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…Basically, in his dorm room at one time and then able to now sell it and he’s going to also give us some really awesome tips on sourcing. It’s funny because whenever I do these interviews, I always kind of have a topic of what we’re going to dig in to which is obviously here how he built a business from scratch and then sold it right, like that’s what you think we’d be talking about which it is. But then we just start to go down these different paths through his journey and I love doing that because it’s so real, it’s so raw.
There’s a lot of valuable tips that usually get exposed here and that’s exactly what happens here. His name is David Bryant. Real, real great guy, smart guy and just awesome story because he went from nothing literally in his college dorm room to want to earn a little bit extra money and then started to figure out this whole sourcing thing. Well, the rest is history. His kind of let us know what happened and how it all happened and how he’s starting to build another business now after he has already sold one.
So, really awesome and I think the other thing you’re going to probably pull from this is that people out there that are thinking that ecommerce or Amazon or any platform for that matter. It’s just, everyone is doing it. There’s no opportunity out there for anyone and it’s a perfect example of David going back in the game again after he’s already sold and kind of excited and starting from scratch again. He talks a little bit about that at the end and we’ll dig into that as well. The show notes to this episode will be at the theamazingseller.com/330. Again, all the show notes will be there. I did want to remind any new listeners or anyone that hasn’t attended a live workshop of ours.
[00:02:00] Scott: We’re actually going to be doing one this Thursday depending on when you’re listening to this and that is March 9th. So, if you’re listening to this on March 8th when it comes out then you’ll be able to register for this upcoming one on the 9th. If not, no big deal you can still go there and register for an upcoming workshop. We tried to do at least two a month sometimes more and you can register at the theamazingseller.com/workshop and you can get all the details there. So guys, I’m going to stop talking now because I want you guys to listen to this amazing interview on how David went and built a business from scratch and then sold it and all of these awesome valuable tips that he’s going to give us along the way. So sit back, relax, enjoy this interview I did with David Bryant.
[00:02:48] Scott: Alright! Well, David thank you so much. Oh, I’m sorry. Dave, thank you so much for being on the show. It’s so hard whenever I do that because some people are Bob or Robert. You are Dave, David whatever right but it’s Dave so. I’m assuming you probably turn your head whenever you hear either one of those. So anyway, Dave, thank you so much for coming on this show. I appreciate it and I’m very interested in hearing the entire story. So again, thanks so much for coming on.
[00:03:16] David: It’s a pleasure. Like I say, I’m a huge fan of your podcast. So it’s a little bit of an honor to be here.
[00:03:22] Scott: Awesome, awesome. That’s awesome too. When do you get people caught up really quickly. I mean you got a pretty cool story and I want to dig in. I did look through our notes. You and I been kind of emailing each other back and forth for seems like the past like eight, nine months and we finally got it to happen here. I think when you were first starting to email me you hadn’t sold the business at that point, right?
[00:03:46] David: No, I hadn’t. That’s the funny thing, so I think it’ll be an interesting backstory to all this.
[00:03:51] Scott: That’d be really cool and then also something also that you just recently did as kind of a test to get behind the scenes a little bit. I think we can kind of talk about that a little bit too, right?
[00:04:01] David: Yes, absolutely! Do you let people know what that is right now?
[00:04:04] Scott: No, no, no. We’ll let people sit on that one but it’s a pretty interesting story. How you figured out a way to kind of see how things operate behind the Amazon which is pretty cool. Why don’t you take as back a little bit and tell us a little bit about yourself and how you got started in the Amazon space.
[00:04:24] David: Sure, will do. So when I was in the university, I started importing a couple different products from Alibaba and this was about in 2009. Another time, I basically did kind of a side hustle trying to earn a few hundred dollars a month just to basically pay for my textbooks, pay for a little bit of beer money. So we’re rolling one or two products at a time and I say, “we” but it was was really just me at that time. And then once I graduated, I realized that, “Hey! A few hundred bucks a month is great while you’re on your university but once you graduate you actually need to start earning a full-time income.” I realized that either, A.) I’m going to have to make this a real business and get it to a full-time income or, B.) Get a full-time job. I think that most of us can probably relate to that. You thought of going back to work kind of terrify me. I got to take my little sit in the company and turn it into a real business.
[00:05:21] Scott: Let me ask you this, what were you going to school for?
[00:05:24] David: I was going to school for Business.
[00:05:25] Scott: Okay. So you were kind of in that but did you have an idea of where you’re going to go with or you’re just trying to get a business degree and then go out and shop yourself around maybe a management position or something like that. Did you have any idea or was it just I’m going to go to school to get a background in business?
[00:05:40] David: I think I’ve always been pretty entrepreneurial kind of in my life. I think my first business when I was six years old. I was selling crossword puzzle answers in our class for quarters. I always hoped that I would do something entrepreneurial with my Business degree and not have to go get a 95 job per se. The business degree definitely gave me a little bit of a fall back if I needed it.
[00:06:08] Scott: Now, let me ask you this too because I’m not familiar with this but like going for a degree in Business, was there any entrepreneurial classes available or was it more less just Business 101 stuff. I’m just trying to get the context. I’ve heard there’s now starting to be more entrepreneurial stuff.
[00:06:28] David: Yeah, that was definitely when I was starting it was starting to take off and normally you specialize in one or two areas Finance, Marketing, Accounting those are the typical ones that you would focused in. As I was kind of finishing up they’re starting to offer an entrepreneurial specialization. I never went through with it so I never kind of got that hands-on learning with the entrepreneurial focus but they were just starting to offer it at that time.
[00:06:52] Scott: It’s interesting. Years ago I was like if you’re an entrepreneur you just didn’t want to get a job. Nowadays, it’s becoming something, I guess a little bit more respected which is I think it should be anyway. But anyway, I just want to get a little bit of backstory there. You’re in there, you’re doing a little side hustle, making a little bit of cash. You graduate and you’re like, “Alright. I got to do something here.” How long was this little side hustle going on for?
[00:07:18] David: I think it was going on probably started around my second or third year in the university so probably about two years.
