Multi-Channel Mastery: Empowering Your E-Commerce Brand with Jamin Arvig

Brent Peterson (00:06.662)
Welcome to this episode. Today I have Jaimin Arvig. Jaimin is the co-founder of AIC Brands. Jaimin, go ahead, introduce yourself, tell us your day-to-day role and maybe one of your passions in life.

Jamin Arvig (00:17.61)
Great, thanks for having me, Brent. Again, my name's Jamin Arvig. I co-founded AIC Brands over 21 years ago, which owns, operates, builds, and buys e-commerce brands, which turn into multi-channel brands. Also co-founded AI Commerce, which is a service company that provides multi-channel marketing and growth benefits to brands that we own, and of course, more importantly, many others out there in the world. So that's what I do.

served on the board with Thrasio, which buys Amazon companies as well. And I have passions in life. Next question. We've got five young kids. My wife and I have been married for over 20 years with these five young kids, so we're busy, but we have, we do have passions. So one of the passions right now is a project called Junior Presidents. So I know you're an EO and in, there's not much for kids like EO.

So EO or YPO doesn't have anything for kids, which was missing. So a junior president's organization is something that kids can enjoy to learn more about themselves, about entrepreneurship and how to start businesses, stock market games, all kinds of things, emotional intelligence. And so we've really gotten involved all over the world, actually, about 50 countries with kids that are doing some great things together. So that's one of my passions.

Brent Peterson (01:48.022)
Wow, that's awesome. Thank you. And for anybody that's just listening and they're not watching the video form of this, Jaiman looks like he's 21 years old. So, you're wearing your five kids very well on your face. You look awesome. So before we get into content, you've so graciously volunteered to be part of the Free Joke Project. So I'm just going to tell you a joke and all you have to do is say, should this joke remain free or do you think somebody could charge for it?

Jamin Arvig (01:58.47)
very kind.

Jamin Arvig (02:02.584)
Very good.

Brent Peterson (02:18.883)
Here we go. As an American, I'm tired of people saying America is the stupidest country in the world. Personally, I think Europe is the stupidest country in the world.

Jamin Arvig (02:31.31)
Ooh, tough. Can I compromise and use some type of crypto? Okay, very good, very good.

Brent Peterson (02:35.162)
Thanks for watching!

Brent Peterson (02:40.362)
Absolutely, yeah. Yeah. Yeah, just everybody soon discovers that none of the jokes are very smart or funny, anything. All right, so let's dive in. We're gonna talk a little bit about multi-channel. Tell us why multi-channel's important now.

Jamin Arvig (02:47.811)
Hahaha

Jamin Arvig (03:02.37)
Well, multi-channel probably has always been important. Companies over the years, you know, for hundreds of years, have always had better valuations when they've got more diversification in their business. Less customer concentration or more diversification means the business is more stable. So that has always been important and is important now. I think it's becoming more visible to people that this is important now, because so many people of late have built companies

they're either Amazon native or digital native. And they're realizing that as these ecosystems become more mature, the cost to compete, the cost to win on these channels becomes greater. So it becomes more expensive, less profitable sometimes. There's so much competition, competition from China, competition from manufacturers that are knocking off your product, lots of competition. All of your data is online with your product, your reviews, all kinds of data is there.

things off. So you want more diversification. That's one big reason. Another big reason is brand value. So if a customer, a potential customer even, is walking around seeing your product in a store, seeing it on Amazon, seeing it on your DTC site, seeing it on the ads on the top and the side of the Google search pages, seeing it on social pages, seeing it all over, now there's much more brand equity. These people are much more knowledgeable of

invest in your brand. So your brand value goes up, your diversification goes up, and most people in business are interested in a higher valuation, so as a result your valuation goes up. So there's lots of reasons why it's important now and probably more important than five, ten years ago for an e-commerce brand to start sorting out their multi-channel strategy.

Brent Peterson (04:58.502)
And I think most platforms now are accommodating for that. And there's all these buzzwords like headless that are helping any brand figure out how can they get more channels out there and connect to one spot. I know in our green room, we talked a little bit about buy with prime. Tell us a little bit about how Amazon is kind of pushing in to your traditional purchase path outside of just buying on Amazon.

