Paul Sonneveld
I'm your host, Paul Sonneveld and today we're going to help you make the best decisions for your clients, especially when it comes to expanding on marketplaces such as Target+. Now, to help me do this, I am really excited to bring Trent Lee on board to bring and share his expertise and perspectives with us.

Let me introduce him to you. So, Trent is the co-founder and Chief Revenue Officer of Acenda, a cloud-based e-commerce software platform specializing in marketplaces. Acenda offers a unique combination of content management solutions and distributed order management systems all in one place with a wealth of experience in assisting brands on online retailers.

Trent has dedicated his career to helping him navigate the optimal strategies for selling on marketplaces, and I'm sure that given his extensive knowledge and insights, we will greatly, be enriched in terms of the conversation today.  Thank you so much for being on the show and being with us today, Trent.

Trent Lee
Paul, thank you for having me, really excited to be talking with you and to your network. 

Paul Sonneveld
No, that's absolutely great. Non-Amazon marketplaces is such a big topic, particularly this year as profits are really being, growth is slower, profits being squeezed, so people are naturally looking, you know, going out there.

What else, what else is out there? So, maybe that should be our first question actually. You know, when it comes to other marketplaces in North America, you know, curated marketplaces. What else is out there? I mean, it’s a big question, but, what are the outside Amazon, the Walmart and the like? What is on the shortlist?

Trent Lee
Yeah. You know, companies and people in our space always ask me, where else should I be listing your products? And the first question I ask them is, who is buying your products? Right? Like, who are your core customers? Meaning like, what's the gender breakdown? Or, maybe even their household income also plays a role in that.

So, you know, outside of Walmart, being the number one, like a big box retailer out there, target, which launched their marketplace, about five years ago. That would be my first recommendation. We've seen really great results, from our, clients that are on target. And then, Macy's launched their marketplace end of last year. Again, very strong performance out of that channel. And then Coles will be the another one. And Bloomingdale’s is also looking to launch. 

Paul Sonneveld
So you, can I just go a little bit deeper on that question around demographics and spend and all of that? You mentioned, you know, to have a real good look at that. I'd love to just, you know, why do you sort of preempt your answer with that? What's behind that? What's behind the answer? Yeah. 

Trent Lee
It'll just depend on the products that the brand manufacturers or brand sellers are trying to sell. And as everyone knows, like everyone shops on Amazon, right? You're talking about an evenly gender split. You're talking about, low income, high income, it really doesn't matter. Everyone shops on Amazon and then you're talking about other marketplaces, you know, Walmart is a little bit lower in spend. So, you kind of see that, out of performance and what type of products are being sold.

And then you, when you talk about like Target, you're talking about middle to high income, mostly, younger women, that are shopping on there. So again, if you have products that's geared towards young women, you know, little bit higher price point. You're going to perform really well. And then you got Macy's, little bit older women demographic, higher price point. So again, depending on what type of products you sell, price point, all of that, you can definitely really geo-target, your audience and make sure you're getting the maximum out of your performance. 

Paul Sonneveld
Know thy customer is something that comes to mind. Right? 

Trent Lee
Absolutely. 

Paul Sonneveld
Where the right fit is, for sure. Yeah, for sure. So yeah, let's talk a little bit more about Target. I mean, we're going to talk mostly about Target and Target Plus today. You mentioned they've launched their marketplace five years ago. What's been the journey to date over the last five years from Target’s point of view? How have you seen them kind of evolve from where they started to their marketplace offer today? 

Trent Lee
Yeah, I mean it's just like any marketplace, right? They want to kind of build up ramp-up like the number of selections, the technology services and all of that. It is a curated marketplace, where you have to be invited, and even once you do get their approval, you have to use technology like ours with item creation and then after that order processing syndication and all of that.

It's not like they have an open platform like Amazon or Walmart where anyone can just go in and create listings and start selling their products. Target actually is anti-Amazon, if you will. With how they manage their operations and that. They want to make sure that everyone follows the rules of as far as creating their listings with the right information, right images, and customer service. Absolutely. 

