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…I did want to remind you guys if you want to ask a question in the future or right now or whenever just head over to theamazingseller.com/ask and you can do that.
Just do me a favor, just leave your first name, where you are tuning from and then just leave a brief question, that’s it. Yeah I’ll go ahead and try to air it on an upcoming show so be patient though because I do have a bunch in queue but I’ll try to get to it, I promise. Now I don’t even know where to start today because I am super excited. Yesterday which I am recording this a little bit in advance I always kind of do in a week, week and a half in advance, depending how far ahead or if I’m travelling I might have to do a few extra episodes that way I stay on track but we just opened up our first 1k fast track beta program.
It’s really awesome and I’m so excited, and we had no idea what the response was going to be. We had just over 500 people that registered to basically want to be part of that group of 50. We only wanted to have 50 for this first round because we wanted to go through it, have Dom sugar, my good friend, a retail arbitrage guy for years now and actually take 50 people through the process. We had no idea how it was going to go as far as like how many people actually wanted to be part of this.
[00:01:59] Scott: Well in six minutes we filled all the 50 spots when we opened the registration page which was absolutely insane and everyone is pumped up that’s in there. Now a lot of people didn’t get in. There are a lot of people who wanted to get in and we wanted to be really, really strict and only keeping it to 50 people. We wanted to do that so that we can take care of everyone and make sure that everyone gets through this, also we are going to be learning through this process too. Now if you did not get in in this round we will be opening up for another round and it will be tweaked because we’re going to actually create this for these 50 people and they going to help us create it by telling us what else they need that we might not be providing.
We’re also going to be able to use their examples of products that they’re trying to find and source in their local retail. Really what this program is to get people started, that’s what it is that’s why it’s called 1k fast track. If you guys have not jumped on that list and you are interested in that in the future I would suggest heading over to 1kfasttrack.com getting on that early notification list because when we open it up again I’m sure that the response is going to be very similar and there will only be a limited amount of spots for that group as well.
We are going to keep each group small so this way here we can definitely manage it and be able to make sure that everyone gets what they need but I am super fired up about that. I’ll be updating you in letting you know how people are doing within and what we are learning from actually going through it ourselves. So really, really excited about that. Actually I have an upcoming interview with a couple, a married couple that sounded very, very similar to myself and my wife, they’re husband wife team. They’ve done retail arb for the past 12 months, just little over 12 months. In their first year they did over a one million in revenue. Now that’s revenue, I believe he told me they netted just over $100,000 but I have them coming up in an interview session that I did, really great people.
[00:04:02] Scott: They laid it all out there but it’s exactly what we are teaching now inside the 1k Fast Track course or group whatever you want to call it. It’s not really a course, it’s live training. We actually go through the process with everyone and it’s live feedback and all that stuff. Anyway, if you want to be notified about that definitely do that head on 1kfasttrack.com. The other thing is, if you have not listened to episode 312 and you wanted to see how maybe you could just maybe find some stuff laying around your house and put it up and sell it and make an extra 500 bucks or more you definitely want to listen to that episode because we really dive into that on that episode, give you some action steps. There is a little challenge attached to that.
I want you guys to reach out to me and let me know how you do in that challenge and there is a link there that you can actually record a message very similar to the Ask Scott sessions but really exciting stuff. The whole goal here guys is if you are brand new this is awesome, this is definitely for you. If you are already privately labeling and you are already on that road then keep going on that road. Obviously you could also add this to your business and have that be another part of your business but I would never want to distract you from your private label journey because that’s really where we want to end up.
A lot of people that do retail arbitrage, online arbitrage as they call it, those people usually graduate to private labeling or at least they add that to the mix now. My good buddy, Dom Sugar, that’s exactly what he did. He went from retail arb for years and he still does that, he still has a massive business just to do that business model and then he also has private label and he has brands now that is inside of that private labeling space. So you can see that there’s different ways that you can attach different businesses models to our business and really build out a portfolio but if you are brand new that’s what it was designed for, it’s this 1k Fast Track is to really get you unstuck and I can’t tell you how many people told me like, “I have been listening to the podcast for over 12 months and I have not done anything yet.
[00:06:01] Scott: I want to but I’m just scared to take that leap,” and this 1K Fast Track is definitely something that they feel it’s going to give them a little kick in the butt and get them started without a turn of a risk and that’s what it’s designed to do. So anyway I’m fired up, you guys can tell. I’m really super excited about this group we are going through and the 1k Fast Track so definitely check that out. Alright guys let’s do this, let’s dive in into today’s first question and then I’ll give you my answer or my feedback or opinions because really that’s all it is guys. I’m just giving you my thoughts as if we are sitting there having that cup of coffee, which by the way I do have a cup of coffee and if you have one let’s take a sip together, right now, what do you say? Alright let’s go ahead and listen to today’s first question and I’ll give you my answer.
