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Learn from Fast Growing 7-8 Figure Online Retailers and eCommerce Experts

EPISODE 49 66 mins

Applying a Lean Mindset to a Private Label Amazon Business w/ Will Tjernlund

Posted on 25th November 2015 , by Kunle Campbell


About the guests

Will Tjernlund

Kunle Campbell

Will is a Fulfillment by Amazon (FBA) Expert that was part of an Amazon seller team that he helped scale from $350,000 to $6 million over a 2 year period. Not happy with where he was in his life however and wanting to travel around the world, he has taken a step back lately to teach about Amazon FBA.



Until the beginning of 2015, Will Tjernlund was part of an Amazon seller team that he helped to scale from $350,000 to $6 million over the previous 2 years. Not happy with where he was in his life however, and wanting to travel around the world, Will decided that in order to lead a fulfilling life he needed to build an Amazon business that was location independent…and he is today he does just that.

Quitting his previous partnership in May 2015, Will has created a new partnership where he now uses all his prior experience with Amazon and is building a location independent, private label FBA business that has been successfully operating on Amazon for the past seven months.

Preferring a non-textbook approach based on trial and error, Will works with new ideas and a series of completely different strategies to starting up and selling on Amazon to what he had been doing in his previous partnership. This episode is jam-packed with fascinating insights and tips for anyone selling or looking to sell on Amazon, as we look at Will’s lean approach to Amazon selling and his ideas on working capital, cash flow, and scaling of the business, as well as why he chooses to private label.

Will shares how being successful all comes down to his ‘Two Golden Rules To Successful Amazon Selling’. And we get specific about Will’s approach to product selection and the steps that enable him to sell on Amazon profitably as a private labeler, buying and branding products from China to sell on Amazon.

Finally, we cap this episode off by continuing a thread currently running though 2XeCommerce podcasts with other Amazon sellers in the past few episodes as we ask Will what his thoughts are on the long-term future of Amazon.

If your business just stays the same, it could triple by 2017 just because of the sheer volume of shoppers coming to Amazon

1: General Recommendations On How To Approach Amazon

Scaling With Amazon: I’ve heard recent projections: as close as the end of 2017 there could be 100 million Prime Members, and there’s currently 30 million Prime Members in the United States. And Prime Members buy twice as much stuff and their carts usually have twice as much value in them. And so from those numbers alone, even if your business just stays the same, it could triple by 2017 just because of the sheer volume of shoppers coming to Amazon.

Drop Shipping versus Wholesale Accounts versus Private Labeling:

  1. There’s definitely still money to be made drop shipping, even on Amazon. But the problem with drop shipping is that there are no barriers to entry, and so anyone can just come in there and just take your business out if they just get the same deal as you, there’s no way to really protect yourself because you don’t need any cash up front.
  1. The wholesale accounts can work really well if you work out a deal where you’re the only distributor that’s allowed to sell on Amazon. It’s a thing where you have to convince them that once you let anyone else sell on Amazon, they’re going to have to lower the price a penny lower than mine to win the Buy Box. And then I’m going to have to lower my price a penny more, and then we’re going to get a race to the bottom, and that’s going to screw over all of their different wholesale accounts and their different mom-and-pop and brick-and-mortar shops because we’re going to be selling it at half the price we’re supposed to on Amazon. And so that can be very lucrative if you just work out a deal where you will keep their price high as long as you’re the only distributor.
  1. Private labeling is the best of the three of them currently because it has the highest barriers to entry. Instead of just calling to the manufacturer and saying, ‘Hey, I’d like to become your distributor,’ you actually have to do negotiations with the suppliers say over in China, you have do design, do packaging. And all those extra steps and hurdles that you jump over creating your private-label products are just definitely more hurdles that your competitors are going to have to jump over if they want to copy you and compete with you. At this moment 100% of our revenue is coming from private label products that we buy from China.
  • Single vs Multiple Amazon Stores: I just currently run a single Amazon store. The multiple Amazon stores maybe makes sense if you’re going to be doing like weird stuff tax-wise like with nexus in a different state. Or if you’re planning on selling your company down the road, that can make it a lot easier if you are split between your different niches. Some people are worried about having the same Amazon store sell a bunch of different types of products and niches, and they’re worried that their customers are going to get confused. But I think that’s a fallacy, I don’t think that’s something that anyone really cares about.
  • Scaling Using Turnover Time and Cash Flow Awareness: Now I’m much more conscious of how fast things sell, and how fast they can flip to get the cash back in my pocket. And so instead of having $1 million in inventory in Amazon any one time, I’ve learned my lesson to manage my cash capital a lot better. So now I only have say $200,000 in inventory at any time and then I have an extra $800,000 liquid to re-invest in new products and try new products as opposed to sitting there and kind of playing this waiting for cash flow game.
  • Working Capital Required To Start A Private Label FBA Business: People need to manage their expectations and if you want to make $1 million this first year, then I hope you have a half million dollars in cash, because that’s what you’ll need. But if you’re saying, ‘I want to make $2,000 a month, consistently, starting four months from now,’ it’s like that is a very realistic goal and you could get started with maybe $2,000. And then just slowly build your way up: you buy $600 worth of three different products, you see which ones work. Two of them work, one of them doesn’t. Liquidate the one, double down on the next two. And then start working on a private label brand. By the time you start working on a private label brand from flipping those samples over and over again, maybe three months has passed and you’ve got a couple winners that are making 1,500 bucks each in profit a month. And it’s like from there, that’s $3,000 a month in profit, that’s pretty decent business already.
  • Think Outside The Box: A lot of the Amazon community and the Amazon sellers live in a giant echo chamber where everyone kind of just repeats the same stuff over and over again and no one really thinks outside the box, ever. And so it’s the kind of thing where they always say these strict rules where it has to be this size, has to sell for this much, FBA products also should be this bestseller ranking on Amazon or whatever. I just try to learn a much about business in general and apply outside concepts to Amazon that people aren’t doing yet. And that seems to be a lot more successful than just following the crowd.

2: Specific Advice For Selling On Amazon

The first thing is you need to get your product in front of the customer. And the second thing is you need to give the customer a reason to buy once they see your product.

The Two Golden Rules To Successful Amazon Selling:

  1. You need to get your product in front of the customer. This is the main thing that people have a lot of trouble with: getting people to see their product in the first place. And so I only source products for the most part where I can get on the first page almost immediately, because there’s such low competition, or there’s no ads at all for that product or the keyword that I’m targeting; and so I know I can get on the first page pretty cheap through Amazon PPC. For example, I wouldn’t sell something that’s like a dog leash because I’m going to be on page 1,000 when I throw up my listing. But I would sell something maybe like a seeing-eye dog leash, or something like dog leash for hunting dogs. It’s like you go one more niche down, a niche within a niche that no one else is going after yet. And yeah, I may only sell 3 to 4 leashes a day but if I’m making 10 bucks a leash, it’s like that’s a pretty good product right off the bat.
  2. You need to give the customer a reason to buy your products specifically, once they see your product. And so your say you’re selling a dog leash and somehow you can get on page 1, if everyone’s dog leash is either black, red, or blue, then sell one that’s pink. You know what I’m saying? Because people shop with their eyes. They don’t do a lot of reading on Amazon and so they’re going to type in ‘dog leash’ and they’re going to scroll up and down and if they see a pink one it might catch their eye and they might click on it. And then from there that’s half the battle already. Give the customer a reason to buy once they’ve actually seen your product.

