Podcast

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

EPISODE 53 69 mins

How to Rapidly Grow an Amazon Private Label Business 6X in 12 months w/ Andrew Tjernlund



About the guests

Andrew Tjernlund

Kunle Campbell

Andrew began his first importing business in 2005 at 19. Graduating with "High Distinction" in 2 majors from the Carlson School at 20, Andrew now owns and operates four businesses related to manufacturing, importing, private labeling, wholesale distribution, retail sales and third party marketplaces. His lifetime sales on Ebay and Amazon are EACH in the 8 figures and he now also sells directly to Amazon from which a six figure order is a weekly event. Now 30, he lives in Hidden Hills Preserve with his wife and two young children.



On today’s 2X eCommerce Podcast Show I interview Amazon seller Andrew Tjernlund, who has grown his Amazon business from $350,000 in Year 1 to $1.2 million in Year 2, through to an expected $8 million in this financial year, in Year 3. He has several thousand SKUs, is adding another 10,000 products in the next month, and was approached by Amazon to sell one of his (obviously very successful) brands directly to them, which he now does. Now if the name Tjernlund sounds familiar to you, it might be due to the fact that we interviewed Andrew’s brother, Will Tjernlund, on episode 49, also an Amazon expert. While his brother spoke in particular about how to build a lean, location-independent style of Amazon business, Andrew speaks to us about strategies for scaling and expansion of an Amazon business right through to the point of selling to Amazon itself.

Andrew really delivers here, with a cohesive package of clear and powerful strategies for how to risk-manage your capital so that it grows steadily – for sure, how to scale your business by choosing a supplier with whom you can expand in to, and how to go about choosing the right products to sell in the first place – by starting with the supplier. Apart from these fundamentals for growth and scaling, we also have gems from Andrew on how to manage our stock, optimize our prices, and get the edge on keyword searches, and so much more. And finally, we address the on-going thread regarding the future of Amazon…do we have a conclusive answer? Find it all out by listening, 2Xers, because this episode is jam-packed with expert Amazon advice and strong business sense for how to scale and expand your company.

Key Points in Scaling For Amazon Success

1. Expansion of Sales On Amazon:

  • Expand sales while also mitigating risks: I basically focused on not just expanding my breadth of products, but really my breadth of products within each supplier so that I can become a big fish to them. I can dictate my own terms and, by the way when I’m doing that, my cost per unit to get from point A to point B, from China to here or from my supplier in the US to Amazon… and then all that savings is money in my pocket.
  • Capital is definitely important : You have to grow into it. If you’re starting with $500 it’s going to be a long grind to get to $1 million.

Choosing Stock to Sell:

  1. Sell what you know: Not only does it make it easier to work with suppliers where you can kind of more quickly scan through what makes sense, what is new and exciting and what is kind of silly and a waste of money. But also you’re able to buy just a little bit more smartly. You know that you know I should be buying a little more blue than I should be buying red, and not just the same quantity all the way across.
  1. Choose products that you can liquidate if things don’t work out: You have to be buying right so that if you need to liquidate, you can in a fashion that is doesn’t leave you in a disastrous situation where you lost 90% of your capital. If things don’t work out but you can still retain 80% of the capital you invested, then you can live to fight another day. One of my first items was ping-pong paddles: it is just wood, foam, and rubber and that’s all it needs to work. And I knew that if I had 2,500 paddles landed here at an average price point of $2 apiece, there is no way I couldn’t liquidate them for $4.99 apiece or $5.99 apiece. But electronic products don’t make sense, because if a watch doesn’t work, it doesn’t work. And not everything I sell is private label as that has more risk of becoming dead stock.

I have them quote me a certain thing but have them actually send me their entire catalog which may not be in Alibaba.

  1. Start with the supplier: Most people go on Amazon and search for the best selling products and then try to source something similar to it and then resell it. I do the total opposite. I go to Alibaba first and try to find really good deals on stuff and then go see if someone’s offering it on Amazon. I search through catalogs: I have them quote me a certain thing but have them actually send me their entire catalog which may not be in Alibaba or Global Sources and see if there’s anything new or interesting that I like. I’d rather go and find a supplier that I can grow within to expand my catalog and grow by expanding the number of SKUs rather than finding one thing, that one basket that I’m going to put all my eggs in and then hope that works out. It sets you up for failure more often than it sets you up for success.

Optimizing Pricing and Keyword Search:

  • I try to take an item and twist or pivot it to something brand-new. If it’s truly unique then you have real pricing power. But I should also add that lot of my sales are not always private-label. I will sell the existing products from a legitimate experienced supplier, and then based on what I sell of theirs I will go and private label my own version of a similar product that they have. And so it’s a way of doing it so that when you search a certain keyword for my product, not only am I selling the top brand that’s been selling for a long time, but I’m also selling the private label brand that I’m offering. And I have all 10 of the 10 results that show up on Amazon. So if you’re going to buy on first page, you’re buying it from me.

Managing Expansion:

  • I’ve been expanding my catalogue because I offer a manufacturer’s entire line. It’s a total long tail approach. Many items I sell sell once every three months and if I have an item that sells five times a day, it’s a very good item for me. With this approach it’s especially important that you sell relatively high ticket items. My average item is $100 US dollars. Many, many items I sell are thousands of dollars per unit and so that helps make it more manageable. I’m not managing several thousand products that sells several hundred units per day

Selling to Amazon:

  1. Amazon did contact me to sell a certain brand of mine. That’s typically how they identify products, by brand. If you sell a lot on Amazon but you have it under 30 different brands because they’re totally unrelated products, that’s great but Amazon doesn’t identify that as a cohesive brand. And it takes, if not hundreds of thousands, millions of dollars of sales for them to contact you.
  1. For certain items in competitive industries, when keywords are very competitive, selling items specifically to Amazon makes a lot of sense. Since within the last few months you can go to VendorCentral.Amazon.com and apply to be able to sell to Amazon.The whole point of that 90% plus of all sales go through the Buy Box. And of course Amazon gives themselves the leg up as far as winning the Buy Box. Not only do they promote it on Amazon, but they promote it on the Internet at large and then they also win the Buy Box a bunch of times It’s a big advantage if you want to move products in a competitive industry. But if you sell something very, very odd, then you’re probably fine. You can win the Buy Box, you can show up well in search rankings without selling to Amazon.
  1. If you get to the point where you are selling to Amazon, you have it made the shade. Because Amazon is an awesome company to deal with. They are like every big box retailer without all of the chargebacks and annoying procedures. I mean they have their own kind of neuroses, for lack of better term, but they are really awesome. I have a real person to talk to when I need to and I have automation when I don’t need to talk to a real person.

2: Managing Your Capital For Growth:

  • The Hard Talk: The key is to preserve your capital. And it seems obvious but the key thing to emphasize is limit your losses. If you only have $2000 to invest in inventory and things like that, it is that much more crucial that you are prudent about taking care of your capital. Do not try to chase the home runs. Chase what will make you money for sure. And do that and go from 2000 to 3000. Go from 3000 to 5000. 5000 to 6000. 6000 to 8000.

