Are Cheap Amazon Agencies Costing You More?

Chris: [00:00:00] Hey everybody. Welcome back to Seller Performance Solutions, our wonderful illustrious podcast with a wonderful, illustrious guest today who's been with us maybe three, four times. I think this might be your fifth time on the podcast. It's Drew Morgan's ology. I'm actually, you're in the neighborhood of four or five.

We just passed five years of doing this podcast like last week, so time flies when you're. Putting a COVID pandemic behind you. Right?

Andrew: I think the saying goes, time flies when you're having fun, Chris.

Chris: Yeah, we're always having fun every time you're on. Because we know you'll give us the lay of the land in agency world and the straight dope on what you're seeing.

My heart goes out to a lot of full service or full account management agencies with some of the brands who I don't know if you'd say they're being pushy in the wrong ways or they're asking weird questions. I understand where it comes from. It's not a lack of empathy because I have some of the same conversations with them on the other side, the [00:01:00] appeals reinstatement, that kind of angle on it.

But I know there's kind of this ongoing scrum between brands trying to set agencies against each other or auditioning them or changing agencies. I mean, just because of the competition level and because maybe people aren't making as much money as they used to, but do you get into that fray or do you just kind of say, look, this is our offering.

This is what we can do for you, you want to talk to some brands we've worked with in the past. I can give you a couple to talk to, but the rest of it's up to you in terms of how you vet agencies and what kinds of things you're looking for? Is that how you handle it?

Andrew: Yeah, so, a lot of our business like comes referral inbound.

There is some prospecting, there is some outbound that happens, but definitely when you're outbound or prospecting, you're having to hunt. So if you're marketing a product where you're needing to take market share from someone else, that's a different strategy than if it's an open blue ocean and you're just out there saying who you are and what's happening, you know?

If I get [00:02:00] direct inbound from somebody, I rarely have to like position myself to just say like, who we are and why we're better. Instead, it's more of like, how can we help you? And that referral like builds it in. So that's a little bit different. But what I will say is, feels more like a what do they say, buyer's market or seller's market in real estate where like the tides change, like the climate changes, and I do feel like it's in the brand's favor these days, which is to what deal can I get by switching, how can I get pricing lower? Because agencies are having to pivot and figure out how to stay in business and how to keep growing much less, just plateau and maintain, but like how to keep growing kind of in a tough spot.

I feel like the economy among a whole bunch of other things, dropping of ai, whether AI is like making everything better or not, there's a perception of it doing it. And so all of those things are like contributing to brands wanting more for less, and being able to get it because the desperation is higher among agency owners, among consultants, among professionals to just get [00:03:00] business.

I hear when I get a customer, I hear about bad agency experiences all the time. I wouldn't say it's like part of our strategy to attack them, and at times, like whether people believe it or not, honestly, we'll give them the benefit of the doubt when I'm talking to the brand as far as like, look, these things happen.

Using vine for a launch and getting a whole bunch of bad reviews back happens. Like, it's not always that like the agency messed up, or a lot of times they're like, I just got dropped by an agency. It's probably your fault, and I'll even say that in a joking way to just be like kind of clear the air about it.

But it, it's very rare that I am actively attacking another agency owner.

Chris: Not attacking, like I'm working on an article right now and and I'll talk to you when you're free about it, but about you took over from another agency, so you had to do some sort of assessment to figure out do you want them, do they want you.

But you have to look at what the previous agency did and part of what you're offering, pitching, proposing the brand, whatever it [00:04:00] is, is going to include like, they did this for you. We would do this differently. They did that for you. We would do this differently. I would imagine that's happening all the time now.

Andrew: Yes.

Chris: And that involves being at least a little bit critical. I mean, if you think the previous agency did what you would be doing. And if you think the problem isn't the agency, it's the brand, then you're not gonna want their business anyway. So that handles itself.

Andrew: A hundred percent.

Chris: But in every other case, you're pitching something different.

Like we have a different strategy. So I'm just wondering how

Andrew: and sometimes it's like, look, I can understand why they went this way, but we need to go a different way. It's always, 'cause you know that even if you're pointing out where the other agency has failed or dropped the ball, there's an element of them.

That has a bad taste in their mouth because they paid for that, right? And they're frustrated like, so even if I'm telling them opportunity and good advice, there's a level of frustration that they're hearing whenever I say it. And that's a delicate balance to try to do, [00:05:00] which is to try to give people critical feedback and then also understanding as you're telling them that what they're feeling.

But I feel like my duty or my responsibility as a professional in this space is to say, here's my opinion based on experience, based on learnings, based on whatever. This is what I see and I'm being paid to tell them that. Yeah, it is, a lot of times it's not even agency names that I know of, that they were with previously, and I don't know how these brands get in front of these agencies.

