Dave Kelly 9:00
I don’t remember if it was you or someone else on our show, but they warned they said if people say passive income if people say easy, that they’re probably trying to sell you something again, like you said you don’t know these individuals. But that that’s kind of the warning. If something is too good to be true. Damn it just like my dad said.
Rolando Rosas 9:22
It is. It is and not only that, but I’ve talked to a TikTok influencer and she’s got nearly a million followers. And I believe she was trying to get her son hell off the ground with a with a with a drop shipping business on Amazon. And, and this is kind of what started me on this whole thing. Maybe we should just let people know the truth about this. And she had a video on it and it had just pallets of inventory that she could not sell and her son could not sell and the These types of mixed messages that you can just sleep and it’s, you know, money’s coming in, don’t believe that, save yourself the hassle, there’s a lot of other things you could do to dip your toe in the water, that’s low risk, that will let you validate your ideas. Without having pallets or crates, or cartons of things that you’ve got in your garage that will never sell that will never move in, you don’t want to be in that position. Because it’s, it’s scary, right? They’ve when you’ve invested, maybe a good chunk of change open a line of credit, maxed out your credit card to get inventory in it is not moving. So let’s define some of these terms, because they all also imply slightly different strategies. So first of all, let’s define what is dropshipping, let me give you the easy way to define drop shipping. Drop Shipping, is essentially when you sell a product to a customer. And that product is not physically sitting at your location. The classic term of drop shipping means that someone else is going to ship that product to that customer. Now, that’s has been conflated to also mean a business where you may be you have the products, and it gets sent to customer that’s more direct to customer but to drop shipping, the true essence has always been I don’t have the inventory. It’s in some other location that somebody owns that inventory. But at the moment I sell the product to a customer, that other location will ship it to the customer on my behalf. Did I get that right, Dave? Or did I miss anything on that one?
Dave Kelly 9:22
I don’t think you missed anything. You know, drop shippers are very important in our business. They’re good at shipping. You know, so when when a customer buys from us, if we use a drop shipper, drop shippers not trying to sell them direct. They’re not putting their own invoicing in that packaging. Buyers still think that the product is coming from US legally. I mean, it is our product, we purchased it, we sold it. The drop shippers are great at shipping, and a lot of them can help with shipping costs. Because some of these drop shippers are so large that they’ve been able to contract some really aggressive shipping fees.
Rolando Rosas 12:24
And they give very advantage, no doubt. And they get very, very, very low rates. And it’s a good way Dave, for folks to also, if you’re not into shipping, if you’re not familiar with shipping, you could get up to speed very quickly. But if that’s something that is a frightening prospect, drop shipping is a very good way to sell items without you, or you end up helper having to do that store things in a garage or in an office and having to have products going out from your location, it’s a good first step, to validate an idea. Is there a demand? Do I like this product? Do I know know enough about this product? Can it product sell? That’s where you want to start if you’re going into products. But now let’s define another term that gets thrown around a lot. retail arbitrage, what is retail arbitrage? Retail arbitrage is simply finding a product that is available, let’s say at Best Buy. It’s available at $1 store. It’s available at a garage sale, available through a liquidator that’s getting rid of merchandise or through them are manufacturer that doing liquidation and they sell it to a low cost, low cost channel, you go ahead and buy that inventory. And then you sell it online. And that’s the classic sense whether it’s on eBay, Amazon, Walmart are your own website. That’s what retail arbitrage mean. And you know what they I’d never been exposed to retail arbitrage. That’s not our practice. That’s not what we do. And at first, I was like, What is this complicated thing? It just that’s all it is getting merchandise at other liquidated or been discounted. And it doesn’t have to be refurbished. It could just be in the box. But it’s been discontinued. And now you’re selling it back to a customer. And that’s something to consider. So for part two, we’re going to dive into, you know, what are some of these implications if you do that, because there are some things you can do you go buy it on eBay, you can sell it on Amazon, but on Amazon, there’s a lot of shenanigans rules and even guidelines that Amazon has, when it comes to different brands. So you want to stay tuned for part two, about how to do that well, so that you don’t get into Amazon jail, so to speak. Right, another one? That’s right, another one on part two. Thank you DJ Khaled. All right, well Jumping to our next definition, resell or reselling, Dave, because this is, this is what we do. This is what we’ve been doing for 20 years. So resale is simply you taking merchandise, from, in the classic sense from a manufacturer, and you then sell it to a customer, that customer can be a business customer, and that customer could be the consumer, it could be anybody for that matter. And that’s all that means, and within resell. There are a lot of manufacturers and brands that have agreements in place that allow you to sell that product. Now there’s other ways to also resell without an agreement. And again, in part two, we’re going to get into those strategies and some of the pitfalls. When you have these agreements in place. There’s some just say there’s some things like that are called the first sale doctrine, Dave, I’m so like pumped, I have kick get my words out the first sale doctrine. And we had a guest on big props to CJ Rosenbaum of Amazon Seller Lawyer, who broke this down really well for us. And it’s really important. If you don’t know anything about reselling, the first thing you want to get educated on. Dave is the first sale doctrine. It will protect you. So get familiar with that. And if not reach out to somebody like CJ, who can help you understand what that means to you as you grow, because that’s going to be important. The more you grow, you’re going to find out that that’s something you really want to be familiar with. Dave, did I miss something here on reselling?
Dave Kelly 16:40
I don’t think so, man, this is this is our world. You know, as a reseller be aware, you’ll have a lot of competition out there. So you’ll have to come up with some of your sales and marketing tactics so that you can really bring value to the customer. Because when you are reselling, there’s a lot again, there’s a lot of other folks that have access to these products. So you’re gonna have to be smarter than your average bear if you want to be successful.
