We’re very excited to present our interview with Karen Ellenberger, founder of Agile Merchant!
Karen loves using data to automate, accelerate and scale Amazon FBA businesses. She began selling books on Amazon in 2008, starting with $500 and entering ISBNs the hard way into a cell phone. She used technology and automation to grow a simple textbook arbitrage business into a national textbook buyback website and FBA business, which she sold in 2013.
After the sale of her Amazon business, Karen launched Agile Merchant to develop tools to help Amazon sellers build a business, not just a job. She’s an expert with managing FBA operations, especially recapturing FBA inventory reimbursements, and loves learning from her clients.
Now, on to the interview!
What inspired you to start Agile Merchant?
Working with my own FBA account, I often had the sense that I was missing important information buried in Amazon’s many and confusing reports. The more I worked with the data, the more I realized most merchants can’t take full advantage of the rich opportunities available because automating the analysis and asking the right questions takes specialized knowledge.
Seeing a bunch of data on a spreadsheet isn’t that helpful unless you know what kinds of questions to ask and, more importantly, what action you need to take based on what the data says.
Increasing profitability through technology and getting to the right next actions are the core of Agile Merchant’s mission.
Many Amazon sellers think that reimbursements are such a small thing that they aren’t even worth paying attention to. Why do you think they should take a closer look?
As Amazon gets more competitive and sellers get more sophisticated, using your data for a competitive advantage and getting every penny to your bottom line is becoming a necessity.
The first thing we do before a new client signs up is run a free summary analysis to help them understand the size of the problem. The results are almost always a big surprise, revealing a much larger problem than they expected (and a big opportunity to get some cash back from Amazon).
Reimbursements are already-earned dollars that go straight to your bottom line at a higher profit and lower risk than if you were to sell the item. You don’t pay fulfillment costs and you don’t risk returns. It’s a win all around.
Could you elaborate on the process you use to help capture reimbursements from Amazon?
The initial analysis:
We start by going through 18 months of history to create an initial list of reimbursement opportunities using our proprietary algorithms, then remove anything that’s less than 45 days old.
This gives Amazon time to auto-reimburse so we aren’t taking a commission out of reimbursements you would have received anyway.
Researching and creating tickets:
Next, our dedicated account managers take over, adding a manual review and additional research to the initial analysis. They’ll start creating tickets to request reimbursements, making sure each ticket is well researched, documented and compliant.
We never automate ticket creation, and tickets are researched and managed by the same person, providing continuity and additional insight. Client managers can get to know the businesses they’re working for, and tailor their service to fit.
Once Amazon responds, we review the reimbursements we’ve received to make sure they’re at market value and appeal them if we think the amount is too low. We also verify each reimbursement has been deposited in the settlement account.
At the core of our process is research and constant improvement:
Updating the algorithms we use to find reimbursements, taking the time to understand Amazon’s reimbursement policy in depth, and learning from our interactions with Seller Support through reviewing case responses.
We’re constantly testing how we find and request reimbursements to get the best results for our clients and ensure policy compliance.
Do you have any data that shows how much, on average, sellers might be losing from unissued reimbursements?
On average, merchants are losing 1-2% of their annual sales to Amazon from unclaimed reimbursements.
This seems like next to nothing, right?
Consider this: If you’re selling $1m a year, this is $10k you’ve just left on the table. Now what about the power of that money if you’re able to re-invest it in inventory that will turn 3-4x (or more) over the year.
That’s a lot of lost opportunity from ignoring revenue that’s already been earned.
Getting reimbursements from Amazon is a manual process, yet some SaaS providers choose to tackle the problem with automation. What advantages does a manual approach provide when it comes to recapturing reimbursements?
Our goal is to increase profitability while maintaining compliance. This means no automated ticket creation, which is against Amazon’s TOS.
We chose dedicated account managers instead, who can get to know the businesses they’re working for and provide continuity and oversight. This gives everyone, from Amazon to our clients, a better experience.
The key is in smart automation. We use automation to help us sort through lots of data, and extend the automated process with manual research and management.
Because we manually enter and review tickets, we can see patterns that a computer or anonymous VA wouldn’t identify. This ensures every ticket is adequately researched and compliant and ultimately leads to better results and individualized insights.
As an example, we recently noticed that a client’s SKU was being lost at a much higher rate compared to the rest of their inventory.
As a result, our client discovered two items in their inventory had been switched at FBA, and Amazon had been shipping the wrong item to customers.
Knowing that there was an unusual pattern meant our client could get in front of the problem and proactively manage it, rather than sorting through the negative feedback fallout and potential account suspension from shipping items “not as described”.
Over-using automation can lead to “ticket spam”, flooding Seller Support with poorly researched or non-compliant tickets that impact Amazon’s ability to help merchants with legitimate tickets, which is a violation of the FBA TOS. In response to recent problems with automated tickets, Amazon closed a large number of tickets created by an automated system because of poor quality.
Besides reimbursements, you provide a number of other services; the big one is list analysis, but you also provide custom, one-on-one services depending on a customer’s needs. Can you talk more about those, and in what ways your approach to them is unique?
We’re essentially a high-touch data analysis company focused on helping smaller and mid-size merchants that don’t have the resources to create in-house data analysis solutions.
We love exploring data and finding ways to answer our clients’ questions efficiently.
Our list analysis tool is a free tool that helps sort through long wholesale or liquidation lists to get basic profitability metrics and make short lists for further analysis.
Agile Merchant works closely with our clients to tailor our service to fit their needs. We’re always looking for ways we can turn data into action.