Knowing what customers actually want is not a game, but potentially big business. New player AMZSCALE takes this concept very seriously — and enables their clients to reap the rewards. CEO and founder Daniel Vogler tells us how.
A warm welcome to you, Mr.Vogler. Please tell us a little about yourself.
Thanks for having me. Well, let’s see, I’m 33 years old and I chose to pursue the entrepreneurial path when I was 21. Since then, my focus has always been on emerging business models made possible by the vast potential of the Internet and exponential technologies. That’s how I recognised eCommerce and its astounding potential for growth and scalability, which started me on my own first experiments in this field in 2013. I quickly learned that Amazon goes far beyond being simply an online marketplace. Defining it that way would be like looking at the moon and not noticing there are millions of stars beyond it. It is unquestionably the largest product search engine in the world,you could say the end of the rainbow – anyone shopping here knows what they want, and has in effect reached the end of the sales cycle. Whoever understands how to position products and brands on it benefits from never-ending streams of high-converting search traffic. So I decided to double down on understanding Amazon’s algorithm and began building brands specifically based on search demand. This all took off like a shot. I met my business partner Maurice in a mastermind group for thriving German Amazon sellers. We clicked, and we went on to found a training company for Amazon sellers. Out of this grew AMZSCALE, with now over 100 team members.
What exactly is AMZSCALE, and what unique services are you bringing to the market?
AMZSCALE is a company that is building the one-stop-solution platform for Amazon brands and all those who want to participate in and benefit from the eCommerce boom. An example is our Done4You brand building service – this enables anyone to have their very own brand built as an asset they own and can flip within a few years to one of the large aggregators, if they so choose. Beyond that, we’re in the process of rolling out a dozen more services that provide eCommerce brands with all the tools they need to maximise growth while minimising friction. Imagine one centralised dashboard for all the tools and services you need to manage, grow and eventually even sell your Amazon brand! One of the newest modules of our platform, one we’ll be announcing soon, promises to be a game-changer in the market. It will – for the first time – allow any retail investor to participate in the upswing of the fast growing eCommerce space. We’re also fired up about officially launching our services to the UK market as of this week, as well as officially establishing our presence in the US in the very near future. It’s definitely an exciting time for us.
AMZSCALE recently closed a double-digit million financing round led by Elevat3 Capital. How do you intend to use this funding?
We’re proud – I’d go so far as to say thrilled – to have found not just an investor but also a strategic partner in Elevat3. They share our excitement for the eCommerce space as well as our vision. With Elevat3’s funding and network, we’re well positioned to build the world’s leading platform for any and all needs of any and all brands – be it identifying qualified products to add to their catalogue, matching them with vetted suppliers, supporting with growth-capital or exiting to a larger buyer. Our platform services and algorithms will streamline most of those tasks for existing brand owners or those looking to enter the field as investors.
Before this funding round, you built up your business without any external financing – the so-called “bootstrapping” method. Would you recommend this to other founders? If so, why have you turned your back on this approach?
It’s hard to generalise here, as it comes down to a slew of factors – business model, growth goals, capital requirement, evaluations and much more. Personally, I’ve built all the companies in my 12-year career as an entrepreneur 100% bootstrapped. Of course, as a business owner, your shares are your most important asset and – here I can generalise – it’s usually wise to hold on to them as long as possible. There may however come times where your true growth potential can only be realised with the right partner at your side. It’s important to recognise when that time has come – when your ship has come in, as they say, before it possibly sets sail again.
Let’s get back to the services that you offer. Can you elaborate on Selling-as-a-Service and Capital-as-a-Service? When did you realise that these services are must-haves in your portfolio? How did you build expertise in these areas?
Building our own successful brands as founders and building hundreds of brands for our clients has helped us understand every stumbling block you can possibly imagine in the life cycle of a growing brand. Our services Capital-as-a-Service (CaaS) and Selling-as-a-Service (SaaS) were logical next steps, as they solve two of the largest problems faced in the growth of any eCommerce brand – 1) easy and fast access to growth capital for ramping up production of high-demand products and 2) the VAT infrastructure needed to expand to all of Amazon’s nine European marketplaces. Both services save brands massive costs and delays and therefore accelerate growth significantly.
Brand building and scaling are engrossing processes that nonetheless present special challenges. Please share an experience related to one or both of these areas that you find particularly interesting. Do you still build your own brands when you see the opportunity?
I’m personally most fascinated by our process of building products and brands 100% based on consumer demand rather than guesswork. We live in a time where proper data analysis allows us to take a peek into consumers’ heads and build the products they really want. I think many out there haven’t realised how profound this really is. I’m also fascinated by the marketing side of things. Have you ever heard the saying “Great marketing makes bad products fail faster?” Well, the opposite is true as well. Great marketing makes great products skyrocket. At AMZSCALE, we celebrate every single successful product launch. I can honestly say one thing you never get tired of is seeing how everything comes together and how, in the end, consumers rave about the products they’re pleased as Punch to have bought. And yes, the opportunities for niche brands on the constantly evolving Amazon marketplaces are basically endless. Next to building brands as a service for our clients, we also have our own internal brand building department. Here, we acquire or develop brands to different stages of maturity and then sell them to larger clients or aggregators.
Two of the year’s biggest purchasing frenzies are around the corner – Black Friday and Christmas. Which trends do you see or anticipate? Do you have a favourite category of products?
In 2020, we saw the impact of Covid on online shopping behaviour. In the US alone, eCommerce in general grew by 32% in comparison to the 2019 Christmas season. Amazon even saw a staggering 60% increase in third party seller revenues, making it the biggest holiday season in history. With online shopping still growing rapidly and many countries still imposing lockdown rules – or consumers still being concerned about entering crowded physical stores – I expect similar results for this year. However, this year’s holiday season will feel the impact of global supply chain disruptions caused by Covid. There will be many online shops running out of inventory early in the season, and logistics cost spikes of up to 300% for shipping containers will eventually result in price increases for end consumers.
As a favourite category of products both as a consumer and seller, I would pick niches in home sports equipment or home office space. The remote work trend is definitely here to stay. Our company is a good example – we run 100% remotely. And there are many more like us out there.
For more information, visit the website: https://www.amzscale.net/en
