Author name: Sam Gupta

In this episode, we have our guest, Jason Chester, who shares his thoughts on how evolving consumer trends are forcing manufacturers to rethink their approach to managing manufacturing processes. He also touches on how optimizing your quality operations across the three fundamentals of cost, value, and risk will ensure long term growth, competitiveness and ultimately, profitability. 

Finally, he shares why rethinking of approach will enable new manufacturing businesses and SMBs with ambitious growth plans. And how they can leverage the substantial growth opportunities that exist in today’s global consumer society and the frictionless global market.

Chapter Markers

• [0:00] Intro
• [3:17] Overview of Jason’s company
• [4:26] Manufacturing Quality Intelligence?
• [9:44] Why is Quality number one priority for manufacturers?
• [15:35] Overfill vs underfill issue in Quality management
• [19:45] Collaboration of SPC with ERP and MES systems
• [23:01] Right time to implement quality initiatives
• [29:05] 30-60-90 plan for implementing quality initiatives
• [32:22] Closing thoughts
• [33:37] Outro

Key Takeaways

• There are a lot of changes happening in the markets. We’ve got advances in global logistics that are lowering competitive barriers to entry for manufacturers. It’s kind of creating this global single market. We have now online e-commerce and price comparison sites and distribution channels online. This trend is really creating much more frictionless markets for manufacturers.
• An automated production environment isn’t an optimized production environment. We can still get a lot of waste in automation. We can still get poor quality products in automation. An automated production process does what it’s pre-programmed to do, whether it’s filling bottles of source or cans, etc.
• There is often a lot of confusion about where manufacturing quality intelligence fits with ERP and MES. But typically, MES and ERP systems manage the environment open till a product goes into physical production.

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About Jason

Jason Chester has over 25 years of experience working directly within the Enterprise IT industry.  After starting his career as a software engineer he moved into the IT analyst world. In this role, his work focused on how information technology capabilities can deliver sustainable and transformative business value to end-user organizations. 

He now leads the global channel partner operations for InfinityQS, a world leader in manufacturing quality intelligence and Statistical Process Control solutions.

Resources

• Connect with Jason
  • LinkedIn
• Connect with InfinityQS
  • Website| Facebook | Twitter | Linkedin | YouTube

Full Transcript

Jason Chester 0:00

If we do that sales and marketing promotion, but then we distribute poor quality products out to consumers. That’s going to come back and hurt the manufacturer very significantly very, very quickly.

If we send out products that are not safe for consumption, that’s going to really hurt the manufacturing brand.

Intro 0:18

Growing a business requires a holistic approach that extends beyond sales and marketing. This approach needs alignment among people, processes, and technologies.

So if you’re a business owner, operations, or finance leader looking to learn growth strategies from your peers and competitors, you’re tuned into the right podcast.

Welcome to the WBS podcast where scalable growth using business systems is our number one priority.

Now, here is your host, Sam Gupta.

Sam Gupta 0:55

Hey, everyone, welcome back to another episode of The WBS podcast. I’m Sam Gupta, your host, and principal consultant at digital transformation consulting firm, ElevatIQ.

When we think of growth, we often don’t consider quality as a cornerstone for enabling it, especially in the SMB space. The perceived quality of your products can lead to a poor customer experience, disengaged consumers, and financial implications. All of these factors will have an impact on the P&L and slow your growth down.

Quality Control is of paramount importance for growth for brands seeking the path of DTC. In today’s episode, we have our guest, Jason Chester from InfinityQS, who shares his thoughts on how evolving consumer trends are forcing manufacturers to rethink their approach to managing manufacturing processes, and how by optimizing their operations across the three fundamentals of cost, value, and risk will ensure long term growth, competitiveness and ultimately profitability for new manufacturing business, and SMBs with ambitious growth plans.

Rethinking your approach will enable you to leverage the substantial growth opportunities that exist in today’s global consumer society, and the frictionless global market.

Jason Chester has over 25 years of experience working directly within the enterprise IT industry. After starting his career as a software engineer, he moved into the IT analyst world where his work focused on how information technology capabilities can deliver sustainable and transformative business value to end-user organizations.

He now leads global channel partner operations for InfinityQS, a world leader in manufacturing quality intelligence, and statistical process control solutions.

With that, let’s get to the conversation.

Hey, Jason, welcome to the show.

Jason Chester 3:15

Thank you Sam

Sam Gupta 3:17 – Overview of Jason’s company

Jason, so before we start, as you know, the topic we are going to be discussing today is going to be quality initiatives.

In the quality community, my understanding is that a lot of people know you. They know about your company as well. But what about the other folks and my audience that do not know anything about your company or your background? Would you like to give us a brief about what you guys do and who you help?

Jason Chester 3:43

Yeah, certainly. So InfinityQS, so we’ve been around now for approaching 30 years, we have extensive experience of providing quality intelligence and manufacturing intelligence solutions into manufacturing that is based on statistical process control.

We help clients large and small for multinational manufacturing organizations right down to you know, small single plant manufacturing operations where we utilize fairly advanced data collection, analytics, intelligence, and statistical process control solutions, help them optimize their manufacturing or their production processes. A lot of years of experience in the field.

Sam Gupta 4:26 – Manufacturing Quality Intelligence?

30 years is a very long time, Jason. Okay, so I think I caught a couple of things, and pardon me here because I don’t really have as much familiarity with the quality space and think of me as your manufacturer, and I’m actually trying to understand how I can utilize quality processes for my business.

So I caught some of the terms as per your conversation such as quality intelligence, manufacturing intelligence, they sound fancy but tell me a little bit more about how they can help me

Jason Chester 5:00

Okay, excellent. Yeah, so let’s just take a look at, you know, typical manufacturing organization and the markets that they serve, whether they’re B2B manufacturers or B2C, consumer manufacturers, etc.

You know, there are a lot of changes happening in the markets, they serve, we’ve got advances in global logistics that are lowering competitive barriers to entry for manufacturers. It’s kind of creating this global single market. We have now online e-commerce and price comparison sites and distribution channels online, which are really creating much more frictionless markets, than those manufacturers.

And also the supply-side, you know, we have a lot of, you know, online supply chain hubs and ecommerce platforms and that sort of thing. You know, we have the whole kind of online social media, you know, we have this consumer base that they are now able to influence one another very effectively, where they can rate and review. They can share good and bad stories. They can name and shame brands. You know, even the consumers themselves are shifting. They’re becoming what I call more promiscuous.

And they’re becoming less loyal to brands, and where are the factors take more of a priority. They’re becoming more thrifty. They can be more cost-sensitive, etc, you know. They’re not conscious, conscious consumers. They’re, they’re very, very cognizant towards, you know, recycling, and upcycling, etc. And they’re very ethical now that they shun corporations that have a disregard for the waste and corporate responsibility and environmental responsibility. And they have a voice to be able to share those things across the consumer space, you know, almost instantly to very large numbers, etc.

Jason Chester 6:44

So that is what I kind of collectively call the liberalization of markets. And that’s a very significant change for manufacturers. But equally, there are opportunities as well. New markets are emerging on the back of that new opportunities. You know, opportunities for new products and new innovations, etc, you know, we’ve got new, easy access to emerging economies and emerging markets.

We’ve got a growth in population. And generally, you know, the global economy and wealth growth be, you know, some would argue not equitably, is increasing significantly. And we are genuinely in this kind of era of mass consumption.

So that’s really creating a very challenging environment for manufacturers, and an environment where there’s a lot of opportunity for growth for manufacturers, whether there be small startup manufacturers, or established manufacturers looking to expand into new markets and grow, etc.

And what’s really critical for a manufacturer to be able to address those challenges, and this is why I focus on three really important dimensions, and they are cost, value, and risk.

So cost is obviously really keeping costs as low as possible, reducing waste, reducing resource usage, be more efficient, be more productive. And that obviously doesn’t just impact the profitability of the manufacturing organization but allows them to be more competitive in the markets from a price perspective, etc.

The dimension of value would be about quality, one thing that caught those consumers do demand is better, faster, cheaper. So quality is absolutely paramount. You know, even if we very cost competitive in particular markets, we can’t give way to quality, you know, quality has got to be the number one priority.

Jason Chester 8:29

But value also applies to things like the ability for a manufacturer to be able to adapt to changes in the market, to be more flexible, to be more agile, to provide more capability to get innovative products out to market quickly, etc. And then the risk element falls into two categories.

