EP 53 - How Can You Optimize Your Amazon Sales in Europe - Anton Hermann - Co-founder of SPACEGOATS

Speaker A: Okay, Michael, we are live and we all have amazing microphones. That's super great.

Speaker B: You know Martin, one of the things that I miss is the announcement in French that we're starting.

Speaker A: That's right. When was that? It was at the very beginning of Ecommerce Intercover. Right. We had a little sentence in French saying it's was starting. I don't remember.

Speaker B: I don't think you remember it because your French is not so good. But we used to have this announcement in French. I think from now on we should do it in German. I mean just to make Anton happy. Um, we can. So Martin, who do we have joining us today?

Speaker A: We have Anton from Space Goats. I'm really curious about what they're doing and eager to learn more.

Speaker B: You know what I'm not going to do?

Speaker A: Tell me.

Speaker B: I'm not going to ask Anton why the company is called Space Goats. I'm just not going to do it. There's no way.

Speaker C: Then you will not show you.

Speaker B: Anton, thanks for doing this. Can you give us a little bit of your background? Like where are you? Where are you from?

Speaker C: Yeah. So first of all, thanks for having me. I'm very excited about this. So my name is Anton Hermann. I'm um, one of the founder of Space Goats. But before my Space Goats live, I was actually a mechanical engineer. The, I was studying mechanical engineering, working as a mechanical engineer for Bosch. And now you know where I come from. I come from Stuttgart or I live in Stuttgart. And here is basically the headquarters of uh, the brain of the German mechanical engineering industry. And um, during, during my, my job and during my studies, I already started selling on Amazon my own products, private label stuff. And um, we experienced that there. Me and my co founding colleagues experienced that there are many problems which we had to solve on our way. And we couldn't believe that everybody needs to go through this hell. That's why we came up with the idea. Yep.

Speaker B: Of Space goods. So I want to ask you this though, again, just for people that don't know, right. Is there, is there an Amazon? What is it.de.co.de so there's a specific Amazon just for Germany, right. Because some of my other friends in Europe say, oh, I have to order from France to get it delivered to Sweden, Switzerland or whatever. Like. But there is Amazon, um, in Germany. Yeah.

Speaker C: It's the biggest Amazon marketplace in Europe.

Speaker B: Got it. Okay. This is why I do this, right. So I can learn things. Because I'm just not that smart, right. But I need to learn. I gotta go to People like you to figure this stuff out.

Speaker C: Being smart or educated are two different things.

Speaker B: So yeah, very well educated. Very well. Just not that smart. So very different.

Speaker A: Okay.

Speaker C: But yeah, there is a German marketplace um, for Amazon in Germany and uh, it's the biggest in Europe. It's even bigger than uk it is. So yeah.

Speaker B: Can you talk a little bit about the e commerce market on, on the whole in Germany in other words, you know like in Thailand it's super dominated by shopping and by Lazada.

Speaker A: Right?

Speaker C: Yep.

Speaker B: What does it look like to you in Germany and then what does it look like in the rest of Europe as well?

Speaker C: Yeah, Amazon is by far number one in Germany at least it's by far number one. I, they have done 40, 50E commerce market share. I don't, don't confuse the numbers. But some, something like that. So it's a tremendous, tremendous part uh, of the e commerce world. Then you have smaller marketplaces like Kaufland and Otto that are like German marketplaces but they don't, they cannot really compete with, with the Amazon uh, experience. And um, there are some online shops and also the, the big um, maybe you know media marked and, and, and the big uh electronics um retail stores. They have also their own online shops. But, but marketplaces are just the strongest here or at least uh Amazon and that's for Germany the case and in the other countries it's totally different. I know about France that we have a, a French guy who might know it better. It's like C Discount. Right. That's on number one one in, in France.

Speaker A: I, I have no idea to be fair. Like which one is number one or number two? I think Amazon is, is number one just because we see them much more and we, we probably can find much more stuff on Amazon then. Yeah, that's right. I see discount is pretty big then there would be a few others like but, but what I see the mostly in front of right now and, and it's maybe because of a startup called M Miracle who uh, are helping doing that. But what they do is that they take big retailers like for example uh, I can't get the name but like they take the big retailer and they expand them into a marketplace. So they already have the traffic, we already have the name, they already have the e commerce business and then they become a marketplace and they put over people project on their marketplace and this is, this is growing right now in France and uh, mainly because Miracle is providing this backend infrastructure to easily create a marketplace. So that's what was doing on so that's why I'm not sure who is the first and what are the market share. But this is what's happening right now into our country.

Speaker C: So Martin knows about, uh, France. In Poland, for example, you have Allegro. Um, that's the biggest marketplace. In Netherlands, it's Bridge. In the Nordics, they are pretty strong in E commerce, but less on marketplaces. So strong online shops there. In every country it's different, but I would say in Germany's Amazon the strongest. And Germany is also the biggest country in Europe or. Yeah. And, uh, and has a good purchasing power still. We will see how that goes.

Speaker B: So when you said when you were in college, you first started selling on Amazon when you were at university. Right. Why did you start doing it? Like, did you need the extra money? Were you interested in the process? Like, what was the reason for getting interested in E commerce?

Speaker C: Great question. I wanted to do my own thing because I was already working for Bosch and I saw that this is not for something for the rest of my life. And, uh, because I saw guys which were like 60 years old and they did exactly the same what I did. Don't m. Don't get me wrong, I love the job, but I knew this will be boring at some point. And then I got into a, ah, mindset and self development and all that stuff. And then some YouTube video came by about Amazon and I said, like, hey, if you want to start a business, let's go for this one. And then we just did it and it worked out better than expected.

