ZQ Magazine - Issue 07 / September • October 2022

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Table of Contents Our Brands Brand Spotlight: Smokey Mountain Brand Highlights Informational Resources Businesses Struggle with E-Commerce Demand Amazon Ad Types Amazon Advertising Basics ZQ Community ZQ 101 Charlie’s Corner Join Our Team Get in Touch 6 8 12 14 16 22 24 30 31 2

A letter from the CEO

This summer has been full, exciting, and rewarding for the ZQUARED team.

Renovations are underway at headquarters to provide additional space to our growing team and warehouse operation expansion. Gearing up for the holiday season, we’ve begun preparing across the board for the busiest time of year, from stocking up inventory to Black Friday promotions.

Outside of headquarters, our team has been traveling coast to coast – from Florida to California – furthering relationships with our Brand Partners, exploring new opportunities and attending key trade shows.

Additionally, we officially hit 1M units shipped in July, with an average of 35k units outbound from ZQ weekly.

As we enter Q4 and anticipate the holidays, we intentionally pause to appreciate the growth we’ve experienced so far this year while diving headfirst into planning for 2023. We are proud of our Brand Partners and the ZQUARED team for coming together in a collaborative, relationship-based approach to business.

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Our Brands 5 ISSUE 07

Spotlight Brand

In 1985, Smokey Mountain Chew was born as the first true innovator in the smokeless tobacco alternative space. Since its inception, the company has experienced tremendous growth, meeting a need in the industry for nicotine-free and tobacco-free alternatives to dip.

Their vision for assisting adult tobacco consumers in taking back their tobacco-free lives has attracted attention from well-known names. Pro Football Hall of Fame NFL Inductee Randy White tried the product many years ago and became a fan and spokesperson. Later, National Baseball Hall of Fame Inductee Chipper Jones, while trying to quit chew, also started dipping Smokey Mountain and has represented the company ever since.

CHALLENGE

Before partnering with ZQUARED, Smokey Mountain had achieved a high level of success. However, the company faced considerable challenges specific to the Amazon platform. Multiple unauthorized sellers competing for the Buy Box on key products, duplicate detail pages, and unchecked MAP violations stunted their growth efforts and created a web of obstacles.

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PLAN

Together, ZQUARED and Smokey Mountain developed a strategic plan for overcoming these obstacles and furthering growth. Elements of this plan included three key areas for execution:

Consolidate third-party sellers into an approved list of distributors and remove unauthorized resellers.

Eliminate duplicate and unauthorized listings to reduce potential customer confusion, streamline the catalog and regain listing control.

Create and enforce a revised MAP policy to ensure consistent pricing across all channels.

EXECUTION

To help narrow the list of sellers, ZQUARED conducted an extensive platform analysis, identifying all rogue sellers that were unauthorized to distribute products. ZQUARED and Smokey Mountain worked together to remove unauthorized sellers, leaving only approved sellers who operated within the brand’s set guidelines.

Since duplicate and unauthorized listings were created by unapproved sellers, their removal from Amazon simultaneously streamlined the catalog. The listings that remained are now under Smokey Mountain’s control.

ZQUARED and Smokey Mountain collaborated on creating a new MAP policy to resolve the pricing issues that plagued their online marketplaces. Smokey Mountain was able to effectively enforce the new policy, protecting the brand image, stabilizing pricing, and creating consistency across platforms.

RESULTS

ZQUARED was able to help Smokey Mountain reduce the number of resellers to a select and authorized few, allowing them to increase the impact of their strategic advertising. Additionally, their newly streamlined brand presence and organized brand catalog helped improve the overall shopping experience for the customer. ZQUARED is proud to be in a partnership with a category innovator and looks forward to supporting Smokey Mountain’s continued growth.

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HighlightsBrand

For the months of September and October, we’re highlighting Canada RNA, Bimeda, Delta Nutrition and Grillinator. We’re honored to be a part of the journey alongside these incredible brands.

Year Founded: 2001

Category: Supplements

Year Founded: 1960

Category: Pet

FUN FACT

CRNA is focused on applying modern scientific technologies to the power of traditional medicines to unleash their fullest potential in health and wellness.