[00:07:26] Scott: What gave you the idea that you can even do this?
[00:07:30] David: I worked with a family friend before then and he was basically a yacht broker and I was kind of managing his eBay listings, his website. That type of thing for any time he would list a boat. I’ve seen that he actually had some selling different things on eBay and I kind of heard about the whole alibaba the wave going on at that time so this goes kind of a natural fit. At that time to break of onto my own.
[00:07:54] Scott: That’s awesome! So you kind of have a little insight in that market and you see there was an opportunity and you’re like, “I could probably get some parts and stuff over here and we could sell them over here and make a little bit of cash.” That’s pretty cool. But again, you had that experience with that person that actually got you interested in that market or that certain area where you could actually sell product.
[00:08:16] David: Yeah, absolutely! But I think I got that job though from having a prior interest just starting on my own in my own personal interest. Kind of managing websites just doing things at the time and it goes, early teens just kind of putting up websites for fun and that kind of got a word through from a family friend, “Hey, Dave kind of knows the stuff here and that’s why I kind of landed that job so I think kind of as a takeaway for the people… We start even poking around in a really small scale on your own. It’s a really good powerful way to start small and hopefully grow into something bigger as time goes on.
[00:08:50] Scott: I love it. I love it, you know it goes back to what I’ve talked about. All of the different things has got me to where I am today. Just taking action on one thing and starting to have interest in thing, learning it, and then that turns into something else. You’re a clear example of that as well. It’s really awesome.
[00:09:09] David:. When you can start as small as possible where you not relying immediately as a full-time income. You can start off getting just a few hundred dollars on sales in a month. You don’t have to be getting thousands or tens of thousands of dollars a month to start it off. Just try to get that initial attraction and kind of prove it to yourself more than anything. Getting off the ground is sometimes the hardest part so anything you can do to get that first sale traction that’s really should be your focus. Don’t worry about doing tens of thousands or millions of dollars on sales. Just try to get those first new sales.
[00:09:43] Scott: I, a hundred percent agree. It’s like making the first hundred dollars is like key because you’ve proven it to yourself, you validated to yourself, you got a little confidence going now. It’s like anything, if you’re playing basketball and you start hitting threes, you’re going to start shooting more threes or if you’re hitting baseball you’re going to start hitting baseballs. It’s the same thing. You’ll get a taste of it. I love that. Awesome! So now, we’re out of college and you’re saying, “Okay! Now what?” So, now where do you go with that?
[00:10:13] David: So, I always learned from this reading books at a time. There wasn’t a lot of private labeling information at that time but from the books that I read every single one said you need to go to China to really kind of accelerate things, really take your important business to the next level. So this is around 2009 and 2010, I kind of worked up the courage to go over to China and travel to a couple of different trade shows. The Shanghai trade show, the boat show and I think there’s a fishing show in there too. Kind of went there completely and it’s funny looking back at just how kind of naïve I was about the whole process and I was also a broke student at that time and when I’m over there I couldn’t afford to stay at a fancy hotels or anything. I could only basically afford to stay at hostel and typically when you go to China and you meet suppliers. You make meetings with them. They meet you in your hotel lobby and then you go have lunch at the hotel or whatever. I don’t want my suppliers to meet me at a five-dollar-a-night hostel. So what I would do is I would actually book my hostels close as possible to the nearest Hilton. As soon as my supplier would give me a ring and tell me that he was in the lobby, I would quickly run over there, meet him in the lobby and hopefully he would think that I was actually staying there at the Hilton. I mean it just goes to show that you kind of fake it until you make it.
[00:11:31] Scott: Yeah, I like that. That’s a great strategy. That’s awesome! It worked obviously, right?
[00:11:37] David: Yeah, it did. Actually, from that very first trip, I met two or three different suppliers. This is like I say in 2010 and up until 2016, these suppliers are basically the crux of my business. Each one of the suppliers I meet millions of dollars of revenues off of. The great thing about them was traveling to China and going to these trade shows and meeting suppliers. A lot of our advertising in Alibaba, so he can find the supplier that’s not advertising in alibaba all of a sudden it’s going to decrease your competition 99.999% just because it is where everybody does go to look for a suppliers.
[00:12:18] Scott: I agree too. If someone doesn’t go there though to China, is there any other things that you would suggest to looking for a supplier or an agent?
[00:12:32] David: Definitely the biggest hack if you’re not going to go over to China, try to find some trade show listings in China. Just Google a trade show China. You’re going to go list of hundreds of different trade shows in China and each one of those trade shows typically is going to have a directory listing of all the suppliers there and each one of those directory listings is also going to have their website. You can see all the suppliers who are exhibiting at a trade show in China at the time. So, go through to the suppliers, simply Google the name of that business and see if they’re advertising in alibaba or not and if they’re not advertising in alibaba, “Great”, you’re likely to say you’re going to decrease your competition for those products tenfold and you can also kind of hack it a little bit more and tell them, “Hey! I found you through XY trade show. Can you give me some prices for these products?” and they’re going to think that you’ve actually met them in person at the trade show. This is so many people coming through the trade shows. They can’t remember who they met or who they didn’t. So, it’s a great way to kind of give yourself a little bit more credibility even if it’s not necessarily completely true.
[00:13:38] Scott: Right. It makes sense. That’s actually a really good hack so to basically look for trade shows that are in China that are going on and then just going through and looking all of the exhibitors that are there, to see if they have a website. Going to the website, seeing what they have. Would you say that most of these that are going to a trade show like this are I guess, reliable or that you would think that aren’t just going there and going to be scamming or is there ways that we can kind of go through and look a little deeper at their history.
[00:14:08] David: Probably, a hundred percent of them. Hundred and ten percent of them are not going to be scamming. I think the same thing goes for alibaba for the most part too. The big issue that you run into all the time with China is not necessarily being scammed of your money. It’s just getting crappy quality products. And the trade show definitely tend to attract a little bit higher quality supplier than on alibaba, just in alibaba they vetting there is not necessarily… They have even in place but it’s a little more commitment than it takes from a supplier to exhibit in a trade show than to simply set up shop on alibaba.