Product Selection:

  1. Trial and Error: Amazon’s biggest protected secret is search volume and sales volume of their products. And so if you are trying to use different third-party softwares, you just have to always realize that they’re not a hundred percent accurate. And it’s just unfortunate that I see all the time someone will spend say three months doing research using all these different softwares using inaccurate data and they get stuck in analysis paralysis. I basically have zero reassurance ahead of time that there’s going to be traffic and there’s going to be sales. And so I usually start off on AliExpress, not Alibaba, so I can just get sent 20 samples with one click, get them to my house within seven days. Get them in stock within three to four days at Amazon. And I know within 10 days if there’s sales volume or not. And worst-case scenario I just sell them on eBay at breakeven cost and just liquidate them and move on to the next product.
  1. Finding Product Differentiation On AliExpress: There’s still stuff out there on Amazon that just people aren’t doing, where you’ll look at like gardening tools, and they all have wooden handles, and then you’ll see one that has a metal handle on AliExpress, and you look around on Amazon and won’t see one with a metal handle on Amazon yet. And so basically it just comes down to finding inefficiencies in the market and capitalizing on them. I have a dual monitor setup and I just have one window open to AllExpress/Alibaba and I have another one opened up to Amazon, and just constantly comparing between the two.
  • Managing Inventory: The more historical sales data you have, the more predictable it is, makes it a lot easier. But basically you just take number of units you sell per day times the number of days it takes from you ordering it to getting it stocked at Amazon, say that’s 60 days if you’re ordering via sea. So if say you sell 5 units a day, it takes 60 days, so I would set the replenishment alert quantity would be around 300 because then you know once you’re down to 300 you have 60 days’ worth of inventory left, and so to give myself an extra buffer, I would set it at maybe 350 – 400, just to make sure.

The lean startup technique is to just get it out there as fast as possible, see what the feedback is, and then slowly make pivots and tweaks over time.

  • Lean Start Up Tip: Do not try to overcomplicate things and confuse things right off the bat with your supplier. You may have all these grand ideas with your product, saying okay I want have this logo, label it this way, this packaging, fix this part. And they try to seven things on their first product when they go to launch it. Whereas, if you slowly build your steps over time, and every time you ask for them to do something new for you, you at least like double your order, it kind of makes them a little bit happier and it makes them a happier relationship between the two of you. And so the lean startup technique is to just get it out there as fast as possible, see what the feedback is, and then slowly make pivots and tweaks over time. And so one of our products it’s like, the first time I get it from AliExpress it has no logo on it. And then the second time I order it from Alibaba, it has a logo on it. And then the third time I get packaging with the logo on it. And then the fourth time, now I got it so they’re going to label it correctly and polybag it and send it directly from their warehouse to Amazon as opposed to their house to a pre-fulfillment center first to Amazon.
  • Adding Perceived Value To Your Product: With the tweaks to the product over time it’s important to be able to see whether you are adding perceived value. And so like I have a fashion product we can get each one of our fashion items in a super-nice wooden box for an extra two bucks a unit. And it’s well like, that would make our product look maybe $10-$30 more expensive and fancy and add to the unboxing experience. But it’s only going cost me two dollars extra a unit? Well that sounds like a great upgrade; let’s move forward with that one. But if I’m going to do something where I’m going to spend $5,000 having the design or do fancy packaging, it’s like well I don’t know if that’s really going to add $5,000 worth of perceived value.

I’m just going where the money’s at and so I’m just constantly going to keep my eyes open for what’s the next big thing and then try to get there before everyone else.

  • Products to Stay Away From: Stuff I stay away from is basically a lot of the stuff the different Amazon selling courses try to get you to sell because it’s kind of simpler stuff. So anything that’s like a kitchen accessory, pet accessory, or workout accessory, I just stay away from because those are just so oversaturated. And then from there, anything like heavy electronics I usually try to stay away from because it’s just going to be a nightmare later on. I don’t like to do anything electronic that has much more than on-off switch.

3: Parting Advice

Software Tools:

  1. Xero for accounting
  2. And that’s in conjunction with StitchLabs for our inventory management.
  3. Currently using FeedbackFive for automatic feedback software but now we are looking to move to a more robust system now that we have some traction.
  • FBAexpert.com that I run is mostly just there is kind of an SEO placeholder so when people are looking for FBA experts, Amazon experts/ consultants on Google, I show up, so that’s kind of just a lead generation type of thing for consulting jobs. The Mastermind there is more of a private forum than a mastermind, actually, it’s where people can just talk and discuss a little bit more privately. It’s $20 a month and the majority of people are doing at least $10,000 a month in sales. It’s a great community of people who are serious and doing Amazon full-time and not asking a bunch of beginner questions and but asking more strategy-based questions.
  • My brother and I and my business partner, just launched Amzhelp.com, which is a consulting service where you get unlimited email support for flat, monthly rate. Because I’m just lately just getting flooded with emails and so I needed a better way to help people out in a more organized and systemized way.
  • The Future of Amazon: Amazon’s just starting from the top of the list working down with Amazon sellers and different brands, sourcing and selling everything themselves. So I think maybe like 7-10 years from now, Amazon just sells everything themselves. And yeah, I could see someone like Alibaba coming in here but honestly, I was just over in China for a month, I’m not worried about them. They can’t market worth anything. Everyone just copies each other, no one has an original idea. And so it just really comes down to the future is, for all Amazon sellers, eventually you’re going to have to design and make your own product. Not just private label and throw your brand name on it. You’re going to have to actually make something from scratch, and make a propriety product that you’re going to sell. Because that’s the only way you’re going to be able to protect yourself against other Amazon sellers and against Alibaba coming in and cutthroat prices.
  • I have no attachment to Amazon or anything. I’m just going where the money’s at and so I’m just constantly going to keep my eyes open for what’s the next big thing and then try to get there before everyone else.
  • Best Mistake To Date: It’s more a collection of a million little things wrong happening to me every day. Nothing is the end of the world, you’re going to live. And so you just start working to figure out the problem and fix it. Don’t let the little stuff stress you out because you’re going to just be stressed out constantly because there’s constantly going to be little problems going wrong with your business and the key is just to kind of figure out which ones are actually serious and which ones you should worry about. And being as clear as possible with your Chinese supplier will help.
  • Tip For Getting Started on Amazon: Don’t do too much research. Don’t do too much reading. You’re just going to stress yourself out and think about a bunch of problems before they even happen to you. Just pull the trigger and learn by experience.

Podcasts:

  1. I really like The tropical MBA Podcast. It’s very just kind of normal business advice, it’s not super flashy or anything like that.
  1. I also like This Week In Startups. It’s just nice to have the newest and coolest startups constantly on there and keep me in the loop and know where the world’s kind of going as a trend.

Key Takeaways

(05:52) Introducing Will Tjernland

(10:54) General Recommendations On How to Approach Amazon

(30:23) Specific Advice For Selling On Amazon

(50:47) Parting Advice

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Transcript

“And so the lean startup technique is to just get it out there as fast as possible, see what the feedback is, and then slowly make pivots and tweaks over time. And so one of our products it's like, the first time I get it from AliExpress it has no logo on it. And then the second time I order it from Alibaba, it has a logo on it. And then the third time I get packaging with the logo on it. And then the fourth time, now I got it so they're going to label it correctly and polybag it and send it directly from their warehouse to Amazon as opposed to their house to a pre-fulfillment center first to Amazon, kind of thing.” (Will Tjernlund)
[Intro clip] Welcome to the 2X eCommerce podcast show where we interview founders of fast growing seven and eight figure eCommerce businesses and eCommerce experts. They’ll tell their stories, share how they 2X’d their businesses and inspire you to take action in your own online retail business today. And now, here he is, the man in the mix, Kunle Campbell.

