Andrew, it’s great to have you aboard. You’ve been to several conferences and expos recently. What is it that grabbed you about NY KnowGO? What most excites you about it?
A lot of conferences I see are focused on the seller or advertiser – most people attending are large retailers. At NY KnowGO I’m excited to help retailers understand how brands might be thinking about things. While everyone’s end goal may be the same, we might look at things slightly differently.
Your company has a cool backstory. For the benefit of those who might not be aware of it, can you elaborate on the company and your role there?
We actually started off as a retailer with stores in Manhattan, but began making our own products to stand out. Quite quickly lots of businesses came to us – and particularly our products - for their office supplies. As time went on we started testing our products online: gauging how they sold on other websites.Then in 2011 we tried selling on Amazon; that was the first time we realized that we were more than just a unique retailer. Rather, we were doing well promoting our own brand of items. In 2013 we started selling on Staples.com,which then led to selling on Office Depot, then Walmart, Target and pretty much everywhere in the US where office products were sold; and then across Canada and now Europe.
Can you offer some insight as to the distribution channels JP&E uses? For example, marketplaces and Direct-to-Consumer (DTC)?
We mainly ship directly to customers, also known as a “drop-ship vendor”, so for the most part the orders come through via our channel partners' websites. We then ship that order out within hours. But there are some exceptions, some channel partners will purchase big movers before season (if they’re affected by seasonality); and with Amazon, we sell through their fulfillment centers – but we’re still primarily drop-ship vendors. Our channel partners’ websites capture the sale and we ship the products (usually thousands per day) directly to our customers.
Have you encountered any difficulties with this process, or has it always been smooth sailing?
Initially, when it first kicked off with Staples, they just assumed we connected via EDI (electronic data interchange) and had everything set up already. So, that was a scramble to begin with. But over time our systems caught up to the promises we were making. In the beginning we required a lot of manual labor until things improved. A lot of channel partners can often make changes [switch EDI around every three years] and thus it can be a challenge to keep up with them.
Where do Sponsored Product Ads fit into Jam Paper’s advertising strategy?
We realized that, especially when we were new, we had to pay to get our items seen. Every site has their own algorithms for search and how they show items. Oftentimes we would do long-tail key searches and work out the best places for our products to show up. Every site is different in terms of how they show items. So the question was: what tools are available to us, how do we show up? This led us to variations in terms of tools. Some sites are much further ahead of others in terms of others. Not so much competing in terms of generic search (sites usually have big, winning large brand already showing up/own-item or private label already showing up). For us it was about getting those long-tail keyword items to appear on their respective searches.
Often, a retailers’ search results wouldn’t even have enough volume to show any relevant results for which we wanted our item to show up. Now - when those searches occurred, our item – which always was the best result - would appear.
You mentioned that, in terms of SPAs, some channels you work deliver a smoother experience than others. Can you elaborate on what separates one from another?
Frankly the better the tool, the more accurate and the more targeted JAM Paper’s ad could be. This means a better return for us as the advertiser and a better return for the retailer as they can show the best possible ad possible. And naturally the customer experience is also better. We spend more, we have a better return and the customer sees a better item: everyone wins.
What are your considerations when it comes to co-funded campaigns? Does Jam Paper & Envelope make use of Co-funded Product Listing Ads (PLAs)?
We’ve certainly tested them. As the brand though, we’re willing to spend more time to get the best results. When we’re helping to just support campaigns it’s a little broader. It might mean great results on branded searches... but when building out more granular campaigns, or spending a lot of time targeting long-tail keywords, it might not make sense for the retailer to head in this direction. So, when possible, we choose to handle it ourselves. In no way does it mean we’re spending less. And it doesn’t mean we’re not looking for support. It’s quite the opposite! We’d be willing to spend more – we just want to make sure it’s profitable spend.
Let's drill down to Amazon a bit more, on which you are a third-party (3P) seller. JP&E goes way back to the 70s - but when you launched online you had a brand-new environment to consider. Presumably you faced competition from “bigger” more established players? And yet you still trumped them. What happened?
Retail’s very expensive. Every time you build out and launch a new store it costs money. Expansion is expensive. In 2007, when I launched the website it was just an extension of the store. We began with Google AdWords as one of our first advertising tools. In 2011, when we launched on Amazon, it built off that. We already knew the products that sold in retail, so we simply moved them to that online environment. In that traditional retail environment, it’s difficult to compete with the largest retailers, who have much larger pockets. Whereas online we were able to compete.