[00:14:43] Scott: I agree. They’ve got more invested and they have to have actually people there. I agree. That’s a great tip though. So, that’s actually a really good tip so anyone listening right now definitely consider doing that. That’ll definitely eliminate a lot of your competition if you went that route. Would you agree once you create this? I mean you kind of already said it but I want to highlight it again, won’t you create a relationship with a company like this? It’s almost like you’re kind of loyal to each other in a sense to where you now have these people to create future products or the current products all the time.
[00:15:20] David: Yeah. It’s funny the business relationships in China are so much different than we are accustomed to in the west. Relationship don’t matter so much and I see a lot of people taking that for granted when they’re working with Chinese suppliers and said they kind of flop around from one supplier to the next looking for the cheapest price. But if you kind of build those relationships with your suppliers, you know, over the course of a year or two, they’re going to give you a lot of favors. All of a sudden, you’re orders will become higher priority for them. They’ll ship the them out quicker. Quality will tend to be a little bit higher. You’ll get a little bit better discounting and more importantly you might even get some exclusive products. They might say, “Hey! Dave, we are just launching this. Are you interested in it? You can basically negotiate, be their sole seller and whatever country you’re in whether it’s the U.S., Canada, U.K. or wherever.
[00:16:10] Scott: That’s great. That’s really good. I believe relationship is everything in anything in life, right? We can have that good relationship. We can definitely have a little bit of an advantage there and I think that’s exactly what you’re saying. That’s cool. Now, let’s move on a little bit. So where do you go from here now you’ve got a really good supplier. You’ve already establishes relationship, where do you start to direct your focus at this point?
[00:16:39] David: So, I think one of the big things that I did that kind of help me succeed was I picked a really good niche. So, boating, the great thing about boating is number 1: that people are your typical customer have a lot money and [inaudible 0:16:52] good. But more importantly there’s also a lot products that I was able to branch off in the building. Some of the biggest boating companies of the world have hundreds of thousands of different products. It was kind of natural for me. I took this one niche and at that time it started off with two products but overtime it grew to a hundred of different products and each one of those was kind of a natural fit. I sell boat anchors somebody I could sell the anchor line and if I sell the anchor line there’s somebody I could sell the boat fenders and you just kind iterate over and over in the same industry. That’s the biggest I recommend to people. Think of really good industry that you can upsell the people but also sell accessories and add on’s too. That’s going to become a lot easier.
[00:17:39] Scott: Yeah, I know. That’s huge. Did you start selling directly on your website first before you went to Amazon or eBay or any of those channels?
[00:17:49] David: At that time, Amazon actually wasn’t really… I don’t think they have the FBA program end in 2010. So, it was majority eBay and a little bit on the website and over time for better or worse eBay is slowly took second seat the Amazon and it went for programs like 0% Amazon in 2010 to last year where was well over 60% over sales where coming through Amazon.
[00:18:17] Scott: But you really then you initially launch on eBay?
[00:18:20] David: Yeah! Initially launch on eBay. Kind of look like what people are doing now on Amazon, I did the same thing but on eBay. The certain categories on eBay still has a pretty good presence on for third party sellers.I think a lot of people overlook eBay, but there’s certain categories where eBay is still pretty powerful even compared to Amazon. They sell certain products. They sell them on Amazon. Branching off and selling them on eBay, that still not a bad channel to sell them on.
[00:18:47] Scott: I guess the only thing that comes in this than you are going to be fulfilling yourself or someone on your team. You’re not going to be storing it.
[00:18:54] David: You can ship from Amazon though…
[00:18:56] Scott: That’s true. That’s true. You can connect now through your FBA. You’re right, absolutely. That’s a great point. So you can technically. You can ship your inventory into Amazon, you can still fulfill it, you and your order are connected over. So, you initially launch on eBay. Did it right off the bat like I mean was it already starting to I mean you already started like before that. did you build on those two products that you currently already had there?
[00:19:22] David: I think it went from two products to four to eight and basically I just kept trying to more or less double both the number of products at the order quantity, each order. So I grew it from two products and just kind of scale up over the years to about 200 hundred products. Our strategy was, when I was starting off, I’d try to get a small of an order in as possible. Maybe it’s in 10 or 20 pieces if I could do it. I tried selling those and most of them actually sold fairly well and if they didn’t sell well you’re stuck with 10 or 20 items, not a thousand different items and so it’s pretty minimal risk.
[00:20:02] Scott: So were you taking something and strictly taking something that was basically on the shelf and just branding it with your branding or were you customizing it or modifying it at all. For 10 to 12 units I know people are probably saying “well how the heck would you differentiate that?” But what you’re saying is that you had a little bit of exclusivity because you weren’t on Alibaba finding these. You were actually off to the side a little bit so it might be harder to locate that product, is that true?
[00:20:33] David: No, one of the products were simply off the shelf products but a couple ways that we were differentiating them, aside from the actual product… Number one, was the packaging. Especially, now in our industry you know the established guys tended shipping really terrible packaging, just a brown cardboard box. What happens there is, people don’t feel great about leaving a review for it. Packaging is kind of a first impression so that was definitely one of our main focuses, to make sure the packaging was very good. The second thing was just really improving the marketing of it. The Boating industry alone with you guys, you know, they have one picture and one sentence describing it. We would take six, seven, eight photographs, really good photographs showing every possible angle. Giving lots of specifications for the product. Every length, width, imaginable and also giving it a really good description. The packaging and also the outline marketing for it.
[00:21:36] Scott: You were really giving everyone everything that they would be thinking. You were kind of going through and making sure that every question that you could think of or that you’ve been asked in the past you kind of threw it in there, that way it was like you guys really knew your product.
[00:21:50] David: Exactly!
[00:21:52] Scott: I like that a lot. From there, you’re saying that packaging alone, a lot of people will feel perceived value, might be a little higher. They’d experience was a little bit better. At that point in time if you were just selling on eBay, did you do any type of follow-up with your customers, or email or anything?