How Much Capital It Takes To Grow a $1 million Amazon business in 18 months :

  1. The Process: I want to turn inventory once every two months. And I want to make 20% profit margin on each one. And that’s minimum. If I can make 30 of 40, which is very doable, I would do that. But I have to make 20%. And that includes returns, defects, things like that.
  1. Non-Linear Growth:To get to a million in sales in 18 months I would probably need 200 grand. But if you gave me you know 24 months, if you gave me 36 months, all of a sudden we’re dropping drastically, we’re dropping to, all right 20 grand, you know after 36 months. Or 50 grand for 30 months and you can expand out from there, the growth is not always linear. Once you grow within as such an supplier, not only might you get better pricing, but you also might get into where you’re logistics are better.
  • Tip To Not Lose Money: Do not overlook domestic suppliers. You want to look for companies that you can eventually become a big fish with. And those are companies between probably like $2 million and $20 million in revenue. You get their pricelist by asking them in a ‘carry a big stick’ way and if you take a $5000 order at a $20 million company, they are going to bow down and fan you with palm leaves. And there’s no customs baloney. There’s no shipping across the ocean baloney. I mean all of a sudden it can be very, very simple to make a 20% return and it’s honestly so easy that it seems like it’s like it’s malfeasant. There are opportunities out there that’s all domestic suppliers.

3: Growing With Amazon:

  • Regarding the Future of Amazon Private Labelling And Selling their own Products: I think to offer in quantity all the products that they offer, it would take such a substantial amount of capital that it’s just unrealistic. And plus the logistical nightmare of actually trying to do that. You know 20 years from now, yes. Are you better off being either a manufacturer a.k.a. private-label person a.k.a. brand owner? Yes. That’s what’s going to be key, being a private label owner or the brand owner. What I’m doing now with some of my US domestic distributors, that’s got a shelf life: certain brands are going to turn over and start selling directly to Amazon. I think that that’s a long way off though. There’s just way too much going on with Amazon’s focus on Amazon’s web services and all these other expansions of business.
  • Amazon’s Wave: I think we are we’re not at the crest, I mean we still have a long ways to go whether it’s going to be millions and millions of Prime Users added, millions and millions of new markets added; they’ll probably integrate that. You know, they make it very easy for sellers to be able to sell, you know, they’ll do all the work basically. And so I’m not ready to cash out on Amazon, so to speak. I expect several more years of growth that is attributable a lot to Amazon’s growth in general. From the selling on Amazon standpoint, our main thing is to just ride the wave of Amazon.

Four Rules for Amazon Success:

  1. The key measure for Amazon is 18 x 14 x 8 inches. If an item’s largest dimension is over 18, or middle dimension is over 14, or smallest dimension is over 9, that item becomes oversize versus standard. That is a key thing to consider when you’re offering product because all of a sudden the pick-and-pack fees goes from $1 to $4 dollars. Especially if you’re in a low-revenue thing where you’re selling something for $19.99 instead of $199, that becomes a big factor.
  1. Stick with what you know. You’re going to be able to just search that much more efficiently. And if all it is a search on Alibaba or Global Sources more efficiently, your time is better used there. Remember, you only have a limited number of hours in the day, especially if you’re doing this as an add-on to what else you might do for a living.
  1. Do a scenario analysis. Take your best case, realistic case, and the worst case scenario of what you sell it for. Use an FBA calculator, and figure out what all your related costs are and where they would be at different things. Your fulfillment costs, all that kind of stuff, what’s the worst case, medium case, and best case. If your worst case is that you spend $2000 and you end up with $1800, that’s a winner. Because you cannot realistically lose much. So make sure that you’re taking account of that and you’re being very conservative with how you’re doing that.
  1. Choose a Supplier you can Grow Into: Instead of going with whoever’s lowest-priced for whatever product you’re looking for, find someone that has a good price for that product and then see what you can grow within that supplier because expanding your catalog is the key to sales. Otherwise you’re risking your entire business on one or two or five products. And if those things get eaten up by other people, you’re in a rough spot. If you can diversify over hundreds of products, let those five get taken up by someone else where your margin is not very good anymore. You still have 95 that you’re making money on.

5: Parting Advice:

Tools:

  1. So for feedback, I use FeedbackFive. And that helps with winning the Buy Box.
  1. From that same company, I also use RestockPro, which helps me keep track of my inventory and helps me reorder from my multitude of suppliers, notifying me when I need to.
  1. I use Feedvisor which is a very expensive but very nice repricing tool. Appeagle I used to use and unless you’re selling millions and millions of dollars, Appeagle is a very good choice.
  1. UpWork’s great for taking care of menial tasks.

Seek Expert Advice.

There’s a bunch of different platforms out there. There’s Facebook groups, which can be really, really resourceful and they’re inexpensive a.k.a. free. I’ve seen paid ones before. They can be great and they can be help if you’re at the level where you’re selling $10,000 a month or something like that so you can really get into some nitty-gritty. Otherwise I’m directly involved with

AMZhelp.com. The long and short is for $500 a month you get access to several different experts to have your questions answered by. We can take you from the very beginning all the way through and can handle not just Amazon questions but business questions. Which can be very useful for a wide range of people, from people at enterprise to just starting off, so that whatever you’re doing, you’re doing as smartly as you possibly can

  • Go out and sell. Sell it – that’s the best way to prove whether it will sell or not, by actually selling or not. Don’t get too academic; don’t get too paralyzed by details. And just go out and start grinding away. And you’re going to start selling stuff and you’re going to learn stuff and that’s the best way of doing this. So forget the library, get on Amazon and start listing product and that’s the best lesson.

Key Takeaways

(04:11) Introducing Andrew Tjernlund

(08:03) Expansion of Sales on Amazon

(30:56) Managing Your Capital For Growth

(18:07) Growing With Amazon

(43:02) Parting Advice

Transcript

“I offer a manufacturer’s entire line. It’s a total long-tail approach.” (Andrew 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.

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Kunle: I asked for feedback on iTunes and I did receive one. I got a feedback from Max last week and he said, “I listen to every one that Kunle does. Very insightful. Great content. Highly recommended if you own, work, or run an e-commerce site. Max I appreciate your feedback. Now to everyone listening, if you listen to 2X eCommerce Podcast or this is your first episode, or you enjoy this show, you’re a regular, and have any feedback of any sort, just feel free to drop feedback or a review on iTunes. I would appreciate it as it helps a ton with not only our exposure, but our rankings and eventual downloads. It’s important to me because I get feedback on the value I endeavor to deliver in these shows I publish, these episodes I publish. So just go ahead and leave me a feedback or a review on iTunes. It would take under a minute. Okay, so back to the show.

