In this episode of the Econ Breakthrough Podcast, host Josh interviews Chad Rubin, operations and strategy leader at Profasee. Chad discusses the critical role of dynamic, AI-driven pricing for e-commerce and Amazon sellers, sharing how continuous price optimization can boost profits without sacrificing sales rank. He offers actionable advice on leveraging AI tools, strengthening business operations, and building strong supplier relationships. Chad also recommends influential books and software for entrepreneurs, and emphasizes the importance of surrounding yourself with trusted advisors. The conversation provides practical strategies for sellers aiming to thrive in a competitive, ever-changing marketplace.
Chapters:
Introduction to Chad Rubin and Profasee (00:00:00)
Josh introduces Chad Rubin, his background, and his role at Profasee, focusing on e-commerce and AI-driven pricing.
Why Pricing Matters in E-commerce (00:00:37)
Chad explains his focus on pricing, its impact on profitability, and why many sellers neglect price optimization.
The Fear of Raising Prices and Real-World Example (00:02:01)
Josh discusses common fears around raising prices and shares a personal example of increasing prices without losing sales rank.
Dynamic Pricing vs. Static Pricing (00:03:57)
Chad describes Profasee’s approach to dynamic pricing, the importance of adjusting prices, and the Amazon flywheel effect.
Dynamic Pricing in Other Industries (00:05:28)
Josh compares dynamic pricing in e-commerce to revenue management in airlines and emphasizes the need for ongoing price adjustments.
Three Actionable Takeaways for Sellers (00:06:13)
Josh summarizes three key takeaways: focus on profits/pricing, incorporate AI, and strengthen organizational structure and supplier relationships.
The Importance of Level 10 Meetings and Team Alignment (00:08:38)
Josh highlights the value of EOS Level 10 meetings for organizational clarity and leadership alignment.
Most Influential Books for Entrepreneurs (00:09:41)
Chad recommends “The 4-Hour Workweek” and other books that influenced his entrepreneurial journey.
Favorite and Game-Changing Software Tools (00:11:27)
Chad shares his favorite software tools, including Ellie and Notion, for productivity and business management.
Mentors and Influential People in E-commerce (00:12:31)
Chad discusses the importance of surrounding yourself with trusted advisors and names key people he respects in the industry.
How to Connect with Chad Rubin and Profasee (00:14:46)
Chad provides contact information and ways to connect with him and learn more about Profasee.
Links and Mentions:
Tools and Websites
Profasee
ChatGPT
Ellie.com
Notion
Books
The 4-Hour Workweek” by Tim Ferriss on Amazon
The Almanack of Naval Ravikant
The Great CEO Within
People Mentioned
Brandon Young
Transcript:
Josh 00:00:00 Today, I’m super excited to introduce you to Chad Rubin. Chad leads prophecies operations and oversees its strategy. He often speaks about e-commerce, Amazon, and leveraging AI strategies on webinars and conferences worldwide. He is also the author of the Amazon bestseller cheaper, easier, direct. Prior to Profasee. He founded Think Crucial and co-founded Cubana and the Prosper show. He is also a father, husband, and loves coffee and tacos. So with that, Chad, welcome to the Econ Breakthrough Podcast.
Chad 00:00:35 Thank you for having me. Excited to be here.
Josh 00:00:37 I want to ask you the question, Chad. You’ve you’ve gone through multiple exits. You have your own ecom brand. Why the focus on pricing and why is it so important at the end of the day?
Chad 00:00:48 Yeah. So. Well, firstly, the reason why I was focused on price was that I was trying. I’m trying. I’m still working through it. I’ve been working on turning around my e-commerce business. It’s been deteriorated over time. Didn’t get a lot of love for me as I’ve been building other initiatives in my life.
