Nick Shucet (00:18)

Welcome to the Million Dollar Sellers Podcast. I'm your host, Nick Shucet. Today we have Chelsea Cohen on the call. 

Chelsea is the founder of SoStocked which has recently sold to Carbon6 so now she's involved with them. We've had some of those guys on the call or the podcast before. 

They are such a great group. Chelsea's also a longtime Amazon seller. I think you said in 2014 you got started. You have that great tool SoStocked to help with supply chain stuff. 

We're excited to bring you on and hear what you've been up to and what's in the pipeline for SoStocked.

Chelsea Cohen | SoStocked by Carbon6 (00:56)

Absolutely. Very glad to be here. I love MDS, so it's always good when I get the chance to work with you guys.

Nick Shucet (01:03)

It's such a great community to be a part of. It's also what I like about Carbon6. I think they're building a community over there as well, from my perspective. 

I love seeing those guys at the events. It's cool to see you involved in that. I think we typically see each other at events, which it's such a blessing. 

Sometimes it hits me like it is right now how cool it is to network with just great people.

Chelsea Cohen | SoStocked by Carbon6 (01:37)

It's funny because I was just telling my husband there aren't a lot of opportunities and a lot of industries to connect with. 

So many different cultures, so many different communities, from Romanians and you got Russian friends, just all over the world. 

You know someone in every part of the world when you work in this industry.

Nick Shucet (01:59)

It's amazing. I've got friends in Turkey now, I've got friends in Southeast Asia, all over the US, and England. We go to New York City and I stay with a member. 

It's such a great place to stay up there. I wouldn't be able to do stuff like that if we didn't meet the people in the community, which is great.

Chelsea, I'm a SoStocked user. I could talk a little bit about our workflow. I think our workflow, is something simple. 

I always try and check my perspective because I started out as a reseller through arbitrage drop shipping, wholesale, retail arbitrage, and online arbitrage. 

Keeping that stuff dialed in was pretty hard. On stock levels, it sold a lot faster than private label stuff, if you're getting that off the ground then there are things you can't control. 

Branded search that you're not in control of, happening on Amazon because you're selling big brand name stuff. 

For us putting together a PO and getting it into Amazon, knowing exactly what our landed cogs are. 

How that formula is being calculated, creating a shipment tied to that purchase, keeping it all tied together, and having an easy path to look back on how profitable your purchase was.

To me, it's simple and it's critical, but to have a process that allows you to do that efficiently, it wasn't an easy thing for me to get to. SoStocked helps us with that. 

InventoryLab was another tool, which was one of the first tools I used, which had a great little bar battery graph chart at the bottom and you can see all your fees chunked up in your profit. 

I'll just touch on that because I think it's simple but powerful and everyone should have a process they can depend on for generating POs, especially as you scale.

Chelsea Cohen | SoStocked by Carbon6 (04:34)

Exactly. As you scale, adding more ASINs, more marketplaces, and you have to combine all of that together to create one PO for your supplier. 

Then it has to split out into the different marketplaces, and keeping that all coordinated can get really out of hand.

Especially we've got sellers that have hundreds and even thousands of ASINs that they're having to supply.

Nick Shucet (05:01)

It can lead to significant savings too. The efficiency behind it is if you get in there and you put in your product dimensions, you put in your case pack dimensions. 

You tie it to your supplier's information. You don't realize how much it's doing if you've had to do all that stuff manually before. I think some people take it for granted. 

When they're thinking about how much they're going to pay for a piece of software, they're not thinking about these value ads. 

Hell, not everyone just knows how to generate a nice purchase order on Google. 

You need an Adobe, plugin or you need something to generate a fillable document like that, that can serve as something official and trackable. 

I think I try to think of all that stuff when I'm looking at software and another value I see from SoStocked is that purchase order, that work order, and that drafting process. 

I really like it because it helps us collaborate with other members of the team that are involved in that process.

Chelsea Cohen | SoStocked by Carbon6 (06:20)

I think that's important. I have a bit of a finance background. One of the things that was really frustrating, some of the software that we would work with, is someone making a change. 

You don't know who made that change to be able to trace back and say, why did this happen? 

When you log in, everyone can have their own login to be able to see who did this and why was it done. It's a form of communication to be able to see what the logging of the changes is.

