Episode Summary
James Thomson of Buy Box Experts talks about the dynamics of Amazon selling, and how to sustain climbing the entrepreneurial ladder. James shares insight into his growth and success. If you’re an aspiring entrepreneur this episode is for you!
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▶ Inventory Destroyed Without Permission
▶ Reimbursement of unpaid Reimbursements
▶ Returns Posted after Amazon’s Return Deadline
Find the Full Transcript Below
Yoni Mazor 0:06
Hi, everybody, welcome to another episode of prime talk today I have an amazing guest. When I say amazing, I’m not joking. We’re having the legendary James Thompson. James is the Chief Strategy Officer of buy box experts, which is a leading marketplace agency. Plus, he’s a former Amazonian who works for Amazon. And he’s the co-founder of the prosper show, which is one of the most important shows for Amazon sellers all over the world. And also, he’s a prolific author about e-commerce, and he wrote a few books. And he’s a regular contributor to the media on Amazon-related stories. So James honored to have you Welcome to the show.
James Thomson 0:41
Many thanks for having me on.
Yoni Mazor 0:43
My pleasure, really. So today’s episode is going to be the episode about, you know the story of James Thompson. So you’re going to share with us, where are you? Where are you from? Where’d you grow up? How’d you begin your professional career, no career, and what’s happening with you today? So, without further ado, let’s jump right into it.
James Thomson 1:02
I feel like I’m making up for not having had a Facebook page for many, many years. oversharing. But thank you for having me. I’m James Thompson. I grew up in Canada. I was born in England and then spent the better part of 20 years growing up in Canada and so on.
Yoni Mazor 1:21
You’re from Canada be born in England. Let’s talk for a minute. Morning. Which part and why were you born in New England and not in Canada?
James Thomson 1:28
Because my mother was in England? No, I’m joking. But my parents were studying abroad and happened to be in the womb of my mother while they were living in England. I was born in Oxford.
Yoni Mazor 1:41
And then our academic or your mother was an academic, University of Oxford.
James Thomson 1:45
Yep. And then I ended up coming back to Canada when I was about one spent the next 20 years in Canada,
Yoni Mazor 1:51
Which part of Canada?
James Thomson 1:52
I grew up in a city called Edmonton, which is in western Alberta, and went to…
Yoni Mazor 1:58
The western part of Canada from not mistaken.
James Thomson 2:00
Yep yep, just north of Montana. I went to undergrad there and ended up moving to the states in 1992 to go to grad school. And I’ve lived in the states ever since,
Yoni Mazor 2:13
Which was about to go into grad school.
James Thomson 2:16
I had the opportunity to go to Vanderbilt University in Nashville, Tennessee to do an MBA, and then I moved to Chicago, and did a Ph.D. in b2b distribution at Northwestern University. So back in the day, whenever.
Yoni Mazor 2:27
You shouldn’t know what your…
James Thomson 2:28
1993 1998 I graduated from Northwestern. Back in the day, b2b distribution was not a sexy topic. And then fast forward a few years, e-commerce marketplaces came along, and brands started to realize that maybe they need to manage their b2b distribution. So I’ve been very fortunate to have gone, gone, and earned a strange degree, years before it became relevant. And now I find myself in a place where I’m having lots and lots of distribution conversations.
Yoni Mazor 2:59
Yes, so you’re a genius, right? Because yeah, you’re a Ph.D. in b2b distribution, which is booming, and in the world of e-commerce today, but in the early 90s, or maybe late 90s, when he graduated, it was kind of maybe on the fringes of things. But now fringe totally talks about the mindset in 1998 of b2b distribution was just having Walmart or Sears, own everything, or they’re the benchmark of everything, or what was the spirits back then.
James Thomson 3:27
So I was living in Chicago, and the big b2b distribution company was Granger. And we’re talking literally, purchasing managers flipping through catalogs trying to figure out how to get enough supplies for their companies.
Yoni Mazor 3:42
Their carrier for the most part, what’s the what’s there.
James Thomson 3:44
The model, distributor, huge, huge distributor carrying other brands, sales team going out, pitching to purchasing managers, b2b companies all over the country. Things have since come online. I mean, back in 1998. e-commerce was very, very nascent. Yes, Amazon existed, but it was not.
James Thomson 4:04
Yeah.
James Thomson 4:06
So fast forward a few years, things started to come online. Now we’ve got Major b2b online, including Amazon business. And purchasing managers don’t have to tolerate having salesperson after salesperson walking through their door, throwing them another catalog. Some of that still happens. But you know, you’ve got a situation where sales teams or brands can sell their products to retailers and distributors without ever actually having to meet them in person. Because everything could be done online.
