, you know, if you're comparing apples to apples, we tend to be just a little cheaper. But you know, our secret sauce is not too dissimilar to what everybody else's secret sauce is. Pixel Me, essentially what Pixel Me does when you sell. Let's say again, we're using advertising on Amazon. That's pretty Straightforward. But what Amazon wants to do is capture our market share the same way everybody's looking for more eyeballs, more market share.
Lee Loree:
What they're really interested in is, let's say, getting people who were on Google to come and buy on Amazon rather than going to somebody's store or going to Temu or going wherever they go. Amazon wants those eyeballs. And so Amazon, if you will advertise on Google and then push that traffic into Amazon, they will actually give you a 10%, what's called a brand referral bonus in just to drive that new traffic like they like that new traffic and they're willing to give you back money in order to drive that traffic to Amazon. And what Pixel Me does is, helps with that process and, and then it's got attribution. It's very difficult. We're the only game in town that I'm aware of on Pixel Me that is able to do attribution such that when you have a sale on Amazon, you can actually really understand what the avatar of that person was, what they searched on, where they go, what their program is. It works on Meta, it works on, on Google, it works on, it kind of works on TikTok. They've got a slightly different API, makes a little more complex, but it's the same for everybody.
Lee Loree:
But essentially what PixelMe does is it helps you understand when you're spending money on platforms other than Amazon, where that money is going and how to make it more efficient. And that business, I mean I mentioned earlier that our business is grown substantially under the Carbon 6 platform. Pixel Me is having similar type growth only because what we're finding is, I mean this isn't common, but you know, you can theoretically have infinite roas with Pixel Me because you can get the brand referral bonus. And if you're spending less than the, than the refund of what they're paying you to drive the traffic from Google, theoretically your ad spend goes to zero. And we absolutely have clients doing that for sure. We do. It's not everybody, but on Pixemy, what we, it's, it's not for everybody we like doesn't have to be a branded product, but branded helps. It tends to be a little higher price point.
Lee Loree:
So anything other than, let's say like 20 bucks gets a little difficult and it needs to have a good listing. So the health of the listing needs to be pretty good. We you mentioned, how does this all tie together? We have another business called Seller Assist within the Carbon six umbrella and we do a lot of account health like managing your listings. So for example, excuse me, so if that was my phone going off, apologies. So if you take those your listing and you clean it up through seller assist and then run it through Pixemy and then help with, you know, with seller investigators getting your money back, that creates a flywheel, right? We're getting money back for you. You can then deploy that money back into the business to buy ads, to drive Pixel Me, to drive revenue. And you know, another business we have is so stocked. So stock does inventory management.
Lee Loree:
That talks about trying to drive efficiencies into your business. So really ultimately, depending on which segment of the business that we're talking about, Carbon six, our intention is to drive efficiencies in your business. We do it through marketing, we do it through refunds, we do it through inventory. And you know, those are the three big kind of pillars within your business.
Andy Splichal:
So with, with all these things, where typically does a new customer with you guys start?
Lee Loree:
Yeah, so I mean typically it starts with seller investigators. And I mean that's great for us because you know, it's fun to see a business flourish as much as it does. But it's typically the simplest sale. The problems that I mentioned about seller investigators and, and what we do to get monies back for people, this is a, this is a platform wide challenge for Amazon. They're massive. I mean they're an 800 pound gorilla. And even if you're huge, we have clients on our platform that sell over a billion dollars a year in sales on Amazon. Even with that, they're still relatively small.
Lee Loree:
They still represent less than a quarter of 1% of total sales. So even the biggest of the big are pretty small. So seller investigators allows the our salespeople an easy sale to sort of explain to people. Look, it's free, the sign up is free, the audit is free, doing the work is free. If we get money back, we participate in that and those wins by taking a percentage. But absent of that, there's no cost to be on Seller investigator. So in that scenario, let's say that we find somebody in a, you know, let's say they've got a 3 million dollar store and we find them between 20 and 35 million dollars. Very common.
Lee Loree:
We see that many, many times a week that we then say to the client, the sales rep, it's an easy conversation from that point to then say, hey look, we got you back all this money. Aren't you excited? Sure, you can take your family to Europe, but why don't we take some of those proceeds and redeploy them in your business and give me an opportunity to show you DSP and Pixel Me and so Stocked and these other things to see if we can kind of start not only just getting your money back and making your business more efficient, but. Well, why don't we grow your business? Let's figure out a way to, you know, to be a partner here and help, you know, get your business velocity up, if you will.
Andy Splichal:
Why do you think that Amazon and we're, we're talking more on Seller Investigator here. Why do you think Amazon isn't more concerned about the fees, that they might be overcharging?
Lee Loree:
Do you mean like that we get back at Seller Investigators or just being the fees in general?
Andy Splichal:
Well, I mean, it's two different stories.
Lee Loree:
Yeah, right.
Andy Splichal:
I guess start with Seller Investigator. I would think with as much as they're embracing AI that they could easily do a better job.
Lee Loree:
Sure. But in a way, they're shooting themselves in the foot by doing that. Right. I mean, there are statutes of limitations on how long you can go back. It used to be 18 and nine months, and that's been, that's been shrunk to about 90 days, depending on what the category is. They just did that back in October. So like about, about a month ago, a little less than a month ago. So there was a pretty radical change in our business that, that impacted the business pretty severely.
Lee Loree:
Fortunately, we're growing so fast. You know, it didn't slow the curve down. I mean, it flattened it out a little bit, but it's still, you know, on the upswing. But if Amazon were to give all this money back, first of all, I'm not sure they could. Certainly I could help. There's some things they could do. But this is essentially pure profit. Once you get past the statute of limitations, Amazon gets to keep that money.
Lee Loree:
So they always, you know, we're, we're a trusted Amazon vendor at Seller Investigators. We are on stage with them at, at big Amazon events. Like, they know who we are. We have access into the right people at Amazon. We've hired ex Amazon people. Like they're not adversarial to us. The way some people listening might think. They see us as a necessary evil that kind of helps keep them honest and keeps the platform kind of cleaned up.