Hello 2Xers. Welcome to the 2X eCommerce Podcast Show and I’m your host, Kunle Cambell. This is the stop, you stopped here for an hour, you stop here for 30 minutes, if you want to get vitamins for growth. Now, growth in e-commerce. I assume you are involved in some way, shape, or form in e-commerce. That’s why you’re listening to this show. And what you get from the show, really, is growth. I’m very much involved and interested in market growth and sales growth. How you’re going to grow your brand, your e-commerce businesses, and sales as a result. And I not only cover normal e-commerce businesses, that’s e-commerce businesses on their own websites, I also cover marketplace e-commerce businesses, so Amazon, eBay-like e-commerce businesses. Now if you recall on episode 49, speaking of marketplace businesses and Amazon businesses, I had Will Tjernlund on the show to talk about the lean way of starting and growing a Fulfilled By Amazon private label e-commerce product business. You’ll recall that Will worked with his brother, Andrew, for two years where they both managed to scale an Amazon business from $350,000 in Year 1 to $1.2 million in Year 2, through to an expected $8 million in this financial year, in Year 3. Now Will went on to travel and to discover Life and he as a result has set up a lean Amazon business. And we talked about his approach to building out a lean, location independent Amazon business which was very, very interesting, on episode 49. Well on today’s show we’re going to be talking about scale, about the specifics of this bigger business, the bigger business Andrew runs and manages. And at this scale, he’s going to talk about the capital requirements, the discipline required to effectively manage stock, it’s just jam-packed with a lot of info. It’s an hour-long conversation and we’re going to cover a lot. We’ll talk about how to also select the right manufacturing partners domestically or from China. And if you want to know what it means to grow an Amazon business from a 6-figure to and near 8-figure business, grab your notebooks and pens and be prepared to take notes in this episode. He delivers on this one. So without further ado I would like to introduce Andrew Tjernlund. Welcome to the show, Andrew. Could you take about 30 seconds to a minute to introduce yourself to listeners, please?

Andrew: Excellent. I will definitely do that. My name is Andrew Tjernlund. I am an Amazon seller. I own a few different Amazon related companies, but my main company sells products on Amazon, as well as to Amazon. I’ve been doing that as a main focus of that business for about three years, but I’ve been selling online through Amazon, eBay, and related channels for about 10 years. And so we hope to do around probably $8 million in 2015, and probably closer to $10-$14 million in 2016. So things have been growing and growing quickly and we’ve had a lot of fun doing it.

Kunle: That’s very interesting. So you said you’ve been around for about three years. First year you were in business, in Amazon, sorry, in the context of Amazon for our listeners, that’s what this episode’s really going to cover, we’re going to dig right deep into your Amazon business. So your first year, what did you do and what we’re you selling on Amazon?

Andrew: So we had access to products from previous channels or other channels but we just stuck with a handful to start, kind of the bestsellers, so to speak. And we probably did about $350,000 in that first year. We didn’t focus a lot on it. And then following that we were able to grow that substantially, and then substantially again.

Kunle: So Year 2 was, what kind of revenues did you do in Year 2 from $350K in the first year?

Andrew: I would guess, you know, $1.5 million, $1.75million, something like that. It kind of all runs together now but somewhere in that range.

Kunle: Right. And this year you are expected to do about $8 million in revenue. So that’s just phenomenal growth, this is 5 or 6X year on year.

Andrew: Absolutely. Yes, Amazon has been very good to us and we’ve been able to kind of just expand our product line to continue to grow by expansion of product line, versus relying much purely on selling more of the same units.

Kunle: Okay, let’s dig into expansion of product line. Sorry, let’s first of all talk about the products you sell. So what kind of products do you sell on Amazon? Is it confidential or are you happy to share it with the audience?

Andrew: I can… I do all sorts of products so there’s several. We do anything from… rather than name them all, I’ll just give you a wide range. We sell 3-D printing filament, knee scooters for people who need an alternative to crutches to get around, I sell fighting gloves for UFC-style fighting, I sell industrial mechanical equipment, I sell small little speed controls and circuit boards and a whole bunch of stuff in between. So there’s a really wide variety of what we offer right now.

Kunle: Talk about the breadth, in terms of 3-D printing filaments to through to fighting gloves. Okay so why did you focus on expansion of product lines as compared to trying to sell more volumes of your initial products?

Andrew: Sure. Well I think the best way to expand sales while also mitigating risks is to expand your line. And not only does expanding a line drive costs down by being able to be in a better negotiating position and a logistical position with your suppliers… that is a fancy way of saying: by ordering a bunch from a certain supplier they’ll give you better pricing, and by ordering a bunch at one time you can take advantage of the scale too, in order to lower your per unit costs to get from point A to point B. So I basically focused on not just expanding my breadth of products, but really my breadth of products within each supplier so that I can become a big fish to them. I can kind of dictate my own terms and, by the way when I’m doing that, my cost per unit to get from point A to point B, from China to here or from my supplier in the US to Amazon…whatever it is, that goes down drastically and then all that savings is money in my pocket.

Kunle: Yeah, that makes a whole lot of sense. But I see two challenges here. One is capital to expand the range. And the other is stock. You know dead stock. Just stock that, you know you’d have winners in many instances and you have losers. And depending on how you play it, it might affect margins from your projections. So what would you suggest to listeners who have that thought in their mind. Okay, they want to expand but they’re limited with capital. They don’t want too much stock lying around and they want to be on top of the numbers in regards to the profit margin.

Andrew: Sure. Well there’s a couple different things. One, you definitely have to grow into it. I will not lie that capital isn’t important…we’re in a capitalist market. Capital is definitely important and so if you’re starting with $500 it’s going to be a long grind to get to $1 million. That being said, none of our sales happen overnight, I mean it happened over months and then years, I would say. So there’s that aspect as far as just growing into where you can handle that much capital and that sort of thing. From a stock standpoint, part of it is, the things I tell people who are starting off is, 1). Sell what you know. Not only does it make it easier to work with suppliers where you can kind of more quickly scan through what makes sense, what is new and exciting and what is kind of silly and a waste of money. But also you’re able to buy just a little bit more smartly. You know that you know I should be buying a little more blue than I should be buying red, and not just the same quantity all the way across because you know that market somewhat well. The other thing is, the stuff that I started off selling were items that were already being sold by other sellers on Amazon. So I can tell by the number of reviews or other things that those things sell. So I start with the supplier’s top-selling items and then expand from there. Not everything that I sell is necessarily private label. If it’s that kind of thing, it is definitely more of a risk. So I mean you do have a chance of getting dead stock more with those but that’s why you have to be buying right so that if you need to liquidate, you can in a fashion that is doesn’t leave you in a disastrous situation where you lost 90% of your capital. If things don’t work out but you can still retain 80% of the capital you invested, then you can live to fight another day. So I know I’ve touched on a lot of topics there but that’s kind of the thought process.

Kunle: I kind of understand. I was actually going to get you on the show to talk about liquidation just due to the size of your company but I looked at your revenue, I said wait, hang on a minute, I think the listeners will be more appreciative if we talked about growth. So perhaps some other time in the future we could possibly schedule another call in for how to handle liquidation. So let’s go back to the sourcing from your suppliers. So would you just go all out in to purchase large quantities or do you kind of test, like almost have sample orders come in the tens or in the low hundreds and then when you start to see the performance on Amazon, you start to scale out and reorder more. And if you do that, what kind of delays from a shipping standpoint do you make plans for. How do you work out lead times? If you see, okay, you might be running out of stock on a high-performance item?

Andrew: So, let me actually kill two birds with one stone with your liquidation and your new product search methodology. Because honestly, the key thing that I use, or I used early on especially, and I’ll give an exact, a real-life example of what I was doing, is how well I was able to liquidate stuff. So my first major product that I still continue to sell and I’ve sold millions of dollars’ worth and continue to offer are ping-pong panels. All right, I’m not a ping-pong aficionado, I don’t know it really well so it’s not like I have some real passion for it, but at the end of the day a ping-pong paddle is a piece of wood, a piece of foam, and a piece of rubber. And there are ping-pong paddles regularly, if you such ‘ping-pong paddle’ on Amazon, you’ll see them anywhere from $120 and many, many in the $50 – $60 – $80 range.