Speaker B: Is there. Is there like an entrepreneurial history in your family? And. And also, like, is.

Speaker A: Which.

Speaker B: Not at all though, right? Because it's so hard to say, right? Because Martin M. Like, in your family and in my family, and I hadn't thought about this a ton, but like, you know, my grandfather had his own business, my dad had his own business. My uncle had his own business. Like your family runs their own business, right? It. It's weird, right? Like, there's a thing that gets just built into your brain about, I think kind of like what Anton just said. Like, I could do this, but I'd be bored in a little bit, and I just didn't know when and. And I'd want to do something on my own. Yeah.

Speaker C: So. So there is something like a story as you, as you explained it. Because, um, um, the father of my best friend, he was an entrepreneur. Unfortunately, he's not, uh, under us anymore. But, um, when he picked me up when I was 10 years old, uh, I met. I met the Father, the first time he came by with a Porsche and was looking like the last bum, you know, like, living on the street. He was like, his clothes were like. He was living on the streets. And I thought, in this, in this time, uh, rich people always wear suits, and rich people, they, they, they, they need to, uh, win in lotto or whatever. I don't, I did not had any connection to that entrepreneurial stuff and that. And I was like, okay, this guy did it himself because he, he was getting from his father only depth and no, no real capital. And he made it from scratch. And I said like, hey, that's, that's kind of possible. And ask him this, uh, why he's looking like that? And he said like, I don't give a shit. I have my own company. I can wear whatever I want. And I was like, hey, that's cool. I like it. I like it. And then I knew at this point, I knew when I was 10 years or, uh, 11 years old that this is possible. You can make it on your own. You don't need to win in the lottery.

Speaker A: You don't need.

Speaker C: You can make it on your own. And, and that's why it was always in the back of my mind that I will do something like that in the future. And I guess that that is so. Because I'm from Russia originally, like, um, German Russian. And as you know, they had like, communist, um, society. And, uh, there were no. Yeah, you remember, you might remember. And there were no entrepreneurs basically in, in Russia because. Yeah, it's good. Was communist. So we had no experience with this.

Speaker B: Do you, um, do you write code?

Speaker C: I don't write code. I, I was learning it in university a bit, but I, I don't write the code. No, we have coders which write the code.

Speaker B: Got it. Can you. Because you mentioned, you said earlier, like, you, you were wondering why it was necessary for people that wanted to sell on Amazon to just go through this hell together.

Speaker C: Yep.

Speaker B: Can you just explain, like, why it was so hard? What were some of the pain points that you were. Yeah, why was it so hard?

Speaker C: Yeah, the biggest pain point we, we identified was the internationalization we had to get to. So we wanted to sell all over Europe. When the UK was part of the European Union, it was, it sounded to be pretty easy, but then the bureaucracy kicked in. You need to have VAT numbers and all the different places. You need to have packaging, regist. You need to have this compliance, uh, document. You need to go for that compliance document. And when you have everything in place, then you work with Amazon and there are more bugs than, than in any other software I've ever experienced. So you'll upload a picture. Uh, you cannot imagine the seller central. It's not, it's not, it's not the, the best software because they have technical depth, I guess a lot of technical.

Speaker B: Wait a second. Yeah, wait a second, Anton. So you're saying that like Amazon, which is almost like a trillion dollar if not. I haven't looked at the stock market cap valuation recently, but it's like, let's just call it a trillion dollar company which runs basically the backbone of a big part of the Internet because it runs AWS and it sells that as a service to people. And you're suggesting that just like the interface to get stuff like from your product catalog onto their site is hard.

Speaker C: Like it doesn't work. It is hard. Has more failures than it works. Seriously, if you upload a picture, it does, it does, it does, it doesn't upload. And then you have to open up a ticket and then they will give you a trash response. Uh, and then you said, no, guys, I'm 100 sure that I uploaded this picture. You know, and then you always have to communicate with them. But I, uh, I tell you something, we don't have any choice than using the software. And that's why they don't have a motivation to make it good. That's, that's the point. If, because if you look on the B2C side of things, the software is slick. You do, you have the best customer experience and whatever. But we as sellers, we cannot get around Amazon and they know that. That's why you don't need to be that good for the B2B part then as for the B2C part. And I have the same example also for Facebook. Maybe you, you, you, um, you Facebook ads, you cannot compare the front end for the users with the front end for the ads for the, for the companies. You cannot compare it because we have no choice than making advertising on Facebook, for example. Then they know that and that's why they don't need to do the software as nice as the B2 B2C part of the software. That's my own experience.

Speaker A: That would be such a great topic, Michael, for a podcast. Like, why that's true. Like what's the back end of Amazon and Facebook, which is huge companies. We have like a lot of developers. Why it is so bad, so many problems.

Speaker B: And you and I talked about this but like last week and actually I think what I released today for my India game changer show, we had this guy on Prashant Malik and Prashant actually built the Cassandra sort of database layer, this sort of like super efficient database layer for Facebook. So they do spend a ton of money on like this back end infrastructure. But, but the connectivity infrastructure, the selling ads is like, look, we know you got to advertise here, so you're on your own. Basically. Just send us, give us your credit card, we'll figure it out later. Yeah, that's what Anton saying is the same with Amazon.

Speaker C: Yeah, that's the first part. Uh, the, the first answer to a question. The second, if you compare Netflix with Amazon, for example, if you compare, uh, Netflix with Amazon Prime Video. Okay, yeah, the Netflix software is like working so nicely. You, you, you don't have any bugs and any nothing. But if you. And I don't like the Netflix content that much, it's a bit too woke for my, from my perspective. But if you take the Amazon, if the, the Amazon software or the Amazon prime video, you, you watch a series and the sixth episode is on Japanese suddenly and you're like, what, why, why this? And, and then I also thought like, it's a trillion, multiple trillion dollar company and you cannot, you know, and I think the quality is not the same as for companies which are specialized.