Chad 00:01:03 And so, you know, for me, I optimize spend and my ACOs, and I’ve been optimizing our conversion rate and my listings itself and the infographics on those listing pages. But the one thing that’s driving the most to the bottom line is a very small lever, and it swings big doors, but it’s not being swung with price. And I just couldn’t understand why. Like if we have a $10,000 ad campaign, you would never leave it on. You would never leave it on optimized, you’d always be optimizing it. So why is nobody optimizing price? Because it’s a it’s hard to understand and it’s very manual. And by the time you make the change to the price, the market shifted. So this is why I focus on it. And it’s a juicy it’s a delicious problem.
Josh 00:01:50 It really is. And it can provide I mean it’s a huge impact to your bottom line, right? If you want to, you know, increase your bottom line, the best way to do it is just by raising your prices.
Josh 00:02:01 Says Roland Frazier, one of the previous guests that we’ve had on the show. One of the things that he does first, when he acquires any businesses is he simply raises prices. Because to your point, so many brands do not touch their price. They’re too scared to be honest with you because they’re like, well, I like sales where they’re at. If I raise them, you know, 10%, 25%, I’m going to lose it. All right. And I think I actually fell in that camp prior to all of the inflationary environment that we’ve been in recently with Amazon continually increasing their FBA fees. You’ve got manufacturers increasing, you know, the cost of goods that you’re purchasing from them. ACOs is going up ads. So with all of that, like our back was against the wall, although I felt like, hey, 1999 is kind of the that’s the tipping point. You go over the $20 like you cross that mental bridge of $20 and something cents Since all heck is going to break loose, right? And I’m just going to be in a downward spiral, lose my market share.
Josh 00:03:08 And on the contrary, we raise the price by $5, increase the price by 25%, and still maintain we were currently the number two best seller in that entire product category. Didn’t move a needle. We stayed right there. Now we’ve got more profit coming to the bottom line. So I want to ask you the question, Chad. Like, are you seeing the same thing with a lot of the clients that you’re working with and these early users of the software, that there is more room to increase prices on Amazon, and it’s not affecting organic rankings or it’s not a spiral downward. Or are you seeing the opposite true of hey, really like lower your price? Yeah, you get margin compression. But man, you you shoot to the roof and you stay locked in in those top positions. What what have you seen.
Chad 00:03:57 Well, okay. So Profasee in general is about maximizing profit without sacrificing your BSR. So there’s a lot of people in the Amazon space that say, just raise prices. And that’s a lot of times could be reckless advice and insight, right? Because like, pricing isn’t one size fits all.
Chad 00:04:14 And yes, pricing needs to change. But the question is should it go up or should it go down because you can increase price and that may offset demand and you can lower price. It may spur demand. It’ll increase velocity and it could produce more absolute profit dollars to your bottom line. And you could lower BSR as well. So there’s also a knock on effect that happens on Amazon, like the flywheel that I hate to talk about but needs to be talked about, which is like the price today impacts your orders tomorrow. And so nobody knows what that sweet spot is. And just because you raise price tomorrow doesn’t mean actually it should be lowered two days from now or three days from now. So like I said earlier, pricing is a series of changes that need to happen in a series of decisions that happen over time based on pattern in the data. And I don’t believe that pricing should be stagnant. I think it should be dynamic all the time. Kind of like Uber surge, right? Uber has changes of pricing for their drivers all the time.
Chad 00:05:07 Nobody even knows that it’s surge surge environment environment anymore. But they know they know the right price that’s going to maximize their profit on each ride. And Amazon sellers don’t. Even Amazon by the way changes. So anyway, that’s a long way of me saying that pricing needs to be dynamic. And it’s not one specific decision that needs to happen.
Josh 00:05:28 Yeah. Well it’s interesting. You know, I started my career at American Airlines, right. And they have huge revenue management departments because pricing is dynamic, right? They’re always changing the fares, on a regular basis to see what’s the competition doing. How full is my plane? are there certain events like big football? Is there Super Bowl going on in this weekend? Well, in this market I’m going to increase the fares because there’s going to be that much more demand. So I think that I mean that’s such a good mindset shift for, I think, private label sellers to look at their pricing instead of like. Well, you get to your maximum price and then you just leave it there, right? And instead, like you should be dynamically pricing.
