ZQ Magazine - Issue 11 / May • June 2023

Retailers

M A G A Z I N E

TIPS FOR FORECASTING ON AMAZON

Learn tips and best practices for navigating demand spikes and drops on the Amazon channel

INFLATION TARGETS THE PET INDUSTRY

Pet care businesses struggles to maintain a profit margin without pushing buyers away with high priced goods

CONTENTS Table of

BrandHighlights

PetIndustryInflation

Rising costs plague businesses and consumers, presenting new challenges for the pet category

ForecastingonAmazon

JoinOurTeam

We need team players to help us continue to grow as the industry's leading e-commerce partner

Explore ZQUARED's culture, values, team, history, and more in the ZQ 101 section

GetinTouch

We provide comprehensive e-commerce solutions; contact us to multiply your brand's success

Letterfromthe CEO

As we cross the halfway point of Q2, we reflect on the new opportunities and growth that 2023 has brought our way thus far.

We have added additional Brand Partnerships to the ZQUARED family, and are excited to welcome A N Skin & Beauty, Hyalogic and Gonesh As we strategize, plan, and execute together, we look forward to the new success and expansion the rest of the year will bring

Alongside our new partnership opportunities, we are working towards increasing our internal capacities We are actively seeking talented individuals to add to our brand management, business development, and inventory teams so that we can continue to serve our Brand Partners at the highest level

Looking forward to the summer months, we are eagerly anticipating continued growth that matches and exceeds the opportunities we ’ ve experienced this spring. As always, we owe our thanks to our incredible Brand Partners and capable staff who make it all possible

Zach Cornett Co-Founder&CEO,ZQUARED

OUR OUR

BRANDS BRANDS 5

BRAND HIGHLIGHTS

Animal Necessity

Pet

Co-founderJohannaMejia-Favacurrentlyworkswith DolphinsPlusMarineMammalResponder(DPMMR)asa mammalnutritionalandholisticmedicineadvisor, VeterinaryConsultant,ResearchAssociate,Development Consultant,andSecretaryontheDPMMRBOD.

AquaOmega Supplements

AquaOmegaisknownasanindustryleaderintheOmega3supplementcategoryandhasprofessionalalliances withOmega-3InstituteandDoctorsofGuelphUniversity, CanadianCollegeofNaturopathicMedicine,and UniversityProfessorEmeritusofNutritionalSciences, amongothers.

Rescue Detox

Health&Household

AppliedSciences,theRescueDetoxparentcompany,is passionatelycommittedtotheimportantfieldof detoxificationresearch,inventinganentirelineof detoxifyingproducts.

Filter Flosser

Patio,Lawn,&Garden

FilterFlosserproductscontributetotheplanetby using50%+lesswaterresourcesthanastandard gardennozzle.

IINFORMATIONAL NFORMATIONAL

RESOURCES RESOURCES

Inflation Targets the

PET INDUSTRY PET INDUSTRY

Although overall U S economic inflation shows signs of cooling in recent months, the pet care industry continues to suffer from a high consumer price index (CPI) - the standard statistic used to measure inflation rates As a result, pet care businesses struggle to maintain a profit margin without pushing consumers away with rising prices on goods.

According to Bureau of Labor Statistics, CPI rose more than two percentage points across key pet sectors since the new year: pet care products and services (up to 10.9%), veterinary services (10.3%), and pet food (15 2%)

Price increases in the pet care industry are largely attributed to the rising costs of ingredients Andrea Binder, vice president of North America Pet Retail at NielsenIQ, stated, “The cost of chicken, the cost of beef, the cost of aluminum to make a wet cat food can…a lot of those commodity prices have been rising pretty dramatically throughout 2021 and 2022, which has caused manufacturers to increase their costs, and then therefore a lot of retailers follow suit ”

Inflation has cut into the discretionary incomes of individuals across the country, which is typically bad news for pets. At the end of 2022, a study by analysts at NielsenIQ indicated that 39% of consumers globally were in a worse financial position heading into 2023 and identified as “cautious spenders ”

Uncertain economics situations have led many pet owners to cut costs, resulting in record high levels of pet surrenders reported in 2022. However, pet owners who haven’t surrendered continue to spend on their pets’ wellbeing at a similar rate to pre-inflation –though analysts predict pet owners will opt for cheaper alternatives to their usual products if inflation continues

Overall, analysts are optimistic that the price of pet care will deflate this year The producer price index for pet food - the cost of ingredients and good essential for production – dropped at the beginning of 2023, which should lower costs for consumers in the coming months.

