Jordi Ordóñez: «You better have a margin of 30% or you won't get

Jordi Ordóñez: «You better have a margin of 30% or you won’t get

Jordi Ordóñez (Barcelona, ​​1980) has become, over the years, a reference in terms of dissemination and training in eCommerce. An extremely communicative person and very active in networks who usually brings a point of humor to everything he does (not in vain, when asked about his profession, this consultant calls himself  AMO en Jordiobdotcom, SL”).

Now, with several books on eCommerce and marketing behind him , this time he has teamed up with Miguel Nicolás (Madrid, 1975) to make the leap to paper format on « Amazon. Survival manual in the nº1 marketplace in Spain» that Anaya has just launched, becoming a success even in its pre-sale period.

As Miguel explains, with a long career as an SEO consultant , creative and trainer in the digital field, one of his main motivations when writing this book was that in his experience ” clients are usually very good at their business, but selling on Amazon is a bit beyond their remit and they need a lot of guidance.”

To learn a little more about this book and their vision of Amazon today, we spoke with them.

“They are the best at what they do”

Come on, let’s start with a simple question. Imagine that I am a time traveler arriving from 1999. How would you explain to me what the hell Amazon is?

Jordi : The best place to earn and lose money if you dedicate yourself to online commerce.

Miguel: An online bookstore that has been diversifying the business to unsuspected heights and, therefore, an example of the extent to which e-commerce can be scaled even without selling its own products.

Why has Amazon achieved its dominant position in eCommerce? What role does your marketplace play in that domain?

Jordi : They are the best at what they do : convenience for the end customer. Infinite catalog fund, low prices, purchase in two clicks, “free” shipping (someone always pays for it) in 24 hours and returns with 2 clicks and an “I don’t want it anymore”. Amazing what these people have done.

Miguel: And they were also the first in many aspects. In some way we can say that they have defined the norms and standards . Not only among marketplaces, but also in eCommerce in general.

So with such a powerful marketplace, it is logical that so many sellers want to have their site on Amazon but… is it the ideal alternative for any of them?

Jordi : Definitely, it is not. After all the expenses involved in a sale, you better have a margin of 30% or more or you will not get the numbers. That said, it is the site for sellers with a margin of more than 30%, brands, manufacturers, DTC brands, resellers, people from retail or online arbitrage, dropshipping … but with a margin. If not, forget it.

Miguel: In fact, we dedicated almost an entire chapter to explaining who Amazon is for and who it is not for. It is very important to reflect on this and inform yourself before embarking on an exploration of such a complex channel. 

Miguel Nicolás: «It is important to find out before embarking on an exploration of such a complex channel»

“Many times things are taken for granted that they shouldn’t”

And in this context, your book arrives. How did the idea of ​​writing it come about? Who is it addressed to?

Jordi : The idea came from the publisher itself. We wanted to put out a book with everything we’ve learned over these years of selling on Amazon and helping customers and generate a reference manual for people who want to start on Amazon or who have been selling there for a while and want to deepen their knowledge. In 233 pages, we cover:

  • Ways to sell on Amazon
  • Business models that have a place in Amazon
  • Who is Amazon for?
  • Ways of logistics on Amazon
  • SEO for Amazon
  • Advertising on Amazon
  • metrics
  • Brand Registry
  • Tools
  • Alternativas a Amazon

Of course, do not expect to find from how much billing you need liability insurance or the detail of all the taxes that must be paid if you use the Amazon Pan-EU logistics system.

Miguel: We seek to help at all levels, it is planned from the moment the decision is made and it increases in complexity. Why? Well, because in addition to being logical, we have realized that many times things are taken for granted that we should not. 

Customers are usually very good at your business, but this is all a bit beyond their remit and they need a lot of guidance. At least that is one of the motivations that I find when starting to write it.

Patience, margin, blood, sweat… and a candle to the Virgen del Pilar

What does it take to survive selling on Amazon? What skills/resources/attitudes should a seller have who wants to make this channel a profitable source of income?

Jordi : Patience, margin, blood, sweat and a candle to the Virgen del Pilar.

It is important to know about the product, competition analysis, CPC, SEO on Amazon, dealing with the customer… and, above all, understand that, for Amazon, the customer is at the center. But not in the sense of that traditional company that says “the customer is our main reason for being” and then you have to send a fax to a number in Antigua and Barbuda to make a return . At Amazon, this is 100% so. That means that the customer will agree with the seller before, and making that change of chip costs.

Miguel: It also helps a lot to rely on the experience of someone who has already hit many shots. There are things like Amazon’s policies that, more or less clear, are present for anyone with a little interest, but other practical matters are given to you by experience, trial and error.

With this I am not telling you that you necessarily have to buy our book (although that is why we have written it), there are many online resources: media like this, Twitter profiles, newsletters… it is very worth following them and learning from them.

In your opinion, what is the main problem that sellers experience in this marketplace?

Jordi : They don’t know the expenses in advance, nor how the visibility algorithm works, so they either lose money or opt for a worse logistics solution from the point of view of meeting Amazon’s performance metrics or, they simply believe that a bad product is going to sell.

Before entering a party, you have to know who is the host and who are the guests .