Josh 00:06:13 So now, Chad, as we wrap things up today, I love to leave the audience in our listeners with three actionable takeaways from each episode. So, Chad, here are the ones that I’ve noted. Let me know if you think I’m missing something. So number one, from our conversation today, you should be walking away with a greater emphasis on profits and pricing for your business. I think overall, so many businesses and private label sellers haven’t tested their pricing or considered raising their pricing recently. And because it is such a bear to kind of understand what kind of impact a decrease in the price could bring, or an increase in the price could bring, most people just leave it alone. I think that, like you mentioned, the aggregators are on top of this. They’re going to start using it. So it’s going to be the strong and the smart sellers that are going to be able to survive 3 to 5 years from now. So starting on that today, and I would give a shout out to Profasee.
Josh 00:07:15 What a great AI tool to use that’s going to maximize your profits and make sure that you maintain that BSR. So step number two or action item number two is think about and strategize ways to incorporate AI into your business today. if you’re not the creative visionary type that I love to think about, you know, new business ideas, what I would start off with is to ask your team to say, hey, with all of the responsibilities that you guys have going on, how could you utilize ChatGPT in your current workflows and see what ideas your team comes up with? I know that’s one of the things that I’m going to be tasking my team. early on here coming up is how do we incorporate ChatGPT into what we’re doing to save time? And then last but not least. The third takeaway is to make sure you’ve kind of battened down your hatches, so to speak. This kind of correlates with your pricing, but it also coincides with your supplier relationships and this kind of layers up into, I would say, an even bigger topic, which I would just say is get really clear with your organizational structure and making sure that you’re firing on all cylinders.
Josh 00:08:38 And it’s easy, as a visionary CEO sometimes for you to say, hey, I’ve hired somebody that does supply chain. I’m not going to have those conversations with them that they’re going to run things. What you talked about, Chad, is like that level ten meeting from the EOS framework is so vital to a business we’ve been implementing. We’ve been we’ve had it implemented in our business for a year now, and it helped us run faster than we ever imagined. So firing on all cylinders means everybody on your leadership team knows the direction that you’re moving forward with. And you guys are solving issues because every every business is going to have issues that pop up, but you’re solving them repeatedly and everybody’s on the same page. So those are my takeaways. Chad, anything else you would add?
Chad 00:09:23 That was Josh. That was really eloquent. Did you put that into ChatGPT or was that off the top?
Josh 00:09:27 Well, in the in the well I was going through here and reading through my script, sadly, I would like to say that I was incorporating AI, but off.
Chad 00:09:35 The cuff that was really good. That was great. That was a great summary of what we discussed and the takeaways for sure.
Josh 00:09:41 Awesome. Well, Chad, as we wrap up our conversation today, what is, what’s been the most influential book that you’ve read and why?
Chad 00:09:51 it may seem like a trite example for our workweek was ahead of its time by Tim Ferriss and inspired me to make some serious changes in my life and move off of Wall Street. Essentially, it literally gives you a strip of what to give to your boss to work one day a week from home. This is before, like remote work was even acceptable and encouraged me to go down the entrepreneurial path. So it was just like a big pivotal book in my life. That being said, I’ve read a lot of books, but that was definitely a pivotal book book.
Josh 00:10:21 That is that is a good book. I remember reading that book as well, and I do agree. I think it was ahead of its time, but laid a great foundation for, I think, what we’re experiencing now.
Josh 00:10:32 So it’s a good one to go back in reference.
