Using AI To Make Profits On Amazon! – Podcast With Chad Rubin
00:21 Welcome to AMS Podcast
01:29 Chad, who are you?
02:58 What was Private Label in 2009?
04:09 Your approach to launching products on Amazon
06:37 What niche do you sell in?
07:33 About bundles
09:50 Pain in your business
12:19 How do your algorithms work?
Chad Rubin is a husband, father, and Chief Executive Officer (CEO) who’s making all three of these work at the same time. He’s an Ecom dinosaur who has more than 15 years of experience, and there’s certainly a lot you can learn from his journey!
Chad’s Professional Journey
He started his first E-com business back in 2006, where the company manufactured home appliances and vacuum and coffee filters. He’s also the co-founder of The Prosper Show and sold one of his businesses back in 2021. Now, Chad is on his next business venture called Profasee.
All of his businesses have been focused on Amazon and e-commerce. He started reselling on Amazon in 2006, became incorporated three years later, and was one of the top 100 Amazon private label sellers.
Opening up about Amazon then and now, Chad said, “Amazon has definitely shifted since then and changed tremendously.” Initially, Chad used that data from reselling to determine what products would be on Amazon and what wouldn’t. Based on these insights, he was able to launch a new product every month.
How To Escape The Reselling Rat Race?
Chad mentioned that reselling on Amazon is the rat race that almost everyone is a part of. From his experience, you can learn that the only way to escape this rat race is to go private label. Chad recommended that this can be done by developing your own brand and selling your own products!
The Prosper Show and Amazon Sellers
The Prosper Show is a network hub and trade show for established Amazon sellers that dates back to 2016. Chad and his co-worker stumbled upon the idea after the realization that Amazon was missing a community of like-minded people.
They identified an untapped opportunity and started building upon it. Chad later sold the business because he was getting offers he just couldn’t refuse. Attending the Prosper show can help you learn more about your target audience and how to sell on Amazon.
Using Kits And Bundles To Maximize Your Amazon Footprint
Chad sold his products in kits and bundles. He has defined a kit as a group of two different yet complementary products and a bundle as a pack of similar products. Learning from his practices, it can be said you should also adopt a similar approach to expand your Amazon business.
This allows you to take up more space on Amazon and helps you maximize your footprints. In addition, it helps you increase your gross profit margins because the FBA and Amazon Pick and Pack fees do not significantly increase.
What Is Chad’s Profasee?
Profasee was built by a team of ten professionals who managed to raise $2.3 million for the development. The development of Profasee, an AI software for Amazon, was driven by various factors, including shrinking margins, inflation, sourcing problems, and more.
After considering these factors, he came up with a fundamental question that can best be described in his own words.
“Why is everybody optimizing their spending? And they’re not optimizing price!”
This question then became the cornerstone for the development of an AI model. An AI model that determines the perfect price, at the perfect time, for the perfect customer on Amazon.
How Does The AI Algorithm Work?
During the podcast, he mentioned that the algorithm is no secret and that he’s willing to share how he’s managed to build it. Profasee essentially helps you maximize profits by dynamically driving price changes without sacrificing your Amazon rankings.
The algorithm uses data from Amazon’s Seller Central API and the Ads API and other factors such as economic fluctuations and inflation to determine optimal pricing decisions. In addition, consider your listing and the quality and recency of your reviews.
Can Using AI On Amazon Get You Suspended?
Charging prices that are higher than that recommended by Amazon is price manipulation and can get you suspended, but that is not the case with AI. Chad mentioned that his AI algorithm is based on a self-learning model and also has suppression monitoring.
So if you build an AI model similar to his, you can monitor the effects of the price changes and reset back to the original price if needed. In addition, it has a hyper-learning phase meaning that it’ll make small changes to the price and see how Amazon and your competitors react.
Using AI As A Co-Pilot
AI is great, but at the end of the day, it’s still a machine, and machines can make mistakes. Learning from Chad’s practices, it can be said that if you plan on using AI for pricing decisions, you need to monitor the changes it makes actively.
When monitoring these changes, it’s important to look for any odd prices and to reset them immediately. He mentioned that Profasee is still in the early stages, and the company is currently working with sellers making anywhere between or around 2 to 5 million.
Current Challenges With Profasee
Towards the end of the podcast, Chad mentioned that there are a few challenges that he’s currently facing with Profasee. He mentioned that managing the runway and expanding the feature set is challenging because the company is still in the startup phase.
In addition, he mentioned that his e-commerce business has been challenging as of late, and he recently had his first profitable month in a long time.
How Can Chad Help You?
Chad is someone who believes in inspiring people to take action by making himself available. If building something from scratch or want to take your business from one to ten, Chad is the person to contact. You reach out to Chad via email or follow him on LinkedIn.
Manage Your Pricing Without Headaches!
Finding the right price point is often the most difficult thing to do, and prices can be a dealbreaker for customers. If you’re having trouble finding the right prices for your product, visit Profasee now and learn more about how dynamic pricing can help you grow your Amazon business.