The Impact of FBA Seller Strategy on Plugable Technologies
Plugable Technologies & FBA Seller Strategy
Plugable Technologies, founded in September of 2009, has successfully established their goal of “building a better device company” – largely thanks to the implementation of FBA seller strategy & automation.
Before founding the company, Bernie Thompson worked for 15 years at IBM, S3, Microsoft, and DisplayLink on devices and device drivers.
“I saw an opportunity to deliver plug and play products while hitting a higher quality bar and having better support to back them up.”
I hoped the extra cost of doing things that way would work out by focusing on channels where product reviews matter, like Amazon,” he said.
We spoke with Thompson to talk about his company’s growth on the Marketplace and how Fulfillment by Amazon (FBA) has impacted his business in the past 7 years.
Q. How would you describe the early stages of Plugable Technologies?
A. “The short-term goal was launching a first private label product — a USB docking station — within a month. That goal was hit, but it had few sales in the early months until things started snowballing.”
“The first 1.5 years was just me (no employees) with days filled filing incorporation and tax forms, setting up our website, selecting products and doing artwork and documentation, negotiating with vendors, listing products on seller central, and supporting customers,” Thompson said.
“I was excited to build a physical company with a completely warehouse-less model by leveraging FBA.”
About Fulfillment by Amazon:
FBA is considered one of the most influential levers third-party sellers can utilize to improve Marketplace performance, but without a proper FBA analysis, many sellers will see their profitability fall short of projections.
While some sellers are seeing profitable returns through FBA, many are still looking for new revenue channels to drive bottom line growth.
For both brands and resellers, having an advanced fulfillment strategy is critical when it comes to gaining more Buy Box share, increasing detail page conversion rates, and optimizing the overall profitability of Amazon as a channel.
To learn more, check out our recent post: “27 Tips on How to Build FBA Strategy“
“For big shipments, I would rent a U-Haul truck, drive to the customs bonded warehouse to take delivery out of the container, and use the U-Haul as a temporary warehouse for a few hours.”
“I would crawl inside and shuffle boxes around, labeling them all for shipment to Amazon. I would then drive those to UPS and unload them for same-day turnaround. Then I’d return my “warehouse” back to U-Haul,” he said.
“Being a software developer and having to do all the work myself made me motivated to automate as much of the paperwork and communication as possible. I didn’t want to keep checking for new reviews, so created some python scripts to do that for me and email when new reviews were posted. Same with post-order emails, notification of seller feedback, downloading reports for further analysis, etc. — all of that got automated.”
“For a long time I debated whether to offer this automation to others, or keep it as a competitive advantage. After a few years, it became clear that keeping the software ahead of the other alternatives required several full-time software developers, so we decided to give up this potential advantage in order to offer it to others and share the cost of development.”
“This year, we’ve made all these tools available at Efficient Era and have dozens of other sellers taking advantage of them.”
Q. When did you first realize it was essential to build a presence on the Amazon Marketplace?
A. “Plugable bet on Amazon and FBA from day one. I wanted to focus on technology and customer support and not have to worry about selling and the logistics of individual customer orders.”
“I needed our higher investments in product quality and support to be rewarded through positive reviews, so it would all be financially sustainable.”
“Electronics is a brutal category with a lot of big competitors, so I needed a marketplace with transparent processes and pricing — no negotiation — so that a small guy could have a level playing field with the big guys. Those goals made focusing on Amazon Marketplace our best choice in 2009.”
Q. Which Amazon advertising platforms have you seen the most success from?
A. “In the early years, all of our spend was on Google Adwords, but two years ago, we switched almost 100% to Sponsored Products.”
“Amazon has a killer advantage through their ability to see the transaction through from impression, to click, to purchase.”
“By providing reports where we can adjust our efforts based on all of these metrics (including average cost of sales), it allows us to know exactly what we’re willing to spend. With Google driving traffic to Amazon, it’s a guess on how many sales result. You can never be sure of the quality of the traffic you’re generating.”
“The most important thing for Plugable is we’re an innovative, USA-based electronics company first, and an Amazon seller second.”
“I think anyone who can combine an expertise in a product area with an expertise around online selling has a big advantage.”
The other factor has just been mirroring Amazon in terms of a laser focus on the customer — which also means noticing events like reviews, loss of buy box, out of stock, etc as soon as possible, and taking action on them immediately.”
“Amazon makes some of this easy, and some of it hard, which is why our Efficient Era software has been so important to us.”
Q. What do you envision for the future of Plugable Technologies?
A. “We’ve slowly built an awesome team over the past 7 years. Everyone is in it for the right reasons and is a joy to work with. We’re all at one office in the Seattle area. Both as an electronics company (Plugable) and a software tools company (Efficient Era) we face lots of competition.
“If we rest on our laurels for even a few months, global competition is there to eat our lunch. But we’re doing great. We celebrate every product launch and every positive review. We fix what’s wrong.”
“I think and hope we have what it takes to be building on this foundation for a long time to come.”
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