There are the operational risks that a manufacturer might have, such as you know, operational risks, machine downtimes, quality issues, workforce issues, etc, right through to strategic risks, where potentially, you know, a food safety issue in the case of a food beverage manufacturer, for instance, could really damage brand reputation, or even the cost of quality or safety recalls, product recalls, etc. can be devastating on a business.

So yeah, so really what we do is really help manufacturers to optimize across those three dimensions of cost, value, and risk.

Sam Gupta 9:25

Amazing. So there are a couple of things that jumped out to me based on your conversation, especially the liberalization of the market that’s very new for me.

I did not know that term existed for this one. So maybe we need to have another show for that.

Jason Chester 9:42

Certainly. I would be happy to talk about it.

Sam Gupta 9:44 – why is Quality number one priority for manufacturers?

And the other three dimensions that you mentioned the cost, value, and risk. I think we need to talk a lot more about that. But before that, what I really wanted to discuss is quality being the number one priority.

So as a business owner, my priority is always to get money in my bank account. And the focus of this podcast is really growth for the smaller to medium-sized businesses.

So why is quality the number one priority for me?

Jason Chester 10:11

Well, I think if you look at traditional, or even current manufacturing environments, there’s a heavy emphasis on manufacturing automation. So in recent years, you know, we’ve invested heavily in automating the production process itself, you need very rare now unless it’s an artisan kind of product producer, or whatever, that all of those manufacturing processes manual, you know, even right back decades ago to the introduction of the automated production line, etc, it’s become commonplace.

But an automated production environment isn’t an optimized production environment. We can still get a lot of waste in automation. We can still get poor quality products in automation. An automated production process does what it’s pre-programmed to do, whether it’s filling bottles of source or cans, or making packaging or making components for automotive industry clients, etc. We have this automated production environment, and we’ve gained a lot of benefits.

Over the years from that we’ve displaced a lot of labor, we’ve dramatically increased efficiency, we’ve dramatically increased productivity. But when you look at quality alongside that, the quality process is really unchanged as it was perhaps 10-20-30 years ago, we have this production process going, we have an inspection station, at predetermined intervals, we take a certain number of pieces of products off the production line, we inspect them through various different characteristics and features. And we write down the results on a sheet or we input them into an Excel spreadsheet. Then, we let the line run. And then we’ll test again further down the line.

Jason Chester 11:57

And then at the end of the line, when we’re about to package the product apart or distribute it to the customer, we may do a final inspection of one in 1000 pieces or, you know, one in you know, every hour or something like that, to check that the quality of those products is within specification.

But let me give you an example. Those products may be in specification. But that doesn’t mean say that we’re optimizing that production line. I once worked fairly recently with an alcoholic beverage supplier that filled you know, many, many bottles in a high-speed bottling line. And there are rules and regulations about the fill volumes of content like that, where you know, if you bought a bottle of bourbon, for instance, and it was below the label stated content of 750 milliliters, then you wouldn’t be happy with that as a consumer or neither with the regulators.

So they allow you a certain amount of underfill tolerance, but it’s fairly narrow. So the general trend in the industry is to overfill those bottles, so that they when they get variability in the bottle filling process, they’re not at risk of going below that level stated content allowance.

But imagine that, you know, we’re filling bottles with a lot more product than we actually need to. But technically the product is within specification.

Jason Chester 13:17

And so this particular company, they would monitor that by knowing in a given lot like 8000 bottles, how much volume of liquid is passed through the filler heads and divide that by the number of bottles and the volume of each of those bottles, then is the average on track four would be within specification.

And if it is that batch would be put would be released. If it wasn’t, that whole batch would be scrapped. So that’s 8000 bottles of, alcoholic beverage, which is expensive to produce and, and potentially, you know, lucrative to sell was literally scrapped because that level status, content couldn’t be verified.

So imagine that differently. You know, we only know that process has got inherent variability as we’re checking it. So if we check every 500 bottles, we only know that one bottle in 500 is within specification. And then if there are a problem 1000s of bottles being produced by the time we get to be able to take remedial action to fix the problem. That’s clearly not good.

So you know a with a solution like InfinityQS where we can monitor data in real-time and monitor the variability of those filling processes in real-time, not only can we predict when an out of specification event might occur to enable them to make correct corrective action prior to that specification event becoming an issue but also trying to make the gap narrowed between the overfill and the underfill.

Jason Chester 14:50

So they’re not giving the product away unnecessarily and they’re not at risk of you know, annoying the consumers that buying them refill bottles or causing a problem with the regular lasers for shipping products with not enough content in, etc.

So that’s just an example of where moving away from traditional quality management processes, and through to quality optimization or manufacturing optimization can really make a fundamental difference to the bottom line.

And that’s, you know, just an example of what we see in the industry by taking quality. And bringing that into the 21st century where at the moment, in a lot of scenarios, it’s almost been separate to that investment that we’ve been made be made in automation.

Sam Gupta 15:35 – Overfill vs underfill issue in Quality management

Amazing, when I look at what you just mentioned, the way I’m interpreting this is based on what I have personally seen with the manufacturers, typically when they measure their quality, the process, my understanding is called sampling.

So what they are going to do is they are going to take a couple of sample products to be able to test and those are the only ones that are being tested, and the rest are going to be assumed to be tested. And based on that I think there is going to be a real problem of overfilling and underfilling. And that’s the point that you just mentioned.

So in the case of alcoholic beverages, I can see the problem. But do you see this problem happening with the other industries as well, where we don’t have the problem of overfill versus underfill?

Jason Chester 16:23

Yes, absolutely. I mean, you can see that across all industries. And another example is just taking a step back in, you know, typically, when a quality issue occurs, it’s occurred for a reason there is it’s either a machine problem, or a problem in the process, or a worker that’s made an error on a machine setting, there is some causal factor in that quality event more often than not, and again, you know, you talk about sampling. And you’re absolutely right that products are withdrawn off the line and tested.

But how do we correlate that in real-time to the environment that’s producing that product?

So take a manufacturer of cookies, for instance, you know, we take all of these raw materials, we mix them together in a certain word according to a certain recipe, then we go through certain processes, like forming them into a cookie shape, letting them rest, we then put them through an oven, you know, we then you know, maybe glaze them or dust them with icing sugar or whatever it is, when you get brought bad product off the line is invariable because you know something within that process, as you know, variability has happened or a problem has happened, which has led to that quality event.

But when we just talk about sampling in isolation, we take the product off the line and we determine that it’s not within reasonable limits or within specification limits, etc.

Jason Chester 17:46

But actually, if we monitor the production line, at the same time as you know, the characteristics of the product, then we’re in a much better position to make correlations between right okay, we’re getting these overcooked cookies, because the oven temperature is slightly too high, or the belt speed is slightly too low.

So if we can optimize those manufacturing environment variables, then we’re not going to get a product that’s out of spec in the first place. So that significantly reduces waste.

And I know that that’s another food example but another example might be in, in packaging manufacturers, you know where ingredients into making PT bottles, for instance, you know, have to have a certain ingredients or they’d like a UV, ultraviolet protection additive put in that’s a very expensive raw material.

So they try and limit the amount of UV additive that goes into those products to try and limit obviously waste of a high-value ingredient. But if you have too little, you know, UV protection ingredients in the PET bottles, then inevitably what’s in those PET bottles can spoil either in the distribution channels supply chain or on the in the consumer’s hands for instance, or you put too much in and then you’ve got unnecessary cost in the manufacturing process.

Jason Chester 19:04

So it’s prevalent all around us, you know, we can see in automotive, you know, in automotive components that there are very, you know, strict automotive standards in the tier one automotive OEMs at the supplies that they get.

And unless the product absolutely meets the stringent requirements, the automotive OEM isn’t really that bothered if the 100 products that they’ve ordered, has it taken the manufacturer a sales in previous products to get the 100 good ones or 110 previous ones to get the 100 good products. So it’s all about performance and productivity. And you see it prevalently across all sectors.

Sam Gupta 19:45 – Collaboration of SPC with ERP and MES systems

Okay, I think you touched on several different industries there. Just to recap, you talked about food and beverage then you talked about the automotive industry and the packaging as well. All of the industries could benefit from the real-time quality monitoring that may not be part of their current system that they might be using, especially ERP.

And my understanding of the manufacturing floor is that there are two cases that we see typically with manufacturers. Number one is going to be if they are running the production floor manually, the second is going to be either the combination of ERP or MES.

Is that in common in your experience as well? Jason, can you talk a little bit about how your platform would talk to ERP? So let’s say if I’m a manufacturer, and I use ERP, for my quality processes, because I need to gather data related to quality in my ERP. So how would these two systems work together on the production floor?

