Outsmarting the Competition With Advanced Amazon Tactics with Kusha Karvandi

Andy Splichal:

Welcome to the Make Each Click Count podcast. On today's episode, we have the pleasure of speaking with Kusha Kurvandi, an Inc. 500 entrepreneur who has successfully launched and exited multiple seven and eight-figure ecommerce businesses primarily focused on the Amazon platform. Kusha is also the brains behind Kazam, an innovative AI-based tool that's revolutionizing Amazon advertising. Hi Kusha.

Kusha Karvandi:

Thanks for having me.

Andy Splichal:

Thanks for joining us. So, let's start. I mean, with such a robust background, can you share some of the core strategies that guided your success in driving sales and scaling different brands on Amazon?

Kusha Karvandi:

Yeah, in the past, it used to be that you could just launch private label products on Amazon and you could see success. But nowadays, I would say in the last two, three years, the game has changed quite a bit. And every year it obviously gets a little bit more challenging where you can't sell another me too product on Amazon. And what I mean by that is you can't sell a commodity. You can't sell just another dog leash or another water bottle. You know, there needs to be something unique about what you're selling. It needs to be differentiated. So there needs to be a little bit more thought that goes into it in terms of the design improvements that you make or functional improvements you make to your products.

Kusha Karvandi:

And in many cases, a lot of what I'm doing and have been doing over the last several years is focusing on more engineering. So custom molds, custom tooling, things like that to really differentiate the product and potentially make it so that you can get some intellectual property around the product, like having design patents, utility patents and so forth that you can then use to build a moat of defensibility around your product.

Andy Splichal:

Interesting. I mean, we've had a lot of attorneys on lately talking about patents and protecting your property. So that really fits, fits right in there with that. What stage do you get to before you look at getting a patent or protecting your product, copyright or trademark or, I mean, where, where do you get into the creative process before you look at getting that?

Kusha Karvandi:

Yeah. In most cases, what I recommend is first finding a category where there's not too much competition but there is demand. So you want to find kind of that balance between there is some demand and you can use tools like Jungle Scout, for example. They have a chrome extension which will show you not only sales, but, you know, estimated sales of products on a search results page, but it'll also actually give you based on whatever keyword you searched on Amazon, it'll tell you an opportunity score. So it'll say, okay, this is a low opportunity score because it has low demand and high competition. A high opportunity score would be something that has high demand but low competition. And so I try to find something that's maybe a level six or above, a score of six or above, which would be like medium demand medium competition or high demand medium competition. Something like that would be fine.

Kusha Karvandi:

And then once I find a category like that where it's a little bit more blue ocean in terms of competition, I'll look for what are the top products in that category. And I'll look at the reviews, for example, and look at those three star reviews, because the three stars are very honest and less likely to be competitor sabotage. Like maybe fake one star reviews or five star reviews can often be fake from the seller themselves. So the three stars would be very honest. And I'll look at those for ideas of how to improve the product. So that way when I go to a potential factory in the US or China, wherever it may be, I can then take this feedback and say, hey, can you make this product? But can you make these small changes to it? And what I'm looking for is that MVP, that minimum viable product, where I can make just a few changes initially and just enough to differentiate and add value, even if it's something small, maybe it's just one little thing. And in the beginning, it may not even be enough of a differentiator to really build a moat around or get intellectual property around, but enough at least to drive clicks and conversions to your listing over the others. Otherwise, especially if you go in a category where the competitors have a lot of reviews, like hundreds or thousands of reviews, if you don't have any kind of differentiation, then you're competing basically on price.

Kusha Karvandi:

That's the only thing you're going to be able to compete on and becomes a race to the bottom. So I don't recommend that. But if you can have something where you can add a little bit more value and ideally be kind of the mid or higher priced option out of the competitors, out of the competition, then that would be a good place to start. And then what I like to do is after I have some proof of concept, meaning that I've gotten some sales on that product on Amazon, at least for a few months, then I'll invest in the intellectual property. I'll invest in trying to get some utility or design patents. I've made the mistake of doing it too early. And then the problem is when you do that, if you get your patents early on, you may find out that the market doesn't really care about those design changes or functional changes that you've made. So you wasted a lot of money getting patents that you're not even really using anymore.

Andy Splichal:

It's a great point.

Kusha Karvandi:

Better to prove it first when you.

