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

EPISODE 69 69 mins

Solopreneur Profitably Selling £1m+ a year on Amazon UK with Retail Arbitrage & Private Label w/ Saj Gilani

Posted on 20th March 2016 ,
by Kunle Campbell


About the guests

Saj Gilani

Kunle Campbell

Saj started selling on Amazon in 2011 with only £300 pounds and a 37.5% APR credit card. Fast-forward four years on and he's running a seven-figure Amazon business split between private label and retail arbitrage.



My third guest on this month’s Amazon Seller Success Series is Saj Gilani, our first UK-based expert Amazon seller to the show. Saj started selling on Amazon in 2011 with only £300 pounds and a 37.5% APR credit card. Fast-forward four years on and he’s running a seven-figure Amazon business split between private label and retail arbitrage. He has also co-founded and is managing and consulting four other Amazon accounts for split-profits. He has a podcast and blog, Anybody Can Do It, and an academy where he trains and mentors students to sell on Amazon.

This is part 1 of my interview with Saj, which went for over 2 hours and hence this episode is split into two parts. In this half being the first hour,  Saj shares his strategies with retail arbitrage initially, and then with regards to the creative and highly successful launch of his private label. We then touch upon different ways that Saj continues to evolve and expand in his business. We finish this half of the show on Saj’s outlook and tips for both retail arbitrage and private label on Amazon. The insights and advice Saj shares here are grounded in business fundamentals and hard-earned experience.

Saj’s fascinating story of building an Amazon business from zero and constantly adapting and evolving with a positive outlook on an ever-changing landscape is inspiring, and not to be missed!

 

Key Points in Amazon Seller Success

1: Gettting Started on Amazon

Retail Arbitrage with High Margins

At the start of 2011, I started selling on Amazon. Due to my very limited capital, and compounded at that time with the fact that Amazon only paid out once every 14 days, I could only buy two or three or four items to sell at a time and have to wait for the 14-day to get money back to buy again. So I quickly realised that I just had to do retail arbitrage in a way where the margins were really high. And my technique then was that I would search for end-of-line items with good margins, and there was an item which I bought which really got me excited. Sony Bloggies and flip camcorders from Cisco were very popular, but they were going out of style because mobile phones now had in-built cameras. But I knew that some people would still prefer them, actually I found it was mainly schools that bought them for their students and stuff. But you wouldn’t believe, I mean on average I must have bought them for £40 – £50 or even sometimes £30, and I resold them for up to I think about £300 as well at one point. And so, although I was still very tied down by my limited capital while doing this, it taught me that if I could find something like this, the money could potentially churn quickly into big amounts.

Seizing the Opportunity

As time went on the capital situation got a little bit better because I started finding and supporting these kind of products and also I became eligible for certain credit cards. So at that time it was all retail arbitrage, and then there was this one new product that came out in the market. When people started using Wi-Fi in their house the biggest problem was that the signal would drop, like say when you were upstairs or when you were two rooms further down, because of the wall. Huawei came out with these range extenders for Wi-Fi. Amazon was obviously selling them but it was an item which was still on pre-order status and showing it will be in stock in four weeks’ time. But then there was this company that had a division where they were looking out for online retailers and they saw that I sell similar kind of retail arbitrage items and they contacted me to sell these range extenders.  And they said they will have it in two weeks’ time and I saw that I could easily make £2 or £3 on each. So I went ahead and listed them.

I just thought this is one opportunity I need to probably grab. If things go bad, they go bad. If it goes good, then you know, I would be the only seller.

And the craze went so high, there was a point where sometimes I even sold 300 a day. At that time, I still didn’t have that much money but because it was a new product, everyone else was scared to stock them and probably ordering only 50 at a time and then they’re going out of stock and then they have to wait for another week in-between. So you know, I just thought this is one opportunity I need to probably grab. If things go bad, they go bad. But if it goes good, then I could be the only seller, so I started ordering 500 at a time. And because it was the only product of it’s kind at that time, it reached the bestseller rank. And so things went really well. But then Amazon obviously was listing them as well, so they started undercutting sometimes and leading to situations where I was probably making only £1 – 1.50 net you know after tax and everything, but selling hundreds a day. And you might think it’s not bad. But the worst part was I wasn’t even using FBA, I don’t even know if FBA was there then or not but I was just fulfilling it myself.

2: Successfully Starting a Private Label

The Three Triggers to Private Labelling

  • What happened was probably Amazon was able to get hold of a large amount of stock at much better pricing than mine. I couldn’t compete so I cleared my last lot at a little bit of a loss. But that day, something triggered in my mind, I thought, ‘I should have something of my own brand.’ Because, after Amazon, I was the only seller who would have sold thousands of those units. Unfortunately, I can’t sell it now because Amazon’s buying price is obviously different. Yes, I made a couple of grand. But what’s the point now? It’s their listing, they want to keep dominating that. So that started something in my mind saying that I should have something of my own. Unfortunately, I didn’t know what to start so I still kept on doing this retail arbitrage thing.

And then at one stage what happened is probably Amazon got their biggest stock so their pricing would have been much more better than mine, that goes without saying so… So I cleared my last lot at a little bit of loss.

  • And then on another forum I saw a guy who used to do a little bit of RA like me, suddenly after year, I saw a post from him that he was selling some of his own branded products because there was a robbery or something so he was reselling some of his existing PLA items for cheap price if someone wanted to buy, just so that he could have cash flow for a little bit of time. And I thought, look at him, he was selling something similar to what I used to do and suddenly he’s transformed into one of the best brands on Amazon. I started following his products and stuff, and so, you know, that was the second trigger.

If people were really concerned, I mean if the store employees were so concerned that they would spoil that add-on product when they combine that with the actual product, then that gives me a chance that I could study that up. And that’s how I thought, ‘This is it.’

  • And the third one was I went into one of the retail outlets because I wanted to gift something. And without giving out exactly what the product was otherwise it just relates to my product, say if you buy something in the store and then there is an addon product that you can have for 50% off with that item. But no one, in the store you know, the employees wouldn’t want to attach that addon because they thought they would accidentally spoil the item. And that just made me think you know, why are they so concerned about it? And then that was the lightbulb moment. I said you know, this is the product I want to go for to start off with, because it is the cheapest product in the niche that I would be interested in. And I thought, if people were really concerned, I mean if the store employees were so concerned that they would spoil that add-on product when they combine that with the actual product, then that gives me a chance that I could study that up. And so in the end of 2013, I ordered some samples from AliExpress and then I came to know about Alibaba so I ordered from there as well. And in 2014 I branded it myself and started my private label journey.

How to Package when you don’t have any Packaging

I wrote a thank you email, which I used to print out on a A4 sheet, and in that I used to wrap the actual product.

So I contacted about 5 or 10 suppliers and went with the one that had better material, even though it was more expensive. And obviously I couldn’t do packaging, I couldn’t do trademarking as such at the end of the 2013 so it was pretty much bulk-packed. And I created the listing. The worst part was there’s no packaging and then if you’re promoting a premium item that goes to a customer which is not even retail packed, it’s going to be a big problem. But what I did was I wrote a thank you email, which I would print out on a A4 sheet, and I used to wrap the actual product in that. So that became more sort of like my actual packaging, the A4 white sheet, but then I used to explain just in a few words like, ‘I’m sure you were hoping to receive a premium product and when you open this you might have thought, it’s not premium because it’s not even packaged. But I’m a new brand and I’m just trying to see if customers like the product. If I get a positive response then obviously I’ll move on to packaging and stuff like that.’

Techniques for Initial Product Visibility

There was no PPC at that time and everyone just gets confused like, ‘How did you sell?’

And I started receiving five-star reviews for most of the orders that I had because I used to email them, and at that time there was never any Amazon third-party software is available for UK market, like email software or anything like that. And I started getting about 50 – 60 orders a day just for that one little item. It wasn’t making much money initially; I mean I started selling below cost because there was no PPC at that time. Because if you remember when somebody tags something like say, HDMI cable, they’ll get results, and there is a small portion of customers who will then go on the right-hand side tab to filter it from low to high price. So that’s what I or probably any other private label seller at that time relied on, that someone will pick up something just because it’s just low-priced, even though it doesn’t have reviews. So that’s how the sales started coming in then, and then obviously it started ranking.