Rolando Rosas 17:04
Yeah, that’s right. Little John agrees with you, you better believe it, you can take a brand that everybody’s looking for, I’m just going to throw one out. For us doesn’t really mean anything. Bose let’s for example, Bose, you can go ahead and start reselling. But without having the proper information on the implications of where you’re selling it pricing. There’s all kinds of all kinds of things that can go south if you’re not aware of it. So, Dave, let’s keep going in with these definitions. Wholesaling. Now, wholesaling. For us, it means something different than I even I’ve heard more recently, wholesaling is simply buying merchandise in bulk. From a manufacturer, let’s just keep bows for an example. You buy a trailer load of merchandise from Bose, because you have an agreement, and these brands generally will have what they call distribution agreements with wholesalers. And so they buy merchandise by the trailer load. Then they store that and then sell it to their channel partners, their dealers, agents, retail locations even. And that is the classic sense of a classic definition of wholesaling. Other people have defined it in different ways. But when you’re talking about wholesale, there are large companies usually distributors as we refer to them in the channel that buy these big trailer loads of merchandise and then sell it through other channels, dealers, authorized distributor authorized resellers and such. And that’s what wholesaling means. All right, Dave, anything that I missed here on the wholesaling side that you want to add.
Dave Kelly 18:53
I think sometimes wholesaling can, you know, not always the case with distribution, but generally it is selling large volume at small margin.
Rolando Rosas 19:08
That’s usually the case. That’s why you’re in business as a distributor. And if you’re not moving a lot of cases, you’re not really a distributor and you get to literally it’s all about volume for distributors slash wholesale businesses. Now, you could sell in bulk on Amazon and other places, but that never necessarily mean or imply wholesaling, because wholesaling and the channel is referred to in distributors are usually locked together. And then they sell products again, through a lot of other smaller agents, smaller dealers, even smaller retailers that buy from them so that they can sell to their customers. All right, so that’s wholesale. Now, we’re almost done here with these terms. B2B on Amazon. What does that mean? B2B on Amazon. What what? That’s right, John Little John, let me tell you what little so let me tell you B2B on Amazon is selling business to business, and usually are actually not usually but all the time selling to Amazon registered businesses what that means is our company global tech worldwide if we’re on there as a seller, I can sell to other businesses like Cleveland Clinic, Ford, the Ford Motor Company, Toyota Motor Company, just making some of these names because they are clients of ours that we’ve sold to, which sold to a bunch a couple of the manufacturers, a couple of the farmers, I can’t. So like merch and bear, as well as educational customers, they’re considered b2b, or businesses on Amazon. So any government entity is falls under that branch of business to business. Now, business to business transactions doesn’t necessarily mean that you’re selling, you know, at pennies over your cost, it just simply means you’re selling to another business. Now, it is the case that there are businesses that will buy large volumes on Amazon. And those businesses are not wholesalers, those are end users, who then send the product to all their remote workers. For example, if it’s one of the Ford Motor Company, one of these Toyota, they have a bunch of workers that work outside of the plant and factory, they will buy 100 units of something, they get to their location, and then they know distribute that product. So b2b is a good way to also find a channel for customers. Because there are many, there’s 1000s 10s of 1000s of businesses and government institutions on the Amazon platform registered as businesses. So if that’s if you haven’t considered that, or that hasn’t been part of your game plan, you definitely want to start thinking about how to do that, because from the government all the way to the Toyota Motor Company, they buy everything from toilet paper, to electronics, to janitorial supplies to arts and crafts, all of the stuff in between that you can imagine is used by a business, it will be consumed in and purchased on Amazon.
Dave Kelly 22:23
So B2B on Amazon, you know, something I just want to add, there is a lot of business buying happening on Amazon, you know, buyers aren’t always waiting for a phone call from a hardware supplier. They can do a lot of their own research. But what I love about b2b for our customers first, it’s opened up the doors for just another another avenue for for sales, it gives that it gives that buyer an opportunity to flex their buying capacity. So they might get a they might get a slight discount, you know, because their buying power is greater than just a everyday consumer. But also this is where you can really flex the value of your solution and the value of your brand. Because there’s a lot of support that b2b buyers like to like to be exposed to. So it opens up a whole new marketplace. And again, it gives you a real chance to shine as a brand to show what else you can bring not in terms of product, but more in terms of the support and why you want to do business with that particular seller. Also consider your solutions that you’re selling our market happens to be products that fit in a consumer and also a commercial marketplace. I don’t know what it would be like selling just general office supplies or toilet paper or cleaning supplies. But I know with business grade communication products, like the products that we sell, we’ve had a lot of success here on the b2b side.
Rolando Rosas 23:57
Yeah, absolutely. Little John agrees Yeah, it’s been successful. And that’s something we’re going to cover in part two, what happens to resellers when they start growing from 5000 to 10,000, to 100,000 to a million to millions of dollars, because when you start reselling, I guarantee you you’re gonna get calls from the manufacturer at some point, some really good ones to say great job and some that sound like they want to rob you right out of the existence and be like stepaside son we can handle it from here and we got a lot of stories around that that we can share on part that we will share in part two because it is important you grow your business just like anything else I don’t know was it was it was the JC that said more money who was it that coin more money more problems was that big daddy?
Dave Kelly 24:53
No, I think it was I think it was biggie.
Rolando Rosas 24:55
Biggie is the house Hold on a second. Let me see a big he’s in the house, I thought he I saw I saw money somewhere. He may be somewhere in here.