Q g

Navigating inflation is difficult for all businesses Working with experienced e-commerce consultancies, like ZQUARED, helps businesses maintain profit margins during turbulent economic times

ZQUARED has a long history working with pet care industry sellers and can ensure that listings are search-engine optimized, maintain a competitive minimum advertised pricing, and streamline warehouse operations to cut operational costs, all of which allows business owners to focus on creating quality pet products and meeting their consumers ’ dynamic needs

To see how ZQUARED can help your brand going into the 2023 season email us at partners@zquared com

Tipsfor

FORECASTING ON AMAZON FORECASTING ON AMAZON

TheImportanceofForecastingonAmazon

You’ve done the hard part: you have an excellent product and launched your e-commerce business on Amazon However, selling online can be volatile: even after the turbulent start-up phase, navigating demand spikes and drops can be challenging if you are not fully prepared Forecasting is an essential tool to ensure you are ready for the ebbs and flows of supply and demand.

Forecasting:Amazonvs.“BrickandMortar”

Accurately predicting sales is critical for inventory management, pricing, and marketing However, forecasting in e-commerce looks different than for brick-and-mortar stores, primarily due to differences in data availability On Amazon, sellers have access to a wealth of automated data on customer behavior, sales trends, and competitor activity – all of which are essential for making accurate forecasts On the other hand, brick and mortar businesses typically require more manual means of collecting data, which are time consuming to compile and analyze

ForecastingToolsforAmazonSellers

Forecasting on Amazon is simplified through tools that are a part of Seller and Vender Central dashboards, which are accessible to all Amazon sellers The dashboard provides a breakdown of sales by product, marketplace, and time, as well as can track customer reviews and analyze traffic data Amazon sellers can also utilize Selling Coach, which uses algorithms to analyze sales data and provide actionable insights to sellers on aspects of their business, like inventory.

Amazon’s tools, however, are based on consumer demand, and, as a result, they struggle to account for seasonal goods, promotional periods, and external traffic Additionally, these tools do not include year-overyear comparisons, nor do they anticipate stock requirements or transit times for Amazon fulfillment centers Despite these shortcomings, they can give you simple starting point for data and help you forecast

BasicsforForecastingonAmazon

To forecast sales on Amazon, sellers need to have a basic understanding of traffic and conversion rates, market trends, and competitor activity Traffic data indicates how your customers navigate to your product pages and which of your advertising campaigns are most successful Evaluate this data over time to predict how future campaigns will perform. Understanding the underpinnings of successful marketing campaigns will help you plan for the future

Historical sales provide a baseline for forecasting If you need to do so, manually tracking sales history monthby-month, allows you to evaluate the year as a whole in order to fully understand macro-level market trends When planning for the future, these figures will be a guidepost for your required supply

For sellers using Amazon fulfillment, track how many units were sent to Amazon fulfillment center and make sure you did not miss any sales due to unavailable stock This data can help you accurately integrate logistic requirements to maximize profits.

Additionally, analyzing market trends and competitor activity will help you more fully understand your ecommerce environment and how it might influence your sales Use tools like Google Trends, monitor activity on social media platforms and “social commerce, ” and watch Amazon's Best Sellers list to track emerging trends – which can help you prepare and capitalize for potential surges

HolidaySeasonForecasting

Holidays, such as Black Friday and Cyber Monday can be a significant source of revenue, but only if you are prepared Without proper forecasting, you could fail to take advantage of these peak periods, or get quickly overwhelmed due to poor planning. Analyze data from previous holiday periods to see whether your products are relevant to specific times of the year.

For example, if your products are popular during summer vacation, be sure to account for the surge in demand and ready your inventory ahead of time Having enough stock on hand to meet demand, but not so much that excess inventory becomes a burden or costly, is an important balance

Forecasting should go hand-in-hand with your marketing strategy. If you know your products are in demand during the holiday season, offer themed promotions or bundle deals, or create gift guides to help customers find products that perfectly match their needs

Regardless of the occasion, successful e-commerce sellers must stay diligent and adjust to yearly trends in order to maximize their sales potential.