Jason Chester 20:45

So they are absolutely complimentary. And I think that’s where there is often a lot of confusion or potentially even misconceptions about where manufacturing intelligence fits with ERP and MES. But typically, MES and ERP systems manage the environment open till a product goes into physical production.

So a lot might be released into production and scheduled into production or on a specific line, and there might be, you know, 8000 units of a particular product to be made. And then the final quality inspection characteristics of that lot, and potentially even some sampling characteristics, might then get fed back to the ERP or MES system.

So that in the future, you can look at that particular lot number and see what the final quality inspection characteristics were for its, you know, if there was a customer complaint or, or any other event that needed investigation, etc.

Jason Chester 21:37

But really, that’s where an ERP kind of stops. And we’re really where solutions like InfinityQS begin. Because what we focus on is from when that product goes into production, is really monitoring all of the process environments, and the quality characteristics of that product whilst it is in production, and be able to use in statistical process control, being able to alert to abnormal trends or abnormal variability, to be able to predict when you know, machine settings need to change or when the production environment needs to change, to ensure that we’re keeping that product as close to specification as possible or within the central specification as possible.

And then at the end of that, all of that statistical summary can also then be integrated back into the MES and ERP solution. So it’s really that when the product is in production, where solutions like quality intelligence really come into the room. And obviously, if you scale that up across a manufacturer with multiple lines, or multiple facilities, or even multiple regions, then that all of that information can be aggregated.

So they can compare performance, across processes, across products, etc, to see where you know, the opportunities for improvement. And typically, that is not what ERP solutions are designed to do.

Sam Gupta 23:01 – Right time to implement quality initiatives

Okay, so I think I am convinced of the value of real-time quality monitoring, there’s definitely a value, but I want to shift the gear a bit. And I would like to touch in terms of real hard dollars because we are talking about the growth podcast, right?

So obviously, we can do as many processes as we want, we can implement as much quality as we want. But when is going to be the right time to implement quality for a manufacturer, when I have to compete with my other priorities, such as sales and marketing or R&D?

So what would be your recommendation to implement these quality processes? And which industry? What is the right time to implement the quality initiatives?

Jason Chester 23:42

So I think that the right times when to implement quality initiatives is absolutely right now, I mean, you know, for a manufacturing organization, what those organizations do is manufacture products, the sales, and the marketing and promotional aspects, a route to get those products out to market.

But go back to what we talked about earlier in the sessions, if we do that sales and marketing promotion, but then we distribute poor quality product out to consumers, that’s going to come back and hurt the manufacturer very significantly, very, very quickly. If we send out a product that is not safe for consumption, that’s going to really hurt the manufacturing brand, etc.

Jason Chester 24:22

Or even if we do you know, if we’ve got high volumes of waste, and we struggle with efficiency, and we struggle with you know, output and productivity, then if we get a certain increase in demand because of a successful sales promotion, then we leave consumers wanting because they can’t get that product quickly. Because we’ve got backlogs we’ve got issues in the manufacturing process, etc.

Quality has got to be the underpinning of all of that and it is certainly with you know modern cloud-based implementations of quality intelligence those things can be achieved very quickly. They can be achieved very cost-effectively. The whole notion of digital transformation has been there for a very long time, high cost, high-risk strategy for organizations just simply not true anymore.

You know, we can deploy quality intelligence, very tactically, you know, cloud-based solutions that don’t require, you know, any, any kind of specific infrastructure or investment up front means that you know, we can, we can get in, you know, solving very specific problems in very specific areas, and then potentially expand out those capabilities as the manufacturer needs to or as the manufacturer grows, etc. That’s the beauty of the scalability around the cloud.

Sam Gupta 25:37

Yeah, I think you bring a very good point there with respect to sales and marketing, as business owners, we have a tendency to push a lot for sales and marketing. But I think what matters end of the day is going to be the customer experience. So even if you have your fancy sales and marketing, but let’s say if the customers are receiving the poor quality product, they are not going to come back.

In fact, they might not be able to refer you to other customers because of that experience. Or they might be talking online, I think you brought one element about social media as well, that nowadays customer’s voice is going to be really important too. So let’s say if they have a bad experience with your product, they are going to be talking on social media channels, and word of mouth is not going to be good, which is one of the pillars of influencer marketing.

So I definitely, definitely agree with your point there with respect to thinking of quality as one of the pillars as part of your overall strategy.

Jason Chester 26:33

I couldn’t agree more. Absolutely. And, you know, just reiterate that point around cost value and risk is that you know, we often think in terms of just reducing cost, and just maximizing value and eliminating risk. Actually, that’s quite a misnomer as well, it’s much more complicated than that. This is where it does get quite tricky for manufacturers, because, you know, yes, we can reduce the risk of poor quality product down to almost zero by testing every single product that comes off the line.

But that’s not economical, you know, we can reduce the cost further and further and further down. But it will get to a point where we start to impact on agility and flexibility or will start to impact on product quality, etc. So it’s about achieving that optimal balance between those three dimensions of cost, value, and risk.

And only when a manufacturer has got that optimal kind of state, do they know that they’re absolutely they’ve got the manufacturing capabilities behind their organization to be able to support those sales and marketing initiatives cost-effectively? And you know, and effectively to be able to support whatever it is the business wants to do. If you’ve got a business where you know, the pushing very well on the sales and marketing initiatives and, you know, export initiatives and channels to market and that sort of thing, but they don’t have that top-notch manufacturing capability, then it will rapidly unravel. And that’s how our experience certainly with a lot of manufacturers quality has got to be at the top as a strategy.

Sam Gupta 28:09

Okay, so I really like those three terms, cost, value, and risk. And I’m probably going to take this to the next level. I’m going to create an acronym there for that. And I’m going to call it CVR. I really like that, because that is similar to project management. I think they talk about the triangle where they have similar pillars if I’m not mistaken.

Jason Chester 28:30

Yes. Yes. And, you know, the approach is obviously very common. We’re in an industry that doesn’t shy away from three-letter acronyms. But yeah, I mean, it is a very effective way just to distill a lot of what we talk about down into those three dimensions because I do think it all does boil down to that. And that can be complex. And when you don’t have the tools in place to be able to deal with that complexity.

Inevitably, then it gets overlooked. And it doesn’t get done because it’s seen as a, you know, as a thing that’s too hard to do. And that just isn’t the case with today’s technologies and today’s tools. Okay, amazing.

Sam Gupta 29:05 – 30-60-90 plan for implementing quality initiatives

So I think I’m sold on the value of the manufacturing automation, real-time quality monitoring. I think there’s definitely value with this. But as a business owner, I need to prioritize right, obviously, I have got so many different initiatives.

So I’m actually looking for some sort of actionable advice. And let’s say 30-60-90 day plan, if I want to implement the quality initiatives in my organization, how would you recommend the 30-60-90 approach for me?

Jason Chester 29:33

so we have a very defined methodology internally within InfinityQS. And this is very much around what we call a proof of concept. And we actually have a 30 day, you know, timeframe on our proof of concept. So we aim to work with manufacturers to get them up and running with a proof of concept. And that’s very, very focused in scope.

So it might be a particular production line, a particular product, or a particular process. Where we implement a policy intelligence proof of concept project to address that immediate challenge? So they might choose which process? Or which product? Do they have the most problem with? What do they have the most waste with? What do they have the most variability or in predictability with etc, and really focus on a proof of concept trial, because there is no better way to prove the value to a manufacturing client, than for them to see the value of a solution in their own environment with their own processes, you know, we can provide endless case studies and, and success stories from other sectors and from other industries, but every manufacturer is different, every manufacturing environment is different.

Jason Chester 30:40

So 30 days, you can do a proof focus proof of concept to create that business value proof point internally within your manufacturing organization, then once you’ve done that, that gives you the confidence then that you can scale up, you know, very effectively to other areas.

And this is the beauty of, as I mentioned before, about, you know, cloud-based products now, you know, you don’t need to install, you know, servers and database servers and have a data center provisioned or, you know, new networks put in place. I mean, you know, just a device with an internet browser, and you’re good to go. They’re scalable, they’re elastic, if you know, certainly we’d like InfinityQS, there are no long-term commitments or contracts, you’re not signing up to an annual agreement. It’s a subscription-based product.

Jason Chester 31:27

So, you know, it’s an operational expense, rather than the capital expenditure, you can scale as you scale within the business. You can put a plan in place for focus proof of concept within 30 days, an expanded proof of concept within 60 days, even a full line or full plant pilot within 90 days, and then potentially an enterprise-wide rollout within six to 12 months.