FUN FACT

Bimeda is headquartered in Oakbrook Terrace, Illinois, and has four manufacturing facilities and employs over 170 people.

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Year Founded: 2014

Category: Supplements

Year Founded: 2018

Category: Grilling & Outdoor Cooking

FUN FACT

The original founders of Delta Nutrition started the company because they were tired of paying a small fortune for nutritional supplements. They believed that more affordable supplements was something the market needed, and they brought this vision to life with Delta Nutrition.

FUN FACT

Founders Brad, Shawn, and Damien (collectively known as the Grillinator Boys) all have their own preferences when it comes to grilling. Spice selection, sauce usage and grill type are all up for debate, but they each find their link in their shared passion for grilling.

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Informational

Resources 11 ISSUE 07

Businesses Struggle

with E-Commerce Demand

E-commerce growth has soared since the onset of COVID-19, surpassing FTI Consulting’s pre-pandemic 2025 sales figures projections. It is on course to reach $1 trillion in 2022 for the first time ever. Analysts predict e-commerce retail to grow at a 10% compound annual growth rate through 2027, and exceed $2 trillion by 2030, which will comprise 31% of the total retail market share. Despite rapid growth, paradoxically, e-commerce demand has not always yielded profit for online sellers due to spikes in infrastructure, operational costs, and the changing role of consumers.

A study conducted by Ipsos for Publicis Sapient and Salesforce surveyed over 300 businesses across Europe, the U.S., and Australia and found that online sellers are almost twice as likely as brick-and-mortar retailers to report that their businesses are unprofitable (44% versus 20%) and nearly twice as likely to say they are struggling to make the investments necessary to improve profitability (69% versus 39%).

Jeffrey Sward, founding partner and CEO at Merchandising Metrics, explained the phenomena citing the changing role of the customer. Traditional pricing in-store schemes were built around the customer acting as a highly productive free employee: “They showed up at the store, they shopped, they selected, they picked, they packed, they took it all to a register then did their own delivery back to the house. Simple. Beautiful.” Today, online sellers are expected to deliver to the doorsteps of their customers in increasingly effective manners, with Amazon and Walmart leading the charge on “same-day delivery,” significantly raising the operational costs for sellers.

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Despite the challenges the e-commerce supply-chain poses to businesses (including a higher rate of return for products bought online), Forrester Research Inc.’s Vice President and Principal Analyst Sucharita Kodali predicts that e-commerce will continue to take a greater share from the physical retail each year – reflecting buyer preference for ease of shopping experience, more fulfillment options, and growing use of buy-online pickup in store (BOPIS) and buy-now pay-later services.

As a result, many businesses are adjusting their strategies to streamline supplychain costs by either partnering with businesses that can provide brick-andmortar infrastructure or off-setting delivery logistic costs through selling via Amazon or Walmart Marketplace. Both e-commerce giants have invested heavily in their logistics infrastructure across the U.S., while Walmart has even proposed to sell best-selling Marketplace items directly on their store shelves.

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Amazon Ad Types

Amazon Ads play a key role in sustained success on the platform. Whether you’re an established seller or just starting out, ads are important for driving traffic, gaining brand recognition and, improving ranking.

There are many forms of advertising that can be utilized both on and off Amazon to drive traffic to detail pages. In this article, we’ll focus on the three most successful Amazon Ad types: Sponsored Products, Sponsored Brands and Sponsored Display.

Sponsored Products

Sponsored Products ads are the most flexible Amazon ad type, allowing you to advertise singular products by bidding on relevant keywords. Sellers bid the maximum amount that they’re willing to pay when a shopper clicks an ad for their product. The more competitive the bid, the more likely the ad is to be displayed when it matches a customer’s shopping query.

If your ads win the bid, it appears right where shoppers will notice them the most – at the top of the first page of their search results. This is a powerful tool for maximizing your product’s visibility.

Amazon claims that in the first year of launching a campaign advertisers saw an average weekly increase of 54% in glance views, and 40% in units ordered.