Dave Kelly 25:07
Big here it’s puff, puff,
Rolando Rosas 25:10
Its Puff Daddy, come, come, come, I sorry, come on, then come on, come on. That’s Puff Daddy, Mo Money Mo Problems, that is a real thing. It is real. And we could tell you from experience will the more you sell the more attention in a good way you’re going to get from the manufacturer that you’re reselling. But at the same time, there are potential, there’s potential for things to go sideways yourself. If they don’t have a clear roadmap on Amazon. That’s the caveat. If the manufacturer you’re working with doesn’t have a clear understanding and roadmap on how they want to be on Amazon, I guarantee you you’re gonna run into issues. So how do you know that? And you know, if they do, we’re going to cover it in part two. All right, let’s move on listing. What is a listing? If you’ve never heard that word, let me help you here. A listing is a page on Amazon that contains your product. It contains the images, it contains the description, it contains the video, so when you go to Amazon, and you and you’re searching, you’re gonna get search results at first if you’re typing in some keywords. And then once you click on that, it takes you automatically to a page where you see the product and you can check out that is what a listing is a listing. Now, let’s go to the next one transparency program. Let me tell you why this is going to be important if you’re planning on selling, or I should say reselling, or drop shipping or doing any retail arbitrage on Amazon. The transparency program is meant to protect brands from counterfeit. And the transparency program also serves to keep out counterfeiters and hijackers off the listings. So if you remember listings is the product page. People is designed to keep them off of that because this particular brand has encountered problems in the past. So if you go and sell like our like I said, before you go, let’s say go buy Bose and you buy it somewhere at liquidation prices, you may find yourself when you go back on Amazon to sell that product. If you take the product and you attach it to an existing listing that’s branded Bose, you may find that you can’t sell that product because of this transparency program that Amazon has in place with a company like Bose. And they have a lot of brands that are have been doing this program. There’s a lot more to it. But suffice to say, the transparency program serves the brands in one way where it does protect them from counterfeiters. And it also is meant if we’re agitate for sellers, that are not in not part of the transparency program, because a brand can essentially let you into that program with them. Or you’ll be on the sidelines. So it’s really important. That’s why starting slow finding out if if you can put these online these products online, without any issues is going to work for you or not. And by the way, Dave, there’s also a way for you to sell without the worry of a transparency program. But again, we’re going to cover that in part two. The last one, the coup de gras, the keys to the kingdom, Dave, the keys to the kingdom brand registry. Without brand registry. It is awfully difficult to succeed on Amazon, all the tools, all the insights, all of the investments that Amazon is making with AI and analytics, the only way to unlock that is to have brand registry on Amazon. What is brand registry simply put, you go to Amazon, and you tell them hey, I have a brand name. This could be the name of your company, for example. Like for US global tech worldwide. That name is trademarked by the patent office. So then we can go over to Amazon, give them those documents. And they have an Amazon accelerator program. If you have not if you’re not familiar with that and you haven’t done that, that will walk you through that. There’s also attorneys like Amazon Sellers Lawyer, CJ and company, they will help you with that if you need and others out there. But with that you have the ability to apply for a brand registry program and you have the ability to unlock the keys to the kingdom. And here’s where you can do more than folks that aren’t part of the Amazon Brand registry programs. So if you’re starting out, you want to have this in the back of your mind. You want to try to get your name trademarked through the patent office, because then you can apply for this. What does this mean to you as a reseller, as a reseller, that means that a couple of things, one, you have listings with your own company name on it, and eventually what I would say, you know, what, Ori, give me pro tip, numero uno gets credit for a prompt you want, you get registered for brand registry, and that’s accepted, you’re accepted into the program, you have a path that will allow you to take control over your listings. When you start off, you may not have brand registry, and you probably will go in and list yourself, essentially list yourself under other brands so that you can sell their product. You may have some success early on doing that. But to really grow to grow your business on Amazon, you will you absolutely want to leverage brand registry because then you can, you can use ads that are pointing to your listings, you can look at the analytics that give you further insights. You can also unlock other programs that are within Amazon, but only available if you have brand registry. So if you don’t, you’re gonna be looking from the outside in at all times when you’re on the Amazon platform. If you’re a brand registered, you’ll have those keys to the kingdom so that you can unlock the growth that you really want to have when you’re selling on Amazon. Okay, Dave, did I miss anything here? What did we cover all the essentials of these terms and definitions before we go into the meat?
Dave Kelly 31:53
So it sounds like trademarking your brand. If you plan on BM, being on brand registry, trademarking your brand is one of those first most important steps that you’ll need to make.
Rolando Rosas 32:06
Absolutely, absolutely. And even if it’s not done on day one, it’s something that you should have in the back of your mind or have a game plan around because that’s what’s going to allow you to really excel as a reseller, you eventually want to have a mechanism to have your own trademark or your own brand on Amazon, so that you can control your own listings. Otherwise, you’re beholden to listings that where you can get yanked, or where the, the the brand all of a sudden registers. As Trent as a listing as a transparency listing, you’re out of luck, unless you get essentially into the fold with them. And sometimes brands are very hostile to other sellers. So you may find yourself on the wrong end of the stick. If you don’t go down the brand registry road. So good tip for all of those starting out or that haven’t done it yet.
Dave Kelly 33:04
All right, Rolando. So getting started on Amazon. So Global Teck Worldwide. How long? How many years have we been on Amazon?
Rolando Rosas 33:14
I want to say we’re going into our 12th year on Amazon.
Dave Kelly 33:17
Alright, but we’ve been in business for 20 years, correct the products in the solutions. So you on your own, you had eight years of experience working with the products and the brands that you brought into Amazon. So you started with something that you already knew something that you had a passion for. Right?
Rolando Rosas 33:35
And that’s that’s usually the best place to start, Dave, because if I would have gone into selling cosmetics or home goods, I can cook but I know nothing about pots and pans. I’m just saying are cosmetics, cosmetics. I know that women buy cosmetics, and therefore maybe I could get into cosmetics and selling that online would have been a bad idea for me. So I’m glad I’m glad. So this is where you’re talking about is continuing that, that knowledge that knowledge set and going into something that you know, because that’s usually what I would say one of the key differentiators when it comes to folks that have success and the folks that really crash and burn. You could go to Alibaba buy something for 50 cents and then hope and pray that you’re on page one of Amazon and that you sell tons of units that’s also being sold and pitched in a lot of these online ads and an influencers and people selling courses. It doesn’t happen that way. And then in for sellers that are that are selling seven, eight figures and above. It doesn’t happen magically. There is no magic by the way, Dave, there is no magic on Amazon. The magic is the hard work. And the magic is the mastery of the different areas that are required to succeed on Amazon and that’s work and going back to work. Right? And you know Dave, there there is a guy Gary Vee he’s so big on this idea of getting your feet wet. Go on the weekends, go get some merchandise, buy it for $1 $2 Whatever it is go to the garage sale or thrift store and start selling because this will unlock in your brain ideas experiences you know the confidence that you can do it so then that you could take it to the next level. Or do we have footage on that?
