01:23  Hey, welcome back to the show. And today I'm so excited to have Dan with us today to talk about some really cool Amazon stuff. Dan talk to us, man. Who are you and what do you do?

01:33  Yep, yep. I'm Dan Brownshire, co -founder, CEO of Channel Key, which is a full -service channel management agency that supports mid-market enterprise -level brands on the Amazon marketplace.

01:50  I love it. So you help people transition from an existing sales structure into how do I get busy on Amazon?

01:58 Well, there's a lot of things we do. Sometimes we, our clients don't have a great Amazon strategy and they need a strategy. And so we'll help them create that. Sometimes they're net new on Amazon. Maybe they've got a big DTC business and they want to activate on Amazon. Sometimes they manage it in house and don't have the knowledge, the technology, the resources to do it. So we come in and our objective is to help these brands build best in class Amazon businesses. And we've been doing it for a long time.

02:28 I love it. I love it. You know, I think everybody hears about all these Amazon stores and start an Amazon business and all this kind of stuff. If it was that easy, I think everyone would be doing it, but everyone doesn't do it. What are you finding? What do you find the best client type that you can help with this?

02:46 So I love this question, Todd. So one of the most amazing things about Amazon is it's created this ecosystem for entrepreneurs. Okay. And it's reduced or basically eliminated the barriers to entry for an entrepreneur to create a brand and launch into a sales channel. Right. So like pre -Amazon, pre -Internet, you can do that. Right. That easily, you have to go find a manufacturer and a, and a distributor and get into brick and mortar. Right. So it's super cool. Now to your point, it's super competitive. So like in the, in, you know, 2012 to 2018, there was a, there was so much opportunity for entrepreneurs to come in and create Amazon only brands and be super successful. And actually the business that Channel Key came from did, did that partially at a, at a, at a very large scale. But today Amazon is hyper competitive, hyper expensive and hyper complex. And so if anybody comes to us and says, Hey, we want to build an Amazon only brand. We say, Hey, listen, you can do that. It's really hard. It's really expensive. And in our opinion, if you're going to do that, you have to also have a social strategy. You've got to do other things to build the brand outside of the platform. Otherwise it can get really expensive unless you've got just this unique product offering or unique intellectual property or something that's hard to replicate. It's hard to find white space and seize it quickly today in the Amazon because it's so ubiquitous and the barriers to entry are so many tools. 

04:22 And there's so many tools, right? There's so many tools.

04:24 Yep. Yep. Exactly. Exactly. So

04:30 So what is it that you do then? So you're taking people that already have a brand, already have products, and saying, dude, you're missing out on a channel. Let's get you in or no.

04:38 Yeah. So, so our clients, and this has changed over time. I've been running Chanuky since officially January of 2017 is when we first started. Right. And, you know, I was employee zero and over time, the agency changes and the types of clients we work with changes. Right. So in the early days, we would take on a lot of businesses, regardless of whether or not they were fit, right. Because we've got to keep the lights on. Right. But over the years, our service line has developed and has become far more sophisticated. And so, the way we've craft crafted our service and priced it, it speaks more to established brands in the marketplace. Right. So our clients, for example, typically are doing at least $2 million a year on Amazon and revenue up to $200 million a year on Amazon. Right. So we work less with the net new entrepreneur, scrappy entrepreneur type, and more so with more established brands that have distribution into brick and mortar wholesale D to C, wherever, mid market enterprise level brands like Fortune 100, Fortune 500 level brands.

05:44 Awesome, awesome. So you're not messing around with all the startups that are just tapped into a factory and all of a sudden they're a business.

05:52 Generally not right now. We've talked to those folks and we've got, and we want to provide value. And so we've got agency partners that help with those, those, those types of businesses. every once in a while we'll take on what we call it net new, like net new to the marketplace. If there's some reason why we think it's got a lot of opportunity, right? They could, they could have major funding. The pedigree of the executives could be significant. They might have some competitive advantage in manufacturing or product type. But generally speaking, the folks we work with have established brands, they've got established products, they've got established distribution, and they're just either under indexing on Amazon for where they should be or they're under executing.

06:38 Yeah, and which is it more frequently?