So very, very fast, very fast time to value very scalable, and very cost-effective. You know, and again, the final point on that is that demand obviously changes. You know, as we’ve seen this year with the pandemic, demand can be up and down. And so can usage of cloud-based solutions, like quality intelligence, you can acquire and more licenses when required and reduce that license count when they’re not required. And that works well as well for seasonal manufacturers, as well.

Sam Gupta 32:22

Okay, amazing. So one thing that jumped out to me, overall, from the show is each manufacturing environment is different. And I couldn’t agree more with that. So with that, Jason, I think, you know, we are done with the show. Do you have any last-minute thoughts that you would like to share with the audience?

Jason Chester 32:40

No, I think there’s been a great conversation, there are a lot of opportunities, I guess the only point I would share is that you know, whilst every manufacturer is different manufacturers can also learn from other companies, even in different sectors, we talked earlier about the difference between food and beverage or automotive components or, or packaging manufacturers, etc.

Whilst there are a lot of differences. There are also a lot of similarities. And you might learn techniques around quality in one industry that can be applied with great effect to another industry. So that kind of cross-pollination of techniques and ideas from different industries can be really important as well.

Sam Gupta 33:20

Yeah, I cannot agree more with the cross-pollination aspect of learning. I think that’s the foundation of learning in my mind.

So again, thank you so much, Jason, for your time, really appreciate it. And you have a wonderful day.

Jason Chester 33:32

You too. It’s been a pleasure and enjoyable having this conversation.

Sam Gupta 33:37

I cannot thank our guests enough for coming on the show and sharing their knowledge and journey. I always pick up stuff from our guests, and hopefully, you learn something new today. If you want to know further about Jason, or InfinityQS, please visit infinityqs.com. They are currently offering three months free trial of their real-time quality, intelligence, and statistical process control software called Enact if you’re interested in trying for your quality operations. Links and more information will also be available in the show notes.

If anything in this podcast resonated with you and your business, you might want to check other related episodes, including the interview with Michael Begg from AMZ advisers, who brings a unique perspective on D2C from Amazon as a marketing channel. Also the interview with Chase Clymer from Electric Eye, who touches on D2C from the e-commerce toolset and architecture standpoint.

Also, don’t forget to subscribe and spread the word among folks with similar backgrounds. If you have any questions or comments about the show, please review and rate us on your favorite podcasting platform or DM me on any social channels. I’ll try my best to respond personally and make sure You get help.

Thank you, and I hope to catch you on the next episode of The WBS podcast.

Outro 35:07

Thank you for listening to another episode of The WBS podcast. Be sure to subscribe to your favorite podcasting platform so you never miss an episode. For more information on growth strategies for SMBs using ERP and digital transformation, check out our community at wbs.rocks. We’ll see you next time.

In this episode, we have our guest Michael Begg from AMZ Advisers, who brings a unique perspective for manufacturers and e-commerce merchants from his experience of helping customers getting started on Amazon as a revenue channel and grow their e-commerce businesses from the ground up.

He also shares his expertise to plan your marketing budget. If you have been thinking about or are already immersed in the path of D2C, you must listen to this episode.

Chapter Markers

• [0:00] Intro
• [2:49] Overview of Mike’s company and clients
• [3:17] Mike’s company’s growth journey
• [7:42] How can manufacturers start on Amazon’s journey?
• [9:37] Which products are the right fit for Amazon?
• [12:14] How can traditional manufacturers plan for Amazon’s journey?
• [16:43] Is Amazon strategy only applicable for sales or branding as well?
• [20:55] 30-60-90 plan for manufacturers starting on Amazon’s journey
• [25:11] Can manufacturers start on Amazon’s journey without a website?
• [28:05] Closing thoughts
• [29:12] Outro

Key Takeaways

• If you are going to really try to grow on the Amazon platform, you need to focus on all aspects of it. It’s not just put the product up there and see if it sells.
• The research tools such as JungleScout and Helium 10 might help with your Amazon’s journey.
• In the US, 69% of all consumers use Amazon to start their product search.
• Amazon charges a 15% referral fee. If you’re using Amazon FBA, the fee comes out to be about another 15%. So, you’re looking at about 30% of your margin. And then if you add in advertising on top of that and shipping to get the product to Amazon, you may be lucky to be close to 40% of your margin.
• The average number of impressions that a customer needs with your brand before they actually purchase from you is about 20.
• Across the Amazon platform, most categories have experienced significant sales increases. Mike has had clients that have had sales go up 400% since COVID happened just from e-commerce sales, just through the Amazon channel.

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About Mike

Mike Begg is an entrepreneur and expert in eCommerce, digital marketing, and operational nearshoring. He co-founded AMZ Advisers with his two partners in 2015 and has grown the business to managing over $10M per year in ad spend and $100M per year in Amazon sales.

Mike and the AMZ team also operate AMZ Courses, educating Amazon sellers on how to maximize sales on the platform.

Mike loves sharing advice and help on anything related to Amazon and building efficient businesses.

Resources

• Connect with Mike
  • LinkedIn | Facebook | Instagram
• Connect with AMZ Advisers
  • Website | Facebook | Instagram | Linkedin | YouTube
• Download Mike’s free eBook if you would like to learn more.

Full Transcript

Michael Begg 0:00

I think the research shows now that the average number of impressions that a customer needs with your brand before they actually purchase from you is about 20.

Intro 0:11

Growing a business requires a holistic approach that extends beyond sales and marketing. This approach needs alignment among people, processes, and technologies.

So if you’re a business owner, operations, or finance leader looking to learn growth strategies from your peers and competitors, you’re tuned into the right podcast.

Welcome to the WBS podcast where scalable growth using business systems is our number one priority.

Now, here is your host, Sam Gupta.

Sam Gupta 0:47

Hey everyone. Welcome back to another episode of The WBS podcast. I’m Sam Gupta, your host, and principal consultant at digital transformation consulting firm, ElevateIQ.

When I was putting together a list of growth topics for this month, that could be valuable for our audience, especially with the changing business environment due to COVID. direct to consumer (D2C) strategies were on the top of our list. We wanted to cover D2C from different perspectives, including operations, finance, and marketing.

In today’s episode, we have our guest Michael Begg from AMZ Advisers, who brings a unique perspective for manufacturers and ecommerce merchants. From his experience of helping customers getting started on Amazon as a revenue channel and grow their ecommerce businesses from the ground up. He also shares his expertise to plan your marketing budget. If you have been thinking about or already immersed in the path of DTC, you must listen to this episode.

Let me introduce Mike to you.

Michael Begg is an entrepreneur and expert in ecommerce, digital marketing, and operational nearshoring. Mike co-founded AMZ advisers with his two partners in 2015. He has grown the business to managing over $10 million per year in ad spend and $100 million dollars per year in Amazon sales.

Mike and the AMZ team also operate AMZ courses, educating Amazon sellers on how to maximize sales on the platform. He loves sharing advice and help on anything related to Amazon and building efficient businesses.

With that, let’s get to the conversation.

Hey, Mike, welcome to the show.

Michael Begg 2:40

Hi, Sam, thank you for having me here. I really appreciate the opportunity to speak with your audience.

Sam Gupta 2:44

Okay, so to start with, do you want to talk about your company? And what you guys do?

Michael Begg 2:49

Sure, yeah, I’ll start off talking about us. My company is AMZ advisers. We’ve been around for five and a half years, almost six years at this point. And what we do is help brands and manufacturers maximize their online sales on the Amazon platform.

And our company will handle everything from doing the content creation, the SEO Marketing, the paid advertising, pretty much the entire Amazon sales channel for brands and manufacturers, they’re looking to increase their Amazon sales.

Sam Gupta 3:17

Okay. Do you target any specific manufacturers or specific verticals in manufacturing?

Michael Begg 3:23

Yeah, for sure. So we just give you a little background on what our typical client is, they’re typically doing about a million dollars to $10 million in sales right now.

And they’re looking to increase that amount of sales. And we’ve worked across a variety of different verticals, from apparel to food and grocery to pet supplies, as well as some more niche categories like child’s educational materials.

Sam Gupta 3:48

So tell me a little bit about your own growth, how you started, how each year was. Did you have to pivot with respect to your business model? Were there any challenges? Can you touch in detail about that?

Michael Begg 4:00

Of course, yes. Um, my background really wasn’t anything entrepreneurial. I came out of school, I started working in finance jobs, which we kind of already mentioned.

And I just realized that I needed to do something for myself. So I and two other partners that I have right now started looking for new business ideas to make money online.

We actually started selling products on Amazon ourselves, we began importing products from Asia and selling them online on the Amazon platform. And once we realized that we were very good at marketing and the advertising side and actually achieving sales for ourselves.