Kunle: Wow.

Andrew: Now if you think about that, there’s a whole methodology of why that price is actually reasonable but I won’t get into that now. The long story short is a piece of wood, a piece of rubber, and a piece of foam is not going to cost any more from China than maybe $1.50 apiece. So what I can do is, I can buy them $1.50 and sell them potentially for a discount or low price at $49.99.

Kunle: That’s ridiculous.

Andrew: The beautiful thing about that particular item is that I knew that, and this was my first big lesson was probably buying about 2,500 paddles at a $1.50 a piece, it was only with shipping and inbound freight and ALL that kind of stuff, it was less than $5,000 so it wasn’t chump change but $5000 is not obscene, a lot of people can gather that together. And was 2,500 units – you wouldn’t necessarily have to buy that much. But my point being is that I knew that if I had 2,500 paddles landed here at an average price point of two dollars apiece, there is no way I couldn’t liquidate them for $4.99 apiece or $5.99 apiece. In the United States you can ship a paddle, which is about 8 ounces, first-class mail anywhere in the country for a 3-day service for less than three dollars. So if I’m two dollars in, and three dollars shipping, even if I have to fulfill it myself versus using fulfillment by Amazon which can do it for around the same price, I’m at a five dollar apiece, you know, I just have to get to five dollars and then I break even. Anything above that I’m making money. And even if I have to sell them for $3.99 apiece and lose a dollar per unit, I’m still holding onto a big chunk of my capital. And so with the liquidation thing, you can go big if you’re smart about it. Products that don’t make sense are A). Electronics. If you get a big junky thing… If a watch doesn’t work, it just doesn’t work. And it’s literally worthless. Where a ping-pong paddle, if I send that to a customer, if they open it up, even if they don’t like it for whatever reason, it’s still a ping-pong paddle. No one can deny that it is rubber, foam, and wood and that it doesn’t hit a ping-pong ball when in contact with it. And so it’s that kind of methodology that you can use, where you don’t chase the big fish, you don’t chase the million-dollar product at the get-go, you chase stuff that you almost certainly can at least break even on and if you make any money, that’s a bonus. And that’s a way of starting off to preserve your capital. You know, I don’t know the exact terminology, but the best way that a guy like Warren Buffett says is the best way to make money is to never lose money. And if you never lose money then all you can do is make money. And so that’s the way growing into that thing.

Kunle: Okay. So that leads me onto a question. And the question really also connects to another point you made earlier which is, you said you’d look at competitors and look at their fastest sellers. And so the question I have is how do you find these opportunities? This is five dollar cost landed perhaps, and then you’re selling almost 10 times the price at $45 or $50. So how do you find these opportunities on Amazon and then eventually that then leads to sourcing the items for from China or manufacturers in the US?

Andrew: So I guess maybe I maybe kind of misspoke or got ahead of myself. I guess I do everything backwards from what most people do. Most people go on Amazon and search for the best selling products and then try to source something similar to it and then resell it. I do the total opposite. I stick with stuff that I generally know and then I go to Alibaba first and try to find really good deals on stuff and then go see if someone’s offering it on Amazon. Or I search through people’s catalogs. I have them quote me a certain thing but have them actually send me their entire catalog which may not be in Alibaba or Global Sources and see if there’s anything new or interesting that I like. And then I try to figure out a way of selling it on Amazon. So I go to the supplier first and worry about the sales on Amazon later and don’t let the sales on Amazon drive the sourcing. I know it’s kind of backward for most people, but it works out for me because, especially if your private labeling, trying to enter intentionally a very, very competitive field doesn’t make sense to me. I’d rather go in and find a really good supplier, find a supplier that I can grow within to expand my catalog and grow by expanding the number of SKUs rather than finding one thing, that one basket that I’m going to put all my eggs in and then hope that works out. It sets you up for failure more often than it sets you up for success.

Kunle: All right, that makes sense, so you’re flipping it on its head, from what I’ve gathered from what you just said. You spend more time on Alibaba and on the supply side. And do you kind of bring new items to the market? Do you want to lead the market and nudge people away from top-selling products? So, say I sold Widget A and you source Widget B which does pretty much the same thing as Widget A but do you try and sway people away fromWidget A to Widget B on Amazon once you’ve sourced Widget B from Alibaba?

Andrew: Sort of, yeah. I try to take an item and twist or pivot it to something brand-new. And that’s the only way to get pricing power. If there is another competitor out there that that is just a different color or a slightly different shape or something like that you know, then people can very easily… they’re smart enough to directly compare the two prices and the values and then you’re beholden to them. Where if you have a unique item, it’s a totally different story and it doesn’t really have to be extremely unique to fake a phrase that doesn’t make sense, but if it’s truly unique then you have real pricing power. The other thing that I should add is a lot of my sales, not to misrepresent myself, are not always private-label. They are existing products and what I’ll do is I will sell the existing products from a legitimate or experienced or whatever term you want to use, a supplier, and then based on what I sell of theirs I will go and private label my own version of a similar product that they have. And so it’s a way of doing it so that when you search a certain keyword for my product, not only am I selling the top brand that’s been selling for a long time, but I’m also selling the private label brand that I’m offering. And I have all 10 of the 10 results that show up on Amazon. So if you’re going to buy on first page, you’re buying it from me.

Kunle: Yeah, that just reduces the word. Okay that makes a lot of sense massive sense, that makes a lot of sense. So you fight for the Buy Box for the generic listings where there are other suppliers and then you also own your brand and that’s how you control all of the positions on search results. Okay, that makes a lot of sense. So how many products do you currently sell on Amazon? When you open up use Amazon Central account, how many products, how many SKUs are listed on there?

Andrew: Several thousand. It’s a nightmare. I don’t even know what it is but we’ll probably be selling… I’m hiring two people in the next week to basically help expand my catalog and I expect to expand 10,000 more products in the next month.

Kunle: Okay. So this is, you’re going in, you’re going right in.

Andrew: Yes, yes I am. Not all of those will sell, by the way. I’ve been expanding them because I offer a manufacturer’s entire line. It’s a total long tail approach. And so I’m more than happy… many, many items I sell sell once every three months and if I have an item that sells five times a day, it’s a very good item for me. A couple things I want to make clear is this approach it’s especially important that you sell relatively high ticket items. My average item is $100 US dollars.

Kunle: Your average order value is US$100?

Andrew: Correct, correct. And that’s per item, not per sale. So my per sale is more significant than that. And I do have a lot of inexpensive items that bring that down. Many, many items I sell are thousands of dollars per unit and so that helps make it more manageable. I’m not managing several thousand products that sells several hundred units per day. I’m doing several thousand products that, you know total I might sell only 200 or 300 units per day total but that equates to tens of thousands of dollars.

Kunle: Okay, okay. Let’s dig a little deeper here. So 2015, you’re expecting revenues about $8 million. If you then look at the stock that you have in your warehouse, how much stock do you have as compared to $8 million?

