In this Prime Talk Podcast Video Sponsored by GETIDA, Steve Yates, from Prime Guidance discusses eCommerce COVID-19 tips and how we can all stay alert to change in the dynamic and fluid industry of Amazon. One difficulty e-commerce entrepreneurs have when they want to take their businesses to the next level is not being prepared to strategize to scale effectively.
In today’s episode, PrimeTalk has teamed up with Steve Yates of Prime guidance, and he tells listeners about his interesting journey into e-commerce.
Find more info about Prime Guidance.
Learn more about GETIDA’s Amazon reimbursement solution software today!
Yoni Mazor 0:05
Hi, everybody, welcome to another episode of Prime Talk. Today I have a special guest. I have Steve Yeates from Prime Guidance. He's based out of Dallas, Texas.
Steve Yates 0:17
So thank you so much for taking the time today to come see us. I'm going to talk a little bit about
Steve Yates 0:25
He's the founder CEO of Prime Guidance, which is pretty much a marketplace consultancy. They have decades of experience developing results for companies ranging from startups through multibillion-dollar fortune 500 retailers, you know, big names such as Amazon, Costco, Dick's Sporting Goods, eBay, enterprise foot action fossil, but also the work with a bunch of, you know, well-known brands like Asix, Varidesk, and Vitamin Shoppe just to name a few.
Yoni Mazor 0:56
So, really welcome, Steve, welcome to the show. It's a real honor to have you and for you to share your spine you know, with your life and your business. So tell us who you are. What's going on?
Steve Yates 1:10
Well, my name is Steve Yeates. I'm the CEO of prime guidances. Union mentioned. I live in Dallas, Texas. I've got a wife and three daughters and founded prime guidance about five and a half years ago.
Yoni Mazor 1:28
Nice. So tell us a little bit of background I guess, you know, in a nutshell.
Where are you born? Where'd you grow up? Where'd you go to school in college? How'd you develop your career, a little bit of the background set of your life?
Steve Yates 1:41
Based in the Pennsylvania area, Harrisburg, Pennsylvania, which is centrally located in that state, started my career very young. At the age of 16. I started in retail sporting goods stores and just immediately jumped into management and continued to grow through the ranks. And in 1999.
Steve Yates 2:05
I was drawn to a company in Philadelphia that was starting an e-commerce business and I was owned by Michael Rubin. He was at the time $150 million entrepreneurs at the age of 26 years old and
Steve Yates 2:19
I moved my family across the country to start the businesses we launched five businesses five e-commerce websites that first year and I was employee number 40. So it was a it was kind of a fly by the seat of your pants operation at the time. But when I left the company 11 years later, we were doing $3 million with 5000 employees so I learned a tremendous amount during those years it was a little bit of a do-all everybody contributes to make a difference
Steve Yates 2:51
In the type of environment which I really loved. They were bought out by eBay and later named eBay enterprise. So that's kind of how I got I got started in e-commerce and then moved on to Dick's Sporting Goods for the second time I'd actually worked for them prior to moving to eBay enterprise.
Steve Yates 3:11
I lead their e-commerce team so I was in charge of all the e-commerce buyers and our strategy team and they're their vendor direct program which is dropshipping vendors that supplied all the inventory for the expanded skew offering at Dick's Sporting is calm
Steve Yates 3:30
I was later pulled away from Amazon to help them get into the sporting goods category for one of their subsidiaries they purchased a few years prior.
Steve Yates 3:41
They weren’t really you know doing well in that category. They hadn't yet kind of gotten their feet wet there per se so we carry goes on buying team-focused, sporting goods. So sports fitness outdoors, apparel, accessories, and what was the name of the company is the theater that they purchased.
Steve Yates 4:01
Woot.com would also Okay, so you were the Wu team already when they bought you guys out?
Steve Yates 4:08
No, no, no. Amazon hired me a couple of years after they bought Woot. Got it. So I then built their sporting goods team was there for a few years and then decided that.
Steve Yates 4:21
You know, this was the right move for me, actually started getting people inquiring about me helping them with consulting and decided that you're just kind of a natural thing for me. I like helping people. I like unique challenges that I can help overcome. It's just a great fit. So I really wanted to start a consultancy that was different than everybody else. Because there were a lot of companies out there that I felt were very, very much centered on what was good business and not what was good for the client. So we've done a unique approach of focusing on a client-centric approach. Whatever is good for our client is good for us.