A Secret Ingredient that Boosted Reviews

This product was such a common product that all the other retailers, including the big retailers, they all took it into their mind that customers knew how to use it. And I invested my time in writing a how-to instruction in that letter that I used to post them, which again became like a leaflet later on once I started branding it. Like say, if you get a butter knife, everyone knows how to use it but say if it has to be used in certain sophisticated ways so that they get better results out of it. That’s what was on my instructions. And pretty much every other retailer was ignoring that so I guess that was the main reason I started getting five-star reviews. And you wouldn’t believe, I think up to my first product variation, my average rating was 4.9 so it used to show up as five-star reviews, up to about the first 1500 reviews. After that it went down to 4.8 so you know then it showed 4.5. And there was no other seller with so many reviews apart from one or two big retailers but they were all like 4.2 – 4.5 whereas I was rating five stars. So it was quite easy for customers to at least click on my product and that really helped boost my product.

But say if it has to be used in certain sophisticated ways so that they get better results out of it, that’s what was on my instructions.

3: Different Ways of Expansion

Starting a Consultancy and Placing Eggs In Many Baskets

I was able to reach $1.2 million in 2014, which is about 850K in pounds. 2015, I was able to do about $2 million which is about 1.3 million in pounds. I haven’t really placed too much importance on the other marketplaces outside of UK as of yet. Unfortunately, I couldn’t give that much time because I actually started doing like a consultancy business as well in the end of 2014.

So my private label product was all good. But then you know we all keep hearing about these horror stories that Amazon boots you off, and something similar happened to me on eBay anyways. So I always had that in mind, and I said what happens if something goes wrong? A lot of people said, why don’t you employ and increase your business? But obviously if you want to increase twofold or threefold you need finance again, you need people to look after the new products as well. And I thought, if I employ people, I’m probably not very good employer. Everyone has their own strengths, and managing a group of staff wouldn’t be that easy for me. But I used a little bit of a different strategy and I thought, there was some genuine people I knew who, when they saw my success with Amazon, said that if there was an opportunity, they would be able to put some time and some money but they don’t want to do it full-time, they would do this as a side gig. So I thought you know it’s not really bad because then I would have these shared profits from them.

Everyone has their own strengths; I know my people skills are not really that good. I’m good at talking to people and stuff like that, but I know managing a group of staff wouldn’t be that easy for me.

So it’s like a consultancy where I have now four clients, two retail arbitrage clients and I have two private label clients. And I pretty much handle most of the stuff. I mean the private label some of them don’t even know their supplier, all they know is when they need to transfer the money. So they chose the niche that they want to get in and then we narrowed it down to the product, then I chose certain suppliers and that’s how it started. And it’s pretty much just re-ordering so I just tell them that this is the invoice number you need to pay. I charge them as a consultancy fee whatever the bottom line profit is, as 50%. So it has been a good experience and I thought that way I’m spreading the risk as well, you know if something goes wrong with the Amazon account then I’ve got another four businesses that I can be part of.

Starting the Academy

It was mainly to help out other people, I’ll be very honest, because you just remember the days when you started.

Jake Robinson invited me onto a webinar and there was mostly UK people who came on the webinar, and some of them said you know why don’t you start a course? And that was like 5 AM the morning and I said, I’ll think about it today. And somehow I thought you know, let me just do this because it’s probably a side gig which could benefit anyways. But it was mainly to help out other people, I’ll be very honest, because you just remember the days when you started. And a couple of students who approached me were in a similar situation to how I had been, and then I thought, let me give it a start. And I told them give me 14 – 15 days and I’ll create a course. And somehow I managed to get the course on.

A Plan to Expand

My initial plan in 2015, was to expand all these European Amazon marketplaces in the same way and same quantity, and along with that the Amazon.com marketplace as well. But because of all the consultancy and the academy, and then, because I have a retail arbitrage, especially quarter four, it became so busy that I couldn’t do anything. So 2016 is pretty much all set for that, so expanding through Amazon.com and all the other Amazon marketplaces in the EU.

4: Outlook and Strategies on Amazon

Retail Arbitrage on Amazon: Outlook Now and Future

It’s actually quite exciting. And I always look at things positively. In fact, I find more and more retail arbitrage items that Amazon is actually selling, because sooner or later sometimes they do go out of stock, so it’s much better. And yes, Amazon will try to undercut you. Not just Amazon, a newbie who’s just starting now with five or 10 units can always undercut you and there’s hundreds of such part-timers who will keep undercutting you most of the time. But one thing I’ve realized is that things are going to always evolve, and you need to change your strategies to evolve and change as well. If you resist change, then it’s really hard.

Have Ever Evolving Strategies

Now I know a lot of people do online arbitrage and retail arbitrage as in they just check the offer and then they’ll see what the current price is on Amazon and that’s it. They buy whatever they can sell at profit. But I look at a completely different.

Firstly you need to know a little bit about your niche. So I would see the patterns and know what was going to happen with that. For example, if I was dealing with something like an iPhone thing, I would know that after every two years there’s going to be a new iPhone. After every one year, there’s going to be a Samsung phone. So I knew when those products in that particular range are going to go out of fashion, but then also that there are customers who still like to get the old products. Either because they’re used to those products and people resist change.

And so my strategy at that time was studying end-of-trend items you could say, rather than end-of-line, and I would constantly try and get that. Because I had limited funds, I needed to sell low, but then make higher profits. Then I had to change my strategy, because after I started PL, I didn’t have that much time to go out and search for those gold nuggets.

And also, now I have money and the turnaround is faster since I can withdraw daily now instead of every 14 days. So I can find even items which are not reduced by retailers, but a quick check can show me that I can make a fiver out of it, but then I know I can sell 50 a day so I can order 500. So I have to now mix up, so I have some items which I can hold as well, some items I’ll quickly churn.

As time goes by the competition changes, Amazon is obviously will try to retail out any, every possible item that they can, even if they make a loss, if any big retailer in the UK is going to do any offers, they are definitely going to price match it. Straightaway, whether they make profit or not. But as a retail arbitrage seller, you need to know that Amazon are not going to continue to sell at that price for a long time so hold the stock and sell it there at a better price later on. Some items you got to keep selling quickly, you can make a loss if Amazon never runs out of stock and undercuts you most of the time. So you have learn different strategies over time.

Amazon Outlook for Private Label

I’m certainly positive, as usually, I would say the outlook is definitely viable. But yes there is going to be increased competition, especially in the low value items or even like a cheaper version of any product. Because obviously, you know sellers from China, even from India now and a lot of other places like Europe and places, they’re going to start listing on dot com and dot UK and the European platform. So it’s going to get worst day by day, but then it’s like, the pie is getting bigger as well so they have more people who are shopping online day by day for each and every product that they need. So it’s always going to get better.

But everyone has their niche, so the big sellers or big companies are always going to dominate where they can sell a lot and make a little bit of margin but they can sell a lot. And then there’s that premium element with only 10 – 20% of the customers that will always buy the premium products so that’s where I’ve concentrated. But then you have to be a bit creative. I had a premium product but I also provided instructions. And I had to keep it a secret, I couldn’t even say that I was giving them instructions in my actual descriptions because if I did that, then the very next day my competitors would read it.

And there’s that premium elements where customers are only 10 – 20% but then they buy always the premium products so that’s where I’ve concentrated. And that’s where you have to get a little bit creative.

Retail Arbitrage Tips

  1. The only problem is it involves a lot of work.
  2. When I talk about retail arbitrage, most of the time it’s more online arbitrage I do, so like if it was in Tesco, so you can just order and then go in store.
  3. While I try to spread it, so I might sometimes have 50 – 60 odd items, most of those items might have been smaller quantities, and I will have concentrated on a few items where I would have gone deeper. So like, if I know that an item is going to sell, I’m going to buy a few hundred units of each item. Because that makes it a little bit easier when you don’t have a bigger team.
  4. When you start, you should spread it out more, like if someone is starting today with £500, even if you could double your money by getting 50 of these, don’t buy all 50, buy only 10 and try to find other items if you can get them. Because if someone else started stocking that item and you have to pay your bills at the end of the month, those people might have money to sit on and always undercut you and then you will probably have to clear it out. So if you can spread it between 10 different items, you have less chances of that kind of thing happening all at the same time. As soon as you progress, and you have a little bit more money, then your strategies can change.
  5. As you grow your strategies change.