Speaker B: Let me just say, Anthony, let me just say this. If the sixth episode comes up in Japanese, you won't notice.

Speaker C: Sorry, sorry, I didn't, I didn't get it. Sorry.

Speaker B: I said, I said so I speak Japanese. So I said if the content comes up in Japanese, I get super duper happy and I actually to like celebrate and Yorokobu makri means he just like keep celebrating. Anyway, I was just joking around, showing off.

Speaker C: Okay, no worries. Yeah, it's okay.

Speaker B: But it, but it is interesting and I love what you said. I like Netflix. I don't love the content. But the, but the software is actually really good. But you're right though, because they don't have the same level of technical debt as Amazon. Right. Because they haven't been around as long and Amazon wasn't originally built to do what it's doing today.

Speaker C: Exactly.

Speaker B: It wasn't to be a marketplace. Sorry, go ahead.

Speaker C: Another example, Spotify versus Amazon Music. You have exactly the same issues. Spotify is just so, it's working so good. And Amazon Music, uh, here a bug, there a bug, and that's that, that's how Amazon is scaling up their business. They just do everything what they can. And of course you cannot be perfect in every field.

Speaker B: So I promised myself I wasn't going to ask you this, but Space Goats, really, like, what is. What's the point?

Speaker C: Do you like the name or you don't? That's my.

Speaker B: I try to figure out. Here's the. Here's the real question for me. Like, I try to figure out why, like, my. The name of my company is Michael Waits Media. Like, it doesn't take a lot of thought to get through it, but it's also pretty obvious, like, what it does and who's running it and who's in charge. I like to make things obvious, right? It's in the name. But I think a lot of people. But then. But there's another strategy for company naming and I'm asking you. Uh, part of it is just like, let's just give it the. Let's just take two words that nobody would ever put together and let's make that our company name. Because we could probably buy the URL anywhere we want and people will just wonder, like, Space Goats. Okay, I get it. It's not going to be confused with any other company. So, like, you're just trying to stick out. I'm thinking. I don't know. But here's my problem is that like, later when you become like a $2 trillion company, you're just going to call yourself like SG Consolidated or something, because no one's going to make space. You know what I mean?

Speaker C: We are, we are super proud of our name. Super proud of our name. And we got almost only positive feedback about it. But one time, only one time, and there was a guy like you, uh, on the investment committee. A guy like you in the investment committee of our vc. So we were in the last round of VC funding and there was like one guy from, I think Lidl or so because we're, uh, we get in the German VCE invested in our company and therefore, um, the DAX, so the S&P 500 companies, the DAX companies, also invest in this VC. And that's why the last round is with the ducks. DAX companies, which, um, invested the money as well and they need to give the go also. And this guy was like, I think from Lidl or something like that, he's like that guys, really? Why, why Space goes. I can. That's not a seriousness. Not a serious company. Uh, I cannot, I cannot believe that you guys came that far with that name, you know? And he was like super, super bad on this. But the, the boss of the committee, he said, like, come on, forget this guy. He's always like that and blah, blah, blah. He's always like that. He's always like, you're gonna say that.

Speaker B: Go. From now on, instead of saying he's just like that, you're gonna say, he's just like that guy. I did a podcast with Michael Waits. Oh, my God. There's no sense of humor.

Speaker C: So. But back, back to a question, because there is actually a story behind it. Uh, I will tell you the official one, the unofficial one we will go. We can do after the recording part. I, I never do it on air, but the official story is goats. Yeah, it's not only the animal goat, but the animal goat always wants to climb up. So do you know the goats on the, on the mountains, they all, they're which are standing there and they always want to get up. But goat is also greatest of all time. Okay, so we, our customers, Tom Brady, uh, for example, or Cristiano Ronaldo. Um, I know I didn't want to open. No, no, no, no, no. Not messy, not messy, not messy, not messy. So I didn't want to, uh, open up this one. But, uh, we call our customers goats as well, and we give them the space to do so to become a goat. Okay. And together we are the space goat. So our customers are the goats, which always want to get up, and we give them the space to do so. And that's why we are the space goats. We made it up afterwards. But that's a nice story.

Speaker A: That's okay.

Speaker C: But at least it makes sense. It. It makes sense. If the next VC guy will ask this question, we have an. We have an explanation for it.

Speaker B: Yeah, remind me to tell you when we're done recording about this, um, accelerator. One of the first accelerators in Singapore that was called jfdi. Uh, we can talk about what it really was and then what they called it. But anyway, so you had this experience where you figured just like selling for, selling for sellers on Amazon in, in Germany, but also in Europe. It's just so hard, such hard yards. So like, you can't create the software, you can't replace the software that uploads photos, that does all the front end stuff for Amazon. So what does space go do to make it easier?

Speaker C: We know the drill. And we take away this ugly bureaucracy and administrational work on our end. And when we want to solve a problem, it takes less time than if somebody who has no experience with the seller central wants to solve, uh, a problem. And that's why we take this problem so from our customers and then they can focus on whatever they are good in, for example, product development, marketing, whatever. And um, what spacegood does is we sell basically other companies products through our Amazon account all over Europe plus UK since two weeks. Also in the usa. Ah. Without our customers, uh, need any VAT number in other countries. Without any, um, compliance issues in other countries. Any. Yeah, yeah. Like this.

Speaker B: So do you, do you do the selling? Are you the entity through which they sell?

Speaker C: Yep, yep, yep.

