In this episode of Interesting B2B Marketers, Steve sits down with Brian Beck, a veteran in the e-commerce field with over 20 years of experience specializing in B2B e-commerce.
They discuss the case study of a manufacturer of pneumatic tools managing channel conflict due to numerous unidentified sellers on Amazon, as well as a distributor selling on Amazon, and the benefits and challenges associated with it.
They also talk about Brian’s first marketing job, data-driven decision-making, Amazon's Business in the B2B space, and advice for easing the concerns of those hesitant to initiate an e-commerce initiative.
Connect with Brian Beck and Steve Goldhaber on LinkedIn.
In this episode of Interesting B2B Marketers, Steve sits down with Brian Beck, a veteran in the e-commerce field with over 20 years of experience specializing in B2B e-commerce.
They discuss the case study of a manufacturer of pneumatic tools managing channel conflict due to numerous unidentified sellers on Amazon, as well as a distributor selling on Amazon, and the benefits and challenges associated with it.
They also talk about Brian’s first marketing job, data-driven decision-making, Amazon's Business in the B2B space, and advice for easing the concerns of those hesitant to initiate an e-commerce initiative.
Connect with Brian Beck and Steve Goldhaber on LinkedIn.
Disclaimer: The transcription of our podcast episodes has been generated by a third-party AI tool. While we strive for accuracy, we cannot guarantee that all typos, errors, or misinterpretations have been corrected. So, if you come across any blunders, don't blame us. Blame the robots. (Just kidding, don't blame them either. They're doing their best.)
Steve Goldhaber: All right. Hey everybody. Welcome back to Studio 26 and the interesting B2B marketers podcast. Excited about today's show. We've got kind of a fun, special theme today, and Brian's gonna walk us through a bunch of different B2B e-commerce-related issues, challenges, opportunities, you know, whatever. Whatever we wanna say, but.
Brian, welcome to the show,
Brian Beck: Steve. Great to be here. Thanks for having me.
Steve Goldhaber: All right. Give us a quick 60-second overview of your background.
Brian Beck: All right. Well, 20-plus years in the e-commerce field. Steve, I was, I started. Started when I was two. Tell you, tell you, I just age myself now. It feels like, you know, I used to be one of the young guys in the, in late nineties and early two thousand when e-commerce was just coming to be.
And so I got into it a long time ago, beginning of my career, finished grad school. Started working for a company called at and t, which at the time was, you know, putting broadband into, you know, businesses and eventually homes. And the internet was way slow back then. And, and people trying to figure out commerce well, Over the course of my 20 years, I got into deeply into the e-commerce field.
I ran e-commerce for several companies. Harbor Freight Tools, you might know is hundreds of stores, actually over a thousand stores now across the United States and ran their e-commerce business for a time. PacSun on the consumer side and. Which is an apparel retailer. And then, you know, most recently, last six, seven years I've gotten into the B2B e-commerce side.
I, I wrote a book about B2B e-commerce called Billion dollar B2B E-Commerce. And really, you know, what's fascinating about the B2B side and why I got into it is because there's so much opportunity. For companies to transform their business using e-commerce, using digital tr, you know, tools both on the marketing and sales side to, you know, really serve their customers better.
And the ROI is enormous when companies do that. So I was privileged to get into a relatively early into a position where I was interviewing companies, working with some, some of the leading companies in the world on their digital transformation. So I've been doing that now for about six, seven years.
And these days I'm the managing partner of a company called, we Work on. E-commerce and Amazon specifically for B2B companies. And they also have a thought leadership series called Master B2B where we take on some of these issues and talk about them with manufacturers and distributors. So, all right.
That's my background.
Steve Goldhaber: Nice.All right. Let's jump into case study number one and. This is the two fearful words of any B2B marketer channel conflict. It's the nice way of saying, Hey, we know, we know where our bread is buttered. I don't know, is that the expression? But hey, yeah, but we wanna do something else.
We don't wanna upset anyone, but we still want to grow our business. So that's the essence of, of this case study. So go ahead and take it away.
Brian Beck: Yeah, Steve, well get, you know, it's interesting because there's a, an enormous fear. Of channel conflict, as you mentioned, particularly amongst branded manufacturers.
Right. You know, for many, many years these companies have gotten their bread and butter, as you say, from, you know, traditional distribution from retailers they sell to, from distributors or dealers. They stock the product and resell it. And that model is, is still very viable, but it's also changed. And, and, you know, manufacturers these days have a mandate to be thinking about, well, how that end customer is really needing their product, wanting to learn about their product and buy the product.
