Jason Hanan | How a NYC Retailer Successfully Adopted Ecommerce
In this Prime Talk Podcast Video Sponsored by GETIDA, Jason Hanan, the co-founder, and CEO of AZ Seller Kit, an automated pricing business intelligence software for Amazon sellers, shares his personal journey into eCommerce how he as an NYC retailer successfully adopted e-commerce.
From bricks and mortar retail outlets to online e-commerce shops, inventory management is a key tool to make sure your business can keep your customers satisfied. With the technology available today, this doesn’t have to be as difficult as it sounds. Yoni Mazor from PrimeTalk discusses the importance of proper inventory management for your business.
In today’s interview, PrimeTalk chats with Jason Hanan, the co-founder, and CEO of AZ Seller Kit, a tool kit of innovative software that can help you better navigate the tricky world of margins, inventory management, and ad spend. Up to today, they have helped 138 companies earn more than $7 million dollars on extra revenue.
Jason Hanan describes his journey and experiences from his retail days in Manhattan to the state of his current agency, AZ Seller Kit. So if you’re interested in having a more streamlined seller experience on Amazon, or if you’re simply curious about this unique New York Tale of ups and downs, then this episode is for you!
Link to the Az Seller Kit website.
Get more info about GETIDA's Amazon FBA reimbursement solutions.
Find the full transcript below
Yoni Mazor 0:06
Hi, everybody, welcome to another episode of PrimeTalk. Today I'm really excited to have my guest. My guest today is Jason Hanan. Jason is the co-founder and CEO of AZ Seller Kit, which is an automated pricing business intelligence software for Amazon sellers. So, really helps Amazon sellers deal with all their pricing and do it automatically in order to get the most sales and also the most profit. We're going to touch a bit more about that later. But in the meantime, Jason, welcome to the show.
Jason Hanan 0:35
Amazing to be on one of these! Very excited, I've watched them before. It's a lot, a lot of fun to be on one!
Yoni Mazor 0:40
Alright, our pleasure. Thank you for coming and joining us today. Alright, so today's episode is going to be the episode of Jason Hanan and your story. So it's going to be all about you. It's you're going to share with us: Who are you? Where are you from? Where did, where were you born? Where'd you grow up? How'd you bring in your professional career and all the way to e-commerce? So without further ado, let's jump right into it.
Jason Hanan 1:02
Sure! So I grew up in Brooklyn till I was about 18. I went to the Yeshivah Flatbush. I was very, very proud and happy to be part of Yeshivah Flatbush, it was great. Went to college at Baruch, which was also a very nice experience. Which I’ll tell you a little bit about in a second..
Yoni Mazor 1:20
Baruch College is in Brooklyn as well, or It's in the city of Manhattan?
Jason Hanan 1:23
Baruch is in Manhattan, actually on 25th Street, 25th and 23rd they have campuses, which ended up working out well for me. I used to, when I was about 18, I was commuting to Jersey City on a little bus that would take me to my father's retail store in Union City, New Jersey. And uh, he got a call from my uncle at the time, aléha hashalóm, he passed away, basically asking if we wanted to be involved in selling videotapes and CDs in Manhattan on 14th Street.
Yoni Mazor 2:02
Which year was this, just for perspective?
Jason Hanan 2:04
This was in 1996.
Yoni Mazor 2:05
So 1996, during college years for you, you reach out to, you cross the river, New Jersey to the west side, you know, for being in Manhattan, and essentially have family members who are in the retail game of entertainment, CDs, music, video games and so forth.
Jason Hanan 2:25
Exactly. So when we have the opportunity to get involved in that, instead of sitting on a bus, I didn’t ask twice, I told my father “Yes, let's do it”. I was, I remember sitting in class when my father called and saying “100% I never want to go back to Union City, New Jersey again”. So we started our retail stores there. It's called Entertainment Outlet. We, at one point, had three stores in Manhattan on 14th Street, one on 40th Street...
Yoni Mazor 2:52
What was the name of the store again?
Jason Hanan 2:53
Yoni Mazor 2:55
Jason Hanan 2:56
Yep, some high-volume stores. And you know worked our way through the, all the transitions in you know, that happened from VHS tapes to DVDs...
Yoni Mazor 3:09
So, 1996. VHS was still...
Jason Hanan 3:11
VHS was still something. Yeah, the biggest movie we had was Titanic. Titanic came in, people lining up with the Titanic VHS paying $20 for a VHS tape. I don't understand it. But it was definitely, really it was fun to sell.
Yoni Mazor 3:28
You say historical, but it's only 1996. So it's almost like talking in the 50s when people are waiting in line for other things that today seem silly to all of us.
Jason Hanan 3:37
It really, yeah, it was definitely, we would have when CDs came out. We had lines around the corner. When a new Jay Z CD would come out or Notorious BIG CD would come out. It would be, it was definitely a lot of fun.
Yoni Mazor 3:53
Yeah, so this is the real New York life right? The cultural life, but you said that the oldest stories were especially in Manhattan? Midtown? Downtown? Spread-out?
