ZQ Magazine - Issue 15 / January • February 2024

Professional E-Commerce Retailers

MAGAZINE AMAZON & HOLIDAY RETURNS Learn strategies to lower your risk amongst the inevitable spike in returns following the holiday season

AMAZON ANNOUNCES OVERHAULED FEES Read about changes involving low inventory level fees, storage fees, fulfillment rates, & more

Issue 15 | January / February 2024

Table of

CONTENTS 3 Letter from the CEO

6 Brand Highlights

10 Amazon & Holiday Returns

Co-Founder & CEO Zach Cornett gives updates on the market and provides vision for 2024

This issue features Smokey Mountain, HawkGrips, Pacinos and Forager’s Feed

Learn strategies to lower your risk amongst the inevitable spike in returns following the holidays

12 Amazon’s Overhauled Fees

14 E-Commerce Calendar

18 ZQUARED 101

Read about changes involving low inventory level fees, storage fees, fulfillment rates, & more

Check out upcoming significant dates that are likely to impact e-commerce sales

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

24 ZQUARED Lean

26 Join Our Team

27 Get in Touch

At ZQUARED, Lean is a way of life; explore the Lean philosophy and the latest ZQ Lean improvements

Help ZQUARED continue to grow as the industry's leading e-commerce investment partner

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

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Letter from the

CEO

As we bid farewell to 2023 and usher in 2024, we find ourselves anticipating the ever-changing landscape of eCommerce. This year presents a blend of uncertainty and opportunities, particularly with Amazon's recent adjustments to inventory fees reshaping industry strategies.

The surge in demand for manufacturing and storage space necessitates adaptability and alignment. In an industry that surpassed 6 trillion dollars last year, effective communication and heightened capabilities are pivotal. At ZQUARED, we've devised a robust plan to address these changes, ensuring our continued leadership in the eCommerce sector.

Our heartfelt gratitude extends to our Brand Partners for joining us on this journey into 2024. Additionally, a sincere appreciation goes out to the entire ZQUARED family for their unwavering dedication and hard work. Together, through consistent action and effort, we look forward to another successful year ahead.

Zach Cornett Co-Founder & CEO, ZQUARED

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OUR

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BRANDS

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BRAND HIGHLIGHTS

Smokey Mountain

Health & Household Pro Football Hall of Fame Inductee Randy White and MLB Hall of Fame Inductee Chipper Jones are both avid fans and spokespersons for the Smokey Mountain brand

HawkGrips

Health & Household Hawkgrips was inspired by the personal healing and progress that founder Frank Osborne experienced from IASTM tools.

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Pacinos Beauty & Personal Care Founder Erich 'Pacinos' Roa is a celebrity barber and entrepreneur who has made a name for himself in the world of men's grooming

Forager’s Feed Pet Forager's Feed is on a mission to provide eco-friendly, sustainable, and nutritious feed for dogs, poultry, fish and other animals.

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INFORMATIONAL

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RESOURCES

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Amazon & Holiday Returns The holiday season has come and gone, leaving a trail of twinkling lights, joyful memories, and, unfortunately, a mountain of returns. While some Amazon sellers meticulously strategize and bolster their return infrastructure, others might be caught off guard, facing customer service backlogs, processing delays, and ultimately, reputational damage.

The question becomes: how can brands weather this inevitable storm and emerge stronger on the other side?

Firstly, sellers utilizing Fulfillment by Amazon (FBA) need to understand Amazon’s return policy, which is set to change in 2024. Starting June 1, 2024, the returns processing fee will expand to include all high return-rate products across all categories except for shoes and apparel. The fee ranges from as little as $1 to more than $150 per return item depending on the item weight. Whether a product qualifies as a “high return-rate” depends on the return rate relative to the average in your product’s category.

The best strategy for brands is to mitigate excessive returns, which requires understanding why customers return items. Thankfully, Amazon makes gathering this data easy, as customers who submit a request to return their order must choose a reason. Some reasons – like improper packaging or damaged items – may be within seller control, while others, like buyers changing their minds, are not.