06:49 Good question. I believe that they go hand in hand, right? If they're not executing, then they typically are under -indexed, right? But there could be a slew of issues, right? It could be their catalog's not right. It could be they don't have demand planning in place, and so they have stock issues. It could be they have got horrible price negotiations and terms with Amazon. It could be their ad strategy is a mess and unprofitable. There are so many different ways that prospects and clients present to us that are in various stages of the life cycle on the platform. But in general, they come to us because they believe they're underperforming and or under indexed on the platform. Like they're either their business is declining, their competitors are beating them, or the channel is not producing the amount of revenue that it should given how big the business is.

07:35 I love it. So you said several things that I think are really deep and actually a lot cooler than you made them sound. Realistically, what you just described is an awesome business life cycle for both your clients that you're working with and your own business. First of all, you said at the beginning of that segment here about the fact that at the beginning of your business in 2017, you were taking anybody with any kind of store and just kind of helping them get out there and build their their product lineup on Amazon. Then you talked about how you started to niche down into very specific targeted groups. And I want to dive into that for a second, but the other thing you talked about is that the opposite was happening. The clients that you wanted to work with were people that already had presence, already had some revenue generated, and they were kind of coming to you saying, dude, we tried, we're not expert at this, help us out. And both of those kind of revolve around the same kind of topic here, but how do you, how do you interpret what I just described back to you and how do you see that kind of having unfolded in your life?

08:48 Good question. So, and there's a lot of ways I can look at it, right? But I think if I had to distill it down in its most simplest form, my objective with building channel key is to not create a lifestyle business, right? I'm building a business that is here to grow, right? And I've got partners and I'm not interested in building a lifestyle company. I'm interested in doing cool stuff and growing and finding opportunities and figuring out how we can be the best in class. Okay. And so knowing that as my underlying framework, we gravitate towards high service, better service, finding bigger and better and more complex clients because that's what happens, right? I don't know if you're in the service business and you want to be a premier service provider and you've got in my world, you got to work with the big brands, right? You got to work with it with the big dogs in a lot of cases, which requires you to be more sophisticated in your messaging, in your execution, in your pricing, in your tools that you've got available, in your knowledge set, in your, in your team and the strength of your team. And so we've consciously made the decision to go up market based on this idea that we want to build a growth business and we want to work with clients for years, right? And the way we're going to do that is to find great clients with big brands, with big opportunities, with big resources that we can sink our teeth into.

10:25 captainscouncil.com

12:04  So part of that, I'm guessing you didn't come around and say it, but when you have a choice to work with two different types of companies, one that's like trying to figure out their way through Amazon, another one who's already got money and is willing to spend to get it done right, which one do you choose? Is it that easy?

12:24 Well, so sometimes it is that easy, right? And again, like from just experience, what we've seen is that the larger brands that are more complex, that have more resources, that have more opportunity, right? To try things, to invest more, right? If it's a single operator, that has two items they can sell. And guess what? You know, the channel key fee is, is a extremely high percentage of their revenue. It becomes really hard to justify a and B if one bad thing, one bad thing happens, then the business can go sideways. Right. And we're in the business of creating long -term value, long -term relationships with brands. And so, and I think inherently you want to choose clients and brands that are, that are built for scale, right. And that are built for longevity. So I think it's a natural progression and a matching of who we are, who we want to be in and the clients we want to service.

13:42 And those of you listening, I hope you pay special attention to this because Dan just really mentioned something that I think two people think far too little about, and that is when you're given the choice between two types of clients, do you wanna choose the one who has a harder problem to solve but is willing to pay you more, or someone who's probably got, they think it's an easy problem but it's just as complex and they don't have the money to pay you. And clearly, Dan, you figured that out early and identified that the avatar you're looking for is far different than the one you initially started with. And probably one of the reasons why is because they could pay you more to do, solve more problems for them.

14:23 That they stick around longer, right? There's more, there's generally more opportunity, more offsite, right? And so, I don't know the business term is your ICP Todd, like what is your ideal client profile? And, and if, and that's for us, that's changed over the years and it's changing right now. 

14:40 Which is okay. Yeah. Yeah.

