Connected Commerce: Knowing the Rules That Can Help You Grow

Hai Mag 00:07

Hey, welcome back to Connected Commerce. So today I am together with Leslie Hensel, who I know for many years because he she had her own company in the past and she sold it. Now she has another company. So she's in the Amazon space for a very long time. So Leslie, welcome.

Lesley Hensell 00:27

Thank you so much for having me. I'm excited to be here.

Hai Mag 00:30

Absolutely. So before we start with the connected commerce stories, if you can tell us about like yourself and what you are doing now, so that will be great.

Lesley Hensell 00:40

Okay, great. So I am a grandma in the Amazon space, not in real life, but in the Amazon space. I have been a seller since 2010, which is forever. And then

Hai Mag 00:50

Okay.

Lesley Hensell 00:52

I've been helping sellers with suspensions of accounts and ASINs and other challenging issues for 14 years. So I was a co founder and co owner of Riverbend Consulting, which I sold about a year ago.

Lesley Hensell 01:09

And since then, I have been working as a solo consultant to Amazon sellers, Walmart sellers, folks on eBay, and other platforms, helping them with suspensions and then with other difficult issues that come up that they just don't know what to do. brand registry, inventory problems, and then the category random.

Hai Mag 01:33

Absolutely.

Hai Mag 01:34

So, first of all, it is very hard sometimes to explain people like, hey, you know, you may have a suspension on Amazon, especially like, you know, I I also sold in Amazon for almost like 10 years, and we had a nightmare of 20 days. I remember like every hour we were thinking we are, you know, kind of losing thousands of dollars and finally.

Hai Mag 01:58

somebody helped us with the account we tried so many times so it's a it's an amazing work like that needs to be done when there is a suspension case or something but it's also very hard to

Hai Mag 02:11

Tell people who are like launching their products on Amazon, like growing on Amazon, who never had such an experience. So at least now everybody watching this, if you have a problem, you know who to call. It's Leslie. So Leslie, like back to the connected commerce. as you said, like I also work on the Amazon space now, it's more than 15 years, and

Hai Mag 02:34

In the past there was not even advertising. There was just Amazon. You list your products and and it works. Like even before that it was eBay. So life was pretty simple. Now it's like complicated

Hai Mag 02:46

marketplaces like Amazon itself, it's very hard to even find a person who understands even fifty percent of Amazon, including the Amazon employees themselves, they don't get it, what their company is doing. So now everything is getting even more connected, integrated with different channels, 3PL, all that stuff.

Hai Mag 03:06

We'll be very happy to, you know, kind of listen if you share as a a story, a success story with us about connected commerce.

Lesley Hensell 03:15

Sure. And my connection is the least sexy sounding connection ever. But I'm going to talk about how it won't just keep you in business, but can help you grow. It's connecting e-commerce platform rules to seller survival and success.

Hai Mag 03:31

Okay.

Lesley Hensell 03:32

So, like you said, the ecosystem of rules has exploded. back in the day when people were first starting to get on FBA at Amazon.

Lesley Hensell 03:41

There were not that many rules. It was the wild, wild west. You put up a listing, you resell whatever the heck you could find anywhere you could find it. People listed things as new that were definitely not new, broke all the shipping rules. I mean, all the things happened. And then Amazon started suspending accounts and then ASINS. And now the whole rules framework has gotten very difficult to understand.

Lesley Hensell 04:08

different categories have different rules. Advertising has a different set of rules. Walmart has a different set of rules. And so it really takes investing time and understanding the rules, not just so you don't run afoul of them and end up getting your account suspended, but also so that you can protect your account from bad guys. you can fight.

Lesley Hensell 04:31

back against people who are doing the wrong thing and you can get them out of your category so that you can sell more goods.

Hai Mag 04:38

Absolutely. Like that's very interesting, all the rules and people kind of tend to ignore some of these things, right, when they start. give us some more like concrete examples, like what should be the things that the sellers should be looking at.

Lesley Hensell 04:54

So right now, a tremendous area of suspension across all the platforms is restricted products. And that's just something they don't want you to sell for whatever reason. It might be that it scares them. So there are some products that Amazon and Walmart just don't want because they're high liability to them. There are some products that have an ingredient that isn't allowed. Think about supplements. There are foods that are not allowed.

Lesley Hensell 05:22

Well, there are a lot of people out there who will list things that are not allowed, and then you jump on that listing, or you create the same listing and you say, Well, it's on Amazon, so why are they suspending me for it? so you really have to make sure you understand the risks of those categories.

Lesley Hensell 05:40

And whether it's something you even want to go into, because I know so many sellers who've gotten stuck with tremendous amounts of inventory they cannot unload. And do you mind if I give you a really wild example?