So, You know, we worked with a commercial lawnmower manufacturer. This is a company that makes, you know, they make products that are used to cut enormous lawns. They, you've seen these things. They go 35 miles an hour over the lawn and there's zero turns. They spin 'em and they spin around really fast and that they really efficiently cut lawns.
And so this is a, a global company. A lot of their market is here in the US and North America, and they have dealers and distributors all over the US in particular, but also the world. And so thinking about the, you know, the, the management family owned business management's thinking about how do we, they know these things are happening in digital.
They know that customers want to buy on e-commerce channels like Amazon and other places, but they're also, you know, 90, 90. 8% of their revenue is coming from these traditional dealers. So how does a company like that, that is, I don't wanna say beholden, but really has traditionally worked through a traditional Salesforce and marketed to these folks and sold to these folks, and the dealer is really the one that, the relationship with the end customer.
How do they enable, you know, e-commerce, how do they en, how do they embrace digital for the business, while also, you know, maintaining those relationships and deepening those relationships. They were terrified. Of channel conflict. Yeah, right. The instant that, you know, go over here, they're not the only company that makes these things.
There's other big manufacturers out there that make these, these lawnmowers. So the way they started, which is really fascinating, they started with Amazon. They said, well, number one, we don't have any real technology tools or knowledge or. Organizational muscle to get into this business and understand how to market to customers, how to reach these customers through search engines.
How to sell through e-commerce and digital channels. So the reason they started with Amazon, number one. So you got this next generation, right? The third generation coming in, the folks are all, you know, Amazon shoppers or e-commerce people, they, they understand it natively. Cause they grew up with it. Well, they said, let's start with Amazon because it'll help us make a case to the family, the, you know, the older generations of the family.
Yeah. That people actually will buy our products this way, and the traffic was already there on Amazon. You know the structures there on Amazon too. They know the infrastructures in place, the buying infrastructure prime and all these things. They could use Amazon's fulfillment centers using fulfilled by Amazon to fulfill the orders, and they launched this program.
Now they were nervous again about. Channel conflict. So they went slowly. They started with accessories and parts, and what they found was when they launched, they, they started to see orders come in and they looked at where those orders were coming from. And the fascinating thing they found is that most of these orders were, were places that were more than 70 miles away from any dealer location.
Oh, yeah. Okay. Makes sense. Yeah. So it's, yeah. So all incremental sales, they got two and a half years into this. They have zero complaints from their dealers. In fact, their dealers e-commerce sales went up in part because Amazon, they, their presence on Amazon, well, most folks don't realize it. Amazon is a search engine.
It gets 70% of product search Now. So at the end of the day, they're improving their presence in the market and it lifted their dealer sales. Guess what? No complaints. And now they're launching direct e-commerce. Now they're gonna be selling directly to end buyers and to their distributors and dealers through e-commerce, through a B2B e-commerce site.
You know, the third generation came in, he convinced the earlier generations, you know, the CEO and the, and the other C levels that, you know, this is something that's real. We can sell our products this way and it's not gonna completely disrupt our channel.
Steve Goldhaber: Yeah. So it's interesting. So I've, I, one of my clients a long time ago was not in this space, but a large B2B manufacturer.
Relied heavily on distribution dealer network. And it's so funny because they had the simpler approach. You know, they're like, well, maybe, maybe we just start with some parts and accessories. You know, it's always the low price point, non-threatening products. And then comes the real question, right? Which is the o your big ticket item?
Are you gonna do it? So, Help us understand, like how did they make that decision to say, we're going after it, we're gonna go after the big ticket stuff?
Brian Beck: Well, it was, it was a, you know, it was, it was a crawl, walk, run. Right. So it was understanding, they, what they did was they incrementally added more product.
So they started with, again, the low price, as you mentioned, the parts, the. They added then accessories, which were, you know, the components, the other things that you could add to the, to the mowers. And now it's a matter of now they realize that people will buy these larger items online and they're not concerned as they were about the, you know, dis intermediating the traditional dealer.
What they've come to realize, Steve, is that the dealer and the distributor plays a different role. If the dealer and distributor really is adding value to that end customer, they're gonna be able to. You still capture that sale because guess what, it's about service. Mm-hmm. It's about recommendations about how you utilize those products in the field, literally in the field, and this and that.
