How to Master Amazon: “Your customers are your greatest assets.” with Mitch Berkowitz and Esriel Rappoport, and Eldad Shashua
Your customers are your greatest assets. Using the Amazon platform doesn’t mean you can do away with customer service. Like in any business, your customers are your greatest asset. The way you treat them will determine their continued business with you, the reviews they write on your products, and their advocacy for your brand. Treat your customers with respect, understanding and maintain a liberal refund policy. They’ll create lifelong value for you and your business.
Mitch Berkowitz grew up in Brooklyn, New York in a strictly orthodox Jewish family.From a young age he showed an entrepreneurial spirit, launching multiple small businesses post high school and in his early twenties. After working for two of New York’s largest camera and electronics retailers, Mitch ventured out on his own in 2005 and founded The Digital Pavilion, today one of the largest Amazon sellers in the country.
Esriel Rappoport was born and raised in Zurich, Switzerland. He moved to the US for Rabbinical school at age 20, got married, and made Brooklyn his home. After gaining experience as a buyer for a wide range of consumer goods in several e-commerce companies, he partnered with Mitch, where today he serves as Director of new development.
Thank you so much for doing this with us! Can you share with us the “backstory” about what brought you to this specific career path?
Our story is a unique one in the business world. We both grew up in strictly Orthodox Jewish communities, where college education was not prioritized, and was well beyond the reach for most young adults. Because we did not have the experience or education to enter a traditional business career, we had no other option but to innovate, and Amazon provided us exactly that opportunity.
Time, money, and a solid business education are three fundamental necessities to start a successful business and brand. As neither one of us had any of these, we needed a way to bootstrap our business without them. Amazon was the brand, Amazon had the experience, and Amazon had solid teams of highly educated professionals. Amazon established a successful marketplace with millions of customers and a very low barrier of entry for aspiring entrepreneurs. With everything in place we could focus on what we did best — buying, and selling merchandise.
Politicians and the media are quick to fault Amazon for the damage they’ve done to small retailers. What they rarely talk about is the tremendous opportunity Amazon created for ordinary people who’ve had little opportunity to start their own businesses. Amazon gave anybody with a computer and a product to sell the ability to reach hundreds of millions of customers across the globe — an impossibility not too long ago.
When did you realize just how successful you could become on Amazon?
Our Amazon operation started small — the entire business operated from Mitch’s garage. The garage was our warehouse, our office, our shipping depot, and customer service call center. We were selling mostly consumer electronics, and making approximately five sales a day.
Back then, before automated systems handled our sales, Amazon would notify us that a sale had been made, and that we should ship out our product via an email titled: “Sold — Ship Now”. One day without any notice, our inbox began filling up with hundreds of “Sold — Ship Now” emails. We were sure there was some kind of pricing mistake, as we had never made more than ten sales in one day. After some research, we realized what had happened — Amazon had given us a Featured Seller status, which gave us access to the main buy box on the product page. We realized at that moment that this was the beginning of something big, and began to devote most of our resources to our Amazon business.
Can you share the most interesting story that happened to you since you started selling on Amazon?
We’ve had so many interesting stories, it’s hard to choose one! Here’s one interesting story we learned a few important lessons from:
Amazon had recently launched a new initiative, where they allowed sellers to ship their products to special FBA warehouses which would allow for the use of their own branded boxes instead of using Amazon packaging. We were excited by the opportunity, and shipped more than $500,000 worth of merchandise into Amazon.
Due to an internal software conflict at the Amazon FC, all of our merchandise was “frozen” and became unsellable. We reached out to Amazon on multiple occasions over the course of a month to try restore our ability to sell our merchandise, but no one we spoke with understood our issue, and they were unable to help us. Without the money to pay our suppliers, our company was just a few days away from bankruptcy.
In a desperate attempt to save the company, we sent an email to every executive we could think of within the Amazon corporation — including Amazon’s CEO Jeff Bezos. Within 24 hours of sending the email our issue was suddenly resolved. Apparently our issue was dealt with by the head of the entire third-party division of Amazon. In a subsequent conversation with him he told us what had spiked his interest in our case: He had received a forward of our email, with a question mark in the subject line, from none other than Jeff Bezos himself.
We learned two things from this story. One — when your entire business is on the line no idea is too brash. And two — regardless of how senior you are inside your company, you are only ever as valuable as your customers.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?
When we first started out we each had to wear multiple hats. There were so many different things to work on and we really had to improvise to get everything done.
One day we were mailing out a large amount of packages, and Esriel helped pack some of the boxes. The UPS driver began loading everything onto his truck, and the bottom of every one of Esriel’s boxes collapsed, sending products scattering everywhere. That was the last time Esriel packed any boxes!
The lesson we learned: Stick to what you’re good at and find other people to do the rest!
We were one of the first major FBA sellers, so we’ve experienced our fair share of mistakes in our past — both on our end and on Amazon’s end. There’s one mistake, though, that really helped us learn about ourselves, and has since steered our business direction to where it is today.
The Digital Pavilion is now an umbrella company to a variety of different Amazon brands. We needed a custom management software to handle inventory, sales and customer service across all those brands. In line with our entrepreneurial spirit, we decided to create the software ourselves. It seemed easy: We’d hire a couple of developers, oversee their work ourselves, and crank out a custom management suite in a few weeks.
As you can imagine, it didn’t quite work out the way we envisioned. Neither of us had any experience in software development, and the project was bogged down by complication after complication. A long series of failures helped us realize we were entirely out of our depth. We outsourced the project to a software development company, who created, implemented and trained our staff in the new custom suite in a matter of a few weeks.