14:41 Yeah, exactly. And it's a, that's the problem you want to solve, right? Is who's my ICP? Are we able to serve that ICP today or not? And if not, how can we get there? A and B, am I able to find those clients? Right? Do I have a funnel and a lead gen process that allows me to get in front of those, those types of businesses? And, and I think, I don't know for any business, really service business, if you don't know who you want to do business with, it can get really hard. Right. It can get really hard. Yeah.

15:09  Dude, it can get really, really hard. Yeah, yeah, no, literally, I find myself, in one of my first businesses, I had a partner, and every month, we would sit down together, just the two of us, and we'd review key employees and key clients. And it was like, this always is question of, okay, are these key employees still doing what we need them to be doing, and are these key clients the type of clients we want to have as our quote unquote key clients? Because some people are just better to work with, given your personality, given your skill sets, and given the product you have, that you gotta choose. Who do you want to work with? I love you explaining that, Dan. Thank you so much.

15:48 You're welcome, Todd. I've learned it the hard way over the years, right? So it's, I'm no expert, right? We just, we press on and we continue to build and operate and we learn along the way. And that's one of my big learnings. One of my partners, she says, she always references a book like the hard thing about hard things. And, you know, it's basically alludes to the fact that what got you there isn't necessarily what's going to get you to the next level. And that could mean a lot of different things.

16:20 No doubt about it, no doubt about it. Now when you're talking about evolution of your business and we talk about where you've come from in this particular business since 2017, we're seven years in. As you look at, obviously your ICP's changed a little bit. What other things have happened? Looking back, was there another key decision that you looked at and said, boom, this was one of the biggest growth drivers for us is when we did X. Can you pinpoint anything like that?16:47 That's a good question. I could say so many different things. One is we're lucky. We chose to play in the Amazon sandbox. It's a good sandbox and there's a ton of opportunity. It's still nascent from a total retail volume perspective, certainly almost half of all U .S. e -commerce at this point, but there's a ton of growth and upside, right? So we're playing the sandbox that is there's a ton of upside, a lot of blue sky, right? So that's one. and I think for us doubling down on our team and the quality of the people we bring on and the focus on culture and people is the foundation of our entire business. We're in the people business period. End of story. I run a remote 85 person agency. Half of the team I've never even met, we don't have trucks, we don't have a manufacturing facilities. Like we, you know, like all my, the business is people and software and contracts, right? And so I think the, the emphasis and focus on our team and culture has been absolutely critical because that provides the stability that is needed to grow and scale over the years. The enemy, the enemy of the business is churn of people and clients, right? Unless it's the right churn. And so I think that's one key element. I think more from a technical perspective, we've built really close relationships with Amazon. We're members of their partner program. We've leaned very heavily into the advertising part of the business, specifically around programmatic and DSP, which is providing us with access and multiple levers of opportunity. And I think the way we've structured our offering in Total Todd, given where we came from and through some recent acquisitions that we've done is a heavy focus on more retail ops, forecasting, demand planning, like hardcore retail math and demand planning and analysis on top of the more sophisticated and sexy topics of demand generation, traffic driving, advertising on the Amazon platform. Right? So I think the offerings evolved over the years as well.

19:12 So as you talk about that though, it makes me think, you're talking about, first we talked about our ICP, now we're talking about your ideal employee type. Now as that has evolved, a lot of businesses start with generalists, right? Like I can wear 20 hats boss, don't worry about it, I'm here for you. Versus when you get to the point, I'd say anyone above 20 to 30 employees, hits these metric points where it's like, okay, I don't need another generalist. I need a specialist. Can you walk us through that evolution? Because with 85 people, you probably have manager levels. It's a whole different dynamic than a sub 10 person company. Walk us through that.

19:56 That's right. Yeah. Yeah. Good, good, good question. So I'm going to frame this around, a system we use. Okay. And you may have, you've probably heard of it, but, we're, we are users of EOS or traction. Okay. Right. 

20:11 Yeah, love it, love it.