If the distributor and the dealer are truly adding that kind of value, they're not gonna lose the sale to any other kind of, you know, to, to other types of yeah. E-commerce transactions, because let's be honest, Amazon and e-commerce. They play, you know, when you need the product quickly in short order, and typically in small quantities or even, you know, wanna place an order for convenience because you already know what you want, even if it's a large high ticket item.
They're, they're gonna place that order now on e-commerce. And they don't need a sales rep. They don't need a dealer. They don't need the consultative aspects. But if you're a distributor or dealer sitting out there and you're just, all you're doing is price and assortment, you're, you know, it's, you're low price and you're, and you're just making the product available, guess what?
E-commerce does that better. Marketplace marketplaces, Amazon, they'll do that better than you potentially. You've gotta find a different way to differentiate if that's your, if that's your business model. My opinion.
Steve Goldhaber: Any issues with this company experiencing showrooming? So showrooming is where essentially, you know, I go into the showroom cuz I wanna kick the tires on something.
I get educated by the sales force and then I go, all right, I'm good. I leave, I buy it online. Any, anything like that happens?
Brian Beck: Not anything measurably, you know, you can't assume that every sale in e-commerce or to Amazon or through Amazon is incremental. Cause it's not. There is some channel shift, but you know, again, not getting in the way the customers is really, you know, the.
The goal of the smart manufacturer, my, in my. Experience and what this company experienced. I would say actually though quite the opposite. What's fascinating about this too, Steve, is that when a company sells through Amazon, if they take the right approach, number one, they can, they can manage the pricing.
So it's not a race to the bottom on price. But also, you know, if you take the seller central approach on Amazon, you can actually. Understand where those orders are going. You, you can actually get more information from, from an Amazon program than you can through a typical distribution or dealer channel.
So guess what? When a customer buys something on Amazon, if it's shipped from the manufacturer to that end customer, they know exactly where it's going. And the dealer that's in that market, who makes pro, who provides service, aftermarket service on this equipment and this, this equipment stays in the field for 20 years.
Right. So there's a significant amount of service business attached to these, these lawnmowers. Well, that dealer, even though it was bought on Amazon, can now knows that that product is in that market and, and they can provide that service. Amazon is not providing service on lawnmowers. It is. Right? So this is a, so the point is that, you know, by, by getting out of the way of the end customer, let the customer buy where they wanna buy.
I have another client that said, you know, I think one of the smartest things I've heard is we wanna just. B, where the customer is, whether that's on Amazon, in the dealer channel, in Home Depot, in Lowe's, and whatever, you know, whatever channel they're in. We want to get out of the way of that customer and present our brand the best way we can.
And all of our differentiation points. Because at the end of the day, the ultimate customer, in our opinion, has the power. And I agree with them. They now have the ability, they have so many channels they can buy from. This is transparency coming to b2b. It came to B2C a long time ago. It's now here in b2b, so it's interesting with the dynamic.
Steve Goldhaber: Awesome. All right, let's jump into case study number two. This is another story of the B2B company leveraging Amazon. This one has to do with another manufacturer that took control of their own kind of channel.
Brian Beck: Tell us about this one. Yeah. This one is was a, was a different situation. This is a manufacturer of pneumatic tools.
So pneumatics are basically air tools. They're used in commercial industrial applications. Some d i y people use 'em in home. Not too many. You think about abrasives, like, or, or a sander or, or you know, those air guns that shoot nails, that sort of thing. But it's all, you know, a lot of it's used in production lines and auto body, you know, repair, things like that.
They basically improve surfaces, right? They finish surfaces, whether that's metal, wood, what have you. So this company a couple years ago was faced with a situation where they had dozens and dozens and dozens of companies selling their products on Amazon, and they had no idea who these companies were. So, you know, this is a common thing with branded manufacturers where they won't know who the, you know, who the resellers are on Amazon, and it's a pain point because oftentimes those resellers.
In order to win the sale on Amazon, they'll just drop the price. That's the only advantage they have. That's the only way they can, what they call win the buy box, right, on Amazon. So this company, you know, had this situation where they were getting complaints from their traditional dealers, like, you know, the big distributors out there and retailers and dealers that were carrying their products because, you know, they'd, they'd find product on Amazon, the dealer or distributor would, that was below the price that this company is offering to sell it to them for, because.