We looked at a lot of the other brands that were on there, and a lot of the other sellers that were well-known household name brands, and they were really underperforming and they weren’t hitting the sales levels that we would have expected.

So we saw an opportunity there to kind of build a business out, help these brands achieve more sales and the platforms, and then obviously grows business ourselves. You know, originally we started small just taking on stuff on the side while we had our full-time job still in the corporate space.

And then once at a certain point, we realize we have enough revenue to at least survive. And we were like, Alright, let’s go into this, you know, full steam. Let’s burn the ships. Let’s not look back, let’s see what happens.

And yeah now we’re here five and a half years later and we manage about $10 million in ad spend on the Amazon platform per year and help our clients do about $100 million in overall sales.

Sam Gupta 5:27

So, so tell me a little bit from the process perspective as well. Obviously, you have done amazing with respect to your sales and marketing.

But I’m sure you have had some sort of challenges, as you grew, did you have to change your business model just because that was not aligned with your processes, any processes, you know, that you came up with were unique and that manufacturers can learn from?

Michael Begg 5:52

Yes, I mean, I think we’ve developed our own for our clients, we’ve developed our own playbooks on how to actually achieve the advertising sales they want. And we can talk a little bit more about that later if you want.

But in general, I mean, as a business ourselves and growing on the platform, there are always challenges that that come up, a lot of times the e-commerce space is very, it’s very rewarding, the companies that are flexible, that are agile, and that are able to get into new markets quickly.

So for example, we’ve had many clients that have been wildly successful in a niche product that has taken off one example that sticks out is CBD oil, we had a client that was doing phenomenally they were one of the first ones out there, they took off overnight from pretty much zero, within two months, they were doing $100,000 in sales of just one CBD oil product.

But however, they were not willing to invest in the advertising, and the marketing to help them stay at that number one spot.

Michael Begg 6:49

And then the other companies that were familiar with the e-commerce space, realized that they needed to advertise that they could steal this market share back, jumped in there, produce the product, put it out almost the exact same product, ran the market, we needed to get the visibility on the platform and essentially put this client’s product out of business because the visibility just wasn’t there, the cost of his advertising became too expensive.

And he just wasn’t able to compete with a lot of these other brands are doing.

So the biggest lesson there, I think to learn is that if you are going to really try to grow on the platform, you need to focus on all aspects of it, it’s not just put the product up there, see if it sells.

You need to focus on your marketing, your reviews, the way that you’re getting social proof for your product, constantly trying to drive more traffic to it through off-platform SEO efforts, there’s a lot of different things that you need to do to make sure that once you start selling a product, well, it’s going to stay there for the long term.

Sam Gupta 7:42

So for the manufacturers, you know, the ones that have never explored Amazon’s path, or might not be familiar with e-commerce as much. Can you describe this to them a bit, and how they can start on the path?

Michael Begg 8:01

Yeah, of course, well I think one thing that, at least from my perspective that COVID has really opened up a lot of retailers to is that being online is more important.

And if they’re, if people are not physically able to go into their stores, then where are the sales gonna come from that are gonna drive their products. And that becomes even more relevant for manufacturers that follow a traditional business model, where they’re selling products to these retailers or to a distributor who’s selling it to the retailers, and they’re just selling wholesale.

Essentially, by going to e-commerce, you’re going to DTC you’re cutting out the middleman, there’s no wholesale, you’re capturing that whole margin. And it provides such a bigger incentive for you to make the shift to the platform.

Michael Begg 8:01

Now, if you are looking to figure out which of your products or if you have a lot of manufacturing capabilities and produce a lot of different products, the best way to start is just by getting in either with partnering with a firm like myself, like my own firm or like other firms that are out there to help do a lot of the market research for you.

So you can understand what markets within your product category look the best.

Or if you want you can also purchase a lot of the research tools that are out there, there’s one called JungleScout, another called Helium 10, and other that’s viral launch.

All of those can help you get some insight into what the markets look like and different marketplaces. And there are different tools for different marketplaces as well. So depending on whether you want to sell in Europe, if you want to sell in the US, Canada, Mexico, Australia, you know, wherever India, wherever it may be, there’s a lot of different tools out there to help you get some insights into where your best opportunities for the sales are.

Sam Gupta 9:37

So I want to touch back, you know on the example that you mentioned about the CBD oil.

So when we talk about this particular customer, obviously it makes sense for them to go for the e-commerce path just because number one the product is small, you know, this shipping is probably not going to be as much of an issue.

But if you look at the bigger products, such as automotive manufacturers, right then I don’t know if the e-commerce path is going to be relevant for them.

So do you have any specific recommendation in terms of who is going to be the right fit for the e-commerce path before they explore this?

Michael Begg 10:13

Right. So if, in general, if we’re talking larger e-commerce, essentially, I mean, there are more opportunities to sell larger bulkier items.

But if we’re talking specifically about Amazon, one of the ways to really outperform on the platform is to be using the Fulfillment by Amazon fulfillment model. And using that model actually rewards products that are smaller and lighter.

So if your product is under two pounds, if it’s less than, I believe, 18 inches, you’re actually going to pay less fee. And once you hit those, you start getting above those, those packaging sizes above the product weight, the fees start really adding up. So that’s one thing to consider if you’re going to be selling heavier products or bulkier products, the price point needs to be there for it to really make sense, at least within the Amazon platform.

Now, if you are going to be selling in general, like you said, automotive parts, in e-commerce, there’s still a lot of opportunities to reach the right audiences, however, the marketing that you’re going to need to do is going to be a lot more targeted.

Michael Begg 11:13

So on Amazon, we’re going a lot broader. If you think about it, at least here in the US 69% of all consumers are going to Amazon to at least start their product search.

So you know, if you’re selling, let’s say, I don’t know, a carburetor, it probably doesn’t make sense on the Amazon platform. Because it’s so broad the amount of search volume that people are searching for, are I’m sorry because it’s so specific, the carburetor is so specific on the platform, people are going to Amazon and search for everyday household items apparel like lightweight things that they need.

If you’re looking to do e-commerce in a specific niche like automotive parts, you need to make sure that you’re engaging with automotive groups, making sure you know Facebook groups, Instagram, social media link building with other platforms, being in the automated forums, whatever it may be, there’s still a lot of opportunities to drive traffic to your own website or to another platform that way to sell your product.

However, selling on Amazon, those types of products probably doesn’t make the most sense.

Sam Gupta 12:14

So let’s take a bit of a scenario here, right, the traditional manufacturers that we see. And what I was thinking is if we have a traditional manufacturer, who was actually looking to go for D2C. Their current channels at this point of time are pretty much going to be trade shows. Their marketing spend is not as much. So if the average manufacturer is looking to go for D2C again, if they have a very small product, they are slightly more mixture of e-commerce as well as the manufacturing then it would make sense for them, right.

But the traditional manufacturers typically go for the traditional, you know marketing channels, and typically they are going to be working with their distributors. So my average manufacturer, typically what they do is they have their distributor channel, they just work with them, they have their margin set up.

But now you know, we are talking about going for the D2C path for that. And obviously, we need to compare the margin. So as you mentioned that the margins could be slightly more lucrative because you are not really sharing that with your channel.

But at the same time, you are going to have your existing channel because you can’t go all-in in the D2C.

That could be too risky.

So, you know, we need to look at number one, the margins, and number two, the happiness of the channel.

So how do you manage the channel conflict? If a traditional manufacturer is going to go to D2C?

Michael Begg 13:36

Yes, and I think you bring up a very good point understanding that the amount of advertising you’re going to need to do if you’re a traditional manufacturer, is significantly different than what you’re going to be doing in your you know, traditional model where you’re selling to a distributor.

However, that doesn’t mean you personally need to go DTC, you can also find other sellers that are out there. And there, there’s a variety of different sellers that will do this where they’ll actually partner with you.

So instead of if we’re saying in a traditional model, you’re wholesaling to the distributor and distributor selling to the reseller, or the retailer, you would go directly from yourself to the online reseller, cutting out the distributor, you can increase the margins a little bit, the seller will probably be paying for more of the advertising to get it going.

But you’ll also be giving them a discount on the product allowing them to make a margin on the spread. But that is one way you can do it.

Now if you’re gonna do it yourself, you do have more margin, but if we’re talking about Amazon-specific, there are significant fees that you need to understand as well.

So Amazon charges a 15% referral fee. If you’re using Amazon FBA, the fee comes out to be about another 15%. So right there, you’re looking at about 30% of your margin. And then if you add in advertising on top of that in shipping to get the product to Amazon, you’re using FBA Amazon will pay for the shipping to get to the end customer, but you also need to factor that in.