Steve Yates 5:00
And then helped our business thrive over the years. Awesome. But just to get a bit more specific a bunch of time on it with Amazon.
Yoni Mazor 5:11
So what years were you in 2012 to 2014? Got it? And, you know, as a part of your position there, what would you What did you focus mostly on?
Steve Yates 5:19
So I was the general manager of sports, fitness, and outdoors. So I oversaw teams of buyers, that bought and sold products on both the woot.com website as well as amazon.com.
Yoni Mazor 5:32
And this is mostly for one peer, right for Amazon, that, you know, vendor when Amazon purchased goods, the goods from brands directly, correct?
Steve Yates 5:41
Yeah, exactly. We were purchasing products directly from brands, right.
Yoni Mazor 5:47
So this wasn't, this was not on the three-piece out on the third party seller. And
Steve Yates 5:51
No, we actually, because of the unique arrangement with Amazon and Woot, acting as a subsidiary, the products that were offered on we were actually sold as a third party seller in Amazon. But it was, was wholly owned. It was a wholly-owned subsidiary. So we actually purchased the inventory. And, you know, sold it at the retail price we set not,
Steve Yates 6:18
You know, I was not in charge of the three-piece sellers in that category, for example. Yeah. And so you're saying that, essentially, in an organic way, you gravitated outside of Amazon? Because he saw that companies and brands needed help with e-commerce?
Yoni Mazor 6:35
So I guess my question is,
Yoni Mazor 6:39
What were you able to identify that you can do for them that they were not able to do on their own? And what was the advantage of that? And especially how does it reflect into the, I guess, the biggest space at this point, which is Amazon? It's a three-part question. Yeah. So yeah, so let me try and answer them for you. So
Steve Yates 6:58
One of the things I saw was I worked with a lot of brands, and we basically had to talk them into selling to Amazon or to slash Amazon. So these brands oftentimes didn't really embrace it, you know, in 20 2012, through 2014, Amazon is continuing to grow. But the vendors still haven't fully gotten on board, it's still a small percentage of their overall sales, and 90 plus percent of their business is coming through retail. So they were throwing stuff up, but they were not really presenting their brand in a very effective manner. nor were they getting the most out of the platform, because they weren't, they weren't advertising, they weren't fully optimizing their listings, or they were doing those things, but not in a really well thought out manner. They didn't have a full strategy behind what they were doing, they were kind of getting their feet wet. So what I decided was that there was a real need to help brands and in particular because they had historically relied on brick and mortar retail. And they no longer had this thriving foot traffic, you know, more and more of the business was shifting towards e-commerce. And consumers began gravitating towards buying direct from brands and buying through e-commerce. But the brands were having trouble adapting. So I really wanted to help them, you know, put their best foot forward, as well as retailers and so forth. But really, particularly brands. And when I looked out there that other consultancies, most consultancies, blocked people into long-term contracts and charged a percentage of revenue and really...
Steve Yates 8:40
Did what I think isn't ultimately in the best interest of the clients. And I really wanted to do something that was very different. So one thing I really respected at Amazon was their leadership principles. And their number one leadership principle is called customer obsession. So I decided that I would found the company based on what's good for our clients, and everything else will work itself out as far as the revenue stream and so forth. So we've been able to help over 350 clients.
Steve Yates 9:14
Grow their business aggressively on Amazon, without having to put money behind marketing and such because of the word of mouth advertising that our clients provide, because we do good work for them.
Steve Yates 9:27
So even though we allow customers to have month-to-month engagements, our average client stays with us well over a year, and that that says a lot.
Yoni Mazor 9:33
That's awesome. But when you say Amazon, you mean you get two brands to Amazon to one p or three p or a combination of both.
Steve Yates 9:47
Both. So when I as you know, I wasn't in charge of 3P businesses back then.
Steve Yates 10:00
I was really invested in becoming an expert in this channel, I knew I knew Amazon really well, I knew retail really well, I knew e-commerce really well. But the thing that I didn't yet have a grasp of was amazon seller, Central, and vendor Central because we didn't work in those tools ourselves. So I set out to be an expert in that area, and to really help go deep in how to get the most out of those platforms and taught myself how to how to be an expert, and really was able to thrive because many, many sellers and vendors,
Steve Yates 10:39
You know, struggle in those platforms is not intuitive.