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Regardless of how efficient a business is at mitigation they should still expect returns especially during the holidays. According to industry analysts, a staggering 42 percent of holiday shoppers return some or all their purchases. This makes top-class customer service to smooth over potential frustrations essential. As disheartening as it can be to accommodate entitled customers, providing quality customer service – driven by sound communication – is key to 5-star reviews and brand loyalty. 56 percent of shoppers that face a poor return experience never purchase from that brand again.

Smaller brands with limited logistical infrastructure may want to consider collaborating with third-party ecommerce specialists, which can ease returns and other logistical challenges.

Here are some of the ways they can be invaluable: Enhanced customer service: Outsourcing customer service can ensure brands respond quickly to customer questions, troubleshoots issues, and guide customers through the return process, overall providing a positive experience even during peak holiday periods.

Real-time data and analytics: Third-party consultants can provide valuable insights into return trends, identifying problem areas a business may face. By analyzing return reasons and customer feedback, brands can improve product quality, packaging, and communication, minimizing future returns.

Reduced operational costs: Outsourcing return management can be surprisingly costeffective, often resulting in lower processing fees and reduced personnel costs compared to in-house solutions.

Remember, preparing for the inevitable is key. In the dynamic world of ecommerce, proactive strategies and strategic partnerships are the difference between weathering the return storm and getting swept away. By partnering with companies like ZQUARED, brands can streamline the return process, enhance customer service, gain valuable data insights, and improve brand loyalty in the long run. If your brand can leverage the support available, the post-holiday tide can transform from chaos to an opportunity to grow and stand out from the crowd.

To learn more about how ZQUARED can help your brand, email us at partners@zquared.com.

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Amazon Announces Overhauled Fulfillment Fees

In late 2023, Amazon announced plans to revamp its popular Fulfillment by Amazon (FBA) system, its storage and distribution infrastructure utilized by millions of Amazon third-party sellers to guarantee two-day delivery to their customers.

For Amazon, the goal of this strategic shift is to improve delivery efficiency, reducing transportation and operational costs as well as the environmental toll. Unfortunately for sellers using FBA, the changes include new and amended fees, predicted to increase average seller shipping costs by $0.15 per unit sold - a rate Amazon defends as 70% less expensive than their competitors.

Starting on March 1, 2024, there will be a new inbound placement fee –when the product is sent to an Amazon fulfillment center – which will average $0.27 per unit for standard-sized items and $1.58 per unit for large bulky-sized items. The fee can be reduced depending on whether sellers send their products to a single fulfillment storage center, rather than multiple.

Additionally, Amazon announced a new “low inventory level fee” for sellers using FBA, which begins on April 1, 2024. The fee only applies to standard-sized products, however, and can be avoided by maintaining more than four weeks of inventory relative to sales for that given product. To help dampen the blow, Amazon also announced that storage fees for

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standard-sized products during non-holiday months (January through September) will lower by $0.09 per cubic foot.

The good news for sellers is that fulfillment rates – delivering the product to your customers from FBA facilities – will lower. Amazon expects an average drop by $0.20 per unit for standard sized products, and a drop by $0.61 for large and bulky-sized products.

The new rates will apply starting April 15, 2024. For products below $10, there will be an additional $0.77 discount on fulfillment fees per-unit.

Additionally, for products that can be shipped in their existing packaging, Amazon offers a discount fulfillment fee, called the Ships in Product Packaging (SIPP) program, with discounts ranging from $0.04 to $1.32, depending on the size and weight.

Efficient and timely customer fulfillment is central to any successful ecommerce business strategy. By understanding the upcoming FBA fee changes and their potential implications, sellers can adapt their strategies and mitigate potential challenges. This proactive approach can help them remain competitive in the Amazon marketplace and leverage FBA effectively in 2024 and beyond.