So at the end of the day, you may be looking at close to 40% of your margin.

Michael Begg 15:00

If you’re doing advertising, it could be significantly higher, it could be about 50-60%. So depending on where your product margin is on the manufacturing side is really going to determine whether it makes sense for you to go DTC or not. Or to continue to use a similar model, a lot of distributors are getting more advanced and starting to sell on the platform more.

So again, maybe if you don’t feel like tackling the platform yourself, you can find the distributors that are doing e-commerce and selling products through e-commerce and partner with them as well.

So you can continue to sell your product in the traditional model, without having to make that jump to DTC if you’re not entirely comfortable with it.

Sam Gupta 15:38

Right. So basically, what you are saying is, rather than doing it yourself, you know, what you could do is you could actually enable your channel, and you can help them understand to increase your sales.

And as your distributors or the channel is going to increase the sales, obviously, that is going to increase for you as well.

Michael Begg 15:57

Exactly, exactly. Yeah, everyone’s realizing the opportunity, whether you’re the manufacturer, or the distributor, there’s so much opportunity to sell online and more and more people are adapting to it. There are a lot of distributors out there, they’re actually acquiring agencies like mine that had the expertise within the Amazon platform to help them sell their products more online.

So, they’re actually increasing the relationships and the number of wholesale purchases that are buying. They can increase their margin, and then they’re turning around and selling it on the e-commerce side instead of selling to retail.

So they’re increasing their margins that way. So there’s a lot of different opportunities for you, if DTC is not something you’re willing to invest in yourself, just finding the right partner can help you achieve more sales for your products through online channels.

Sam Gupta 16:43

So let’s go back to our example a bit more. So as I mentioned, the traditional manufacturer, right does not really have as much marketing spend if you look at the kind of their website, they have, they would have spent, let’s say, $5,000-$10,000, just to build the website, and that’s pretty much you know, their marketing spend, their marketing spend is also going to be more from the trade show, because that’s their primary channel to get the leads.

And then they actually hang out in a lot of different forums such as the National Association of Manufacturers (NAM), that’s where they are going to be building relationships with the fellow manufacturers. So this is their marketing landscape.

Obviously, they are targeting their distributors for marketing and education.

But let’s say we are going on the path of D2C. And the goal is not really sales, because it’s not always sales that matter from the marketing perspective. It’s also the relationship with the customers because the customers need to know your brand, irrespective of whether your channel is selling or you are selling.

So what would be your perspective, let’s say if the manufacturers don’t want to, you know, go for the DTC, from the perspective of sales, they simply want to go from the brand recognition perspective, do you still think DTC adds value and the manufacturers should be investing something there?

Michael Begg 18:00

Yes, and I think there’s a lot of value there if that is your goal to actually build brand recognition and a brand name.

However, the amount of investment and the amount of time it’s going to take to do that is significantly longer than just putting a product up and getting sales immediately.

If we’re going to really build a DTC relationship for your brand, we really need to look at the entire sales funnel. And that includes not only your ecommerce channels like Amazon, but also what you’re doing through your own website, and whatever traffic sources you’re using there.

So within the Amazon platform, you need to start with the basis which would be the SEO and getting the product part and content done. So the product listing looks good. But then we’re actually building the sales funnel within that platform. So within Amazon, we’re working at the bottom of the funnel, using ads to target customers that are already interested in buying the middle of the funnel targeting customers that are considering other products in our category, and the top of the funnel to build that brand awareness to get your name out there to make more people familiar with it.

I think the research shows now that the average number of impressions that a customer needs with your brand before they actually purchase from you is about 20.

So being able to hit them in these different stages of their customer journey within Amazon, but also within the entire ecommerce sphere, not just the Amazon channel. Whatever channel you’re looking at is extremely important in being in multiple places as the way you’re really going to build that brand recognition.

Michael Begg 19:26

Now within Amazon. The ability to build an audience is starting to appear there allowing you to create followers, people can follow your brand within the platform. And then you’re going to be able to use certain retargeting through different ad types in the future. Or you can use Amazon DSP, which is demand-side programming, which is a whole different sphere of advertising. It really focuses on brand awareness and customer retargeting, but you can use all of this to build that funnel to start building that loyalty and then retargeting those customers to get more sales over time.

And again, Amazon is just the largest brand discovery tool. I mean, if we’re going 69% of customers are going to search there. So by not being on the platform, there’s a very good chance that your brand’s not going to be discovered. And then if we are expanding it to that next level of what’s your overall brand, and through all of your sales channels, Amazon is going to be essentially the top of that funnel. That’s where everyone’s going to find you. Then, as people start buying through Amazon, you’re going to want to try to find a way to bring them to your website. There are different practices and tools you can do for that.

But Amazon just becomes part of that funnel, and then you’re looking at how you’re going to build out that entire funnel for all of your ecommerce channels, not just one platform. It is an involved process, it’s very difficult to do on your own. But if you have the money to invest in it, you can find the right partners that can set up those funnels for specific sales channels for you, and help you build your overall DTC online presence.

Sam Gupta 20:55

Yeah, couldn’t agree more. You know, Mike, Amazon is really that big, I mean, synonymous to its name, I guess, you know, it’s really that big channel.

So if you’re ignoring that, obviously, you know, that’s going to be very limiting. So now, you know, based on that, I want to make sure my audience has some action items here, with respect to let’s say if they want to include Amazon as part of their strategy for 2021, and 2020, is almost ending with COVID. Obviously, there are challenges.

So let’s say they want to include Amazon as part of their strategy for the next year, what will be your, you know, 30-60-90 day plan for them? How they can structure, how they can talk to companies like you, and what they can expect out of it?

Michael Begg 21:46

Yeah, well, I think this is we’re at a very good point right now. I mean, we’re already in Q4, it’s too late this year, to really get capture those sales on Amazon. If you’re just looking to get started on the DTC side. Really, we need to start shifting the focus to what we’re going to do next year. And the first thing you should be doing and using the rest of this year to do is to start interviewing other agencies that are out there.

So there is a variety of them that can help strategize exactly what you need to do for that sales channel. But there are a few different things that you need to be really learning you need to be figuring out if you have products within your catalog that can do well.

So you are going to want to be paying someone for research or doing the research on your own to see what the sales market looks like for these products. That’s the first thing, you need to consider what your logistics are going to be to get the product to whatever market so if you’re shipping from Asia, how are you going to get it to the US? How are you going to store it? What logistical challenges might you run into with customs or whatever it may be?

Michael Begg 22:38

These are all things that you might have to deal with. If you’re already shipping to the US, maybe you already have that part figured out. But then once you’re here in the US, how are you actually gonna be able to fulfill the customer orders. And as I mentioned before, Amazon FBA is a great service to do it.

However, there are other services out there. So now Shopify is rolling out a fulfillment network, Walmart is rolling out a fulfillment network. And there are also third-party logistics companies that can help hold that can warehouse, your inventory, then fulfill orders as they come in. So there’s a lot of different complexity there that can be done.

And I would honestly recommend looking at having multiple distribution networks within the US or within whatever target, excuse me, whatever target market you’re looking for, I think that’ll be extremely important to focus on in the next 90 days.

And then just start budgeting, start calculating what you’re going to do. I mean, we, like I said before, about if you’re selling on Amazon, about 30% of your margin is just the fees. Now, if you How much are you willing to spend on advertising to help you achieve your goals? How does that fit within your margin on your overall product, determining what your end goal is whether it’s actually getting sales, or as we said before, building a brand within the e-commerce space, that’s going to lead to different outcomes and how much you’re going to want to advertise?

Michael Begg 23:54

I mean, if you’re just looking for sales, the advertising spend may not be as important or you may be willing to scale it down a little bit or have a more efficient target that you’re looking forward to, to maximize the profit you’re making.

But if you’re looking to build your brand, you might want to be more aggressive on the advertising to reach more customers get the brand name out there more. These are all things that you’re probably going to want to talk to an e-commerce agency about. So they can help layout the roadmap for you and help you start planning that stuff with you.

But I mean, by the end of the year, you know, we’re in the middle of November at this point right now, by the end of the year, you should already have whoever your agency partner is going to be for 2021 you should start they should start having the research for you.

So you can start figuring out what products within your catalog or your manufacturing capabilities are going to be ready to go and then start looking at the distribution networks that you’re going to use. Those are probably where I would recommend starting.

