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James Thomson: “Becoming a successful seller on Amazon is hard ”

Stop thinking that Amazon will partner with you, the seller. Amazon isn’t interested in whether you are a big account or not. When I worked at Amazon, I spoke with so many sellers who wanted to grow significantly their topline sales as they thought it would convert into special treatment from Amazon. And yet, except […]

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Stop thinking that Amazon will partner with you, the seller. Amazon isn’t interested in whether you are a big account or not. When I worked at Amazon, I spoke with so many sellers who wanted to grow significantly their topline sales as they thought it would convert into special treatment from Amazon. And yet, except for the top couple hundred sellers (companies that sell over 25MM dollars-50MM dollars/year each), no one at Amazon is going to roll out the red carpet for any Amazon sellers. Everyone pays the same commission rates, everyone is measured by the same performance metrics, and everyone competes on the same marketplace for the same customers. I prefer sellers to focus on operating well-run businesses (a.k.a., think efficiency and profitability over raw topline size).


As a part of my interview series about “Five non-intuitive things you need to know to run a very successful Amazon business, I had the pleasure of interviewing James Thomson.

James Thomson is a partner at Buy Box Experts, a managed services agency supporting brands selling online. Earlier, he served as the business head of Amazon Services, the division of Amazon responsible for recruiting tens of thousands of sellers annually to the Amazon marketplace. He also served as the first Fulfillment by Amazon (FBA) account manager. Before Amazon, James was a management consultant and banker.

In 2015, James co-founded the PROSPER Show, a continuing education conference for large Amazon sellers, and in 2017 published the book “The Amazon Marketplace Dilemma”, designed for brand executives seeking to optimize their distribution strategy on the Amazon marketplace. In 2020, he co-authored the book “Controlling Your Brand in the Age of Amazon”, designed for brand executives struggling to handle critical channel management issues caused by pressures from the Amazon marketplace.


Thank you so much for doing this with us! Can you share with us the “backstory” about what brought you to this specific career path?

I never planned out a career in e-commerce. I had been working for a failing bank in Seattle when I started looking for other options that would keep me in Seattle. At the time, I had spent twenty years building a huge music collection and thought it might be worth looking at Amazon, given I’d bought so many of my CDs from this company. I had also heard that Amazon was a place that used a lot of data — something I had craved in all of my professional roles. I landed a role at Amazon, starting the first week of December 2007, at the height of Q4 shopping season — a time when everyone at Amazon is focused nearly exclusively on getting orders out as fast as possible, rather than “training the new guy”. So, on my first day, I was given my laptop, access to Amazon’s huge data warehouse, and told to look after myself for a month until colleagues had time to show me around in January!

Can you explain to our readers why you are an authority about selling on Amazon.com?

Over the past 13 years, I’ve been fortunate to work with tens of thousands of Amazon sellers. Starting with my nearly six-year tenure at Amazon, I was Amazon’s first account manager for the Fulfillment by Amazon (FBA) program, trying to convince Amazon’s largest third-party sellers that they should leverage Amazon’s capabilities to store product and to ship out individual orders. Through this role, I spoke with literally thousands of sellers each quarter, learning what was slowing them down from increasing their sales and profits. I also run the team responsible for recruiting a hundred thousand new sellers each year, a role that pushed me to dive deep into understanding why people want to become Amazon sellers — reasons that ranged from logical channel expansion to misguided expectations of easy riches.

Since leaving Amazon in 2013, my business partner, Joseph Hansen, and I co-founded Prosper Show, which is now one of the largest continuing education events for the top 5% Amazon sellers. Through this event, we have been fortunate to meet hundreds of industry experts who specialize in all sorts of areas supporting Amazon sellers. Joseph and I have also worked together for more than five years through our Buy Box Experts agency, where we have supported hundreds of brands and resellers that leverage Amazon as a sales channel. In the past 4 years, I’ve co-written two books that address the specific challenges that brands face selling on Amazon.

Can you share the most interesting story that happened to you since you started this career?