Hai Mag 05:53

Please go on.

Lesley Hensell 05:53

So recently in the last couple of months, I worked with a client who sells in sports and outdoors. And for a long time, they've done well on Amazon by selling some of these borderline kind of products. So they're things that are allowed on the platform, but most people don't want to touch because they're just risky. So think of things like a grip that goes on a handgun. You are allowed to sell those.

Lesley Hensell 06:20

But you can see how someone at Amazon might not understand the category and suspend. Well, that's exactly what happened to them. They were selling a grip that goes on a handgun, totally allowable under the rules. So, first, Amazon suspends the product. We appeal. Amazon suspends the whole account, and in their notifications, said not just that they violated Amazon's rules.

Lesley Hensell 06:45

They claimed that the seller actually violated federal law and committed a felony because they were selling a serialized handgun, which they were not. It was just a rubber grip. It was not a handgun. There was no serial number. Well, if you don't know the rules and take the time to read through Amazon's rules, understand the laws around your category and your product, you might just say, well, well.

Lesley Hensell 07:11

I wasn't willing to let them say well because they were being accused of a felony. That that's terrifying.

Hai Mag 07:18

And what happened at the end? Like were you able to convince Amazon that it's not a felony?

Lesley Hensell 07:25

So I'll tell you, it was a very difficult suspension because people at the front line at Amazon are afraid to overturn that kind of suspension, right? With that really scary language that you're a criminal. So we ended up escalating multiple times, went to someone in the legal department, got it overturned. The account is live, everything is fine with it. But my

Lesley Hensell 07:48

Goodness, if we didn't understand the rules around that category really well and understand the Amazon rules, we wouldn't have even known how to appeal. So it's super important not only for a seller to understand the rules, they have to understand their products. There are so many guys who just resell everything, right? They

Hai Mag 08:06

Excellent.

Lesley Hensell 08:07

they will resell anything they can make a profit.

Lesley Hensell 08:09

Well, that might be okay if it's school supplies or something that's probably not gonna kill someone, but if it's anything in health and beauty, sports and outdoors, electronics, which a lot of that can cause a fire, all of those things. You have to understand the product and be able to lay your hands on it even after you've sent it all to FBA. So you can take those six sided pictures and prove that you're not a felon.

Hai Mag 08:33

Exactly. So by the way, you also mentioned another category which is my favorite and Eva's favorite is the supplements. We love consumer package goods, beauty, and supplements, but I guess as we speak, we manage around fifty plus supplement brands. And on top of it, like

Hai Mag 08:53

I'm starting a new supplement brand too, it's a dog supplement, hopefully in a couple of months. So I'm personally super interested with that too. But then there is like so many things that can go wrong with the supplements. So I just want to get your opinion on that. Like, what's your view? Like the rules versus the the supplements and to make sure that it can work on Amazon.

Lesley Hensell 09:19

Supplements are an amazing category for people who do it well. Because the people who don't do it well, they don't make any money, so they drop out, or they just can't they can't get any traction on the platform because they're not advertising well or or positioning themselves well, or they don't get the right documents and use the right manufacturer. So Amazon won't accept their products. So this is another great example of.

Lesley Hensell 09:45

Having to know Amazon's rules as well as your category rules. Because I tell you, you know, a few years ago when Amazon started requiring GMP manufacturing, I can't I had so many clients who just disappeared because they were using cheap manufacturing that was not as reliable and it cleaned out the category. Don't be surprised to see that happen again and again as Amazon continues to tighten down.

Lesley Hensell 10:14

On supplements. But the people who do it well and who understand the documentation they need and keep an eye on their manufacturer, the margins are amazing. My one caveat that I have learned though you can't trust the manufacturer. You have to trust but verify. One of my favorite phrases ever in life. I've used it for raising children for years trust but verify.

Lesley Hensell 10:40

And with manufacturers, that is so important. I worked with one company, one of the largest sellers on Amazon. they

Hai Mag 10:48

Okay.

Lesley Hensell 10:49

do more than a billion dollars a year on Amazon, huge. and they've done supplements for years. And the manufacturer for a supplement, one of their machines was not working well. And so, you know, the seal that goes on top of the bottle before the lid goes on.

Lesley Hensell 11:05

That seal wasn't gluing down properly for a particular brand. And so at Amazon, they were getting all kinds of complaints from mold inside the supplement bottles. You can't just trust that the manufacturer is doing the right thing. It only takes one bad batch for the product to get suspended, for Amazon to then review all of the products in your brand.