Jason Hanan 4:02
We have one in Midtown across from Bryant Park, which was you know, definitely an upscale location.14h Street was a little more grungy. And then we had a store on Broadway. And the funniest part about the store on Broadway is when we opened on Broadway, on Canal Street, everybody told us that's the best location you ever gonna have! You’re a genius! Miserable failure...When we opened on 40th Street, they said terrible idea and that ended up going really well. So it was, you know, you never know, but we were definitely, did really well, thank God, with our you know, the two stores, 14th and 40th Street, and we ran those businesses all the way through till about 2014 we still had those retail stores.
18 years. Even though what, uh, streaming? When did really streaming kick in? If you can look back and let us know.
Jason Hanan 4:53
Yeah, it was, really probably, you started to see the writing on the wall by about 2012. You started to know that it was gonna be, you know, a problem. The prices on everything started to come down, which was good. We were selling for cheap. But it got to a point where you can't pay rent in New York, even if the cost of goods is free. Like we were buying new CDs at the time for a quarter and selling them for $5. But...
Yoni Mazor 5:22
Not enough volume, not enough demand.
Jason Hanan 5:24
Yeah. How many pieces can you sell to pay rent for $20,000 a month, or whatever you needed to pay in, in Manhattan? So at some point, it was time to close. But we were lucky enough, while we were doing business, we got into the wholesaling of DVDs. And were actually racking other retail stores. So we would go around and we had a guy who would go into, like your local 711. And all those DVD racks that you see in different locations, we used to have a rack in every gas station in the tri-state area, which you know, we grew that business out of, you know...
Yoni Mazor 5:59
And what year did this start? The racking business or the wholesale business? When or how did you develop this? What was the story of this?
Yoni Mazor 6:05
That was, so when the prices of DVDs started to come down, I would say around 2009-2010, where the bottom started to fall out a little bit, we, there were a lot of closeouts available. And we were big users of the product. So we took that, you know, that closeout model, and really through the help of, and probably a consistent story: it's always a friend or family member or somebody who said, “You know what, why don't you try this in my store, I have a retail store or a discount store. See if a rack of DVDs might work for, you know, cheap, we sell for $5, maybe we can make money, you can make money, let's try it”. It worked in that location, then we, you know, the word spread, we built the business. And we, you know, we did that for quite some time, probably till, we did that for about five or six years, where we really weren't
Yoni Mazor 6:55
When you found out that, you know, that's kind of the new medium or outlet for this, the secondary market, you can say, you said the primary market for consuming multimedia and culture through CDs, movies and so forth, you know, when into streaming and online, and the primary mode, which was a, you know, tapes or CDs became secondary, but there was still a market for that.
Jason Hanan 7:15
Exactly. It was exactly a secondary market. And then part of throughout this, I would say entire process going all the way back from 2003. We were selling on Amazon as third-party sellers.
Yoni Mazor 7:28
Okay, so yeah, so now we're, I guess, we're gonna, so, we had a trail of, you know, your retail stores up to 2014. And then, you know, you branched out to essentially wholesaling to secondary markets with the racking, as you mentioned. And now there's another trail where you entered the world of e-commerce. So let's touch on that. Take us there, you know, the year that it started, and, and the, you know, how things rolled out from that point?
Jason Hanan 7:49
Yeah, so in 2003, we were, we had a basement in our retail store at 40th Street. And we, you know, again, you’re in retail, so you have inventory, which was you know, so that it really was just a matter of listing it on Amazon, and no one else was really doing it at the time. You know, it's 2003. So it was definitely, you know, it was easy, easy pickings so to say.
Yoni Mazor 8:12
So 2003, you decided to, I guess, you know, branch into e-commerce. When the first choice was Amazon? Or Ebay? Or?
Jason Hanan 8:21
It was actually Amazon and eBay at the same time because they were kind of neck and neck back then in 2003. And then we saw pretty early on how much easier it was to, you know, for both the shoppers to shop on Amazon as it was as opposed to eBay and how much easier it was as a seller to actually get the product onto Amazon. So I remember the day like it was yesterday, it was like something like 2007, we bought a DVD on sale from Amazon for $14.99. And because they were having a crazy deal, and they shipped it two days later it landed, you know, in our store, and we sold it three days later for $24.99.
Yoni Mazor 9:06
On Amazon or in the store?
Jason Hanan 9:09
On Amazon. I said I gotta buy stock in this company. These guys just made money on me twice. And I made money in between! This is ridiculous!
Yoni Mazor 9:18
So this is 2007. This corn drops in your mindset saying this is an unbelievable market because it has a built-in demand like no other. It's something that is, something that, selling to, for $1 might sell tomorrow for two or $3 and people will buy it. It's a no-brainer. You know, it's almost like a goldmine with opportunities to make money in all these pockets.
Yoni Mazor 9:36
Exactly. And we really had the, I'm gonna say, the magic formula of having a retail outlet where you could experiment on Amazon. And if it didn't work, you could always sell it in the store. So it really allowed us to, you know, take chances and be more, you know, and then we had, it was really a perfect storm where when we had the retail stores and we were selling to other places at the same time, where we were really very powerful buyers of the product. And we were really able to find the best place to put, you know, each piece of merchandise, whether it was most value online, most values in our store was not in another store. And it really was a lot of, it was definitely a nice sweet spot on Amazon, we're nice, we're still, DVDs we’ll still sell.