Yoni Mazor 4:35
So kind of, in a way democratize a little bit the b2b world where it’s not only related to connections, personal connections, I know this guy know that guy or that I know that lady or this lady. It’s more about if you have a winning product that consumers, you know, demand there’s a demand for because there’s ability in the e-commerce space to touch them directly, right, the b2c right? In terms of advertising or whatever it is, To generate the demand. And if there’s a demand, you don’t have to put too much on the b2b side saying, see, this is my brand. This is my product. This is a demand, there are data-driven, you can show the numbers, would you like to be a distributor? And boom? Is that kind of the dynamics? Or was that a lot of room for politics?
James Thomson 5:14
A couple of big things have happened. Number one, it used to be pricing was not very transparent. If I came to you and I pitched you a product for this particular price, you didn’t necessarily know what somebody else was also being offered for that same product. Now, price transparency is a lot easier, not just for b2b, but certainly for consumers. I can see the prices for products in Florida and New York and California all at the same time. Because at the end of the day, it doesn’t really matter where I’m geographically located. It comes down to can you ship it to me quickly? If you can, I’ll buy it from anywhere in the country. Secondly, you know, I think back to back in 9697, I went and visited dozens and dozens of purchasing managers and hospitals. I remember going in and walking into their offices, their offices, we’re always down in the basement, next to the morgue. A very exciting place to be working, oh, high energy places. Oh, yeah. And I go in and you know, office after office would literally have catalogs stacked halfway to the ceiling. And as the purchasing manager needed to find some doodad for some department, they’re literally filing like picking a catalog and pushing papers out. And like this is insane. Because in a typical hospital, it’s not unusual to have over 100,000 different skews that the hospital needs to buy. Well, how is a single purchasing manager or even a purchasing manager team? How are they supposed to keep track of all that? And how do you find out? If you’re inefficient? How do you find out if, in fact, you could be doing volume purchases, I mean, it’s very, very hard to keep track of all that when it’s all paper-based. We’re now online things have changed quite a bit. But it’s changed a lot, not only for the buyers but it’s definitely changed for the brands and my world today is all about brands. And helping brands make better sense of what they need to do to evolve in order to think more effectively about how to capitalize on the e-commerce channel. And by the way, it’s not just what happens on e-commerce, e-commerce creates a whole bunch of waves for brands in their traditional brick and mortar channels. And so if they don’t understand that there is this price transparency, there is this marketplace situation where products can easily be diverted and create pricing strains for traditional and authorized retailers. Now a lot of that kind of noise is now so big, that brands can’t ignore it. But often, many of them have no idea what they’re supposed to do to tackle it. So that’s a lot of what I spend my time doing today is working with brand leadership teams to have those conversations and say, here’s how you need to evolve, here are some of the behaviors you’ve had in the past that are going to get you in trouble. And quite frankly, if you don’t wake up and fix these problems, it’s only a matter of time before somebody else is basically going to dictate what happens to your branch. Yeah, got it. Not a pleasant situation.
Yoni Mazor 7:55
Got it? So I’m trying to kind of jump back to 1998. Yeah, yeah, the early components of, of the mindset there. And of course, how and where we are today, and I guess, bridging that gap. So 1998 was where you got your Ph.D. And once again, to give us a little taste of the b2b distribution, which is, to be fascinating. I’m from the industry, you know, full disclosure also. But, you know, to the average listener, it’s important that you know, what you just share with us, they have the ability to kind of gauge, you know, where the hospital was, and what’s happening today, which is great. So 99, do you graduate. And that kind of my mindset in PHP in b2b distribution. highly unusual, but I think it’s a blessing in disguise. So what was the next session 99 do for you?
James Thomson 8:37
I want to I worked for a couple of consulting firms in Boston, and ended up then going into banking, and lived in Charlotte, North Carolina.
Yoni Mazor 8:48
That sounds like smells like that’s, that’s, that’s what I did.
James Thomson 8:52
And then I went, went back to consulting moved to Atlanta, and work for Boston Consulting Group. And then I ended up saying, you know what, ECG?
Yoni Mazor 8:59
Yeah.
James Thomson 9:00
Yep, yep. And I decided I needed to stop moving around every couple of years for another job. And I said, Where do I want to go live? And I had had the good fortune through my consulting and banking work to travel to, what 70 different cities in the US. And while traveling to a city for a couple of days doesn’t necessarily give you the full sense of what it’s going to be like,
Yoni Mazor 9:22
the culture. Yeah, no,
James Thomson 9:23
I had a pretty good idea of where I didn’t want to live. And they had a pretty good idea of what places I wanted to continue to consider. And I family still lived out in Western Canada. And I said You know what, I want to live in Portland or Seattle. Let me first figure out what kind of companies there are in those two cities. And then I’ll make the move but I’m going to geographically target specific places and then find companies rather than finding companies and moving to wherever they happen.