Sponsored Brands

Sponsored Brands are the second most utilized Amazon ad type and are available to Brand Registered sellers. These are the large banner ads that you see at the top of your Amazon search results page.

The ads typically include a brand’s logo, a personalized tagline, and multiple examples of your products that correspond with the selected keyword. There are three types of sponsored brand ads:

1. Product Collection – promotes multiple products from a landing page of your choice

2. Store Spotlight – drives traffic directly to your Amazon storefront

3. Video – features a single product with an autoplaying video

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Sponsored Brand ads provide a more visual ad experience to shoppers, and offer an opportunity to build brand awareness, connect shoppers to your storefront and product line directly, and create a branded shopping experience.

Similar to Sponsored Products, you control your ad spend by setting your budget and bids. You only pay a fee when a customer clicks your ad.

Over the years, Sponsored Brands have increased in popularity. Today, 38% of third-party Amazon sellers utilize them, including 66% of sellers who’ve hit lifetime sales of $1 million.

Sponsored Display Ads

Sponsored Display ads provide a solution for reaching audiences both on and off Amazon. Similar to Sponsored Brands, this ad type is only available to Brand Registered sellers or vendors.

Sponsored Display Ads are more exclusive than other Amazon ads types, meaning less competition and more potential opportunity. Additionally, these ad types can provide more exposure than alternatives as well. Ads may be featured on the Amazon home page and shopping results pages, as well as third-party websites and apps.

Compared to Sponsored Products and Sponsored Brands ads, some reports show that Sponsored Display ads yield a lower return on ad spend (RoAS). However, they are a unique opportunity to drive off-Amazon traffic to your product detail pages which can offer residual benefits.

What Are the Benefits of Amazon Sponsored Ads?

There are many benefits to utilizing Amazon sponsored ads, but the biggest advantage is brand and product visibility. Paying to have your brand shown immediately in a consumer’s search results positions your brand or product first and front-of-mind. It allows for market capture based on search terms and provides a competitive advantage that might not be achieved organically.

THE ZQUARED ADVANTAGE

ZQUARED helps brand partners capture relevant consumer audience attention through advanced advertising strategies. Our proprietary advertising platforms allow access to key performance indicators (KPIs) that help drive campaign measurement and optimization with the goal of better understanding target markets to increase brand and product awareness and revenue.

We leverage the experience of our dedicated experts to create, monitor, and audit product listings to ensure compliance, effective keywording, and company branding.

To learn how ZQUARED can help you stay ahead in the Amazon game, request a comprehensive assessment of your Amazon channel from our Amazon Investment Partnership Team. You will receive audit results focused on your listings, category, competitors, reseller landscape and more with an individually-tailored strategic plan designed to capitalize on opportunities.

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Amazon Advertising Basics

In order to effectively sell on Amazon, seller’s need to create a comprehensive digital strategy that allows them to stand out amongst the sea of competitors. While an amazing product, eyecatching imagery, and captivating product listing content are all essential to driving sales and revenue, in today’s digital environment, those elements are not enough to hang your sales strategy on. Incorporating Amazon advertising into your digital strategy is as crucial as it gets for your product to be in front of the right consumer audience at the right time, which can enhance product viewership and lead to higher sales conversions.

Overview of Ad Spend on Amazon

Amazon offers a multitude of sponsored ad types that provide brand and product visibility by displaying a seller’s product based on a consumer’s search results. It allows for potentially higher market capture and helps brands to compete on keywords that might be difficult to rank for organically.

Setting Your Ad Spend Budget

When creating ad campaigns on Amazon, sellers will need to establish a budget, either on a campaign level or daily spend. A campaign-level budget allows the seller to set an overall total advertising cost (Ex. $10,000), while a daily spend budget allows for the seller to set a daily limit on advertising (Ex. $100/day). Ad campaigns can be created using manual ad bidding where the seller sets their own bids (for those experienced in media buying) or with automated ads, which allows sellers to use automatic bidding and ad campaign optimization.

Amazon ad bidding utilize the following cost structures:

Cost-per-click (CPC): The average cost you pay each time someone clicks your ad. This number is calculated by dividing the amount of money you spent on an ad by the number of clicks it received. Sponsored Products and Sponsored Brands are examples of cost-per-click ads, so you only pay when your ad receives clicks.