How ZQUARED Can Help Are you struggling to stay ahead of Amazon’s continuously changing policies and systems?

ZQUARED is an industry expert ready to act as a resource for helping you pivot quickly and efficiently, keeping your business running smoothly amidst the unknown.

Our model includes comprehensive benefits provided on our dime, because we are committed to your success. We handle key e-commerce functions like SEO, content creation, logistics management, and advertising, working to provide you with the greatest advantage in your space.

To learn more about how ZQUARED can help your brand, email us at partners@zquared.com.

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SAVE THE DATE

E-COMMERCE CALENDAR

New Years Day January 1st

y a D s ’ e n i Valent February 14th

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DATES TO WATCH OUT FOR

New Year’s Day New Year's Day holds significant importance for ecommerce sellers as it marks the beginning of a new sales year and provides an opportunity for fresh starts and strategic planning. Sellers should leverage this occasion to analyze the previous year's performance, identify trends, and set realistic goals for the upcoming year.

Valentine’s Day Valentine's Day holds importance for ecommerce sellers across various niches as consumers actively seek products and services for gifting purposes. Regardless of product range, sellers can capitalize on the occasion by embracing the spirit of Valentine's Day, enhancing customer engagement, and ensuring a smooth shopping experience for buyers seeking gifts or treats for their loved ones.

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ZQ

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COMMUNITY

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ZQ 101 Founded in 2010, 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 than 50 of years collective experience.

OUR PURPOSE

YOU GROW, WE GROW

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

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.

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.

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.

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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.

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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.

2010 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.

2011 Charlie Meyer was ZQUARED's first official hire, and he's been with us ever since. Our people are our foundation.

2014 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+.

2019 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.

2021 ZQUARED hires Jeff Bush as President, positioning the company for continued growth.

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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.

GET TO KNOW US

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.

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TEAM light t o p S e e y o l p m E

ADAM SAEY

CONTACT US

Adam joined the ZQUARED FBA Team in 2023, taking on the roll of processing inventory. He takes pride in motivating the rest of the FBA team and maintaining efficiency and focus. Recently, he’s been working on growing his understanding of the machines we use and cultivating his leadership skills. When he’s not working, you’ll find him cheering on his favorite football team, the Las Vegas Raiders, and playing disc golf.

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LEAN 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.

LEAN

WHAT IS LEAN?

ZQUARED LEAN 1

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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!

One Piece Flow 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.

Fix What Bugs You A critical component of the Lean mentality is addressing the little things that irritate

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Eliminate Waste 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.

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THE 8 WASTES OF LEAN Waste of the Month

WAITING TIME Waiting time waste refers to the unproductive periods or delays that occur during the production process, resulting in inefficiencies and reduced overall productivity.

It arises when work is stalled or hindered due to bottlenecks, dependencies, or inadequate planning. Instances of waiting time waste include workers experiencing idle time due to machine breakdowns or unavailability of necessary materials, delays caused by inefficient workflow design or excessive handoffs, waiting for approvals or feedback, and delays in receiving vital information or instructions from other departments or stakeholders. By effectively addressing and minimizing waiting time waste, organizations can optimize resource utilization, reduce lead times, improve operational throughput, and enhance overall efficiency.

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.

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JOIN OUR

TEAM

We're looking for enthusiastic team players to help us continue building the industry's leading investment-minded e-commerce partner.

OPEN POSITIONS 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.

INTERESTED?

Reach out to Tim Myers for more information: tim.myers@zquared.com

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UPCOMING EVENTS Take a look at the tradeshows on our calendar for the first quarter of 2024. If you plan on attending, let us know! we’d love to see you there!

COSMOPROF MIAMI

January 23-25 | Miami, FL

EXPO WEST

March 12-16 | Anaheim, CA

GLOBAL PET EXPO

March 20-22 | Orlando, FL

AMERICAN’S BEAUTY SHOW

April 20-22 | Rosemont, IL

GET IN TOUCH https://zquared.com

partners@zquared.com

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