Andrew: I have about two months of inventory which means I have about $1.6 million. So two months of inventory seems like I’m actually turning it pretty quickly, $1.6 million means I seem like a crazy man. So that’s kind of where I’m at and that’s where I mentioned you know, capital is is important. I mean at some point if you want to grow, you have to have the money to be able to make it grow and hopefully you can grow into and we’ve been fortunate enough to be able to do that. But I mean there’s a lot of money I have sitting at Amazon and I’m paying a lot of storage fees so it’s not all sunshine and roses, but I mean were making it work.

Kunle: No doubt. But the thing is it’s strategy first. You can give many human beings $350,000 and they would not turn it into $1.5 million. And neither can you give $1.5 million to several other human beings and they turn it into $8 million so you’ve done a really good job here in three years. So I wanted to ask more or less about your strategy going forward. Before this call we talked about the fact that you’re moving into selling directly to Amazon. How does that compare to the retail play within Amazon and what kind of items? Did Amazon approach you first or did you sort of go through a program to get on to Amazon?

Andrew: So Amazon did contact me to sell a certain brand of mine. That’s typically how they identify products, by brand, so if you have… if you are a really, really good seller and you sell a lot on Amazon but you have it under 30 different brands because they’re totally unrelated products, that’s great but Amazon doesn’t identify that as a cohesive brand. If you have all your products under one brand and you sell a lot, then they may contact you. And it takes, if not hundreds of thousands, millions of dollars of sales for them to contact you. However you can go to, and this is a new, this is within the last few months you can go to VendorCentral.Amazon.com and basically apply to be able to sell to Amazon. And so that’s relatively new. Before it was invitation only and now they’ve opened it up where you can apply. And I don’t know enough people to give you an idea of how much you need to sell for them to take you on. But the whole point of that is… let’s talk about the Buy Box. The Buy Box is the key to sales. Still 90% sales go through the Buy Box, or 90% plus, go through the Buy Box. And of course Amazon gives themselves the leg up as far as winning the Buy Box when they’re selling their own items. And so the natural thing to do is to, if you are able to, and it’s not the be-all and end-all so don’t get discouraged, but if you have the opportunity for certain items in competitive industries, is to sell items specifically to Amazon so that not only do they promote it on Amazon, but they promote it on the Internet at large and then they also win the Buy Box a bunch of times. And so there’s a big advantage if you want to move products in the competitive industry. If you sell iPod cases, you need to be selling to Amazon in order to make that work. But if you sell something very, very odd, then you’re probably fine. You can win the Buy Box, you can show up well in search rankings without selling to Amazon. But for some products, I need to be selling to Amazon to make it work, and for other products it’s less important. So there is that, you know it’s not the be-all end-all but for me and for certain products it just makes a lot of sense

Kunle: I see. So I guess the take away for the audience, really, is build a range of products and stack them onto a brand in a market that’s almost flipable in a sense. That’s packaged as a business which you could then wholesale to Amazon to do all the legwork really.

Andrew: Absolutely. And if you get to that point, you have it made the shade. Trust me. Because Amazon is an awesome company to deal with. They are like every big box retailer without all of the chargebacks and annoying procedures. I mean they have their own kind of neuroses, for lack of better term, but they are really awesome. I have a real person to talk to when I need to and I have automation when I don’t need to talk to a real person. So they’re really, really friendly in terms of that. And it just depends on your products. I mean, I don’t offer them every single product they sell, not even close, but ones where they can be helpful to me because they can get up get my items to show up better in search rankings. When keywords are very competitive, I sell to them. When it’s something obscure that I can control on my own, I don’t sell to them. And that’s kind of the long and short. So I get the best of both worlds.

Kunle:. And it’s that predictability where you know for sure there is a minimum order coming from one customer, which is Amazon, on a monthly basis. Your accountant must be very happy, your financial directors are very, very happy with regards to the forecast and the insights you can have from having them as a customer. Okay. I’m going to take a few steps back and talk more about cash and, more or less, capital. Has your growth… you said you started in 2005… has it all been self-financed or did you need to get external capital to fuel this growth?

Andrew: So, the company I started in 2005 is a separate entity than the one that I do most of my sales with now. So the one that was completely self capitalized and I had an initial investment of maybe $1200, that had sales as high as like $300,000 recently. So I mean it’s respectable for sure, and the margins were insane, so we’re making good money. This other company that does millions of dollars, I have outside backing. There’s just no way for me to realistically maintain $1.6 million in capital, it wouldn’t be prudent. I don’t even know if it would be feasible. Basically it would restrict my growth. And so bringing outside capital, just like any outside capital, it’s not meant to give up ownership willy-nilly to have a cash have a payday. The idea was to basically be able to expand much quicker. And so when I talk about adding 10,000 products in the next month, it is a realistic. I have the capital to be able to do that. Without it, I wouldn’t be able to grow as fast. Could I still grow to this point? Absolutely. But we would be talking, right now Kunle, in 2019, and not right now. And so it’s a back and forth. Not everybody is…you don’t need to make $14 million in sales to be able to make a decent living. So again, when I talk to people who are starting off or even very successful people that are selling on Amazon, it’s all about identifying your goals and where you’re trying to get to. If you’re trying to make a really good living where you are living high in the hog by all means and putting in a limited number of hours, you still don’t need to sell millions and millions of dollars. You could sell $1 million with a halfway decent margin and be killing it, trust me. But we’re trying to get beyond that, at this point.

Kunle: Okay. And is the capital equity or is it debt?

Andrew: Equity. Equity.

Kunle: Right. Okay.

Andrew: I sold my soul.

Kunle: You sold your soul. Okay, fair enough.

Andrew: Yeah, exactly.

Kunle: Yeah. [laughs] And do they have a say in your decisions or do you pretty much still have the say and they’re more or less ghost investors?

Andrew: They are very, very hands-off.

Kunle: Okay. That’s good.

Andrew: Every time a place a quarter million or $500,000 order, I give them the heads up out of courtesy, but I’ve never had them give more than a shrug and say, ‘Well, whatever you say.’ So I include them. They would be even more ghost-like if I didn’t have the common courtesy to say, ‘I’m going to spend half a million dollars of you’re money just so you know.’

Kunle: [laughs] Fair enough so everything is driven by you in terms of communication. Okay. Right, now. Tracking back to what you just said. You just made a very, very important point which is in regards to the listeners, the audience. Their situation would be most likely different from yours. Others may have a similar situation where they can get finances, so what you’ve just said is gold to those listeners. But for other listeners who do not necessarily have sources of funding and they have $1 million revenue in their mind, what steps from a capital standpoint will you suggest as an expert whose doing $8 million now? And not only that, from a process standpoint, how much would they need to start and how will they need to get there? And how long will they need?

Andrew: So the more capital you can muster, the better off you are. But let’s get back to the liquidation point that I talked about earlier. You are going to have home runs and you’re going to have swings and misses. And the key is to preserve your capital. So limit your losses, and take advantage of your gains. And it seems obvious but the key thing to emphasize is limit your losses. If you only have $2000 to invest in inventory and things like that, it is that much more crucial that you are prudent about taking care of your capital. I mean me, I could spend $500,000 and if we run into big issue, we’ll just move onto the next thing. It’s not that big a deal. But most people are not in that kind of situation. And if you only have $2,000, you need to be very prudent about how you handle that. So [inaudible [00:36:03] quit, or I shouldn’t say, I feel like I’m scolding. I’m sorry. I just hear too much of this. Do not try to chase the home runs. Chase what will make you money for sure. Or in any realistic case will make you money. And do that and go from 2000 to 3000. Go from 3000 to 5000. 5000 to 6000. 6000 to 8000. Do that, because you need the capital. Eventually you’ll have capital where you can risk it. But just like a stock market or anything like that, you need to be able to deal with risk capital and I’m going to tell you to try to pull an Icarus and fly too close to the sun. It’s not worth it. Until you can afford to do that, do not do that. So I don’t know, I feel like I’m admonishing at this point. Is my tone a little severe, Kunle?