[00:06:46] Isham: Hi Scott, this is Isham from Boston Massachusetts. I love listening to your podcast, very informative, keep up the good work. I just had a quick question in regarding loans for starting an FBA business. I have capital but it’s not enough because the product that I was looking to obtain is on the higher price points, it’s actually going to cost me $15 to $30 to actually get it from the cost of the product to actually get from China. So I was wondering if, are there are like businesses out there that can be able to provide us with a loan if you haven’t actually started the FBA business because I know Kabbage, they can provide you a loan but you have to be in business for I think about a year or something like that and then you also have to have a good amount of revenue to be able to show that you can be able to pay back and everything. So I was wondering, is there as any loans out there, loan companies that can be able to lend you funds for starting your FBA business? Thanks.
[00:07:55] Scott: Well, thank you so much for that question, Ishmael, I really do appreciate it all the way from Boston. Now, I’m going to assume you’re probably a Red Sox fan and I’m a Yankee fan so we are really not supposed to get along. I think we can still get along I’m not like that but you’re probably a Boston Red Sox fan but I’m just going to guess maybe you are not, maybe you’re not into baseball. I do not know but I’m a Yankee fan, I just want to let you know that and I’m not sure if you want to take advice from a Yankee fan but anyway am going to give you my advice.
This is a great question and another hang up for a lot of people and it’s money, it’s about like how do I get capital if I don’t have a lot of capital to get started? Now, when I heard your question when I was listening to it, my first thought was, man be careful like I’m just very, very leery about taking money and just totally like going all in without testing the market. Like I understand we are testing by doing validation through Amazon and the sales and the reviews and all that stuff but we are talking about taking like 20 grand and laying it down for me personally. To some people it’s like, “Aaah I don’t care, just throw 20 grand down, we’ll borrow it, we’ll see what happens, we are risk takers.”
I am too but to a certain degree. My first thought is man just be careful, I would just be a little bit leery about doing that because again now you’ve got money that you don’t actually have right now, that is you are possibly going to have to pay back if even this project doesn’t work, so I would just be careful on that. Other companies out there that will loan you money, I have heard of a couple I don’t know much about so am not going to recommend them here on the show and you guys know that. Like I don’t really recommend anyone here on the show unless I have dealt with them or someone that I know has dealt with them and they either know the owners or they have had the experience.
[00:09:53] Scott: There’s a couple I know that are out there. I have not heard much about them but just be careful on that. The other couple of things you could consider doing is… I like lean startups anyway, I like to do a lean start up, I like to take maybe five, turn it into 10, then 10 into 20. That’s how I like to operate unless there is something that we have already kind of did a little of a lean start up and then we know it’s going to work and then we want to take in, borrow $50,000 or $100,000 because we need more inventory. That’s a different story, we have already tested and validated. We may already have a customer list like that’s different.
We’ve got a little bit more of a security blanket there but in this case we are saying I think I have a product and that was the key word, I think I have a product that’s going to work, I’m going to borrow $25,000. Like mmmh that’s… I don’t know, if where we are, we are sitting in a coffee shop together right now I would be like, you know what Isham I think I would back off there for a minute and what I would try to do is would try to do a shorter run, a smaller run and try test and validate. The other option… There’s two more options, the other option is is if you wanted to you could always probably just use a credit card. I mean if you have decent credit you can get a credit card line up to probably $15,000 to $20,000 nowadays or you could even get more.
I’ve got credit cards I can probably borrow $30,000/$40,000/$50,000 on, I don’t but I could so you can do that too. The problem with that is depending on the interest rate you got to figure that into the equation because you want to be able to turn that money over. The minute that you take on that money, you’re going to then be starting to pay back interest after the 30 days or whatever your terms are. So you want to be careful with that too because you want to know that rate, that you’re going to borrowing against. Again I would definitely try to start small [inaudible 00:11:46] I had a while back he started with a bigger product, heavier product. He just bought one unit, sold it, and doubled his money and then kept scaling up that way.