Yoni Mazor 10:24
So it was a lethal combination for you guys to have the opportunity to really enjoy the best of all worlds, online, your own physical stores, wholesale to other stores, and really know where the products can succeed best and just also buy cheaper and cheaper because you're buying such a large volume. So 2003, you started 2007, four years later really dropped the cone on you? And what was the next station for you guys? From that point on, at least online?
Jason Hanan 10:51
Alright, then, you know, once it starts to hit, I would say by 2014. We're looking at the future. And, you know, people I remember used to call me and say you're in the DVD business, like, you know, when are you, you know, when are you selling a house? Like you're obviously, you know it’s cute, but you're obviously going to be in trouble here. So we would say that I don't know. So far, we're okay. But we knew the other shoe was gonna drop at some point. And probably around, you know, 2015, you know, my brother actually used to work with our company together, we were all partners, he went off on his own because we kind of, you know, the business was not succeeding anymore. But we did almost unknowingly have this extra piece in Amazon. And in software that we built all the software to run our business on Amazon. And we didn't realize that it was, actually had a lot of value. So my brother went to work at another company, the name of his company was RBX. So he owns and manages their e-commerce division now. At the time...
Yoni Mazor 11:57
He works at RBX or he owns RBX?
Jason Hanan 11:59
Now he owns the retail, he owns the e-commerce portion of RBS.
Yoni Mazor 12:04
So RBX is a recognized brand and he owns the online e-commerce rights to sell the brand online. So he started this, partnered in this online licensing, I guess agreement where you can market online, but he started what, in 2014? 2015?
Jason Hanan 12:19
Let’s say 2016, 2015 or 2016 is when that started, I believe they were when they were trying, before he had gotten there, they were trying to do e-commerce without Amazon. So when he got to the company, he was there to open both retail stores and anything direct to consumers. And, you know, he basically told, you know, one of the other partners that if we want to do Amazon, you know, this is what, you know, my brother and Lenny, who's my, the other co-founders, like this is what they do, we should talk to them. So we would talk to them as friends. You know, like, okay, we can help you get set up if you want, I guess, you know, and they said, How about if we pay you? Like, Hey, wait a minute, that's interesting. Like we actually have something, like you would pay us to? They're like, yeah, we can't warehouse this stuff. We don't know how to do any of this stuff. And we're doing you know, we're doing an e-commerce website only and it's floundering, and you don't know what to do. Okay, we know we were looking to do anyway, we said, let's try it. And then thank God, the RBX brand, you know, took off with really, you know, my brother leading the...
Yoni Mazor 13:32
So RBX is a brand, its apparel, sports and outdoors, undergarments. And, you know, your brother branched out into for an opportunity with but sucked you into even more into the world of e-commerce, realizing that effectively to now we can call it becoming an agency.
Jason Hanan 13:51
Exactly, that was step one to becoming an agency. So, which we didn't even know I don't even think the term agency existed at the time. But you know, that was, you know, that was really the beginning of realizing that we had a skill in, you know, listing creation on Amazon, warehousing in Amazon, and just knowing that other people really didn't have and was sellable.
Yoni Mazor 14:15
Yeah, I wanna... Yeah, I want to mention again, that you started in 2003, 17 years ago, and by the time of the year 2015/16, you got such a vast and deep knowledge and experience in the marketplace. So for you, It seems so obvious, but for others, was like heaven and earth you over the all the way in the skies, they're down there, like help me get up there. I'm more than willing to pay for the flight, you know, so...
Jason Hanan 14:38
Yeah correct and we literally had no clue that, you know, all of this software that we had developed to, you know, do report to understand our business.
Yoni Mazor 14:47
Yeah, I want to touch that. When did this happen? This, you know, you dabbling into technology, software creation? What was the story of that? Where does this need come from? Tell me about that a little bit.
Jason Hanan 14:57
So we've been... It's kind of, it's definitely funny because both my brother and my partner, Lenny, were much more software-driven. And I always had this belief, you know, I have, thank God, I have a very good memory, I can remember details from here till the end of time. And I always said that no computer can do better than my head, I'm against whatever technology you want to do, you know, you can play with but you know, whenever I would go on vacation, they would have to do my job. And they would come back and say, There's got to be a better way. So eventually, over the years, they were able to convince me that if I could take what's in my head, and have it talk to software, it's much more efficient. So took me a while too, you know, to...
Yoni Mazor 15:43
How long? A few weeks, a few months, a few years? What was the...
Years and years until I was really able to say, you know what, I'm willing to try and put, you know, into software, what's in my head? As far as..
Yoni Mazor 15:58
What year did you guys write the first code?
Jason Hanan 16:01
Which year? Ummm... this is back from probably 2010 until I started really, you know, allowing for, you know, what was in my head to be put down on paper?
Yoni Mazor 16:13
And what was the main purpose of the software when you started, you know, first writing the code, what was it supposed to automate? Streamline?