Andy Splichal:

Launch a new product on Amazon, how much budget do you suggest people put into ads? Running Amazon ads?

Kusha Karvandi:

Yeah, ads are becoming more and more important with regard to sustaining your rankings. In the past, you know, you would just focus on launching a product and sometimes you could do with or without ads. If you did it with ads, you could do it for a short period of time until you got that organic lift in rankings like the SEO on Amazon. And once you had that organic rankings for all their major keywords, you could pull back on your ads and you didn't have to waste really any money on ads. But now I feel like the algorithm is really taking into account your advertising. So in order to sustain your rankings, like let's say, for example, you get to the top of page one for your target keywords, you may lose those rankings if you're not continually running ads in tandem as well. Occasionally, not always the case, and it's not the case for all keywords, but for competitive keywords where your competition is strong and they're running ads and such, and there's a good mix in terms of market share, you're going to want to have some level of PPC going. So in terms of budget, it's kind of hard to say because every product and category is different, but you want to have a decent budget to where you're going to be able to have enough inventory to buy for at least six months because you're going to want to have enough inventory to launch the product for the first two to three months and you're going to probably be upside down on that investment like you're not going to.

Kusha Karvandi:

You don't want to expect to launch that inventory and expect to be profitable necessarily in the first three months and you may not be profitable in the first six months depending on how competitive that category is. But generally my mindset is like the first one to three months, I may or may not make a profit. But outside of that, then I want to start turning the ship around and start focusing on becoming more profitable by maybe increasing my price slowly by, you know, improving my ad spend and not having such a high a cost or low roas. Those, those are the types of things that you want to focus on as time goes by over the next six to twelve months.

Andy Splichal:

Now, Amazon fees, you know, I mean, especially if you're running FBA, it seems Amazon fees come from everywhere and it's more than just the 15%. It's, it's the shipping cost, it's warehouse cost, it's the cost for this. And it doesn't always seem that transparent. And I have a lot of clients that get frustrated with trying to figure out what they're going to get charged when from Amazon. How do you suggest people go about trying to forecast their profitability?

Kusha Karvandi:

Yeah, again, you might want to use a different tool, like maybe helium ten. I think Jungle Scott may even have this as well inside their own dashboard. But you can create basically a sales and profit dashboard. You just plug in your cost of goods and it'll give you a daily snapshot, which is essential to be able to manage your business. It's like having KPI's key performance indicators to run your business in real time. And that's really essential with Amazon because the business reports that you get inside seller central are not enough for you to really know, am I making money? Because those reports are not going to show you in real time all these other fees that you're talking about. So it's important to have some kind of a dashboard that integrates all of that information, including all those other transactions that Amazon may be charging you fees for as well. As, you know, in many cases I find that I use different tools as well, like Geta for getting reimbursements for lost inventory or damaged inventory.

Kusha Karvandi:

And so it's nice to see on these dashboards to see when I am reimbursed for that. You can see those reimbursements show up there. So it's just a one easy hub that you want to be able to have access to on a daily basis to manage your business. So, you know, are you making money or are you not?

Andy Splichal:

Now, your latest venture, Kazam, it utilizes AI optimized campaigns. Can you explain a little bit of how this technology works and what kind of improvements users could expect in terms of profitability and rankings.

Kusha Karvandi:

Yeah, exactly. So, you know, Kazam is something I've been working on for the last couple of years. And really it came out of this frustration of these rising Amazon costs. And especially I found that many times when it came to Amazon PPC that I was paying for clicks that I would have probably otherwise got the sales for if I wasn't advertising for that keyword because I was already ranking well for that keyword. So I designed Kazam specifically so that it would take into account your lift in organic rankings. So if you're launching a new listing or kind of trying to scale or revive an existing listing as your rankings go up for a certain keyword, once you're above the fold for a specific keyword, the software will automatically start reducing your bids to make it more profitable because in many cases it may not make sense to show up twice in search results, both sponsored and organic. And so it's better for you in most cases to focus on getting that organic sale and not having to pay the PPC costs as well. And so if you lose the rankings the audited system will automatically start raising the bids back again.

Kusha Karvandi:

So it's kind of maintaining kind of a homeostasis like we talked about of having to have PPC going evergreens that you sustain your ranking. So if you were to dip it will come back on to give you that lift again. But the idea is that we want to try to minimize your advertising cost of sales, your acos, and maximize your roas by tracking that position.