[00:11:56] Scott: He didn’t go and spend $25,000/$30,000. Now I know some of you are going to listen, go, “Scott I don’t care I just want to borrow money to get into this thing.” I mean it’s going to be hard if you do not have any track record, you are going to have to use either some of your money or you’re going to have to use someone else’s money and that’s leads me into my next option, which would be find someone that has that money and partner up with that person and then give them maybe 20% of the business, kind of like Shark Tank does. It’s like if you just need me for the money I’ll do that, tell me your idea and I’ll put up $20,000 obviously you’re going to probably have something in writing there, and have to contact an attorney and draw all that stuff up a but that’s an option.
Find someone else that has the money, that’s what you are lacking but you have the plan, you have the actual goal and the focus in mind of what’s going to happen but you’re going to have to explain that to that partner. That would be the best way to me personally because that there they got skin in the game and they’re also going to want to maybe help in other ways rather than saying, “Give me the money and I’m going to ahead and try this thing myself.” That would be a great way to do it. So that would be probably my first way. How can you get someone else that you know to maybe partner up with you and maybe just give them a portion of the business? Let’s face it, like anyone that has a little bit of money laying around if you tell them that you will pay them 10% or 15% on their money that’s pretty good return but you got to prove that that return is actually going to be able to come back.
You’re going to have those terms. You might have to say for first six months there’s going to be nothing coming back to you until sales come through or maybe so much per unit, maybe you say I tell you what… This could be forever if you want kind of like Kevin O’leary where he usually says, “I tell you what, I’ll give you the money and after the money is paid back you just pay me a dollar per unit forever.” Like that’s another option you can do. These are different ways you can creatively do if you find someone that has the money, maybe someone in your family.
[00:13:58] Scott: I’m reluctant even saying that because I would never want someone to borrow money from a family member and then something go wrong and then you owe that… You just gotta be careful, you gotta be smart and try to do it lean startup. I like to do lean startups, I like to be able to, like I said and I’m going to say it one more time, try to start with 1,000 bucks and turn that into 2,000 or 3000 bucks and then flip it and then just keep scaling it up. That’s why I love and going all the way back to 1K fast track you guys you can tell I’m pretty fired up about that because that’s all about them making 1,000 bucks and then learning the process but then scaling up from there and if they want to continually do that with RA or OA they can or they can take that money and invest into their private label business. So I like that way, I like starting small testing the waters and then scaling up versus saying, “I’ve got this product, I think it’s going be a winner, I need $50,000,” that’s a little bit scary.
I think I made myself clear that’s what I would do myself personally. This is me, this is not you so take that what I just said and process it and see what makes sense to you. If you want to still go out there and find some place that will loan you money and you are ok with it, then that’s your choice. You can do that. Hopefully this has helped. Thanks again for being a listener and I appreciate you. So let’s go to ahead and listen to another question and I’ll give you my answer.
[00:15:25] Chris: Hi Scott, this is Chris from Liverpool, New York. First huge, huge fan of the podcast website, everything you do, I am signed up for a webinar on the first, looking forward to it, thank you for everything. I’m new, looking at my first product potentially being a supplement or a gum or candy form in just wanted to enquire if there is any type of certification or authentication as far as the quality of the manufacturing that can be verified and also if there is any other type of inherent or added risk with a consumable on my end as well as if there is any sensitivity with Amazon, with this category of consumables or supplements. I appreciate it very much. Again thank you for everything you do and I look forward to getting the answer. Thank you very much.
[00:16:41] Scott: Well hey Chris, another New Yorker, what’s up man. Thanks so much for being a listener and I do appreciate the question and I do have some thoughts on this. My very first thought is this. Anything that is consumable be very, very careful and it’s going to definitely require more, I don’t want to say work, definitely more making sure that you are covered because this is risky in a sense, it is, whenever you have something that goes into someone’s body, it’s very risky especially and I hope that in this case that you wouldn’t be doing this if you are sourcing something from China or another country like I don’t know, I would not do an ingestible from another country.
I personally would not do that but whatever you do decide or if you do decide to go down this road you’re going to have to have certain certifications. You are definitely going to have that stuff and you’re going to have to make sure that your factory is within, the FTC and like there’s a lot of things that go into that and you have to be careful. You have to also make sure that you are covered legally just in case something did go wrong. You would never want one person to break out and get into a rush and then irritate their skin and then have skin damage for the rest of their life and you’re basically liable for that.
Then this goes for anyone out there listening that might be getting into something that is going in the body or even on the body; a skin cream or anything like that. You got to be very, very careful with that stuff. Your risk level goes up. I did have Michelle Love on the podcast and she is an insurance agent/broker. I think she is a broker, anyway Michelle if you are listening I apologize for that but I had her on the show and she does handle liability insurance, she would probably be a great one to contact to ask her opinion on this because she will be able to say, “No listen this is what you need to have in place to even, just make sure you are covered.”