This episode is brought to you by Remarkety. Remarkety is an email marketing platform specifically built for eCommerce businesses. With Remarkety, emails are automatically triggered by shopper behavior and purchase history. With a few simple clicks, Remarkety allows you to recover abandoned carts, win back inactive customers, make product recommendations, deliver newsletters, and a whole lot more. In other words, emails you will send through Remarkety will be highly targeted, with glaring improvements on your open rates, click rates, and most importantly, conversions. You are also able to track revenue generated from every single email sent by Remarkety.
Try Remarkety absolutely free for 30-days. No credit cards and no contracts.
To sweeten the deal, 2x eCommerce listeners can get Remarkety for 30% OFF an entire year using the coupon code PODCAST30.
Visit Remarkety.com to learn more. Remarkety is email marketing for e-commerce, simplified.


Kunle: Welcome to the show today. Before I kick off the show today I’d like to give a shout out to my audio production team: Quarter After Productions. It's run by a chap called Mike and his team. They do a fantastic job on each episode of the 2X eCommerce Podcast Show. I pretty much just hit record, save my shows to Dropbox and they take care of all the technical aspects of the show.
So even when my audio quality is poor, as in when I record in echoey rooms, Mike and his team try and bring it up to spec so you guys hear crispy clean episodes. So if you're into podcasting or looking just for a reliable audio post production, just head over to:
http://quarterafterproductions.com/
I’ll link to them in the show notes.

Next, I am gunning for 50 reviews on the iTunes US store and 30 reviews on iTunes UK store. The last time I checked, I only had 12 reviews on iTunes UK... you guys need to be more generous in the UK...and 27 reviews in iTunes U.S...you guys are more generous.
To nudge you guys to give me more reviews, please, I need it to go up the rank on both iTunes stores, I’ll be running a sweepstake contest to the moment I hit these targets. So the moment I hit 50 reviews in the US, I'll run a quick sweepstake for all of you who have given reviews. I'll be giving a $50 Amazon voucher to whoever I choose at random. And if you're based in the UK, and I hit my 30, then I'll run another sweepstake for £50 prize. So please, if you can, drop me a review. I would be very, very much appreciative of that. And if you're really enjoying the show journey with me, I don't even need to give you a voucher to, you know I don't need to run a contest but please if you enjoy this show I will really appreciate if you can leave me a review.

On a final note I am thinking about setting up a Facebook group where we get in and what I'll do in the Facebook group, it would be more or less a question-and-answer. If you guys have any questions... I'll send more details on upcoming shows but if you have any, any questions in regards to e-commerce in general, anything in e-commerce, just leave questions in the Facebook group. I'm thinking about it anyway. It would be more like a community, really where we just hang out, not just doing anything but it would be more or less questions are asked, links are shared, questions most especially are asked and you know other members of the community will help in to give their advice or answer questions. What I'll do initially, or what I'm planning to do initially would be to answer questions myself, as the community is small. And as it begins to grow you know other people would emerge who would start to help other people out. Yeah, and I'm hoping it would be a good mix of e-commerce managers, e-commerce entrepreneurs themselves, and experts in various fields of e-commerce, be it film and be it branding, be it marketing, the whole you know spectrum.

Hi guys this is the main show and my guest on today's show is Will Tjernlund. Will and his brother Andrew sold in 2014 $6 million worth of products on Amazon. Now prior to 2014, in 2013, they did 1.2 million. So they did five times more in 2014 than it did in 2015 [2013]. But in 2012 when the business started, in that year, that financial year they did $350,000 worth of goods. So they pretty much increased their business by about five times in year one, from 2012 to 2013 and then another five times, a great 5X again in 2013 to 2014. Now all of this was quite stressful for Will. He had just graduated from University and it was quite a lot because it was a two-man business, basically, him and his brother doing this much revenue. So he decided to take a back seat, pull out of the business and pretty much start to travel, just try for a location independent and explore the world. So he said okay, I still understand what Amazon is all about, but I'm not going to take the whole buy from supplier approach, the whole batch approach more or less. I'm going to go for more lean approach towards Amazon. And he was no longer looking towards more industrial products, more or less what his family business was doing, and he was going more for consumer products. And he pretty much was able to build out business in a few months, a lean startup Amazon business which he's going to talk more about as a private-label reseller. So he's buying from Ali Baba, Ali-Express, branding his products from China to sell on Amazon.com. He has quite a fascinating story to share. And his approach and philosophy generally to selling is... it's not textbook at all. It's more or less sell, learn, sell, learn, sell, learn sell, profits, you know. So he learns a lot, he runs very small experiments and if he gets good feedback, he invests more, and then he expands and expands. And he's managed to build a substantial portfolio of products in his private label Amazon business. So I guess now would be time to introduce Will. Without further ado I'd like to welcome you Will Tjernlund to the show. Welcome to the show Will.

Will: Hi, I'm Will Tjernlund, I've been selling online now on Amazon and other various channels full-time for three years now. Been selling part-time for much longer than that. I started out full-time selling with my brother, selling millions of dollars on Amazon over the course of 2013 and 2014. And now I have built a location independent Amazon FBA business for myself and been running that now for the last seven months or so.

Kunle: Okay, let's talk about your FBA business because I read a number of articles and what you've done in three years has been just amazing. So you've done $6 million worth of products on Amazon.com and then another million dollars’ worth of sales on eBay and then half 1 million through your e-commerce business. Are these figures gross sales, inclusive of like your seller fees and your FBA fees?

Will: Yes, this is just like total revenue for the month, it's not profit.

Kunle: Gotcha, gotcha. It is still crazy, $7.5 million online in three years. Okay. Then another thing now I checked out was the fact that in 2013... Okay let's talk about your revenues. Okay, so your first year...we're in 2015 now and taking it three years back to 2012, you probably started in 2012, what were your revenues in 2012?

Will: So, I don't know the exact numbers for you because my brother had already kind of started himself going full-time at that point. And so I couldn't tell you the exact numbers for 2012 but I think, like I wasn't there the full 2012 but I think 2012 maybe ended up with like $350,000 in total sales, something like that.

Kunle: Okay, all right.

Will: So it was still a sizable amount but it wasn't nearly what we grew it to. And then I think... this is out of the top of my head, I'd have to look at numbers... then I think we did about like for 2013 like $1.7 million in sales and then from there we just took all of that cash and reinvested it and basically paid ourselves peanuts to really take it to the next level for 2014.

Kunle: Two takeaways from there, one is paying yourself peanuts, which is good, very very good business practice. Loving the business and nurturing the business, not killing the goose that lays the golden egg. And then the second is 5X. How did you manage to grow the business 5X two years in a row. Normally there'd be some gravity, so there are businesses that have gone 10X first year and they're not able to maintain that momentum and you know they just dropped to 5X and 3X and that's it, they just trod along really, they peak out or play to, more or less.

Will: Well I can definitely tell you that my brother's business is not going to go 5X for 2015. That's for sure. But at the same point, we definitely cannot take all the credit for it. Amazon between 2012 to 2015 has become a whole different kind of monster and they're all into FBA and all that kind of stuff. And so it's the kind of thing where like, I've heard recent projections: as close as the end of 2017 there could be 100 million Prime Members, and there's currently 30 million Prime Members in the United States. And Prime Members buy twice as much stuff and their carts usually have twice as much value in them. And so from those numbers alone, it's like if your business just stays the same, it could triple by 2017 just because of the sheer volume of shoppers coming to Amazon.

Kunle: Those are really fascinating stats. So that's like a quarter of the population by 2017 would be Prime Members in the US, given that there are 400 million people in the US. That is fascinating. Okay, so you're a family business, you run the business along with your brother, Andrew, is that correct?