Andy Splichal:

Is there any data out there that Amazon has released showing how many, like what percentage of clicks go on to the sponsored products, the first couple that are listed versus the organic. I know in Google, if you're not at the top, the amount of clicks you're getting, even if you're on top of organic isn't nearly going to be as much. I mean, I'm curious. I've never seen anything released from Amazon that tells that I haven't seen any.

Kusha Karvandi:

Data on what percentage of clicks. And I'm sure it's different for every category. But what I have noticed in the last several years is that it used to be that when you'd search for a keyword, the majority of the search results above the fold were organic and now majority are sponsored. Now it's like the first row or two are all sponsored. It used to be the first two listings and now it's like the first four or eight listings are sponsored and many more sponsored placements throughout. Search results now trickle throughout. So I think that for that reason I think over time there's probably going to be more and more and more placements. So that's why again, that's why I created Kazam software, because I knew over time PPC was going to become more and more important to the overall ecosystem of playing the game of Amazon.

Andy Splichal:

So yes. When did you launch Kazam and what kind of results have people been seeing on it?

Kusha Karvandi:

Yeah, we launched about two months ago, three months ago. So very recently we launched, we've been testing it internally before then. We have a consultancy business as well. So I've been using it with our clients that we used to do a lot of this stuff manually with and run manually and sort of having a system comparing what it can achieve versus what I can do manually. And what I'm finding is that the Roas that it's achieving is the same or better than what I was doing manually and going in manually putting in keywords or optimizing bids or negative matches and so forth. So you know, it's in terms of cost of having someone to manage it. You know, most people, if you're hiring an agency or a person, it's going to cost you, you know, at least 1000. I've seen 4000 5000 a month from several agencies, maybe more.

Kusha Karvandi:

It can get very costly to have someone manage it for. So this software is designed to be somewhere in the two to dollar 500 range for, you know, I would say most sellers are going to probably be in a dollar 200 range based on their size, that it's going to make it much more reasonable for them to have something manage their account for them. And the cool feature we're adding that the AI portion of it right now has been primarily on the backend. The AI using OpenAI, it adds another layer of discretion. So it takes all the logic and the rule sets in terms of how the software should be extracting keywords or adjusting bids, adjusting campaigns and so forth. And the AI acts almost like another pair of eyes, like a media buyer, to determine what's most relevant and what makes the most sense in that specific instance. But what we are launching very soon here is we're going to add another layer which is going to be more on the front end so the user can then interact with AI and ask you questions, just like OpenAI chat GPT, you can go and ask questions regarding your campaigns, you can ask related to how it's performing, any suggestions the AI has for you to make them better? So it's going to be pretty cool. A lot of versatile functions that the AI will have on the front end for the user to interact with.

Andy Splichal:

How knowledgeable does a seller need to be to use it?

Kusha Karvandi:

Yeah, I designed it for the absolute beginner in mind. So again, not only just price point wise, but also feature wise, I designed it to be very, very lean in terms of the user interface, to be very simple. So I do have a lot of different campaign themes and features that we plan to launch. But in the beginning I didn't want to make it so complicated so that people don't know which one do I launch? Do I launch this type of a theme or string of campaigns or do I launch that one instead? We launched with this something called the quick launch. So on the dashboard, there's literally just one theme right now, which is the quick launch theme. When you go into that, it allows you to select your SKU and then all you have to do is put in a couple variables and these couple pieces of information are really just your minimum and maximum bid to act as guardrails for you and your target, acos or roas. And that's pretty much it. That's the only minimum required information.

Kusha Karvandi:

There's a lot of other optional information. If somebody's more advanced and they want to get more granular with keyword expansion or bid expansion or day parting or seasonality, things like that, they can get much more granular with it. But for the absolute beginner, they can get started. Just a couple of clicks hit go and then that's it. They don't have to do anything. The system will automatically launch all the necessary campaigns for that specific product and then it will expand those campaigns and optimize those campaigns every single day, every single week, just as if it was a media buyer. And so again, I designed this really for the beginner in mind who doesn't have the, the budget to hire a full time media buyer, but they want the same type of performance and they want it to get more affordable and more profitable over time, which most media buyers aren't really doing. Most media buyers aren't tracking your organic positioning, your organic rank, and cross referencing it to the keywords you're targeting now.