Steve Yates 10:44
But it's not rocket science, either. It's about helping understand think Amazon's point of view, understand what are they trying to achieve, and understanding the objectives or the obstacles, you have to get past those toolsets that are, you know, less than ideal. They're not, they're not exactly as user-friendly as people might like. So that's, you know, that combined with the strategy of how to do this successfully in our experience, and then surrounding myself with senior consultants, that all came from really deep e-commerce experience. You know, as you mentioned, multimillion-dollar companies where they've, you know, been running large organizations, the advice that we're able to give our clients is, is really based on real-life experience. You know, we don't leverage offshore resources, we don't leverage lower-level staff to coach our clients. We're using executive-level folks that are coaching our clients. So that's been a differentiator for us since then, but you guys mostly focused on consulting or we actually manage the marketplace for your clients.
Steve Yates 11:51
So we have a very wide breadth of services, clients that do want us to offer full-service account management, we are able to provide that. And we offer able to offer ala carte services such as you know, product page optimizations, and...
ad campaign management, and so forth. But one of the things that I think is a really unique service offering, and where we spend a lot of our time with our clients, is coaching them, and helping them figure out how to get through this, we become a partner in this journey of growing their business on Amazon. And we actually teach their teams how to do the tasks that they need to do we help them understand what are the levers to pull on Amazon? and help them identify what leverage do we pull at a certain given time? Why are we pulling it? And how do I do it? A lot of times that involves us sharing our screens and walking them through exactly how to do something, but then having them actually execute it with our guidance. So we're empowering them to grow and to build this expertise. But they're not going to be proficient at everything. So we then offset their skills with our team and are able to do things for them as well. So it's a combination of coaching and execution support. And then if we find that they just really want certain things to be turned over to us, let's say their ad campaign management or what have you, then we'll just go ahead and change up the engagement to give them exactly what's in their best interests. Amazing. So what I take from your words is essential, you know, truth, your name, your, you know, your prime guidance for the brand for, you know, the companies. But, you know, after giving them a better setup, you guys become also some sort of a North Star for them.
Yoni Mazor 13:39
So you can continue the journey with them in this terrain, which is a hyper-dynamic, Fast Track terrain.
Steve Yates 13:46
You know, they always need a good Northstar to know where things are going and, you know, keep the path going on the right way. I think that's a very powerful offering. And these days, especially now we're in the days of, you know, the Coronavirus, COVID-19 era.
Yoni Mazor 13:59
And that being said, What's the status with your, I guess, to two parts question. The first part is, how's your business doing? You know, overall, you know, for you as an entrepreneur, as a business owner, was in the second Bowlby for your clients, how are they experiencing this?
Steve Yates 14:18
Sure. So, you know, how's business in this time, I would say, some clients have pulled away because of fear. You know, they're, they're unsure of what the future holds. And those clients are usually folks that are cash strapped and didn't prepare themselves for a rainy day. So, you know, one of their fear factors is just there, you know, their ability to keep the lights on. However, most of our clients are actually seeing a real different light in this situation. Hey, there's a lot a lot of opportunities to be had on the Amazon platform.
Steve Yates 14:57
Your ability to rank, for example, is much greater right now.
Yoni Mazor 15:01
Because so many people have backed off of their advertising spend your ability to climb the ladder and your ability to get more for your buck through Amazon advertising is, is there. If executed? Well.
Steve Yates 15:16
There is an opportunity to really shift focus here operationally and say, Okay, how are we? How are we going to diversify? How do we take what was typically a lot of focus on FBA, and gravitate towards building operational independence, whether that's in the house or your own operations, or through a third-party logistics company or a 3 PL network?
Steve Yates 15:43
Having that capability empowers you to expand beyond Amazon at a faster pace because you're not reliant on just one source of fulfillment.
Steve Yates 15:54
So that's a thing that we've we've always helped our clients, you know, be diversified in that manner. But now's a good time to really make sure that we're ramping that up, we're also helping them expand beyond Amazon, to not put all their eggs in one basket. As you can see, just shutting off FBA has been detrimental for a lot of sellers.