Will: Well, I currently do not work with him anymore. We quit working together full-time in May. I kind of decided around January that I wasn't really liking what I was doing with my life. We're completely different people where he just bought a house, just had a second kid, he's six years older than me, he's just ready to settle down and do that kind of thing and I'm more of a wild child and traveling around the world doing this, doing that. So I knew I needed to create my own Amazon business and make one that's location independent where I never touch the inventory or anything, for me to have a fulfilling life.

Kunle: Okay, so whereabouts are you know?

Will: Oh, currently at this moment I am in Minnesota. But I just got back like two and a half days ago from like a month over in Southeast Asia.

Kunle: Nice. So you were a Thailand location independent type person.

Will: Yep. I was in Bangkok and then I was over in Hong Kong and China for all the different tradeshows, and Canton Fair.

Kunle: Ah yes, the Canton fair just took place. I just want to put a sider here for our listeners. Some of the listeners would not know what FBA is; some of you, it's just Fulfilled By Amazon. It pretty much means that you give your entire inventory to Amazon to take care of and all you need to do is the marketing front. And you could actually sell anywhere, from your store, from eBay, and still have Amazon fulfill for you. So, that's another section of Amazon's business, they're actually a fulfillment business also, so FBA is the Fulfilled By Amazon. Okay now let's talk about... So what do you do now? What kind of stuff do you sell as compared as to what Andrew sells? Because I believe you guys were into fans or industrial equipment of sorts at the time.

Will: Yeah. He sells mostly, at this moment he sells building materials and a lot of safety materials, a lot of different things to keep you safe, and a lot of construction type equipment. And basically all the unsexy, larger products that no one else wants to sell. And that doesn't really lend to my location independent business. And two, mine's more of a cash flow business where I'm trying to get paid almost immediately as opposed to just reinvesting over and over again for the sake of growth. And so a lot of my stuff is more a kind of like trinkets and smaller products and more products that are... like, my brother sells needs not wants, and I sell wants not needs.

Kunle: That's a good point. Let's flesh that out. So needs: my fan in my radiator is broken. I need that and I need to get it fixed or else my family will be cold. So I go to your brother's Amazon store and I buy spare parts there. But a want is: I have extra cash and I want to look good, I'll buy a trinket from your store. Is that kind of like what you're saying?

Will: Yeah, exactly, it's the kind of thing where my sales are going to go up during the Christmas season and my brother's sales are going to go down during the Christmas season. Because everyone's putting off all those kind of around the house projects or this or that because they got family coming in town, they're making dinner, they don't have time to worry about these little handyman. While mine is the kind of thing where people just buy to buy, so like Christmas is my best time of year.

Kunle: So yours is very emotionally driven.

Will: Yeah.

Kunle: Right. Okay, cool. So how is your business doing at the minute?

Will: I think as of right now, I'd have to look at the numbers but where at like $14,000 for the month right now in sales for the month of October. And we started out, I work now with my best friend and we started from nothing with a brand-new seller account in May and so it's doing pretty well, we just bought a bunch of new inventory that we're going to be testing [inaudible 00:16:55] a few deals with different manufacturers and so it's, I'm really curious to see where we're going to be in the next three months because if all these different deals pay off we're going to be in a completely different place than where we are now.

Kunle: Absolutely. And you've got three years of experience to bring with you. What about your friend, your cofounder? Does he have FBA experience or selling experience online or?

Will: Yeah, he's been selling online for a while too and he was working in the corporate world before this, so he kind of brings more of a analytical point of view and a more numbers cruncher point of view. And we've been best friends since we were both 11 or 12, so we've worked with each other for a while and we both have the same mindset and the same goals for our business, so we work really well together.

Kunle: Gotcha. So you're more the visionary and he's more like the manager of the business, he's going to make sure the operations actually work as intended. Okay, all right, cool. Let's talk about your family. Your family is entrepreneurial right, you come from an entrepreneurial family, is that right? Apart from your brother, are there any other entrepreneurs in your family?

Will: I wouldn't really call it entrepreneurs. My family owns, like my dad owns a 76-year-old manufacturing company, but my great-grandpa started it. And so I do know if I'd really call that entrepreneurial, because he kind of just, he's been working there full time since he was like 17 or something like that. So he's been there forever. But yeah, my brother and I have always been starting weird businesses as a kid and always doing just random stuff when we were 12 - 13, trying to make money on the side doing this, trying to make money on the side doing that. And so it's something that, I got it from my brother I assume, but I don't know where my brother got it from.

Kunle: There's a sense of stewardship you know, when family businesses are handed over to the next generation. And you know the thing is, you're not, your family's not reliant on corporations, things like that, you're self-sufficient really when you think about it. So I would consider you come from a entrepreneurial family, if that's a go. Right. So let's go into your FBA items you currently sell on FBA. So are all your items FBA or do you do retail arbitrage, which pretty much means you buy from the manufacturer and you sell their own brand?

Will: No, yeah, I do a little bit of... well, the terms I use is, yeah retail arbitrage is you're buying it from a retail store and then just selling it online for bigger price. It's a little different from wholesaling where you get like an actual contract with like a US manufacturer and brand and you become like an official distributor for them. It's a little different, you get paid differently all that kind of stuff. But yeah, we have a couple deals with official manufacturers of different US brands and different technology companies that are coming out. But mostly I would say, like at this moment 100% of our revenue is always coming from private label products that we buy from China, kind of spruce up the packaging, put a brand and logo on it and jack up the price because of it.

Kunle: What's your philosophy on: I'm going to take out retail arbitrage on wholesaling versus drop shipping versus private labeling. Where do you see the biggest growth leverage from e-commerce standpoint?

Will: You can make a lot of money still drop shipping. People say you can't, but there's definitely still money to be made drop shipping, even drop shipping on Amazon. But the problem with drop shipping is that there are no barriers to entry, and so anyone can just come in there and just take your business out if they just get the same deal as you. And so that one is...I don't really do much drop shipping just because there's no barriers to entry, there's no way to really protect yourself because you don't need any cash up front. The wholesale accounts can work really well if you work out a deal where you're the only distributor that's allowed to sell on Amazon. It's a thing where you kind of have to convince them that once you let anyone else sell on Amazon, they're going to have to lower the price a penny lower than mine to win the Buy Box. And then I'm going to have to lower my price a penny more, and then we're going to get a race to the bottom, and that's going to screw over all of their different wholesale accounts and their different mom-and-pop and brick-and-mortar shops because we're going to be selling it at half the price we're supposed to on Amazon. And so that can be very lucrative though if you just work out a deal where you will keep their price high as long as you're the only manufacturer [distributor]. So that's a pretty good deal. And then private labeling is the best of the three of them currently because it has the highest barriers to entry. Instead of just calling to the manufacturer and saying, ‘Hey I'd like to become your distributor,’ you actually have to do negotiations with the suppliers say over in China, you have do design, you have to do packaging. And all those extra steps and hurdles that you jump over creating your private-label products are just definitely more hurdles that your competitors are going to have to jump over if they want to copy you and compete with you.

Kunle: Gotcha, gotcha. And you're private-label business. So how many items do you currently sell on your Amazon store?

Will: Right now, last time I checked, somewhere between 25 and 30 different items.

Kunle: Wow. And are they all private label products?

Will: Yeah, they're all private label but they're kind of... a lot of them you could consider like parent-child listings or like variations. And so it's like it's 30 different SKUs but some of them are like it's one product that comes in four different colors and that kind of thing.

Kunle: Gotcha, gotcha. So you're giving them variety. Okay, okay. And do you currently run a single Amazon store or multiple Amazon stores? And what are your thoughts on just single versus multiple stores?