Nick Shucet (06:54)

That's so critical. One thing I talk about on the podcast often is communication in a virtual work environment. It's amazing how many people will think they don't need to do that. 

They don't need to drop that note. They don't need to give some type of logic and reasoning behind what they did and why and what they expect to happen. 

Stuff like that's super critical for virtual businesses that are scaling and hiring people. You need to have that communication loop dialed in. 

You bake a little bit of project management in there, which is just super valuable. The onboarding calls have been super helpful. 

The focus reports we're using on our weekly meetings now. We were actually able to take a lot of stuff off our scorecard and replace it with some of that stuff. That was super helpful as well.

Chelsea Cohen | SoStocked by Carbon6 (07:57)

That's something that we're getting into more. How do we make it more actionable? We started in 2020 is when we really did our aggressive launch. 

Timing couldn't been more perfect for an inventory software back then.

I've been teaching on this subject for that long and found that you have data and that's one piece, but there's also strategy and execution. 

That's what we're working to build into the software and into our processes more and more. I've been talking about data and talking about the strategy and the processes and the action items.

It's not enough just to talk about it. It's how we can put the strategy into the hands of the sellers and how we can make that actionable. 

So someone can look on a weekly basis and go, you know what, I know what needs to be done, I know the status of every ASIN and I know what the financial impact of my decisions are.

Nick Shucet (09:02)

We're definitely leaning into that. Even if it doesn't get you exactly where maybe you wanted to go before you adopt the focus reports, it's still going to get the staff and the team members.

Looking at those things, heading in the right direction. We just shifted right towards that because you guys have that column, that action column. 

I was like, Hey guys, don't come talk to me until you've done these things, which is super helpful.

Chelsea Cohen | SoStocked by Carbon6 (09:34)

Awesome. It's interesting because inventory, we always say it's a slow boat to turn. 

Anything you do with a physical inventory, whether you move it or don't move it, every decision has a financial impact.

Nick Shucet (09:51)

It's so tough to keep track of that, those things as well. 

I think that another great thing that SoStocked is helping us do is being able to look at that stuff more quickly and see the impact it's having. 

I was talking to you about how we're taking those inventory timelines and copying and pasting them into a Google sheet. 

Then add that column to add the AWD fees, the transportation fee, and all that stuff based on our different options to get products into Amazon. 

There's so much great stuff, behind the scenes on the tool there, as far as setting your buffer inventory for your warehouse and your FBA. 

I think it's really helpful to try and develop a timeline of order frequency over the year.

Hopefully, shipping in some ways that are going to be more cost-effective. If you're going LTL, can you put a plan together that pushes you to FTL? 

There's a lot of savings there. Moving to full containers or using an LGL for LCL-type shipments.

Chelsea Cohen | SoStocked by Carbon6 (11:09)

Absolutely. The consolidation. There are a lot of ways to use supply chain and inventory planning to affect your bottom line. 

There are huge opportunities, and it's sometimes really knowing the options, which I think that's why I educate.

There are so many ins and outs of AWD and what those policies and programs afford in terms of waiving fees. 

There are the aged inventory fees and the structure and the ticking time bomb that is aged inventory. 

Low inventory fees, which as you break them down are actually not going to impact people as much as possible. 

People have been really nervous about that, but it's actually really understanding. It took me a while to understand and that's my business. 

There are so many pieces that fit together that I've always felt I'm very passionate about sharing the data. 

Again, Vanessa Hung and I wrote a white paper or we've done webinars, but it's how do you take an understanding? 

First of all, an understanding that is not very prevalent throughout our community, but more importantly, the strategy involved. 

How can I save over on this side if I'm paying, if I can't avoid the inbound fees, how can I resize my product to get an extra 30 cents per unit? 

Or use AWD to waive my aged inventory fees and that sort of thing?

Nick Shucet (12:46)

It's a tough landscape to navigate. When I first started getting introduced into that world, you're just uncovering a lot that I didn't know. 

I think the ability to negotiate shipping rates and what you're gonna get if you just hop on the internet and try and ship something somewhere. 

Versus even walking into a UPS store, versus getting a rep and negotiating and having that conversation with multiple people and getting negotiated rates. 

That can make or break a business. You can go from unprofitable to profitable just from stuff like that. It's critical. 