I was very fortunate to work in Jeff Wilke’s organization for three years, learning from Jeff through his weekly business review meetings. Jeff is currently Amazon’s CEO Worldwide Consumer, set to retire in early 2021. During a weekly business review meeting, one of my peers was presenting an updated report when Jeff asked him a very pointed question about my peer’s business. My peer hesitated, and due to his not knowing the actual answer to the question, he fuddles his way through the answer. Jeff stopped him, and in front of about sixty people asked my peer “Are you the business owner of this business?” “Yes” answered my peer. Jeff continued “Should you know the answer to this question?” “Yes” answered my peer. Jeff said “If you are the business owner, and you are supposed to know the answer to this question, then I expect you to have the answer or to go and get me the answer and report back very soon. But never fake your way through this — Ownership is a critical Amazon leadership principle. Own your job, because if you don’t own it, we will get someone who will own it.”

My peer was initially shaken, but Jeff had provided real-time, absolutely spot-on feedback that became a defining professional learning moment for me, and also for my peer — who went on to become CEO of other companies, clearing owning his roles going forward.

Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?

When I first started working in e-commerce, I was responsible for recruiting third-party sellers to the Sports category at Amazon. One day, I was meeting with a couple of my Sports colleagues, identifying companies that we wanted to recruit to our platform. One of these firms was Dick’s Sporting Goods — as I immediately learned, the URL for this company is dickssportinggoods.com, not a shorter version of just the name. When we pulled up the incorrect website, we were horrified by the X-rated content, and immediately worried that Amazon’s HR department would track down and fire us all for surfing porn at work. Fortunately, nothing bad came of this naïve mistake, though we were never able to convince Dick’s Sporting Goods to sell on Amazon.

Ok. Let’s jump to the core of our discussion. You are a seasoned Amazon expert. Can you share with our readers five, non-intuitive, insider tips, to be as successful as possible on Amazon? Please share a story or example for each.

Becoming a successful seller on Amazon is hard — yes, there are hundreds of millions of customers, but there are also 5 million sellers, and not all of them play nicely or fairly. Here are my priority tips:

Stop thinking that Amazon will partner with you, the seller. Amazon isn’t interested in whether you are a big account or not. When I worked at Amazon, I spoke with so many sellers who wanted to grow significantly their topline sales as they thought it would convert into special treatment from Amazon. And yet, except for the top couple hundred sellers (companies that sell over 25MM dollars-50MM dollars/year each), no one at Amazon is going to roll out the red carpet for any Amazon sellers. Everyone pays the same commission rates, everyone is measured by the same performance metrics, and everyone competes on the same marketplace for the same customers. I prefer sellers to focus on operating well-run businesses (a.k.a., think efficiency and profitability over raw topline size).

Amazon is the judge and jury of seller performance. Amazon is also not very direct at explaining why your seller account has been suspended or why your ability to sell certain items have been removed. You are supposed to figure it out yourself using next to know bread crumbs’ worth of data from Amazon. When you sign up to be a seller, you waive your right to use Amazon, so everything can take a long time with Amazon not in any rush to solve perceived problems with your account. Amazon makes mistakes regularly, and its enforcement platform can be manipulated unfortunately too easily by sellers attacking one another’s business. Hence, if you are plan to sell on Amazon, expect to be accused of things you haven’t done, and expect to be very frustrated at the lack of human conversation you get when you try to make your case with Amazon.

Read all of the terms you are agreeing to, and keep up-to-date on all Amazon notifications. Amazon makes announcements regularly, but it’s not always clear that the point of the announcement is, or why you specifically received the notice….so I recommend finding a seller peer group with whom you can compare notes. For example, I’ve seen sellers go out of business because they didn’t collect and pay sales taxes properly, as they thought Amazon was looking out for them. I’ve seen sellers get suspended for selling products that many others on Amazon continue to sell, yet only one seller is being targeted for enforcement by Amazon.

Just because your brand may have substantial pull outside of Amazon doesn’t mean much on Amazon — most brands end up competing similarly on Amazon, trying to capture eyeballs through traffic that the brands have to generate themselves while creating high-converting listings that will get Amazon customers excited about your products. Yet countless national brands never properly optimize their Amazon listings (inadequate or lacking digital assets), leaving revenue opportunity for much smaller, digitally-native (non-household name) brands to grab market share from much better-known brands.