Know Your Niche

I’ve never really looked that much at bestseller ran. Because if Amazon suddenly decided today to just sell a £40 item for £10 just because they wanted to clear their shelf, it’s going to show as number one bestseller today. And if I just saw the same item today in, say, Tesco and I just base my decision on that, then I’m just going to think, ‘Oh, wow, number one item.’ But it’s number one item today because it’s a £40 item selling for £10, and maybe customers don’t want to buy that at £20. A lot of people say, don’t marry your products, but I always say go into a niche which you are either passionate about or you have knowledge about. It has to be at least one of those two things. That’s how you know what is going to happen. So even if I found a discounted vacuum cleaner, I wouldn’t sell it. Because I don’t know, I haven’t been looking at these items so sometimes, just like the example that I said, you know, if Amazon has cleared it today, that’s why the reason it’s ranking high and selling more. Once it goes up, customers might not buy. Whereas with a niche item, I know with my past experience when I just look at the item, I know whether that’s going to sell or not and 99.9% time that never goes wrong.

Key Takeaways

(04:00) Introducing Saj Gilani

(11:44) Gettting Started on Amazon

(20:29) Successfully Starting a Private Label

(33:44) Different Ways of Expansion

(44:27) Outlook and Strategies on Amazon


Transcript

Kunle: Hello guys. Welcome to 2X e-commerce podcast and today I have with me Saj Gilani. He's our first UK-based expert Amazon seller I've invited onto the show. I'll give you a little bit about him because he's going to tell you a lot by himself and his journey really. He started selling on Amazon in 2011 with only 300 pounds, which is about US$500, and a humongous 37.5% APR credit card, those almost those almost payday loan type credit cards. But fast-forward four years on, he's running a seven-figure Amazon business split between private label and retail arbitrage. He's also a fellow podcaster, he hosts the Anybody Can Do It podcast and runs a blog. He runs an academy on there, where he trains students on how to sell on Amazon. So without further ado I like to welcome Saj to the show. Welcome to the show, buddy.

Saj: Thanks a lot. Thanks for having me, mate.

Kunle: Brilliant. Brilliant. Okay, so could you take about 30 seconds or 60 seconds, a minute, to introduce yourself and tell our listeners a bit about you.

Saj: Yeah, so I'm from India originally. I came to the UK as an international student. After a while it was really hard to survive because I had to be earning a certain level to be able to stay in this country and to apply for permanent residency. So that's when I thought starting something of my own would help me get there, so it was eBay initially, which we can probably get into later on. And then eBay blocked me, and that's how it open doors for Amazon. That's pretty much it, I guess you pretty much nailed it in the intro and hopefully I can give you a little bit more information going forward.

Kunle: That is brilliant. I never picked up that you actually sold on eBay and they banned you. You were in Uni, where you in London at the time or another city?

Saj: Yeah, I've always been in London. It was kind of an accountancy college so I came here to study being an accountant, so I'm actually a qualified accountant.

Kunle: Which is good.

Saj: Yeah, it's good for at least my accountancy. But I never fancied it, I worked in retail. That's when I used to do a little bit of eBay. To be very honest I was always anxious and excited about working for myself since I was in college. I used to do, doing part-time work, I used to build PCs, I used to set up Internet cafés in India, that was my part-time job. Then me and my mate, when mobile phones became quite popular in India, like college kids, we used to buy and sell them and make a little bit of money, so I've always been like an entrepreneur since then. But unfortunately when I came here, it's only after I came here I came to know that I can only work 20 hours, I can't do any self-employed jobs, you know like business or anything like that so that pretty much changed it and put a lot of pressure. Because when you come from India, it's like 1 pound is like Rs.100 there so you're converting your own money and coming here to study. And after that I was allowed to work, it's only when you come here you are told you can't work. And the rules kept on changing so it was quite a bit of struggle. I don't know if your listeners actually heard my intro or a couple of webinars that I did with other people but at one time the situation was so worse that, I used to work in PC World... for you US listeners, it's something like Walmart or I think Best Buy would be the best...

Kunle: Yeah, Best Buy I think.

Saj: And because I was allowed to work only 20 hours and that was outside London, so I used to work four hours on Friday and Saturday and Sunday would be another eight hours. And pretty much for all three days my lunch would be a digestive biscuit. So that would be spread in three days, that's how much I could afford as a lunch.

Kunle: Wow, that's pretty rough beginnings there.

Saj: Yeah, I guess it gave me a lot of motivation and...

Kunle: So rewind to 2011, had you finished Uni then or were you in Uni?

Saj: No, I finished my accountancy course. And after that basically, it's only after end of 2009, that's when I was basically allowed to work. So I was doing part-time eBay a little bit, because I didn't have money, the problem was every time I went and applied for something like a credit card, I didn't even get a contract phone because they needed three years history and I can only 2006. I think I only got my contract phone in about 2009, before that I had to use prepaid phone because every time I applied for a credit in UK they said you don't have a three years history and you know it just automatically be declined. So getting finance was obviously not possible so initially I had a couple of my friends, they had, because they were all being students as well but some of them were obviously from well-to-do families from back home so they had a little money. So I used to borrow like a couple hundred pounds and then return them. Because at that time the good thing about PayPal was you could withdraw it straightaway. Unlike Amazon, where you had to wait like 14 days. At that point I didn't even know that Amazon existed. Because coming from India, eBay was a little bit known there. Amazon, the only thing I knew, there was something related to books, that's all I knew. I didn't know that they had a marketplace so I never sold that. On eBay I started selling a little bit here and there, because we had our own concession store within PC World, which was like phones for you, I think they used to have like a link store which would be [00:09:47.26 inaudible] store. So I used to buy a couple phones here and there, accessories, when they were on clearance and sell them on eBay, that's how I started.

Kunle: Okay, okay. And then how long did you sell on eBay before they kick you off?

Saj: I think after that, because I think obviously once I bought a couple items from my own store and then my manager said that I couldn't do that, because it was in terms of service that if I'm an employee I can't buy stock from my own store to resell. So then I used to, somehow I saw an ad on Gumtree, which is I guess like Craigslist in US, that was like a Chinese link and that took me to Ali Express. So the only thing I knew a little bit about was phones and computing, you know that's what I've done back home as well. So I started doing charges and batteries and stuff because obviously that's all I could afford anyway with the money that I had. And then I did a little bit of RA, I mean I didn't even know the term RA, all I thought was I was buying something and selling because I didn't hear about this Facebook group. So I didn't know what retail arbitrage was and what private label was, but I knew I was buying something to resell, that's what I knew. And I think I bought a couple items from one of the big retailers and I sold, I think it was quarter four, I'm 100% sure, so I was like buying and selling, buying and selling, quickly withdrawing money at the bank. And suddenly they asked me for the receipt, because obviously you know when your account activity goes up suddenly, they take you as a suspicious seller because it's a similar situation so I can understand, because I've seen a lot of big retailers have done similar things and then run away with their customer’s money. So they asked me for the receipts and I didn't know what to write in the email so I just uploaded like a scanned receipt and the email I got back said your business model is quite risky for us so we're not going to allow you to sell anymore.

Kunle: Ouch. Okay, okay. Right, and that just fuelled your move to Amazon. So what did the first year of business Amazon, this is 2011, look like?

Saj: Right yeah, so inbetween obviously as I said, I still didn't know that I could sell on Amazon, this is like 2010 I think when they blocked me. The worst part was they blocked the money for six months so I didn’t have any cash. That's how PayPal works so, inbetween I ended up onto one of the wholesale forums where I cleared my stock, what I had. And someone there actually told me,' Why don't you sell on Amazon?' And I said I don't even know how to sell Amazon. They said, you know, it's pretty much like eBay but it's like existing page so you don't have to create your page. And somehow I just landed there and started selling there. But that's when I applied for that £300 credit card and that's how, pretty much, I started. But there was very limited stuff that I could do at that time because you get paid once in 14 days, so you have to buy two or three or four items at a time. So I started working again for Currys, which is part of PC World, same company, part-time. And I did a little bit of AliExpress at that time, and yeah, that's pretty much how I started, so I would use the money... but I realized at that time that I had to do retail arb in a sense where the margins were really high. So, with retail arbitrage, you know I tell a lot of people that you have to keep [00:09:27.15 inaudible] and you have different techniques. So how I started was I would search for end-of-line items. I mean there's hundreds of items on the shelves as well in store and online arbitrage, but then not everything would have similar kind of margins. Sometimes you just make £5 or £10 and that's not feasible because you can use your £200 once only in 14 days. So there was an item actually which I bought which really got me excited. I don't know if you remember, but there was like those flip camcorders?