Lesley Hensell 11:31

for them to double check every single bit of testing that you've ever sent them, because gosh, that's a terrible buyer experience.

Hai Mag 11:39

I mean, I'm so grateful that you kind of touched to this manufacturer and the GMP certification and the manufacturer-related issues. Because if you asked me like 12 months ago, I wouldn't know much about the details of the GMP certification and what it is. Even at some point, Amazon was not even asking for it. Like everything was Wild West. But right now it's so important. And then when I started like

Hai Mag 12:06

Looking into developing our own dog supplement brand, which is a powder, then I realized that like it becomes really so much like a black box. This conversations going on with the manufacturers, and even the pricing is like from a dollar to a five dollar. Like it's like five times more expensive if you're talking to a

Hai Mag 12:30

a different manufacturer. And then first you think, hey, you know, maybe these guys are, I don't know, like trying to charge me a lot of money. But then you realize that the other ones that are trying to charge less are maybe not doing a proper job. And that is so important because it's not only about as you s like the GMP certification. The reason Amazon is asking is just to make sure that everything is aligned with the rules. And but the thing is

Hai Mag 12:56

If there is something wrong, the consumers start complaining and you can end up losing everything, right? And also, so that's why I like that, you know, the verification. Well, I have to tell you, maybe, maybe it's on me, but I'm more into now, you know, manufacturing our own stuff because we had three warehouses and we took like one of them is now GMP certified and everything. So

Hai Mag 13:20

Because I was not able to to trust enough, let's say, the the the manufacturers right now. So we we build our own, you know, basically manufacturing facility also for some other customers. So that was not a bad investment, not only for our brand, but I can I can definitely understand that.

Hai Mag 13:40

So that's a great story. So we talk about the rules and the connection with you know, being successful on Amazon or Walmart. Walmart is also getting more and more like there are more and more rules on Walmart side too. Happy to listen happy to get another maybe connected commerce story from you as well.

Lesley Hensell 14:00

Sure. So let's talk about how knowing the rules can help you to grow

Hai Mag 14:04

Okay.

Lesley Hensell 14:04

because that's exciting. Usually people see the rules as something that only keeps you from growing on Amazon. So I work with a client who sells an over-the-counter drug and

Hai Mag 14:16

Okay.

Lesley Hensell 14:17

it requires FDA approval and it requires all kinds of documentation.

Lesley Hensell 14:23

And they were deciding to go into a similar subcategory to what they already sell. They took a look at both of these subcategories and looked at the top hundred sellers and saw how many of the products either didn't belong in the subcategory or they were violating FDA rules or they were violating Amazon rules or sometimes all three. And so I know there's the magic.

Lesley Hensell 14:51

Report violation on Seller Central. We all know that that goes into the void and no one ever does anything with it. but first we did some report of violation in this first subcategory, and then we started escalating throughout Amazon because we know the rules. We know Amazon's rules, we know the FDA's rules, I looked them all up, I read all the things. we know how to approach it. Again, this took

Lesley Hensell 15:16

Multiple escalations, but ended with taking down 23 ASINs in this subcategory, which vaulted this seller up in the rankings on that subcategory is dramatically helping their sales. And so now we're cleaning up the second subcategory for a new product launch. So this isn't being black hat. This isn't being a bad guy. In fact, in this case, we actually made the platform safer because

Lesley Hensell 15:43

There was a child packaging issue that wasn't being followed by a lot of these products where kids could eat this over-the-counter substance and but easily and shouldn't be able to. And that's probably what got it taken down. but we cleaned up the category for the legit sellers, and you know, the bad guys are the ones who were sending in the products that aren't safe for consumers.

Hai Mag 16:07

This is an amazing story and and they do it right. The others are not doing it in the right way. So definitely they shouldn't be selling it because that creates an advantage for them, maybe a price advantage. Maybe they don't pay enough money for the certifications or they don't spend the time. So I perfectly understand that and I think it's an amazing story. I also think that, you know, one of the things that you mentioned about like, you know.

Hai Mag 16:33

Everybody loves the supplements category. Why? Because everybody thinks, it's like the cost is a dollar and I can sell it for five dollars, so the margin is five X. Well, yes, but not for everybody. And like you need to put efforts, like and also the the more difficult it is, like there is more certification required, maybe more stuff is required. Of course, then you will have less.

Hai Mag 17:00

competition. If it is so easy to enter the market, then I think then basically there are some categories like that and products like that. Then everybody is trying to sell the same stuff. And then it becomes pretty much like a price game. And then there is no margin. So if it's a high margin product, it's normal to have to have to to do some investments into that too.