These folks would get, you know, a few extra units and they'd be sitting in their garage, these resellers, and they'd put 'em up at, you know, below what the, you know, what, what the prices were just to get the sale. And so they were dealing with all this channel conflict, which was, and they said, well, hey, we're not selling on Amazon.
We're not, well, yeah, but I see it on Amazon and like you guys, so it's this crazy situation where they, they, you know, they had, they had to get control of it, right? So they also realized that their products, their product, and their brand names, We're getting enormous amounts of search on Amazon. So, you know, Amazon again is a search engine and it's a place where people go to buy, you know, research and buy product.
And what's happening in the market, and this was happening in this company, is that when they searched on, you know, sort of general terms related to their product category, like pneumatic sander or what have you, you would see all these products and these are companies they'd never competed with before showing up Yes.
On Amazon from brands they didn't know and they're doing, we have tools that run this stuff. We're doing millions of dollars in sales on individual products, these brands, and they're, and they're not all cheap product either, and a lot of it's coming out of Asia and it's, it's really fascinating what's happening.
The competitive dynamic is changing. So not only did they not know who was selling their product on Amazon, they also have all these new competitors coming in, taking share from them on Amazon. So they had to fix this. So, so we helped them do it. Essentially what we did was, was several things we inventoried, you know, the resellers we first looked at who the heck these people were.
You know, the good news is these days is you can find out, you know, who a lot of the sellers are, and this isn't restraint of free trade. This is just managing the strategy of the channel more effectively. So they decided we're gonna get in and. Create a proactive program here. We wanna sell directly and control our destiny on the number one search engine in the, in the United States, arguably the world.
And so they instituted a number one inventory of this. Then they, we helped them put a foundation of channel control in place. And so we talk about this it's really about making sure that you have. A well-structured distribution strategy for how and where your products are sold. This is all, you know, legal, a law.
You know, law. There are legal specialists that work with this. We often find ourselves working with, you know, the law, the law practices or the law internal legal counsel at our clients where we're helping them establish distribution policies, internet policies for resale. There's something called M A P, minimum advertised price policies.
Mm-hmm. Which are, can be put in place and there's some, there's some other things you have to, you know, when you do this work, you have to overcome some of the Sherman Antitrust Act and Langham Act, or there's these, these federal statutes that govern free trade in the United States. That varies internationally.
But at the end of the day, there's a legal structure and a a business structure you can put in place that will help you manage this and regain a level of control over your brand presence. On Amazon, there's a something called Amazon Brand Registry, which allows you to do that. As well as manage the the retail pricing that's, that's displayed.
So this company launched a direct selling program. They launched a brand and and content management program for Amazon. They have gained control of the channel, so they've authorized specific resellers for Amazon, which is great cuz then when a company, when a customer buys the product on Amazon, they can now be assured that it comes with the.
The warranty, the guarantees, the service is necessary. These are complex products that require service, just like our lawnmower company we talked about. And so there's, there's, you know, there's a lot of sort of goodness in the customer side in terms of making sure they're getting what they're paying for and, and they're getting the brand promise that the, that the manufacturer puts out there.
So counterintuitively, Steve, when you think about, you know, having a proactive Amazon program actually reduces the channel conflict. In the case of this manufacturer and has led to that, they have had no issues with their dealer base. Their dealer base and distributors applaud it. They feel like they're more strategic now in working with their key distributors and, and dealers.
Their, their dealers have told them that, and so they're a huge fan of this approach to, to ad addressing this. They're in a much better situation than they were a couple of years ago.
Steve Goldhaber: Yep. It's always interesting, you know, the delicacies around the power of e-commerce. I remember I was, this wasn't a B2B company I worked for, it was B2C and.
They had a Salesforce and all of a sudden when we wanted to sell online, it was kind of like, wait a second. You're taking away my sales. So it's always just this inherent conflict and we actually, in this example, we worked out a pretty good solution in that we just said, look, if you had, you know, if you're quota was for a hundred sales this month and we took five of those people from your, you know, territory, we would remove those five from the goal of a hundreds.
We would acknowledge that. Okay. Yes. We've, we've done like the address matching and yes, this was a customer that would've bought from you. And I like that solution because it acknowledged, look, we're not gonna not sell online. Like it's, it's stupid if we were to not do that right. But we also acknowledge that it does impact your, you know, footprint that you're operating in.