Kunle: Yes.

Saj: Sony Bloggies and flip camcorders from Cisco, they were very popular but they were going out of style because mobile phones now having cameras. But I knew that some people would still prefer that, especially I found that every time I saw that, it was mainly the schools that actually bought them, so maybe they have some use with it like for their students for projects and stuff. So that was something I bought from one of the retailers for about £40 – £50 on average, they always had different prices on their eBay outlet. And I resold that in different prices but you wouldn't believe, I mean those on average I must have bought them for £40 – £50 or even sometimes £30, and I resold them for up to I think about £300 as well.

Kunle: Wow.

Saj: At one point. So the worst thing was used to list a lot on their clearance outlet on eBay. Unfortunately, I never had money to buy them, so even if they listed 10, I could only buy sometimes like two or three because the money was stuck on something else. Sometimes they listed even 50 to clear out but I wouldn't have money, so you know the big sellers would obviously buy them and they would sell as well so I would have to undercut and then obviously sell the couple of units that I had. But that kind of taught me that if I could find something like this, then the money could churn quickly into big amounts. So that was pretty much the start of 2011 on eBay. I mean on Amazon.

Kunle: So it was right really at the start. So you started your private label Amazon business, it was still within the same Amazon account, in 2013. So what did business that like between 2011 and 2013, prior to starting your PLA? Private label, sorry.

Saj: Yeah, I mean the situation obviously got a little bit better because I started finding and supporting these kind of right products which would help me. And then you know, because I had obviously gone over three years in UK now, so I started applying for certain credit cards, so it was all pretty much a credit card business anyways. Obviously I started getting more credit cards, I mean after I finished my studies I got a work permit so that changed a little bit. Obviously that gives you a bit more credit history. It had already been like four years, four or five years now. So at that time it was all retail arbitrage, and suddenly what happened is that one of the companies... it's actually a big company that used to supply stock... it's, if you know Peter Jones, Dragon's Den?

Kunle: Yes.

Saj: He owns actually that company and they used to be a big supplier to Phones4U and [00:16:26.13 inaudible], you know, big retailers. So they used to mainly do phones and these networking equipments. And suddenly there was this one new product that came out in the market, I don't know if you remember, when people started using Wi-Fi in their house the biggest problem was that the signal would drop, like say when you were upstairs or when you were two rooms further down, because of the wall. Huawei came out with these range extenders at that time. I didn't even know that that product existed, but maybe this company had a division where they were looking out for online retailers so they must have seen that I sell similar kind of retail arbitrage items and they contacted me and they said you know, if I would like to sell this item. And I didn't know anything about that but they said you could just buy 10, but were giving like a Huawei smart phone free with that. So it was like win-win situation, because I checked on Amazon... Amazon was obviously selling them but because it was an item which was still on pre-order status, it already was higher in search but Amazon was showing it will be in stock in four weeks’ time. And they said they were the first people would get in stock because of the size of the company and whatever relationship they had with Huawei. So they said, 'We will have it in two weeks’ time. You can sell it, you know this is how much Amazon selling it.' And I saw that I could easily make £2 or £3 on each. So they said all you have to buy right now is 10, that's it. And we're still giving you another phone absolutely free of cost. So I thought you know, it's a win-win situation. The worst thing is, even if I sell at a cost, I still have a phone so that would be like a freebie that I can make money out of. And, oh my God, I listed them and the craze went so high because Amazon would just take off their listing after some pre-orders I guess. So this is, obviously to cut it short, I mean there was a point where sometimes I even sold 300 a day. And the worst part was I still, at that time I still didn't have that much money. I had some credit cards so I told them that this is the situation and they said because you are a private company and you're over one year trading, we'll do a credit check and we’ll give you credit limit. So everything went good that way, and you know, the demand was so high that the order was always on pre-order status with them. And obviously just like me they must have approached a couple of other Amazon sellers, so they were getting stock as well. But because it's a new product, everyone's scared of stocking them. Everyone's probably ordering 50 at a time and then they're going out of stock and then they have to wait for another week and then between.... You know I just thought this is one opportunity I need to probably grab. If things go bad, they go bad. If it goes good then you know I would be the only seller. And I think I started ordering like 500 at a time, and others were probably ordering 50 – 100 at a time. And because it was the only product at that time, you were selling so high that it reached to the bestseller rank. And I guess this is the problem that everyone had, I still have it as well, I've got two range extenders in my house. So everything went good, I started selling a lot, but obviously the price was started and then Amazon obviously was listing them as well, so they started undercutting sometimes. So that was a situation where I was probably was making only a pound or £1.50 net you know after tax and everything. But then selling like hundreds a day, and you might think you know it's not bad. The worst part was I wasn't even using FBA, I don't even know if FBA was there or not but I was just fulfilling it myself so that's pretty much...

Kunle: Wow, okay. [laughs]

Saj: Yeah, I think at that time FBA was quite new, I probably didn't even know about it. It was just like sponsored ad, when sponsored ad started in UK they didn't roll it out to everyone. They'd cherry-picked some sellers, I remember I was invited as well and I didn't even know how to use it because I thought you know I don't even have my own product, what am I going to use it for? Because everyone else is selling it, so I didn't even use it when they invited me for the sponsored ad. So pretty much, like again to cut it short because otherwise I'll keep talking about it, I just get pretty much excited about the past, but I sold a lot. And then at one stage what happened is probably Amazon got their biggest stock so their pricing would have been much more better than mine, that goes without saying so... So I cleared my last lot at a little bit of loss, some of them at cost when they increased, because Amazon moves their price several times a day. But that day, something sparked in my mind, I didn't know what private label was as a term, but I thought, 'I should have something of my own brand.' Because I personally think that I, I still think that I was probably, after Amazon I was the only seller who would have sold thousands of those. Others would obviously have contributed to the rank because everyone was selling it. But I thought in my mind, obviously it was not because of me, that I thought I must've sold so much that this item is now number one seller. Unfortunately, I can't sell it now because Amazon's buying price is obviously different. It's a regular item now, so Amazon always be in stock. So what benefit I got out of it? Yes, I made a couple of grand I would say profits out of that, I lost some of them at the end of the season when Amazon was stocked. But what's the point now? It's their listing, they want to keep dominating that as long as they can have stock. And why wouldn't they order, I mean, you know if they went to Huawei I'm sure they would give them thousands and thousands because Amazon is a big retailer. So that start something in my mind saying that I should have something of my own. And I always used to fancy a lot of these logos like Nike's swoosh, I was always interested in Ed Hardy, I used to read about it, I mean look at it, they had those kind of tattooed T-shirts and a T-shirt would sell for like 50 – 60 – 70 dollars. Superdry. So I always used to monitor these kind of brands and I said you know, I should start something of my own. Unfortunately, I didn't know what to start. [laughs] So that was just in my mind and then I used to follow another wholesale forum which I mentioned in between you know that eBay and Amazon thing where I then resell some of my products when eBay booted me off. Fortunately I kept on emailing someone in eBay higher up, because I used to be on a couple of these forums, and somehow they opened my account but I then never traded there because Amazon by then was quite regular for me and you could always get better a pricing on Amazon. But you have to keep in mind that your products were up-to-date, your box can be damaged here and there. EBay customers would accept anything because they’re price...

Kunle: Sensitive, yeah.