Miguel: Besides, everyone has bought from Amazon. Basically it’s like the bars : on the other side of the bar everything seems very simple, the shopping experience is great, the service is fast… the feeling is that everything is easy with Amazon. The problem is that the seller’s part is much more complex, that simplicity of purchase comes from the effort of the vendors .

Jordi Ordóñez: «Before entering a party, you have to know who is the host and who are the guests»

Do you think sellers are happy with Amazon?

Jordi : In general, no, since the treatment of the seller leaves something to be desired. A large part of the interactions with the seller are algorithmic and, when you do manage to talk to a human to solve a problem, 10 out of 10 times that human does not know what you are talking about. The sales commissions are high and the (up to) +70 charges that can affect the net margin of your operations are not at all clear.

Miguel: That frustration of many sellers comes precisely from what we were talking about a moment ago. It’s because they don’t know exactly where they’re getting into. I honestly believe that our book can improve decision making before you find yourself in a negative dynamic that does not meet your expectations.

What should Amazon do to improve as a platform for sellers?

Jordi : Relatively recently, they released an official Amazon Help Twitter for sellers. It is a first step. Putting qualified people in customer service would also be of great help. And not leaving certain criteria, such as the closing of a product page or reviving a closed seller account, to the decision of an algorithm, it would be a lot of fun, really.

Miguel:  I totally agree (Jordi wouldn’t allow me to say otherwise either). When you have a company in which the buyer is prioritized in such an unconditional way, the number of cases that can occur is gigantic and unpredictable. It takes a little more “human affection” to the seller.  

Miguel Nicolás: « A little more human affection is needed for the seller »

“They are not an NGO”

How do you rate the growing avalanche of paid results shown on Amazon when searching? Is it still possible to rank well without resorting to advertising?

Jordi : Amazon’s advertising department is one of those that grows the most year-on-year. 31,000 million dollars billed in 2021 is a lot considering that we are talking about cost per click. That said, it is normal that they put more and more paid results.

Let us think that they are not an NGO and that, from each sale, they take:

  • From 5 to 20% commission on the PVP
  • Storage expenses in Amazon Fulfillment Centers, if you use their logistics
  • Amazon Logistics shipping costs, if you use their logistics

With this they could easily take 20-25% of an operation.

  • From 5 to 20% commission on the PVP
  • Storage expenses in Amazon Fulfillment Centers, if you use their logistics
  • Amazon Logistics shipping costs, if you use their logistics
  • +5/10% or more, depending on the cost of the keywords and what it costs you to make a sale using advertising campaigns

And this last toll is a good fistful of dollars in billing.

Anyway, we still have a lot of organic sales . Amazon uses ACoS (Advertising Cost of Sale) as a metric for its advertising campaigns. 10% ACoS means that you have spent 10% of the product’s RRP to make a sale from advertising. Many sellers / agencies also use the TACoS (Total Advertising Cost of Sale), which distributes the investment in advertising between all sales: organic and advertising.

What the Amazon organic positioning algorithm rewards the most are sales and their speed . So every sale has an impact on a better organic positioning. It is logical to add them all and distribute them in the TACoS.

And what would you say are the keys to having a good organic positioning on Amazon?

Jordi Ordóñez: “What rewards Amazon’s organic positioning algorithm the most is sales and their speed”

Jordi : Sales history and sales speed (varies according to the niche / category). For example, our book reached the Top 1 of two categories in less than 24 hours. The book isn’t even for sale! But the pre-sale has achieved such a high sales speed in less than 24 hours that we even became Top 1 in “Momentum Products” (best-selling products on Amazon in the last 24 hours) for the Books category, above of other Best Sellers of, for example, narrative.

If the two of us have achieved this by investing €0 , imagine what we could achieve with a powerful brand and a high advertising budget.

Miguel:  Here I see the need to clarify something important that has to do with this question and the previous one. Although it seems like a contradiction, to improve organic positioning you will have to use advertising as well. What is the fastest (legal) way to get traction and sales speed?

Indeed: putting a few euros into advertising, with which both strategies, rather than coexist, feed each other. As you said, the paid results are pushing the organic ones in the internal search engine, so the sales are much lower. We know that very well because it applies the same to SEO as to ASEO (SEO for Amazon).

Let’s go back to the time machine: how do you imagine Amazon towards 2025?

Jordi : If everything continues as before, like a monopoly with more than half of the vendors from China, low prices and same-day shipping.

Miguel: What Jordi says and probably with more additional services . There was speculation about the jump to physical retail, but it does not seem that it will be to all niches, in fact they have recently announced the closure of their bookstores and pop up stores in the US and the UK , however smart fashion stores and supermarkets Amazon Go does consolidate.  That is to say: by 2025 I think there will be a greater multi-channel approach, although not in all categories.

Another way in which it could grow is by becoming less dependent on carriers and external parcel companies. They are becoming more self-sufficient. Finally, look at the weight that the strategy with influencers will gain in the coming years. They already allow you to create pages for these profiles with affiliation , but seeing what is happening in China, sales-oriented video streaming has to be a trend.

And for you, what advice would you give yourself if you could go back in time 10 years?

Jordi : “Do yourself a favor and read this book before selling on Amazon” and “Buy BTC”

Miguel: Don’t buy that exercise bike and invest in Amazon shares now.

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