Jason Hanan 16:19
Well, it was always, the beginning was automating buying processes. So if I'm, and again, this is back from the DVD days, before we're an agency is, you know, I'm trying to, you know, manage, we were, you know, there are 14,000 SKUs, and we're trying to figure out how to do, you know, make buying decisions and pricing decisions and do all these things. And, you know, me and my, you know, the big head was like, I got 14,000 SKUs, I don't need the sleep, I'm just gonna manage everything myself, I can handle buying, I don't need reporting, I know what's going on. And eventually, you know, I was, I was convinced and made to realize that, you know, if you can just put rules into software and, you know, and get what's in my head into a computer system, then…
Yoni Mazor 17:07
Essentially the algorithm that's running in your, you know, in your mind and your brain, write it into code. And instead of doing 14,000 SKUs, or market research, you can do 140,000, or more and find all these treasures.
Jason Hanan 17:18
Exactly. And that really was, I was definitely, you know, I'm gonna say I'm not, I've gotten better, but I definitely was stubborn, you know, back in the day, but I've definitely learned to understand the value and the power and the efficiency of using software to, you know, to make decisions.
Yoni Mazor 17:39
So when the software was done, and all that said and done, were you the only user or who else was using it?
Jason Hanan 17:45
So, we each, I mean, it was basically it would be, you know, our entire staff would end up using our software for different purposes. So, you know, my brother, Adam was the financial person, so he was using software to, you know, understand the financial side of the house. You know, Lenny was always in charge of shipping, advertising, and, you know, managing the internal staff to actually get things done. So he's creating tools to help manage inbound shipping, to help label creation, you know, each piece of the puzzle was, you know, needed to have different software to make things more efficient for whoever was using it. And, you know, honestly, I was the last to the party because they were always developing software for themselves. And I was always trying...
Yoni Mazor 18:30
Your components were more on the purchasing end. You know, inventory management and purchasing.
Jason Hanan 18:37
Exactly, buying, management, pricing. That was always my, that's still is my baby. Like, I live that, I love that. And, you know, that was... so I was last to jump on board the software train in our company. And once I finally, you know, let that into you know, our business, it was really a very big difference in how you can grow from there.
Yoni Mazor 19:00
Nice. That's pretty cool. So you mentioned your brother was in the business. So yeah, you know, because you’re brothers I don’t have to ask how you guys got to meet each other and connect. But I guess, Lenny, so the question is directed at Lenny became, what's the story of Lenny? Share with us today. He’s your partner with AZ Seller Kit. How did you guys meet? What's the story there?
Jason Hanan 19:17
So, so Lenny lived four blocks away from me our whole life. So we were very tight family, friend, childhood friend, you know, you know, close family, my cousin...
Yoni Mazor 19:31
Oh, cousin. Okay, got it.
Jason Hanan 19:33
My cousin, he was, at the time, which is kind of funny how the world works. He was working, my brother was at a different company called RCS where Lenny was working there. And they both, pretty much within two months, I think it was like I don't even remember what year 97/98 or whatever, is very, very early on. came on board to work with you know, Entertainment Outlet, this, you know, new company and it was... Yeah, with me and my father at the time, and my cousin, whatever uncles. And my father told me, trust me, we need them. I was like, really? He's like, you're gonna see we need them, take them. So we, you know, they both came on board and it was immediate growth with more people that, you know, had brains and were involved. And you know, Lenny's been, you know, we've been partners, you know, for you know, since then we have
Yoni Mazor 20:27
20 plus years, yeah, 20 plus years. And what were the dynamics, when you first started the store? Who owned it? Was just oh, you, you and your father, you and your brother?
Jason Hanan 20:40
So when we opened the store, it was actually me, my dad, and my uncle who used to be in wholesale. And, you know, his family were, you know, they were very, you know, very generous in the way they handled the situation. And, you know, they also, they knew that my father's business at the time was a health and beauty aid store, and Rite Aid opened across the street. So we were in trouble. So they said, I know that you know how to run retail. So we have this opportunity to sell, you know, closeout videos, and used CDs and different products that they had. So let's see if we could, you know, get into this partnership together. So we were partners in that for a few years until we eventually, you know, parted ways, philosophical differences, they really wanted to focus more on wholesale, we had different, you know, ideas in retail. So, you know, that was a few years of being partners with them, which was, you know, great, we still are, you know, very tight with that family, and I always give them credit for everything that we have is really because of them. And we, you know, and then at that point, it was me and my father, and then we brought in my brother, and you know, and Lenny, you know, back in the day, until we, you know, just it was a lot of evolution or a lot of changes.
Yoni Mazor 21:52
So, New York City style, you know, in New York City, in a way, it's, I don't know if it's still like this today, but back then there was like, you know, in this marketplace of New York City was probably over a trillion dollars. It's all it's almost like it's on Amazon, where things are fast. When you, when you get to hit something, it's a boom, and then the growth and, and then you move on to another part of town. It's just, that was kind of the New York state of mind, as I say, back in the day, but today, I think much of that trade shifted into our e-commerce on a global scale. You know, because we're in the pandemic age, you're going to New York City. I mean, you tell me do you ever go there at all? Do you go visit Manhattan at all? What's his status right now, give us a status report.