Saj: …customers, whereas Amazon customers, I mean I understood very early that they wanted everything up to date. You know the box should arrive in proper condition, they need an invoice, most of them were business customers buying them. So I saw the difference why Amazon customers would pay a little bit more, and that excited me. But then still the other thing was, what to sell? So I still kept on doing this retail arbitrage thing. And then on another forum I saw a guy who used to do a little bit of RA like me. And suddenly after year I saw a post from him, that he was selling some of his own branded products because there was a robbery or something at his place and he had to pay up his credit cards and stuff like that so he was reselling some of his existing PLA items for cheap price if someone wanted to buy, just so that he could have a cash flow for a little bit of time. And I suddenly thought, oh my God, look at him. He was selling something similar to what I used to do and suddenly he's transformed into one of the best brands on Amazon. I started following his products and stuff, and I… you know that was the second trigger. And the third one was I went into one of the retail outlets because I wanted to gift something, and without giving out exactly what the product was otherwise it just relates to my product as well. And just like, the easiest example, like you buy something in the store and then you ask them to gift-wrap it. And because that was the added product, they said you want to buy this because you get 50% off, you know it's like all these retail outlets always have that kind of scheme. And I said okay, you know, yeah I'll take the added product. But say if it was something like a gift wrap, no one, in the store you know, the employees wouldn't want to just wrap it because they thought they would spoil it. And that just made me think you know, why are they so concerned about it? I mean is that like a big problem that they couldn't gift-wrap it so easily or they would spoil it. I mean obviously wasn't gift wrap but it was something to explain what it could be. That then, you know, that was that lightbulb moment. I said you know, this is the product I want to go for to start off with, because it is the cheapest product in the niche that I would be interested in. And I thought, if people were really concerned, I mean if the store employees were so concerned that they would spoil that add-on product when they combine that with the actual product, then that gives me a chance that I could study that up. And that's how I thought, this is it, you know, not private label, but this is what my brand will start with. And in the end of 2013, I ordered some samples from AliExpress and then I came to know about Alibaba so I ordered from there as well. And in 2014 then, it pretty much, you know I've branded it myself and started my private label journey.

Kunle: Wow. Well, that was a long journey. And so, what quantities did you initially get from AliExpress? And do you just sell it on or did you just order the samples based on the fact that you wanted to see exactly the quality, just to quality-check it?

Saj: Yeah, I mean AliExpress, that was a big mistake. So obviously I ordered from AliExpress but they came in random packaging so I just basically sold them... I can't even remember now, I think I didn't even sell them online. The AliExpress one I just gave it to some of the stores, you know my retail stores, small convenience stores in my house, because I had a couple of friends who have concession kind of stores with smaller shops. And then I went on Alibaba but it was so, it was like a maze, because I thought AliExpress was kind of like sellers showing you the price, why are these guys not showing the price? So the first thing you always think when you think about those early online scams is that someone's going to scam you because they don't even tell you the price, that means they're just going to try as much as they can make out of you. And surprisingly, I narrowed it down to, because at that time I didn't know these podcasts, Facebook groups, even if they existed, I don't know. As I said I didn't even know what private label was at that point. So somehow I managed to get some samples from two or three different suppliers. So I contacted about five or 10, I narrowed it down to three. And then the third one was really not that responsible because they understood I am not a big seller anyways, so they thought I was wasting their time so it came down to two of them. One of them I think was about three or four years Gold Supplier, the other one was seven and eight. So I pretty much thought that I was going to go with seven and eight, you know just the mindset always say that you know, go with someone who's more experienced, but I thought let me still order samples from both. Surprisingly when the samples came, the one with three or four years were more professionally packed, they had different materials so they had different stickers on them saying what the material difference is. And then I thought you know, then you just go with the three or four years supplier, I don't want to go with the seven or eight years even though their pricing was half. But I've always wanted to go with the better material, and they had different materials. And they kept on pushing me, they said don't buy the most expensive materials because you won't be able to sell. And I said you no, if I go, I'm going with the expensive material, whether it works for me or whether it doesn't work for me I don't mind. So they were quite surprised as well. And obviously I couldn’t do packaging, I couldn't do trademarking as such at the end of the 2013 so it was pretty much bulk packed. And I created the listing, it took a lot of time to even learn how to list it at that time, you know to get the EN numbers and stuff so all that was quite exciting and it was quarter four again in that time. So I had a little time but I started selling, I promoted it. The worst part was there's no packaging and then if you're promoting a premium item that goes to a customer which is not even retail packed, it's going to be a big problem. But what I did is I wrote a thank you email, which I used to print out on a A4 sheet, and in that I used to wrap the actual product. So that became more sort of like my actual packaging, the A4 white sheet, but then I used to explain just in a few words, I used to explain like, 'I'm sure you were hoping to receive a premium product and when you open this you might have thought, it's not premium because it's not even packaged. But I'm a new brand and I'm just trying to see if customers like the product. If I get a positive response then obviously I'll move on to packaging and stuff like that.' And I started receiving five-star reviews for most of the orders that I had because I used to email them, and I don't know if you remember but all the software is that existed at that time, even right now I think it's only in the last few months that UK versions came out. Otherwise there was never any Amazon third-party software is available for UK market, like email software or anything like that. And I started getting I think about 50 – 60 orders a day just for that one little item. It wasn't making much money initially, I mean I started selling below cost because there was no PPC at that time and everyone just gets confused like, 'How did you sell?' Because if you remember when somebody tags something like say HDMI cable, they'll get results, and there is a small portion of customers who will then go on the right-hand side tab and then choose it from low to high price, filter it. So that's what I or probably any other private label seller at that time relied on, that someone will pick up something just because it's just low-priced, even though it doesn't have reviews. So that's how the sales started coming in then, obviously it started ranking. And pretty much in 2014 I decided you know let me just properly brand it up and sell it. So that's it, that's how private label started under my brand in 2014.

Kunle: That is very interesting. So you went there, you validated the product and the demand. It's so fascinating, the fact that you wrote them emails and they responded, you got quite positive responses. One question I have is, what were your return rates like in reality? And what was your shrinkage? Because many retailers will factor in shrinkage which would be like returns or defects. So from your books, how did the theory differ from reality, without packaging initially?

Saj: Pretty much the product, because it was like below £7 to be honest, so it was a very regular item that you would buy, something like a HDMI cable, so I had zero returns in a way. Some people had problems and I would just replace it because the cost of replacement wasn't high, just to help them out. And as I said this is a product, something where it is such a common product that all the other retailers, including the big retailers, they all took this into their mind that customers know how to use it. And what I invested my time was in writing a how-to instruction basically in that letter that I used to post them, which again became like a leaflet later on once I started branding it. But initially it was on that A4 sheet so I had some instructions on how to use it, which pretty much every other retailer probably ignored it. I saw some YouTube videos so I believe that's how customers, some of them, were finding out. It could be something very basic like say, if you get a butter knife, everyone knows how to use it but say if it has to be used in certain sophisticated ways so that they get better results out of it, that's what was on my instructions. And pretty much every other retailer was ignoring that. I guess that was the main reason I started getting five-star reviews. And you wouldn't believe I think up to my first product variation, which had I think two or three variations, it climbed up to about forty so was in different sizes and stuff like that. But initially when I have only a few of them, I think up to about 1400 or 1500 reviews, my average rating was 4.9 so it used to still show up as five-star reviews, up to about 1500 reviews. After that it went down to 4.8 so you know then it shows 4.5. And there was no other seller with so many reviews apart from one or two big retailers but they were all like 4.2 - 4.5 whereas I was rating five stars. So it was quite easy for customers to at least click on it, whether they bought it or not was another story. But that’s how it progressed, so that really helped boost my product.

Kunle: You just dominate the space. Fantastic, fantastic. So let's, just for our listeners, what kind of sales did you eventually do? What was your turnover in 2014 now that you had the private-label business in full swing?

Saj: Yeah, I mean because it's a low-value product, so still the numbers, the revenue doesn't look that big, and anyway as you know it's the bottom line that matters. But still I was able to reach $1.2 million in 2014, which is about 850K in pounds. This year, 2015, obviously because I did a little bit more retail arbitrage as well plus I have my product two now which has a lot of variations, so I was able to do about $2 million which is about 1.3 million in pounds this year...I mean 2015.

Kunle: That is not bad at all, from the beginnings, the story and the way it's moved. Now with regards to the revenue and where you sell, do you sell predominantly only in the UK or do you also have your listings in other EU countries?