Guest Speaker 35:39
Where do I start? What do you want to eBay completed items for fucking I’m going to show them you’re going to garage sales. You’re like oh shit, I see a lot of salt and pepper shakers. Then you go to Filter sold and completed items swirl highest price. And then you’re like, Oh shit $441 600,000 You’re not buying this little fucking bird kind of fucking garage sale. If you don’t know who bought this for three, salt and pepper shaker fucking collector. People buy everything. Everything can be flipped. But how do you think I figured out one life I was like I see a lot of mugs at garage sales. Do mug sell for anything? Search on eBay mugs completed items sold sort by fucking price. Holy shit. There’s $88 mugs. There’s $63 mugs. There’s $96 mugs that go buy a bunch of mugs for quarter come home, look them up, educate, educate, educate. The key to flip life is the homework you do it during the week that you punking them leverage on Saturday when you kill it with your fucking knowledge. Absolutely. What do you want to eBay.
Dave Kelly 36:37
He’s the reason why you want to get to these yard sales 10 minutes before 20 minutes before they actually open because people like this and people that are paying attention to him. They’re beating the regular casual Saturday yard sale shopper.
Rolando Rosas 36:53
No doubt, no doubt. And he hit it there on the nail on the head Dave, educate, educate, educate. And that’s really what it’s about. If you’re a teacher, if you’re working a corporate job, and you want to get a side hustle off the ground, and you want it to go beyond just a couple 100 bucks on the weekend, educate educate yourself on the product, on the people that buy it on where it’s sold, how it’s sold. Because the better you understand that, the more likely you’re going to succeed as you’re trying to take that from just a weekend side hustle of a couple 100, maybe a couple 1000 bucks to actually a full blown business when you’re making $10,000 a day $50,000 A day or more. So start with something that you either know or you’re interested in, because that’s going to then allow you to unlock the Oh, ah, yes, I could find this here, I could do that there. And one step leads to the next you’re confident Oh, I could do this. And that’s what started with. For, for me, that’s how I started global tech, I had a couple boxes of headsets laying around. And I thought you know, I’ve want to burn these because I had a bad experience with it with the manufacturer that I was working for at that time. And I thought you know what, let me just see if this gets if I could sell this, I called a couple of clients that I was working with. And they say, You know what? We want that come down on our offices. And I ended up they wanted more than what I had in the boxes. And I thought, Hmm, this could be a business in that first sale, that first deal then led to the next that led to the next to lead to the next and on and on and on and on. But that first step, can I do it? Yeah, check. Can I make another deal? Check? And then just like Gary educate. So how do I sell more? How do we do more of this, I could go to every client in the country in my car and flight and I still won’t ever reach them. So at that point, then we went online and started selling online. And then that evolved into selling on Amazon when none of these companies were there. And that’s kind of where we are continuing and evolving our story. So we’re now looking at that next phase where we’re going beyond Amazon, and looking at other platforms and other services that we can provide customers. But getting started getting educated, getting the confidence understanding the cost, you know, hey, you know, retail arbitrage. If you can buy stuff for $1.02 Or three, that’s not going to break the bank. But once you start moving up, and you start selling greater quantity to home, I need more I need more and more. You’ll find you’re going to need some financing, or maybe you do have but you can use it in a smart way because you’re going to know I need x to meet this demand or the holiday season is the big season. So I do need to ramp up for that. Right so you know where to deploy your cash because the cash is the hardest thing to come by. It’s it’s the biggest constraint on the business is cash flow. So having that in line Next up and getting ready for that is really there’s an art and a science to it. As well. Dave, you’re gonna say something.
Dave Kelly 40:09
I was gonna say first, I’m glad that we’re not selling salt shakers. But also, you know, you said this a while ago, you like to sell expensive, premium product. Yes, margin margins are tight. But the more expensive it is, the more money you can make. Not necessarily, the more margin you can make, but the dollars are greater.
Rolando Rosas 40:35
And it scares away a lot of other sellers. Right when, like he’s talking about salt shakers, you can fly for a couple bucks and sell it for 80 or 30. You know, but the reality is, yeah, you if I could sell shark shake a salt shaker for $1,000. I know that there aren’t going to be a lot of sellers, because they’re they’re afraid or put off by that price. And took, you know, a lot of focus a lot of times early on is on the low side, low cost, low margin, low sale price item. But keep an eye out for premium items. Because you may find that that market may be in some ways easier to sell into because there’s less competition for the premium products. So one of the other things when it comes to getting started, there’s like, like Gary was talking about educate, educate, educate. So let me give you some of the places that I’ve gone to educate myself. And I would recommend to others if you’re trying to find out, okay, who is already on this path and can I learn from I would easily recommend somebody like a Josh Hadley. He’s got his own podcast of wonderful guy. We’ve had him on the podcast as well, very well versed on the Amazon world and it’s been around a while so he understands it. Serious sellers podcast with with Bradley Sutton. The MDS podcast have been on there as well. They’ve got a lot of sellers that are million dollar sellers, hence the name MDS. So they’ve been around for a while they understand they understand the pitfalls in you can learn a lot from somebody who’s been on a platform for 7, 8, 10 years. And you’re gonna you’re gonna pick up something that you did not know, the other thing Dave, selling when you reselling things, change. Conditions, change, marketplaces change, people in the organizations change. And technology forces change when you’re doing resell, and to stay current, to stay in that curious mindset to continuously learn is what’s going to allow your business to thrive for 20 years or more. Whatever you learn today, whenever you’re listening to this video, I encourage you to keep an open mind to stay curious. And to always want to learn more, because the more you keep learning and adapting, the more you realize at some point, I gotta change this or this is not working and you’re willing to change the game plan a little bit, I can guarantee you that you’re going to find a lot of folks that are going to start with you so may immediately rise to success. But then they sink to the bottom. Because they’re not willing to change marketplaces. Right now we’re going undergoing an AI revolution. And every platform that I know of is bringing it in house one way or another, to deploy it in that will change how users interact on Amazon, on eBay, on Google, everywhere else, internally within companies. So you want to have an eye on what’s happening with AI? And what does it mean to my category, my business or the platform you’re trying to sell on?