Speaker B: See, Martin, this is what we're always talking about right there. You're basically just disaggregating the seller away from the market. Just tell me where I'm wrong here, Anton. Right. But this sounds to me like, you know, every company has a product and they want to sell it somewhere and you're saying, don't worry about the selling, like, we'll take care of that part of it for you. We already have the license, we know the legal documents, we have all this stuff. We'll do all. You just get the products that you love. Martin, In a way, it's almost like the flip side of other companies that we've talked to, right. That say, don't worry about the products, we'll get the products. You do the other side. Yeah, yeah.

Speaker A: But how does it work on the leader side? Like, which was. I don't know, if you have a company, you're supposed to sell one thing, but here you're gonna sell like a lot of stuff from a lot of different companies. So, uh, I'm really curious.

Speaker C: Yeah. So in the, from the legal perspective, we purchased the products of our customers as soon as they were shipped to the Amazon warehouse. Okay. And at that point, that, um, second, I think it's the English term for it, we purchased the products and write our customers a credit note for it. It's a reverse invoice, basically the same, but with the payment conditions as soon as we sold it. That's how it works. And the purchasing price will never hit the real profit, which you will get if you would sell for yourself on Amazon. And that's why, uh, the miracle of our business model is that we have an additional document. We calculate how much we, uh, uh, buy the products for in this purchasing, um, purchasing document and what really was gener it on the Amazon marketplace. And the difference you will get as a credit or we will invoice this to you. So it feels like it's commission, but it's legally not commission because it's not allowed to be commission because we are selling all over Europe. And otherwise you would need to do a commission every time Amazon is distributing one product to another country, blah blah, blah. So it's practically impossible. Impossible. And that's why we took this system for our use case. And then the second uh, part of, part of your question, how does it work? We have one big Amazon account and of course we cannot give every uh, each of our customer access to our Amazon account. That's why we built our software, a software that's called Galaxy, where we get all the data from our seller central and show to our customers the data which interests them. So basically their products data, their products, advertising campaigns, their products, um, stocks, their products, payouts and so on and so forth. That's the business model.

Speaker A: But they still run the marketing, right? They still do the marketing themselves.

Speaker C: They can, or they can book an additional service where we can also take this one, this one over it and they also get an access to our partner uh, company software. It's called Bit X. They do ppc like pay per click automation on Amazon. And they built a feature for us where we have the same system. We have one big Amazon account and we can uh, give to sub accounts, skus or products and they can run their own ads uh, through this software and they can actually automate it as well.

Speaker B: So do you take the inventory risk or do your sellers take the inventory risk?

Speaker C: The sellers take the inventory risk. Our uh, margin is too low to take the risk.

Speaker B: Yeah, yeah, no, that took, I'm just curious who does it, right? Because it opens up other businesses that are potential financing businesses and stuff like that that we talk about. Um, but if you've got one sort of like parent top level Amazon account and a bunch of lower level Amazon accounts, right?

Speaker C: And then you have one top level Amazon account, one Amazon one, one top level Amazon account and it's registered in all the different countries. It's one account.

Speaker B: Yeah. And then you just say to yours, you just say to your sellers, give us the product, we'll handle the whole Amazon thing. But do they have their own store? Like do they manage that too? Or do they like sell on Dr. Tech or sell on Shopify or something and then it just goes through it like how does this work? Right, because what are they doing physically?

Speaker A: Right?

Speaker B: Like Martin said, are they doing the marketing but are they like logging into their own backend Amazon account that's a sub account of yours and then doing their own selling but you handle all the sort of Amazon facing logistics for them.

Speaker C: So what, what we do in our basic service, what is always included, we handle the Amazon account to the Amazon account management and Customer support, troubleshooting and the actual selling part. And therefore also the invoicing of the end customer which takes away all the obligatory, uh, from our customers. So that's the basic service. So vat, obligatory, um, epr, so extended product responsibility. All that stuff is taking away because we write the invoice to the end customers, because we are the entity which is actually selling to the end customer. Everything else is an optional service which the customers can book or can do themselves, for example, marketing. They can provide their, or they have to provide their own content or book this m. Uh, this content at our company or some, some other company, whoever. They can do their own ads or they can book some agency or our service or BitX to, uh, run their own ads. They uh, can do their own production or they can arrange their own production. But if they say, hey, I have this product idea, we can also find some supplier for you. So it's a modular service. The basic service is always included, but the rest is modular and optional.

Speaker B: So what are your barriers to scale?

Speaker C: Sorry, our. Our own barriers.

Speaker B: What are your. Yeah, what are your own barriers to scale? In other words, if tomorrow another million sellers sold up with you.

Speaker C: Yeah, yeah. The Amazon bucks. That's the biggest barrier. 100% the Amazon bucks. And the operation behind it. Uh, operation.

Speaker A: That's a crazy answer, but you know what I mean?

Speaker B: Like what, what are your, besides Amazon, what are your, what are your operational barriers to scale? Like the number of stuff you can handle? Is it people dependent?

Speaker C: Yeah.

Speaker B: Or is it tech dependent? Because I'm still curious what your tech is.

Speaker C: Sorry, go ahead. Yeah, um, compliance is one bottleneck, or it could become a bottleneck. We have two people, uh, in our compliance department, and every product which we sell for our customers needs to be checked once up front. So that is compliant, because compliance for what product? Compliance, for example, do you have to write labeling? Do you have the right certifications? Do you have the right, the right languages on it? Is your listing actually correct? Do you have any health claims which you are not allowed to have? Stuff like that. So that because we are the seller, the government will always come to us first. And we need to have a good answer why we are selling a product which is not compliant. That's why we have to take the compliance part very serious. And that's also one of the bottlenecks. The other bottleneck is if a customer wants to upload, um, new products to our software, we need to upload them to Amazon. So you're a customer, you want to sell a new Product, you upload it into our software and we need to take this product and upload it to Amazon and there always something goes wrong. And um, I would say yeah, that's insane stories here. It's just insane. Um, and I think that are our two bottlenecks. So operations in this Amazon account and product compliance up front, the rest scalable.