Jason Hanan 22:32
You know, I lived in Manhattan when I was 18 years old till I was 34 and 43 days, I lived there for a lot of years until we actually closed the store. It didn't really make sense anymore. But Manhattan is definitely, you know, I love it. Every time I go back, I love it. My brother still lives there. We used to visit before the pandemic. But I'm a big believer in Manhattan, I think it's going to be, you know, I think it's going to be back now in 2008. They Oh, you know, everybody said it was dead in 2001. September 11. Everyone said it's dead. No one is going to want to live in cities anymore. And I just, I don't believe that's really, you know...
Yoni Mazor 23:16
I believe it also. I think it's gonna come back but just gonna be a bit more painful. I think it’s gonna be, you know, just a gut feeling, three to five years on the fast run, or maybe even a decade before it really bounces back to those levels, because of all the hits that it took. Okay, back to e-commerce, New York City has its own magnificent story, and stories and charm. But okay, back into e-commerce, you realize that around 2015/16, you can do an agency, you already started running the first code to manage your own business in 2010. So what are the courses there? Now you have an agency and then I mean, today, you are the co-founder and CEO of AZ Seller Kit, which is a price management platform. What happens on these trails, you got the software and the trail of an agency.
Jason Hanan 24:02
So now we're, you know, we're, so now we're an agency and we're managing, you know, we end up managing, we're still fairly boutique, you know, we only had about 12 to 15, you know, clients at one time, you know, the same idea, you know, I'm stubborn, I don't want to, you know, I don't want to not have control of what's going on, I want to make sure that I can manage everything. And the only way to really do that is software. So now I have, you know, we have 15 accounts, if I want to manage the buying for all these accounts, we need the best tools in order to do that. So we, you know, we're continually writing software to communicate with Amazon to pull as much data as possible to make it as easy as possible, you know, ultimately for me to manage my portion of the program, and ultimately for the rest of our staff who needs to get things done to manage their, you know, their side of the program. And we were, you know, getting we had the background from before. So we were always writing and building software. And now went from sort of a DVD only to, we have to now write software that can manage all different lines of products. For every one that we're representing, you know, in the, you know, in the industry. What happens then is we were using a company called Feedvisor’s software, they had a repricing tool, which was definitely making us money.
Yoni Mazor 25:32
This is once again for selling the multimedia CDs on Amazon?
Jason Hanan 25:35
No, now we're already in agency land.
Yoni Mazor 25:38
Oh agency land, you adopted the Feedvisor technology to push your brand that you're managing.
Jason Hanan 25:46
Exactly, to help us to Automate Pricing for all the different products that we have. So we're using Feedvisor to try and get the most out of every private label item that we have. So if we have a pair of pants, for example, that was selling for $19.99, you know, that software would really, you know, allow you to try and figure out, can I get $21.99? $24.99? What's the, try and find the best price for the item.
Yoni Mazor 26:12
The sweet spot?
Jason Hanan 26:13
The sweet spot. Exactly. So we were, you know, using that software for a while. There were some limitations that we didn't, we didn't like. It was very, you know, very expensive. They charge a percentage of sales. So whatever you're, you know, whatever you're selling, you feel like you have a business partner, you know, on your back so to say. That is, you know, not really, you know, we didn't feel like they were contributing as much as they should be to that…
Yoni Mazor 26:42
They don't handle the sweat, there is no element of actual sweat.
Jason Hanan 26:45
Yeah and every month, you pay them more money, and you just feel terrible about it. So the, all along the line, you know, just kind of, you know, funny, Lenny is always telling me, we should sell software. And all along the line, I'm telling him, we're not in the software business, we're an agency, we sell product, we don't sell software, leave me alone, we do not sell software. Finished.
Yoni Mazor 27:09
It sounds like the same dynamic of 2010. Where he told you that you need software to survive and you’re like no I got it all here. That's where it's at. And six years later, kind of same dynamics. But now you guys have an agency business. He’s telling you we can be in the software business.
Jason Hanan 27:21
Exactly. So that’s a consistent theme. Takes me a while to like get the whack that I needed. So when we start making the attempt to, you know, some of the limitations that we didn't like what the feedback is and model, we started building into our own, you know, efforts to build a repricing tool. And once we were really able to figure that out and our method of real repricing is, you know, we give a little more flexibility. But the main thing that we're really doing is looking at inventory levels. So we were very often selling out of the product, and you know, they would find the magic price that was, you know, $21.99, let's say for a pair of pants, but I sold out of it. So it didn't help me that the magic price was $29. And it was $21.99. I was you know, manually going in and changing it to $24.99 and $29.99. Because I don't want to sell.
Yoni Mazor 28:15
So to cool off a little bit so you don’t stick out because that can punish you even more.
Jason Hanan 28:20
Exactly. Your, you know, your advertising dollars get killed, especially if you're doing you know, in apparel, you're out of specific sizes, then you're spending money on a pay per click basis for, you know, the small or medium customers clicking on the item because they're in that size range. And all you have left is the large and the extra-large. So now once you pay for the click, and you tell Amazon now that your item doesn't convert, it's a bad item. And it creates this downward sales rank spiral, which was, you know what, in a perfect world, you have everything in inventory. And you know, that seems to be that the Feedvisor mindset is that you're a billion-dollar company and you never sell out of anything. And I look like realistically we're managing 10,000 SKUs. We don't have everything. There's going to be stuff that we sell out of. So we set out on this journey to really write a repricing tool that would work for us. When the repricing tool worked. We looked up, you know, I looked at Lenny...