Steve Yates 16:16
You know, the consumer spending has gone down on non-essential items, but there's still a lot of things that people are buying, that they are using at home that you can still benefit from, you know, anything that you know, entertainment type things, things that are used for working at home, things are used in the kitchen, and these things are thriving.
Steve Yates 16:36
So embracing what you can to get the most out of these business opportunities at the moment. And we're doing your thing
Yoni Mazor 16:45
I want to talk to you, because what you're saying, I think is pretty amazing because it's really interesting. You're saying that, although, you know, we're in a point of crisis, because there's uncertainty in the future of what's going on, on the business level. But nevertheless, there's so much opportunity in e-commerce to overset this fear if you do this, right, if you focus on what you need to do. And basically,
Yoni Mazor 17:07
If you have guts and you seize the opportunity, you invest, you know, when everybody's backing off for PPC and managing their campaigns, you put yourself in, you know, do it the right way carefully, and you take your rank. So that's an opportunity to you know, get, get yourself well situated on the ranks and in growing your sales. And second of all, on a logistical level flip from FBA, FBM. And by doing that, and having this kind of outfit, you're able to maybe open up to other channels, it can be eBay, your own Shopify website, or whatever it is. So all of a sudden,
Yoni Mazor 17:37
All of a sudden, I'm still stuck in a position where not only that you prepare it for the future, and you better situated on the Amazon level, you also better situated on all the other channels, which is a great addition for any business to be well-diversified, and solidify your game for years to come. That's pretty interesting.
Steve Yates 17:57
Yeah, and even on Amazon, you know, every seller has a long list of things that they need to accomplish and not enough time to do them. Right? Well, if you're no longer shipping in FBA inventory right now, it's a great time to be focusing on product page optimization, reaching out to customers that may be left poor reviews or poor seller feedback may be requesting removals, trying to improve your account health.
Steve Yates 18:24
You know, really, looking at Amazon,
Steve Yates 18:29
You know, shipments into FBA, I mean, that's obviously right up your alley, helping to get reimbursements for things that, that, you know, Amazon's lost inventory or what have you, a lot of those things get overlooked during the busy day to day environment, now's the time to step back and say what's on my plate that I need to execute in this time? Right?
Yoni Mazor 18:51
It’s also happening to be that it’s springtime. And you know, usually, there's a saying spring cleaning. So this is a time to look. Yeah, so this is a, I guess a timing and one, you know, it's never good timing to experience a crisis. But this happened in springtime and you're saying treat it as a spring cleaning opportunity. Look into your logistics log into your account health, look into your listings, whatever you can optimize, look into auditing, you know, all the activity that you did in the past 18 months. That's how GETIDA can come into the game and help you get some financial recovery you know, because every dollar counts and these days I mean, I think it's a good attitude you know, it's a good attitude to have and probably a lot of you know of you who are listening now to this episode would appreciate it so if you're sitting there in the mindset of you know, I see darkness I see clouds I see a rainy day you right this is a rainy day nevertheless, you should be able to see past that because around the corner if you put your mind in the right track
Yoni Mazor 19:52
It's gonna be sunny and beautiful and and and you know, you'll pick it up and on an on a general level. I think that e-commerce will be the biggest one
Yoni Mazor 20:00
Winter, as an industry, from this whole crisis on a global level, which is, you know, so it's a reminder for all of you, even though your sales might be depressed because you're right now in the wrong category,
Yoni Mazor 20:12
If you hold up your company in such a way where it's gonna survive the storm, it's gonna bounce up, because what's gonna happen? I think, Well, my personal opinion, there's a lot of new consumers that are experiencing e-commerce, even Amazon, you know, you know, a certain age group, 56-year-olds were never shopped online, are now forced to shop online because they're stuck at home, or they're gonna get used to the platforms. And that's gonna breed a whole new layer of opportunity for sellers to create more offerings for them that will fit their needs, which will be another kind of renaissance in the e-commerce revolution.