Speaker A: So do you do that only in Germany or in other countries as well?

Speaker C: All over Europe and uk.

Speaker A: All over Europe. So you have, you yourself have companies all over Europe?

Speaker C: No, we have one company, we have one German entity which is registered tax wise all over Europe. And not only for taxes, also packaging, registration for w eee for textile, uh, registration for battery, for all that stuff. But it's all one too many. That's, that's, that's a good part. We, we buy it one time for a high price and then we can sell it for lower cost to all our customers because we don't need to do it for every customer. Um, again. And we also started selling in, in the usa but therefore we have a partner account. So some guy who has already operating Amazon account in the States and he's using basically our software to make his own processes more scalable. Scalable. And we bring him the customers which he customer products which he distributes in the States. So that's second model.

Speaker B: So tell me what the software does to automate stuff.

Speaker C: What the software does. Invoicing for example. That's uh, I would say that's in the beginning. Just, just to give you an idea. In the beginning we did it all with spreadsheets. So we have this big Amazon account and there you have like stock fees, ah, warehouse fees, you have FBA fees, you have returns, you have PPC campaigns, you have all that different stuff for companies and who will get how much money in the end of the month. You know. And this, this was take, this was, this was taking in the, in our first day so we had like 20, 30 customers. It was, it was taking one week to do the monthly billing that we call it monthly billing. One week. So after one week our customers received their money. Now with the software we just generate, we just click on generate invoices and they are generated for all our customers. And then we click generate credit notes. They're generate for our customers. Then we just need to double check and uh, see who gets how much money and transfer the money actually. And this takes one day instead of one week for 10 times as many customers. And that's, that's I would say a big part of the thing and the other thing is that, um, with our software, our software can actually also write on the Amazon, uh, through the API on the Amazon Marketplace, for example, prices, for example, you can, um, generate your own shipment plans and you will get the labels automatically, stuff like that. So before, before that it was like, hey, guys, I would love to know the return reasons for my product X. All right, we go to Amazon, download the report, filter the report to your SKUs, uh, then send it back to you via, uh, ticket. And now we fetch it through the API and you see it directly everything in your software, and we don't need to look everything up for you or ppc, for example, in the beginning it was like, send us your keyword, send us your bits, and we will upload it. And then you can give us a new request when you want to, uh, edit your campaign or whatever. And now you can directly use our software to run your own PPC campaigns without us involved. So that's also a huge part because 50% of operations or 40% of our operations in the past was PPC campaigns for our customers. Yeah, but not optimization. Just, um.

Speaker B: Yeah, sorry, I was gonna say, have you heard of Profit Dog?

Speaker C: Profit Dog? No, not yet. What is Profit Dog?

Speaker B: It's okay, I'm just curious. Yeah. Is that a German guy, a French guy? I can't remember. I think it's a German guy, Swiss guy.

Speaker A: It's the. It's not. The episode we released this week is the episode we released before. You should have a look. It's, uh, a. It's a. It's, um, It's a software that. Help you. That help you track all the cost involved into selling your product through a marketplace, for example, and then tells you, like, okay, this project makes more profits, basically.

Speaker C: We have.

Speaker A: Sometimes it's. It's hard.

Speaker C: Yeah, we have it in house, so we build that kind of stuff ourselves. So we.

Speaker B: You built it yourself? Yeah, that's what I want to know. Okay, but.

Speaker A: But maybe I oversimplified it. Maybe.

Speaker C: Um, so maybe for sure you did.

Speaker A: I tried, I tried to summarize it into, into one sentence.

Speaker C: For sure you did. Uh, okay, sorry. Yeah, let's.

Speaker B: What do you look like to Amazon? Right? So when Amazon is out there sitting on their side of the fence and they see this massive account with all these sub accounts, like, do they know what you're doing? And do they care?

Speaker C: Yeah, they care and they love it because we take also problems away from them. We take like, not every problem needs a support ticket, for example. Not every Problem needs a support ticket when you know the drill, when you know how to solve the problem with flat files instead of just uploading a picture like that. So we reduced our operational effort on their side still. Uh, but while we are increasing their offer, their offers on international marketplaces. So they love, they love you to sell in France, but to sell in France you need to get the French VT number and blah blah, blah. And they, they would love to have more people selling in France but because it's so complicated, not that many people are doing it and we basically solve this problem. So we, we, we extend the product portfolio in the different countries but plus we reduce their own operations plus we increase the quality of the listings and of the, of the continent of the performance of the sellers because we know what we are doing. So Amazon loves it and they actually know it. And I not allowed to say it but there's one guy in Amazon, he, yeah, he loves us a bit more than the others. And if somebody comes up with the promise, ah, uh, go to, go to Space Goods check, check them out. They're doing that, they're doing, they're doing a good job.

Speaker B: I won't, I won't tell anybody you said that.

Speaker C: Yeah, it's okay. No worries. No worries.

Speaker B: Yeah, I never heard a word. Um, but so here's like Martin and I talk about this a lot, right. I talk about curated marketplaces. Right. I'm, I'm curious about a bunch of things here.

Speaker C: Yep.

Speaker B: You have all this data because you own the account. You know what selling really, really well. Is there a way for you to sort of abstract some of it away onto your own marketplace? Right. In the sense that I know that Amazon gets the traffic. Like I know how this works. But is there a way for you to start with a massive marketing business just for your sellers that are super duper good.