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Cost-per-thousand-impressions (CPM; “cost per mille”): The average cost you pay to deliver 1,000 impressions of your ads. Whether or not a consumer actually sees the ad (impression), a seller is still charged a fee for the ad space.

Cost-per-thousand-viewable-impressions (vCPM): The average cost you pay to deliver 1,000 viewable impressions of your ads. A consumer needs to actually see the ad (impression) on the web page for a seller to be charged a fee for the ad space.

Monitoring Your Advertising Spend

For a seller to properly manage their ad spend, they must first establish a budget (campaignlevel or daily spend). If they want a campaign to run for a month, they will need to set a maximum daily spend budget in order to not run through the majority of it within the first few days or weeks. Understanding the default bid amount – the cost of the ad placement – will allow a seller to work backwards to estimate their average daily or monthly spend when establishing their budget (total campaign spend and daily spend, no matter which budget strategy is chosen).

Throughout the campaign, staying on top of keywords, campaign performance metrics and trends, and product selection will be crucial for running an effective campaign that minimizes Advertising Cost of Sales (ACOS) and maximizes Return on Ad Spend (ROAS). More on these metrics in the next section, but making sure that relevant keywords with a healthy conversion rate are being utilized will ensure that the proper audience is receiving the ads.

Analyzing data allows for insights that will drive campaign adjustments. For example, a product listing is receiving a high click-through rate on an ad, but the conversion rate is low. This means that the ad is relevant to consumers but something on the Product Detail page is deterring them from purchasing. This allows the seller to maintain their current ad campaign, make the necessary edits to their Product Detail page, and then remeasure their metrics based on the changes. Comparing pre- and post-edits will allow the seller to know if their changes were effective or if more changes are required.

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How to Analyze Amazon Ad Campaign Metrics

There are quite a few valuable metrics that help to determine if an ad campaign is effectively targeting core audiences and resulting in increased traffic, sales, revenue, and more. Below is a list of key advertising campaign metric terms from Amazon that will help you better understand how to measure the success of your ad campaigns.

Advertising Cost of Sales (ACOS):

A metric used to measure performance of Sponsored Products and Sponsored Brands campaigns. ACOS represents the ratio of ad spend compared to promoted product sales (Sponsored Products) or overall brand sales (Sponsored Brands). It is calculated as ad spend divided by attributed sales.

Brand Lift:

A measurement of the direct impact your ads have on a shopper’s perception and behaviors toward a brand. This metric is calculated in a variety of ways using postexposure success metrics, such as brand awareness and likelihood to purchase metrics.

Click-Through Rate (CTR):

The percentage of ad impressions that are clicked when compared to the total number of ad impressions to show the effectiveness of the campaign. The standard calculation for CTR is (clicks/total impressions) x 100.

Conversions:

An action that a customer completes; this phrase can be used to refer to any number of actions, including clicking “Add to Cart,” completing a purchase, etc.

New-to-Brand Metrics:

New-to-brand metrics describe customers purchasing your brand/product for the first time on Amazon over the past year. These metrics allow advertisers to estimate the cost of engaging new customers on Amazon and identify the most efficient channels and tactics to achieve their campaign goals.

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Impressions:

The number of times an ad was rendered on a page or device.

Reach:

The total number of users who are shown the same ad on any web page or screen.

Return on Ad Spend (ROAS):

A measure of how many dollars you earn for every dollar spent on advertising. The standard calculation for ROAS is (total ad sales) / (total ad spend).

Return on Investment (ROI):

A measure of how much net profit is earned for every dollar spent. The standard calculation for ROI is: ((revenue – cost) / (cost)) x 100.

THE ZQUARED ADVANTAGE

ZQUARED helps brand partners capture relevant consumer audience attention through advanced advertising strategies. Our proprietary advertising platforms allow access to key performance indicators (KPIs) that help drive campaign measurement and optimization with the goal of better understanding target markets to increase brand and product awareness and revenue.