Andy Splichal:

With the sponsored listings for people that they may or may not know they're out there. If you're just starting, you got sponsored product, you got sponsored brands display, what is it running ads for all those different types for some of them. How does that work?

Kusha Karvandi:

Right now it's only focused on sponsored products. So it's only focusing on those PPC campaigns that will be on mainly in search as well as product pages. But in the future we will be launching sponsored brands and sponsored display as well. There'll be more features there. But again, we wanted to launch with something very simple and easy and the bulk of the results always comes from sponsored products.

Andy Splichal:

And are the people who are using it, are they individuals? Are the agencies? Is it a mix of both?

Kusha Karvandi:

It's a mix of both. You know, this is a great tool for agencies to use with their clients. Again, very, very affordable. If you're running an agency, most clients, you know, are going to fit into those lower tiers of pricing based on their spend. So it's great for agencies and it's absolutely great for individuals. Again, who, whether you're a beginner or intermediate and you don't have a lot of experience with running your own Amazon advertising, and you need something that can get up and running and optimize everything for you, or you're somebody who's very advanced and you have a lot of experience with it and you want to get very granular. It gives you a lot of tools that you can get very, very granular with.

Andy Splichal:

Now I'm curious, I mean, AI, everybody's trying to figure out how to best integrate it into almost every vertical and every marketing, non marketing everywhere. How did you get involved in AI? How did you decide to spend your time on making kazam? Creating kazam?

Kusha Karvandi:

Yeah, I mean, AI right now is probably 25% of it. I would say 75% of it is really the logic and taking all my knowledge from what I was doing manually for a decade with PPC and putting that into the best practices and optimizations and so forth into the system. But AI, I think will be a growing thing. Right now. I want to start with something very minimal, like I said, adding that layer of discretion as if it's a person. So that way if it was a person managing it, they'd go in there and they'd say, okay, well, of this list of keywords that we're extracting, these ones are the most relevant and so forth. So the AI is coming in and taking the place of a person that you would hire or a media buyer to do that. So it's adding that extra layer.

Kusha Karvandi:

But I think as time goes on, especially as we expand more features, AI is probably going to become much more prominent, especially when we have the front end feature in the next few two to four weeks, probably where you can interact with it, that will become much more of a useful tool.

Andy Splichal:

Now with Tazam, I see you've also introduced an affiliate program. Can you explain how that works and what the benefits are to those that would offer and become affiliates?

Kusha Karvandi:

Yeah, absolutely. The commission kind of varies depending on the level of the affiliate. We have a few different programs. So people can go and they can apply to our affiliate program or they can email us and request information on our affiliate program. But basically we have. The essence of how it works is that you get a commission not only on the initial sale, but ongoing. So if somebody signs up for Kazam, the affiliate will get an ongoing commission on that monthly subscription. And we also offer a commission for second tier.

Kusha Karvandi:

So if they have other affiliates or super affiliates that they refer to us, they will also get a commission off of all of their referred sales.

Andy Splichal:

Well, you know, this has been great to hear about your journey and to hear about your new AI program. I guess for listeners who want to learn more about either the affiliate program or about Kazam, I mean, how would they do it? What's the best way to go from here?

Kusha Karvandi:

Yeah, I would say best way be to go to go kazam. G o kazam. And kazam is kazam.com. Or they could email us at info at google gokazam.com. I don't think at this moment on our website we may not have a link yet to enroll in our affiliate program. Right now it's, you know, people are emailing us and applying for that, but I think in the next week or so we'll probably add in the footer, we'll add a link that they can apply to be an affiliate.

Andy Splichal:

Well, this has been great. Is there anything else you would like to add before we wrap it up today?

Kusha Karvandi:

No, I think we covered the most of it. You know, like I said, the most important thing moving forward with Amazon, my opinion is, you know, differentiate your product, build a moat around it with some custom IP or at least some differentiation, and then focus on trying to optimize your PPC as your products rank higher.

Andy Splichal:

Well, this has been great for listeners. Remember to check out Kazam. You can go to www.gokazam.com. Thank you for tuning in and make sure you subscribe for more expert insights on mastering the ecommerce world. And if you join, enjoy this episode. Please go to Apple podcasts and leave us an honest review. That's it for today. Remember to stay safe, keep healthy and happy marketing and I'll talk to you in the next episode.