You kind of see the other side of that with Amazon having hundreds of millions of SKUs in their catalogue where a lot of misinformation, everyone, you know, fighting for the buy box and all of that. With Target, you're not going to get any of that issue. Only one seller can sell one product, at a time. And there's a reason why even though this is their fifth year going in, to have less than 1000 total sellers in their marketplace. So it really is still like an Infancy stage where if you're able to get in and start selling, you're really setting up for a really good future with Target marketplace.

Paul Sonneveld
Yeah, that's, I mean I'm sure for those who are listening, you know, some of that sounds like music to your ears. 

*(Both laughs)*

Trent Lee
Right. 

Paul Sonneveld
I'm sure it's not as simple as that. Yeah. What I heard was, no competition, no buy box. And you need to be invited first and I'm going to get into that whole topic cause that's probably the number one question that people are thinking about. Right? But before we do that, So you mentioned kind of no buy box. The content is a bit different, what are particularly, you know, putting yourself in the shoes of an Amazon seller, let's say you do get invited, you do work with someone like yourselves to get your listings up there, what have you noticed in terms of, what are the big differences that particularly Amazon sellers would notice, or be surprised either, you know, adversely or positively about when it comes to target. What are the kind of the warnings and the make sure you do this when it comes to target? 

Trent Lee
Yeah. I mean, even taking a step back, like some of the requirements that they have, you know, you have tax US tax ID, you have to have inventory in the US, the products itself for them to approve. You have to have really good product and seller review or feedback on other marketplaces like Amazon or Walmart. And have certain like, revenue threshold, right? Probably above 5 million a year in gross revenue on online channels, things of that nature. 

And then with respect to like the content or your image, all of that. Whatever that's on Amazon, you're probably going to spend, you know, 30% more and making sure that you add additional like product attributes, product information, that target is going to require which is quite different from, Amazon.

Paul Sonneveld
So, product attributes and data structures related to listings are very different. Let me ask you some really basic questions, right? 

Trent Lee
Yeah. 

Paul Sonneveld
Things like images and bullet points and descriptions. Can you reuse those on, on, on target or do you have to invest and do something with those?

Trent Lee
No, you can, but again, you're probably going to add additional information to what you already have on Amazon. For Target and it's going to be the same thing with other curator marketplaces too. It's like one size doesn't fit all, so every marketplace has their own unique requirements. And so, again, even though Amazon is the first one out there and it's very robust in their technology and how they help sellers to list and sell their goods, again, like Target and Macy's going to be a little bit different in what they require. 

Paul Sonneveld
Yeah. And what's the content approval process at Target? Does every page have to be, I mean, I was talking, doing a similar podcast with a European colleague about Zalando and you know, there, he was talking about this sort of, you can put the page up there, but then actually it's manually reviewed by someone. It's then approved. If it doesn't get approved, you end up in a really long kind of exception-based loop, which can take a lot of time. So there's a lot of emphasis on, making sure you get it right the first time, to avoid the pain. What's that experience like on Target?

Trent Lee
Yeah, and I think that's where we can add value because we've done this now, so many times with our existing clients on Target and other marketplaces that we know their requirements. So we can make sure before we even send your catalogue to Target for them to review, making sure it has all the right product attributes, data points, information, and all of that so that your integration set-up time is very minimal. 

Still, you're looking at, you know, about four to six weeks on average to get live on Target, depending on like how many SKUs do you have and all of that. To your point earlier, they do review every piece of data that you send over. But if you listen to our advice, and do things the right way, you should be pretty good as far as anticipating about four to six weeks of launch time. 

Paul Sonneveld
Okay. Four to six weeks. And just sort of one more detailed question on the content. I'm only going to go right back up, but what is the most common sticking point when it comes to content? What are the one or two things that tend to hold people back in terms of getting everything ready? Or, if there's a particular piece you say, look, if you're going to, if you're thinking about this and you think that you'll be invited, which is a whole different question. If you know, here are some areas in terms of content where you should start thinking about now because would help you getting onto Target. Are there particular areas where you see people get unstuck? 