Yoni Mazor 9:46
Interesting. Yeah, that so yeah, no inclination to go back to Edmonton, Canada. That wasn’t on you know, looking back.
James Thomson 9:52
That wasn’t something I was looking to do. You know, I had been doing enough things was the kinds of companies I wanted to work for. In Canada, basically, everything is based in Toronto, and Vancouver with the exception of oil companies being in Calgary, Alberta. I didn’t really want to live in any of those three places. And so the opportunity to continue to live in the United States was something that I continued to explore that.
Yoni Mazor 10:16
And I assume when you got married, your wife was American or Canadian.
James Thomson 10:21
My wife is American and still is American. And I’m still very much Canadian. So yeah.
Yoni Mazor 10:25
Oh, yeah, I got it. Alright, so it made sense. Also, there’s, you know, she has her platform or family around here. So it also makes sense for you guys to stay in the United States. But okay, so you know, How many years did you bounce around to doing consulting from 1998? Until which year until you settled into you’re going to share with us in a moment, was it Portland or Seattle? But how many years? Did you bounce around and consulting? Yeah, well, I ended up in America. Yeah.
James Thomson 10:50
It was about nine years. And then in 2007, I was already living in Seattle, I left one bank in Seattle, and came to work for Amazon, and then working in Amazon from 2007 to 2013.
Yoni Mazor 11:04
And six years before jumping to that, okay, so 2007 that’s when you make the move. And you were debating between Portland and Seattle, when companies were debating just share with us a little bit of that. What was on the menu for you back then?
James Thomson 11:16
Oh, I was I was looking at an esteemed bank called Washington Mutual, which no longer exists today..
James Thomson 11:24
It’s part of Wells Fargo. Chase
Yoni Mazor 11:28
It got swallowed in 2008. With the financial meltdown.
James Thomson 11:31
I ended up going to work for WaMu. And I ended up leaving about a year before they got Well before they went bankrupt.
Yoni Mazor 11:39
Yeah, 2007 or 2008. That’s when they melted away, right?
James Thomson 11:42
Yep. And so I ended up coming to work at Washington Mutual for a year and a half and then left to work for Amazon. And you know, a very good, very good timing to leave and come and work for Amazon. I was the only person who had ever worked at Washington Mutual and then came over to work at Amazon,
Yoni Mazor 12:01
Let’s say guaranteed on the first one to say.
James Thomson 12:04
I was told by HR that they had never hired anybody for Washington Mutual people didn’t go from banking into Amazon. Fast forward. A few years later, Amazon started getting into Amazon lending. Then they started hiring a bunch of bankers, but…
Yoni Mazor 12:16
Capital lending again, a major lender to the e-commerce world. Billions of this
James Thomson 12:20
Yep, yep.
James Thomson 12:21
They did. Indeed.
James Thomson 12:22
I remember.
James Thomson 12:23
I had a conversation. When I was at Amazon. I had a conversation with the Amazon lending team shortly after they had been founded. And they wanted to talk to me because I was working on marketplace stuff. And they said, Well, you know about third-party sellers. I remember sitting down with them. And saying to them, well, I used to be a banker, and they kind of looked at each other like…
Yoni Mazor 12:41
Banker liaison.
James Thomson 12:42
We have people at Amazon, I used to be a banker. So that was…
Yoni Mazor 12:45
Was that just for trivia purposes?
James Thomson 12:47
That was 2012 2000.
Yoni Mazor 12:50
That’s when Amazon established capital lending and the lending team.
James Thomson 12:54
Amazon lending was just getting started. Yep.
Yoni Mazor 12:56
Got it. Okay, so let’s dive into your you know, I guess the Amazon chapter. Oh, they were gonna give a bit more attention because it’s relevant for the e-commerce space. Sure. And what kind of fundamentals I guess you grabbed from Amazon, and then, later on, pushed it from 2013. And on. So let’s, you know, where do you start with Amazon? What was the purpose? What was the role? You know, let’s dive a little bit into it.
James Thomson 13:14
So I started in Amazon sports running the third-party business, December 2007, beginning of the month, q4, complete insanity. I literally was escorted on the first-day show my desk, somebody pointed out where the bathroom was said, Here’s your password for your computer, we’ll see in a month, because we’re we don’t have enough time to talk to you for the next month. Because it’s Q4.