Dave Kelly 43:50
There without a doubt and having a circle of connections that are in this Amazon world that aren’t selling what you sell, you know, everyone’s done different types of solutions and products. But having a circle, being part of different groups is going to really be a lifesaver, because the rules change overnight. You know, the rules change overnight Rolando, I remember we used to have weekly meetings. And when the pandemic hit, we started having daily first thing in the morning meetings because Amazon was changing the rulebook overnight every single day there was something new and if your team if our team wasn’t coming together and all understanding what had happened and how this is affecting the business. Yeah, that could have really, that could have been a costly mistake. So definitely keep your ear to the ground with Amazon. But of course within your circle of Amazon sellers is super important.
Rolando Rosas 44:46
No doubt Dave up let me give that a clap. Because that is important. Things will change. You got to be your mindset. I’m just gonna say the mindset has to be that at some point that Things will change. And they’ve got to adapt. And those folks that do that well, in the Amazon sellers that we’ve talked to Dave, the ones that adapt, tend to do better and tend to be more profitable now. So be ready for that. Now, as you get on the platform, so let’s just transition a little bit here, Dave, you understand? This is what’s going to take, you’re starting them, you knew you do in your Gary Vee suggestions are going into the garage sales and thrift stores, and you’re doing all that business. And then you’re thinking, What should I do next? Okay. So if you’re going to sell on Amazon, you have two directions, you have direction of shipping everything to your customer. And some categories that makes sense, big, bulky items, like furniture, going to be different than small electronics, okay, we understand those differences. But in general, if you go in that direction, versus sending everything into Amazon for what they have available, which is their prime Pro, or FBA program, which is what unlocks the prime logo, on your listings, and on the search results, you want to evaluate the impact that prime that logo has on your listings in on yourself and from what we can gather in our own data, it can have anywhere from a three to 10x result, versus just what is called merchant fulfilled, meaning I have the inventory sitting at my warehouse, and I ship it to the customer. And that’s because Amazon does favor products that are in their warehouse through their FBA program, and therefore allows you do have that prime logo. I will also add that as Amazon has been expanding their one and two day service in different cities, and even some they seem to have started seeing on products that are order from Amazon, is that that same day, like arrives before seven 7pm. Mike, I’m getting it in what is amazing about that is that as Amazon has promised, and they keep doing expanding this same day and next day program, more and more customers are becoming accustomed to that type of shipping method, can I get it tomorrow? Can I get it today. And in some some major markets, a lot more items are being shipped the same day or the following day. And so FBA unlocks that, that’s really hard to do on your own when you’re starting. And so if you want to get more exposure on the Amazon platform, FBA is the way to go. Now, there are some things to be aware of with FBA that does require for you to get inventory that does inventories and investment, which gets to what we were talking about, you want to get really familiar with the product or products that you’re bringing into the Amazon warehouses, because there’s a lot that’s going to happen there, you’re gonna get returns, you’re gonna get good bad sideways reviews, Amazon’s gonna lose stuff, you’re gonna have to on your own, try to get reimbursement, there’s third party companies that will do that for you as well. So there are some some real big benefits on the platform of Amazon, primarily the prime logo. And then there are some things that you’re not you may not like, when returns, negative reviews, complications with inventory moving through Amazon system and they lose stuff that happens things get damaged that happens. So you really need to think about that. And what that means to you with margins you have to factor the if you’re in the retail space is called shrinkage in the online space returns and those other expenses associated with that program. So that’s what I want to say about the FBA program. But for us it’s been an awesome awesome awesome thing. And but we have in place a team of people that work on that on the FB just alone on logistics and FBA side. And that’s something as you grow, you’re gonna find you want to do you’re gonna want to think about team building, and we’re gonna get to that in a moment. Dave, did you want to jump in and say something about that about FBA?
Dave Kelly 49:21
Well, two things about FBA. I think it’d be an interesting LinkedIn poll. On the b2b side, what influenced your recent purchase on Amazon? Was it fast delivery, or was it low price? And I think it’s a misconception out there that you have to be the lowest price to be successful on Amazon. But we know that’s not the case. When I talk 100% You know, talking to the b2b buyers, they like Amazon because of the speed they ship things better than Anybody I mean, of course, mistakes happen. But I think about the think about our marketplace, people that sell some of the brands that we sell, they can’t be as good and as fast as, as Amazon. So when you’re thinking about Amazon FBA, also consider, you can retain more of your profit dollars, possibly, because it’s going to get to the customer fast. We we are going to put that as a poll out next week, and we’ll share our results on the next episode.
Rolando Rosas 50:32
And I liked that, I liked that. And that, go ahead, Dave.
Dave Kelly 50:36
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Rolando Rosas 51:03
That’s right, real life. That is real life. That’s right, DJ Khaled real life, make sure that your lifeline is nice and secure with the best possible internet and prices keep going down. So if you haven’t checked it, go to Circuitloops. And you’ll be able to see if you have the best price in town or not. You know what, Dave? There are six things that every seller, and every person that’s looking to sell their product online, should know before they start selling on platforms like Amazon, you know, the first thing about Amazon, I guess, maybe seven? Let’s call them Lucky seven, there. The magic to success on Amazon is that there is no magic said this earlier. Why would I say such a thing that there is no magic there is, you know, there are tricks that people do and hacks and you can listen to all these all day. They’re Blackhat things that happen. But I gotta tell you, Dave, you know, we’ve seen this over the years that we’ve been on Amazon, somebody publishes something about a Blackhat, it gets shut down. Those people get busted, and big problems that counts get suspended. And all kinds of things happen when people try these short cuts that are either very questionable, and very borderline, and even in some that are outright fraud. You want to avoid anybody that’s leading you down that path. Because if you’re building a business, the last thing you want is all of a sudden one day for it to be gone. And so looking at the long term picture, setting yourself up for the long game, is really what you want to do. And in order to do that, you have to think about how to master this platform because it’s not like selling products on Shopify and your own store, your own store, you don’t have competition, you create your own rules, not so on Amazon. eBay operates its own way. And I’m super curious to see what happens with TikTok shop because they have the potential Dave to really upset the applecart when it comes to Amazon. They’re doing some things that Walmart’s not doing Amazon, Walmart doesn’t have a media presence. Social media presence, like tTikTok has. eBay doesn’t have that either. And because they they’re not being dragged down by retail locations, like a Walmart, but they have a lot more clout than an eBay. I think this is probably going to be the biggest thorn in Amazon’s side in the coming months and years. If TikTok starts to pull it off.