Trent Lee
Yeah. I think the number one thing really is, especially if it's like a brand or product, someone created from its infancy, you know, they really take it to heart, right? And they know that product inside and out. So, however, they created their listings on Amazon, and they think it's a hundred percent accurate. 

But the way Target sees it, you're talking about maybe simple as what they call, a colour differently, because their colour scheme is way different from like Amazon for example, or maybe even sizes. How they want you to call out. The sizing difference is going to be different as well. So, you just got to go in with an open mind that again, there's going to be some percentages that's going to be different, with like target listing versus, your existing like Amazon. 

Paul Sonneveld
Yeah. I certainly noticed being in this space a couple of years ago. It's amazing. There's not even a homogenous what one marketplace calls peach, other marketplaces called orange or beige or, you know, absolutely. Yeah. Well, let's get to the big question here, in terms of How do you get invited and just to summarize what I've already heard from you. Obviously, you got to make sure that you got a good fit with the customer demographic Here, the female, the younger female spends a bit more, that's probably good news. You know, obviously, certain amount of sales velocity already that you can prove in terms of e-commerce.

I think you mentioned, a couple of million dollars a year there as a minimum. You know, good reviews. A bit of I guess a visible track record out there. Those are good starting points. But, tell us more about it, and how do I get an invite, and what are all the things that Target's going to look for as they assess my application?

Trent Lee
Yeah. You know, they're absolutely going to review your own website or your marketplace listings. They'll do their diligence as well. But since I've been doing this almost 20 years now, whether it's I worked at like Amazon or Walmart or you know, other technology companies, I just, since I've been doing this, I kind of know what Target and Macy's and other marketplaces are looking for.

So been pretty accurate in when I take a look at the products. Doing my own review, whether, I think that it can pass or not. So, yeah, if you know all those criteria I’ve mentioned, if they are a good fit, I can quickly take a look, give you a feedback, whether I think it's going to pass or not. And then we would ask for some additional information about their products, things of that nature. And then we officially help the company apply to Target and then you should hear back within two weeks or less. They're pretty quick. 

Paul Sonneveld
Yeah, so actually one of the things I just picked up now, you can help essentially solicit that invitation. But obviously that goes with a caveat that you've go through hundreds of these applications, and I think, you know, obviously you don't want to focus your energies on things where you feel the success rate is close to zero. Are you able to share some examples of types of products, categories, types of brands that have been successful in the last six months where you've worked with them. What are the things that target's looking for kind of right now? Which stands most chance for success? 

Trent Lee
Yeah. Again, just going back to who that core target customer is. So if you think about that in a lot of home decor, home textile, type of products have been approved and done really well. Fashion, of course, does well. Baby, pets, although pets, they're looking for actual pet foods at the moment. Absolutely would get approved. 

Outdoors right now because we're heading into summer, they're looking for anything like outdoor décor, camping, and golf, seems to be really hot sport during the pandemic and continues to do so. So anything related to golf is something that they're looking for. Pickleball is another one, that's really hot right now here in the US. 

Paul Sonneveld
Everybody loves pickleball.

Trent Lee
Right. So yeah. Any pickleball-related products. I mean, Basically, like every category you could possibly think of that's on Amazon, they're currently looking for that. 

Paul Sonneveld
That's very encouraging.  Actually, you know, and without your sort of disputing your own self, but are there particular categories where you'd say, look right now, not the right time, unlikely.  I'm thinking like tech accessories or electronics or auto parts or maybe some of the obvious ones, right? 

Trent Lee
Yeah. 

Paul Sonneveld
Which categories of kind would be like just non-starters? Like guys just don't waste your time. You're better off focusing somewhere else. And I can probably recommend a better curated marketplace for those sort of products. What will be on that list? 

Trent Lee
Yeah, that's a good call, Paul. Yeah, absolutely, auto parts. They don't have fitment currently. Any large item that requires an LTL shipping, they're not looking for that. But outside of that, again, if it's a product that has really good reviews, customer reviews, and maybe even have a really good social following because it's a brand new product and brand, they're absolutely open.