Jamin Arvig (05:25.45)
Yeah. Well, I think the first I'll give you some context that, you know, years ago, you know, more people were starting their search on Google, uh, for everything, including product search. And then over, you know, the last 10 years that has shifted slowly, but surely until more people are starting their search on Amazon. So Amazon for product search. So Amazon has become the place to start for product search, which makes sense at this point. Um, and they've,

but they couldn't achieve, they can't achieve full coverage just on people starting their search on Amazon. So once they achieved that, they wanted to make sure they could go beyond Amazon too and find people that are starting their search elsewhere. Also, there are competitors like Shopify, and they're the biggest, but other e-commerce platforms,

Jamin Arvig (06:25.45)
see websites out which are presences online that compete with Amazon's presence in a way. So it makes sense for Amazon to either compete with those or bring those into the fold and partner with those types of companies to make sure they can help continue to grow their infrastructure and their value to customers. So the way they're doing this now in 2023, there's been different iterations over the years.

is Buy with Prime. So Buy with Prime is a very big initiative at Amazon. There are over 1,000 people that have been hired into that ecosystem and department, I guess, under a VP at Amazon over the last couple years. And so Buy with Prime has a lot of resources to help brands, not just to bring them into Amazon, but to help them and help their customers grow. So what they're doing

is opening up their fulfillment network, their FBA network, with all their warehouses, which is a huge benefit. It's a benefit of having a 3PL for a brand. It's a benefit of outsourcing so much infrastructure and complexity. And it's a benefit for brands to deliver to consumers what they now expect, which is quick delivery, maybe two days, plus or minus, maybe better, eventually one day, in more common practice.

providing the cost of shipping that is much lower as well. So buy with prime can can be a button on a DTC website which allows people to check out on a branded website but use the backend of Amazon for the fulfillment and for some of the other benefits too. So they don't need to put in a customer doesn't need to put in their credit card information they don't need they're able to get some of the benefits if they they do use an Amazon credit card or have a five

sent back rebate or anything like this. So there's a lot of benefits. Those are some of them that they offer to the brand and ultimately the end user.

Brent Peterson (08:35.842)
And I think there's been a push and pull. Some brands get onto Amazon and they realize that they want to try to save some money, so they move into their own website, and some people have their own website, and like you said, multi-channel. What is the advantage then of a merchant who has, let's say, a Big Commerce or a Magento site to add that button for buy with Prime? Because a lot of merchants might think about it as,

Jamin Arvig (08:46.65)
you

Brent Peterson (09:05.743)
kind of giving it away to the competition.

Jamin Arvig (09:06.67)
Right, and that has to be considered. It definitely has to be considered. People that have built a D2C business can't imagine building an Amazon business quite often, and vice versa. People on an Amazon business can't imagine a D2C business without Amazon, or certainly not a brick and mortar business. That's a different world completely to people that have been focused on one silo. But people that have focused on the D2C branded website silo do ultimately see that

that search their site don't want to buy anywhere but Amazon. So there is definitely a segment, a market segment, that is not being touched currently on a D2C site. So they do see that, there's data behind that, and there's also data behind conversion rate increases. So if you're like almost everyone in this country and many other countries, you have an Amazon Prime account, and it's pretty easy to click the

Jamin Arvig (10:07.57)
It's very easy to check out quickly there. You trust the system. You know what you're getting into. You don't need to enter information. It's a very quick, seamless, frictionless experience. So because of that, conversion rates can go up too. And when conversion rates go up for a DC brand, that means they can spend more money because the economics, the unit economics are more efficient and they can grow more. So it has to be considered. The counterarguments need to be considered as well.

lot of benefits to doing this. Also notably there's there's ways through Buy with Prime companies for for these brands to drive more traffic to their site because they do have Buy with Prime now. There are also ways for them to advertise even on the Amazon platform to bring people to their D2C site. So there there are some other opportunities and reasons for brands to strongly consider this.

Brent Peterson (11:04.822)
Yeah, and I've heard the analogy said that Amazon is just this kind of soulless marketplace that doesn't have a lot of customer experience, and there's not a lot of opportunity to create customer experience for your brand within the Amazon marketplace. But by doing it on your own side, you can create that entire experience as well as having that benefit of two-day shipping or the backup or the name recognition of having the Amazon

Amazon payments there. Talk a little bit about how customer experience plays in on that.