Lee Loree:
But I think it's unlikely that they would just globally decide we're going to just sort of crush this category and give back a couple billion dollars a year to sellers. I mean, it's just not in their business interest. I mean, theoretically it would be the honest thing to do, but it's not in their best business interest. And so, you know, I don't know. You know, I, maybe they're, maybe they will, but I'd be surprised. You know, every other industry I've ever been a part of, they're not big incentives for the incumbent to just all of a sudden put their hands up and be like, you know what? I've been taking too much. I need to do a better job of giving it back to people right now.
Andy Splichal:
Let's, let's talk about the other fees. I mean, you had mentioned it, all the other fees. And that is from the Amazon sellers that I work with. That's always a frustration is I'm getting billed for this and that. I don't know what I'm getting billed for. Do you have anything in the, in the Carbon six universe that helps kind of decipher some of those fees?
Lee Loree:
Yeah, I mean, we don't necessarily decipher some of them. We try to help mitigate them. It's, it's challenging. You know, on the surface, it looks like they're just raising fees and, you know, making it harder for sellers. And certainly there is a component to that. I mean, I won't say that there's not, but Amazon is spending billions of dollars building AI tools, building warehouses, building data centers, building warehouses for product buying robots, buying airplanes. Like they are a massive consumer of assets, I mean, as a business. And that money needs to come from somewhere.
Lee Loree:
And they've built a platform or an ecosystem that allows sellers to be able to reach hundreds of millions of people. And, you know, for that they charge fees. It used to be pretty simple. The fees have certainly got, they've gotten bigger and they're more of them. But, you know, it's still, you know, I'd like someone to try to put a store somewhere and get as much visibility or, you know, you just, there's just nowhere else to go. I mean, they control like 60% of E commerce. I don't think those fees are going to go away. I don't think they're, you know, it's like inflation.
Lee Loree:
I don't think they're going to come down. But I think the best you could do is hold it at bay. Right? I mean, it used to be a good store could have 30%, 40% margins, you know, 10, 15 years ago. A good store now is probably in the high teens, and an average store is probably in the low teens. And so what we tell people is, you know, you need to be on something like Seller Investigators. And you know, I'd like to be self serving and say be on seller investigators. There are a few competitors. I think we're better for a variety of reasons which you know, people want me to go into, they're welcome to reach out to me, but I'm not going to badmouth anybody.
Lee Loree:
There are some real players. I don't have a problem with there being competition in space. A lot, a lot of room for people to be, you know, to be out, you know, helping people in this, in this category. But if we can get you 1% of sales back and you're running a 10 margin business, that's a couple of points of EBITDA that just sort of fall in your lap. That's pretty hard to replicate in a lot of other places if you use let's say our SO stock tool. And you know, one of the big no no's is running out of inventory. When you're running a sale or in general, it crushes your organic ranking and you don't want to spend money on advertising and not have product because people will just go to the next one, you know, and then, and then your competitors get a free ride. So, you know, that's an example.
Lee Loree:
You can use SO Stock to mitigate a lot of those fees. I would say Pixel Me allows you to mitigate, not fees, but it makes you run your business more optimally. And so as these fees go up, but you've gotten more velocity, that's at a higher price point or at, you know, a more, a higher margin either through SO Stock with managing inventory better or seller investigators or DSP or whatever we're talking about, we can offset some of those fees. There really isn't a great way to say the fees are going to go away because they're just platform fees and you just can't do much about them.
Andy Splichal:
Now all of your services seem to be geared for FBA sellers. Is, is that correct or is there anything for, for people. Yeah.
Lee Loree:
So you know, within, within 3P there's FBA and FBM. So FBM is where you've got. FBM is fulfilled by merchant. And that's where it's in someone else's, it's in your own warehouse, but it's going through the platform. Since your inventory is not physically going through Amazon Seller investigators won't be much help to you because the errors that would happen in the warehouse around your inventory are happening in your own warehouse. So you can't exactly go after your own warehouse. So we don't do much for fbm, but we do have a product, it's called Charge Guard. And Charge Guard helps with one piece sellers.
Lee Loree:
They do the refund recovery for that seller Investigators does. But on the other side, on the vendor side of the one piece side. And what's great about the, the Charge Guard is that instead of looking at about 1% of net sales that gets jacked up, they tend to run on the vendor side more like 4 to 7%, believe it or not. It could be a huge number. And normally on the vendor side you're talking about bigger brands. You know, Amazon is trying to push small people out of vendor into seller central. But you know your name brands and that could be any number of things. We work with Speedo, we work with Hershey's, we work with Nestle.
Lee Loree:
Not because we have two chocolate companies, maybe not Nestle, I think it's Hershey. But you know, we have a number of brand name companies, both food disposables, clothing, shoes, all kinds of things. Right. 4 to 7%.
Andy Splichal:
Why is it so much higher for for fulfilled by.
Lee Loree:
No, because there are just a lot of rules around how vendor works. You know, the label needs to be in the box a certain way. It needs to have this and it needs to have that. And you're not allowed to run out of inventory. If you run out of inventory, they ding you, they're all these things. And then let's say that you run a special for Black Friday, but and only for half of your ASINs. And I'm using a simple example, these are much more complex normally, but you know, half your ASINs, but in your agreement, your 1P vendor agreement, you've got Amazon, you know, buying it at, you know, a 30% discount to retail. But since it's a Black Friday deal for this two week period, they're going to be able to get it at a 38% discount, but only half.
Lee Loree:
Amazon sometimes will apply that to the entirety of your ASIN count and in that window they mess it up. Now to your point about AI, could they clean those systems up? Sure. I don't think they do it maliciously. But the complexity that Amazon has, the number of ASINs, the number of people, the number of things that go in and out of a warehouse every hour is mind blowing. If you ever been to a warehouse. And I think they do the best they can and know that perfect is the goal, but excellence is, you know, what we can, we can tolerate. And you know, that means that the people who are on the platform, the sellers and the vendors need to look out for themselves. And you know, we try to go in and advocate for the, advocate for those sellers and vendors.