I can get in there and figure stuff out, but it's not something I'm keeping a pulse on day to day, which I think is important. You need someone that's doing that.

Chelsea Cohen | SoStocked by Carbon6 (13:43)

Exactly. One of the things that changed suddenly was Amazon created a new policy. 

On the 15th of the month, they'll do an assessment and they'll see if is there a product that you have sitting at Amazon that's been there for over a year and hasn't sold for six months.

We're working with a big seller, this is an eight-figure seller. There's a lot of aged inventory involved and we ran an assessment. 

We found out it got announced recently and April giving you a little over two weeks, basically to make the call. 

Run the assessment really quickly because we have that data sent this seller a message saying they're going to automatically remove this and it's going to cost you $14,000. 

You’re going to wake up in there.

Your business is going to have $14,000 less sitting there. Just by simply alerting to that, a plan can be devised. 

Okay, you have 14 days to drop the price, try to market as much as possible. If you can move that inventory, it won't be automatically removed. 

You'll still be incurring those fees, but by the 14th of the month, do something or you're going to be charged a bunch on the 15th when those fees are assessed. 

There's knowing the cadence of the fees. One of the strategies is on the 16th of the month, you look at your aged inventory. The FBA, we have in SoStocked. 

We pull that in and we calculate it to the future for 12 months. There is a report. If you're not using software, the FBA inventory report will give you the age of the inventory. 

You can look at and identify ASINs that are in those higher ranges, nine months and above you're being charged over $5 per cubic foot. You can make that call. 

Now I have a month to sell through the inventory as much as possible. Then on the 14th of the month, make a decision.

One of the things that can happen is we've alerted people sometimes to this, we do a free profit audit at the beginning of our conversation. 

We've had people just knee-jerk reaction, remove the inventory and it costs a lot. A lot of people forget that Amazon has a liquidation program, which will stop the bleeding. 

Once you place that order on the 14th, you'll no longer be charged aged inventory and you'll also get some cash back within the 90 days. 

In most cases, they charge a processing fee, and they take a percentage, but most of the time you'll get some money back in your pocket that you can then reinvest. 

You're no longer paying the fees. It actually has a net savings in addition to what you would make on the liquidation.

Nick Shucet (16:36)

That's a critical process. I find myself having to deal with it on my own. I haven't really been able to outsource that decision-making process of how much it's going to cost to remove. 

How much could we boost advertising in making that decision? What I've realized is a lot of staff, were just thinking of sending it into other marketplaces. 

That's where I learned my lesson. All right, they're not thinking about the impact of sending this into a different marketplace or the probability that it's not gonna sell. 

If it's not selling on Amazon, it's most likely not gonna sell on Walmart. 

Obviously, there are some areas where that could be different but at least going through that set of questions to get down to the best choice.

Chelsea Cohen | SoStocked by Carbon6 (17:34)

That's actually something that we've put together as the next stage of SoStocked is we're going to be launching a profit killers piece. 

Identifying not just where your profit is at now, but where your projected profit will be based on your current timeline and your current sales velocity. 

Then take all of that and put it through a filter of what we call overstock strategy, which gives you in the next three months or the next six months. 

What am I going to be paying and aged inventory fees? What if I remove it? How much is that gonna cost? What about liquidation? What about marketing? 

With all of those factors, you can make a decision because when you don't have all those factors, you don't have the ability to make a quick decision. 

Usually, a decision is not made. That's where you start racking up the fees.

Nick Shucet (18:28)

You gotta have a pulse on that quickly. I know SoStocked is helping us do that. I don't think we've even unlocked nearly most of the potential of the tool, but it’s been a win for us so far. 

It's been helpful for training other people and then having Colette to help with onboarding is so valuable.

You guys really do a good job. I think Carbon6 does a great job of this, but I know SoStocked did it even back in the day, just helping people be successful with the tool. 

That's a big value add also.

Chelsea Cohen | SoStocked by Carbon6 (19:05)

MDS has been huge for SoStocked as well. 2020, right at the beginning, January, February, before COVID even started. 

We had a Facebook group and would ask, how did you hear about SoStocked? Started seeing MDS coming in. I was like, I didn't even know what MDS was.

I was taking all the support calls. Finally, I got someone. I was like, how did you hear about us? Oh, MDS. I was like, what is that? I see you guys. 