Like I do believe it's a smaller space, but it's always a name that I'm just like. I never heard of 'em. In the PPC space, it's a lot of the same actors on the SaaS side, I would say. Right. But I would consider them agencies, but it's just like, yeah, not surprised. This is a mess, coming in here, the organization and stuff.

But, I think it's just a lack of a ton of agencies jumped into the space. A lot of them can get your products up and put images up and do some keyword research because there's enough YouTubes out there telling them how to do it. And if they wanna get it cheap enough, they can, [00:06:00] but brand building takes a lot more than just putting stuff up and hoping for a prayer.

Chris: I think we've already cycled through the people who are like, we're not interested in sharing revenue, which is shrinking with an agency, so we're gonna do this all in-house. That usually cycles through and then it doesn't get them any traction and then they go back into the agency market.

Andrew: You think we're on the other side of that?

Chris: We're close to the other side of it if maybe, I mean, financial stress and duress dictates whether or not some brands are on the other side of it or not, and some people will never be on the other side of it. But that also means maybe they won't continue to sell on Amazon.

Everyone else is going to have the sort of, come to mama moment where it's like we need to work with a agency and we can't just think about this as a revenue problem in terms of sharing revenue with somebody else. We have to generate more revenue on this account at all costs. Who's the right person to do it?

Because kind of this leads into my next question. Some people are going with the agency that makes the biggest promises, [00:07:00] but also poses the biggest risks 'cause they're going to try to leverage tools and tricks that haven't been used in a while that probably aren't compliant and maybe they never were.

Andrew: I think what's the shame is that like, if I had to bet, I would say that agencies, like average retainers per brand or per client have gone down considerably since 21, 22 for everyone across the board. Yeah. And what I as profits and profitability and all that has shrunk.

So as agency rates, well what people need to understand or brands need to understand, I mean, it's a collective, no one's gonna make this change, but it's like if you're wanting an agency to run your brand for. $2,000 a month, 2,500, $3,000 a month. You have to understand what we have to do to make any money on that $3,000.

Chris: Yeah.

Andrew: Right. And that means hiring internationally. That means tracking hours and making sure we're not spending more time than is accounted for. For an account that means pinching pennies just in the same way that they are.

Chris: Yeah.

Andrew: Um, there isn't, you couldn't hire a [00:08:00] nanny for that much money on like part-time, like surely, like you really couldn't. And so you're wanting someone to run your business across multiple departments and want them to be experienced and be in the US and be on your same time zone and all these things and you want to pay pennies for it.

That's my feedback to any brands listening is like, look, you get what you pay for. We're agencies are having to adjust to demand and what brands are willing to pay. But because of that, you have to start figuring out how to cut corners, how to give less scope, creep, how to put boundaries up.

And they're just a give and take. Even in a couple years, I think it's changed a lot.

Chris: And in the events, we were talking about this before in the event space. Um, you know, I usually put in whatever events we're doing.

Smaller stuff, bigger scale stuff. I go to Prosper Show. In Vegas in March, and I go to Accelerate in Seattle. But I think events are gonna be changing too, in terms of ROI. And do you know that if you travel [00:09:00] somewhere you're going to get more than if you stay at home and just spend more time on the phone or emailing people or looking at their brand or looking at their account?

I think we're at a tipping point with events too, because I need the ROI in order to keep doing it. Year in, year out.

Andrew: Yeah I think there's two parts to any event, right? Which is the networking, B2B if I'm an agency, other contractors, other service providers. And then there's the brands or the Amazon sellers or the individuals that are trying to learn and be there.

Like usually events have both elements. The way that the events have any type of ROI, for me is to make a partnership with, another agency, another service provider, that together we're stronger because of it. Whether that's from a lead perspective, whether that's from a service perspective.

If you're not getting that out of the events, then you know, you just can't get, I don't believe that you can get the same type of relationships from a phone call as you can from, sharing dinner, sharing a meal, events like that. So like the events almost need to tailor to like [00:10:00] getting that marketing message.

If that's the value we're getting out of it, then focus on that. Versus paying thousands of dollars to sit in a room, and hear a service provider expert, I'm not pointing any fingers, but get up there and rehash something they can see on YouTube or on a podcast, you know?

Chris: Yeah. Or just the same people over and over at some of the events, which it continues to be a problem.

Andrew: Yeah. Yet brands still find the agencies that I've never seen speak anywhere or be anywhere, and they still find these agencies to work with.

Chris: Oh, I think that's just random. TikTok, Instagram, YouTube, or Googling.