Lee Loree:
So, you know, I mean, selling on.
Andy Splichal:
Amazon, it can be overwhelming. If somebody's just starting out and listening to this, this episode, I don't know if we've helped that much, but I guess I'd be curious if somebody's just starting out, what is a piece of advice that you could give them to be successful?
Lee Loree:
You know, that what I would probably say, you know, and if you look at first of all things like YouTube, Reddit boards, you know, anywhere where you find people blogging and getting in Facebook groups, that's another one. There are lots of places to go to be able to get resources of people that are either like you size wise or that are bigger, that can help you get started. So use the community. And there is a real sense of community within this system. And then once you've sort of gotten comfortable around that, I would say that the most important thing in order to scale an Amazon business, you need to get comfortable that you can't do everything. A lot of entrepreneurs try to have their hands on all of it. They want to ship the product, they want to get the product, they want to do the receivables, they want to do the banking, they want to do the ppc, they want to do the boxing of the units. Maybe they have a couple people that do that, but they want to have their hands in everything selling on Amazon.
Lee Loree:
You know, the fees have gone up, the complexities have gone up. If you try to do everything, you will never scale your business. It's just, it's just there's too many, there's too many points of time suck that happen. So go find vendors and not to use vendor because the term vendor, we're using it interchangeably with charge guard and seller investigators. But go find people like carbon6 that are honest, legitimate people. You can go out and find it on, you know, you can go read reviews, you can go out and see places. We do independent reviews. They're places to go to find legitimate people, Carbon six being one of them.
Lee Loree:
And go out and try and find tools that help fix your business. You need to be finding asins. That is the name of the game on Amazon. The best thing you can do with your time as an entrepreneur if you run an Amazon store, is find new products and then figure out ways to have other people run the store. That is, that is the method that is the most effective we have. I don't know, coming on probably 10,000 clients on the seller investigator platform. And if you look and you pull and we've done this, we've run some modeling and made some phone calls and our CS people, we specifically ask them to do these surveys from time to time and survey you get mixed results from people and all those things. But the general rule of thumb is that the bigger businesses all have multiple vendors in helping them run the business and a lot of our small people don't.
Lee Loree:
And the reflection is that the reason that's the case is that the small people don't want to spend the money or want to have their hands on everything because they think it's going to slip through the cracks or whatever else. And that in turn makes you have small views of how to grow the business, spend some money, rip at it, find product and just blow and go as fast as you can get scale and defend your, your business with, you know, it'd be great if you had brand recognition so that you could build moats. But you know, there are a lot of tools out there for people figuring out how to, how to find the next product that has got, you know, a lot of search terms, relatively inexpensive PPC and you know, you can go buy the product on Alibaba or Temu at scale and you know you only have to manufacture it and you know that is the best way as an entrepreneur you can grow your business is finding those products and know that you're going to churn through them, they're not going to last forever. The, you know, the fidget spinners of the world work amazing if you find them and then just know that you got to put the foot in the gas and ride it as long as you can and then know that eventually it's gonna have a tail and a cycle and it's going to end.
Andy Splichal:
So let's talk and make sure that the audience that is looking to get more help and, and with carbon 6 can, can know how to do it. How who is the perfect fit for Carbon six and seller investigators and how can they learn more and get started?
Lee Loree:
Yeah, so you know, the Carbon six, some of the tools are, I mean like our business at cell investigators is free. So the sign up, the audit being on the platform, all those things are free. We get, we charge you for when we're successful. So we participate in the upside that you get when you get refunds back. So in that sense it could be for anyone. But you know, Pixel Me for example or dsp, there's some minimums and you know you are going to spend some money. And if you have a relatively small store having a 300amonth burn to run, Pixel Me plus a $25 a day ad spend can be difficult. I, I understand that.
Lee Loree:
So it's not for everybody. But as you get bigger and have some velocity, all you need to do is have that cost to be able to make more than the cost. That's all it is. Once it does that, you can scale it. And so from a, you know, who was our ideal customer, I would say that that Carbon 6's ideal customer does a million dollars a year in GMV on Amazon, whether through, through 1 or 3P, they don't really care or, you know, we don't really care. We take smaller. But in some cases some of the tools just won't get as much velocity. Sell investigators will.
Lee Loree:
So everybody can do seller investigators, but some of the other tools just are a little more difficult just from a cost perspective, if you just don't have some velocity already.
Andy Splichal:
And what's the best way to get started?
Lee Loree:
Yeah, so you can go to the carbon6 website. It's carbon6io and there are, you know, just like any other website, lots of places you can click to try to get help and sign up and talk to agents and do different things. That would probably be the best thing. If you specifically have a seller investigators question, you're more than happy to email me. My email is Lee Seller investigators. There's an S at the end of that leeellerinvestigators.com and you can drop this in the podcast and the whole in the notes, whatever you want to do. I'm happy to help anybody I can. And if it's, you know, I'll point you the right direction.
Lee Loree:
We have lots of different people that, you know, do our enterprise sales all the way down to smaller accounts. And we have representatives at all levels. And I'll be happy to connect you to those people. And if I can help you personally, you know, I've been doing this a long time. I'm seven years in this, in, in this SaaS space for Amazon and trying to help service provide, you know, to be a service provider. So I have a number of resources that I can bring to bear, you know, and be happy to help somebody if I can. That's the goal. I mean, I mentioned earlier the community compart of this business.
Lee Loree:
We've had a lot of people play it forward to us and we believe that as a business it's important to continue to do that. And you know, we, we try to help everybody that we can.
Andy Splichal:
Well, this has been great. Thanks for joining us today. Lee, are there any other final words you'd like to add before we wrap it up?
Lee Loree:
I don't think so. I really appreciate the opportunity to be here and spend some time with you and and your listeners.
Andy Splichal:
All right, well, thanks for joining us.
Lee Loree:
Thanks for listeners.