Saj: I actually didn't even, I should say that kind of my fault, I didn't really place too much importance on the other marketplaces as of yet. In fact this is just before quarter four, there’s another team which is called Amazons Global Team. They contacted me and they were basically asking me if I wanted to list on Amazon.com and they would do all the listings. I mean it doesn't really take much time but they said they will class for all the listings and stuff like that and then they will allow me to take part into all these you know, the lightning deals and special deals. And unfortunately the UK business itself keeps me so busy at the moment that I did list, I send the products, they allowed me to appear on lightning deals for a day or two as well but unfortunately, the stock is still there, it tells about two – three – four units a day on Amazon.com, but unfortunately I couldn't give that much time because very few people actually know about this, which I just talked to you about before the interview started, I think half of my students they don't know, that I actually started doing more like a consultancy business as well in 2013. Not 2013 actually, sorry, that was the end of 2014. So my private label product was all good. But then you know we all keep hearing about these horror stories that Amazon boots you off, and something similar happened to me on eBay anyways. So I always had that in mind, and I said what happens if something goes wrong? So rather than, you know a lot of people said why don't you employ and increase your business, but I used a little bit of a different strategy. What I thought was, and obviously I had again limited finances. I mean with business the finance can always be limited because there is no limit, you could go kind of big guns as much as you want to be honest, the Amazon space is so huge. And then I thought rather than me employing someone and increasing my business, because I had the same thing just like when you work for another company, you have limited interest because the company doesn't give you that much benefit, you know when it sells something. I've seen that, that's why I had to quit my PC World job. I used to love retail, I used to love to talk to customers and just go on and on about the products as well. Unfortunately the problem was there was no direct relationship between the efforts and the rewards because these last few years we all know that the sales commissions are just completely gone off, apart from a few retailers, they don't really pay you commission. Like in PC World, we had commission like when you saw the computer, when you sold a Norton Security with it, you sold insurance with it, you get a couple pounds commission, only if the store hit the target. And in my three or four years tenure there, this store never hit target.

Kunle: That’s the caveat, yeah, circumstances beyond your control. [laughs] That so hard.

Saj: I mean I could use a couple hundred pounds extra but just some of the people are not really that serious about their sales job. That's the problem with the job, and I thought if I employ someone, and I'm probably not very good employer. Not as in like a person but you know everyone has their own strengths, I know my people skills are not really that good. I'm good at talking to people and stuff like that, but I know managing a group of staff wouldn't be that easy for me. And then obviously if you want to increase twofold or threefold you need finance again, you need people to look after the new products as well. And I thought... there were a lot of people who showed some interest, initially when I told them, you know I was going to start this business everyone said, 'Are you crazy, you want to start this product?' After a year, which was end of 2014, when I showed them my Amazon account and the brand, what I've done, they were surprised and then obviously some people who had money but no experience wanted to jump in straightaway. Which, I wouldn't let them in because it's like the hard work is done and now everyone wants to get into the business just to take a share, so that's not going to happen, I'm not that bad as a business man. So then there was some genuine people who said that if there was an opportunity, they would be able to put some time and they would put some money as well. But they don't want to do it like this full-time thing, they would do this as a side gig. So I thought you know it's not really bad because then I have these shared profits from them, so I have now four clients. Actually I'm letting go of one of them because they are now so excited about Amazon that they want to actually increase it 10X and I said I don't have time to do that. So I have two retail arbitrage clients and I have two private label clients, so I used to pretty much handle most of the stuff. I mean the private label some of them don't even know their supplier, all they know is when they need to transfer the money.

Kunle: Wow. So is it like a mastermind you organize? Or you do you just consult one-on-one with your clients?

Saj: Right, it was more like a consultant. So I said, let me know, you pick out your niche because if I select the niche then it's always going to be the one that I like, which is not good. So they chose the niche that they want to get in. Then I said okay, if this is the niche then I'm going to give you about 10 products. Choose something from these 10 products which you think are good in your niche and you know a little bit about and you would be excited to sell about. So then they narrowed it down, then I chose certain suppliers and that's how it started. So they know suppliers name and stuff like that, but some of them have never even talked to them. It's me who actually started conversation on Skype. And it's pretty much just re-ordering so I just tell them that this is the invoice number you need to pay. But just two weeks back I sat down with one of them because they wanted to go 10X and I said, I was hoping to cut it down. [laughs] I needed a little bit more time on my...

Kunle: Your stuff, yeah.

Saj: Yeah, so much it's like that. I charge them as a consultancy fee whatever the bottom line profit is, as 50%. So it was a good experience. I thought that way I'm spreading the risk as well, you know if something goes wrong with the Amazon account then I've got another four businesses that I can be part of.

Kunle: Exactly, exactly. You're diversifying and working on your strengths, which is most important. Okay, so touching back on exactly where you sell, I know you sell a few products in the USA but do you sell in the EU, like in Germany, France, Spain, those core markets? Or is it predominantly the UK?

Saj: I would say at the moment it's 95% in the UK. There is equal amount of opportunity at least in Germany and Italy that I know, so you know that Global Team that I mentioned? Similarly, I think they have now FBA kind of managers, or managers in all these marketplaces that they are trying to attract people to sell on their platforms as well. So some of the listings they got translated, you know they did it, they just emailed me that if I wanted to translate, because then it just gets connected to your UK pool anyway, then you know it can be shipped from here, from FBA. So they did activate it but unfortunately that's the reason what I'm saying, I had to invest so much time into these consultancy stuff and then suddenly I decided after the webinar when people approach me that if I wanted to teach them... and I didn't even know how to start a blog. And even if you go to my blog right now it's one of the worst blogs anyone can say anything about Amazon.

Kunle: Well, but there is that core content which is most important. The message is most important.

Saj: Yeah, I guess at least it helps some of them. And this all started when actually I started a podcast and then I don't know if you know Jake Robinson who does these webinars, he invited me and then I got onto the webinar and there was obviously like mostly UK people who came on the webinar, I think about 60 and some of them said you know why don't you start a course? And that was like 5 AM the morning and I said I'll think about it today but I don't even know how to create a course because I don't even like to work on Excel sheets to be honest. That's why probably I wasn't a good accountant. [laughs] Because I hate monotonous jobs where you need more patience, I'm not very good at that. And somehow I thought you know, let me just do this because it's probably a side gig which could benefit anyways, but it was mainly to help out other people, I'll be very honest, because you just remember the days when you started. And a couple of students who approached me were in a similar situation, and then I thought, let me give it a start. And I told them give me 14 – 15 days and I'll create a course. So again, then I went on a couple of podcasts where I asked questions, how to create this online platforms to create the course, I found online, you know videos. And somehow I managed to get the course on, that's how it probably started. So yeah I do sell on all these platforms, but it's very limited at this stage. The issue is that my plan in 2015, last six months, was to expand all these European market places in the same way and same quantity, and along with that the .com as well. But because of all this, and then quarter four again, because I have a retail arbitrage, especially quarter four, it became so busy that I couldn't do anything. So 2016 is pretty much all set for that, so .com and all the other marketplaces in the EU.

Kunle: Okay. Okay, because I can imagine the potential that you have, because UK is proof of concept. With the support of the Amazon Global Team, your sky's the limit in 2016. Okay let's talk about selling on Amazon. And I like to bring this topic up quite a lot with Amazon selling experts. It's about the ever-changing landscape of Amazon. So here's the thing, especially with regards to retail arbitrage. Selling on Amazon, is it at the moment a race to the bottom, from your perspective, on price? Especially when Amazon comes in with their strength, their pricing strength to just undercut all other sellers? What are your thoughts on the current landscape on selling on Amazon as a retail arbitrage business and the future, what the future holds?

Saj: Okay are you just talking about the retail arbitrage or private label as well?

Kunle: Retail arbitrage. We'll talk about the private label shortly after this.