Jamin Arvig (11:40.59)
It's a great point. So on the Amazon platform, you can tell your story a bit as a brand, right? There's multiple ways of doing it. Amazon's been adding these ways continually over the last dozen years, probably. So you can have a branded page, you can have A plus content, EBC content, you can have ads that are focused on your brand, you can have comparable products, you can have all kinds of things. You can have a matrix, you can have video that tells your

There's a lot of things you can do now within the Amazon platform that you couldn't do even three, four years ago. But there are many more things you can do on your own site, of course. The boundaries really are limitless. So if you really have a story to tell that's hard to tell on the Amazon platform, you're absolutely right. That's another reason to use Buy With Prime. So you get the benefits of both worlds. You can tell your story in any way you want on your site, and you can have the Buy With

Brent Peterson (12:43.062)
Talk a little bit about branding strategy. I know that we've had a number of guests who have talked about just having a generic product on Amazon makes you just get lost in the huge pool of everybody else as compared to a branded product where you can sort of try to stand out with that brand itself.

Jamin Arvig (13:03.15)
Yeah, it's important. Uh, and again, over the years, uh, businesses always have had to be differentiated, but now even more than before, it's so easy to get knocked off. Uh, and you know, you, you rise in the rankings a bit on Amazon, you get knocked off quickly, um, your products on Alibaba, maybe even before you get knocked off, your, your manufacturers already showing other people your product and they're already competing with you if you're not careful. So it is very important to have differentiators. One of those differentiators is brand.

two. One of them is low cost supply chain. It doesn't need to be lowest price to the end user, but you have to have the best cost really in your supply chain or others with better cost will be able to have lower prices or advertise more, do whatever they want, but you need to have lower costs. You need to have a strong supply chain. You need differentiation in the brand and hopefully some IP. So if you can have differentiated IP support with

can help. If you've got even better, if you've got an app along with it or if you've got some type of experience that allows you to provide a community or an infrastructure that goes along with the product, then it's way more difficult for people to knock off your product.

Brent Peterson (14:21.102)
Yeah, and I think, let's just say, for example, the Apple product realm, all the different things that plug into your Apple, if you go on Amazon, you're gonna come across some kind of a docking station that is gonna be a thousand people that are selling some version of a USB-C to USB connector, or whatever that thing is. There's only a few, though, that stand out as a brand that probably do the same thing. So the importance of developing that brand

even then makes it more important as you as you're expanding in Amazon. Do you have some tips and tricks that people that you could tell people on how to start branding your product and and reasons to do it?

Jamin Arvig (15:04.25)
Yeah, I think, again, reasons to do it is to add more diversification, more stability, more barriers to entry, and increase your valuation. I think with that motivation, though, it is difficult. It's not that it comes easily and without risk and without complexity. There's a lot of complexity that is involved by branding because it usually does require multiple channel exposure.

through technology complexity, through operational complexity, through general infrastructure complexity. Your fulfillment networks might include Amazon and Walmart.com, could include D2C, it could include a lot of B2B fulfillment. So your operational infrastructure technologies and fulfillment technologies are all very

to have complexity when you're multi-channel. Your pricing becomes complicated. You've got map pricing issues, maybe you've got channel conflict issues. So there are lots of reasons why people don't do this. But if you are truly trying to build a brand, it is so much better when you can build that multi-channel brand. And to answer your question then next of what are some tips and tricks, I think it's always good to dip your toe in the water and start testing things that can be proven

one by one and So if you started as Amazon you can as an Amazon Platform company you can maybe try Walmart.com. Maybe that's next on your list Maybe maybe eventually you're trying your own D to C site if you start with you if you started with your D to C site It's probably time to start Amazon a little bit more if you're on both There are things you can test and improve on both of these I mean you're certainly not ever fully optimized no one ever is so there there are things to keep pushing the boundary on on

And when you're ready, if you are more digital native, when you're ready, you need to start looking offline too. We do that a lot with brands as well, with our own brands and with other people's brands, is help bring them offline and make sure that the brand can fully be built out. So I think it all starts with a long-term strategy, long-term multi-channel expansion strategy that can be broken down into phases and stages.