Chad 00:10:35 Yeah, I mean I can if you want, I can mention like maybe two other books that have been are great that I love. Let’s hear it. the Almanac of Naval. I think it’s called Navy Almanac. I’m not sure if you’ve been following Nevada Ravikant. he’s a business philosopher, and, he’s known for his tweet storm, around, like, business and philosophy. But he’s he’s someone, like, wrote a book about all his subject matter, and it’s really great. It’s a really great book. That’s a that’s a good runner up that I loved. if we’re talking about business books, the great CEO within is a playbook on being a CEO and covers all the challenges that you and may come up over time and how to deal with those challenges. Those are a lot of self-help books too. So but these are these are good business. these are good business books.
Josh 00:11:22 Those are solid, solid recommendations. All right, Chad, next question.
Josh 00:11:27 You kind of already answered it earlier in the episode. So I’m going to ask you if there’s any other softwares that people should be using. But what is your favorite or game changing software that you’ve been utilizing talked about like any other AI softwares or other? Anything in general that you would recommend our sellers should be listening to?
Chad 00:11:48 All right. It’s Ellie.
Josh 00:11:50 Com ellie.com.
Chad 00:11:53 Yeah. Ellie. And by the way, they don’t pay me to recommend this. I’m just a fan. Right. And I want to share stuff that I’m a fan of. Other softwares. I’m a fan of notion. I’m a really big fan of notion. you can do so much in it. It has, you can use it as a wiki. You can use it as a project management software. You can use it personally, you can use it professionally, and you can use all these templates that are built already for you. So I’m a Big Notion fan. I use it both in my software company Profasee, along with my e-commerce business, with different sections of software that I love.
Chad 00:12:25 Outside of that, I mean, I love using software, but those are the two biggies that have come across my my desk recently.
Josh 00:12:31 Awesome. All right. Last question who is someone or a group of some people that you admire or respect the most in the e-commerce space that other people should be following and why?
Chad 00:12:43 So this is a really interesting question. I’m very particular of who I’m getting advice from and the people that I am getting advice from. I’m staying very close to them. So meaning I’m text messaging them all the time. I’m trying to set up at least weekly or every two week conversations. so, for example, like Brandon Young, you know, he’s on I have him on text for to go through things as we both go through things as an entrepreneur. Steve, Steve Pope is another one who I keep pretty close to me. So I think if anything, I would encourage people to find the person who can be supportive, who can, like, really listen to you and give you sound advice, and you run the risk of taking advice from people who.
Chad 00:13:27 Where the advice isn’t so sound. If you ever seen, like Game of Thrones, The Hand of the King, and that’s why the hand of the King is so important. And they, you know, they pull the pin off of his jacket very quickly, or his or her jacket very quickly, because it’s all about the people you’re surrounding yourself with. Yeah. And so I just would encourage people to take a look at their report, like who they’re communicating with and evaluate that and keep those people that they really want to get close to on speed dial.
Josh 00:13:53 Yeah. You are a summation of the five people that you hang out with the most, right, and interact with the most. so it is definite wise advice to, kind of do some inventory of, you know, who are you spending time with and what type of value are they providing to you, and are they helping you uplevel your game in your mindset as well?
Chad 00:14:16 So yeah, there’s another quote where it’s like, you don’t want to be the smartest person in the room, but the feedback that I just shared was, you want to be the one that’s putting the room together.
Josh 00:14:26 It’s very true. Very true. Well that’s why I have this podcast and I invite people like you bigger, better amazing things than myself Chad. And you’ve done some incredible stuff. So thank you so much for the insights that you’ve shared with us today. Chad, where should people reach out to you if they want to learn more about Profasee? Where should they go.
Chad 00:14:46 So they can turn out Profasee pro f a s e e prophet? You could see.com. they can email me directly on my personal email, which is Chad at Profasee. Com. I do post thoughts on LinkedIn and I try to be vulnerable and open and share. So feel free to follow me on LinkedIn on Twitter. I’m here to support you and help you and achieve your goals. So thank you for having me on Josh.
Josh 00:15:09 Awesome. Well, Chad, thanks again.