Alright, case study number three, we're gonna, Not jump on the manufacturing side. This one is about the distributor side. You get, it's kind of fascinating. You get to work with all different angles here and I guess the distributor is lucky to have you on their side cause you could go any route when it comes to e-commerce sales.
All right. Case study number three, take it away.
Brian Beck: Yeah, so case study three. Steve has to do with a distributor. Now, you know, selling on Amazon. Well wait a minute. If I'm a distributor, what the heck am I doing selling on Amazon? Right? Because, you know, you could argue that a distributor is just hastening their own demise if they do sell on Amazon.
But quite frankly, you know, a, a couple things that you have to recognize, I think you're a distributor. Number one, Amazon is setting the bar. It certainly has in B2C and now is in B2B with 35 billion in sales on B2B transactions. Annually, Amazon is setting the bar for the B2B e-commerce experience, right?
They're bringing the same kinds of functionalities and everything else to the B2B buyer, and they're filling a gap, quite frankly, that most distributors are not. So, you know, in terms of the, the efficiency, making the buyer's job easier, that's what Amazon does. And so they're doing that in b2b. And if a distributor, you know, if a distributor sells on Amazon, you could argue, well, heck, you know, they're doing it better than me.
Why the heck do I wanna sell there? Well, number one, you've got to learn what Amazon is doing, and the best way to do that is to sell on Amazon. Right? So that said, I think also there's a real, really strong business case for distributors to sell on Amazon. So let's, we, we announced earlier this year in my thought Leadership series Master B2B that we.
This is, this is the year of one of our predictions, the year of the distributor squeeze. Right? So what does that mean? The distributors are under pressure from a lot of points. Number one, you've got manufacturers selling directly, you've also got, you know, the marketplaces. So Amazon certainly is, is one, one aspect of that.
You've also got vertical marketplaces that have emerged. They're filling the gap. That a lot of distributors traditionally are not, they're ahead of them with e-commerce, and so distributors are under a lot of pressure. So if we think about what can a distributor do in a market like this? Well, one of the things that's the smart distributors are doing is they are launching private label product number one.
Number two, they're buying their suppliers, which is a roughly equivalent to that. And then they're also partnering with their suppliers, who many of these manufacturers are slow to market with e-commerce. They're partnering with them to essentially become their e-commerce and Amazon arm, right? Yes. So they're going out and they're saying, Hey supplier, let me enable you on Amazon.
You don't wanna deal with, you know, potential blow back from your distributor, from your distributor distributor channel. Let me be your Amazon, appoint me your exclusive or semi exclusive Amazon seller. A lot of distributors. Are thinking about this, and a lot of manufacturers are very open to that discussion and because they want to empower their traditional distributors and help them succeed in e-commerce.
So this distributor I'm talking about is a mid-market industrial distributor. We help them launch on Amazon, a program focused on in two areas. One was their private label products, which they make and source. Some of them they make themselves. Some of 'em they source in private label products and we're set them up in selling them through Amazon Seller Central, using Amazon's fulfilled by Amazon service.
So you get the prime, you know, two day shipping and all that. And then the other thing we did was we went back to some of their suppliers and we said, Hey supplier, you're not selling on Amazon at all. It's an uncontrolled mess on Amazon for you. Your brand is being degraded, your price is going through the toilet.
You know, hey, we'll help you fix that. So we went with them to their suppliers and we got them in some cases some exclusivity on some product together with them based on their relationships to sell these products on Amazon and be that manufacturer suppliers. Amazon partner. Right? And so they, they have close to a 10 million Amazon program now.
It's incredible. And it's more profitable it ever was. They had a small Amazon program before, and the reason is because they're, they're working with their channel and they're managing, they're helping them to manage their MAP policies. They're minimum advertised price policies. They're managing the, you know, the whole presence with the content and everything else on.
On Amazon for them. And the suppliers happy and they're happy and they're learning for their own e-commerce. Right? Yep. That's the other piece that I mentioned earlier. So it's a win for all parts of the supply chain there.
Steve Goldhaber: You know, three cases that are just really interesting. It's the dynamics of channel sales and b2b.
It's, it's just, it was once so simple. So it's fascinating to see how complex. It's gotten. All right, we're going to transition over to Q and A. So my first question for you, tell me about your first marketing job.
Brian Beck: Oh gosh. My first marketing job was, call it marketing. It was e-comm, you know, it was my career, but it, it had a lot of marketing in it.