[00:22:08] David: In the beginning, no. The good thing about eBay platform is that you are given quite a bit of flexibility on following up with them as opposed to Amazon where they kind of own all the information. Even though today you still don’t get access to the customers email on eBay. There are certain things that you can and can’t do without that information but near the end what we were doing is definitely we decided to follow-up by email with different products and also one of the things that we did really well is that we gave the people the option to download an eBook from us on boating. Now, people would download that eBook and get put into our sales funnel.
[00:22:45] Scott: Did you find you guys getting additional sales from your follow-ups?
[00:22:51]David: Yeah, I mean every customer that you get every time that we send our email blast of a hundred or a thousand emails, one percent it seems kind of a typically through and through, are going to actually buy from the email blast. So, every email that we can get on there is going to bring incremental revenue over time.
[00:23:09] Scott: And what was the price point on your products generally. I mean, what did you start out with? Did you graduate to higher products or more expensive products?
[00:23:16] David: Well, funny thing is, the first part of the import was boat anchor and it sounds absurd that your shipping is boat anchor.
[00:23:23] Scott: How heavy was the boat anchor by the way?
[00:23:28] David: Heavy enough to hold the boat but just light enough to be able to ship UPS ground. So, they’re ranging anywhere from 20 to 50 pounds. What was the question again?
[00:23:40] Scott: So, the price points.
[00:23:44] David: Yeah, the price points. So, on average boating products tend to be a little bit higher priced. So the average price point was about $200. I think as of last year our average item it was just above $125 so it kind of came down over time. I think as I grew more confidence to import some of the more competitive items, those $10 would be the lower priced items. So, I started high and then came down over time.
[00:24:10] Scott: And then, what type of margins were you’re looking at?
[00:24:14] David: The gross margins were typically marked up three times. So, if the product was $50 we’d sell it for a $150. Add shipping and everything on top of that, I think our net margins at the end of the day and this is after the hours of employee’s salaries, warehousing, office space, yadda, yadda, yadda. And it was about 13 to 14%. So you go from a gross margin of well over 50%, but by the time the smoke clears it was like 13, 14%.
[00:24:43] Scott: That’s again after everything is accounted for, all your marketing and employee’s. How big was the outfit before you exited?
[00:24:57] David: So, last year we were basically on a track to do just under two million dollars in sales.
[00:25:05] Scott: That’s pretty good. And how many employees did it take to do that?
[00:25:08] David: So, I had two full-time employees. One customer service person and then one basic techie person who managed all the eBay listings, Amazon listings and all the stuff that goes with that. And then we basically had a full-time person working at a 3PL that we had rented in Washington state. So we used Amazon FBA, but we also had a 3PL that had all the inbound shipments from China and doing a little bit of other fulfillment in-house.
[00:25:35] Scott: So, it wasn’t a huge team.
[00:25:38] David: No, I think we could have grown to probably double that size with the same amount of people.
[00:25:43] Scott: So things were moving along and how often were you thinking about adding new products? Was it something you guys, you know, we’re just going to have a bucket that we want to launch and then we’re going to slowly launch out more. Like was there was a plan in place for that or any type of idea where you were going with that as far as products that you were going to be adding?
[00:26:05] David: Well, so in our industry, we’re a little different from a lot of people. Where a lot of your listeners probably rely on the Christmas season, but in the boating world Christmas is basically summer for us. So, about six, seven months before the start of the summer season I would do our yearly plans. For the growth number on that we wanted to do for growth rate and then basically if we wanted to double in size, I knew more or less, we probably needed to import twice as many products so that’s what I would do. The amount if we want to grow 25% then we need to grow a product by 25%. Obviously you have some cash flow problems there too which you always have to take into consideration. You might want to import a million different products but if you don’t have the legs to do it, you can’t do it.
[00:26:51] Scott: That definitely can be an issue with physical products. Were you still doing the small orders if you could to roll these products out or were you saying like, “We’re always going to start with a couple hundred units or more.”
[00:27:07] David: No, no. Yes, until the very end. We were doing 20-25 pieces to start an item up if we could. The great thing was that we had such strong relationships with our suppliers. They basically they had no minimum of order qualities which is a really nice thing and when you’re first starting off with the supplier they typically have some absurd minimum order quantities. So, more or less when we kind of ignored that, it really helps. So again, kind of forming those long relationships with suppliers that you meet through Alibaba or trade shows or whatever that you really start to get that benefits from it especially down the road.
[00:27:44] Scott: I agree. I mean I think we should definitely highlight that because it’s important with the relationships and I think that you’ve proven that. That you’re able to have this low minimum order and that’s allowing you to roll out more skews without having to really go so deep within one skew. I think that’s huge to be able to do that. I think that’s a huge sticking point for a lot of peoples because you have to order 500 or a thousand or more sometimes. That’s what people get that, “Oh my gosh” it’s like scary. Now, in the same breath, let’s say that you were only able to order 20 units of something and they’re costing you 50 bucks. To someone that’s going to be a good chunk of change to get started. You had some cash flow coming in. You can reinvest some of that so it helps with that but still for you it was a lower amount for the amount of volume that you’re doing. It allowed you to rapidly increase the amount of skews that you had in the marketplace which I think is big for a lot of people listening. And it doesn’t hurt to ask I think again if people are listening it’s like try to negotiate. Tell people or tell the supplier that you’re doing a test run and if it works you’re going to be ordering a lot more. Again, it all comes down to that relationship.
[00:28:59] David: And kind of on that note too. Distract the ethic and I knew since when I’m starting is that a lot of people ordered one sample item from China and they want to see the quality. It’s a little bit of a farce when you do that because if you order one sample from China it’s always going to be their sample. It’s going to be perfect quality. So it doesn’t really prove anything nine times out of ten. So what I do instead of ordering one sample, I’ll order 10 or 20 samples and when you’re ordering a sample normally they’ll agree to whatever quantities you say. So if I have 10 samples that I would bring in I could actually try to sell those in Amazon to see if there’s traction on them. With one product you can’t really try that on Amazon because well you only have one product and that doesn’t really prove anything if you sell it or you don’t sell it. But if you bring in 10 products, if you sell a lot of those products in a week you know you probably have a pretty good product and all of a sudden ordering 100 pieces or 200 pieces, that’s doesn’t become quite as scary as if you did it with absolutely no sales history to begin with.