They said there is a lot of buzz about SoStocked. We hope you are what we think you are. Then a month later, the floodgates opened. 

We had a really great feedback loop because I was taking all the calls. My partner was doing all the support tickets.

Us directly with the development team, we were able to take the ideas being fed to us by sellers such as yourself, and just develop the software. 

We got a lot of help from some of the best minds in MDS creating what SoStocked is today.

Nick Shucet (20:11)

That's always great. I've seen that happen a couple of times with some software. 

Some of them are not around anymore, unfortunately. It's always great when you can take that logic and bake it into a piece of software. That's pretty powerful.

Chelsea Cohen | SoStocked by Carbon6 (20:30)

Absolutely. I think that's huge because the way that we look at things or I look at things and what I need for my business has been just one way. 

You get these other business models and you get some really smart people who look at data differently, who have different needs, and you're able to pull the best resources. 

I call it crowdsourcing information.

Nick Shucet (20:57)

Well, I know a lot of members are still actively using that software, saying a lot of good things about it. It's standing the test of time. What else is on the horizon? 

Any features coming up that you wanna let people know about?

Chelsea Cohen | SoStocked by Carbon6 (21:13)

We've had aged inventory for a while. Our plan is to be able to graph that so that you have a quick visual representation of when are you gonna have a huge spike. 

You can see not just the aged inventory fees, but all inventory fees. 

Fourth quarter, we have that huge spike that comes about where people wake up and write posts about $26,000 being taken from their account. 

Being able to see that coming down the horizon three, four months from now, you're able to act on that. Everything is tied in with SoStocked to the timeline. 

If I can predict sales and inventory orders, if I bake the fee policies into the software, there's no reason I can't actually project that. 

I won't be waking up surprised by that huge impact. I can actually look at it, do I have any products that are not huge sellers in the fourth quarter?

Why would I sit on a bunch of inventory at $2.40 per cubic foot and pay all that money on inventory that's not even going to move during that time? 

Let me blast through that or otherwise solve that before it becomes a huge problem. That's one piece. 

Nick Shucet (22:35)

I know we're looking at that number up there and it's great to get ahead of it and start working on it. It gives you more time to think through. What am I what are my options here? What am I gonna do? What's it gonna cost me? What's my goal? Going down that path of Making a good decision based on data.

Chelsea Cohen | SoStocked by Carbon6 (22:57)

Exactly. It's starting to be able to plan for the future. I think just looking at business differently. That's what I'm really interested in. You’re profitable today. 

Are you going to be profitable tomorrow? Products that maybe six months ago were profitable. Something's changed in the market. You've got a bunch of inventory. 

You may not be as profitable as you think you are, and that capital is tied up. 

Let's look at not just, this is how much money we have tied up, but what we could do if we decided not to restock that product. 

We're always looking for cash flow, and we're spending money on funding sources. When you're sitting on a bunch of cash,

It's not only is the cash tied up and you're continuing to cycle through, but also you've got capital that can be recovered. 

The objective for this new stage of SoStocked is to show that and be able to say, this is my baseline margin. This is my baseline return on investment. This is my target. 

What cash can I pull out of my business through liquidation or through marketing and then take that cash? 

If I reinvest it in my target product, in my target return on investment, what is that money worth? What is the opportunity cost? 

Seeing those numbers makes the decision a lot more logical, and less emotional. 

Then you can actually work on scaling your business like we all want to do because the numbers in the data show that.

Nick Shucet (24:49)

I love that. I get so many ideas with the supply chain stuff because it touches everything. There are all these dots you can connect once you've been doing it for a while. 

On our end, it's so unique to your business model. One of the issues that we run into is where we best spend our money. What products? 

We've got thousands of SKUs because of our reselling business. Then we've got the private label companies.

One thing I realized that we're missing is having a quick understanding of net operating capital. How much do we have available to generate a purchase order? 

That would be so cool for us if we had that in SoStocked and you can create purchase orders based on that. 

No, like, Hey, I've got enough money to do this. As you said, being able to visualize that data on the liquidating.

That's one that I don't have a good pulse on yet. Even in my mind. Sometimes I've got it in my head but it's hard to get out or teach.

Even across all our products, it's hard to decide what to do and what to liquidate. We have a big product a brand with big return issues eating into our margin, but it's dog-sizing stuff. 

It's just tough.