Speaker C: Right.

Speaker B: Because you know who they are. Some of them are great, some of them are middling and some of them are terrible. You could take the great products and then build like you know, space goats marketplace.com or.IO or whatever. Do you know what I mean?

Speaker C: 100% what you mean. And we already had something like uh, this as an idea, uh, but not as a marketplace, as a space goods online shop where we have the good customer products in one shop because we know what products are selling well and what products are not selling well. We had this idea already but you know, prioritization is a super, super important thing and there are many other things which are on the roadmap already. Like usa Getting, getting more customers to usa. It's on our roadmap. But uh, we don't know when we will attack it

Speaker A: that, that change. Just, just give me the product and I will, I will make the website for you and then we start. No problem.

Speaker C: Perfect. Perfect. Yeah. Yeah. Perfect. Perfect. Yeah. You, you, you told me already why I shouldn't use Shopify. But actually we started with Shopify. Maybe we, we, we will switch to, to, to Dr. Shop. What's the name? Dr. Shop.

Speaker B: Dr. Tech.

Speaker A: It's.

Speaker C: Yeah, okay. Dr. Tech. Okay.

Speaker A: But yeah, that's super interesting. And, and uh, and, and naturally we share this idea with, with, with people who have like a lot of produce and they know who sell and, and who doesn't sell. And you, you are the first one who say yeah, we already like consider that and we would like to do that. And that's, that's cool.

Speaker C: Yeah, yeah, that's true.

Speaker A: It's not often that people already think about it.

Speaker B: No, most people don't. What are some of the other things in the pipeline that you haven't mentioned? What's coming?

Speaker C: So, uh, what's coming? Yeah, that's a good point. Um, usa, we want to extend it even more because we did not implement all the features which you have in Europe yet to the uh, Amazon account in the States. So that will be the next big thing. And therefore we also want to bring the customer products into local retail stores in the USA and also in Europe. It's also in our roadmap to implement uh, an infrastructure for this one also um, integrate.

Speaker B: Wait a second, Anton. Does that mean you're about online to offline?

Speaker C: Yes, online to offline. The big, the big leap.

Speaker B: How would that work?

Speaker C: How would that work? So we, so it's also one too many again if we have to contact to let's say Walmart for example. We don't have it yet, but it's easier than bigger. You are right. If uh, you would have to contact for Walmart, we can pitch our customer products once per whatever months and they can decide which products they want to pick for their offline retail. And that's, that's, that's how we could help our customers. Beside that, uh, Amazon and Offline, we also started with Shopify already in Germany. Uh, so we have one customer, uh, Shopify, one Shopify store for one customer which is using the same system as uh, uh, as for the selling as a service part. What does it mean? It's also pretty, I don't want to be that humble. So it's a pretty smart idea because we're using the same stock. We are using the same stock as uh, for fba. What, what does this mean? We sent the use. FBA is like Amazon. So Amazon stores, everything, does the end customer fulfillment returns and so on, so forth. And we can actually connect a Shopify store to the Amazon stock and as soon a guy is uh, someone is buying a product on the Shopify store, Amazon will still do the fulfillment, of course for a higher cost, but it's called multi channel fulfillment. And uh, therefore our customer even don't need to manage two stocks. He can just send it to Amazon and he doesn't care if it's sold on Amazon or if he shows. Of course he cares because he has a bigger margin on Shopify. But you know what I mean? I think.

Speaker B: Yeah. So you, you, you said you want to expand into the United States. Is there any plan to expand into Asia in general or Southeast Asia in particular?

Speaker C: Yeah. So our tech works the best with Amazon or at the moment it works only with Amazon and a bit with Shopify. So for us it's pretty easy to connect new Amazon marketplaces to our system. So that's why we want to be at least, at least everywhere where Amazon is as well. So Japan.

Speaker B: Got it.

Speaker C: Uh, uh, Arabian Emirates, um, Brazil, Mexico, Canada. So that, so we will do it one, one by one. We will integrate all over the world like Amazon. All over the world and then we are open for new ideas like uh, the job. No, what did you say? Jabra? No, it was not Jabra. The marketplace in Thailand, Lazada, Lazada and Shoppy.

Speaker B: Like this is what I'm thinking. Like you could, you could just API into them as well, right?

Speaker C: Yes, yes. But we would need to adjust more than if we connect the new Amazon M marketplace. But still we plan it of course alone. Alone because of diversity reasons. Uh, we need to diversify, uh, at some point. That's what we started with Shopify, but still we need more. To be 100 dependent on one horse is not entrepreneurial, smart, but you have to start somewhere.

Speaker B: Yeah. You also mentioned that you raised some money from venture capitalists, right?

Speaker C: Yeah.

Speaker B: Was that, was that always the idea? And in which part of the, your, the building of the company did you raise the money? Was it siege stage? Was it series A? Like precede?

Speaker C: It was precede. So when, when. Yeah, when, when we started the first Amazon FBA business, we wanted to make some money on the side and learn how entrepreneurship works and so on and so forth. When we came up with the idea for Space Goats. We said, like, we want to build a global company, a big thing. And at this point we already knew that we will not do it alone because not only because of the money, also because of the connections and the experience of this VCs. So at that point we already knew what that we will raise some money. And um, the funding story was like that. In 2018 we started with my own Amazon business, which we transferred to another account. And then, uh, we checked how it works, the compliance with the uh, transfer brand registry, whatever, and then we started to code our software. In the meanwhile, we made some meetups where we explained people how to sell on Amazon and there we get some more customers. And then we came up with this internationalization idea. So we sell. You are already a seller in Germany. You know everything, uh, you know the drill, you know how the technique works. But you don't want to get uh, into VAT trouble in all over Europe. That's why we sell everywhere in Europe but in Germany. And you keep Germany for yourself. And that was like a kickoff story for, for space codes there we could, it was so new, nobody did it that uh, we couldn't save ourselves from uh, customer requests. And one guy, which is also in the field of Amazon, he has like a loan service for Amazon sellers. He saw it and he said, like guys, I love it. I invest in you with my money. We will scale that thing up and then we find a VC together. And that's how, that's how we proceed from here. So he gave us money to hire some new people to focus on the important stuff. And then we were actually looking for a VC for half a year or so. And in the end the vc, uh, found us and not the other way around. Yeah, yeah, that was fortunate.