Dave Kelly 53:48
They’re certainly going to make things interesting. I may have shared this with you recently, my son had tried it out. And I had asked him I said, So was it fulfilled like. The TikTok was where he saw the product advertised, where he put his credit card information in place the order, and it was delivered. So fast. And I thought it was super cool, because I mean, we love video, we like doing demonstrations with video. But having all of that in the fingers just right, right in the palm of your hand. You see a demo you like it, you see the price you click you buy it, it’s delivered in a day or two. I know that they’re just getting it off the ground. We know that they have the capital to keep investing in that and I bet it’s a huge market disruptor
Rolando Rosas 54:39
it is and you know we’re gonna give it at our level best and start trying it but they don’t want to see us win. That’s what Amazon that’s what Tiktok would say they don’t want to see us win. And I know that’s Amazon trying to do their best to not not allow them to win. But I think this is a very interesting developer meant in the last few years, this is a little different. You know, Shopify tried to compete with Amazon and bought a deliverer, which is the name of the fulfillment company ran into a huge buzz. Within a year, Shopify sold off deliver, they just waved the white flag, it takes more than just having a fulfillment network. And on the on the Amazon side, they’ve done a lot of investment on the fulfillment. So that’s I think, from when I look at it, the exposure is there for Tiktok they definitely have the resources to capital, can they pull off the fulfillment, this is the why people love Amazon, the prime logo, the next day shipping, the second day shipping, and all the benefits you get from prime. If Tiktok pulls this off, it’s going to be I think it’s going to gonna force some change at Amazon, one way or another because I don’t think they could sit on the sidelines quietly, and let their market share rode. Alright, so there is no magic, the magic, the magic, here’s where the magic is. And let me break down what I think is magic. The magic is putting the odds in your favor. And now there’s ways that you can put the odds in your favor on Amazon, and therefore allow you the greatest chance of success. So there’s a couple of things that you want to be able to master and definitely dive into as quickly as possible. As we mentioned earlier, FBA, that’s a program that is where Amazon is putting all of their chips, and they put their thumb on the scale so that FBA inventory is seen more listings strategy, how can I make my listings shine, there’s a bunch of different strategy, we’re going to get to some of those in part two. Inventory Management. This is where on previous episodes, we talked about the graveyard to companies like toys, R Us and RadioShack. And we have a whole long list of that on a previous podcast, the graveyard was built by inventory, Miss management, and it’s very easy to for things to go off the rails when we’re talking about inventory. So it’s really one of those things that you can control much better than other aspects. But inventory management has got to be key to your success, pricing strategies and being profitable, bundling, we’re gonna get to bundling in part two, there’s some things you can do, as a reseller, retail arbitrage, or even if you want to call yourself a wholesaler, there’s things you can do around bundling that can put the odds in your favor. I mentioned brand registry, this is the way to unlock some of those keys that are unavailable if you’re not brand registered. And that’s where Amazon puts a lot of their investments on the platform, you have to be registered. So something definitely to consider. Now, once you leave these things, there’s some other things that also contribute to success. And that also put the odds in your favor. Those are images, images on your product really dictate the action people take because that’s what they’re going to see when you do a search, the first thing they’re gonna see is your image, your main image, they may read the title, but that image, it has to stand out. And there’s a number of ways to do that. And a lot of folks if you search online, have a lot of strategies around images and what to do and how to do them with but you cannot sleep on images. The next three also are important and for us have been really important as we’ve grown a total team effort. And what I mean by that is that if you’re starting your side hustle, at some point, you’re going to need someone else. And that’s usually the scariest thing when you grow and you add that first employee or that first Virtual Employee, looking at how to build the team and finding out how others have done that will become important as you grow. So it’s a total team effort. And the reason why I’m let me back up for a second the reason why I say a total team effort, I’ve talked to brands that are multi billion dollar multinational brands. And I have found I had four or five that are in my head right now that I’ve talked to the team that they’ve put together on Amazon consists of two or three people. And every single one of these, these four or five that I’m thinking right now that I’ve had conversations with or consulted with the all have major problem was on Amazon. And that’s because on Amazon, there’s so many different things that happen on a daily basis that require resources require attention require mash dri. And it’s very difficult at the level now at the level of a multinational organization, to be able to say, I’ve got three people on the on the assignment of Amazon, all the boxes are checked, and everything should be fine. You’re in for a rude awakening, at that special at that level, now two or three, you’re getting started, your site says, well, that’s gonna, it’s gonna be fine, right. And eventually, you may even grow beyond the two or three 510 1520 4050, and so on. But it’s going to take a team effort, as you grow. PPC, this is what pay per click, or Amazon’s ads is another place that Amazon is putting its thumb on the scale, it used to be that ads covered some of page one. Now if you go into page one, when you type in a result, you’re going to see many, many more ads. And it’s getting even harder to surface those organic results that are non paid. So understanding how to use PVC. And there’s a lot of good folks like add badger and several other folks that are online, my Amazon guy, they can talk about Amazon. And if you want some recommendations on that, and be glad to provide just send us a query through social media. And we’ll be glad to recommend some folks but understanding that, and actually, I would say have some of that knowledge of what it takes yourself. You don’t have to be the masters of it. But having an understanding of how PPC works and how it impacts your listings, and how it impacts the velocity and visibility is something to really have as part of your toolkit as part of your roadmap. And lastly, this is the area that some books ignore. And I don’t want you to ignore this because as you grow, you will find that your success will also draw both folks that can create honey for you, as well as the bears don’t want to suck the honey right out from under you. Having good legal advice on Amazon is very important. Because there’s actions that Amazon takes on a daily basis that can negatively impact you, as well as brands that you’re reselling can also negatively impact you don’t assume that Amazon as well as the big multinationals. And this is talking from my own experience here that they have a command of the loss. Let me give you an example. During this summer, Amazon implemented the verification program. And when we went through the verification with Walmart, for example, it was literally three checkboxes. And then two minutes, it was over, done approved, done.