Another thing too is that, again, I've worked with every marketplace out there and that target team along with Macy's, I mean, they're awesome group of people, even outside of work environment. So, they're very responsive. They're on top of things. I think every one of our sellers have really enjoyed just working with them on a personal level. So, completely different from the bigger marketplaces that are out there, I guess. 

Paul Sonneveld
I guess that just speaks volumes of what people are used to with other marketplaces, right? without naming names 

Trent Lee
Right, exactly.

Paul Sonneveld
Yeah, well that's refreshing. Particularly when it comes to something kind of new. It's always great to be able to talk to the account manager and actually work through some of your issues. Because you always have a couple that's really interesting. 

There's a question that prompted my mind around the logistics and fulfillment. You mentioned, you have to be registered in the US as a business. You need to have stock locally in the US. That makes sense. I just want to talk about the fulfillment side of things.  Really two sub-questions. One, are you allowed to ship from an Amazon warehouse to a Target customer through multichannel fulfillment? And secondly, does Walmart themselves offer any warehousing services or last mile logistics services or any of that kind? 

Trent Lee
Yeah, that's good questions, Paul. That's been a hot topic recently because obviously Amazon's really pushing their multi-channel fulfillment outside of the Amazon channel.

But both Walmart and Target does not allow multichannel fulfillment for their orders. So you would have to ship it with your own logistics or like a different 3PL maybe deliver where to go, could be an option for both Walmart and Target. To your second question, Walmart, yes, they do have their own, like FBA called WFS. And they're also, I just heard news that they're launching their own multichannel fulfillment by Walmart as well. So that's going to be available. 

Paul Sonneveld
Cool. I thought that might be the answer on the multichannel fulfillment. 

Trent Lee
Yeah, it's, you know, nobody wants to help each other out. Right? Like, yeah you know, why would Walmart ever help out Amazon? And you know same thing with Target and others. So, yeah.

Paul Sonneveld
Yeah. Makes sense. So let's fast forward. I'm, let's say I'm a seller of golf equipment, right? Very popular. You just said it before. I've got all my content in the right space. I've worked with you guys, have published my listings and my content onto Target. Obviously, I've got an invite. My products are live. My account is live. I'm ready to go. What does it look like from there in terms of, What works well on target in terms of driving sales? Is it on the paid side? Is it on the organic side? Thinking like deal participation. What are the levers out there for sellers once you're in? 

Trent Lee
Yeah. You know, setting up your listings correctly is the number one driver of success on Target. So, you know, all those things I keep on talking about having the right product content, attributes, all of that so that your products show up the way it's supposed to show. And then from there, they're really leveraging their own product listing Ads, advertising on Target+.

So absolutely should participate in that. And then, just like any other marketplaces, working with your category manager or category counterpart to ensure that you can participate in their promotional calendars, events and whatnot. But what I can tell you is again, just looking at our existing clients. Cost of selling on Target is going to be far less than other larger marketplaces. So, you can definitely get to keep more margin if you are selling on Target. 

Paul Sonneveld
What’s the thing you mentioned costs, and actually it might just be worth just going a little bit more about general commissions or fees to sell on target? What does that structure look like? Is it negotiated on a seller-by-seller basis or is there a standard rate depending on the category? 

Trent Lee
It's definitely a standard rate, very close to Amazon's standard rate of 15. But you do have to consider, if someone uses their red card, which is their credit card that they have for Target, you do have to give like 5% discount. But that's something that each seller should absolutely confirm and get the right information from Target themselves. Certainly, don't want to give wrong information about fees or tax liability or anything of that nature. 

Paul Sonneveld
Yeah, that makes sense. A lot of curated marketplaces that I've seen do have this concept of seller health, right? So in one sense, it's less competition when they get on there, but the marketplace still measures you on your performance, particularly in terms of how you perform to customers, whether it be delivery or response rate, or actually we haven't talked, spoken about who's responsible for the customer service.
So if you could elaborate on that would be great too. But in terms of, how does Target themselves measure whether a seller is doing a good job and is there ever a time when actually the account is at risk and you may be asked to leave the platform? 