Speaker A: And what does the customer acquisition look loot on your side? You said that you been doing some meetups, but do you do something else that. How does people find you?

Speaker C: Um, for how customers, uh, find us. So we do stuff, yeah, we, we do stuff like this for example. Ah, a lot. Um, in many podcasts we have our own show as well where we invite great, uh, people which tell what they are good in and uh, give some value to the people. We do email marketing, we do LinkedIn marketing. We don't do cold calls that much because it never worked out really. And offline event, offline events, uh, are pretty strong for, for our, for our purpose. For example, we have been to the White Label Expo two or three weeks ago. Uh, yeah, something like that. And there Were many companies which would love to sell on Amazon but they, they don't have the processes they are. They only do offline retail and B2B and to, to change it, it's just uh, multiple years story. And with us it's just easy because they are legally still B2B supplier for us and we do all the, all the rest for them. So that is a uh, pretty promising target group right now.

Speaker A: But then it means that my merchants using Dart Attach, if you promise that you stop using Shopify, they might be interested into, into stuff we can have

Speaker C: a conversation about this. Not on air. Not on air.

Speaker A: Of course. About the Shot Piper part.

Speaker B: Yeah, exactly. Negotiate.

Speaker A: Yeah, but, but what, what I mean is that most of my merchants that we haven't on Dr. H and we have thousands of them, they never asked me anything about Amazon. Never. None of them. And, and for for example that you mentioned the like the, the Amazon FBA for even DTC store, like we have the technology on Dortmund, we can implement it, but absolutely never someone asked us, uh, that it never happened. Like people just don't, don't want to use it. So I'm really wondering if they don't want to do it because they are scared of all the things that they really need to do on Amazon. Maybe they tried to set up an account and it was not working. It was. And there was like so much stuff to do and they just gave up where were started on stage. Just like Shopify is so much easier. So maybe they don't do that just because they don't know you. And if they knew you, they would start much, much more easily.

Speaker C: The thing is, uh, yeah, maybe that's the reason. Maybe the reason is because your sellers are not sitting in countries where Amazon is strong. I don't know where your customers are.

Speaker A: Most of my sellers are uh, in France.

Speaker C: Okay. Okay.

Speaker A: Yeah, most of them are in France. And, and, and plus I, I already talked a little bit about, about like international expansion with my sellers and very interested into it. Like they want to sell to Spain, they want to sell to Italy, they want to spell to, to the UK to Germany, but they don't know how to do it. They don't know how to start. Like it's, it sounds like a huge thing for them.

Speaker C: Yeah.

Speaker A: And so what I see is that for example I can tell to my merchants, hey, go through space, go use Amazon fba. So then it makes the process of selling in Italy or Spain or Germany so much easier all of a sudden.

Speaker C: Yeah, that's for sure. That's where we come from. We make internationalization easier and we make Amazon easier and we scale you up to. So yeah, get them, get them over. I'm waiting.

Speaker A: Ah, you have to promise you don't use Shopify anymore.

Speaker C: Yeah, yeah, we talk about it afterwards. So if we have an alternative, I mean we are open for everything. If we have an alternative. Why not.

Speaker A: Yes, I'm digging of course but uh, but yeah, but I'm really, really wondering why people don't want to do DTC plus plus plus Amazon and, and why they never asked me and why when I try to in them they never really seems interested.

Speaker B: Right.

Speaker A: And now. But I understand better your business maybe that can be a solution that would, that would just fix their problem. Right?

Speaker C: Yeah.

Speaker A: And maybe now it's just, just an awareness problem because they just don't know that you exist. They just don't know what you, what you, what you are doing. So yeah, I'm curious like would that

Speaker C: help as we don't have French marketing yet and French people are not the best in English. Maybe that's, that's one of one of the reasons.

Speaker A: That's another, that's another thing. And that leads me to my next question. Uh, do you have local team Speech? Italian, Spanish, French?

Speaker C: Yeah, for, for, for end custom. For end customer support. Yes. Uh, um, but not, not, not for operations here yet. We have someone who speaks Italian. We have someone uh, in German of course. English is our company language. So even though we are based in Germany, we use English to get better talent from all over the world. And then we have one guy who's speaking Spanish. I do Russian. But so, so um. Yeah, so that's why we have focused on Germany at the most then UK and usa. So what we also do is. I didn't mention that at all. We bring Americans to Europe. That's also some something what we do. So if you're an American entity, American company and you're already good on Amazon USA and you want to expand to Europe, it's even more complicated. And there's the problem is even bigger what we saw for our customers. So that's also something. And the American market is super big, so there was no need yet to expand to France and Spain and Italy. Although we have a customer from one for Monaco, but he speaks English.

Speaker B: But why not? I mean if you're an American seller, you should be selling in Europe, right? Although to be fair, most Americans don't even know it exists.

Speaker C: So yeah, Europe is some somewhere next to Africa.

Speaker B: It's just somewhere Next to Mars, as far as most Americans concerned. Yeah, well, just seems like an unattainable and inaccessible, uh, place to them. But they should be selling there. What do we have? 350 million people live in the United States and 425 million people in the European Union. So.