[00:30:01] Scott: That’s a great point. My question is this, maybe the listeners are thinking this as well. So you said like packaging is a lot to do with what you differentiate yourself as far on the surface. So how do you do that with a product that you’re only getting 20 units, do you have like standard size boxes that things fit in, that they’re all branded and they look beautiful or how would you do that with that test run?
[00:30:24] David: A couple of good little things that you do. So you’re going to be able to get a full colored box for 20 items. Nobody’s going to do that but what you can do is you can a sticker a lot of times made. You can do those on a pretty small run. 25 cents of piece and you can put that sticker on the item box. All of a sudden it looks 10 times better than a simple brown box with no sticker. And on top of that, a lot of products come without any instructions and it frustrates people to no end when they got a product, even if it’s the most basic product. People like to have some instructions with it. Get a little bit of use guidelines for it. So every product that we do pretty much we would do up a one or two page Word document to show how to use it. Showing them what they get with it. Give me a little bit of background of our company. It just adds to the entire experience with the product and you can get that every suppliers happy include a little one or two page document in the box with the item. So, those are some things that you can do even with a really small amount of products.
[00:31:28] Scott: So what I’m gathering those so really you are kind of picking through their line that they already have created and you’re just kind of picking the next ones that you want to launch, getting a small order sent it in a brown box and you’re just going to have your sticker, your logo under that makes it a little nicer. Your packaging they can throw in the same box and you’re done. You’re off to the races, is that true?
[00:31:51] David: Yeah, absolutely!
[00:31:53] Scott: That’s really good. That’s a simple model.
[00:31:56] David: Yah, a little bit more prestigious packaging as time goes on. But again, I mean that works wonders for getting reviews and just getting overall better satisfaction from your customers.
[00:32:10] Scott: That’s the next question. So let’s say, you get 20 units and you’re going to test those 20 units. What’s your first plan of attack? Like what’s it look like for you to actually bring that to the market, you know, get some sales. Do you just start pay-per-click immediately like you give a blast out to your list and then say, “We got a new product. Here’s a discount code” and you boost the sales out. How do you do that?
[00:32:34] David: So, we basically had three channels. Our website, eBay and Amazon. So obviously the first thing would be to launch them on all three channels to begin with. Second thing we would do is to immediately turn on Amazon PPC for the products. Amazon PPC still does wonders. Next thing we would do with Amazon if you have an AMS account, basically it allows you to advertise your products on competitors products pages. The URL for that is AMS.amazon.com. So that the secondary advertising platform on Amazon aside from PPC and after that we turn on Google Adwords and then finally we were do an email blast to our email list just letting them know that the products are in stock and a lot of times we wouldn’t actually even advertise our website listings because ESP saved the commission fees on that. But we really want people to go to the Amazon page, buy them and hopefully these are happy customers of the past so they’re going to be more inclined to leave positive reviews, and so we say, “Hey! You can buy on this Amazon link right here.” And those previous customers they’re going to be more prone to leave positive reviews even if you don’t ask for it. And then on top of that too, when we launch a product we also tend to launch in a little bit lower price point than what our ideal price point. We might have kind of long-term price point of a hundred and fifty dollars that we probably launch it around a hundred dollars and it lose a little bit of money in the beginning that you build up that sales traction to begin with. People tend to get a little bit higher value at a lower price point so again there going to be more inclined to leave a positive review because they’re getting a really good deal.
[00:34:18] Scott: That’s really smart. Let me ask you this on the eBay side of things when you would launch it there. Is there anything special that you would do there to get that thing launched or you just list it, make sure the keywords are in the title and everything is well optimized there, good picture and all that stuff and just send it off. What would you there differently on eBay if any?
[00:34:38] David: With eBay there’s not a lot that you can do. They don’t have the advertising options that Amazon has. They have some stuff buried in there for certain seller but it’s definitely not the level that Amazon’s at. With eBay, it was pretty much just launch it, set it and forget it.
[00:34:55] Scott: They definitely don’t make it nearly as powerful as Amazon but again by putting on in that channel you have people there that would be willing to buy it. That are looking there that aren’t looking in Amazon so why not put it there. That’s not that hard to do once you create the listing. And you mentioned Google Adwords, how much were you spending there do you think? I mean, you don’t need to give me numbers but I mean like percentage wise, how much were you focusing on Google Adwords?
[00:35:21] David: It became less and less as time went on. I mean in 2012-2013 it was a godsend. You can be on pretty much any keyword and it would be profitable. Near the end it was so competitive that it was tough to be profitable for a lot of keywords. So in the end I think we were spending about $25 a month on PPC and I think we’re probably breaking even and maybe a little bit profitable. But again, I think most of the money that we were putting on Google Adwords we are now basically shoving at Amazon PPC. The return on Amazon PPC is through the roof right now.
[00:36:00] Scott: 100% agree with that. The other question is, how are you collecting email addresses from Amazon or were you?
[00:36:07] David: No. Amazon we couldn’t collect email addresses. So, that was one of the challenges that we run into with Amazon. With more and more of our sales, there was nothing we could do to collect Amazon email addresses.
[00:36:20] Scott: Ok, I just didn’t know if you had any insert card in there or something you know, get on our VIP list or something like that, future discounts or something like that.
[00:36:28] David: We didn’t proactively do any of that. One of the other good things that you can do too if you’re launching a product on Amazon, you know the brand name, maybe it’s Scott Volker’s products. As long as you have a website called ScottVolkersProducts.com, most people when they go to Amazon they’re going to Google that brand name before they actually purchase so they’ll end up on your website and maybe you’ll have a discount going on at your website and that they actually buy it on your website instead of on Amazon. So as long as you have a brand name, you have a website that matches that brand name, people on Amazon can more or less indirectly find it on your website.