Andy Splichal:
Remember, if you like this episode, please go to Apple Podcasts and leave us an honest review. And if you're looking for more information on connecting with Lee or Carbon 6, you'll find links in the show notes below. In addition, if you're looking for more information on growing your business, check out our Podcast Resource center available at podcast.makeachclick count.com we have compiled all of our different past guests by show topic and included each of the contact information in case you would like more information. Any of the services I have discussed during previous episodes. Well, that's it for today. Remember to stay safe, keep healthy and happy marketing and I'll talk to you in the next episode.
Welcome to the Make Each Click Count podcast. Today I'm thrilled to host Lee Loree. Lee, a seasoned entrepreneur with over two decades of experience across technology, energy, and financial sectors, and the co-founder of Seller Investigator, Lee has an incredible track record of driving growth and innovation through his expertise in IT business strategies and operations. As a driving force behind Carbon 6, Lee leads a team that empowers Amazon sellers with cutting-edge tools designed to enhance profitability, streamline operations, and scale business effectively. Welcome to the show, Lee.
Lee Loree:
Thanks for having me Andy. Appreciate it.
Andy Splichal:
Hey, you know, I'm always fascinated to hear how industry leaders like yourself identify and pivot into new opportunities. What inspired you to focus on the Amazon ecosystem with Carbon 6?
Lee Loree:
Yeah, so kind of take a couple of steps back from Carbon six because I co founded a business called Seller Investigators with a couple of guys about seven years ago and that business, that Seller Investigators, that business really kind of spawned out of. I had a, I invented a very early stage wearable device that now is pretty rudimentary compared to stuff we're doing now, but was doing that 10, 15 years ago ago and we sold on Amazon and I experienced some of these issues that we help address now kind of in the early, kind of wild west days of the, of Amazon and the Internet. So I guess it comes out of a pain point. My business partner Robert Ferreira is also a seller on the platform and no longer just because of the, the world that we live in now, but when we started the business he had a store as well and he also experienced it. Typically what happens with Seller investigators, we do 3P recovery. And so if you are selling on the platform as a seller or 3P, you know a three piece seller. Amazon is, it's a consignment relationship. So ultimately there are inherent problems revolving around your inventory because they don't own it.
Lee Loree:
So whether they do it, I don't think they do it on purpose but you know, they miscount it, when it comes in the warehouse, it gets moved around within warehouses, it gets lost, it gets damaged for a variety of reasons. You need to, you need to advocate for yourself in order to get Amazon to give you that money back that they kind of messed up within their system. You think of it as shrinkage. If you were doing traditional retail, but in Amazon there's no allotment for that, but within your contract, within seller central, Amazon agrees that there isn't going to be any of it. And when there is some, you can advocate on your behalf or we can advocate on your behalf and you can, you can claw that money back. And it typically represents about 1% of your business. So for my partner and me, it was, he had a bigger store than I did, but, you know, a comparable company to us found 10 or $15,000 for him. And he approached me and was like, you know, gosh, this doesn't seem that hard.
Lee Loree:
You know, I think we could stand this up and do this. So we did. And you know, our emphasis early on was always, let's build a really good mousetrap. We're old men compared to, you know, people building tech businesses traditionally. So we're not going to be good at the marketing side. So let's make sure we do a good job of building a proper business. And both of us were seasoned entrepreneurs, so that part we kind of had a pretty good handle on. So we built that business, grew at 100, 150% a year for the first five years.
Lee Loree:
And then we sold the carbon 6. And carbon 6 is really a software aggregating company. So if you're on Amazon and you think of the aggregators that are doing it with brands, in a way carbon 6 is doing the same thing, but they're doing it with software tools or widgets, whatever you want to kind of call it. And so we came up, you know, we got folded into Carbon six and convince them to then turn around and subsequently buy another business, Charge guard, which does 1p recovery. And between the two of them, we cover all of sales that go on to Amazon and, you know, advocate for clients, you know, to make sure they're not getting shorted by Amazon.
Andy Splichal:
Yeah, I mean, that's great. It's great for sellers that somebody's gone and aggregated all these. They don't really have to look for these different softwares that do so many things. Let's talk, I guess, a little bit more about seller investigators and ChargeGuard. You said typically 1% of inventory is lost for sellers.
Lee Loree:
Yeah, it, you Know, it hovers depend. You know, it's. It's kind of a sliding scale a little bit, where if you're really small, and I say really small, let's say you're doing $50,000 a year on Amazon. I mean, that's a relatively small store, and there are lots of people doing that, and that can be a good, a good business. So I'm not saying it's bad business. I'm just saying it's relatively small. We can typically find at least 1%. Unless you've got like, one ASIN and you're like, you know, in it all the time, you may be able to keep track of it, but when you start getting to a store that is bigger than that, let's say $500,000 or a million or 10 million or whatever number you want to go to, there's a lot of velocity in that store with sales because typically the sales are, you know, let's say 50.
Lee Loree:
Anywhere from $5 up to $100 is typically, you know, where you're going to be as a price point, which means you're turning over a lot of inventory in order to hit, you know, five, $10 million a year in annual sales. With that comes complexity. With that comes, ASIN counts, all kinds of different things. It makes it much more complex to be able to really understand where there are issues. So we tend to be able. I mean, we can help anybody, and we take everybody. We don't discriminate on small accounts. There's some people in the space that don't want to bother with the little accounts, but we think it's important to sort of be able to service the market.
Lee Loree:
And we know that for some people, they'll be less profitable for us. But we think it's important that, you know, we, we help everybody out. And so. Yeah, go ahead.
Andy Splichal:
Well, I was just wondering, so what, what typically are the things that you guys are finding that gets sellers reimbursed?
Lee Loree:
Yeah, I mean, it starts it, you know, from when the inventory actually lands into the warehouse. Some people know this, some people don't. But Amazon doesn't physically count inventory. I mean, there'd be human error if they were counting when you think they have, you know, tens of millions of ASIN counts in a warehouse, there would be errors just based on people having to count, you know, individual pieces as a box came in. So they don't do that. They weigh and measure a unit of, of whatever you're shipping in, and they have that on file because it's already in a bin somewhere in the warehouse. So when your product comes in, you label it in such a way that they know what's in that box, they weigh and measure the box and make an estimate of what's in the box. So it's important from the beginning, for example, to make sure that they know how much your product weighs and the dimensions of it.