Kunle: No, not at all.

Andrew: Okay, good.

Kunle: This is hard talk for people ambitious retailers really looking to grow, so if they need the talk, they need to be talked, they’ll know they have to. Anyway, my question has to do with the pace. So 2 to 3 thousand, 3 to 30 thousand or 10 thousand. How can they rinse their capital to, if that’s a metaphor… but how can they put their capital to work? What kind of velocity would they need to put in? First of all let’s talk start out with the capital. What’s a decent bit of capital? If someone wants to build a $1 million company through Amazon in 12 months or 18 months, how much capital would you suggest? If it was you, what would you need to start today? How much cash would you need today to grow a $1 million Amazon business in the next 18 months?

Andrew: Let me just do some quick math here. So I’ll walk you through my process here. I want to turn inventory once every two months. And I want to make 20% profit margin on each one. And that’s minimum. If I can make 30 of 40, which is very doable, I would do that. But I have to make 20%. And that includes returns, defects, things like that.

Kunle: Flying it, clearing, and all that kind of stuff.

Andrew: Yeah, so if I had…let me just see here. To do in 18 months I would probably need like 200 grand.

Kunle: Fair enough.

Andrew: To get to a million in sales. Realistically it’s going to take… but if you gave me you know 24 months, if you gave me 36 months, all of a sudden we’re dropping drastically, we’re dropping to, all right 20 grand, you know after 36 months. Or 50 grand for 30 months and you can expand out from there, you don’t have to…you might not have to, just like any kind of start up, you’re probably not going to go blow up right away. But if you do grow steadily, you grow smartly and you don’t lose money on your items or you lose a very, very little, that’s the whole key. And I can get into.. again, that’s where I get into… there’s a lot, once you grow to a certain point, one of the things…the growth is not always linear. Once you grow within as such an supplier, not only might you get better pricing, but you also might get into where you’re logistics are better. So the money you’re actually putting in your pocket grows just because you bought 2000 units instead of 1000 units. And you know it’s all the same to you, it’s four months of inventory versus two months of inventory. But you’re able to save 10% on that and now that all goes in your pocket. And that’s the kind of stuff that you really want to leverage, it’s the common sense stuff.

Kunle: Makes a load of sense. Okay, let’s talk about how not to lose money on Amazon because that’s been a recurring theme in your last three answers: don’t lose money. So what tips, if they’re just actionable 123 point tips do you have to listeners who run Amazon stores or are looking to run Amazon stores, not to lose money?

Andrew: Okay, the first one is, do not overlook domestic suppliers. And I don’t care if that’s Amazon.UK or Amazon.com. You want to look for companies that you can eventually become a big fish with. And those are companies between probably like $2 million and $20 million in revenue. If you come in there and even at a company at $20 million, if you come in with a $10,000 stocking order or $5000 stocking order because you’ve seen that items of theirs are selling, no one’s prying, you get their pricelist by asking them and in ‘carry a big stick’ way, and you see that there’s big margin there, if you take a $5000 order at a $20 million company, they are going to bow down and fan you with palm leaves. I mean there’s a lot of salespeople that would love that. And so they’re not going to ask questions about how you’re selling or anything like that and they’re going to give you a really good price and don’t overlook that. Because there’s no customs baloney. There’s no shipping across the ocean baloney, there’s no air freight from Taiwan. I mean all of a sudden it can be very, very simple to make a 20% return and it’s honestly so easy that it seems like it’s like it’s malfeasant or something like that. I mean I had a supplier recently that I just bought 96 units of theirs at $85 apiece. To test it out they made me commit to three units at $130 apiece, but they gave me one unit free. So my average price was like $90 per unit and I sent it into Amazon. All three units sold in the first few days and I just ordered 96 more. And anyway my total capital outlay was $270 and now I’m I expect going to be able to, expect to make… By the way, these units I’m buying for $85 apiece sell for $229 apiece. And so I expect to make over a $100 unit. I’ll make 10 grand probably in the first month of these units and I had to spend $270 to build a test that theory. I mean there are opportunities out there that’s all domestic suppliers.

Kunle: Okay. What are your thoughts on, this is paranoid Kunle speaking, now. Amazon is doing lots of private labeling themselves. What are your thoughts on the fact that they own all the data, they are like house in the context of a casino and then kind of, well, cannibalizing on stuff retailers are currently private labeling. Is that an option or do you think they’re just trying to build a platform, more or less, rather than being a product company?

Andrew: So, I think to offer in quantity all the products that they offer, it would take such a substantial amount of capital that it’s just unrealistic. I mean it would take the GDP of the entire world a hundred years over to be able to offer in stock the millions and millions of products that they offer. And plus the logistical nightmare of actually trying to do that. You know 20 years from now, yes. Are you better off being either a manufacturer a.k.a. private-label person a.k.a. brand owner? Yes. That’s what’s going to be key, being a private label owner or the brand owner. And you know these… kind of what I’m doing now with some of my US domestic distributors, that’s got a shelf life. I’m well aware of that certain brands are going to turn over and they’re going to start selling directly to Amazon or Amazon might take them over. I think that that’s a long way off though. For now, don’t worry about that happening in the next 18 months. There’s just way too much going on and with Amazon’s focus on Amazon’s web services and all these other expansions of business. I mean they are more than happy to let the marketplace be the cash cow for all these other things and, you know before you know it they’re in driverless cars too or they’re in music and you know, you don’t have to worry about it, so. They’re not going to kill the golden goose prematurely and if they do, you hopefully have made enough money where it’s no longer an issue or have your own brand where now Amazons begging you to be able to sell your private label brand to them because now they do that for everybody and you’ve got the chips on your side.

Kunle: Speaking of Amazon doing several things, Jeff Bezel’s just joined Twitter and his first tweet was about I think the Blue Origin rocket landing, it was finally successful. Yeah, they going to every single thing imaginable. Okay, now let’s talk about what you’re looking to get out of Amazon eventually. What’s the gain? Is there an exit ahead? Are you just taking profit now, have you sort of broken even? I know you’re profitable but what are you trying to, what’s your objective from you going all in now, really aggressively, with capital from Amazon?

Andrew: So very, very soon, so for 2016 we will be cash flow positive. We’ll turn enough inventory where we are taking in more cash than we’re putting out and finally our inventory isn’t going to be growing as substantially as our sales are and that’s partly with selling to Amazon. So I won’t focus too much on that because it’s not relevant to a lot of viewers or a lot of your audience but personally that’s where we’re trying to go. I would say from the selling on Amazon standpoint, our main thing is to just ride the wave of Amazon. I think we are just, we’re not at the crest, I mean we still have a long ways to go whether it’s going to be millions and millions of Prime Users added, millions and millions of new markets added; they’ll probably integrate that. You know just like, they make it very easy for good sellers to be able to, you know they’ll do all the work basically to take all your inventory and put it on to Amazon.ca or Amazon.mx or you know eventually Amazon.UK. And so I’m not ready to cash out on Amazon, so to speak. I expect several more years of growth that is attributable a lot to Amazon’s growth in general. And then once we get to that point, you know, we’ll see what happens. Maybe I can dump this whole thing on some smuck somewhere, I don’t know.