Rolando Rosas 1:02:59
Amazon is under the same exact rules to comply as Walmart. But Amazon did not implement the verification program. In a similar way, it was a complete disaster. And everybody internally and Amazon knows it. And I’ve talked to many people internally, they all admit the same thing. And so a lot of things happened, that shouldn’t have happened, people had their organizations were not getting paid for months, weeks, and nobody knew what was going on. And so a lot of shenanigans like this can happen if you don’t have someone that can understand, hey, these are the laws. This is what you’re entitled to. This is what Amazon can do to you. They they being Amazon operate mainly under the BSA business service agreement. That’s what they they they will use as their Bible. Brands operate under a whole different set of rules. And sometimes those rules are in conflict with the priorities of Amazon. And so as you grow, you’re going to get a lot of arrows flung at you. And we’re going to cover some of this on part two as well, on how to protect yourself a little bit better. But the legal advice you get is really important. So having somebody on your corner, that you can pick up a call, type, send a message to hey, I’m having this problem, whether it’s suspensions or trademark violations or any of these other problems that arise on Amazon, having the right legal advice will still help you sleep better at night because they know what brands can and cannot do legally to you as well as what Amazon can and can’t do to you as well. I can’t stress that enough. Dave, you want to add anything on that?
Dave Kelly 1:04:44
Listen, I’m just so thankful that you have the right people in our corner representing us because I’ll tell you these multinational brands, Hey, these are multi million dollar organizations that aliens in some cases, millions in some cases says, you know, attorneys for them come easy. And they’re threatening sometimes. And they, you know, they like to send letters and kind of scare you a little bit. And when you have the right people in your corner that really understand the laws around being a reseller. What’s lawful, what isn’t? It gives you kind of that upper edge, you feel more confident with some of the leverage and the information that that you’re getting from the attorneys on on this side of things. You just, you just touched on seven key items that can be seven separate episodes.
Rolando Rosas 1:05:37
No, easily, easily, we could we could easily dive into all of these, and they all could be standalone podcast, because we’re not doing a justice. But in for the sake of time. These are all I think aspects that are important to keep in mind, especially for folks that are starters, or are at the beginning at the starting line right with with their journey of selling products online. So let’s also let’s, let’s continue this discussion on the other aspects that folks should be aware of when they’re trying to get their side hustle going, especially on Amazon, you touched on this already, lots of competitions, and lots of competition on brand listings. So let’s, let’s break that down real easily. Let’s say you’re selling a Bose headset or a Nike footwear, you go to sell that product. And what you have to do is what’s called create a listing. So a listing is a product page, now you can go and create it yourself. But the lot of times what sellers will do that are selling these products that are brand names, they will look for it online and see oh, yeah, somebody already created this listing, I’m going to add my business to the list of sellers that sell this business. Now, something you should know, this is a very, very difficult thing to pull off when it comes to winning what’s called the buy box. Because every single day, they’re probably a bunch of people that want to sell bows, that probably a bunch of people and entities that want to sell on just seeing Nike footwear, for example. And they will go to the listings where they have the most reviews because theoretically the most reviews have the most traffic. And if there’s the most amount of traffic, there’s a chance there’s a chance that you may sell your product. I gotta tell you, we’ve been selling on Amazon for almost 13 years. And this strategy doesn’t always work, it doesn’t always pan out. Because what happens is, it’s a feast or famine, it may work for a while and someone will come in with cheaper inventory or cheaper priced inventory. So you have to know that there’s a lot of competition for these listings, where they’re 4050 100 sellers. And if that’s the case, you probably won’t sell much at all, no matter what the helium 10 or Jungle Scout tool tells you, you got to win the buy box. And if the lowest price wins you that may not be you. And that may not be you for a while. So understand that. And that leads to copycats and hijackers let’s say you go there’s another route you can go which is let’s say you already have your brand registry, you kind of took our advice, you’ve registered your own trademark, you have your own listing, you get it up there, you get that Nike footwear, or that Bose headset and yo, you’ve you put it in there. Now you may find that there’s other sellers that say, Wow, global tech or who XYZ company is doing so well I see a bunch of reviews, I’m going to I’m going to get on their listing, I’m going to, I’m going to sell the exact same thing. Well, you got to have a way to deal with that. You got to have a strategy for that you got to prepare for that. In the end, when you’re not selling anything and there’s zero reviews, you won’t find a lot of copycats and hijacks the moment you start getting reviews, the moment you have q&a, the moment that tools like helium 10 and Jungle Scout, see that you have volume on your listing is going to be the day that you’re gonna really have to reckon with this and having that plan in place. Now, thinking about it even will help you understand the situation when you get there. Otherwise, you’re going to be throwing your hands in the air. You’re like what the hell is going on? What’s happening? What do I do? And there are different ways to mitigate that. And we’re going to touch on those in part two. All right. Now, let’s continue Dave, or did you want to add something here about copycats and hijackers?
Dave Kelly 1:09:47
Not really I was I was having a flashback to the height of the pandemic. The products that we’re selling are were in high demand and there was a lot of those types of shenanigans that were happening on our listings. Nope, nope.