Lesley Hensell 17:25

Totally agree. And then once you've built what should be a moat, because you're doing all the right things, you have the certification, you got the FDA approval if that's required for whatever you're selling, you're using GMP, you're doing all the things, it is not a bad idea to take a look at who is ahead of you in the rankings or just below you. You don't care about, you know.

Lesley Hensell 17:48

Product number 532 in your subcategory, but you care about the top hundred or the top hundred and fifty. Are they actually following the guidelines? Do they actually have the active ingredients? I know you can't test everything, but a lot of times you can take a look at those listings and decide, I'm gonna test by 10 of these. These 10 look really suspicious.

Lesley Hensell 18:10

Right. I'm gonna test just these things. I'm gonna look at them in my own hands and see if I'm gonna try and report these because it's funny, as much as Amazon takes down products, there are so many bad products that are never taken down. And I don't think there's anything wrong with policing your category and subcategory as long as you do it the right ethical way.

Hai Mag 18:30

You already gave me this idea because very interesting that of course I can understand why Amazon is not able to take down every single listing because there is a lot of knowledge, expertise required. Like just to make it even a more precise example, like I said we're working on a dog supplement, which is for the skin and coat health, and it

Hai Mag 18:56

You know, for that the best ingredient is omega 3. Ingre, you know, the the po the problem is there is a specific version of omega 3 is really helping the the skin and the coat like to shine and you know like less less problems with the with the hair and all that stuff. But the the challenge here is like then we figure we we realize that the

Hai Mag 19:23

Almost 75% of the supplements are not using that specific omega tree, but they are all claiming that they are helping with the issue. But without that specific version, it has no value. So, I mean, just give me the idea. Maybe you know, like we should be pushing, like we thought about it, like to push it more from a marketing channel. Hey, this is not the right way, this is the right omega tree.

Hai Mag 19:52

But now you're giving me the idea that maybe this is like a false claim, like because it's it we know that it doesn't work at all. It's just that people probably it has a placebo effect. I'm you know, helping my my my great friend, my dog, you know, in some way is a placebo effect. But in reality, there is no there is no real effect of using that supplements. Most of them are like that. So you give me a great idea here.

Lesley Hensell 20:19

That's a great point. That's a

Lesley Hensell 20:21

great point. Because it that is a really great thing to market for you, right? Because you can point out in your own listing, hey, don't buy the one that's this, because that is not that is not the right omega three. but Amazon does not like claims that are false claims. They are not allowed. And it's not just Amazon. That is something that traces back to the Federal Trade Commission.

Lesley Hensell 20:45

And the Federal Trade Commission does not allow claims on Amazon, not just false claims, but claims that you cannot back up. That's why it's so hard sometimes in supplements and so hard in beauty, because you cannot say this makes you younger, or your digestion will be perfect after you take this supplement. because that's a false claim. You cannot back it up. So they don't like that kind of thing.

Lesley Hensell 21:13

There's a good chance that you can get some of them taken down, especially the egregious ones. There's a difference between listings that say this omega three might help and the ones where, you know, your dog is gonna shine like the sun after taking this omega three.

Hai Mag 21:29

Exactly. So well, I mean that consumer package goods, like toys and supplements, beauty space, that's primarily we see all types of issues and based on our conversation I very much feel like there are just two two times of one is like avoidance, like can you avoid any of these problems? So I mean we try to tell

Hai Mag 21:58

the the the our you know customers they work with us as an agency what needs to be avoided because we always I remember we always kind of start these conversations like hey my product it just avoids cancer. Great, let's put it as a as a claim, right?

Lesley Hensell 22:13

Ha ha ha ha.

Hai Mag 22:14

No cancer cancer free. So I mean this like there is the avoidance piece which can also help as you said.

Hai Mag 22:22

like to have a competitive advantage if you are doing all these certifications and tests. But there is also a disaster phase, but at least now all the people who are listening our podcast they know that when there is a disaster, when then they need to know how to appeal and they can come back and visit your website or reach out to you Leslie if they

Hai Mag 22:50

have that problem and also same as myself, right? Like if we have any any issues like that, we know how to c we know who to call.

Lesley Hensell 22:58

Well, thank you so much. And I do love talking to people about their problems. I know that when things like this come up, or even things like the category cleaning we were talking about, or hazmat approval that you're stuck in, or brand registry, sometimes you don't even know if someone can help you. And I'm always happy to chat with people up front and review the situation and say, Yes, I think we can help or

Lesley Hensell 23:25

No, I can't, I can refer you to someone, you know, just those open ended conversations to see if there's a path forward.

Hai Mag 23:32

Thank you very much for joining us today, Leslie. So we very much appreciate that.

Lesley Hensell 23:37

Thank you again, it was fun.