Kunle: I’m absolutely on the same page with you, I think we’ve got at least a decade ahead of us with Amazon, with Amazon’s dominance in retail in general. And especially in not just the States but in Europe. I’ve spoken to Germans and Amazon is the fastest growing online business in Germany at the moment. People think UK’s the biggest market in Europe, it’s actually Germany, currently

Andrew: Sure.

Kunle: Yeah there is a lot of scope. Okay let’s finally talk about rules. Do you have certain rules with regards to the weights, the kind of products you’d… I know you touch base on electronics, the fact that when they break down, they break down, they’re dead. And also the fact that technology changes almost every six months, right. And if you have something lying around in your warehouse for six months, it might not necessarily be relevant to the market because new technologies have eclipsed it. So do you have any rules for the audience as to what to touch and what not to touch. And more or less also kind of like, size. When you listen to other podcasts and you read so-called gurus they have some rules with regards to dimensions and weights of the kind products they sell on Amazon. So what kind of, what’s your philosophy, what kind of approach do you take running a business at this scale on the kind of products you stock in your store?

Andrew: So if people don’t know it, let me answer your second question first. The key measure for Amazon is 18 x 14 x 8. If an item, any one of those dimensions, their largest dimension is over 18, they middle dimension is over 14, or so not, it’s not volume-based, or the smallest dimension is over 9, your item becomes oversize versus standard. That is a key thing to consider when you’re offering product because all of a sudden the pick-and-pack fees goes from a dollar to four dollars. Especially if you’re in a low-revenue thing where you’re selling something for $19.99 instead of $199, that becomes a big factor. So make sure you stay under that because… it just helps you guys visualize it: there are totes going around Amazon’s fulfillment centers that are all automated and they can fit in 18 x 14 x 9 high packet and so if it doesn’t fit in there it won’t work. And so that’s why they picked those dimensions.

Kunle: So that’s one rule. Size.

Andrew: We have one role. The other rules are stick with what you know. You’re going to be able to just search that much more efficiently. And if all it is a search on Alibaba or Global Sources more efficiently, your time is better used there. Remember, you only have a limited number of hours in the day, especially if you’re doing this as an add-on to what else you might do for a living. So stick with what you know, stick with items. Do a scenario analysis. So for those that don’t know, scenario analysis is where you take your best case, realistic case, and the worst case scenario of what you sell it for. And use an FBA calculator, google ‘FBA calculator’. And figure out what all your related costs are and where they would be at different things. Your fulfillment costs, all that kind of stuff, what’s the worst case, medium case, and best case. If your worst case is that you spend $2000 and you end up with $1800, that’s a winner. Because you cannot realistically lose much. Don’t chase those things where your best case is, ‘Well, I sell these things for $50 and they only cost me $2, I mean that happens but it’s very, very uncommon. So make sure that you’re taking account of that and you’re being very conservative with how you’re doing that. And then try going with a supplier. I wasn’t able to emphasize this very much in your interview, but take a supplier. Instead of going with whoever’s lowest-priced for whatever widget you’re looking for, find someone that has a good price for that widget and then see what you can grow within that supplier because expanding your catalog is the key to sales. Otherwise you’re risking your entire business on one or two or five products. And if those things get eaten up by other people, you’re in a rough spot. If you can diversify over hundreds of products, let those five get taken up by someone else where your margin is not very good anymore. You still have 95 that you’re making money on. And so when you look at other suppliers, don’t just choose the best for that product. Find something you can grow into. Let me quickly given an example. So let’s say that you’re going to sell baby bottles. Now there’s a baby bottle manufacturer you’re looking at that sells other baby products. They sell bibs, they sell car seats, they sell that kind of stuff. You find a baby bottle manufacturer that sells all different kinds of bottles. They sell 20 ounce bottles, 1 L bottles, 2 L bottles, gallon bottles. And then you see a big bottle manufacturer that also sells different kinds of products that are purely plastic what have you and it’s totally unrelated to any kind of specific industry but it’s all organic plastics or something like that. You have to pick which one of those three you want to grow into. And there’s not a wrong answer. But you want to be able to eventually offer a bunch of the things in their catalog. Because the best way to lower your price on those baby bottles is to buy a bunch of other products from them that you cannot only logistically ship cheaper but because you’re not shipping by air anymore, you’re shipping by sea freight or your shipping by not just sea freight but by container load, but also you’re growing by you now being able to be a significant customer to them. You’re not placing… I mean when people ask for minimum order quantity of 1000 units, what they’re really asking you is not, ‘I want 1000 units, to make this work.’ ‘I want $8000 at eight dollars a piece.’

Kunle: Right.

Andrew: So it’s very easy to try out different products and say, ‘Hey listen, I’m going to buy your 1000 bottles again because I’ve already sold those really well and by the way, while you’re doing that, throw on 20 of these and five of these and eight of these onto my shipment.’ And when you do that, all of a sudden you’re able to cast out at a very, very low cost per unit, three other products that you normally wouldn’t sell. And if one of those three is a winner now, next time you order 1000 of the bottles and 500 of something else.

Kunle: Okay. So you approach them with head, sort of like core deal which meets their MOQ, their minimum order quantity, and then you kind of look through their… you almost get samples from them, where you pay for them obviously, and you expand your offering basically and whatever becomes a winner you just go for it, eventually. I think what you said with regards to ‘expanding your product is the key to sales and scaling’ is how we’ll wrap it up. But before we wrap up, let’s talk about tools. I know it’s really down to all what you said with regards to the fundamentals, you know, your approach to capital, your approach to growth, your approach to suppliers and sourcing. But beyond that, what tools do you recommend or do you as an Amazon seller… I know at your scale you’d use a different set of tools because you’ve got thousand and thousands… but what tools would you recommend to be in the arsenal of any Amazon seller?

Andrew: So let me give you several. So the bigger you are, the more tools you need. Because there’s only so much you can do. And it’s much more justifiable to spend X-number of dollars per month because you have that kind of scale. So for feedback, I use FeedbackFive. And that helps with winning the Buy Box and just helping legitimize [inaudible 00:56:15] ties your products and you as a seller. From that same company, I also use RestockPro, which helps me keep track of my inventory and helps me reorder from my multitude of suppliers, kind of notifies me when I need to. I use Feedvisor which is a very expensive but very nice repricing tool. Appeagle I used to use and unless you’re selling millions and millions of dollars, Appeagle is a very good choice.

Kunle: I had Feedvisor on the show in the early days.