Will: Yeah, I just currently run a single Amazon store. The multiple Amazon stores maybe makes more sense if you're going to be doing like weird stuff tax-wise. Like you have nexus in a different state for that one, or if you're planning on selling your company down the road, that can make it a lot easier if you are split between your different niches. Some people are worried about having the same Amazon store sell a bunch of different types of products and niches, and they're worried that their customers are going to get confused. But I think that's a fallacy, I think that 99% of people buying on Amazon think they're buying from Amazon. And I don't think they click on the seller and then see what the seller is also selling and go, 'Well this guy is not trustworthy because he sells hairbrushes and swimsuits.' I don't think that’s something that anyone really cares about.

Kunle: [laughs] Okay, all right. In your store, in your PLA store, private label store sorry, do they go under a single brand? So are you sort of building out a brand at the moment or have you launched several brands?

Will: Yeah, I would say I maybe have five different brands right now. Every different niche is a different brand. So we sell a bunch of like say, coffee stuff, that's going to be under one brand. We sell a bunch of fashion stuff, that's going to be under a different brand and so like that kind of, it's like common products go under the same niche and then the same private label brand.

Kunle: Okay, right. I'm going to credit the scale achieved in the previous Amazon business you were involved with your brother, to a lot of it due to you coming in, because you were that X-factor in 2013 and 2014, okay? You did say parts of it had to do with the trajectory to what Amazon is going, you know. Now from a scale standpoint in an FBA business, what is your philosophy in scale? And my question really has to do with this new business that you are launching, you launched since May. What's your take and what's your approach on scaling and how to scale a new Amazon FBA business?

Will: Well, the main difference between my new business and my old business is my thought process when it comes to getting cash back in your pocket and getting your capital returned as fast as possible and flipping your products as fast as possible. It's the kind of thing where my brother and I would do a $500,000 minimum order quantity with some suppliers because they would sell enough different random products and we could get such a good price on it that we knew like eventually everything would sell. But now I'm much more conscious of how fast things sell, and how fast they can get the cash back in my pocket. And so instead, like my brother and I could easily have $1 million in inventory in Amazon any one time, where now I've learned my lesson and know that I need to manage my cash capital a lot better. So I only have say $200,000 in inventory at any time and then I have an extra $800,000 liquid to re-invest in new products and try new products as opposed to sitting there and kind of playing this weird cash flow game.

Kunle: Okay, so that makes a lot of sense and that ties into my next question. It has to do with the amount of cash realistically visible to start an FBA business, private-label FBA business. What realistically, without wasting time or shuffling your feet, in today's world in November 2015 going into 2016, if the listener is an entrepreneur looking to get into FBA private labeling. How much cash realistically should they have, working capital, should they invest into a PLA business?

Will: Well, it's going to sound maybe cheesy but it's literally time is money. And so the thing is people will just waste so much time, it's just such a waste of resources. Where my very first, when it started on my own again, my very first product was a pair of marijuana-growing sunglasses. And so there's sunglasses that you wear when you're growing marijuana indoors all day. And I got 20 pairs of them, with cases, from AliExpress for I think it was like $70 for 20 pairs. And I flipped those 20 pairs in two weeks and made $400 cash, profit.

Kunle: Okay, make sense.

Will: And so that's the kind of thing where...

Kunle: Profit, not revenue. Profit.

Will: Yeah, profit.

Kunle: Okay. All right.

Will: And so in two weeks and so that's the kind of thing where I just saw product that looked like there might be an opportunity and it looked like pretty low competition. And like 20 pairs in two weeks isn't anything to call home about but 400 bucks in two weeks is not too bad. And so it's the kind of thing where people just need to manage their expectations and if you're going to go into the Amazon FBA business and you go, 'I want to make $1 million this first year.' And it's like, 'Well, I hope you have a half million dollars in cash, because that's what you need,' kind of thing. But if you're saying, 'I want to make $2000 a month, consistently, starting four months from now,' it's like that is a very realistic goal. That's something you could get started with maybe only two grand. And then just slowly build your way up. You buy $600 worth of three different products, you see which ones work. Two of them work, one of them doesn't. Liquidate the one, double down on the next two. And then start working on a private label brand. By the time you start working on a private label brand from flipping those samples over and over again, maybe three months has passed and you've got a couple winners that are making 1,500 bucks each in profit a month. And it's like from there, it's like, eh, three grand a month in profit, that's pretty decent business already.

Kunle: Because you add a zero that initial $20 and it's $200: that's already four grand dollars there. How do you learn FBA? For listeners, where do they learn to be FBA sellers, or you know, pro Amazon sellers? Or resources?

Will: I don't really focus on any FBA resources so much or any Amazon blogs or anything like that. A lot of the Amazon community and the Amazon sellers live in a giant echo chamber where everyone kind of just repeats the same stuff over and over again and no one really thinks outside the box, ever. And so it's the kind of thing where they always say these strict rules where it has to be this size, has to sell for this much, FBA products also should be this ranking on Amazon, bestseller ranking or whatever. And it's the kind of thing where I just try to learn as much about business in general and apply outside concepts to Amazon that people aren't doing yet. And that seems to be a lot more successful than just following the crowd.

Kunle: My question really had to do, and my next question has to do with product selection, as you just alluded to there, loads and loads of resources out there that tell you select a product based on the best-seller rack, use a certain tool to check the rankings and finding potential on a listing. What's your approach to selecting a product? Do you look at it from a market's perspective, from a 'I could use this' perspective? How do you assess demand? How do you just go in and hop onto Alibaba and then buy that product. How do you self-assess a product or market in Amazon and what have been your successes off the back of your approach?

Will: So, I have pretty strong confidence now that everything sells on Amazon.

Kunle: Wow.

Will: And it basically comes down to just two things. Whenever anyone tells me their product is not selling on Amazon, it basically only comes down to two things. The first thing is you need to get your product in front of the customer. And the second thing is you need to give the customer a reason to buy once they see your product. And so the main thing that people have a lot of trouble with is getting people to see their product in the first place. And so I only source products for the most part where I can get on the first page almost immediately, because there's such low competition, or there's no ads at all for that product or the keyword that I'm targeting; and so I know I can get on the first page pretty cheap through Amazon PPC. And so that's how I get my product in front of the customer. And then the second golden rule is giving your customer a reason to buy your products specifically. And so your say you're selling a dog leash and there's a million different dog leashes on page 1. If somehow you can get on page 1, if everyone's dog leash is either black, red, or blue, sell one that's pink. You know what I'm saying? Because people shop with their eyes. They don't do a lot of reading on Amazon and so they're going to type in 'dog leash' and they're going to scroll up and down and if they see a pink one it might catch their eye and they might click on it. And then from there that's half the battle already. And so it's like you just gotta give the customer a reason to buy once they've actually seen your product. But to go back on my first one, if I'm going after low competition niches and just trying to get the customer to see my product, I wouldn't sell something that's like a dog leash because I'm going to be on page 1,000 when I throw up my listing. I would sell something maybe like a seeing-eye dog leash, or something like dog leash for hunting dogs, that's like reflective and camouflage, you know what I'm saying. It's like you go one more niche down, a niche within a niche. And then you sit there and you go seeing-eye dog leash and I'm the very first one you find because no one else is going after that niche yet. And yeah, I may only sell 3 to 4 leashes a day but if I'm making 10 bucks a leash, it's like that's a pretty good product right off the bat.

Kunle: Okay. That's a double-barrel answer. One was about the niches, just chasing low competition niches to get in front of your customers. And the second is being different, you know how different are you. I come from an SEO background and one key thing, one key advantage in SEO AdWords is you can reverse engineer demand by researching keywords. In Amazon I would presume given the fact, given the volume of keyword search going on Amazon, how do you find out these low competition niches but still generating search? So that just could give you the assurance that you're on the right path towards product selection?