Chelsea Cohen | SoStocked by Carbon6 (26:24)

Sizing is always tough. Size, colors, that sort of thing.

Nick Shucet (26:29)

There's so much that the supply chain touches. You guys could just add so many features. What's your process for rolling out features or coming up with stuff?

Chelsea Cohen | SoStocked by Carbon6 (26:42)

Coming up with stuff is easy, but it starts with knowing the blind spots and knowing the opportunity that we have to help sellers look at their business differently. 

There's inventory, but it touches finance and it touches marketing. 

One of the things I try to instill in people is that marketing has a bigger impact on inventory than any other of those three branches because it's the spigot. 

Sometimes I say the inventory is the fuel but marketing is driving the car.

It's really sitting down knowing there are blind spots, what is going to be the most impactful thing first, and then there's the thing that's next, and then beyond that, first is the data. 

You can't do anything without data. Then there's a strategy, and then that will inform what the action items and the focus are going to be. That's the first piece.

We'll sit down with the spreadsheet, that's how everything starts, and work out those formulas, put them together. 

Be able to build a model where I'm looking at a report with the data that has been extracted from SoStocked, and then taking that, breaking it into something that we can give to development. 

Say, here's where the data is, here's what it looks like, here's the formulas, and then they go build it and we launch it. Then, of course, there are the iterations with feedback.

Nick Shucet (28:23)

Awesome. There are so many blind spots. As you mentioned, I was thinking of being a reseller and you're in the buy box, but you're not running advertising and your inventory is aging. 

You decide, Hey, I'm going to try this advertising thing. You get in the buy box and, maybe 10X what you sold because now you got in the number three spot. Top of search. 

You just increased your sales by a significant amount.

Chelsea Cohen | SoStocked by Carbon6 (28:58)

To that point, one of the things that we can help you do that. Tracking those things. 

We were working with a seller and he has the same thing where he looks at, okay, here's aged inventory, looks at the sales ranking, looks at the buy box. Oh, I don't have the buy box. 

My buy box percentage is low. I'm going to drop the price. For this one, I have 100% buy box but the sales rank is low. I'm going to liquidate that. 

Then if it's a price drop, we've got columns for two days, seven days, 15 days, 30 days, up to 180 day velocity. 

Well, if you look at the two days, seven days, and 15 days on a weekly basis, you can see if that price drop is actually moving the needle. 

It's not, by the time you get to the 14th, you can say, okay, we've done our best, and we're going to liquidate.

Nick Shucet (29:59)

It's such a valuable tool for someone like me who has a lot of SKUs in the catalog, and different accounts to manage. 

The hope of training someone to be able to manage it is something the platform offers us as well. 

I think at some point, unless you're a supply chain type person, you need a piece of software like SoStocked because it's going to replace a lot of manual work. It's going to keep alerts. 

I love the email. I love being able to depend on an email alert to trigger the need for a restocking workflow. That's the peace of mind that comes with that. 

I'm always looking for that in software because now I don't feel like I have to check it every day or whatever the schedule would be.

Unless you're one of those lucky people with one product doing a million in revenue, there's a good chance you probably need a tool. I would say you need SoStocked. 

There isn't another one that's as niched-down as SoStocked in my opinion, and not trying to do too many other things in the same piece of software.

Chelsea Cohen | SoStocked by Carbon6 (31:16)

I've always said I feel that if you are in inventory you're not going to be successful because there are so many other things that need your attention and policies change all the time. 

From 2020 we had restock limits, ASIN level restock limits, and then catalog-wide restock limits. Then we had the pay-to-play storage and now we have all the fees.

I write a weekly newsletter and I attribute my success partly to that because we see all of these policy changes coming through. 

I know that like the back of my hand now. I can rattle off all of the different fee tiers for aged inventory, and how that whole policy works because we're immersed in it. 

If you're spinning so many plates, inventory is such a complex beast and it changes so much from month to month that if you're not just really focused on that, you're gonna miss things.

Nick Shucet (32:25)

I agree 100%. I think it's another value add to the software as you get tapped into that, and people would get the opportunity to email you. 

Get to look into the strategy piece as well from someone who's very experienced with the strategy and the tactical part. I think it's a great tool and well worth the cost of it.

Chelsea, before we go, do you have any tips you can hit any people with things you're seeing that are helping save money on supply chain stuff? 