Selling on Amazon requires a lot of daily operational discipline. It is not a place where sellers can dip their toe into the water — instead starting on the first day that a seller lists a product, that seller must be able to work within the performance metrics that Amazon uses to monitor all sellers. I’ve seen too many sellers get kicked off the platform within 30–60 days because they weren’t ready to start selling on Amazon when they went live, and sure enough, they underperformed just enough on Amazon’s performance metrics to get suspended from the platform.

Amazon sellers have a reputation for being great guerilla marketers. Do you use any clever and innovative marketing strategies that you think large legacy companies should consider adopting?

Brands need to invest more heavily in improving the “open-box” experience for customers, causing those customers to want to engage more with the brand (e.g., following the brand on social media, visiting the brand’s website, signing up for the brand’s newsletter, etc.). As a background to this issue, Amazon sellers do not own the customer relationship when they sell products to customers on Amazon. Amazon has strict terms of service rules that indicate that Amazon sellers are not allowed to market to Amazon customers after the initial sale, leaving every Amazon seller asking itself the question “how can I convert Amazon customers into my own customers?”

When most brands start selling on Amazon, they take the exact same products that they sell elsewhere, and list them on Amazon. If the brand has done a good job of locking up physical shelf space, repeat purchase opportunities are easier to secure because there are only a limited number of competitors on any retailer’s shelf. But on Amazon, it’s entirely possible to have more than 500 competitor brands, all fighting for share of customer sales. If Amazon is fulfilling the customer orders (which happens for over 70% of the time), the shipping package experience is controlled by Amazon — typically a brown box branded with the Amazon logo is sent to the customer. There is little opportunity for an Amazon seller or brand to add catalog inserts to the shipping package. Other than the actual product packaging, there are few chances for the brand to tell its story to the Amazon customer.

Hence, we encourage brands to rethink how they package their products for sale on Amazon. Does the item’s packaging offer space for the brand to tell its unique story, and seek more engagement from the customer? Examples of this include showing a brand’s URL, or linking to the brand’s YouTube site through a QR code. Many brands never design their packaging specifically with the intent of communicating with and providing value to the customer after the sale. Have you ever opened an Apple iPad box, and been impressed how well presented the product was, and how quickly answers to common questions are made available to you? This same type of logic should be applied to all brands, whether they plan to sell on Amazon or not, as the open-box experience represents a significant opportunity for brands to capture the imagination, hearts and hopefully loyalty of the customer.

Because of the position that you are in, you are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂

On a daily basis, I am asked to share “secret sauce” on how to become a better Amazon seller. While we all want to know the secrets to becoming successful, that information shouldn’t be secret! My business partner, Joseph Hansen, and I have adamantly gravitated towards the concept of democratizing any so-called secret sauce, and creating public mechanisms of sharing best practices with large numbers of Amazon sellers. Through both our Prosper Show, and publication of hundreds of articles and books, we believe it’s better to provide broadly-available education and insights to help thousands of Amazon sellers rather than keep those ideas to an exclusive group. Even with the right products, prices and marketing message, succeeding on Amazon is hard enough that we hate to see sellers fail because of unclear policies, inconsistent enforcement, and seeming sound business ideas that don’t apply in the Amazon sandbox.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

Since my childhood, my father has reinforced the need to seek out opinions of people who are not like me. He has constantly reminded me that you can learn far more from someone with life experiences, values, and set of desired life goals different from your close friends who went to the same schools, who live in the same neighborhoods, who travelled to the same vacation destinations, and who have the same types of jobs as me. While meeting people unlike me can be awkward, I have learned to understand my implicitly-generated blind spots, and to appreciate how diversity of thought is the critical ingredient for driving more complete solutions.

Some of the biggest names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US with whom you would love to have a private breakfast or lunch with, and why?

I’m a big Magic Johnson fan — not just because he was an extraordinary basketball player, but more because he took the wealth and connections generated from his sports fame, and used those to invest in building better communities in Los Angeles. By using his influence and wallet to break down misconceptions of what constitutes a “safe” funding, Magic Johnson will be viewed by me first and foremost as a very smart, socially-driven entrepreneur.

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