And that also counts today. We understood the product, we understood the environment better than many of those bigger companies' decision makers. Amazon gave us the tools very early to take advantage of this. As some examples - Amazon pushed us to make pack sizes that the market was looking for; improve our photos; or write better copy and descriptions. Amazon sales lead to more sales. Whether it’s advertising or even organic, you get more momentum which leads to higher rankings which leads to more sales.
Amazon has been linked with shifting many smaller vendors towards their seller (3P) as opposed to vendor model. What should brands be conscious of when looking to master this method of success on Amazon?
A traditional wholesaler or brand is much more comfortable as a 1P seller. It’s effectively another wholesale channel. Third-party sellers’ responsibility doesn’t end once they’ve handed their goods to the warehouse. Rather, they’re responsible until the consumer makes that purchase. So it’s not truly DTC but it’s very close. You’re now responsible for the product listings, the rankings, the advertisements – pretty much the customer experience. Whereas, as a 1P or wholesaler your responsibility ends when you hand over the merchandize. Because we started off as a retailer first, unlike most brands, it was sort of in our DNA. It made more sense to stay as a 3P seller. We were never the traditional wholesaler. Even in our wholesale business today, we’re a drop-ship vendor. We have our own warehouses; everything is done by us on the same day and ready to go.
Where do you stand on your relationship with customer data in relation to how you sell through other channels?
From a brand point of view, the retailers always had the customer information. What surprises people can be that, as a 3P seller, the majority are not also selling to retailers. So the fact that they have this data and can copy or private-label a product may come as a shock, but retailers have been making private-label products since before I was born!
It does happen – and it is more visible on Amazon, you can see it in the search results. But it happens to us on other platforms too. For us, it’s almost a compliment. We had a good product, they saw it and copied it. No one’s private-labeling or copying a product until you had a good run. Those sales need to warrant their making. You can’t sit back and relax after making a few products. That no longer happens.
You offer 5000 listings across 12 marketplaces, so it’s clearly a channel you value. How do you see the role of the marketplaces evolving for brands in future?
There’s a fine line between being a marketplace and being a drop-ship vendor. We like the marketplace model because it’s open. It allows us to spend our marketing support on our best items. But when it goes through a retailer there’s typically a person to speak with, a merchant: you have to discuss the items and be on the same page. Often, outside relationships come into play. Marketplaces are a more open model.
If we have the best item today, we typically can move our product up in rankings and they get purchased as a result. But we might have the best products through a retailer and not be able to get that item online.That being said, there are target retailers who do very well and will be around for a long time. For a brand, marketplaces offer an easy way to launch items.You can get items online immediately, test them and get selling. From a brand perspective, it’s almost a no-brainer to test them out.
As retailers and platforms now ask for advertising, you might consider it as a kind of “sales tax” applied on sellers. And the result of everyone paying this is that potential sales uplift disappears. How can brands make sure their bottom-line remains unaffected?
It’s always in your best interests to be channel agnostic. We’ll sell office supplies anywhere they’re sold - and so to avoid a particular model is not in our best interest. We’re going to learn the rules of the game on everyone’s channel/marketplace/site (a lot of them are hybrids at this point anyway)– and make the best of it whatever the platform. We’ll never try to move sales from one channel to another, or hope, say, that Customer X orders from another place at another time.
From a brands’ perspective, we look at it this way: The customer belongs to a particular brand or channel. Let’s assume they’re not going to move – how do we do the best job selling on that channel? At the end of the day, there isn’t that large of a margin difference between marketplaces and retailers. They all have their own fees and demands – we try to consider them equally in terms of our strategy.
NY KnowGO is back for 2019. If you like our website,why not follow us on Instagram, Facebook, LinkedIn, and Twitter?
How can single-brand retailers succeed in the shadow of the platform economy? This article explores the opportunities and pitfalls associated with selling through online marketplaces.Read more
This week's roundup includes a superb article from The Business of Fashion. You'll also find eye-watering statistics around changes to online retail (eConsultancy), and musings on the power of platforms (Ben Thompson's Stratechery blog).Read more
Discovery shopping expert Zulily works with partners to create successful "discovery shopping" campaigns. We caught up with Head of Integrated Marketing and Partnerships, Brian Doherty, to learn how they empower global and boutique brands - from sampling programs to co-op marketing funds.Read more