Lee Loree:
So we have a service that does that as well within seller investigators that we give away to people to try and to mitigate the, the inbound errors. But Amazon is never going to give you credit for 54 units when you ship 50, but they very likely might, you know, give you 47 instead of 50. So that's like an example of a point of leakage where, you know, things get lost. They let's say you mentioned earlier you're from Lincoln, Nebraska. So let's say that there's a warehouse in Lincoln, Nebraska. Forgive me, I don't know if there is, but let's assume there is for a minute for purposes of exercise, that you ship a bunch of product into Lincoln and then they need some in Kansas City. So they intra warehouse ship it between the two warehouses in order to position your inventory in more than one warehouse. That doesn't always go perfectly.
Lee Loree:
They put it in trucks, things get lost, it gets stolen, it falls out the back, who knows, whatever. But if Amazon loses that inventory, that's their fault. That happened when it was, you know, under their wing or under their roof and it's your inventory. So we go in and we help find things like that that gets run over by a robot and is no longer sellable. You know, there are a variety of different categories where, where we find leakage and you know, for different players it's different based on, you know, are you a wholesaler, are you an aggregator, Are you somebody that does, that does arbitrage? I mean, everybody's got a little bit of a different problem on the platform. Cell investigators, we ingest the data from the API, which is how everybody who does refund recovery does it. So that's not special from us, but we ingest the data from the API, we look through it and we identify where there are problems. And from that point forward, everything is done by a human.
Lee Loree:
And the reason that we do it that way is it's within terms of service, it has to be done that way. And you can't file cases with, you know, just blindly sending them in. It has to be peer to peer. There are all kinds of rules around how to, to do it. And you know, with this being our Seventh year in business. You know, we, we have gotten, you know, we've been good at it for a long time, but it's only gotten better. Carbon Six buying a couple of years ago, we've grown in the neighborhood of about 1400 percent in two years. Yeah, it's been remarkable.
Lee Loree:
Again, I said earlier that we had a good business but we didn't necessarily have a good marketing arm just based on our age and sort of the things we're good at. And one of the things, carbon 6 is very good as the distribution model and the integration. But it's really, you know, about the distribution model and when they put the distribution model, the sales vehicle, the people, the bodies, the customer service, back end, all of those things that they do very well, our business really flourished and you know, it's been remarkable.
Andy Splichal:
So let's talk about when you started, I guess and if I'm thinking out of here, if I'm a seller and you said somebody else was doing this and you're like, hey, we could just do this.
Lee Loree:
Yep.
Andy Splichal:
What keeps a seller from saying hey, I could just do this, opposed to buying a service like yours.
Lee Loree:
Absolutely. Seller can absolutely do this for themselves. And I was, you know, I mentioned earlier it's easier if you sell a fifty thousand dollar. If you have a fifty thousand dollar store that has one or two asins, that's not a particularly complex business to keep your eyes on. But if you've got a 3 million dollar business that does 1500 units a month through 13 ASINs in different colors and SKUs and blah blah blah, and whatever complexities your business has, it just gets much more difficult. You can catch the big errors which is, you know, like say the inbound shipments where they miscounted it or something like that. But when you start going into the onesie twosie stuff, you really need to be able to cross reference a number of sales reports, which we have a system that does, to do that manually. You could do it, but it would be pretty tedious, especially if your business had any real volume in it and.
Andy Splichal:
The API connection, you are able just to get access to a seller's account and then hooked into that.
Lee Loree:
Yeah. So as part of the signup process you give us access into your API or you know, into your data feed from the API, basically your seller central login credentials. And we don't get into all of your seller central stores, so we can't make changes to your store, we don't see banking, we can't move money, we can't change the listings we can't do anything like that. We have no reason to have that. We don't care about that. We are interested in being able to view and edit sales reports, ingest them, and then to be able to file cases on your behalf. So those are really the only access points that we need.
Andy Splichal:
I mean, that sounds great. We've also talked, I mean, but that's, you know, once you're selling. Right. That's a problem. You're selling. Now I know that you guys and carbon6 has a bunch of other tools and, and more of them that are, that are for advertising such as PixelMe and DSP. How do those fit in and you know, tell us a little bit about those.
Lee Loree:
Yeah, so I would say within the carbon 6 umbrella, you know, PixelMe is a great example of how the business has pivoted and isn't just a one trick pony saying doing refund recovery, which seller investigator was when, you know, when we were running it as an independent business. So what PixelMe does, the. The simplest way to describe it, it's a marketing tool. It helps attribution, which if anybody is on the platform and does any sort of PPC pay per click, let's say you're on Amazon, pretty straightforward. They have a DSP hook in. So you know, you're advertising on the Amazon platform the same way you would on Google or met any of the others. And we have a chair on that Amazon dsp. So we can help you with your advertising on Amazon.
Lee Loree:
We can basically manage those, manage your, your PPC within Amazon. And that's what the DSP does. And most people know what a dsp, the people who are doing dsp because it doesn't make a lot of sense if you're relatively small. But as you get bigger up, you have a complex business. If you're doing dsp, you know what it is and it's applicable. And we have got a great offering because we have a. We do it. It's somewhat commoditized.
Lee Loree:
DSP is by just the nature of what it is. Certainly there are some secret sauce in it, but we have a seat that allows us to do it at a pretty significant discount to most opportunities that you'd have. So, you know, if you're comparing apples to apples, we tend to be just a little cheaper. But you know, our secret sauce is not too dissimilar to what everybody else's secret sauce is. Pixel Me, essentially what Pixel Me does when you sell. Let's say again, we're using advertising on Amazon. That's pretty Straightforward. But what Amazon wants to do is capture our market share the same way everybody's looking for more eyeballs, more market share.