I think that's all that happens with us too. People will say, we hired so and so to do our appeal for reinstatement, and I'm like, okay, I've never heard of them. Which means either one of two things. Either they're all ad spend and no content and no nothing on their website. Almost every time you're saying the same thing, I think you go to their website, there's like no information about their background.

Barely any names that you can look up on LinkedIn. Well, that's on purpose, [00:11:00] right? And if you see somebody like that on stage in an event, you're like, well, they probably paid to be there and there's nothing else to this.

Andrew: Yeah. Touche.

Chris: Here's the last question for this go round. Are you hearing a lot of talk about agencies merging or do you just think that that's what, this year I've got kind of a pet theory that this might be the year where lots of agencies combine and merge and we've already seen.

Couple posts on LinkedIn about it for January, so

Andrew: I think it's been happening. I don't think it's like just a buzz. I it's been happening like OMG commerce, an agency close to me of any significance in Springfield, Missouri they had a rollup, I think last year. However you want to, like phrase it, whether it's like a combination of forces, the same entity, individual entities, and a co-op, like with those types of plays.

I honestly like transparently have been trying to piggyback on that. Not as an acquisition or a merger, but instead how can I model something that gives me some of the pros of that type of arrangement or that [00:12:00] type of merger while I have my own business. So, for example, last year, an important move I made, something that really helped my year turnaround was partnering with several PPC only agencies.

Not acquiring them, not like merging us, but instead coming up with a service offering that compliments us both. We all meet different people. We're all in different parts of the world. Every PPC agency either needs the brand internally or the brand to have a partner that can fix some of the other elements of Amazon.

Whereas some agencies are merging to buy their book of business or some agencies are merging to get their talent on the team. Or some agencies are merging to offer something else like they wanna offer TikTok or content or services. Those are all different reasons.

For me it was, I can provide the PPC company doesn't have to lose the brand that they might be pitching or that they have because they need these other things.

And how can I mold my services to offer those, what I would consider, like three pillars to their one pillar of PPC. How can I bring that in and just change the way I was thinking about [00:13:00] my offerings in a creative way that benefited us both.

So some free strategy on what worked for me.

You have to be able to get along with other people, you have to have methodology that they'll approve of and, appreciate. But I do think we're gonna see even more of that. And why? Because it's getting harder and harder and harder to not be an individual, like a consultant or a individual contractor with a couple team members agree to actually be a legit agent agency, without like some big firm, to help you with overhead and to help you with some of those things to scale. And it's either like the smaller guys and girls create some alliances, where we're like working together versus the opposite is like going head to head. Like we kind of started the conversation now. Are there, Are there agencies that you're kind of like, poaching business and poaching talent? I've never felt like that's the way to go. So I've been looking for the opposite approach and I mean, I think there's, the market is opening back up a little bit for agencies to be acquired, by bigger companies, even generally. Names, I don't even know of PE firms, like, there's [00:14:00] interests on my own desk, I've been seeing more and more emails coming through about these head hunters kind of looking for agencies that are interested to sell.

But the ones that interest me the most are let's say a competitor that is merging with another competitor. And that's like really interesting to me. Seeing them join a big company that just can't hire within or can't build out their own team and wants to just bring that in and add to what they do.

Seems very common, but the merging of like two competitors to one or like that, I just, um, it makes it easier to withstand like the lows and I think the last couple years have really tested a lot of smaller agencies For sure, what they can handle.

Chris: For sure. Definitely agree. Well, whether people see you in Vegas or New York or one of these other wonderful cities, uh, where can people reach you if they have questions, comments.

Andrew: Yeah, I'm on LinkedIn. Andrew Morgan's, website is marknology.com. I've got a YouTube channel and Instagram. I try to be kind of everywhere. Besides the events, like reach out there, tag me in something, say hi on LinkedIn. [00:15:00] This is for me this year. 2026 is like, um, I'm kind of giving a reboot to my own content.

And the last couple years I've been real internal, just like feeding the team, trying to get mark know where it needs to be and absolute focus like internally. And I'm excited this year to hopefully be putting out more content and sharing. Sharing those lessons with the rest of us, on some of the stuff I've learned the last couple years.

Chris: Yeah. And we'll keep, keep help helping you share.

Andrew: Thanks. Thanks for having me back on. I guess, like, of course, I wanna know if it's officially five or not. Five years is quite the accomplishment. I commend you for that.

Chris: Yeah. Leah and I put a lot into it, so it's five years. Who knew.

Andrew: I'll see you soon and Thanks For having me on.

Chris: Of course, thanks everyone for listening in Performance Solutions. We'll catch you next time.