Trent Lee
Yeah. Really great question there. Yeah, they absolutely measure like shipping lead time. Like how quickly does it take you to process an order from the time, their customer receives the order. And then any customer support response, they take a look at that. They also want to minimize the number of SKUs you have in their overall catalog.

So if you have a subset of your catalog that hasn't sold within the last like six to nine months, they're probably going to delist that item off their catalog. It's just taking up real estate. So, that's something different that Target does something different than Amazon or even Walmart. But you know, other than that, if you're inexperienced Amazon or Walmart seller, it should be fairly easy for you to adjust to Targets requirements. 

Paul Sonneveld
Yeah, certainly. If you survive Amazon, you can probably survive Target. You can't take them for granted either. You’re going to have to pay some attention and effort just like you have to, you know, in investing, getting your content right at the start. It's the same, in terms of running the marketplace. Absolutely. Just briefly on who's responsible for customer service? 

Trent Lee
Oh, yeah. The seller is, obviously. The one difference between let's say like Amazon is that majority of the returns occur at the store level. With Target, So you have to come to a decision once the store receives it. You know, do you want the items back or do you want the items destroyed? It's up to the sellers themselves. And then you have to work through the returns and refund policy that they have as well. But the overall customer service, just like, you know, Amazon or any other marketplaces, sellers are responsible for that.

Paul Sonneveld
So, I already asked you one of the big questions, which was how do you get on, there's another kind of elephant in the room here, which is, If I'm a successful seller on Amazon, and let's say I am doing, I don't know, 3 million dollars a year on Amazon with a couple of ASINs, and my product is purchased by females and I fit the demographic and the category.

What could I expect from Target? You know, obviously knowing it's on one hand it's a much smaller marketplace, on the other hand, if I do get on there, I'm probably like I can run my own race, a little bit, much less competition. What sort of anecdotally, how do you manage your client's expectations around sales velocity on target? It's probably a more appropriate question.

Trent Lee
Yeah. And that's a tough one, right? There's just so many different variables and mostly it's on the seller side that the marketplace themselves really can't control. But for majority of our clients that are on both channels now and looking at sales volume, I've been very surprised and because the sales volume we've seen on Target on majority of them are equal or greater than what they see on Amazon.

So I never thought I would see that day in my career that another channel is going to outperform Amazon. But you know, again, once you peel that back and see why that is. You know, you have less than a thousand sellers on their marketplace. They're averaging over a hundred million unique, visitors a month. I don't know the exact number to that. 

So, the chances of Target customers finding your products in their catalogue, it's very high. Again, they don't have to wait through so many of non-related search products to find your products on Target. So, yeah, it's seen really good results on Target for our clients. And also, with Macy's as well. Just want to throw that out there. 

Paul Sonneveld
Yeah, I just want to say that really resonates. I mean, I'm based in Australia, some of you know, and we've got a plethora of curated marketplaces. And, yeah, it certainly what you are saying certainly holds true here. If the category fit is good and you do get invited, you get on, you really can run your own race.

And even though the marketplace is much smaller, you see great sales. And one of the things I'd love for you to sort of elaborate a little bit more on is what we see here in Australia is the ability, going back to your point around actually talking to people and engaging with the account manager, actually you can, if you build a good relationship, you can build a really strong promotional plan and really capture some of those opportunities that, that may not be around all the time through like a self-serve interface on some of the other marketplaces.

I mean, What's your experience of that on Target? How interactive or how engaged are the account managers around driving sales together and the levers that you can negotiate around? 

Trent Lee
Yeah. Again, because maybe it's in the early stages and they don't have millions of sellers that they’re managing, but I've been assured that they're never going to open the floodgates where they're trying to get up to even like a million sellers. That's just not the end goal. 