Yoni Mazor 13:38
I kind of looked around like crazy boot camp.
James Thomson 13:40
Totally ridiculous. But quite frankly, I was so excited because I was working in a company that had more data than I had ever seen in my life. And I started asking myself, okay, I have p&l responsibilities over this business, what are the things that I need to learn in order to figure out how to grow this business? In the meantime, q4, obviously, is insane. And everybody’s growing, growing, growing, selling, selling, selling, nobody wants to talk to me, externally or internally. So I basically have three and a half weeks in December to figure out what’s the lay of the land before somebody comes to me and says, oh, by the way, here’s some project work I need you to do. I didn’t have any project work, I created project work for myself, because I needed to learn the business very quickly. So early January, things started to become a little bit more apparent when I realized how my role fit in with all the vendor managers around me. It’s very strange to be in the same department as someone and to actually be competing with them.
Yoni Mazor 14:35
All the ones that you are on the vendors, vendors.
James Thomson 14:40
Third-party is third party, seller side.
Yoni Mazor 14:41
So Amazon, you’re on the third-party seller side.
James Thomson 14:44
I’m literally sitting in a room by myself. And everybody around me is my competitor, vendor, all of my colleagues, all the vendor guys, and they’re all looking at my excuse and my brand saying which ones do we think we can flip One piece. It’s a very strange experience to be in. Everyone’s like, Hi, James, how are you? And by the way, I’m, I’m looking at your numbers. And I’m thinking which brands can I take? Kind of like, What are you talking about? This is before FBA was anything meaningful, right? Quite frankly, we didn’t really have a good alternative to offer third-party sellers to say you shouldn’t go to one p, because they just want volume and they want prime eligibility.
Yoni Mazor 15:27
And they want the purchase order. Amazon pays a nice automatic fee automatically from the platform. much about packaging, branding, advertising, and that’s Amazon stuff.
James Thomson 15:36
Things were much simpler back in 2007-2008, much, much simpler. You live literally, if you could get your products on Amazon, you were happy. And then if Amazon came along and said, by the way, not only are you on Amazon, but we’re going to buy a pallet at a time from you. It’s Bingo. Right? That’s, that’s amazing.
Yoni Mazor 15:52
So you were like a little bit of a greenhouse inside that room right there. Like, you know, there’s all these seeds, if one of them goes nicely, they want to just snap it off your basket, right.
James Thomson 16:01
That’s a good analogy. Yep. So I ended up leaving that role to go off to become Amazon’s first FBA account manager. Because about a year into my sports role. FBA was something that we were being encouraged to sell to our sellers. And so I started creating reports, generating email campaigns, sending stuff to the sports sellers, not only helping them understand what products from Sports they should be sending into FBA, but recognizing that a lot of these sports sellers were selling and lots of other categories.
Yoni Mazor 16:32
Of FBA in 2000, in early 2008, right, that’s your kind of started or about before that.
James Thomson 16:40
Let’s talk about beta. I mean, there was a long period of beta things that didn’t really get started until about 2000, late 2009, early 2010. Because Amazon at the time, you know, it, when I think back, it kind of amazes me, FBA early days was being sold to sellers, as we have bigger warehouses than you do and you should put your products in ours. We can help you scale in q4, so you should use our facility instead of yours. And I specifically remember, shortly after I took the next role where I was FBA account manager, I would take large, very, very large Amazon sellers who were not using FBA, I would take them on FBA facility tours. I go to you know Pennsylvania, and Reno, Nevada, some to Phoenix, and I would bring in all the sellers, you know, a dozen sellers at once, and I’d literally take them through the warehouse. And one of the craziest things kept happening. Every single tour, people would walk in and say, oh, wow, can I start taking photos? Let’s say, No, you’re not allowed to take photos? And by the way, why do you want to take photos? Well, I want to figure out how I should lay out my warehouse based on what I’m seeing here. We’re talking, you’re walking into an Amazon warehouse that has like eight miles of conveyor belts. This is not your normal kind of warehouse. And by the way, it’s not the warehouse layout. That is the secret sauce. It’s the software around where do you place inventory? How do you make sure it gets picked quickly? How do you make sure that units get put together into the..
Yoni Mazor 18:13
Robots? That alone is a huge investment long before the robot showed up?
James Thomson 18:17
You know, just getting things figured out around? How do you put inventory in the right places? How do you make sure that you can find it when you need to find it? There’s some unbelievable software that goes into that.
Yoni Mazor 18:30
What do you make of it though, the fact that these entrepreneurs, you know, third party sellers, were always you know, asking about is that an indicator of the character or the spiciness of the Amazon entrepreneur where I got to do it