It was really focused on furniture. So we're talking a little, we're gonna go back to. 2003, I think, or four. I came into a small company that was selling furniture online. We were competing with what is now Wayfair if you know what Wayfair is. Yeah, sure. They were a small company like we were. They raised a lot of money.
We didn't. They're, they're rather large now, and we are not, that business is not even in business anymore. But my first marketing gig was, was that I was running all the e-commerce marketing and website experience for this, you know, this privately held, it was a family-owned business. It was in the furniture business.
We were. We were drop shipping furniture to, and we had a hundred or 150, you know, furniture manufacturers that we went to. And they would place an order on our website and we would drop ship it. But my marketing, I learned a ton about marketing in that job because I, it was all about the time. It was all about search engine marketing.
It was seo. Yeah. Amazon was nascent. It was tiny. And it was all about Google. You had to get to page one on Google, and we, at the time, 2003, four. If you put up a website that was really focused on one category, like we did, we had total bedroom.com, right? Yeah. Exist anymore. So total bedroom, guess what?
Number one in Google for, for like bedroom furniture, bedroom sets, platform bed. That thing went from zero to number one in, go in like a month. You can't do that anymore, but it was it was, it was amazing. So we launched all these little sites and so did Wayfair. That's the same strategy they had for years.
They were called CSN stores. For a long time, and they would do the same thing. We would compete with them. We'd be number one, they'd be number two, vice versa. That went on for about four or five years, and then they raised about a trillion dollars and cremated us. You know, the decision to take on outside capital is always a scary one.
Steve Goldhaber: I mean, you have a family owned business, you know, they're wary of the sharks who sometimes just have a, have a three to five year window of when they wanna actually do something with the company and then, and then exit it. So, yep, it's a tough decision. What do you, you know, you've been in a really competitive channel.
Most of your career? Like what do you, what do you enjoy about the competitiveness that you're seeing?
Brian Beck: Well, what I love about, well, just being a competitive person that helps, you know, to be in a competitive field, that's always changing. I, I love the challenge of, of understanding and testing and, and learning what's next.
When I was an operator, Steve, meaning when I was the head of e-commerce, different companies, One of my favorite things to do was to do, to do testing, multivariate testing, understanding based on data, what the customer's preferences were. That's valid today on Amazon and other places and in B2B as well.
But you know, when I was in the e-commerce field, we would have, I mean, running e-commerce, we would have in some cases, millions of people in our database. We would have, you know, a lot of site traffic coming to the site. So we were able to test things both on the marketing and messaging side, as well as on the merchandising side in our e-commerce experiences.
And we could very quickly learn what the customer's preferences were. And the neat thing was, you know, was, was getting a win. It was a lot of fun when something happened and I would always challenge my teams. I'd say, guys, which one do you think is gonna win? Which one's not? Yeah. You know, so invariably I was always wrong.
You know, that was the, that was the fun part is data just tells you. So much about, you know, what what the customer's preferences are. And, you know, we see the same things these days in b2b that it's still somewhat early. A lot of this testing and, and, and learning approach. The one that's the company that has done that well is of course is Amazon.
It has the pockets to do it, testing and learning different programs, but. To me the, one of the most fun parts is really that, you know, the data driven approach that, you know, helps us to make the best decision for the customer. Where do you see
Steve Goldhaber: Amazon going down the road, right? Like most people would describe Amazon as a frenemy.
You need them, but you don't like that they take a big chunk outta your, outta your sales. Where do you, where do you think they'll go to, to kind of, you know, they obviously need to continue to grow their business, but they can't alienate companies. What, what's their next kind of play? Well, you know, it's interesting.
Brian Beck:
Amazon looks for. No, you saw, it's interesting you saw Jassy and the c e O of Amazon talk about Amazon business for the first time in their shareholder letter. That's never been, never been talked about. Bezos never talked about Amazon business. So B2B is clearly one thing they're leaning into heavily because it's, it's become the fascist growing part of Amazon.
So, What Amazon does though, is they look for inefficiency. They can be solved by what they're best in the world at, which is really technology, relevancy of the customer experience, making the buyer's job easier, and then looking at, you know, these new categories. So they'll get into and test a lot of different things.
You've seen their forays into healthcare. I'm sure you know aws, Amazon Web Services was a, has been traditionally a huge business for them. Very successful Amazon advertising, you know, for the marketers here, Amazon advertising is an enormous profit center for Amazon now, and so you know, they're gonna be leaning into those things.