Steve Yates 20:45
I totally agree. Yeah, it's like you said, it's a, it's a force channel migration, right? People have no choice, retail stores are shut down, you have to buy online. In some cases, you're picking up in-store. But the convenience of having your shipping sent directly to your home where you don't even have to leave the home is really valuable. And it's, allowing consumers to really see this benefit. I think that it's going to actually change behavior, especially with this extended lockdown period, people develop habits. I believe that if if you have positioned yourself to weather this storm, you're going to be in a really good position to take advantage of increased spending. Once we get through this, for example, a lot of people that are reducing their spending their expenditures on non-essential items, have invested money in essential items that they know they've stocked up for six months, or, you know, whatever, those are expenditures that they normally budgeted for every month, you know, going forward, they no longer have those, it's going to free up further, you know, future expenditures, assuming they still have a job and so forth, those people are going to start spending those, those dollars, once again, as soon as they feel comfortable that there's light at the end of the tunnel out here. And when consumers are free to shop, whatever channel they choose, they're now they've already been exposed to this convenience, as you said, people that are older, for example, are realizing the benefits, they're realizing that there's little risk in buying online. So they're embracing it, and that's going to really change. So where I reference 90% is offline retail, I really believe that's going to be pushed up, I think that e-commerce has gotten a shot in its arm. And it's really going to grow much faster now. But you've got to be there early on to ride that wave when it comes back. You don't want to be turning off your ad campaigns, shutting down your Amazon business, essentially, or your e-commerce business. You want to be embracing it so that you're really well-positioned when it does, you know, really accelerate. And again, it goes along with saying, you know, this is in hindsight, but every company needs to leave themselves in a position that when things like this occur, they don't go into panic mode, they have the resources, they have a game plan of how are they going to flex and scale their business without allowing it to fall apart? One of the slogans I like in this trying time is to stay calm and carry on. And I think that that's really what's necessary. If you do that, you think, as a leader would have, how do I adapt? You're going to find that you can really turn this into a positive if you shift your focus.
Yoni Mazor 23:42
Awesome, very good for e-commerce businesses today that basically are struggling financially, what would you recommend them to do on a financial level?
Steve Yates 23:46
Yeah, so there are a couple of programs that I would highly recommend that they consider. The government just rolled out some programs for small businesses, once called the Payroll or Paycheck Protection Program. And the other one is a program that is I think it's EDIC or something of some similar abbreviation that provides businesses with loans that can help them pay their payroll, their rent your utilities, and in some cases, eight weeks are being provided without repayment.
Steve Yates 24:19
So these are benefits that they should be considering. Are they applicable in most cases they are and really leveraging that, you know, but also it's a good opportunity to look at their current expenditures, do they have a positive ROI?
Steve Yater 24:37
You know, are they being efficient with everything that they do? Are they look at the time and effort that they're putting in there running a business and saying, are these things creating meaningful benefit or not? Because I might be able to do more with less. Maybe that makes sense. But there are loans available. Amazon lending has always been a good
Steve Yates 25:00
A good inexpensive way of getting funds. But
Yoni Mazor 25:06
In the midst of the crisis, they kind of stopped new offerings. But nevertheless, they extended the terms meaning affinity sellers experienced a sharp decline in their sales. They're giving them a window to spread the payments a bit more forward. So I think there's that's kind of reasoning. My question is because sellers out there are looking for an alternative, because Amazon, in a way kind of shut the door on their offerings, I guess they're either the algorithm that they have that generates all these offers, is not reliable on these conditions of craziness, where you know, all the categories, all the ranks, everything went upside down, it's not reliable for them to take such risk with millions or hundreds of millions of dollars that they put out there.
Steve Yates 25:28
Yeah, I think it's gonna bounce back once we get into a routine of consistent sales, once again, you know, we've seen is, if there are fluctuations and account health, or there are fluctuations in a business that's drastic in any way, then their algorithms Don't, don't show them as being creditworthy. So as soon as we get back into FBA, and that becomes established, they get a normalized selling pattern going again, I think those offers will come back. So I think it's a good approach for them to leverage in the future. But right now, that's not available to them, as you mentioned yesterday, right?
Yoni Mazor 26:24
Do you think that most e-commerce businesses usually put money on the side saving for a rainy day or they're more in the habit of, you know, live today because there's no tomorrow?
Steve Yates 26:37
You know, I would, I would like to say that most of them are putting money aside for a rainy day and, and they're really well-positioned. But I would say, the majority of clients, we find are, when we start looking at their financials, and you know how they're operating their p&l is in such, a lot of times they're third playing it and dangerously unsafe in cash flow. And in the channel..