If you look at Target's overall business model to have tens of thousands of their own private label, brands and products across many different categories. So what the marketplace offering really is complimenting what they already have in their own private label brands and some of their exclusive brands and products that they sell. So, you know, if you look at that way as far as their business and what they're trying to strategize, and I think that's why, they're really focused on making sure they bring on the right customers right, technology partners, and making sure everyone succeeds on the marketplace.

Paul Sonneveld
Great. All right. Well, we're, we've gone past a half an hour mark, and I'd love to

Trent Lee
Okay. Just keep on talking. Paul.

Paul Sonneveld
I do have lots of other questions. I do have a question from one of our audience members. And actually, it fits kind of right in what my normal next question would be in terms of, how do you help and all of that. But the question that I'll bring it on here. It comes from Brian, and by the way, if anyone's tuning in and listening, feel free to drop in with some more questions. Is there SaaS out there that's designed to help target sellers? 

It seems like a good actually tee up in terms of talking a little bit more about what Acenda does and how you help, I know a lot of our MerchantSpring customers are customers of yours as well. So, you know, I'd love to just understand how you could help and how you'd answer that question. Thanks for the question, by the way Brian, appreciate it. 

Trent Lee
Yeah, I mean, the answer’s Acenda, us. We can absolutely help brands and products, again, get their initial approval and then create the listing. So we do two things better than anyone else out there in our space. The first one is we help with item creation on marketplaces. And we syndicate that listings across multiple marketplaces. And then second one, we distribute orders from those marketplaces to however our sellers fulfill their products. You know, you were earlier talking about FBA. If they use that, maybe their own fulfillment or 3PL, it really doesn't matter to us. 

We probably have connection built in for any number of these companies, we even connect to Amazon MCF with their API. So, we can help there. So those are the two things that we do better than anyone in our space. And it's not just me saying that. Actually, all these curated marketplaces, they grade every one of their technology, partners they work with on things like, you know, how quickly can you launch sellers to least amount of technical errors or issues, all of that. And we do score the highest across the board. 

Paul Sonneveld
That is great to hear. Having been exposed to lots of marketplaces, lots of APIs. Achieving that is not always as easy. Lots of smarts going around behind the scenes to make all that happen. So, well done on the journey so far in getting to that stage. So there might be agencies that are listening today or on our podcast or even sellers or vendors, that'd love to sort of learn a little bit more around their applicability, whether they have a extended chance of getting onto Target. How do they best engage with you Trent? What's the best way to get hold of you? 

Trent Lee
Yeah, absolutely. They can reach out to me directly. It's trentl@acenda.com

Paul Sonneveld
We can type it up here. I hope I've got it right.

Trent Lee
Yep. Perfect. Thanks for that, Paul. And we do currently work with a lot of agencies here in the US already, so we have like an agency partnership model. But I think everyone will find out just like Target is, we're very flexible in how we work with agencies and agency partners of ours. We, again, we want everyone to succeed, so we're never going to like overcharge or have these crazy demands. That's just not how we operate.

Paul Sonneveld
Great. All right. If anyone wants to get in touch with Trent, you'd be happy. As you can see, he's a very approachable guy with lots of knowledge inside that head. So, I'm sure he'd be happy to take your call or chat via LinkedIn, or via email. Great. Well, unfortunately, Trent, we're going to have to wrap it up.

But thank you so much for joining us today. It's been really great. I know Target is mentioned a lot, but I think very few people actually other than knowing it's another opportunity, very few actually understand what it takes, how you get invited, how you can be successful in the platform. So I think thank you for just opening up the bond and sharing with us what goes on inside the world of Target+. So really, really appreciate that and thank you so much for coming on the show today. 

Trent Lee
Paul, thank you for the opportunity, really appreciate it. Had a great time, looking forward to you hearing from some of your listeners and looking to help them out to get into Target.

Paul Sonneveld
Fantastic. Thanks so much Trent! 

Trent Lee
You too! 

Paul Sonneveld
All right everyone. That is it for this week's episode of Marketplace Masters. I hope you've enjoyed that. If you do have questions, get in touch with myself or with Trent, and I look forward to catching you at our next episode, next Monday. So, see you then. Take care!