Will: I basically have zero reassurance ahead of time that there's going to be traffic and there's going to be sales. And so I usually start off on AliExpress, not Alibaba, so I can just get sent 20 samples with one click, get them to my house within seven days. Get them in stock within three to four days at Amazon. And I know within 10 days if there's sales volume or not. And worst-case scenario I just sell them on eBay at breakeven cost and just liquidate them and move on to the next product. And so the thing is Amazon, their biggest protected secret is search volume and sales volume of their products. That's like the thing that their guarding from everyone. And so if you are trying to use different third-party softwares, you just have to always realize that they're not a hundred percent accurate. And it's just unfortunate that I see all the time someone will spend say three months doing research using all these different softwares using inaccurate data and they get stuck in analysis paralysis. And then that goes and then they go and try to launch a product and it doesn't sell. And then they come to me asking what the deal is and I go, 'Well does it fit the two golden rules? Did you get the product in front of the customer? And then once you did, why would they buy yours over everyone else's? Is your price different? Is your quality different? Do you have actual branding? Do you have something different? You gotta stand out some way. And so it's the kind of thing, it always comes down to those two things. And so if I can conquer those two things, I don't really worry about the rest.

Kunle: Okay, all right, that makes a lot of sense. I have another question a follow-up question if you don't mind. You mentioned AliExpress. AliExpress is the baby version of Alibaba, it's almost like an Amazon for Alibaba, is that right?

Will: Yeah. It's basically, there's a lot of Alibaba suppliers on there, and it's kind of like a sample showroom for Alibaba where everything says that it has free shipping but you're kind of just paying inflated costs for the product to get the free shipping. And it's just a very quick way to test your products. It's where I got those marijuana growing sunglasses off AliExpress, and instead of having to deal with negotiations... I don't know how it is with you over in the UK but when you email suppliers saying, 'Hey, I'm interested in your product, I would love to get a sample. They email you back the next day because the timezone change saying, 'Oh yeah, I would love to. What's your address?' You email them again saying, 'Here's my address,' they email you back, 'Do you have a freight forwarder or do you want to use our service?' And then you've already wasted four days right there.

Kunle: So you are more lean and agile.

Willow: Yeah, exactly, and time is money. So it's like, by the time you're thinking about ordering your first sample, I've already tested the product on Amazon and know it sells.

Kunle: Gotcha, okay. Now AliExpress. You can't differentiate stuff on AliExpress. How do you meet up to your second rule, which is telling the customers why to buy by differentiating yourself, with a mass-market platform like AliExpress? Do you see what I mean?

Will: Yeah I know, I hear what you're saying. There's still stuff out there that just people aren't doing, where you'll look at like gardening tools, and they all have wooden handles, and then you'll see one that has a metal handle on AliExpress, and you look around on Amazon and won't see one with a metal handle on Amazon yet. And you go, 'Oh, well someone hasn't taking care of that niche yet.' And so it's, basically it just comes down to finding inefficiencies in the market and capitalizing on them.

Kunle: Gotcha, gotcha. And I suppose it's time again, there are no special tools to help you filter through AliExpress and figure out if it's not on Amazon. I guess you have two windows open and you double check side-by-side.

Will: Yep, exactly. I have a dual monitor setup and I just have one window open to AllExpress/Alibaba and I have another one opened up to Amazon, and just constantly comparing between the two.

Kunle: All right, okay. That makes sense, that makes sense. Okay. Right. I'm going to track back to an article I read about you on WebRetailer, and it was talking about replenishment alerts. How do you set up replenishment alerts in the sense that, you know you never want to run out of inventory. Christmas is coming well ahead and the worst time to run out of inventory is the first or second week of December. How do you manage inventory on Amazon the right way, from your experience?

Will: Well, it obviously gets lot easier with time. The more historical sales data you have, the more predictable it is. You can kind of see, even if you're slowly growing, say your sales are running up 10% a month, as long as it's kind of consistent, makes it a lot easier. But it's basically where you just take number of units you sell per day times the number of days it takes from you ordering it to getting it stocked at Amazon, say that's 60 days if you're ordering via sea. So if say you sell 5 units a day, it takes 60 days, so I would set the replenishment alert quantity would be around 300 because then you know once you're down to 300 you have 60 days’ worth of inventory left, and so to give myself an extra buffer, I would set it at maybe 350 - 400, just to make sure. It's like, 'Okay I'm about to, I'm supposed to order because it's 60 days have passed,' look at, 'Oh, I have about 75 units in stock when my new units come back in stock,' it's kind that's kind of a perfect ratio to make sure you just never run out.

Kunle: Gotcha, gotcha. I suppose you 2-3X it when the holidays are coming?

Will: Yeah, exactly, you just increase it over time and you...best case scenario is if you sold last holiday season and kind of know what the volume's going to be.

Kunle: Okay, okay. Do you have any tips for us with regards to the applying the lean startup mentality to selling on Amazon? And I know you talked about a lot about it with regards to the AliExpress and just testing stuff and churning things out, testing the market. Just pretty much experimenting with really quite quick, finding your mistakes and then learning from them from iterating. But do you have any other tips on how to apply the lean startup mentality to an Amazon business?

Will: Yeah, I just gave presentation actually on how lean startup applies to Amazon. Okay, another tip would be do not try to overcomplicate things and confuse things right off the bat with your supplier. You may have all these grand ideas with your product, saying okay I want have this logo, I want them to label it this way, I want the packaging to look like this, I want to make sure that they fix this part because this part usually breaks so I want to make sure this is extra strong. And they try to seven things on their first product when they go to launch it and it just takes a lot of time, it's a lot of headaches, and it just becomes confusing trying to communicate that between you and your supplier. And so the lean startup technique is to just get it out there as fast as possible, see what the feedback is, and then slowly make pivots and tweaks over time. And so one of our products it's like, the first time I get it from AliExpress it has no logo on it. And then the second time I order it from Alibaba, it has a logo on it. And then the third time I get packaging with the logo on it. And then the fourth time, now I got it so they're going to label it correctly and polybag it and send it directly from their warehouse to Amazon as opposed to their house to a pre-fulfillment center first to Amazon, kind of thing.

Kunle: Perfecting it over time.

Will: Exactly. And you slowly build trust then, going, 'Okay, yeah they figured out this step, everything looks good. Okay, now can you guys do this? Can you do that?' And especially too, something I see with people who are just starting out selling, it's just a mistake where I feel like they just kind of piss suppliers off where they'll go, 'Okay, I want a minimum order quantity of 100 units and can you make them all custom and perfect for me?' And it's like, all you're going to do is lose a good supplier and a good relationship there. Where, if you slowly build your orders over time, and every time you ask for them to do something new for you, you at least like double your order, it kind of makes them a little bit happier and it makes them a happier relationship between the two of you.

Kunle: Gotcha, gotcha. It's kind of like updating software or updating a car. They just keep changing over time. I agree with a lot of what you said with regards to the plain packaging. If that sells, definitely something better would sell so you slap your logo on it. And if that sells, you work on the packaging. It just makes sense you know, iterating. And I love what you just said with regards to fulfillment. Rather than just sending it to a third-party fulfillment, you know, send it eventually, you start that up with that and then eventually once you've perfected the process you get them to ship direct to an FBA unit. Good stuff there.

Will: Well and too, it's like with the tweaks over time it just, for me at least it seems like it's very obvious sometimes when and when not you are adding perceived value. And so like I have a fashion product and I was just talking to my supplier when I was over in China, and we can get them in a super-nice wooden box, each one of our fashion items for an extra two bucks a unit. And it's well like, who delivers their fashion stuff in a wooden box? It's like, that would make our product look maybe $10-$30 more expensive and fancy. But it's only going cost me two dollars extra a unit? Well that sounds like a great upgrade; let's move forward with that one. If I'm going to do something where I'm going to spend $5,000 having the design or do fancy packaging, it's like I don't know if that's really going to add $5,000 worth of perceived value, so that's just what it really comes down to.