The lesson we learned: A jack of all trades is a master of none. Find your core competency and excel in it. If a project is beyond your scope of expertise, hire an expert to oversee it or outsource it to a specialty company. It may seem more costly at the outset, but it will save you a lot of time, energy and money in the long run.
What are some of the new projects that you’re most excited about?
In their attempt to simplify the shopping experience, Amazon has launched new initiatives, where warehouses of certain third party sellers have the ability to operate as Amazon Prime shipping depots. Previously, in order to qualify for FBA selling and the Amazon Prime branding, you had to first ship your products to the Amazon FBA warehouses, from where Amazon would ship them to your customers. This created a series of setbacks; sellers had to try to project sales estimate months in advance and were severely limited in their ability to sell their products through other avenues. Additionally, they had to pay storage fees in Amazon’s warehouse facilities; and they had less control of the shipping process and customer experience.
With Amazon’s new initiatives a lot of these obstacles were removed. The result was a better shopping experience for customers, as well as a more profitable and predictable business model for sellers.
Let’s jump to the core of our discussion. You are a seasoned Amazon expert. Can you share with our readers five, non intuitive, insider tips, in order to be as successful as possible on Amazon? Please share a story or example for each.
- Play by the rules.
Many people start out on Amazon thinking they’ll win by playing the system. What they don’t realize is the complexity of Amazon’s ever-improving A.I., and their ability to monitor fraudulent behavior. Even if finding loopholes helps you win in the short-term, they’ll come back to hurt you in the long run, and you can easily lose what you spent many years building.
2. Add value for your customers.
There are thousands of sellers on Amazon, pushing thousands of similar products, all vying for consumers’ attention. Don’t be a copycat. Don’t just throw another product into the storm and hope for the best. Invent a new product by looking for what’s missing. Think of new ways of doing things. Find unique ways to provide value for your customers that will keep them coming back for more.
3. Your customers are your greatest assets.
Using the Amazon platform doesn’t mean you can do away with customer service. Like in any business, your customers are your greatest asset. The way you treat them will determine their continued business with you, the reviews they write on your products, and their advocacy for your brand. Treat your customers with respect, understanding and maintain a liberal refund policy. They’ll create lifelong value for you and your business.
4. Looks are important.
Search for any given product on Amazon and you’ll find tens, if not hundreds, of similar options to choose from. Consumers make thousands of split-second decisions — often subconsciously — that drastically influence their buying behaviour. Your listings need to be perfect. The images you use; the headlines, body copy and bullet points describing your product; and the Enhanced Brand Content you display are all important pieces in the customer acquisition puzzle.
5. Vet your suppliers.
There are many counterfeit products out there, and as a reseller it’s your job to ensure your products are authentic. Your account can be shut down, your customers will never come back, and you’ll lose any credibility you built in the Amazon marketplace.
Selling on Amazon requires a different marketing approach than the traditional brands. What is an example of an innovative marketing strategy that you think large legacy companies should consider adopting?
Marketing 101 says it’s all about the consumer. On Amazon, this premise is hyper-accentuated. The Amazon platform created an open marketplace for consumer feedback. If any one consumer, in any one city in any one state has something negative to say about you or your product, they have an open forum to air their grievances to millions of potential consumers.
This freedom of consumer feedback is unprecedented, and never had to be dealt with by legacy brands. On Amazon you don’t have established brand name recognition or years of ingrained advertising messaging to rely upon. All you have is your listing, and anything anyone ever decides to say about it. It’s your job to ensure the things they’re saying are things you want people to hear.
Because of the position that you are in, you are peeople of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)
We’ve been extremely fortunate with the business we’ve built, and we do our best to pay it forward. We try to use our expertise and free time to help the communities where we grew up. We try to hire people with similar experiences as ours — people who weren’t fortunate enough to have a college education or who don’t have a direct career path laid before them. We share our knowledge with other young entrepreneurs, and we train people, including our direct competitors, in building successful Amazon businesses.
We see our success as the greatest blessing. And we try to spread that blessing as widely as we can.
Do you have a business mantra that you live by? How do you think it impacts your approach to your Amazon business?
Our business mantra is: Work to live. Don’t live to work.
There’s no denying it, being an entrepreneur is hard. It takes grit, determination, and long hours at your desk to be successful. But the pitfall of many entrepreneurs is when their work becomes everything even at the expense of their families, relationships, and their own mental, emotional and physical wellbeing.
We constantly remind ourselves that we work to live, and “live” can mean different things for different people. For some it means to attain a certain lifestyle, for others it means to bring change to the world around them. Whatever “live” means for you, remember that your work is only there to help you reach a destination. Work is not the destination itself.
Some of the biggest names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US with whom you would love to have a private breakfast or lunch with, and why? He or she might just see this if we tag them.
There are two of us here so we’re going to go with two different people: Jeff Bezos and Elon Musk.
ER: Jeff Bezos is an inspirational business leader. The sign of a true business leader is someone who constantly asks themselves: What am I as a company? What can I do better? And how can I enhance my customers’ experience? Jeff Bezos is a perfect example of someone who not only asks himself these questions every single day, but acts upon them to bring greater change to the world.
MB: Elon Musk is an inspirational visionary. I’m a proud Tesla owner. I’ve traveled to Florida with my children to watch his Spacex Falcon Heavy launch. I have deep admiration and respect for Elon. Elon has taught the world that everything is in your mindset. The difference between possible and impossible is your will. If you will the impossible, you can make it possible.
On a scale of 1–10 how lucky are you?
We consider ourselves extremely fortunate to live in an age where so many resources are available to so many people. The opportunities for success that platforms like Amazon have provided us would’ve been inconceivable in a different generation, and we are forever grateful for that opportunity.
Thank you so much for joining us!