Jamin Arvig (17:34.25)
broken down in lots of little tests. So it can be done responsibly and profitably. And that comes with a little test budget along the way. And so it's fun to put these in place because it really helps people see the value that can be created once they do expand in their current channels and into the new channels.

Brent Peterson (17:55.802)
Are you seeing people that are on Shopify that want to expand? When they try to go on to Amazon The cost could become prohibitive because there's going to be a charge from Shopify they'd be able to use that external payment as Well as the cost that you have to pay with Amazon as it does and then to follow up

Brent Peterson (18:26.003)
Do you think Shopify at some point will be a player to compete against Amazon?

Jamin Arvig (18:31.85)
Yeah, good questions. So starting with Shopify and how people consider the, the, the move or the expansion into Amazon, if that's, if that's what they're considering now, uh, the unit economics are very different. It's a different business, different business model. So just like moving from brick and mortar to Amazon, moving from D to C to Amazon has similar differences in unit economics. And, uh, so you can consider that as an example, the fulfillment costs will be different. The freight costs.

would be different, the advertising costs would be different, the commissions would be different. So the benchmark numbers in any particular product category are different from one channel to the other. That being said, most product categories do have room for success in all of these. Each particular marketplace or channel has their own formula that works. So where in Shopify you

Less for commissions, of course. Amazon you pay more there. You might pay much less on ads on Shopify than Amazon. You might have a way higher conversion rate. You probably do on Amazon than Shopify. It all depends on your product category and your brand, but those are some of the things that are considerations and that kind of level the playing field of profitability between these. That being said, once companies have a multi-channel strategy in effect,

They may find that their target profitability is different in these different channels. It may be more or less in D2C or Amazon or Brick and Mort or one of the others. So they may have a strategy that, you know, in this channel I'm going to have break even as my target or in this channel my paid ads are going to be break even profitability but I want to get organic, I want to get profit out of my organic sales.

Jamin Arvig (20:31.97)
business and also thinking about that halo effect where even if you're breakeven in one channel or maybe even losing money depending on your lifetime value and other aspects of that first order, it still may be very sensible to expand multi-channel like this.

Brent Peterson (20:50.803)
I just want to follow up on the buy with Prime because I think one of the things that that buy with Prime gives you is that sort of happiness feeling that you know you're going to get delivered. But with with them with Shopify plus are going to charge you just to use that external gateway and actually I don't even know if buy prime is available for Shopify yet. But I think where I was going there is the added cost of if you compare your your direct selling.

compared to Shopify. You don't have a lot of choice in terms of payment with Shopify, but with BigCommerce they'll let you do whatever you want. So the move then to Amazon is a different sort of decision to make, because you might have a little more overhead on that if you look at them together. If you're on one or the other, one is going to be more expensive than the other as you add. So do you think bigger brands are making

different decisions on which platform they should choose for their direct sales.

Jamin Arvig (21:54.17)
Yeah, I think there certainly is the consideration of these things. And yeah, to follow up more comprehensively on your question, if a company is more on D to C now, say with Shopify, and they're thinking of doing buy with Prime, that cost is incremental. But again, it shouldn't be compared against 0% either, because a Shopify customer does need to have fulfillment somewhere and freight somewhere.

and labor to fulfill somewhere. So they do need some of these costs, regardless of whether you're using the Amazon backend or not. The difference would be the commission, of course, and then the commission can be, it's just a math question really on whether that commission is offset by other things, like a conversion rate increase in some of those aspects. So does that answer your question? Okay.

Brent Peterson (22:53.622)
Yeah, that's perfect. So in our green one, we did talk about some ways of getting started on a multi-channel, multi-brand or multi-channel sales. And you had mentioned getting partners to prove this. What do you, can you elaborate more on what that means, like the type of partners you should look for?