Kunle: Yep, yeah I absolutely agree with you. That will up the un-boxing experience, that's so important, if you think about it. If you think about it Apple and you think about Beats By Dre, and you just think about packaging: the packaging is so good that we keep the packaging sometimes.

Will: Yeah, I just got the new iPhone a couple weeks ago and I was cleaning up my room and I literally had to sit there for 45 seconds debating on if I was going to throw the box out or not. And then I ended up keeping it. [laughs]

Kunle: Yeah, they're so beautiful. They're so beautiful. And that just probably justifies the amount we spend on Apple products.

Will: Well yeah, you look at their profit and loss statement at the end of year. It's like, did Apple really spend too much money on packaging? I really doubt it.

Kunle: No. No no no. Okay, that's really good with regards to lean startups and the proof of concept. Those tests, they're really important. Okay. What about... are there any... I know you mentioned the fact that there are no rules and stuff like that but what if... Are there areas or niches or categories within Amazon you would not go for? Take for instance, furniture. Are you going to bring a container full the sofas, for instance, to the United States on FBA, well, I don't think you can do that on FBA anyway. But you know, are there any sort of no-go areas for you and do you specialize in specific categories?

Will: No, I would source couches if I found a good deal on them. If I found I had someone who's selling them for 1,000 bucks on Amazon and I can get them for 200, it's worth the price because it's nice when you sell maybe one unit a day but each unit makes you 300 bucks, it's a pretty sweet product that's making you ninety grand a year. So that's something I actually would to. Stuff I stay away from is basically a lot of the stuff like the different courses try to get you to sell because it's kind of simpler stuff, so anything that's like a kitchen accessory, anything that's a pet accessory, anything that's a workout accessory, I just stay away from because those are just so oversaturated. And then from there, anything that's just like heavy electronics I usually try to stay away from because it's just going to be a pain in the butt later on, so like a private label tablet or something like that would just be like my worst nightmare.

Kunle: That makes sense. What about electronics in general, would you go for electronics given the warrantee and how things can actually break in electronics?

Will: Yeah, for me the rule of thumb is I don't like to do much more electronics than like an on and off switch.

Kunle: Okay. All right, and so a headphone should be...

Will: Yeah, so something like that. But it's like every once in a while you see something that's like, 'Oh that's not bad, that seems like it has an on-off switch,' and then like, the on and off switch is built into like an LED screen on it. And it's like, 'I do want to deal with an LED screen. What if I get them here and all the instructions are in Chinese or something like that you know.' It's just like, all these weird… or yeah like, I've heard of people getting electronics and they like to ask and they came with Chinese outlets instead of US outlets for power.

Kunle: Wow. Oh dear.

Will: And so just dumb stuff like that, it's like, aw, that'd just be so annoying, it's like I'd rather sell my granite drink coasters that nothing can go wrong.

Kunle: Yeah, and I suppose for some Amazon businesses that, multi-million Amazon businesses I'm aware of, they have one partner or one buyer in China, basically. And that person is with the container the moment it leaves, and seeing every single thing is to spec. You can't just leave it to third parties, if that makes sense. Those guys sell electronics. Okay. Let's talk about how...I know you talked about the fact that you don't really need much to start an Amazon business. But what if my target realistically was to build a seven-figure Amazon business within a reasonable period of time. How much capital which you suggest is invested in the company today, given applying the lean methodology and the mindset to the business. So if for instance, the business wants to be seven-figure business in the next 15 or 24 months, the next one to two years, how much should they invest into Amazon today?

Will: Well, it's the kind of thing for sure which is kind of a copout of an answer, but the more capital you have obviously the faster you can do it. If you had $1 million in capital right now, you could do $1 million in revenue within the next three months. Kind of thing, so just think of it the way to think of it in a conservative mode would, say you're doing a 20% margin after everything, you reinvest every dollar and then imagine you're flipping your inventory every 90 days, all of it. And so you say start with $200,000, you go and sell that, you get $240,000 back in the next three months and then you do compounding the next three months, you do that $240,000 again, that makes you an extra $48,000, so now you're at 260 and you're six months, kind of thing. And you could keep compounding it. So it's like maybe take you, if you start with say like $300,000 you could be doing $1 million a year easily by like 24 months in.

Kunle: Gotcha, gotcha. You're looking at it at a 90-day flip-around. Okay, that makes sense. That makes sense. Right. Let's talk about tools. I know you're not into training and guru-speak, so to speak, but what tools do you use to run your Amazon business?

Will: So I use Xero for accounting.

Kunle: Okay.

Will: And that's in conjunction with a software called StitchLabs.

Kunle: Yeah, I knw StitchLabs, yeah.

Will: And so StitchLabs. And that kind of does our accounting and inventory management and all that kind of stuff. And then from there, currently I have a meeting with someone to set up our feedback software. We're running like some I think FeedbackFive or something like that right now but we're getting away from them and then we're going to go to a more robust system now that we got some traction. And so where the automatic feedback software is pretty legit. And then from there, no other real software. We just need our accounting, our inventory, and to make sure that we're contacting customers to get reviews and that kind of thing. But besides that I don't use any software to do product research or anything like that.

Kunle: Wow. That's lean, and it's quite impressive. Okay, right. So you run a website called FBA Experts and you also run a mastermind. Could you shed some more light on both of them, please?

Will: Yeah, well FBA Expert, it's kind of this sorry excuse for a blog, it doesn't have that many posts. But it's mostly just there is kind of an SEO placeholder so when people are looking for FBA experts, Amazon experts, Amazon consultants on Google, I show up, so that's kind of just a lead generation type of thing for consulting jobs. But the Mastermind is, it's $20 a month and it's majority of people are doing at least $10,000 a month in sales, and there's a great community of people who are serious and taking...doing Amazon full-time and actually like not asking a bunch of beginner questions and asking more strategy-based questions.

Kunle: Okay, and do you run a weekly meeting or weekly action?

Will: No, it's more of a private forum than a mastermind, actually. It's FBAMastermind.com but it's more of a private forum where people can just talk and discuss within there a little bit more privately.

Kunle: Okay.

Will: But we just launched actually, my brother and I and my business partner, just launched AMZHelp.com. Where it's going to be a kind of like consulting service where you get unlimited email support for flat rate, monthly rate. Because it's the kind of thing where I'm just lately just getting flooded with emails and so I needed a better way to organize them and help people out in a more organized, systemized way.

Kunle: Okay, that makes sense all right, I will link to both of sites from our show notes. Okay. Just off the grid here, what are your thoughts on Amazon in the future? Do you think Amazon will be kind of like a shopfront for manufacturers rather than middlemen? What are your thoughts on Alibaba coming to the states directly? One of our guests actually said, I don't know whether it's true or not, that Alibaba is building out warehouses all over the states. So I just want to know your thoughts and what you think the future of Amazon has in stake for us?