Andrew: They are supersmart and they are awesome, but they’re just expensive. So if they were less expensive, I would say if you don’t go Feedvisor you’re a fool. But they’re expensive, and they deserve it. Other than that the only other thing that I can talk about is just to go with different experts. And so there’s a bunch of different platforms out there. There’s Facebook groups, that I know you are looking at doing, which can be really, really resourceful and they’re inexpensive a.k.a. free, so that’s definitely a very, very good way to go. I’ve seen paid ones before. My brother used to operate one. They can be great and they can be help if you’re at the level where you’re selling $10,000 a month or something like that so you can really get into some nitty-gritty. Otherwise the only other one that I’m directly involved with is AMZhelp.com. The long and short is for $500 a month, which I know is not inexpensive, but you get access to several different experts. And you get your questions only answered by experts. And by doing that we can take you from the very, very beginning all the way through and can handle logistical questions, not just Amazon questions but business questions. And you’ve got a lot of sources with that. So I’m very biased, I’m involved very directly at that, and I’m one of the experts that you might talk to. But it can be very, very useful for a wide range of people, from people at enterprise to just starting off.

Kunle: Well the proof is in the pudding. If people have stuck to this point, we’ve been speaking for an hour now, they will know your expertise, you’ve already proved your expertise. And with regards to ANZ Help, what kind of Amazon entrepreneurs are you looking to get on board? Starters or people who started already and are at a certain point of revenue and… could you just shed some more light as to the kind of retailers you’re seeking to join your site, AMZhelp.com?

Andrew: Sure. We’ll take all kinds. We’re there to help because we have gone from not having the first clue about Amazon to being very, very big experts. I think you get the most value out of having an account and selling your first products or getting ready to sell your first products. Because we can help all the way through from working with suppliers all the way to logistics, getting it from point A to point B, from China to here what have you or from existing suppliers. Plus we can help with a lot of kind of tips and tricks. It’s a 100% white hat. For people don’t know that, it’s aboveboard I guess, to use another term that might confuse people, but hopefully that translates. It’s all good-guy stuff that we use to sell products. So we don’t do anything… a lot of the programs out there we’ve found are short-term. They take advantage of manipulation of Amazon rather than just having sound business principles. So that’s what we emphasize and hopefully through this podcast you’ve heard that I try to emphasize, you know, sound business principles that fit specifically with Amazon and not some kind of tricks or hacks for lack of a better term. To solve the problems.

Kunle: Yeah absolutely. Because what we’ve pretty much talked about for pretty much 80% of this conversation has been on business fundamentals, really. You know stocking, numbers, rules. And yeah, I agree with you 100% there. Okay. So is AMZhelp.com more like a mastermind group or you’re like coaches or advisors to anybody who’s looking to build or grow their Amazon stores?

Andrew: So, yeah. More like coaches or consultants. You’ve had my brother, Will Tjernlund, on your show before

Kunle: Amazing.

Andrew: And from a… he charges an absurd amount per hour to just talk to him and get his advice. And I’m not saying it’s not well worth it, but it’s an absurd amount. You could spend for a one-hour phone conversation, you can get a month of unlimited e-mail at AMZhelp.com to be able to answer questions. It’s guaranteed response within 48 hours and it’s a really, really good service because everything’s aboveboard and what ends up happening is you hire someone like Will, or you hire someone like me who’s less expensive than Will, and I answer your questions. You come away from the phone call or the meeting really, really excited but then you, once you’re in it you go, Oh wait, what was that thing he said?’ or ‘Wait, how I get to that page?’ And you feel like you want to ask a dumb question, but at the rate that we charge, it’s just cost prohibitive. I mean you’d be a fool to spend that money again. So what you do? Fortunately with AMZ help, you can get that really, really good coaching. And then when you’re stuck at this one point you say, ‘Wait, wait. Explain this again, I don’t totally get it because of my situation is XYZ,’ we can take care of it that. A lot of the other services are one size fits all. And we totally do not believe in that. Because everybody’s got a different goal, everybody’s got a different products, everybody’s got a different situation. If you just say, if you’re going to spend a bunch of money joining some kind of organization that’s going to promise that they’re going to teach you how to sell on Amazon make you a millionaire. I’m not doing that, but I’ll tell you how to make sure that whatever you’re doing, you’re doing as smartly as you possibly can.

Kunle: Good stuff, good stuff. There are two things that I failed to ask. Your size, the size of your company. How big is your company now and how many staff do you have? For the Amazon now, I mean.

Andrew: Yep, for it specifically we have four other people besides myself. And I guess I’m hiring two of those people right now. One was an intern and one’s going full-time. So we’ll have five people total that manage the business.

Kunle: So prior to the five you just had three people. You were three people churning out 8 million?

Andrew: Yeah, it was really busy. [laughs]

Kunle: [laughs] That’s ridiculous.

Andrew: That’s why we needed to up our staff by 66%, because it was…

Kunle: That’s like 2.6 million per head, revenue per head

Andrew: Exactly, unsustainable. Yeah, we’re trying to keep it a cool two million dollars in revenue per person so hopefully, you know, I can get that going. But again, it’s exciting and we are able to do that, but if anybody gets to that point, even $1 million, you are going to need outside help. You are going to need to use those services that Kunle talked about and then maybe even get someone that’s much more full-time because there’s a lot of moving parts and at some point you are not doing yourself a service by trying to, what is it, ‘penny wise, pound foolish.’

Kunle: Penny wise pound foolish. Cents wise dollar foolish. [laughs]

Andrew: Yeah, exactly.

Kunle: Okay, and would you be happy to give us the name of your Amazon store, or is that confidential?

Andrew: You can. Ah well, frankly I sell under so many different brands that I don’t really have a good Amazon store. If you search for fans, I’ll probably be up there. So don’t worry about finding my specific stuff, there’s so many different brands and I have multiple accounts and things like that, because I have separate legal entities that sell different products that…

Kunle: You’ve got multiple stores, Amazon stores and Amazon entities.

Andrew: Exactly and a lot of our stuff is selling existing brands that sell really well on Amazon, so we’re just another seller within that, but we are pretty good at getting the Buy Box in those situations.

Kunle: Okay. So any books or resources you want to point listeners to before you say to your goodbye?

Andrew: I am not a big reader. I would say go ahead and use different sources out there. There’s a lot of outsourcing. The only thing that I use a lot that I didn’t mention was UpWork. UpWork’s great for taking care of menial tasks. But as far as books and stuff like that, I mean here’s the long and short I guess, here’s a good way of answering that question. Go out and do. Go out and sell. I know that my brother is in the same mindset that bringing product… sell it – that’s the best way to prove whether it will sell or not, by actually selling or not. Don’t get too academic; don’t get too paralyzed by details. And just go out and start grinding away. And you’re going to start selling stuff and you’re going to learn stuff and that’s the best way of doing this. So forget the library, get on Amazon and start listing product and that’s the best lesson.

Kunle: That’s an awesome way to end this show. How can our audience get in touch with you, so would it be AMZhelp.com?

Andrew: ANZhelp.com is a great way. If you want specific kind of advice specifically from me, I’m at Clarity.fm/Amazon. But AMZ Help is probably the most economical way and it’s a really, really good service so that’s probably the best way to get hold of me.

Kunle: Okay. Fantastic, fantastic. It’s been and an immense pleasure having you on the show. You’ve just shed so much light and I’m sure this is so much value, this episode is going to blow up on the iTunes listings I would assume because of the depth you’ve gone in to. Andrew, thank you so much for coming on the 2X eCommerce Podcast.

Andrew: Thank you very much. Now, all the best you Kunle, you’re the one that makes it happen, so I really appreciate you just spreading this out there.

Kunle: Cheers.

[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

[Theme music, fade out]

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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