Yoni Mazor 29:18
So that was a process, hold on take us there. So this is what? 2016-17? What’s the year that...
Jason Hanan 29:24
I'm going to say about you know, 2018. We set off on this goal to let you know, let's write the repricer tool. So it takes probably about a year to get it because again when you're dealing with pricing, you can't mess up. You know it can accidentally be priced at 19.99 and then go to 9.99 if you didn't want that to happen because you can lose 1000s of dollars.
Super delicate, can get you out of business.
Jason Hanan 29:55
Very, very, very, very delicate and we, you know, it's, you know, we take it with the utmost seriousness of what we're actually doing. So when until we really, you know, turned it on.
Yoni Mazor 30:06
And you know, once again, I want to mention you're doing on your own skin, it's not like you're saying, Let me find this guy, let me try, again, you're doing on your own skin, which is, you can't get more serious than that. It's as serious as death and taxes. Right?
Jason Hanan 30:18
Yeah, exactly. It's, it's, there was definitely, you know, we wanted to make sure it would, it was working. Before we would even, you know...
Yoni Mazor 30:26
Did it feel like launching a space shuttle into space, you know, you have, because you have so much preparation, and so many things got to work. You don't want this thing to blow up.
Jason Hanan 30:33
And guess what, it, we had a lot of crashes and burns in between. So, nothing, nothing in software is flawless, especially when you're building it. And so we, you know, we got it to the point where, in 2019, in the beginning, where, you know, we realize that, that we say, you know, Lenny probably realized much sooner than I did, but you know, where I was able to look at this and say, you know, we can sell this, we're now helping people, if we can, you know, release this to the market.
Yoni Mazor 31:10
After you stress test it, you know, after all the crash and burns, you solidify the infrastructure, you solidify the code, all the tweaks, it's, it's it's running steady, it's running in a way where it's can really handle the load and much, much more of it. And then you say, Okay, now we believe it's ready for commercial use.
Jason Hanan 31:27
Exactly, even still, and we're very, you know, probably a, you know, to a fault conservative by nature, you know, at this point, our version of commercial use is the “ready to start using it with our agency clients” that I’m not even ready to start selling it to anybody else, I'm actually just going to introduce this concept to the companies that we are actually an agent for, and let's roll that out there. And we tested that for over a year because I really wanted to see it through every season, I needed to know that it could work through a holiday season. To say that, you know, I have a philosophical idea of what this is going to do in December, but I can't mess with other people's, you know, businesses or least try to sell this tool until I really know that I saw through January through till you know, December.
Yoni Mazor 32:15
Yeah, you need proof of concept and all year long, all seasons, you know, testing..
Jason Hanan 32:20
Exactly. So we covered that through till 2020. And then we started to, you know, just very lightly soft launch starts to, you know, tell people about the software. And it was definitely a, it's, you know, as I say we tried to really launch in the middle of COVID like March was when we decided, and I remember a friend of mine sent me a text “I saw you're trying to launch this new business. So sorry, you're trying to launch there in COVID. Like, it's a tough break”. Yeah. And it turned out to be the best time to actually do it, as we all know that then, you know, e-commerce took off in April. So especially because the software was inventory-based. And you know, everybody was, you know, struggling with an inventory. So, you know, this person told that person told this person that, you know, they should be using the software. And then there was a day, I can't remember exactly what day but at some point in April, Lenny came up with the ability to put a tile on the dashboard of the software that shows how much additional revenue the clients were making by using the software. So when he wrote this little, you know, tool and put it on the dashboard, and we see, you know, and I saw that pop, I was like, oh, wow, like you, the numbers were, you know, you know it in your head that there's a lot of money there. But when we actually were able to show it for every account, it's 200,000 a month, it's 100,000 50,000 600,00. Like, the numbers were insane. As far as what the price was getting for our clients. And then we said, this is now something that we have to figure out how to, you know, go and market a little bit more seriously. And we are, you know, still in the process of figuring out how to do that. We're, you know, we're definitely good at writing software, and definitely a work in progress and learning how to market the software.
Yoni Mazor 34:26
So, you're saying though what you find to be unique is obviously the ability of the software to optimize your sales and really manage the inventory properly, and especially these delicate times of 2020 to such a degree where you can actually provide visibility, the amount of revenue or extra excess revenue that was generated through the, through the software.
Jason Hanan 34:48
Yoni Mazor 34:49
You know, users actually are able to touch mathematically, you know, the value. So if you pay X amount of money for the software tool, but it doesn't take any cut from you any percentage of revenue, you make 10s of 1000s, more hundreds of 1000s more millions becomes like a, you know, it's a beautiful ride. Right, so to speak. So.. But well, let's touch about I guess the profile of users. Is it more intended, the software is more intended to the resellers, arbitrage sellers? Or is it more intended to the brand owners? You know, what's the dynamic there?
Jason Hanan 35:21
Yeah, it really is brand owner-specific. There's a lot of business intelligence tools that can be used by resellers.