[00:37:06] Scott: That make sense. Now, you and I talked up to this point a little bit you took me through that story but that’s something changed, something happened and I want to hear about this because this was not in the discussion when we talked about 8-9 months ago and now something happened again. That’s just how things happened so lead me up to the point where you were presented with a potential offer.
[00:37:29] David: When was it? February of 2016, I decided to list the company for sale. I think like all business they have this idea of an exit at some point and it always kind of ran through my mind. We had a daughter come along the way about a year and a half ago. So at some point you just decide that it’d be nice to get a little bit of money of the table and into your bank account. So, February of 2016, I’d listed the company for sale through a website broker or website brokerage and in October of last year, we sold the company and everything is all said and done.
[00:38:07] Scott: That’s pretty amazing and that wasn’t even in the plans. Like you said, when you were emailing me it wasn’t even really thought of maybe in the way back in the mind but it wasn’t really in motion and then this happened and then you’re were kind of like, “Okay, well, I guess we now got we wanted to get.” How was that process by the way? How was going through, proving your numbers and validating all of that stuff or verifying all that stuff and then actually closing the deal, what kind of process was that like?
[00:38:07] David: Well, that’s definitely long so I didn’t imagine it’d take that long. Like I mentioned, we listed in February of 2016 and it closed on October 26, 2016. That’s nearly 10 months in between so it was a long process. So, from the time it listed in February the time that we got with the call of letter of intent, some of has basically said, “I’ll buy this as long as your numbers matched up with what you’ve told me.” We got that letter of intent in June so it took about five months to get that initial offer. And then we went through what you call due diligence and that lasted about three months. There was some complicating factors not on our end that just do the buyers end that kind of elongated that. The due diligence was really easy. The due diligence is basically just the buyers confirming all the numbers you said match up. When you’re selling an ecommerce business, especially one like Amazon that has a big sales trail, it’s quite easy to verify those because you can basically set up a user in your Amazon account. They can log in there and they can confirm every number that you’ve said. You don’t have to fear that you’ve manipulated those numbers at all. Same thing goes for Paypal. You can give them a Paypal user account and they can go on there and verify all the transactions. So the due diligence was actually really easy. They were able to match up everything that we said 100%. There wasn’t really an issues there. Kind of grinding out the actual terms of the deal that is what took the time that in terms of actually verifying everything that was a breeze.
[00:38:36] Scott: That’s cool! That’s really cool. How was the feeling once it was all said and done?
[00:40:10] David: Bittersweet, I think. Obviously, after 10 months you finally get that point where it’s thrilling but at the same time, you know it was my baby that I kind of started in university and it was the first business I owned, and the only business I’d owned so it was definitely a little bit bittersweet in that regard. It’s also nice to have a little bit money off the table. I think it gives me a little bit of flexibility in my next project. Take a little bit more risk than I might not necessarily take otherwise if all my money was still on the table, so in that regard it’s exciting.
[00:40:15] Scott: And I guess my last question would be, is there any regrets to selling it at this point?
[00:40:47] David: No, I don’t think so. I still think there’s a lot of meat on the Amazon bones so definitely I have something in the process I’m starting now. It’s going to be Amazon again. I’m sure it’s going to be a big portion of the sales. So I still think it’s relatively easy to reiterate and just kind of do things that I took the first time around and reapply them to a new business and hopefully be more successful.
[00:40:53] Scott: So, I guess now that you’ve been through that whole process and everything. So again, you’ve alluded to you’re starting something else, something new and you’re going to start that business. It’s probably exciting. It’s a new project. It’s a challenge a little bit. It’s funny how you want to get to a certain place and I want you to get that place you’re like, “Okay, now what?” And I think it’s cool that can rebuild and restart. I think we always need that keep pushing ourselves and learning and growing. How confident are you with this new brand that you’re launching that it’ll be successful in your eyes?
[00:41:17] David: I’m 100% confident. I think a lot of skills that I’ve learned along the way I think I’m still a 100% applicable now even as much as they were in 2010 when I first started. I don’t have any doubt how long it takes me. That’s obviously a variable that I’d like to get a new company to the point of the old company with a year and half or so. Whether I could actually achieve that or not, that remains to be seen but I think the business model that I proved on my other business can easily be replicated to other businesses.
[00:41:55] Scott: I agree. You’ve learned a ton through that process and now you can apply that to just about anything. It’s something that you can’t really teach in a classroom. You got to actually go through and do it. Have the ups and the downs and all that to go along with it. Is there anything that you’ve learned through that though that you’re doing differently in this business to speed that process up a little bit?
[00:42:28] David: I think just launching more products quicker definitely. The more products that you can roll with sooner the more sales that you’re going to get. It’d be nice to be able to sell a million dollars worth of one skew but the truth of it is that it needs to be 10, 20, 30 even more skews than that. I think launching more skews quicker that definitely is going to help a lot. I think in terms of the actual marketing of the Amazon pages, eBay pages, the website pages. Photos are absolutely everything. We’re always pretty good with our photos, definitely near the end, I had learned a lot in terms of photography. Just what people want to see and how to present things to really improve the conversions so definitely for the products, better photography. Same thing goes for video. You’re kind of limited on Amazon with video but on eBay and your website it’s still really powerful so definitely more videos to go with the products. I think it’s going to help a lot. I think all those things are going to help achieve success real quick.
[00:42:55] Scott: Is it the same strategy as far as launching a low amount to start to test, to validate. Is it all still the same?
[00:44:04] David: Yes, absolutely! I’ve decided to go over to China for the fair there in April. Meeting face to face with some suppliers because they’re a little bit more prone to give a more orders when they actually meet face to face. They think you’re actually going to be a little bit of a bigger customer. And you can fly over to China now for about $600, so it’s money well invested.
[00:44:33] Scott: It’s something that it’s kind of on my list but kind of not. I want to be able to go meet people in person but in the same breath, me personally I’d rather go to places I’d rather go. That doesn’t mean that I wouldn’t have someone go on my behalf. That we can work out I can pay for the trip. I don’t know I’d rather go I think Australia something.
[00:45:03] David: I agree. Well, for a vacation I agree. There’s certain places which are great for vacationing.