[00:18:46] Scott: Then she might also recommend that you might have to do certain other things to cover yourself legally even though she is not an attorney, she’s probably been through this before to make sure that you are covered 100%. That episode I will link up in the show notes. If you guys want to know more about liability insurance or any of that stuff in that interview I did with Michelle Love, I’ll link up her interview that I did with her and all her information on the show notes page to this episode which is actually 319 theamazingseller.com/319. All the show notes all the links will be there for everything that we discuss which there’s a lot that we’re discussing in here today but yeah I would definitely say that you want to reach out to someone that has been through this, that has dealt with ingestibles or things that are going in the body or on the body.
You gotta be careful and I would not feel comfortable here just saying like, “Aaa, just throw it up there and you know, start selling the stuff.” I would definitely not do that. The other thing I just want to make you aware of is this will be more obstacles that you will need to overcome. So anyone else that is listening and they are thinking of their first product and they are new at this and they want to go down this path understand this is a whole another path like you… Yes you can go a supplement company and buy something off the shelf and then private label it and do that whole thing but honestly if you are getting into supplements or any type of creams, lotions or anything like that your product just needs to stand out.
It has to do something that you probably would be better off having a face to the business because then the face of the business can talk about why the ingredients are so good and all this stuff and maybe some of your clinical studies… Like there’s a lot that goes into that, we’ve dabbled in it and I’m not going to lie, we still have a couple right now in a brand that we we’re in and we kind of backed off of it to be honest with you. We’re still selling about five a day but we had to bump up certain liability stuff on the actual supplement and that plan for us didn’t really work out as planned and as we got into it I was like, “Mmmh I’m not really sure I want to keep going down this path.”
[00:21:00] Scott: It’s a good product, it was custom formulated, we had someone that was a dietician that worked with us and all that stuff and I actually take the supplement but with all that being said it’s still a tough road to go down. I would just be careful with anything like that, and any claims you make need to be backed up and there is just a lot of other things that go. I’m not trying sit here to discourage anyone that wants to go down this road. I’m just trying to let you know that there are things you’re going to have to do and it’s going to be a longer road and probably a bumpier road but if you are up for the challenge then just make sure that you cover all the basics and go out there and create a good product that helps people and the rest will take care of itself.
You just need to follow that course. I think I went on long enough about that. I just want to make sure that anyone listening really understands that you want to be careful on that because you can be liable, totally can be liable and again the first step I would do is I would contact someone like Michelle. Michelle Love that I interviewed and I would definitely just ask her like, “I’m thinking of doing this product, this is what it does, what would you recommend I use for a liability insurance and what is that going to cost me, what other things should I have in place?” I would definitely dig into that before I would ever make a purchase, so that way there you know.
So let’s go ahead and listen to another question and this will be probably the last question of the day. Let’s do that and then let’s wrap this up and let you get on with your weekend or week whatever time or day it is for you, so let’s go ahead and do that. Let’s listen to the last question.
[00:22:42] Nick: Hello Scott. It’s Nick here from the UK. I already have a business that is selling on Amazon and I’m looking to launch a number of new brands to the market and to go through funding to launch those early next year. My question for you is what are the real costs involved that you have to take into account to calculate your margins? I understand that there are the FBA fee calculators online but is there any other cost, hidden costs that are sometimes forgotten? I was wondering if you could you shed any light on this and help us help others out, thanks very much, bye bye.
[00:23:27] Scott: Hey Nick all the way from UK man, what’s up man! Thank you so much for the question and this is a good question because a lot of times we just look at like how much did we buy the product for, how much did we bring in and what’s the basic FBA fees? Those are like the surface ones but the ones that go deeper than that and even we’re just looking at deeper meaning that we should probably figure in those expenses inside of Amazon and that we might not see as like an FBA fee like you said. There could be long term storage fee, there could be… Well the fourth quarter we had a storage fee that was a lot higher than it was before. So that’s got to be figured in.
Then there is also pay-per-click fees that need to be figured into that equation. There’s other those things too but we are talking about like that is the Amazon like stuff like refunds on that stuff, pulling inventory because you want to have it shipped back. There’s different things that definitely do come into the equation and up until probably about, gosh kind of embarrassed to say, but probably two months ago I was really doing it spreadsheet wise. I was just taking the number that was that was in Amazon and was being issued to our accounts, I was taking that number subtracting the Amazon fees and that was kind of like what I was left with, that was the based on.
