ZQ Magazine - Issue 17 / May • June 2023

M A G A Z I N E

THE POTENTIAL TIKTOK BAN & ECOMMERCE

How will the TikTok Ban affect ecommerce sellers? Read about some of the main concerns for those most likely impacted

AMAZON UNDER FIRE

Learn about the FTC lawsuit and the potential impact it may have on Amazon sellers

Learn about the FTC lawsuit and the potential fallout that could ensue once concluded

ZQUARED101

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

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

Letterfromthe PRESIDENT

As we step into summer, brimming with excitement for what lies ahead, we see a world of new opportunities in e-commerce. Looking back, our hard work has paid off, bringing in new partners and improving up our capabilities across the board, making us even stronger in the digital marketplace.

As we move forward, our focus remains sharp on excellence through our core offerings, while staying attentive to the rapid changes in the digital landscape. Challenges and opportunities arise swiftly, but with our expertise and determination, we’ll tackle them head-on, leveraging the latest trends and tech to stay ahead.

We’re also exploring expanding our service offerings to meet the evolving needs of our partners. With our strengthened capabilities, we’re well-positioned to diversify and enhance our range of services in response to market demands.

Let’s seize the endless possibilities ahead, push our limits, and keep aiming for top-notch performance in all things e-commerce. Together, we’ll keep growing and thriving in the ever-evolving world of online business.

Jeff Bush President,ZQUARED

BRANDS BRANDS

BRAND HIGHLIGHTS

SYNTRATECH

Supplements

Syntratchhassoldover1millionbottlesand countingoftheirbloodsugarsupport product.

DELTA NUTRITION

Supplements

DeltaNutritionwasfoundedbyindividuals frustratedwithhighsupplementcosts.They aimedtoofferaffordableoptions,birthing thecompanyfromthisvision.

BIMEDA Pet

BimedaisheadquarteredinOakbrookTerrace, Illinois, hasfourmanufacturingfacilitiesand employesover170people.

FULLBUCKET HEALTH

Pet

ForeveryFullBucketproductbought,onegoes toaananimalinneed.They'veorganized19 GivingTrips,aidingthousandsofworking animalsneedingsupport.

IINFORMATIONAL NFORMATIONAL

RESOURCES RESOURCES

BAN ON BAN ON BAN ON TIKTOK TIKTOK TIKTOK

& THE IMPACT ON ECOMMERCE

The potential ban of TikTok in the U S following a bill passed by U S Congress and signed into law by President Biden on April 24 could rattle the ecommerce industry, particularly for Amazon sellers who were increasingly using the platform to engage potential customers. With its focus on quick, casual engagement among younger demographics, TikTok has become a major game-changer in the way people shop online, spearheading what is known as a “social shopping” trend in which shoppers use social media sites to find and buy products

Since TikTok reached the U.S. in late 2018, it quickly grew into one of the most widely used apps in the country, with over 150 million active users in the U S alone ByteDance, the parent company, is Beijing-based, and political and economic tensions between the U S and China have led to debate over TikTok and its potential national security implications, casting a shadow of doubt over its long-term future of the app in the U.S.

The bill gives Bytedance nine months to arrange a sale or be banned from the U.S. However, analysts doubt whether Bytedance would be willing to sell TikTok with its core algorithms, which provide tailored recommendations for its users – a key driver of its business value, popularity, and potential as a marketing tool for ecommerce sellers. Assuming Bytedance does not sell, a lengthy legal battle could ensue with Bytedance arguing the ban infringes upon freedom of speech.

Because of the vast popularity amongst Gen Z and Millennial audiences, many ecommerce businesses had begun effectively leveraging exposure on TikTok to reach new consumers and increase sales. According to JungleScout, 40% of Millennials and Gen Z consumers start their product search on TikTok, a figure that lowers to 20% across all generations of consumers The same study found that products that went viral on TikTok saw upwards of 2,000% revenue growth. More than half of U.S. enterprise businesses use TikTok ads, and over 20% of Amazon sellers planned to expand to TikTok this year.

Sellers flocking to TikTok had been reinforced by ByteDance’s efforts to break into the ecommerce industry by subsidizing sellers to offer discounts on major shopping days, like Black Friday Prior to the proposed ban, ByteDance projected it would grow its U S e-commerce business in 2024 tenfold to $17.5 billion.