Yoni Mazor 35:30
Okay, so you basically a spanner. So just to clarify, anybody not too familiar with the dynamics of repricing, when you're a reseller, the struggle is, for the resellers is, you know, winning the buy box, right? Who has the best price, the optimized price? So Amazon gives them, you know, the listing page, like the front, the buy box, right? That's really the struggle for the reseller. So you’re selling it for $9.99, somebody else for $9.98, one penny down, maybe they're gonna get the buy box. So it's a race to the bottom, stuff like that. You're talking about a whole different dimension where nobody's in your buy box, nobody's even in your listing, it's really your listing is looking at itself in the market supply and demand, what's the inventory levels, what's the cost of goods. Different mindset really, completely from reselling, it's kind of a different concept altogether.
Jason Hanan 36:09
Completely different. Yeah, the reseller is basically, you know, usually stuck in this battle of a race to the bottom for who has the cheapest price and is willing to work for the, you know, the lowest margin, and we came from that world, we were doing it on DVDs forever. And there's, I don't know if I say 50 software's it's probably 100 by now, that all in some way, shape, or form are doing this one penny below type of strategy. So there's definitely no need in the marketplace for that, you know, for that tool. But this idea of it's, you know, there's no one else on my listing, but there's price elasticity is something that really was, is not available to, I'm going to say, a normal level customer. And the inventory-based solution is something that's just not out there. So it's really a, you know, like, people will say, you know, like, Who's your competition on this software, it's really, there really isn't any, like, it's just, you know, it's Feedvisor has their way of doing it, and they are great, you know, great company, and they are, they really, but they are, god bless them, you got to have the pockets to use them. And it's not necessarily...
Yoni Mazor 37:24
Right, you know, it's just mostly, like you mentioned corporate enterprise level. So in a perfect world, there's really no stockouts, you guys are focused more on the types of sellers that were there, you know, there there are inventory or manufacturing constraints because you're A: you're not a factory, if you're a factory, your enterprise, you're selling hundreds of millions, a few billion a year, it's no brainer. But if you are not a factory, and you work with the factories, and you're dependent on them, stuff like that, you need the technological ability to balance all that. And that will make it a perfect fit. And you know, the price to use this kind of solution and software's pen is essentially where the pricing that you guys put it out to you it's a few $100 a year, a few 100, $100 a month, every month as a subscription. So that's kind of where it's tailored for, though, the private label seller who is, they are trying to make up their way or they're already selling in a few millions of dollars, even 10s of millions of dollars, but they do still have concerns of inventory management. Okay. But in this, this is more for large catalog? Or does it even, I think could be a whole story behind the inventory management, for example.
Jason Hanan 38:25
Exactly, yeah, no, we have people who were using the software for you know, for 4 pieces, I mean, and they just, they like the security blanket of knowing that the software is raising and lowering prices for these items that have spikes in demand. Because you know, if it's a weekend, and for some reason, you know, things get hot on an item. You know, if you wake up Monday morning and you're sold out, then you didn't accomplish anything. So you know, the software will raise the prices on those items to keep you in stock until your next shipment lands at Amazon, until your, you know, your warehouse can get goods there, until you're, you know, until you're basically back where you want to be in an inventory level. So if you have any, you know, any inventory issues, then the software is really going to help you to maximize your profits.
Yoni Mazor 39:14
Right. And you also mentioned that the software is able to consider your spending on advertising, is that correct?
Jason Hanan 39:20
So yeah, so the software is able to, you know, look at your ad spend. And basically, you can see on your dashboard, we give you comparison tools, so you can understand what your retail price is and the relationship to the ad spend, and if you're converting. So if your ad spin is not converting, then you'll see that on your dashboard but also naturally when you're not converting the retail price will come down. But you'll also you know, the most beautiful use case of the software is when the retail price goes up and you're still converting and that's going to give you extra margin now where you can spend more money on advertising. And you'll see that on your dashboard in your face that now my total A cost on an item is, you know, is maybe you know, 5%, but my margin went up by 25%. So if I put another, you know, I put more ad dollars into this item, it should create this upward spiral because you're still converting at this higher price. And if you can get that, that's the holy grail.
Yoni Mazor 40:25
Ah holy grail, where you can draw more traffic into your listing, but even the sale price even more and more up, it means you're becoming a brand. Really well, what's unique about brands, you know, so many of companies sell shoes, but you know, Nikes, you’re willing to pay more for dollars or $10, $20, you don't care, you just do it. So the more they, you know, they throw their marketing at you and the more you see them everywhere, the more they, the more you're willing to pay. So that is where the magic spot where your brand and you can enjoy sustained growth and healthy margins and make a good living and have a good income from this wild journey called e-commerce.
Jason Hanan 41:01
Yeah, and I'll say ad, you know, and I don't sell advertising. But for all the advertising software's that are out there, and the people who, you know, run agencies that are ad campaign agencies, that really is the key like you, you, you know, when we started this business, we thought that the key was, when can I stop advertising, because I want to get my margin by stopping to advertise. And it took us some time to figure out that the goal is not to stop advertising, the goal is to advertise more, but be able to have a margin that can support that ad spend. And when you do that, now you have a business that can, you know, that can really grow and take off, because, you know, you have to be willing to outspend the competitors. And the hope is that you know, this software will help you to find the margin where you can afford to spend money on advertising, not stop.