And then once you have that down as soon as you start are able to start sending products to the US whether it’s Amazon FBA or your third-party fulfillment network, that your agency partner will be able to start pushing those sales for you almost immediately.

So use the rest of this year to start planning. Just get find the right partner to help you. And that’s gonna be the easiest way for you to go DTC.

Sam Gupta 25:11

Okay, amazing. And, what about the manufacturers that don’t really have an e-commerce website at this point in time? I don’t know if that is required for the manufacturers to go D2C, can they do Amazon without having the e-commerce site? If not, do they need to build an e-commerce site first? What will be the strategy that you would take to build the e-commerce site for them?

Michael Begg 25:33

Again, I would say it really depends on what the goals are, if the goals are just making money and making a profit, you don’t need a website right now.

I mean, you can get started selling on the Amazon platform, eBay, Walmart, whatever the channel may be. And as long as you have a brand and consistent branding across those three platforms, you’ll start getting sales, you’ll look more professional, and you’ll start making money.

If your goal is to build a brand, build something of value, and you know whether you have an exit strategy plan for the future, whatever it may be, you do need to focus on building a website, however, it’s probably not the biggest priority.

Michael Begg 26:08

I mean, unless your brand is already out there, it’s already well known in the e-commerce space or in the consumer space in general, then people are still gonna be going to Amazon and you’re still gonna need to reach them there to make them aware of your brand.

So starting on those sales channels, where people are already going to shop is probably the best way to start just creating that brand awareness, more building more brand loyalty, there are other programs you can use within Amazon, such as Subscribe and Save, where you’re offering a discount for a customer to buy the product each month.

So you can build that recurring revenue, build that up brand awareness within the customer, they’ll start you know, that can lead have other knock-on effects too, you know, other referrals, more social proof on your product listings, all of this will help you build as a brand.

And then as that is starting to go, you can focus on actually building out that website. So that is really the way I would probably recommend just getting onto the platforms to start selling, especially if you don’t have a brand that is known right now.

And then focus on placing the pieces like the website and everything else later down the road, once you’re already making the sales, and you can focus on a way to get these people to your website.

Sam Gupta 27:13

Yeah, right. I completely agree. I mean, Amazon could be the near-term revenue opportunity from the sales perspective. And once you have the revenue, things obviously become slightly easier. So from the marketing and sales planning perspective, Amazon could be near term strategy. And you know, if the manufacturers want to take advantage of that, especially with respect to COVID, I think this is the right time to do that.

Michael Begg 27:38

Exactly. I mean, across the platform, most categories have experienced significant sales increases. I mean, we’ve had clients that have had sales go up 400% since COVID happened just from e-commerce sales, just through the Amazon channel.

So really not being there is just missing out on revenue and the opportunity for sales to reach new customers. So you really don’t have much to lose by being on the platform. You really only have things to gain.

Sam Gupta 28:05

Amazing. Love it. I think that’s it for today’s interview. Mike, thank you so much for your time. Do you have any last-minute thoughts before we close?

Michael Begg 28:14

I mean, I think I’ve laid out a lot of them. As I said, it’s really important if you are going to go the e-commerce route to just get started taking action.

Just getting onto the e-commerce platforms where people are already shopping is the easiest hurdle to get started in DTC and using other fulfillment networks out there. So you don’t need to start your own. You know, warehouse your own operations for fulfillment within the US or whatever target market, it may be like Amazon FBA, third party, logistic companies, those can all help you skip that step and at least start getting the sales, see whether it makes sense for your business.

And then you can look at actually building out more of the processes, building out more things yourself within your in-house to help your business grow over time.

But just getting started on the platforms is the best way to see if DTC is going to be for you.

Sam Gupta 28:58

Amazing. Love your advice. Do it today. Do it right now. Mike, thank you so much for your time. Really appreciate it. You know, you have a wonderful day.

Michael Begg 29:08

Thank you, Sam. Have a great day. I really appreciate being here and having the opportunity to speak with your audience.

Sam Gupta 29:12

I cannot thank our guests enough for coming on the show for sharing their knowledge and journey. I always pick up stuff from our guests, and hopefully, you learned something new today. If you want to know further about Mike or AMZ advisers, please visit amzadvisers.com. Links and more information will also be available in the show notes.

If anything in this podcast resonated with you and your business. You might want to check other related episodes, including the interview with Chase Clymer from Electric Eye, who brings a unique perspective on D2C from the angle of e-commerce toolset and Shopify. Also, the interview with Jason Chester from InfinityQS, who touches on D2C from a real-time manufacturing quality intelligence standpoint.

Also, don’t forget to subscribe and spread the word among folks with similar backgrounds. If you have any questions or comments about the show, please review and rate us on your favorite podcasting platform, or DM me on any social channels. I’ll try my best to respond personally and make sure you get help.

Thank you, and I hope to catch you on the next episode of the WBS podcast

Outro 30:22

Thank you for listening to another episode of The WBS podcast. Be sure to subscribe on your favorite podcasting platform so you never miss an episode. For more information on growth strategies for SMBs using ERP and digital transformation, check out our community at wbs.rocks. We’ll see you next time.

In this WBSRocks introduction episode Sam Gupta, the host of the WBS podcast shares his personal story and the focus for this podcast. He also provides details about the recommended episodes and what operations and finance leaders can expect with this podcast.

Chapter Markers

• [00:00] Intro
• [00:53] Sam’s Personal Journey
• [4:00] Why he started this podcast
• [4:43] The focus for this podcast
• [5:06] Podcast Schedule
• [5:19] Where you can listen to the podcast
• [5:27] Recommended Episodes
• [9:03] Acknowledgments
• [10:56] Closing Remarks
• [11:55] Outro

Key Takeaways

• Each episode will feature your peer or competitors who have grown their businesses or in the process of scaling using business systems.
• Irrespective of how confident a person sounds, we all have our insecurities and fears. People worry about their height, looks, age, race, social perception, ethnicity, or accent.
• In this podcast, we’ll be covering several topics that touch ERP and digital transformation. The topics could range from ERP implementation, eCommerce, the evolution of people processes, technology with growth, continuous improvement, lean, quality management, and professional development for finance and operations professionals.
• We are launching 10 to 15 episodes, and we’ll be releasing one to three each week with two episodes being the most common. We will be leaving on Monday and Wednesday, but Tuesday is the backup day for the bonus episode.
• You can tune in to any of your favorite podcasting platforms such as iTunes, Spotify, Google, or Stitcher.
• Whether you are launching a podcast or a business, don’t overthink before you start. There might be many people who might criticize, but there are also going to be millions who will appreciate who you are. So just be yourself and start right now.

Subscribe and Review

Apple | Spotify | Stitcher | Google Podcasts | Deezer | Player FM | Castbox

About Sam

Sam Gupta is an ERP thought leader in the digital transformation space for nearly two decades, with the primary focus on financial systems and ERP. He has been part of large transformation initiatives for fortune-500 corporations but now spends his time consulting with SMEs as a Principal Consultant/CEO at ElevatIQ.

Sam’s deep expertise in the manufacturing value chain combined with cross-industry expertise enables him to have a higher success rate with digital transformation initiatives in the manufacturing, distribution, and retail industries. Sam has engaged with the startup ecosystem in the last 10 years and has experience in building and growing businesses from scratch.

Sam regularly speaks at industry conferences and contributes his experiences through many popular blogs and publications. He also hosts a podcast called WBSRocks focused on business growth through digital transformation and ERP where he interviews top influencers and executives from ERP, Supply Chain, Digital Transformation, Supply Chain, and Accounting.

Resources

• Connect with Sam
  • LinkedIn | Twitter | Clubhouse: @samgupta
• To check Curt Anderson’s book, click on Stop Being the Best Kept Secret
• To check Brian Beck’s book, click on Billion Dollar B2B E-commerce

Full Transcript

Sam Gupta 0:00

I became a laughingstock as I came across as a robot who could not express any feelings that shattered my confidence. That nervousness lived with me. I never felt calm while speaking.

Intro 0:15

Growing a business requires a holistic approach that extends beyond sales and marketing. This approach needs alignment among people, processes, and technologies. So if you’re a business owner, operations, or finance leader, looking to learn growth strategies from your peers and competitors, you’re tuning into the right podcast. Welcome to the WBS podcast where scalable growth using business systems is our number one priority. Now, here is your host, Sam Gupta.

Sam Gupta 0:53

Hey, everyone, welcome to episode zero of the WBS podcast. I’m Sam Gupta, your host, and principal consultant at the digital transformation consulting firm, ElevatIQ. Today, I’m super excited to announce the launch of the WBS podcast.