I think where we are near term with Amazon is there's a focus on profitability. There's a focus on making sure that they're being mindful of, you know, where the business really is succeeding. They're still gonna test and learn, but they're getting. Looks to me like they're getting more disciplined.
Around where they're, where they're doubling down. Right. So B2B advertising, they've recently cut back on some of the healthcare investments. You may have seen that. So where does Amazon go from here? Well, I think they continue to that focus. They continue testing and learning, but in a more focused manner.
I think they will continue to, Penetrate new businesses and try new things. But here's an interesting stat for you. Like if you look at, for example, their private label business, right? So, you know, all these manufacturers are terrified of Amazon going in and taking learning from their products and going in and coming out with their own private label.
Okay, fine. They've done that in a few cases, but guess what? This is not very profitable because, you know, think about these products. Are you doing it's com, they're commodity products, right? So commodity products inherently are less profitable. There's not a lot of margin in them. They wanna bring more value to the Amazon customer.
Well just, you know, sure. Okay, great. It's all about the customer, but at the end of the day, you've also got this pressure to be profitable. So I, I think, and, and they've already announced some scale back in some of the private label product last year. So I think you know that that whole fear of teaching Amazon a business, Number one, you're not gonna teach Amazon anything.
Amazon will learn if they want to. And number two, it's, it's, they're realizing some aspects of their business just aren't, aren't necessarily in the best long-term interest of Amazon and its shareholders and, and its customers. So, yeah. So anyway, I think you're gonna see some changes, some pivots around some of those things as well.
Steve Goldhaber: Okay. All right. Final question. So this is advice you have to give the audience. So if someone is in a position where they've contemplated e-commerce to compliment their existing sales or distribution relationships, but they're still nervous and they don't wanna be the person that starts this initiative because it's just, it's too risky, right?
What are some things that you can tell them to ease them into it?
Brian Beck: Well, you know, it's kind of getting back to one of the case studies I shared. This always depends on the size of the company and the, and the structure and where you sit in that structure. If you're the ceo, I'd tell you to get, get over it and get some people around you that, that can help you implement e-commerce and digital, and you just need to drive change and it's gonna be uncomfortable.
And that's a good thing. That's not bad. It's gonna be, it's, it's not gonna be a, you're gonna have some folks in your business that are gonna potentially resist. Your sales team might say, Hey, you're taking our sales away. Your channel, your channel team might say, Hey, you're gonna, you're gonna destroy all of our traditional channels.
Not true. So I would say get over it. If you're in a different position in the company, then it comes down to, you know, kind of crawl, walk, running into it and building a case really for, again, getting back to that case study. Amazon is a great place to start with this because you can, if you do it well, you can, you can maintain your pricing, you can gain control of the channel, you the infrastructure, the traffic is already there, and you can build that organizational muscle around e-commerce.
Using a preexisting infrastructure that Amazon delivers and there's best practices there. You don't have to invest as much in technology as if you do it yourself. So I argue Amazon's a good place to start. That said, if you are in an organization where you know you're fighting and, and, and there's, there's a c-suite that does, does not get it, and will not change, will not allocate any investment.
Find another job.
Steve Goldhaber: Yep. Always. You know what? That's great advice. My wife was at a conference once, she started out as a C F O in her current role, and she was, she told a really good story about a, it was a C FFO conference, and we were talking about like the relationships between CFOs and CEOs, and that was the advice of, of this CFO was like, if your CEO doesn't wanna be a partner, doesn't wanna talk long term, just wants to transact, get a new job, you don't want that job.
Right? And it's just, it's just good advice. Sometimes you gotta know when to just say, all right, it's not a good fit. I'm out. All right, and speaking of, I'm out, that is my segue into the conclusion for the podcast. I really enjoyed the conversation today. I loved opening my own mind into the world of B2B e-commerce.
And if anyone from Boeing is listening, perhaps by the end of next month, they'll put a dream liner up on, on Amazon. We'll, we'll be the first, we'll have inspired the first commercial airline. I don't know, is that a, is that a half a billion dollar purchase? I'm not sure. I'm not well versed in the, probably in the Dreamliner space, but Anyway.
Brian, I really enjoyed your conversation and thank you to everyone for listening to today's show. Take care.
Brian Beck: Thanks, Steve.