Yoni Mazor 41:51
Got it. So the way that I see it, you guys created a tremendously intriguing and I guess, to be proven as an important tool, to supplement the advertising, either yourself with your own spreadsheets or a software tool, or if you're an agency, whatever your level is, or activity with, with advertising, you know, AZ Seller Kit can be a major component in optimizing that to the brim. Where you’re just enjoying all the best of the worlds, you know, strong inventory management, so you never stock out and lose all that rank all our spend that you did with advertising. And once you start hitting that sweet spot where you, you draw more traffic through advertising, and you're able to either keep the prices or even increase them. That is a beautiful synergy. Like a symphony of technology working in your favor, to raise you up.
Jason Hanan 42:40
Yeah, and the agencies that use that software, love it because they also don't have to communicate with their customers as much because all the information is in front of their faces. So there, you know, we used to have, we have certain agencies that use the software that used to spend, you know, days creating reports for their customers. Now, your customer, you know, you get your reports ready in the software, you tell them to click one button, and here's your report, and they don't have to be near as hands-on with their customers, because their customers are getting that feedback, you know, from the software. And that's really always the best thing is you want your customers, if you're a good agency, if you're a good advertising agency, then you want your customers to see your performance in the easiest way possible. So there's, there's no better, you know, there's no better tool than data that says, You know, I spent X amount of dollars and you made that much more profit. And you can see that on page one at the click of a button when you're using the software. If it's working, God willing, it's working.
Yoni Mazor 43:42
For the ones that work, that is you don't look back, if it doesn't work, it's pennies to try its really entry-level costs. But hopefully, high-end results. Yeah, very cool. So innovative stuff. Unbelievable story, I'm going to call it I'm going to do this, you know, in New York Tale, a New York City Tale from the evolution of, you know, brick and mortar commerce, to the, you know, to the which was in its, I guess, the capital was in New York City, Manhattan. You know, you know, diving into...Actually, let’s do a little, we'll just do a recap, you know, around the mid-1990s, I suppose, you know, you're going to Baruch College, and then you get, I guess, this offer from a family relative, let's go into the brick and mortar business world where you can sell multimedia and VHS and CDs, movies, music, you do that and you're really at the heart of it on a global level and enjoying all that success. And then there's some sort of interruption with technology, right, that creates streaming. So what do you do instead of giving up you say, All right, I'm gonna dive into this technology? I'm gonna, you know, lay a track there, which you did about 2003 so you did eBay, you did Amazon and you quickly identified Amazon as a more of a superior platform. So you transition there, you build a tremendous experience there, you and your team, around 2010, you guys lay out the tracks to create technology that will assist you in scaling your e-commerce footprint. You do exhaust your category around 2014, 2015. But then you have the Epiphany, and the lightbulb is saying, all this experience that are, you know, accumulate for more than a decade and the combination of, you know, being able to create technology that will help me scale, you know, I can reinvent myself as an agency successfully, because you didn't have to even realize that it was, it came knocking on your door with RBX coming in and saying, you know, take us with you. So one client after the other, you just build yourself and reinvent yourself once again, into the retail game. But now with, you know, the same thing that interrupted you with the internet and technology, you're fully in it, and you're your spearhead and that, that industry, and you started as an agency, and now and now you also have that sophisticated innovative layer of, you know, price management, and this combination makes it more lethal and put you guys into a trajectory where it's so much opportunity still left, you know, e-commerce, 15 plus percent of commerce, everybody can make a safe bet, it's going to go to 20, 25, 30 along the years. So it's a great space to be in. And thank you for sharing that, that evolution, evolutionary tale, the story. So now I just wanna kind of close the episode with two components. The first one is if somebody wants to, you know, connect with you, or learn more about you, where can they find you, so give them a handoff. And the last thing will be is what is your message of hope and inspiration for entrepreneurs listening out there?
Jason Hanan 46:35
Sure, you can reach me at AZ Seller Kit dot com. You can reach me at my Instagram, Jason dot Hanan. And I'm...you can go to LinkedIn, I'm on there as well. And as a business owner, I would say probably the most important thing that we really found is that you have to be willing to evolve. And you know, nothing is forever. And it always feels like, you know, we've definitely had ups and downs. And it always feels like, you know, at some point someone can pull the rug out from under you. But you have to really just have this understanding that there's always going to be a way to evolve and move and change. And if you are, if you have a knowledge base in, you know, in, in business in general, you can take that business knowledge and just put it into a different space. And we really, we've done it, you know, my friends make fun of me. I mean, “What are you selling now?” I don’t even know anymore. Like, we still sell DVDs like yeah, we still do sell DVDs, believe it or not, like but we just, you roll with the punches. And you know, eventually you, you know, eventually, you land or you hope to land with God's help and, you know, family, health and good friends.
Yoni Mazor 47:56
Yeah, but yeah, what I find unique in your story is that you're able to land with the same thing that interrupted you, you were able to land in it back in it in a very unique strong position where you were not only prospering on your own, you know, helping also others prosper through the innovative tools that you guys created. So a very interesting spot to be in. This and I wish you guys in the whole team, much-continued success with all the journeys. Thank you everybody for listening. I hope you enjoyed it. Until next time.
Thank you. Take care.