Saj: It's actually quite exciting. The one good thing that I've always learned, and I'm a quite positive about anything. As I said with the Huawei thing, I never thought how much loss I made, I always thought how much profit I made initially and then it gave me an eye that that I actually should start something of my own as well. So I always look at things positively. I in fact find more and more retail arbitrage items where Amazon is actually selling, because sooner or later sometimes they do go out of stock, so it's much better. The other thing I would say is yes, you know of is the Amazon will try to undercut you. Not only Amazon, I mean there's a lot of other things, so when you grow your VAT register so you can't go at a certain level, but a newbie who's just starting now with five or 10 units can always undercut you and there’s hundreds of such part-timers who will keep undercutting you most of the time. But one thing I realized once I started doing this Amazon, and in business as well, that things are going to always evolve, and you need to change your strategies to evolve and change as well. If you resist change, then it's really hard. And that's what I'm actually seeing some, including myself, I'm guilty of that as well initially but then I quickly adopted that, I needed to change my strategy as well. So initially if you remember, when I had a limited amount of funds, my strategy was finding an attempt which is end-of-line. Now I know a lot of people do online arbitrage and retail arbitrage as in they just check the offer and then they'll see what the current price is on Amazon, you know like they use these scanners and stuff like that and that's it. They buy whatever they can sell at profit. But I just looked at a completely different. I always look at it that you need to know a little bit about your niche. So even with retail arbitrage, like say you were toys, you got electronics, you've got so many different items. I kept on doing retail arbitrage only in one particular, or two, niches that I used to monitor. So I would see the patterns, what was going to happen with that. So just to give you an example, if I was dealing with something like an iPhone thing, I would know that after every two years there's going to be a new iPhone. After every one year, there’s going to be a Samsung phone. So I knew when those products in that particular range are going to go out of fashion, but then there are customers who still like to get the old products. Either because they're used to those products and people resist change. You know just for example like cameras, there could be a reason why people were buying those flip camcorders, because they were probably using that in their schools and colleges for some work and then they wanted the same ones to replace the broken ones. So my strategy at that time was studying end of trend items I could say, rather than end of line, and I would constantly try if I could get that. Because I had limited funds, I needed to sell low, but then make higher profits. As time moved back, I didn't have much time actually after I started PL, so now I don't have that much time to go out and search for those gold nuggets. So then I had to change my strategy. Now I have money, the money comes faster especially now because you can withdraw daily. So now I can find even items which are not reduced by retailers, but a quick check can show me that I can make a fiver out of it. But then I know I can sell 50 a day.

Kunle: Okay. So you just order 50 straight up.

Saj: So I can order 500 as well now if I've got my money on my card, you know. So I have to now mix up, so I have some items which I can hold as well, some items I'll quickly churn, even if I can make a couple of pounds. So as time goes by the competition changes, Amazon is obviously will try to retail out any, every possible item that they can, even if they want to make a loss. And you can read that about their books as well, that they made losses on anything they...

Kunle: I mean the other thing they're making profits on is Amazon Web Services which is a SaaS business.

Saj: Yeah, that [00:49:14.04 inaudible] what the I think the most sustainable at the moment, because it's hard now for anyone else to kind of compete there anyways. But yeah, I mean even with the products as well, they're going to buy each and every, you know if any big retailer in the UK is going to do any offers, they are definitely going to price match it. Straightaway, whether they make profit or not. I mean because if you go on certain forums like how to get good deals and stuff, you'll see someone post a deal like say for example Tesco, or in the US something for them is something like Walmart to give them an example, have posted a deal that this product is available for £30. The second or third post straightaway, people are going to come back, 'So what's the price for the same item on Amazon?' And if it's the same then people will start saying, you know in these posts if you go, I just ordered it from Amazon because it's next day with Prime. So that's the first bit that everyone compares nowadays and Amazon knows that so they try to price match everything. But as a retail arbitrage customer, you know, seller, you need to know that Amazon are not going to continue to sell at that price for a long time.

Kunle: Because they have a limited number of stock.

Saj: Right. So you need to start learning your strategies, and learn from there, you have different strategies like you hold the stock and sell it there at a better price later on. Some items you got to keep selling quickly, some items you can make even a loss if Amazon never runs out of stock and undercuts you most of the time.

Kunle: Right. Just get out of that market and move on. Get out of that product and then on. Okay that makes a lot of sense and I like the positivity. Because if you're not positive you can't actually move on and just take on challenges, really. Really, really good stuff here. Okay so with regards to PL, what do you think is current sort of strategy, or, to sort of prepare people, what does the landscape look like for PL? And is it viable looking forward, well ahead, from your perspective?

Saj: I'm certainly positive, as usually. I would say yes, definitely there is. But yes there is going to be increased competition, especially in the low value items or even like a cheaper version of any product. Because obviously, you know sellers from China, even from India now and a lot of other places like Europe and places, they're going to start listing dot com and dot uk and the European platform. And even on dot com because they can now use FBA. So it's going to get worst day by day, but then it's like the pie is getting bigger as well so they have more people who are shopping online day by day for each and every product that they need. So it's always going to get better. But then you have to be a bit creative. Like say for example, there’s so many businesses, like if you go now, there are some businesses who sell thousands and thousands of products, anything and everything they can sell, like private label, because they probably have their own factories in China. They don't really care much about packaging; they don't really care much about quality. They’re probably mainly making money based on how much volume they can sell. Even if they’re are making a pound an item. So my strategy was very focused, as I said, initially as well. I went for one of the best materials at the source, even though that is going to be expensive, and I thought I would retain that portion of the market who wanted premium product in that particular niche. There were others as well, so I'm not saying there was not others, that there were some who were already established so they were charging two or three times. There were a couple of ones who were similar to mine, so we're kind of still competitors in a way because they try to price it exactly the same as I do. But everyone has their niche, so the big sellers or big companies are always going to dominate where they can sell a lot and make a little bit of that, a little bit of margin but they can sell a lot. And there's that premium elements where customers are only 10 – 20% but then they buy always the premium products so that's where I've concentrated. And that's where you have to get a little bit creative, which is what people talk about now, like abandoning and stuff like that. My positive point was that I had a premium product, and I provided instructions which pretty much every other retailer then followed in the UK.

Kunle: You set up a trail.

Saj: Yeah. And you would be surprised, I had to keep it a secret that I couldn't even put that extra bit that I was giving them along with the instructions in my actual descriptions because if I did that, then next day the competitors are going to read it. So I waited, that unless the competitors orders my product, that's when they will know. So pretty much I guess no one really noticed that thing until six or seven months and then everyone started copying. Some even made a better version of that thing that I was doing and it just pretty much became quite obvious then for everyone what I was doing.

Kunle: Okay, okay. That makes a lot of sense. So that premium, driving that premium experience will enable you to charge more and thrive, basically, against competition. Okay, that makes a lot of sense. Right, let’s delve deeper into retail arbitrage, and your retail arbitrage strategy. You mentioned that in Q4, that's when you specialize in retail arbitrage. Is there a reason for this, for just the last three months of the year, operating just the last three months of the year? And how does it look like, your strategy, with retail arbitrage? And what do you recommend?

Saj: Right. So until the end of 2013, so 2011 – 12 – 13 was only kind of retail arbitrage stuff, but again it was very limited based on the funds I had. Even though it was increasing day by day, it wasn't something like suddenly I had 20 K it was going to go nuts. Because you still have to wait 14 days. I personally think if Amazon would have gone this daily disbursement way a long time, my business would have been like 5 or 10X now. But then you can't really have everything, that could have meant that others would have started selling more things.

Kunle: So are you alluding to the fact that Amazon actually gives cash on a daily basis? So they disburse cash on sales to sellers on the same day now or?

Saj: Basically, so you can request one disbursement every 24 hours on the European platform now.

Kunle: Really? Okay, I didn't know that.

Saj: So that makes a lot to difference, because then if you have a fast-moving item, you wouldn't mind making a small profit because you know you can sell the same amount every day. Rather than selling only five, you can sell 50 a day.

Kunle: Gotcha. Get the cash in, put it back in, get the cash in, but it back in.

Saj: Putting back, putting back, as long as you can source the same products again. Because if it's a retail arbitrage kind of item then you know you don't get similar items again. So the reason why, as I said, 2014 start was again, I started concentrating more and more and then your mind just starts opening up more when you start doing private label. So I still prefer 100% doing private label because I personally think private label is like, once you have a new product... you have to obviously work up front, it's more hard work, that's why 99% of people don't want to do it. Because there is a voice in your mind which keeps saying, ' Do you really want to go out of your comfort zone?' And I think now there's a lot of these ways to promote which people are saying, that you know, do giveaways and stuff like that. Which again I'm seriously against. I'm not saying that you shouldn't be giving... I mean once we move on to PL, I'll talk about it, but I'm seriously against that kind of strategies anyway. But yeah, retail arbitrage, so at the end of the year we all know in quarter four it's obviously big. So I thought, I don't want to completely get out of something which I had worked on for so long. Because again, I stayed by most of the time, like toys are big but this is the first year I actually ever sold toys. In the entire four or five years I've never sold toys. So I concentrated on certain niche retail arbitrage items and I continue to buy them and sell them. So I mean the last quarter it gets bigger and you think, once you got private label items which already are selling a lot, like to give you an example, because I was doing all these consultancy work, I started the podcast which I didn't do much episodes anyways, but the academy and then you know the consultancy work. In pretty much right from end of October or November, I haven't even touched my private label products until January. So I knew that I had enough stock, so I send their stock, and it was selling comfortably what I wanted to sell. So I didn't have to do anything once it has already started ranking, it's making consistent sales.