[00:45:10] Scott: This has been really really good. Because you know there’s nothing really super advanced that you were saying. It’s like pretty basic, you pick a good market. You learned a little bit of that market. You pick good products. You find good suppliers and then you launch products you know, small amounts and just trying to get skews up and launch and just do your basic optimization. Do good listings. Run pay-per-click and just keep repeating that process. Like you said, you’re going to have some winners. You’re going to have some losers and you pick the ones that are winners and you stick with them. Is there any criteria when you’re looking at products to say want to go after stuff that has certain amount of volume or do you just kind of build off a product line?
[00:45:56] David: I’m kind of drawing for lower volume rather than high moving products. Just with that lower volume products tend to attract less competition. I’m typically trying to find a little bit bigger bulkier products that you can’t ship via air from China just because I know at the end that’s going to eliminate a lot people especially Chinese sellers shipping directly from China to the customers off Amazon or whatever. Lower popularity items and bulkier items which again it seems to go against the grain for a lot of people, but you get a lot less competition for those products. I think that’s where there’s still a lot of meat on the bones for Amazon are these less popular products which are a little bit bulkier.
[00:46:47] Scott: Now, the one question I would say to you, how are you doing a smaller amount by sea?
[00:46:53] David: Multiple items.
[00:46:54] Scott: So, you’re going to do multiple items. You might do 10 skews but 25 each.
[00:46:59] David: And I’m looking for the suppliers and hopefully they have a big enough product catalog where I can import 10 products, 10 different products, 10-20 pieces.
[00:47:09] Scott: That make sense. That makes total sense.
[00:47:11] David: Is that you’re totally right. I mean you can import 10 items by sea of just one product.
[00:47:17] Scott: It just wouldn’t make sense. Let’s talk a little bit about this little experiment that you did. I think that was interesting. A guy that exits a business you know gets a pretty good paycheck and then decides to do something pretty crazy. So why don’t you talk about that?
[00:47:36] David: So, I had always wanted to get a tour on Amazon warehouse and you can actually get a tour of an Amazon warehouse. But they only do it at selected times of the year and they like doing at a couple of their warehouses and the weight lister absolutely terrible. It’s impossible to actually really get a tour of an Amazon warehouse unless you wait 2 or 3 years. So I was reading my paper after I exited the company and seeing that Amazon was hiring during the holiday season and so I applied and they basically hired me on the spot to be with what they call, “A picker.” I’d be the person walking around the Amazon FBA warehouse and picking all the orders the people have ordered.
[00:48:14] Scott: That is really really awesome. So, you got hired, I mean what was the interview like?
[00:48:19] David: They basically hired you on the spot. The thing with Amazon during the holidays is that they are so desperate for workers. They will pretty much hire anybody. If my daughter, a year and a half, had a social insurance number, the would have hired her on the spot. They are just incredibly desperate for workers at that time. The funny thing with Amazon too is that during the peak season what they called it, from Black Friday to Christmas, they make everybody work incredibly grueling hours like 6 days a week, 10 hours a day for a month straight. That’s completely involuntarily overtime. Everybody has to do it.
[00:49:00] Scott: That’s insane. That was going to be my question. What was it like for you to be there working? Like in your own head, I mean obviously saying to yourself, “I’m glad I don’t have to do this all the time. I’m doing this as an experiment. I can get out here tomorrow if I want to.” But what was it like for you?
[00:49:17] David: I mean it was kind a neat seeing to how the sausage was made so to speak. Until you actually go to one of these warehouses and actually walk around. You have absolutely no idea how big these things are. I mean this warehouse on average day, you can walk 6 to 7 miles just picking packages. It can take you 15 minutes to walk from basically your starting point to the end of the warehouse picking item and another 15 minutes back. It can take you 30 minutes just to pick one item. And that was the other thing, I expected go out there and see a lot of automation. Jeff Bezos is always talking about drones and spaceships and this and that. These warehouses are still almost a 100% run by people like me, manually walking around picking items. So, it’s still incredibly laborious manual labor that goes into these warehouses.
[00:50:15] Scott: Like walk me through that. So, did you get like a list or something on a little device and then you would go to a certain bay and then scan it and then bring it somewhere? Like how would that work?
[00:50:25] David: So the Amazon basically the lifeline of everybody that works at that that warehouse is this little barcode scanner and there’s a few different functions around the warehouse. There’s the pickers like me, like I mentioned I walk around picking the items. There’s a packer who case those items that I pick and they put them in boxes and they tape them up and they get them ready for the outbound team who then takes all the boxes and loads them onto the UPS containers or the fedEx container and trucks them away. So that barcode scanner is kind of the lifeline of everybody that works there and in my case, I’d be given this barcode scanner would give me a list of about 50 different items and I would need to pick over the course of that statement of the day that I working. Typically, they expect you to pick you about 50 items an hour. So, I’d walk around throughout the day just pick those items and the other thing that I should mention too… I was working at what they call an oversized warehouse. So you may have noticed a lot of times, even in a single city Amazon will have multiple warehouses. And why this is, is that Amazon has a warehouse for oversize items and they have a warehouse just for regular items. So, I was working at the oversized warehouse and like I mentioned I’d be typically expected to pick about 50 items an hour over the course of a 10-hour day that would work out to about 500 different items.
[00:51:50] Scott: That’s crazy. So then, you would take that package and then bring it to your packing person?
[00:51:54] David: Yup, so there would be a parking spot that you park all your packages. This is the series of accounts. Basically walking around picking packages and bringing them back to the parking bay and all the packers would then go and take the items, box them up, take them up and ship them on to the customers. It was amazing the types of things at this warehouse like. That’s one thing I kind of open my eyes especially to my next businesses that Amazon can handle pretty much any product. We would ship statues without a box in it. Like a statue, 4 feet tall and somehow they would figure out a way to ship this on to the customer. So if you wanted to sell statues, you can ship them in the Amazon and they will figure out a way to store them, pack them and ship them on the customers. You can ship anything you want into Amazon. They will figure out a way to package them.
[00:52:50] Scott: That’s pretty crazy. It’s pretty crazy story that you actually did that. Are you glad you did?