Speaker C: Well, I don't know.

Speaker B: Brexit. Did Brexit matter to you at all? Like does that.

Speaker C: Yeah, yeah, yeah, we care a lot. We get even more business with it because, because UK is now super complicated. Before that it was part of, of the Pan European Network and people which, uh, yeah, Pan European Fulfillment Network of Amazon. And when you did the Pan European Network you are always also in the UK now it's not part of this network anymore and you have compliance barriers, you have customs issues, you need to export your products from Europe, import them to uk, all that bureaucratic nonsense. And people, they, they, they don't want to go through this and that's why they come to us and we basically, basically take over the products here in Europe. We export them in our name, we import them in our name, we sell them in our name to the end customer and pay you out for everything what you generate over there. So it impact us, uh, impacted us a lot.

Speaker B: A lot, a lot, but in a good way. But do you, do you think. And again, this is more of a, uh, you know, I'm not there, my boots are not on the ground in Europe and haven't been for a while. But do you think there's any chance that the British kind of wake up one day and just say, can we have a do over? Can we just get back in?

Speaker C: I don't, I don't think so. And I think it, that's also just my personal, my personal feeling. I think there will be even more which will leave this union because right now what's going on in the world, it's uh, I'm not sure if the European Union is stable right now because you have the disadvantages. I had it with my friend. You have the United States of America, okay, this one country, one country with one legislation and you have the states, but still is one in one country. And the country thinks, uh, the people which are living there, they think they are Americans and they, they go make America great again and blah. That's, that's an advantage because everybody's fighting for the same thing. In Europe we have the European Union, but everybody thinks on national stuff. Like hey, for example, the German uh, government, they, they released some kind of sweet governmental support for guests. The gas crisis and Then Italy said like, hey, you're much richer than us and why you're doing it, we cannot afford it. That's unfair, it's not allowed. And blah. We will ask. Uh, yeah, really? And so the countries, they are fighting with each other all the time. Different languages, different cultures, and we don't have the United nations of Europe yet. Um, this would solve the issue, but I don't believe in this right now.

Speaker B: Okay, maybe we should, maybe we should veer away from politics and just.

Speaker C: Please, please, please.

Speaker B: But, but, but it doesn't make a point. And I'll leave you with this. Unless you want to cover some other stuff, I'll leave you with this. That is just a manifestation of the differences in the countries inside of Europe. And those things manifest themselves in the difficulties of selling on Amazon because all the separate country restrictions and stuff like that just make it harder. And every time some law changes, it makes it harder for people from outside to come in and for people from inside to navigate around. Right. So, yes, it's just a manifestation of stuff that's already happening in a different, um, in a different arena. And that's kind of why I ask about it from a political perspective. I don't care. It's none of my business. But I wonder how it impacts the business that you're running. And that's a good answer.

Speaker C: Yeah. So then more complicated, the things become then better for us. Hard to say it like that, but unfortunately that's true. That's the case.

Speaker B: Yeah.

Speaker C: Um, it's not our fault that they make it more complicated. Yeah. So we, we just help the people out of this complexity.

Speaker B: Yeah. I mean, theoretically it should be simple for somebody in Barcelona to sell to somebody in Stuttgart, but it's not. And it's not what you're trying to fix. So.

Speaker C: Yeah, enough.

Speaker B: Okay.

Speaker A: One last question for you. Just, Just came in my mind right now. You mentioned you help your customer with pricing. If I'm, um. Yeah. If I'm not wrong.

Speaker B: Yeah.

Speaker A: Do you do dynamic pricing as well?

Speaker B: I was thinking the same thing, man.

Speaker C: Sorry, do I do.

Speaker A: What do you do? Dynamic pricing problem.

Speaker C: Yeah, we. Yeah, there are some Amazon application, but as you know the answer already, it does not work that well. So you can, you can give a. Uh, barriers for your. But, uh, the performance is. So, so we, we are going to implement it, but we did not find a good partner for it yet.

Speaker A: Is it a good thing for you or is just like something.

Speaker C: Let's see, uh, it's a, uh, everything. What is a good thing for Our customer is also a good thing for us because if our customers are more successful, we are also more successful because we get a share of what the customers selling. And that's why we want our customers to be as successful as possible. So yes, it's a good thing.

Speaker A: Great, Enzo. Thank you.

Speaker B: Okay. Anton. Anton Herman, co founder and CMO at Space Goats. I think I've fallen in love with this name. IO uh, thank you so much for doing that man. That was super interesting. Really appreciate it.

Speaker C: Thanks for the moderation. I was enjoying it. I was expecting something a bit different, but I liked it a lot. A lot, a lot. And I uh, wish the audience a great day.

Speaker B: Do you think they were prizes or like what was the difference? Expecting?

Speaker C: I thought like I, I sent some, some, some, some stuff up front. I thought like we have something like an agenda or whatever. But I, I like this casual conversation a lot because right now I'm big. Yeah. Yeah. Everybody has its own style right now. I'm going to many different uh, podcasts and everybody has his own style. Some guys, they want a one hour pre qualification and then they go through every question and then they discuss the answer already up front and blah blah. It's a style. You will get the different, you will get a different outcome. So that's what you are doing is also a different style. So yeah, everybody how he likes it. Because we do it the same as you guys do it. We have like three to four questions in the beginning but then we just keep it flowing in our own stream.

Speaker B: Just like real life.

Speaker C: Yes, just like real life.

Speaker A: Exactly. Thank you very much Anton. That was super, super interesting.

Speaker C: Thanks for having me guys. Have a good day. Bye. Bye. Mhm. Sam.