Should the ban be finalized, some analysts believe that social shopping may never recover. “TikTok was one of the biggest, strongest, most visible proponents behind social commerce and livestream shopping,” said Emarketer analyst Max Willen, “They were investing tons of money into trying to encourage adoption in Western markets And if you take them out of the game, it's quite possible that those ideas never really get any foothold in the US ”

However, it hasn’t been just TikTok paving the way for social shopping. Over half of Gen Z’ers prefer Instagram to search for products, indicating quick, bite-sized social media engagement may carry on whether or not TikTok is actually banned from the U.S.

A potential TikTok ban is good news for Amazon, who maintains their grip as undisputed leader in ecommerce, where 56% of all consumers start their shopping experience However, this dominance may not last forever And if brands are looking to maintain a competitive marketing edge with younger consumers, they may want to explore why TikTok had made such an impression amongst younger shoppers, and plan accordingly

THE FTCSUES AMAZON

Following a year-long investigation, the Federal Trade Commission (FTC) and 17 U S states filed an antitrust lawsuit against Amazon over allegations that the ecommerce giant practices illegal anti-competitive behaviors to maintain “monopolistic control” over the ecommerce industry

The plaintiffs hope it will open competition, lower product prices, and lower costs for sellers However, Amazon argues if the FTC and other plaintiffs win the case, it will raise prices, slow deliveries, and reduce options for small businesses Under either scenario, sellers will be interested to see how this case may shift policies that impact their ecommerce businesses

The Allegations

The plaintiffs argue that Amazon inflates online prices, priorities its own brand over other products, compels sellers to use Fulfillment by Amazon to qualify for Amazon Prime, buries listing offered at lower prices on other sites, and forces sellers to pay nearly half of their total revenues to Amazon (a rate that has increased from just 19% in 2014), all of which is meant to stifle competition and maintain their control over the industry

In particular, the FTC's lawsuit centers on the “minimum pricing” policy” which prevents sellers from offering lower prices off Amazon, ultimately allowing Amazon to set prices.

Amazon controls roughly 40% of the ecommerce market with 9 7 million active sellers and reaching 310 million consumers globally. The next most competitive U.S. ecommerce company is Walmart, which accounts for just 6 6% of the market The case could have major repercussions for the ecommerce economy, given the dominance Amazon currently has in online shopping.

Impact on E-commerce Sellers

If the FTC prevails, Amazon may be forced to change its business practices, potentially leading to lower fees and more flexible policies for sellers

Under this scenario, Amazon may have to abandon its minimum pricing policy, allowing sellers to offer more competitive prices on the platform. Additionally, Amazon could be restricted from giving preferential treatment to its own products, ensuring a fairer marketplace for third-party sellers These changes could potentially lead to lower profits for Amazon, but they could also improve the customer experience by offering a wider range of products at competitive prices

However, a win for Amazon could maintain its ecommerce dominance in the market, leaving many sellers feeling as if they don’t have a choice but to sell on Amazon and adhere to their policies.

The outcome of the case will likely determine the future of competition in the e-commerce market. While there is no clear winner yet, one thing is certain: the results of this lawsuit will be felt by both Amazon and the countless sellers who depend on its platform

The FTC's lawsuit centers on the “minimum pricing” policy” which prevent sellers from offering lower prices off Amazon, ultimately allowing Amazon to set prices. “ ”

ZZQ Q

COMMUNITY COMMUNITY

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 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.

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.

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

EmployeeSpotlight EmployeeSpotlight EmployeeSpotlight

JUSTIN STRAGLIATI

Justin Stragliati has been a dedicated member of the ZQUARED team since 2020

Currently, he holds the title of Returns & Receiving Manager, where he leads the department in improving efficiency and organization Beyond his professional endeavors, Justin coaches high school football at Duchesne, where he has dedicated five years to mentoring young athletes He also enjoys immersing himself in music and working out

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?

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

Unused Employee Genius

This area of potential waste is not related to issues within our processes, but rather the potential waste of not leveraging all of the employee talent that we have at our disposal For example, frontline workers often have more understanding into the true causes of problems and errors than their own managers – as well as insightful ideas on how to solve the issue Unused talent is a challenge at companies in every industry In order to eliminate this waste, it’s vital to thoroughly examine the skills and knowledge of employees and discover the best ways for how to put those talents to use to improve our operations

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.

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.

UPCOMING EVENTS

Take a look at the upcoming trade shows on our calendar If you plan on attending, let us know! we’d love to see you there!

IECSC LAS VEGAS

June 22-24 | Las Vegas, NV

August 14-16 | Las Vegas, NV SUPERZOO

August 17-18 | Anaheim, CA FIT EXPO

NEWTOPIA NOW

GETINTOUCH

https://zquared.com

partners@zquared.com

August 25-28 | Denver, CO