Running a successful e-commerce business is challenging; standing out in a crowded market and handling complex logistics often overwhelm businesses operating in the e-commerce space. Although forecasting requires front-loaded work, it is an essential aspect of any business strategy that will streamline your operations in the long run.

By partnering with ZQUARED, you can rest assured that your products on Amazon are handled by industry experts. ZQUARED ensures that all your product listings are optimized, MAP pricing is regulated, and core data is synthesized and easily accessible in reports. Spend more time focusing on your business strategy, and less time worrying about your Amazon channel by working with ZQUARED.

DATES TO WATCH OUT FOR FATHER'SDAY

Father's Day can have a significant impact on ecommerce operations, as it is a major gift-giving occasion. Many consumers turn to online retailers to purchase gifts for their fathers or father figures, and e-commerce businesses often offer special deals and promotions to attract these shoppers. As a result, e-commerce businesses in relatable categories may see a surge in website traffic and sales leading up to Father's Day. To capitalize on this opportunity, you may need to adjust your marketing strategies, ensure that your website is optimized for mobile devices, and maintain sufficient inventory levels to meet the increased demand.

INDEPENDENCEDAY

On Independence Day, many online retailers offer Independence Day promotions, such as discounts or free shipping, to attract shoppers looking for deals. This tactic can result in an increase in online orders and website traffic, putting pressure on e-commerce operations to ensure that orders are processed and shipped in a timely manner. Additionally, some e-commerce operations may experience reduced staffing levels due to the holiday, which can further complicate the logistics of fulfilling orders. Overall, Independence Day can be a busy time for your business, requiring careful planning and execution to ensure that you can meet customer demand and maintain high levels of service.

COMMUNITY COMMUNITY

ZQ 101

Foundedin2010,ZQUARED is a leading e-commerce partner.

Ranked as a top 100 AMAZON SELLER with over 85k reviews and a 100% positivity rate, ZQUARED's core team has more than50ofyearscollectiveexperience.

OURPURPOSE

ZQUARED invests in brands who sell on online marketplaces and are poised and ready for growth.

WE-COMMERCE

Putting the " we " in e-commerce

At ZQUARED, we understand the opportunities, risks, and challenges of selling online With over 50 years of combined e-commerce sales experience, our primary goal is helping you multiply your success by serving as an extension of your team to maximize results From distribution to advertising strategies, we have solutions proven to grow your brand

YOU GROW, WE GROW

Built on the belief that all boats rise with the tide, our services are based on this principle. ZQUARED invests time, money, effort, and energy into brands poised for success with the expectation of a worthwhile result- beacause we go all-in, growing together and winning. when you win.

OUR MISSION

Our mission is to invest in brands who sell on online marketplaces and are poised and ready for growth by forming partnerships built on trust and rooted in relationship to maximize value and achieve results.

OUR VALUES

UNPARALLELED CULTURE

ZQUARED'S motto is "we-not-me", and we strive to build an unparalleled culture by incorporating this attitude into every aspect of our workplace , Our team is built on trust as well as excellent communication and a service-based mindset to get the job done

FIRST-RATE EXECUTION

We strive to provide unmatched quality when servicing each of our Brand Partners By intentionally being proactive, prepared, and in constant pursuit of improvement, our promise hinges on delivering top-quality results in all aspects of our work

ENTHUSIASM

Our partnerships are more than transactions - we invest in people and brands who share our drive and enthusiasm, deepening partner relations while collaborating to execute expert-level growth strategies.

OUR HISTORY

With more than a decade of experience, we've learned what it takes to win in the most competitive e-marketplaces: ultimately, people matter more than products, and investing in people first leads to growth and profitable brands. Originally named Advantage Nutrition, ZQUARED brothers and co-founders Chad and Zach Cornett set out to establish a brick-and-mortar retail company with an emphasis on health and wellness. They pivoted when they realized e-tail, particularly Amazon, was taking off, recognizing brands needed help navigating the ever changing e-commerce landscape.

2010

2011

Charlie Meyer was ZQUARED's first official hire, and he's been with us ever since. Our people are our foundation.

ZQUARED has moved three times since leaving the original spot in Chad's basement, doubling it's footprint with each move and growing to a staff of 40+.