Lee Loree:
What they're really interested in is, let's say, getting people who were on Google to come and buy on Amazon rather than going to somebody's store or going to Temu or going wherever they go. Amazon wants those eyeballs. And so Amazon, if you will advertise on Google and then push that traffic into Amazon, they will actually give you a 10%, what's called a brand referral bonus in just to drive that new traffic like they like that new traffic and they're willing to give you back money in order to drive that traffic to Amazon. And what Pixel Me does is, helps with that process and, and then it's got attribution. It's very difficult. We're the only game in town that I'm aware of on Pixel Me that is able to do attribution such that when you have a sale on Amazon, you can actually really understand what the avatar of that person was, what they searched on, where they go, what their program is. It works on Meta, it works on, on Google, it works on, it kind of works on TikTok. They've got a slightly different API, makes a little more complex, but it's the same for everybody.
Lee Loree:
But essentially what PixelMe does is it helps you understand when you're spending money on platforms other than Amazon, where that money is going and how to make it more efficient. And that business, I mean I mentioned earlier that our business is grown substantially under the Carbon 6 platform. Pixel Me is having similar type growth only because what we're finding is, I mean this isn't common, but you know, you can theoretically have infinite roas with Pixel Me because you can get the brand referral bonus. And if you're spending less than the, than the refund of what they're paying you to drive the traffic from Google, theoretically your ad spend goes to zero. And we absolutely have clients doing that for sure. We do. It's not everybody, but on Pixemy, what we, it's, it's not for everybody we like doesn't have to be a branded product, but branded helps. It tends to be a little higher price point.
Lee Loree:
So anything other than, let's say like 20 bucks gets a little difficult and it needs to have a good listing. So the health of the listing needs to be pretty good. We you mentioned, how does this all tie together? We have another business called Seller Assist within the Carbon six umbrella and we do a lot of account health like managing your listings. So for example, excuse me, so if that was my phone going off, apologies. So if you take those your listing and you clean it up through seller assist and then run it through Pixemy and then help with, you know, with seller investigators getting your money back, that creates a flywheel, right? We're getting money back for you. You can then deploy that money back into the business to buy ads, to drive Pixel Me, to drive revenue. And you know, another business we have is so stocked. So stock does inventory management.
Lee Loree:
That talks about trying to drive efficiencies into your business. So really ultimately, depending on which segment of the business that we're talking about, Carbon six, our intention is to drive efficiencies in your business. We do it through marketing, we do it through refunds, we do it through inventory. And you know, those are the three big kind of pillars within your business.
Andy Splichal:
So with, with all these things, where typically does a new customer with you guys start?
Lee Loree:
Yeah, so I mean typically it starts with seller investigators. And I mean that's great for us because you know, it's fun to see a business flourish as much as it does. But it's typically the simplest sale. The problems that I mentioned about seller investigators and, and what we do to get monies back for people, this is a, this is a platform wide challenge for Amazon. They're massive. I mean they're an 800 pound gorilla. And even if you're huge, we have clients on our platform that sell over a billion dollars a year in sales on Amazon. Even with that, they're still relatively small.
Lee Loree:
They still represent less than a quarter of 1% of total sales. So even the biggest of the big are pretty small. So seller investigators allows the our salespeople an easy sale to sort of explain to people. Look, it's free, the sign up is free, the audit is free, doing the work is free. If we get money back, we participate in that and those wins by taking a percentage. But absent of that, there's no cost to be on Seller investigator. So in that scenario, let's say that we find somebody in a, you know, let's say they've got a 3 million dollar store and we find them between 20 and 35 million dollars. Very common.
Lee Loree:
We see that many, many times a week that we then say to the client, the sales rep, it's an easy conversation from that point to then say, hey look, we got you back all this money. Aren't you excited? Sure, you can take your family to Europe, but why don't we take some of those proceeds and redeploy them in your business and give me an opportunity to show you DSP and Pixel Me and so Stocked and these other things to see if we can kind of start not only just getting your money back and making your business more efficient, but. Well, why don't we grow your business? Let's figure out a way to, you know, to be a partner here and help, you know, get your business velocity up, if you will.
Andy Splichal:
Why do you think that Amazon and we're, we're talking more on Seller Investigator here. Why do you think Amazon isn't more concerned about the fees, that they might be overcharging?
Lee Loree:
Do you mean like that we get back at Seller Investigators or just being the fees in general?
Andy Splichal:
Well, I mean, it's two different stories.
Lee Loree:
Yeah, right.
Andy Splichal:
I guess start with Seller Investigator. I would think with as much as they're embracing AI that they could easily do a better job.
Lee Loree:
Sure. But in a way, they're shooting themselves in the foot by doing that. Right. I mean, there are statutes of limitations on how long you can go back. It used to be 18 and nine months, and that's been, that's been shrunk to about 90 days, depending on what the category is. They just did that back in October. So like about, about a month ago, a little less than a month ago. So there was a pretty radical change in our business that, that impacted the business pretty severely.
Lee Loree:
Fortunately, we're growing so fast. You know, it didn't slow the curve down. I mean, it flattened it out a little bit, but it's still, you know, on the upswing. But if Amazon were to give all this money back, first of all, I'm not sure they could. Certainly I could help. There's some things they could do. But this is essentially pure profit. Once you get past the statute of limitations, Amazon gets to keep that money.
Lee Loree:
So they always, you know, we're, we're a trusted Amazon vendor at Seller Investigators. We are on stage with them at, at big Amazon events. Like, they know who we are. We have access into the right people at Amazon. We've hired ex Amazon people. Like they're not adversarial to us. The way some people listening might think. They see us as a necessary evil that kind of helps keep them honest and keeps the platform kind of cleaned up.
Lee Loree:
But I think it's unlikely that they would just globally decide we're going to just sort of crush this category and give back a couple billion dollars a year to sellers. I mean, it's just not in their business interest. I mean, theoretically it would be the honest thing to do, but it's not in their best business interest. And so, you know, I don't know. You know, I, maybe they're, maybe they will, but I'd be surprised. You know, every other industry I've ever been a part of, they're not big incentives for the incumbent to just all of a sudden put their hands up and be like, you know what? I've been taking too much. I need to do a better job of giving it back to people right now.