[00:52:55] David: Yeah, I am. The funny thing is actually, it’s been about about a month since I worked there, but still they still haven’t paid me though.
[00:53:00] Scott: Are you kidding me?
[00:53:03] David: I have to go there and talk to them to see what happened.
[00:53:06] Scott: Were you hired as a temp or did you just leave?
[00:53:11] David: They hire everybody else with Amazon. They hire everybody on as a temporary worker basically on a 3-month contract. Basically, you have a pretty strict quota that you need to make the packages each day and the top 10% they all basically keep and hire them on as a full-time Amazon employees and the other 80 percent they keep rehiring as a temporary worker and then the bottom 10% they’ll drop.
[00:53:34] Scott: So they’re trying to weed out their top performers?
[00:53:38] David: Yep! Weed out the weeds and pick the flowers.
[00:53:41] Scott: There you go! Well hey, this has been awesome. We went a lot of directions and I think you gave a lot of great insight. As far as starting a business out of your college dorm for crying out loud and then building something into a sizeable business to then exit and then learning a ton and then starting a brand new one and going to work for Amazon just as an experiment. Dude man, it’s been fun. This has been great. We’ll probably have to follow up again just to see what you’ve done. Is there any last little bits of advice or tips that you’d like give someone, whether they’re just getting into this business or whether they’re starting to sell right now and they want to continue to grow?
[00:54:23] David: Like I think we’ve mentioned at the beginning at the podcast, you know start off as quick as you can, get those first few sales. I mean, even if you’re doing a hundred bucks amount in sales just try to sell your first product. Get started and then iterate over and over. Once you got the first sale I guarantee you you’re going to be so much more motivated actually take this thing to the next level. Way more than if you just think about it for probably longer than you should so just try to get off and running as soon as you can.
[00:54:54] Scott: That’s awesome and if anyone had any questions should they go anywhere special or should they just go to the comments of this post and maybe you can go in there and answer any questions?
[00:55:04] David: Yeah. They can comment on this post. I’m happy to keep my eye over there and happy to reply there and they can also check out my blog, chineseimporting.com.
[00:55:14] Scott: chineseimporting.com, sounds awesome! Well Dave, this has been awesome. I really do appreciate to finally we got to hook up. I know you’ve been going back and forth, back and forth a little bit with emails. We finally got to hook up and this has been fun and I’ll definitely be catching back up with you because I know that you’ll be having some exciting things to report. Once again man, I wanted to say thank you. I do appreciate it.
[00:55:34] David: Yeah. Thank you for having me.
[00:55:37] Scott: Alright. So another great interview, man I tell you every time I get off of these I just say, “Wow!” because there’s a lot of nuggets in there and again I could have this conversations privately but I choose to air them on the podcast. That’s what I want to do and it’s funny because I was just in Dallas and I met up with about 40 TASers and we had a little meet up there, an unofficial meet up I call it because it was just us kind of hanging out, kind of shooting the breeze a little bit and a lot of people said, “Scott, I love it how you have guests on and you kind of go in those areas that normally you wouldn’t go or maybe you start to dig out things that aren’t necessarily on topic but then you come back to the topic” So that’s just me, that’s what I do. I like to get the whole story but then I like to dig into how it led them to where they are or that next opportunity or the failure or what they learned through that lesson and all of that stuff and I learned through every single one of these interviews as well right along with you and I’m not afraid to say that because I’m always learning. In the Dallas recently, when I was there I actually had a great opportunity to attend a four and a half almost 5 hour event or workshop actually of Tony Robbins. Tony Robbins is one of my mentors. I’ve looked up to him for years, listened to a lot of his stuff and the thing that he said was, “If you’re not growing, you’re dying.” And if you’re not willing to fail, you’re not going to grow either because you have to be able to put yourself out there. You have to be able to understand that failure or things that don’t work as planned are there for a reason. It’s a moment in time that can actually help you and actually make that one change that really takes your direction and brings it to a whole other level or a whole another area.
I should probably do an episode on just what I took away from that event which I probably should. So Scott, mental note, do a podcast episode talking all about what you took away from that 4 and a half hours with Tony Robbins and I’m still blown away. Just a great, great time but bringing it back to this interview I just wanted to say again, thank you to David for sharing all of his knowledge and his story and his experience and really giving it back to the community and that is you guys. You TASers that is, because you know really through these experiences we learned a ton and I know I did and I hope that you guys did as well.
I want to remind you guys the show notes can be found at the amazingseller.com/330. You can find all of those there. I did want to bring up something really quickly and I don’t usually do this but it’s kind of like the timing is perfect. This coming Monday which will be episode 332 so it doesn’t matter really the date because no matter when you’re listening to this it will be 332 episode 332 that is. I actually had a guest on that knows a lot about sourcing and I’m going to give it all away but we dig deep into what he calls his, “Sourcing Funnel” which actually leads you through how to source products and validate before you actually make the commitment to go to that factory or that manufacture. How to find agents, how to find agents, how to vet them out, all of that stuff. That’s going to be one Monday. I’m really excited about that because I literally just got off with him and I’m going to say who it is yet. So you’re going to have to stay tune but you guys are going to be blown away. There’s some actionable stuff there and he calls it the Sourcing Funnel. We have a checklist for you and all of that stuff. So it’s going to be really, really awesome and it really goes hand in hand on what we just kind of talked about in this interview because you know, David talks a lot about him having those relationships with those suppliers as really would helped him grow this business and I think that’s really, really important and I think it’s something that we don’t really pay attention to and we should. So, definitely you’re going to want to check out Monday’s episode or 332. So, when that comes out just go ahead and listen to episode 332. It’s going to be pretty awesome.
So guys that’s it, that’s going to wrap it up. I’m pretty fired up today if you guys couldn’t tell. I want to leave you guys fired up. So guys, remember that I’m here for you, I believe in you and I am rooting for you, but you have to, you have to, come on say it with me, say it loud, say it proud. Take action! Have an awesome, amazing day guys and I’ll see you right back here on the next episode.
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