Inc. recognizes ZQUARED as one of the fastest growing privately-held companies in the United States, while the St. Louis Business Journal names ZQUARED on it's "Fast 50" list.

2014 2019 2021

ZQUARED hires Jeff Bush as President, positioning the company for continued growth.

MEET THE MEET THE

OUR COMPANY

A united team is always behind something big. We work hard, laugh a lot, push the brainstorming boundaries, and have the best holiday parties in town.

OUR CULTURE

Founded by brothers, ZQUARED's roots as a family-oriented company run deep. Our "we-not-me" team works together to achieve common goals while supporting one another individually, both professionally and personally. We intentionally invest in what matters most, and our people are our greatest investment.

OUR CORE

Meet the people at ZQUARED and share the vision and values of our community. We're propelled by the idea that results are driven by relationships, diligence and enthusiasm.

GET TO KNOW US

TTEAM EAM

CONTACT US

Alex Cornett

Alex has been an integral part of the ZQUARED family for many years now He manages inventory purchasing, monitors the health of our sales channels, and handles catalog issues that may arise Alex graduated from the University of Missouri in 2020 with a degree in Economics

Outside of work, you’ll find him wrapped up in whatever sports game is on TV

L E A N

At ZQUARED, Lean has become a way of life. We don't simply strive to be Lean at work anymore. As a team, we have adopted the mindset of getting "two percent better" every day in all aspects of our lives - which, over time, has added up to profound changes.

WHAT IS LEAN?

LEAN

ZQUARED LEAN

1 OnePieceFlow

Setting up your daily processes so that each step connects to the previous one can save time and energy. Begin making efforts to avoid any form of backtracking, and focus on a continual workflow without interruptions. Step 1 should seamlessly lead to step 2, which flows into step 3, and so on.

2 FixWhatBugsYou

A critical component of the Lean mentality is addressing the little things that irritate

you and potentially slow you down. For example, at home, where do yoou keep your favorite coffee mug? Is it conveniently stowed in the cabinet by the coffee pot, or do you have to walk to the other side of the kitchen to find your cup? Fix what bugs you!

3 EliminateWaste

Are you spending your time, energy, or money on things that boil down to a waste of time in the long run? Are there things you can outsource, reconfigure, or eliminate altogether to improve efficiency?

Look for ways to "cut the fat" and eliminate the tasks and items that are wasting your resources

THE 8 WASTES OF LEAN

OVER-PRODUCTION

Over-production is one of the eight wastes commonly identified in lean manufacturing and process improvement. Over-production refers to producing too much of a product or service and / or producing it before it is needed. Examples of over-production waste could include making too many boxes for an order or taking too much product off the shelves and having to put it back later. By identifying these “wastes”, we are able to save time and fix what bugs us. Over-production waste can lead to excess inventory, unwanted price reductions, supply chain disruptions, a negative environmental impact, and a broader economic turndown. At ZQUARED, we have identified and eliminated over 50+ over-production wastes in everyday operations which not only improves our process efficiency, but reduces costs for our Brand Partners.

DR. DEMING'S 14 POINTS

Along with Lean, Dr. W. Edwards Deming's 14 points have become an everyday guideline for us at ZQUARED to follow. The 14 points are a set of principles for effective management that have been widely adopted in many organizations around the world. These points provide ZQUARED with a framework for improving the quality of our products and services, increasing customer satisfaction, and enhances the performance of employees. By implementing Dr. Deming's 14 points,

ZQUARED has created a culture of continuous improvement that focuses on reducing waste, improving efficiency, and increasing productivity. This focus results in cost savings, increased revenue, and improved competitiveness in the market for ZQUARED and our Brand Partners. The implementation of these points promotes employee engagement, fosters individual ownership, and encourages collaboration and teamwork.

JOIN OUR TEAM

We'relookingfor enthusiasticteamplayersto helpuscontinuebuildingthe industry'sleading investment-minded e-commercepartner.

WAREHOUSE ASSOCIATE

If you're interested in joining our fun, unique, and energetic warehouse team, we are actively seeking hardworking Warehouse Associates. Job responsibilities include preparing customer orders, receiving, and counting incoming products, and inventory reallocation. Must be able to lift up to 45 lbs routinely throughout the workday.