20:12 So Gina Wickenburg, traction EOS is entrepreneurs operating system. So, the, the, the way that has helped us over the years is the process, the EOS process provides a North Star for us and right North Star where we're going right and that continually updates every single year and part of that process is to build what's called the accountability chart right or other people have called this like the parking lot exercise. Okay. So put everybody out on the street and define your ideal org chart or accountability chart, not considering anybody you currently have on staff. Like what is the ideal structure for your business? Right. And then you draft people in and say, all right, well, this Johnny goes here, Sally goes here. Right. And we've done that over the years multiple times. And I think, and I've had some hardcore realizations in doing that exercise. And, because what you ultimately produce is a visual representation of the structure of your company and what you, if you do it the right way, what I found is that, my gosh, like Dan is in four seats on the bus. Brian's in four seats on the bus. This is broken. Like this is not going to work. Right. And so identifying the ideal structure, it allows you to know. Like that, Hey, Dan, you've become the bottleneck because you're in four seats on the bus. And we need to find people that fit those slots to allow you, Dan, to go do what you're good at because you're not good at this, right? You need to stop doing this. And so I think that the EOS process for us and specifically the accountability chart exercise has allowed us to make sure that we're structured the right way for where we're heading.

22:04 I love that. I love that so much. And honestly, I've been parts of some of those EOS type of implementation meetings where that I've witnessed what you're talking about. If you have never been a part of one of those, I highly recommend you get an EOS guy in just to talk to you about it because it is a game changer. I mean, having an operating system for your business is a game changer. And what you just described in your evolution from your you and your partners up to this 85 person entity, it is a game changer. Like you have to have structure and you have to know your roles and define them and make sure that the people in them know what the heck they're doing, right?

22:48 That's right. Yeah. Yeah. Tom, I have a very vivid memory of, I don't know. I think it was in 2018 or 2019 where we were in a planning meeting and I have a leadership team and literally my leadership team fired me in the meeting. They're like, Dan, you have to stop doing this, this, and this. Like we have to replace you or else this is not going to work. Right? And it was like, wow. You know, my ego maybe got bruised a little bit, but I'm like, I appreciate that my team is willing to share this with me and they're right. You know? So, I don't know.

23:25 You know, and the fact that your team was able to do that is such an awesome sign for you that, okay, they're actually invested in this company and they want the same thing I want, which is to see this thing succeed.

23:39 That's the key, man. Right. Everybody's rowing in the same direction and the vision's clear and, and, it's reiterated over and over again, especially at the leadership team level. And that's really hard to do. It's really hard unless you've got some sort of process that you'd leverage because it's. The business can get crazy and you can get lost and you got to put out a fire here and there. And all of a sudden you're like, what happened? Where am I? I'm lost. But if you've got something to point back to that's like, no, I'm actually not lost. This is exactly what I'm supposed to be. It's A, very cathartic and B, helps create good alignment with your team.

24:13 I love it. So now looking back at your business experience, I know this isn't your first go round and you've had other businesses that you've built and scaled. What was different this time? Were there challenges in previous companies that you felt like, I'm not gonna even attempt to wear these hats or do these things this time? And has that helped you evolve faster with this program versus a previous company you've been involved in?

24:39 That's a good question. So I, I co-founded a business in 2009, which was a, started as a side hustle e -commerce product business, like sourcing products in 2009 from Alibaba and selling them on eBay, you know, which, you know, became, which is how they were the good days, which is that's how we found Amazon, right? We started on eBay and then it was like, maybe we should try Amazon and lo and behold, you know, we didn't know what it would become. Fortunately, I bought the stock in 2012. I got it. They'll have it. 

25:14 Don't we all?

25:15  Yeah. So, in essence, we took a leap of faith and built the product based business for e -commerce and in doing so, put ourselves in a position to seize the Amazon opportunity. And so we did that right with a product business and realized that there was also a service business opportunity here because we had worked with a lot of different brands that were struggling on the Amazon marketplace. And we were purchasing their inventory and we're functioning as a reseller on the marketplace. And we said, you know what, why are we doing that? You guys should do it. And so one of the learnings was running an inventory business is hard from a cashflow perspective. And as owners, you got to personally guarantee lines of credit to financial inventory. And that's tough. Now it's doable and everybody does it, but it's like, you know, it's a...

26:09 If you can avoid it, do it, right?