Or what you're seeing as far as the best option to mitigate those inbound placement fees?

Chelsea Cohen | SoStocked by Carbon6 (33:13)

First and foremost, there's this talk about it, and Vanessa Hung just did a post about it, which is cool. There's this talk about using some tools that will circumvent the inventory placement fees. 

Vanessa brought up the point that Amazon has a policy and they've been sending out some emails saying, hey, we noticed that you're doing this. 

We're actually going to charge you anyway, we're going to reassess what you didn't send and we will attribute what you did send, and apply the placement fee accordingly. 

Those things are not the best long-term or even short-term solutions. Amazon really is forcing a lot of people into Amazon warehousing and distribution. A lot of sellers are going that way. 

I would never recommend that being your only strategy, but a piece of the strategy, there are just so many waived fees. 

So much upside that Amazon has just set up for that inventory placement fee. Then just having strategies.

We advise a lot in terms of looking at resizing your product. Amazon's actually launched new fee tiers this year. 

They chopped up the fee tiers into more tiers. Instead of half a pound, they're doing it by quarter pound. 

Of course, with dimensional weight factoring in, we're seeing a lot more opportunities where a product may not qualify for a tier reduction, but now has very little to adjust. 

We're talking about quarters of inches, fractions of pounds to adjust to get into that lower tier, which can sometimes just be requesting a remeasure by Amazon. 

Or just going to your supplier and tweaking something.

Nick Shucet (35:06)

Nice. That stuff can have such a big impact on the P&L at the end of the year if you're doing a lot of volume.

Chelsea Cohen | SoStocked by Carbon6 (35:13)

Absolutely. We have some free tools. We have a free tool that does that analysis. You can scroll down to the bottom of it and request for us to audit your entire catalog.

Then we have a piece that is for carton optimization, units per cart, and units per pallet so that you're reducing the per-carton fees, reducing the storage. 

Especially if you're sending it to AWD where they charge you on a per-box basis. 

If you can get more units into a single box, then that can significantly lower your cost per unit simply because you've got more items in a box.

Nick Shucet (35:52)

I need to do that. We were talking about that. Can I go on the website and I'll find that?

Chelsea Cohen | SoStocked by Carbon6 (35:58)

You will. We could also, if you reach out to me, the one on the website is single use. If you scroll to the bottom, there's the bulk. 

You can also just reach out to me and we can run it on our end as well.

Nick Shucet (36:12)

Okay, yeah, I'm definitely going to do that because we need to optimize that stuff.

Chelsea Cohen | SoStocked by Carbon6 (36:17)

Absolutely.

Nick Shucet (36:20)

Chelsea, thank you so much for coming on. I really think this part of the business is super important right now, whether you want to think it's sexy or not sexy or whatever. 

Looking back on the P&L and seeing your operating expenses go down by 8%, that sounds pretty sexy to me. I get excited about this stuff now more than I have before. 

Mainly just from that practice now of looking at a P&L and tying it to the functions of a business and really knowing what lever to pull to get the result that I want. 

I know Vanessa Hung talks about operational efficiency a lot as well, but it's just a way to run an efficient business. I think that's what Amazon, that's where they're pointing us to.

They're like, Hey, you should have minimum inventory levels on your own. We shouldn't have to tell you this stuff. 

Chelsea Cohen | SoStocked by Carbon6 (37:23)

The fees reflect that. They lower the fees for monthly storage and fulfillment. 

They penalize people who have too much monthly storage and aged inventory and too little in the additional fulfillment fee with low inventory levels. They're definitely doing that.

We can go into a lot of the politics and the decisions that they're making, which I geek out on. 

The bottom line is they're rewarding people for being good at inventory management and they're penalizing people for not being.

Nick Shucet (37:56)

If you're one of those people who's a little hesitant, I would just hit up SoStocked and lean on them to help you through it. 

As I said, you're gonna get the good software, but you're gonna get someone holding your hand through it as well. I think it can be a quick fix to solve that need.

Chelsea Cohen | SoStocked by Carbon6 (38:15)

Awesome, thank you.

Nick Shucet (38:16)

Chelsea, thanks for coming on and we'll talk to you again soon.

Chelsea Cohen | SoStocked by Carbon6 (38:20)

Awesome, great talking to you.

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