Jamin Arvig (23:14.75)
Yeah, regardless of the size of a company, we all have limited resources. And so the company has achieved specialization in certain things, maybe DTC, maybe Amazon, maybe brick and mortar or something. They've got specialization in those things, but typically not everything. So as they're expanding into one of those new areas, they can either invest on their own and, and build that internally, that capability, or they can buy it, they can buy a company that has that capability, or they can partner and

else that has that capability. So when moving into a new channel, it's usually more effective for people to test it, to expand with a partner until some of those things are proven. Once the economics are proven, the strategy makes sense, that everything has worked with a brand, then the company can consider, do they want to bring that in-house long-term? Do they want to keep with the

Jamin Arvig (24:14.85)
make that capability more robust. Those are decisions to be made. But out of the gate, it's usually more effective to partner with someone. And the reason is simple, that if you were to bring in a team to help you on one of those new channels, you'd have to get, say, a new CMO, a new director of marketing in that area, a team of specialists that have all these specialization skills and the tactics that are needed to win

So if we can instead use kind of a fractional team with a partner, that can make a lot of sense.

Brent Peterson (24:55.782)
So a company like AI Commerce would be a perfect partner to work with to get you there. Ha ha ha ha.

Jamin Arvig (25:02.27)
Depending on the strategy, that's obviously our reason to exist. So we've eaten our own dog food for over 20 years, and it's made sense for us to move channel to channel through these methods as brands are built and values created. And so our reason to exist for others is to serve them as they do try these things.

Jamin Arvig (25:31.15)
and huge valuation increase with us. And then they may want to build a lot of it in-house and maybe we help them with other things or maybe they move on and they've done well on their own creating more value. So, but in the meantime, it can be very helpful to work with a partner like AI Commerce.

Brent Peterson (25:51.284)
Looking at the rest of this year for 2023, what are you excited about in terms of tools for people that are selling things online?

Jamin Arvig (26:00.312)
for software tools and that type of thing for sellers. You can see the

Brent Peterson (26:04.202)
Just partners or platforms or channels or whatever, what is it, if you had some advice to give somebody that has a store already, what would you give that, what kind of advice would you give them?

Jamin Arvig (26:13.635)
Mm.

Jamin Arvig (26:17.05)
Yeah, the things that we're always looking at, we're always making sure we've got the best tools, the best AI that we've got access to. So AI is of course top of mind for everyone right now and that's our name AI Commerce. We try to make this very core in everything we do. So generative AI for content is a no brainer to at least try and hopefully integrate into your business more and more. But there's so much AI that has been developed and becoming functional and usable,

of imaging tools or video tools. There's a lot there. So I think that's the biggest thing, but of course there's always a need, there has always been a need for the best data tools, the best tools that provide the most access to data. So for us who are always extremely granular, we have to be very, very granular in terms of how we analyze profitability. So we don't just look at revenue

or even contribution margins. We try to look at contribution margins or variable contribution margins at a very granular level across products, across channels and combination of product channels and to make sure every profitability decision is deliberate and tracked and optimized. So with that as a goal, it's very important to have the best data we possibly can have access to at all times. I'd say AI is one data, the best data tools out there

And generally for us too, since we believe in multi-channel branding, tools that can help with that. So there are some good tools that more and more can help people either drive traffic to Amazon or with Amazon. Those are becoming interesting. Or integrations that bring your Walmart channels and D2C channels and Amazon channels through the same systems to make sure you can fulfill them efficiently, make sure you can see data efficiently.

AI, data, and multi-channel tools would be the three general categories.

Brent Peterson (28:23.762)
Yeah, and I know that having that data and actually using it for your business is so important and a lot of newer or younger, less mature entrepreneurs might pass up data first and go with gut, but at some point data wins over gut most of the time. I'm not gonna say every single time, but that measurement and testing and then re-innovating off of that

building on that data is such a great way to build your business and continue to excel. So, Jaiman, as we kind of close out, I give everybody a chance to do a shameless plug. What would you like to plug today?

Jamin Arvig (29:10.63)
I don't know if I have too much to plug, but happy to provide a link to your listeners, Brent, that just shows a few considerations when auditing your business in terms of if you're ready to go multi-channel. AI commerce helps with people moving to multi-channel and we've got a sister company, Brands 10x, that helps e-commerce companies move to brick and mortar.

is we do some free audits if they are a good fit to kind of help do a bit of a deep dive. So I can offer that through a link if you'd like.

Brent Peterson (29:52.002)
That's awesome and I'll make sure I put all this in the show nuts. Jamie and Arvig, it was a great conversation. Thank you so much for being here today.

Jamin Arvig (29:59.07)
Glad to be with you. Thank you.