Kunle: Yeah, I, sorry to cut you off, I just absolutely love the leverage, the time leverage where you invest your time, your efforts, your creativity at the start of a private-label business. And off the back of that it just pays dividends over time. So long as you get that ranking and you are delivering customer service, it just returns. It's fascinating, yes.

Saj: Yeah, it's just a completely exciting place, I mean when we go on the private label I'll talk about it. But as we all know, retail arbitrage is obviously the biggest in quarter four, I always never avoided it because it was like, I don't want to let go of something which I already learned for three – four years. But unfortunately in 2014 I still didn't do too much, and to be honest I didn't do anything in October much, I didn't do anything in November, it was only I think December I started doing a bit more retail arbitrage in 2014. And then I had enough stock to do a good amount in January as well. But then I realized, that's a big mistake I did because I should have continued to do at least for the last entire quarter because I'm just letting go, even though I'm doing PL now, but that doesn't mean I should just leave the... and most of the time, you know when I talk about retail arbitrage, most of the time it's more online arbitrage I do, so kind of these... See, you know how it works in the UK, like if it was in Tesco, so you can just order and then go in store. Because I don't have time to go in retail stores and scan. In fact, you be surprised, I've never done that actually in the end of four years, so when I talk about retail arbitrage, mainly talking about online arbitrage.

Kunle: Yeah, I tried it this Christmas, actually. We went into Sainsbury's Christmas Eve and we saw something that was third of the price and I've been hearing all this podcasting stuff like that. And I got on to the Wi-Fi and I installed Amazon seller thingy app and then I scanned. And I was like, 'Woah, it's three times, it's three times the price. I shall buy this, I shall have five, please.' And I did it, they were quite bulky items, and I looked at the whole thing, and that the fact that... So I called the UPS chaps and they came around. The labeling and all the printing. It is hard work, it is still hard work. I know for buying online, if they're bulky it’s hard work, but if it's small stuff like phones and just tiny stuff, things in hand, I guess there's opportunity there. These were quite bulky stuff I think they were like vacuums I bought, and they were like a third, and my neighbors were like, wow, how many of these things is he bringing out of his car? But yeah, it is quite interesting.

Saj: It's a lot of work. I mean that's why I made a couple of webinars that I said, I mean I'm not completely against retail arbitrage, it's one of the best opportunities you can have because you're not even doing hard work. Your hard work is, you are probably shopping with your family in a mall and suddenly you spot a deal. Just scan it and see if that's your retail arbitrage item. So it's quite easy, because it's already ranking and stuff like that. The only problem is it involves, a lot of work. Now I realize it more because. In this November, I realize it more because this November in December I did about 300 K each month...

Kunle: Wow. From retail arbitrage PL?

Saj: This is combined, but obviously the pound looks big because there were a lot of retail arbitrage items as well. So the PL was selling regularly, but a little bit better than obviously other months because obviously people might be buying them for gifts as well, like PL items, but it couldn't have increased so much so it was definitely because of retail arbitrage items. But I mean on Black Friday, I think I did about 55K just on Black Friday. And I could have done more because as I said earlier on, it's only me and my wife to be honest.

Kunle: Yes, I was going to ask you about your team.

Saj: That's it pretty much, we are the only people there, we don't have warehouse, everything just comes in and goes out of my house and it's getting a bit...

Kunle: Tight. [laughs]

Saj: Yeah, at the moment because it's like this is the first house we ever bought. So we don't want to turn it into a warehouse, I mean when we were renting, it was still okay. So this January, the first week, I actually went to see about storage spaces and I spoke to them that I don't need it right away but I needed to see how I can work from here.

Kunle: So approximately how much, from a retail arbitrage standpoint, what volume of products comes in, in this Q4? How many products do you actually handle in Q4, approximately, in this business?

Saj: Oh, I could be doing like 50-60 items at a time. Sometimes I would just go deep, so that I know that this item is going to sell, I'm going to just buy a few hundred items, products, units of each item. Because that makes it a little bit easier when you don't have a bigger team. Even though I try to spread it, so I might sometimes have got 50 – 60 odd items, but most of those items might have been smaller quantities. I mean I would have concentrated on a few items that I would have gone deeper. Because of the limited time I have, even like when you print your labels, if you only have one or two of each, you know you're searching for the items you need to label, that takes a lot of time. So that's how you have to space, so that's how you evolve. So when you start, you should probably spread it more. Even if you find an item where you can make a lot of money, rather than going, say if you only had £500, I mean if someone is starting today rather than buying one item, I would say even if you were making £10 profit on one item and you are getting 50 of these, don't buy all 50, buy only 10 and try to find other items if you can get. Because if someone else started stocking that item and you have to somehow pay at the end of the month that credit card, and those people have got money to sit on, then they will always undercut you and then you will probably have to clear it out. So if you can spread it between 10 different items, you have less chances of happening all at the same time similar kind of situations. As soon as you progress, so you got a little bit more money, then your strategies change. As you grow your strategies change. Like at the moment now I can’t just sit and keep scrolling for different offers that would give me the same profit as I had on those Cisco flip camcorders otherwise I would be sitting there whole day finding one or two units, that's not what I want to do with my time now you know.

Kunle: It's a thing about speed, really, from what I gather, from all of what you said, how quickly you are able to move and then get your money back. I can see a lot of experimentation going on, so if something's bad to you, you get your money out really quickly and then you put your money back into bigger profits. Okay. And then the other thing I gathered from your stuff, from what you said, especially the fact that some items where you're buying 200 – 300, maybe even 400 units, is, down to magnitude. Where you identify the magnitude because you know that Amazon is selling 50 – 100 – even 200 of that particular item today. So how do you, do you always check the bestseller rank in Amazon to validate your purchase before you hit the buy now, 100 units on say maybe Argus or Tesco.

Saj: No, normally no. I mean sometimes I do, actually, there's always bestseller rankings and everything, I only started even though I used to be on these pages for years, I've never noted them because the seller rank didn't mean anything to me. Because if Amazon suddenly decided today to just sell a £40 item for £10 just because they wanted to clear their shelf, it's going to show as number one bestseller today. And if I just saw the same item today in, say, Tesco and I just base my decision on that, then I'm just going to think, 'Oh, wow, number one item.' But it's number one item today because it's a £40 item selling for £10, and I pay it for £20 - 25 and maybe customers don't want to buy that at £20. So I never really looked that much at bestseller rank, but that's what I said, I've always been more sort of like, my PL as well, if anyone listens to my podcast I mean I keep saying, a lot of people say don't marry your products, but I always say go into a niche which you are either passionate about or you have knowledge about. It has to be at least one of those two things. And you pick up any big brands who have made it, maybe I don't make it that big, but look at Apple or anyone, like people who created their product they either love their products or they were at least knowledgeable in their products. That's how they knew what was going to happen. And I said you know, when I did retail arbitrage, I always did in certain niches, retail arbitrage. So even if I found a vacuum cleaner like you did, I wouldn't sell it. Now you might think that's just kind of stupid in a way because you can see that you can sell it at three times. But I don't know, I haven't been looking at these items in a long time so sometimes, just like the example that I said, you know, if Amazon has cleared it today, that's why the reason it's ranking high and selling more. Once it goes up, customers might not buy. And then the limited space you have, so I had certain rules you can say, in my mind, that I will only buy these kind of items. So with my past experience, when I just look at the items, I know whether that's going to sell or not. 99.9% time that never goes wrong.

Kunle: That make sense. So it's just down to business fundamentals really, and your marketplace knowledge, just understanding that industry. Understanding that particular niche, really, in retail. It's fascinating, really, really good stuff.

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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