We leverage the experience of our dedicated experts to create, monitor, and audit product listings to ensure compliance, effective keywording, and company branding.

To learn how ZQUARED can help you stay ahead in the Amazon game, request a comprehensive assessment of your Amazon channel from our Amazon Investment Partnership Team. You will receive audit results focused on your listings, category, competitors, reseller landscape and more with an individually-tailored strategic plan designed to capitalize on opportunities.

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ZQ Community 21 ISSUE 07

Founded in 2010, ZQUARED is ranked as a top 125 AMAZON SELLER with over 75k reviews, 100% of which are positive over the last 12 months.

OUR PURPOSE

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 are a team of professionals who understand the opportunities, risks and challenges of selling online. With nearly 40 years combined experience of e-commerce sales, 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—TOGETHER

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— because we go all-in, growing together and winning when you win.

OUR MISSION

Our mission is to invest in brands who sell online 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, empowering a team built on communication and trust with 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 on Amazon: ultimately, people matter more than products, and investing in people first leads to growth and profitable Amazon brands.

2010

WORKING OUT OF CHAD’S BASEMENT

2011 HIRING OUR FIRST EMPLOYEE 2014 PLANTING IN ST.

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 everchanging e-commerce landscape.

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

ZQUARED three times its original basement, footprint with and growing 50+.

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PLANTING ROOTS LOUIS 2019 HARD WORK PAYS OFF 2021 AND BEYOND

2014

ZQUARED has moved times since leaving original spot in Chad’s basement, doubling its with each move growing to a staff of

Inc. recognizes ZQUARED as one of the fastest-growing privatelyheld companies in the United States, while the St. Louis Business Journal names ZQUARED on its “Fast 50” list.

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

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OUR PEOPLE

Melanie DeMauro

As ZQUARED’s Brand Content Director, Melanie manages online content creation for our Brand Partners. Additionally she oversees the development, execution and delivery of content related to all aspects of the Amazon platform.

One of her favorite aspects of her job is the opportunity to work for a family-owned business that truly cares not only about the success of its brands, but also its employees.

Melanie lives in Charlotte, NC with her husband, Chris, and two teenage sons, Mason and Miles.

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 people are our greatest investment.

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.
September / October Employee Spotlight
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MEET THE TEAM

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

Know Us!

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Charlie’s Corner

WHAT IS LEAN?

At ZQUARED, Lean has become a way of life. It’s not something we simply do at work any more. As a team, we have adopted the mindset of getting “two percent better” every day –which over time, has added up to profound changes!

ABOUT CHARLIE

General Manager Charlie Meyer joined ZQUARED as the founders’ first full-time hire in 2010. Charlie shines brightest when making investments in ZQUARED’s most valuable asset - its people. Charlie’s Corner offers a glimpse into his world, sharing his favorite Lean Improvement insights while offering a peek behind ZQUARED’s curtains.

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SEPTEMBER & OCTOBER LEAN IMPROVEMENTS

ZQUARED LEAN 1

In 2016, Joe Byers joined our team from General Motors Automotive facility. He and I took a tour of GM to learn from their fine-tuned efficiencies and productivity workflows. Around the same time, a workplace neighbor shared “2 Second Lean” with me – a book about one piece flow, fixing what bugs you, and eliminating waste. These two events propelled our team into a new mindset, as we began to implement daily “Lean Improvements”. Making daily two-second improvements continuously add up, and over time can have exponential results.

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 into 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 you and potentially slow you down. For example, at home, where do you 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!

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 your efficiency? Look for ways to “cut the fat” and eliminate the tasks and items that are wasting your resources.

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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 Amazon partner.

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.

Reach out to Charlie Meyer for more information: charlie@zquared.com

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Follow Us! We provide solutions for managing all aspects of the Amazon platform • Multiply Your Brand’s Success ZQUARED / [skwaird] (noun) Get in Touch! partners@zquared.com If you’re attending this event, let us know! We’d love to see you there. NASC Show October 2-4, 2022 Las Vegas, NV https://zquared.com/contact Check the Website 31 ISSUE 07
WWW.ZQUARED.COM

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