But before I do that, I wanted to share a little bit about me and my background about why we started this podcast. The people who know me might think that, oh yeah, everything is easy for Sam. It’s very hard not to notice Sam.

You know what, let me give you a little background about myself. I was never comfortable with public speaking or doing anything in public. For that matter. I grew up as a super shy kid. In fact, I froze on the stage while doing a drama as a child. And I decided that anything public-facing wasn’t for me. I was always a target for bullies all through my school, as they felt that I didn’t know what I was talking about.

To overcome my insecurities. I decided to challenge it again, as a teenager to perform a skit at my university. And I became a laughingstock as I came across as a robot who could not express any feelings. That shattered my confidence.

That nervousness lived with me, all through my life. I never felt calm while speaking.

I went to Toastmasters but never won a single award for my speeches. While I wasn’t the most extroverted child, I was a fighter, no one could beat me on the hard work I could put in. I’m good at analyzing the hell out of a problem until I get to the bottom of it. I would analyze everyone better than me, and try to understand what they were doing differently from me.

Sam Gupta 0:53, continued…

Through my analysis, I recognized that irrespective of how confident a person sounds, we all have our insecurities and fears. People are worried about their height, looks, age, race, social perception, ethnicity, or accent.

The list is never-ending.

It’s up to us whether we want to get caught up in the dark world of insecurities, or rock with our strength and authenticity.

While a ton of people love my voice, I personally never liked it. I was never articulate and could not connect with folks who could not handle fast speech.

So I wanted to start my own podcast, but I wasn’t sure if anyone would listen to it. And I was worried about what if no one understood what I wanted to say. I had no idea how to recruit guests, or edit the software. I had done our blog and YouTube channel and received decent traction.

So that gave me confidence that at least people are willing to hear what I have to say. I wanted to postpone the plan until I hired someone who would be best positioned as the podcast host and perhaps try as a conversation rather than a monologue.

But then I don’t like to be left behind.

So I thought I’ll give it a shot.

Sam Gupta 4:00

When we were thinking of putting together this podcast, we wanted to do a show focused on growth through business systems targeted at operations and finance leaders.

While there were many podcasts in this category, there wasn’t one that was truly aligned with operations and finance leaders’ interests. There were several podcasts in the ERP category, but they were focused on a specific product or an OEM.

There were also several growth podcasts, but they addressed growth from the perspective of sales and marketing.

Finally, there were accounting, finance, and manufacturing-focused podcasts. But they each went extremely deep in these areas, but not diverse enough to meet the needs of operations and finance leaders.

Sam Gupta 4:43

In this podcast, we’ll be covering several topics that touch ERP and digital transformation.

The topics could range from ERP implementation, eCommerce, the evolution of people processes, technology with growth, continuous improvement, lean, quality management, and professional development for finance and operations professionals.

Sam Gupta 5:06

We are launching 10 to 15 episodes, and we’ll be releasing one to three each week with two episodes being the most common.

We will be leaving on Monday and Wednesday, but Tuesday is the backup day for the bonus episode

Sam Gupta 5:19

You can tune in to any of your favorite podcasting platforms such as iTunes, Spotify, Google, or Stitcher.

Sam Gupta 5:27

We have been fortunate to get the attention of some highly influential guests who agreed to share their expertise and perspective with us.

I would like to bring to your attention a couple of episodes that I highly recommend, depending upon your focus, and preferences.

If you’re looking to understand the growth journey of companies through inflection points, from the lifestyle business of one to $10 million to find a million dollars in revenue, I would highly recommend listening to Randy Johnston, who’s highly influential in the accounting technology community and rated as one of the nine technology Stars by Accounting Technology magazine.

I would also recommend listening to Wayne Sadin, the #2 CIO on IT Leader Power 100. Additionally, I would recommend listening to Brian Burke from SellYourMac.com where we have dug through the history of how they became the fastest-growing company on the INC 5000 list three times last.

And my personal favorite with Jim Gitney, who takes us through the journey of companies as they move through different inflection points, and how the need for people process and technology changes.

If you’re looking to grow your business using social media, and how operations and finance leaders can take advantage of social media for their personal growth. I would recommend listening to the LinkedIn influencer, Corey Warfield from CoryConnects with nearly 250K followers, who break down the LinkedIn algorithm secrets and how to win on LinkedIn.

I would also recommend the episode with Sarah Barnes-Humphrey from Shipz where we discussed how she became the top 100 most influential women leaders in the supply chain globally.

Sam Gupta 5:27, continued…

If you are interested in learning about e-commerce and DTC, I would highly recommend listening to Curt Anderson from B2BTail, the author of “Stop Being the Best Kept Secret.“

I would also recommend listening to Brian Beck from Encieba, the author of the first comprehensive book on b2b e-commerce entitled “Billion Dollar B2B E-commerce.”

Additionally, I would recommend the episode with Chase Clymer from Electric Eye, the host of the podcast entitled Honest Ecommerce. Finally the episode with Michael Begg, where we discuss the growth strategies through the Amazon Marketplace.

If you are interested in listening to manufacturing-focused episodes, I would recommend listening to Jason Chester from InfinityQS where we discuss the challenges today’s manufacturers face with changing consumer behavior.

You should also listen to the episode with Chris Luecke, who’s the host of the Manufacturing Happy Hour podcast where we discussed industry 4.0 trends and how manufacturers can take advantage of them.

Additionally, you may want to listen to the episode with Joe Sullivan from Gorilla 76, who’s also the host of the Manufacturing Executive Podcast, where we discuss why manufacturers need to rethink their marketing with COVID-19.

Finally, the fun episode with Greg Mischio from Winbound, where we discussed what CFOs need to know about the value of content marketing, and why it matters for manufacturers with complex products and long sales cycles.

If you’re interested in ERP-related topics, I would highly recommend an episode with Erin Koss, CPA who shares a story of an ERP project that was a massive success, despite disruptions from COVID-19.

Also in the episode with Ram Krishnamurthy, where he discusses why costing strategies matter for an ERP implementation and how to make an ERP project successful.

Sam Gupta 9:03

While I’m privileged and honored to host WBSRocks, it would not be possible without our team members and mentors’ efforts, who have always been there for us and supported us through our journey.

First, I would like to thank my family and friends for their confidence in me for letting me explore these opportunities, and for supporting me with their support.

The whole LinkedIn family provided massive support for my journey. I would like to especially thank my friend Sarah Barnes-Humphrey who has always supported me with questions and advice.

Cory Warfield, no wonder the whole world trust and respects you, this wouldn’t have been possible without your support. Brian Burke, you have always tried to help me despite my resistance to coaching. Thanks for being there and helping me.

Joe Sullivan, from the Manufacturing Executive Podcast. I know you’re super busy, but there are very few people who came out of their way to advise on how To be successful with a podcast.

Kevin Lawton from the New Warehouse Podcast, you have been super friendly with your interactions and always helped. Chase Clymer from the Honest Ecommerce podcast. Thanks for being there, my friend, your advice helped a ton.

Eric Musick from the Subscription Box Show. It’s been a huge support with your guidance. Jim Gitney from Group 50. Thanks for all the intros. They have helped in finding guests for the shows and how to build relationships with guests.

Sam Gupta 9:03, continued…

Finally, Jason Chester and the entire InfinityQS team for their support with the press release and backing us up throughout the journey.

I’m sure I’ve missed a ton of other folks who have supported us. While I’m running out of space and time on the show, and that’s the reason, unfortunately, I can’t name everyone.

But I want you to know that you all are equally important to me, and I appreciate your support and friendship a lot.

Sam Gupta 10:56

In closing, this has been a thrill leading up to the launch. And it’s going to be even more exciting in the future with the amount of traction and love we had received even when we weren’t born.

While we could mention only 10 to 20 speakers, there are at least 100 other excellent speakers who are lined up to speak and I couldn’t be more excited to interview them and share their journey with you. This is a huge milestone for me, personally and professionally.

But I want anyone who’s out there who has been self-doubting themselves in starting anything. Whether you are launching a podcast or a business, don’t overthink before you start. There might be many people who might criticize, but there are also going to be millions who will appreciate who you are.

So just be yourself and start right now.

Thanks for listening in and sharing this podcast with your friends. I look forward to having you on our show and learning a little bit about you. With that, for the love of growth and digital transformation, let’s WBSRocks.

Sam Gupta 11:55

Thank you for listening to another episode of the WBS podcast. Be sure to subscribe to your favorite podcasting platform so you never miss an episode. For more information on growth strategies for SMBs using ERP and digital transformation, check out our community at wbs.rocks. We’ll see you next time.