All of those fees I knew were Amazon FBA fees because well that’s the difference, what was deposited into the checking account, everything after that was a fee. That’s like the basic like really like simple way of thinking about, like how much money was brought in on your Amazon account, how much money was sent to your checking account? Then minus that and then that’s your fees inside of your Amazon account. That’s kind of like how you look at things and then of course you got pay-per-click figured in there because that’s usually not taken out that way, it’s not a credit card you got to figure that in and then you get your cost of goods.
[00:25:33] Scott: That doesn’t come out that money. That stuff does all come into the mix. The one product that I have been playing around with which I am really liking because it’s simple, there are others out there and again I have not tried any of those, I have tried just this one because again I like simple and have used Fetcher. This one here was created by Greg Mercer from Jungle Scout and it does exactly what’s intended to do. Keep it simple but then pull in all of those costs so all you really have to do is just plug in your cost of goods and then any other shipping that you may have had for the cost of goods, things like that.
It will then pull in all of your Amazon data and start to separate it, and start to break it down so then you can look at your top line and then bottom line and you can see what your margin is. You can see what it was for a certain month, you can see what it was for a certain week or day, you can see what it was for the year. It really does break all that down. The other thing that it does, it’ll look at your inventory and if you look at one specific month or maybe quarter and then it will tell you, if you’ve had a history there that is, it will also give you some inventory predictions in a sense to where it will say like, “At this rate you have this much inventory for this many days,” kind of what does in Amazon which it will kind of take that data and kind show you that at a service level.
So you have one dashboard to kind of see where you are. Then you can also look at it per SKU so you can say that my fees are a little bit higher this month but what product is really drawing those fees more like which one is costing more money, which one am I losing more money on? Then you can look at maybe if you have 20 SKUs you can say, “Oh wow, there’s eight SKUs that are costing me money maybe I should do something with those products or maybe I should cancel those products or just do away with them and liquidate them and move on.” So that there you are able to see that stuff. If you guys want to check that out I believe you there is a 31 day trial, you can go through my affiliate link if you want to that is theamazingseller.com/fetcher and you’ll get some awesome support there because Greg’s team is always great but that’s what I’m using right now on one of the brands that I’m working with and I’m liking it.
[00:27:45] Scott: I really truly I’m. It’s really cool to be able to be see it. The one thing is it takes some time to pull in that data. I remember when we first signed up for it and basically what it will do is it will go into your account and start pulling in the data from your past and then that way there you can go and start looking at the past data but it took over a week to pull in all that data but it will give you some data upfront maybe after a day or two but then it will take a little while and then it will tell you it’s working and it has not pulled in all the data yet. That one there I really like simplicity wise, it’s awesome and I know there are others out there. I’ll probably do something on those in the future maybe something like head to head or something.
You can kind of see the pros and cons of different ones and then we can break those down but right now I’m all about simple. You guys know that. I want things simple. I’m a really simple guy when it comes to numbers. I like things in spreadsheets, I like things mapped up where I can visually see them, Fetcher has done that for me but it makes it look nicer and it does definitely pull in all those fees that maybe you don’t want to break down internally by looking down by looking down through all of your orders. It’ll pull all those fees into Fetcher and then break them down and sort them accordingly so that’s what I would recommend checking out.
Like I said they have 30 day free trial. It will basically work as it’s a paid version so head over to theamazingseller.com/fetcher and you can get that and get signed up for that if you want to give it a go and you can go on the show notes page I will have it linked up there as well. Hopefully that helped you and thank you so much for the question and I appreciate it and I appreciate every single one of you that are listeners and the ones that ask questions, I love you guys all the same but I do appreciate these questions and just keep them coming.
[00:29:37] Scott: If you have a question you want me to answer here on an upcoming Ask Scott session head over to theamazingseller.com/ask and I’ll do my best to get to it and give you my thoughts. That’s really what I’m doing here, I’m trying to sit around that coffee table with you and having just a nice little conversation about whatever we want to talk about and in this case today was these topics which is good. Alright, so that’s pretty much going to wrap it up though guys I want to remind you on the show notes though head over to theamazingseller.com/319 and you will find all of the show notes over which there is a bunch today and there is going to be all of the transcripts so all of you that want to download and read through it and you going to go in a plane ride or whatever go and do that.
You can download it there for you. I create them every single month for you, to be able to use them so definitely use them, put them to use. That’s pretty much going to wrap it up guys. Remember I’m here for you and I believe in you and I am as always rooting for you but you have to, you have to… Come on say it with me, say it loud, say it proud, say it TAS style, “Take action.” Have an awesome, amazing day guys and I’ll see you right back here on the next episode.
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