Andy Splichal:
Let's, let's talk about the other fees. I mean, you had mentioned it, all the other fees. And that is from the Amazon sellers that I work with. That's always a frustration is I'm getting billed for this and that. I don't know what I'm getting billed for. Do you have anything in the, in the Carbon six universe that helps kind of decipher some of those fees?
Lee Loree:
Yeah, I mean, we don't necessarily decipher some of them. We try to help mitigate them. It's, it's challenging. You know, on the surface, it looks like they're just raising fees and, you know, making it harder for sellers. And certainly there is a component to that. I mean, I won't say that there's not, but Amazon is spending billions of dollars building AI tools, building warehouses, building data centers, building warehouses for product buying robots, buying airplanes. Like they are a massive consumer of assets, I mean, as a business. And that money needs to come from somewhere.
Lee Loree:
And they've built a platform or an ecosystem that allows sellers to be able to reach hundreds of millions of people. And, you know, for that they charge fees. It used to be pretty simple. The fees have certainly got, they've gotten bigger and they're more of them. But, you know, it's still, you know, I'd like someone to try to put a store somewhere and get as much visibility or, you know, you just, there's just nowhere else to go. I mean, they control like 60% of E commerce. I don't think those fees are going to go away. I don't think they're, you know, it's like inflation.
Lee Loree:
I don't think they're going to come down. But I think the best you could do is hold it at bay. Right? I mean, it used to be a good store could have 30%, 40% margins, you know, 10, 15 years ago. A good store now is probably in the high teens, and an average store is probably in the low teens. And so what we tell people is, you know, you need to be on something like Seller Investigators. And you know, I'd like to be self serving and say be on seller investigators. There are a few competitors. I think we're better for a variety of reasons which you know, people want me to go into, they're welcome to reach out to me, but I'm not going to badmouth anybody.
Lee Loree:
There are some real players. I don't have a problem with there being competition in space. A lot, a lot of room for people to be, you know, to be out, you know, helping people in this, in this category. But if we can get you 1% of sales back and you're running a 10 margin business, that's a couple of points of EBITDA that just sort of fall in your lap. That's pretty hard to replicate in a lot of other places if you use let's say our SO stock tool. And you know, one of the big no no's is running out of inventory. When you're running a sale or in general, it crushes your organic ranking and you don't want to spend money on advertising and not have product because people will just go to the next one, you know, and then, and then your competitors get a free ride. So, you know, that's an example.
Lee Loree:
You can use SO Stock to mitigate a lot of those fees. I would say Pixel Me allows you to mitigate, not fees, but it makes you run your business more optimally. And so as these fees go up, but you've gotten more velocity, that's at a higher price point or at, you know, a more, a higher margin either through SO Stock with managing inventory better or seller investigators or DSP or whatever we're talking about, we can offset some of those fees. There really isn't a great way to say the fees are going to go away because they're just platform fees and you just can't do much about them.
Andy Splichal:
Now all of your services seem to be geared for FBA sellers. Is, is that correct or is there anything for, for people. Yeah.
Lee Loree:
So you know, within, within 3P there's FBA and FBM. So FBM is where you've got. FBM is fulfilled by merchant. And that's where it's in someone else's, it's in your own warehouse, but it's going through the platform. Since your inventory is not physically going through Amazon Seller investigators won't be much help to you because the errors that would happen in the warehouse around your inventory are happening in your own warehouse. So you can't exactly go after your own warehouse. So we don't do much for fbm, but we do have a product, it's called Charge Guard. And Charge Guard helps with one piece sellers.
Lee Loree:
They do the refund recovery for that seller Investigators does. But on the other side, on the vendor side of the one piece side. And what's great about the, the Charge Guard is that instead of looking at about 1% of net sales that gets jacked up, they tend to run on the vendor side more like 4 to 7%, believe it or not. It could be a huge number. And normally on the vendor side you're talking about bigger brands. You know, Amazon is trying to push small people out of vendor into seller central. But you know your name brands and that could be any number of things. We work with Speedo, we work with Hershey's, we work with Nestle.
Lee Loree:
Not because we have two chocolate companies, maybe not Nestle, I think it's Hershey. But you know, we have a number of brand name companies, both food disposables, clothing, shoes, all kinds of things. Right. 4 to 7%.
Andy Splichal:
Why is it so much higher for for fulfilled by.
Lee Loree:
No, because there are just a lot of rules around how vendor works. You know, the label needs to be in the box a certain way. It needs to have this and it needs to have that. And you're not allowed to run out of inventory. If you run out of inventory, they ding you, they're all these things. And then let's say that you run a special for Black Friday, but and only for half of your ASINs. And I'm using a simple example, these are much more complex normally, but you know, half your ASINs, but in your agreement, your 1P vendor agreement, you've got Amazon, you know, buying it at, you know, a 30% discount to retail. But since it's a Black Friday deal for this two week period, they're going to be able to get it at a 38% discount, but only half.
Lee Loree:
Amazon sometimes will apply that to the entirety of your ASIN count and in that window they mess it up. Now to your point about AI, could they clean those systems up? Sure. I don't think they do it maliciously. But the complexity that Amazon has, the number of ASINs, the number of people, the number of things that go in and out of a warehouse every hour is mind blowing. If you ever been to a warehouse. And I think they do the best they can and know that perfect is the goal, but excellence is, you know, what we can, we can tolerate. And you know, that means that the people who are on the platform, the sellers and the vendors need to look out for themselves. And you know, we try to go in and advocate for the, advocate for those sellers and vendors.
Lee Loree:
So, you know, I mean, selling on.
Andy Splichal:
Amazon, it can be overwhelming. If somebody's just starting out and listening to this, this episode, I don't know if we've helped that much, but I guess I'd be curious if somebody's just starting out, what is a piece of advice that you could give them to be successful?