26:10 Yeah, so he said, hey, why can't we build an e -commerce business, but in the service model, we don't actually have to touch the inventory or purchase it. Like that's, that seemed like an interesting opportunity. So that was the genesis of the business. So I think the learning for me was that just starting is so important because you don't, you might have a vision for what the business you want it to be, but ultimately it could be drastically wrong. But that's okay because what you might realize is there's another business or two in here and I didn't realize it or I would have never have known that unless I just started. So I think that was a big learning for me is what type of business do I want to be a part of? A and B, sometimes you just got to start and put yourself out there and realize that you might fail or you might fail and actually learn something that catapults you into your next business.

27:04 I love it, I love it. Well, I gotta tell you Dan, the interview today has been so fun because you've hit three main key topics that I love talking about a lot and that is, first of all, ICP, huge, huge stuff. Next level is your employees and staffing and culture and all that whole part of it. And then just the fact that you have learned from previous mistakes or previous things that you did differently. Honestly, like that whole shift in your whole mind game of going from inventory base to why don't we just help them become the right channel partner and commissionize that. That's a huge, huge shift that allows you to scale much greater than you could otherwise. And then lastly, you and I talked a little bit beforehand about your ability to leverage relationships with other CEOs, like peers that are doing similar things.How has that been a part of your growth strategy?

28:06 It has been tremendously impactful to, to my development, I think as a professional, certainly, but also just as a human human being. so I've been in Vistage for, which is a, you can Google Vistage. It's a large international kind of CEO organization and key executive organization. I've been in that group for over 10 years at this point. So I live in Las Vegas. I have a local Las Vegas chapter forum that I'm a part of. And, and there's a gentleman named Clyde Horner who is.who I interviewed with to join Visage originally who still runs my forum. And I would say that that Visage and Clyde specifically has changed who I am as a leader. And I think what's most important about it for entrepreneurs is sometimes it can be very lonely, right? You deal with a lot of issues with your business that you can't always talk about with people, right? Certainly not your staff in a lot of cases.Now, hopefully you've got people that you can, but it's nice to have an unbiased third party that you can just freely talk to. And so, you know, my forum meets every once a month and literally every single month, the day before the meeting, I'm like, man, I'm so busy. I've got too much to do. Maybe I'll, maybe I won't go to the meeting this month because I'm just so busy every single time. But every single time after I go to the meeting, like, man, I'm so glad I went to that meeting. I was able to either unload something or help one of my forum mates or listen to something that changed my perspective on something. And so like the ROI happens like, like that. So it's important to get to be able to kind of blow off some steam and allow yourself the, freedom and flexibility to share. in a vulnerable and open way because it helps with mindset and you can learn stuff that you apply to your business. So I've learned so much that I've applied to Channel Key.

30:11 And right. And lo and behold, it is weird when all of a sudden you meet somebody that actually had a similar challenge that you have. Whoa. And they overcame it. Right.

30:20 Yeah. Yeah. And it's, you know, and there's nobody in my form that has a business even remotely close to mine, but we still share the same issues, right? Whether you're an attorney, a partner in a law firm, whether you run a a hundred million dollar HVAC business or a whatever the issues are life issues and people issues and business issues.

30:40 I love it, I love it. Dan, I really appreciate this interview today because you have touched upon so many things that I feel like are so critical to anyone's ability to grow. And you really have kind of called out what I call growth blockers that are things that you've been able to overcome and turn them into growth leverage zones where you've been able to take them and move your business forward by overcoming those things. I just think it's awesome. I really appreciate you sharing these things with us today. And for those of you listening, if you're in an Amazon world or you know someone that should be on Amazon more, maybe you got a favorite brand that just isn't even there, you need to have them reach out to Dan. All his contact is below. I highly recommend you reach out to him because as he mentioned, it's highly competitive, but not everyone knows what they're doing. He's been around the block and take his advice. I highly recommend you check him out. Good stuff. Dan, thank you for being here with us today.

31:37 Todd, I had so much fun. Thank you for having me and appreciate the time.

31:43 Awesome. Awesome. And for the rest of you, we'll see you on the next episode of the Growth and Scale and Podcast. Thanks so much.