Will: Well yeah, I've talk to people from different sourcing companies over in China and Amazon's sourcing more and more themselves too, and private labeling themselves. And also, Amazon's just starting from the top of the list working down with Amazon sellers and different brands, sourcing and selling everything themselves. So I think maybe like 7-10 years from now, Amazon just sells everything themselves. The strategy was to get as many sellers as possible on Amazon and make it as easy as possible for them to get on Amazon so they could have every SKU possible and not have to pay for the inventory of it. And then now that they have all of the SKUs in the world on Amazon, they can just use their sales data that I have and no one else has to just source the top-selling stuff with the highest margins. And yeah, I could see someone like Alibaba coming in here but honestly, I was just over in China for a month, I'm not worried about them. They can't market worth anything. It's just embarrassing. Everyone sells the same junk, everyone just copies each other, no one has an original idea. And so it's like yeah, one person's going to come up with a semi-decent product and then it's going to be, within a year, everyone's going to make in China for 10% of the price. And so those are just the kind of things I just wouldn't compete with and I just don't worry about because I sell stuff that's kind of a little bit more trendier, a little bit more hipster, a little bit more cutting edge kind of stuff. And it just really comes down to, the future is, for all Amazon sellers, is eventually you're going to have to design and make your own product. Not just private label and throw your brand name on it. You're going to have to actually make something from scratch, and make a propriety product that you're going to sell. Because that's the only way you're going to be able to protect yourself against other Amazon sellers and against Ali Baba coming in and just like cutthroat prices, is that you're going to actually have to build your own brand and build your own product from scratch. And then that way you're going to have real protection and real barriers to entry.

Kunle: Which is the ethos of crowdsourcing, crowdfunding, sorry. You know like Kickstarter and Indiegogo and the rest of them. It's very a very interesting perspective. Okay, yeah, is there anything I haven't covered, or is there anything you want to say around to our audience quite keen to learn more about FBA and Amazon selling that we haven't covered yet?

Will: Nope, not really. Yeah, tweet me at WTJERN if you guys have any other Amazon questions but besides that, no, I think we've covered almost everything.

Kunle: Okay. What are your plans? What are your future plans? Now that you're on your own with a cofounder, you're doing very decent monthly turnover from Amazon. What are your plans?

Will: Maybe do a Kickstarter in the future and see how that goes. But besides that, I honestly have no preference to Amazon. I have no feelings toward Amazon or anything. I'm just going where the money’s at and so I'm just constantly going to keep my eyes open for what's the next big thing and then try to get there before everyone else.

Kunle: Good stuff. Good stuff. Okay I'm just going to throw you a curveball question here. What has been your best mistake to date? And what I mean basically is a setback that's given you the biggest feedback, so kind of like a lean kind of learning more or less.

Will: That's a good question. It's hard for me to answer because if you look at as a whole, I've had, in my business life I've had nothing major-bad happen to me and I've never had any trips or falls, and it's more a collection of a million little things wrong happening to me every day that I'm just slowly working towards. And so the main thing I can pull away from it is that, just like, nothing is the end of the world, you're going to live. And so I deal with these people all the time where it's like something goes wrong where, 'Hey, my suppliers says I have the wrong paperwork! What do I do? Blah blah blah blah blah! I don't know what to do!' And it's the kind of thing where I've had the wrong supplier, I've had the wrong paperwork - 75 times now in my life.

Kunle: Wow.

Will: And so it's like, okay well, I don't know. You just start working to fix it. Figure out the problem and fix it, kind of thing. There is nothing you can say and so it's like, what I've really learned after all my mistakes is, and like they're all just little micro mistakes, is be as clear as possible with your Chinese supplier and don't let the little stuff stress you out because you're going to just be stressed out constantly because there's constantly going to be little problems going wrong with your business and the key is just to kind of figure out which ones are actually serious and which ones you should worry about.

Kunle: That's a very, very good point, on that clarity. Because you know at the end of the day it's a physical product. Imagine if they cough up on a typo on the packaging or your brand and they produce 1000 or 3000 of it, how do you manage that you know I mean? That in itself is really important. So clarity is important. And another point I just took from there, from what just said, was the fact that you've made micro-mistakes. So you've not really done anything huge. That's not to say you've not had any accomplishments, but you've just taken small steps and those mistakes haven't been...the ramnifications of stuff going wrong has been minimal. So you've been minimizing your risk, mitigating your risk inaudible. I don't know if you read, there is a philosopher called, I say philosopher, he was a thinker called Taleb, I can't quite remember his full name now but...

Will: Nassim?

Kunle: Nassim, yeah. With the black swan event. And he was just talking about small mistakes rather than going for a really big bang mistake. Okay, right. So what would be your parting piece of advice to e-tailers keen on rapidly growing or getting into Amazon?

Will: Don't do too much research. Don't do too much reading. You're just going to stress yourself out and think about a bunch of problems before they even happen to you. Just pull the trigger and learn by experience.

Kunle: Good stuff, good stuff. And would you recommend any books or resources that have had the highest impact on building your business?

Will: Not really, honestly. It's one of those things where again it's just a collection of me trying to listen to every podcast I can, read every book I can, and it all kind of just adds up to one big whole. There's not really one anything that's really been earth shattering for me.

Kunle: What are your two favorite podcasts you listen to? You don't have to mention mine. [laughs]

Will: I really like The tropical MBA Podcast.

Kunle: Okay.

Will: It's very just kind of normal business advice, it's not super flashy or anything like that. And I also like This Week In Startups. It has nothing to do with Amazon but it's just nice to constantly have the newest and coolest startups constantly on there and it just kind keeps me in the loop and know where the world's kind of going as a trend.

Kunle: Two good choices. One is more in the now and the other is very practical in the business. Right, finally, I know you did mention your Twitter handle. You know for listeners who would want to reach out to you and find out more about what you do, what is the best way to reach out to you?

Will: Yeah, you can tweet me. WTJERN is my twitter. Or you just email me, it's my full name William Tjernlund (at) gmail (dot) com, if you guys have any questions let me know.

Kunle: Okay, I will link to all that in the show notes. It's been an absolute pleasure having you on the show, Will. Thank you for sharing your insights on Amazon. And best of luck going forward and well done on your progress, on your successes so far. Cheers.

Will: Sounds good. Thanks for having me.

Kunle: Thank you for sticking 2Xers for sticking to the very end of today's episode and I hope you've found Will's story about Amazon from a lean startup methodology helpful and inspiring. To download the show notes and to read the full transcript, head over to 2X eCommerce.com about a week from when this is released. And as I said earlier in this show, I'm thinking about setting up a Facebook Group. If you think it's a good idea, hook me up on Twitter, just say 'good idea', give me a thumbs up and say that would be fantastic idea to connect to other 2Xers, other enthusiasts in e-commerce in general. Just give me a thumbs up on twitter, my handle on twitter is KunleTCampbell. I know it's a mouthful but it's Kunle Campbell, just search for me on Google, 'Kunle Campbell' and my Twitter will be number one or two. Just hook me up on twitter, give me a shout out, tell me it would be a good idea. I'll be open to more ideas anyway. I would love to hear from you guys. Also be sure to sign up to the email alert up in 2XeCommerce.com so any time shows come out or there are any webinars, you'd be the first to hear, basically. And you'd get guides and tips and stuff like I write on the internet and just interesting stuff in regards to growing your store. Because that's most important to me. Anyway, till the next show, have a fantastic one and have a terrific week. Bye-bye.

[End clip] Thanks for listening to this episode of 2X eCommerce. To help you get more actionable insights and eCommerce growth hacks that will help you 2X your online retail business, hop over to 2xeCommerce.com

It’s a blog dedicated to eCommerce and multichannel marketing run by the show’s host, Kunle Campbell. 2XeCommerce.com is packed full of articles and guides to help increase traffic to your store, increase repeat purchases and average order value.

Thanks for listening. Visit 2XeCommerce.com

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About the host:

Kunle Campbell

An ecommerce advisor to ambitious, agile online retailers and funded ecommerce startups seeking exponentially sales growth through scalable customer acquisition, retention, conversion optimisation, product/market fit optimisation and customer referrals.

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