Steve Yates 27:03
you know, what percentage of their business is in one channel, for example, Amazon being the number one problem, we see where too much of a business's sales are going through Amazon if that account were to get shut down. Or if that..
Steve Yates 27:17
If Amazon restricts them in any way, it's very detrimental to their business, and they don't have diversification enough to weather those storms. So definitely something that would be advisable and making sure that you know, you're using this time to say, Man, I didn't, I didn't, wasn't really well prepared for this or that. Let's make sure we get those things in place. If we weren't setting aside enough cash, to weather these types of storms in the future, let's make sure we're doing that.
Steve Yates 27:47
I think the consumer that's going through these prices, is going to be very similar to the consumers that came out of the Great Depression, where they realized that they need to have more funds available for situations that may occur. They may be better prepared for emergencies. I think a lot of people, including myself, have gone through and realize that, although we may have thought we were well prepared for emergencies with supplies and stuff, there, there is an opportunity to improve. So I think that we need to do the same thing in our businesses and say, you know, what, what should we have done differently so that we could pivot effectively in these types of trying situations? Because today, it's Coronavirus, COVID-19, right? Tomorrow, who knows what that might entail? And it could be something as simple as a rogue seller out there that suspends your account on Amazon, because of a false complaint or something, what are you doing to protect yourself and make sure that, that you could weather a few weeks before you're able to get back on that platform for a few months, in some cases, you know, hopefully, it's only, you know, a day, but you never know. So you got to be prepared. And that's one of the things that I think would be wise for all sellers to entertain.
Yoni Mazor 29:07
Right, what I would add to that is if possible for any of you listening, you know, try to put your business structure and cash flow structure in such a way that you're ready for a 90-day break. If you can get to a 90-day break, where you have zero income, nevertheless, on a financial level, you're sound enough to, you know, Attorney, they'll just help the alternatives in one way or another to restart your engine regenerate your business, that will be a rule of thumb, a good practice for anybody to do. Of course, if you can read that 90 days as much as you can, it could be 30 days, 60 days,
Yoni Mazor 29:38
Many of us, in this space, are used to playing offensive which means the only thing about cell cells, you know, and based on the assumption that you know, things will always always be growing and fruitful and healthy on the industry level and on the economical level. But nevertheless, you know, it's been, what, 11 years since the, you know, the last financial crisis, right. So that was...
Yoni Mazor 30:00
One of the longest runs in history. So this is kind of a wake-up call that usually I think, on a historical level, it's once every six or seven years, there's like a, you know, financial downturn. This was it, you know, exceedingly long, and then all the rest. So, this is a reminder, you know, veteran business people, I think they do have that in mind. So the e-commerce generation that was generated in the past decade is simply finding itself so overwhelmed because of this real-life experience, you know, of the business cycles that are happening. So, you know, this is an important lesson, you got to embrace that lesson.
Yoni Mazor 30:32
Make sure you come out on top and prepare yourself for the next one, you know, once you hit your second decade or the third decade of business, you know, your your your luck align, you're well situated, you know, you don't shake up easily. And you know, you hopefully sleep better at night as well.
Steve Yates 30:49
Yeah, I mean, personally, one of the things that I one or two people that I have a lot of respect for the financial year.
Steve Yates 30:57
Suzy Orman and Dave Ramsey. Yeah, both of them will tell you that you should have about a six-month nest egg for your own personal finances. So from a business standpoint, you could be at three to six months of Safety Man, I think that's really critical to be able to survive any type of impact like this. For sure.
Yoni Mazor 31:21
Awesome. So I want to start finishing off. So in terms of you know, Prime Guidance, your consultancy firm, you guys are fully operational, everything's intact, you're running smooth. All the engines are steaming.
Yoni Mazor 31:43
Any last message, any last words any last blessings for the people out there?
Steve Yates 31:45
I would just say stay calm, carry on. And just stay safe. Focus on family first and foremost, and business and treat one another with love and respect and we'll get through this together.
Yoni Mazor 32:00
Beautiful. Thank you so much for you know, participating in our episode today and sharing your time and experience. anybody watching we all wish you really great health. Happy Easter. Happy Passover. Happy spring cleaning if you're up to the task, and no farewell. Take everyone
Steve Yates 32:18