Lee Loree:
You know, that what I would probably say, you know, and if you look at first of all things like YouTube, Reddit boards, you know, anywhere where you find people blogging and getting in Facebook groups, that's another one. There are lots of places to go to be able to get resources of people that are either like you size wise or that are bigger, that can help you get started. So use the community. And there is a real sense of community within this system. And then once you've sort of gotten comfortable around that, I would say that the most important thing in order to scale an Amazon business, you need to get comfortable that you can't do everything. A lot of entrepreneurs try to have their hands on all of it. They want to ship the product, they want to get the product, they want to do the receivables, they want to do the banking, they want to do the ppc, they want to do the boxing of the units. Maybe they have a couple people that do that, but they want to have their hands in everything selling on Amazon.
Lee Loree:
You know, the fees have gone up, the complexities have gone up. If you try to do everything, you will never scale your business. It's just, it's just there's too many, there's too many points of time suck that happen. So go find vendors and not to use vendor because the term vendor, we're using it interchangeably with charge guard and seller investigators. But go find people like carbon6 that are honest, legitimate people. You can go out and find it on, you know, you can go read reviews, you can go out and see places. We do independent reviews. They're places to go to find legitimate people, Carbon six being one of them.
Lee Loree:
And go out and try and find tools that help fix your business. You need to be finding asins. That is the name of the game on Amazon. The best thing you can do with your time as an entrepreneur if you run an Amazon store, is find new products and then figure out ways to have other people run the store. That is, that is the method that is the most effective we have. I don't know, coming on probably 10,000 clients on the seller investigator platform. And if you look and you pull and we've done this, we've run some modeling and made some phone calls and our CS people, we specifically ask them to do these surveys from time to time and survey you get mixed results from people and all those things. But the general rule of thumb is that the bigger businesses all have multiple vendors in helping them run the business and a lot of our small people don't.
Lee Loree:
And the reflection is that the reason that's the case is that the small people don't want to spend the money or want to have their hands on everything because they think it's going to slip through the cracks or whatever else. And that in turn makes you have small views of how to grow the business, spend some money, rip at it, find product and just blow and go as fast as you can get scale and defend your, your business with, you know, it'd be great if you had brand recognition so that you could build moats. But you know, there are a lot of tools out there for people figuring out how to, how to find the next product that has got, you know, a lot of search terms, relatively inexpensive PPC and you know, you can go buy the product on Alibaba or Temu at scale and you know you only have to manufacture it and you know that is the best way as an entrepreneur you can grow your business is finding those products and know that you're going to churn through them, they're not going to last forever. The, you know, the fidget spinners of the world work amazing if you find them and then just know that you got to put the foot in the gas and ride it as long as you can and then know that eventually it's gonna have a tail and a cycle and it's going to end.
Andy Splichal:
So let's talk and make sure that the audience that is looking to get more help and, and with carbon 6 can, can know how to do it. How who is the perfect fit for Carbon six and seller investigators and how can they learn more and get started?
Lee Loree:
Yeah, so you know, the Carbon six, some of the tools are, I mean like our business at cell investigators is free. So the sign up, the audit being on the platform, all those things are free. We get, we charge you for when we're successful. So we participate in the upside that you get when you get refunds back. So in that sense it could be for anyone. But you know, Pixel Me for example or dsp, there's some minimums and you know you are going to spend some money. And if you have a relatively small store having a 300amonth burn to run, Pixel Me plus a $25 a day ad spend can be difficult. I, I understand that.
Lee Loree:
So it's not for everybody. But as you get bigger and have some velocity, all you need to do is have that cost to be able to make more than the cost. That's all it is. Once it does that, you can scale it. And so from a, you know, who was our ideal customer, I would say that that Carbon 6's ideal customer does a million dollars a year in GMV on Amazon, whether through, through 1 or 3P, they don't really care or, you know, we don't really care. We take smaller. But in some cases some of the tools just won't get as much velocity. Sell investigators will.
Lee Loree:
So everybody can do seller investigators, but some of the other tools just are a little more difficult just from a cost perspective, if you just don't have some velocity already.
Andy Splichal:
And what's the best way to get started?
Lee Loree:
Yeah, so you can go to the carbon6 website. It's carbon6io and there are, you know, just like any other website, lots of places you can click to try to get help and sign up and talk to agents and do different things. That would probably be the best thing. If you specifically have a seller investigators question, you're more than happy to email me. My email is Lee Seller investigators. There's an S at the end of that leeellerinvestigators.com and you can drop this in the podcast and the whole in the notes, whatever you want to do. I'm happy to help anybody I can. And if it's, you know, I'll point you the right direction.
Lee Loree:
We have lots of different people that, you know, do our enterprise sales all the way down to smaller accounts. And we have representatives at all levels. And I'll be happy to connect you to those people. And if I can help you personally, you know, I've been doing this a long time. I'm seven years in this, in, in this SaaS space for Amazon and trying to help service provide, you know, to be a service provider. So I have a number of resources that I can bring to bear, you know, and be happy to help somebody if I can. That's the goal. I mean, I mentioned earlier the community compart of this business.
Lee Loree:
We've had a lot of people play it forward to us and we believe that as a business it's important to continue to do that. And you know, we, we try to help everybody that we can.
Andy Splichal:
Well, this has been great. Thanks for joining us today. Lee, are there any other final words you'd like to add before we wrap it up?
Lee Loree:
I don't think so. I really appreciate the opportunity to be here and spend some time with you and and your listeners.
Andy Splichal:
All right, well, thanks for joining us.
Lee Loree:
Thanks for listeners.
Andy Splichal:
Remember, if you like this episode, please go to Apple Podcasts and leave us an honest review. And if you're looking for more information on connecting with Lee or Carbon 6, you'll find links in the show notes below. In addition, if you're looking for more information on growing your business, check out our Podcast Resource center available at podcast.makeachclick count.com we have compiled all of our different past guests by show topic and included each of the contact information in case you would like more information. Any of the services I have discussed during previous episodes. Well, that's it for today. Remember to stay safe, keep healthy and happy marketing and I'll talk to you in the next episode.