Rolando Rosas 1:10:03
Yes, yep, it’s gonna happen you can guarantee, the more you sell the guarantee, the guarantee goes up to that now, next other sellers outbidding you for the buy box, I talked about this, this just simply means that if you’re selling a product on a website on Amazon, and especially if it’s a lot of like gets a lot of reviews, there’s other sellers who may, you know, outbid you or lower their price, 25 cents 50 cents $1. It happens, we’ve even seen some that will eventually need to lower their price so low that they’re losing money. And that’s the part that you have to understand when it comes to Amazon. The there’s a bunch of fees. The moment somebody clicks Add to Cart, the average fee is around 15%. So if we were to use a hypothetical example, of $100, item 15%, automatically goes into Jeff Bezos pocket, or Andy Jessie’s packet, or the coffers. So you’re already you go from 100 to $85, just by the Add to Cart button, and shipping to the customer. So you’re left with 85 bucks. Now, what you have to understand is that that item, it’s very possible that item could be returned. So from that $85, the actual money you take home could be in the negative, if enough returns come through the system. And Amazon takes that money out of your pocket, literally, they will not they will do kind of they will you have an account with Amazon and they will pull that from your account. Or they will withhold funding until that balance is paid. So being outbid on a listing happens, if you’re enlisting with a bunch of other sellers, this is a very high likelihood. And understanding all the fees associated with selling on Amazon is really important because that’s where you know what your lowest price can be. Don’t, don’t assume you bought something for a buck, I’m going to mark it up 30%. And I’m going to take that home to the bank. You gotta factor a bunch of other things to make sure you are profitable. And at the end of the day, every business day is there to make a profit you that’s what you want to do. Every item you sell on Amazon should be as profitable as possible. And that’s how you survive 20 years. All right. Now, brand hostility, Dave, this is one where I may need you to resuscitate me in case I have a quorum. Okay, I’m here for you and I have been in the trenches. I’ve been in the trenches for 20 years. And I would say it’s become even more of a thing the last five years. Brand hostility. What do I mean by that? There’s a lot here to unpack. So if you are listening to this right now, take a deep breath with me. Grab your favorite drink, cup of coffee or whatever. Buckle up. Right Little John. All right. Little John to kick me off here with a little Yeah. Here’s what’s happening. When we started on Amazon, 13 years ago, hardly any of these electronic companies were selling their products on Amazon, because a lot of them are geared towards the business buyer. And the assumption was, there aren’t really any business buyers Dave on Amazon. Right. Oh, so they’re like, Yeah, go ahead. Do what you want. All right, cool. In for us, as I said, you look at what’s changing. And what’s changing was that, hey, this ecommerce thing is taken off. You know what? Buyers want self service. Businesses don’t want to be interrupted. This harder to take meetings, fewer people are responding to email marketing campaigns. Fewer people are picking up the telephone when you call them to say, Hey, Dave, I got some product for you. Can I come over? Can I pitch it to you that do. So if you’re seeing that, like what’s happening, this E commerce thing keeps taking off. It’s a natural, natural conclusion to think the business buyers are going to gravitate to Amazon because they make an easy to make convenient. I can go on there whenever I want and get what I want. That was my bet. So now we start selling. It takes us a while to understand the platform first year, very difficult within so much. But year number two, oh boy Dave, we got to go in. We start with figuring it out, every month starts going up. Things going in the right direction guiding, it gets exciting. I remember the rep. That the first time, I remember telling him this was right before Thanksgiving, I said to him right before things took off, I said, if you guys will take a chance with us, you’re willing to do this with us, I think we can make a very, very interesting, and we’re both when the rep was like, awesome, love it. And guess what? His commission check. He was super happy. He was loving us. Here’s what happened. He got to a point in helping us out in being successful on the platform. That’s why you want to be partnered with a company that has a roadmap. In their case, they didn’t know, but we’ve been selling for a while. But he started seeing success. Internally, the politics that was happening that we were unaware of at the time. It came down to some big problems internally, because the numbers that he was putting up every month, month after month after month, because he’s getting paid on what we’re selling, are essentially buying from them via wholesale. Other reps internally at this multinational, were also wanting in on the action they thought. And this was told to me later on much, much, much later, we didn’t know at the time this was happening, that there are other reps inside the company that wanted a piece of the action. And they didn’t have any sellers that were doing what we were doing. So they wanted a piece of the action, because it is not an easy thing to do. And so they wanted to separate our account and do all these things internally, that would have made it much more difficult. So internal politics is a real thing, no matter how large the company, because at the end of the day, the guy or gal that’s going to be your manager, if you’re working directly with the manufacturer, if they’re making bank, because you’re selling and they’re helping you guarantee you at some point, maybe some other director and another agent says I don’t know if we want them on Amazon. And the more successful you sell them, when you start climbing into the millions like we have, the more likely some body all says I want those millions coming through my territory. What am I why am I saying this because this is real. And this has happened time and time and time again, as a reseller. It’s different if you’d create your own brand, you know, you make your own products, you’re your own kingdom. But when you’re reselling, and you start selling in the millions, you will see that for those organizations that don’t have a clearly defined roadmap on how to treat Amazon, this will happen. And so one rep has particular politics or director or manager, General Manager, they have a direction somebody comes in, they say we’re going in another direction. Let’s rub out everybody that’s on Amazon. We’re gonna we gotta hear Dave, we got to cover. We got to cover a day. Like what, what? Why we got to cover Dave, you’re selling millions now we’ll take over, don’t worry about it, you can go over here on the sidelines. Right, thanks for building up that online community for us and sellin all that will take it from here. And then what are you going to do? Well, there’s some hard decisions to make at that point. And fortunately for us, we had the great fortune, at some point to be able to have those conversations with some of those entities and say, hey, look, really, it’s in your best interest for us to work together. We have some insights that are not available to a manufacturer. Because like I said earlier, sometimes manufacturers don’t allocate the resources. And what is team two or three, as a multinational devoted to Amazon, it’s just not enough really, at that level. It’s just not enough. So understand that brand, hostility is real. They can send you nasty letters. That’s why you need somebody that is an attorney that is in your corner that understands Amazon, and understands the law, both not just the law, but Amazon and law, because the two separate things, and you want someone in your corner that can advise you legally on what your rights are. Especially when things get hostile. Dave and I missed something you want to jump in. I’m kind of biting my tongue a little bit. We got to be careful here, right? We just got to be factual, right about the situation and about what’s happening, right?
Dave Kelly 1:19:56
I would I would just throw this out there too. The multinational brands, if you, if you, if there is a partner out there that is representing your product, well with value, if their pricing is in line with the marketplace, so I’m just saying, you know, if they if if that, if the pricing is not a few dollars over cost, if they’re creating content, if they’re taking professional photos, you might have a lot to learn from them. Don’t, don’t be scared of that partner. Like Rolando just mentioned, it could be a real great, you know, a win win scenario. There’s people out there that admittedly, they don’t bring a ton of value to the brand. But there’s also organizations that they’re in a niche market, they understand the solutions, they know how to support it, they’re not dragging down the value by dragging that price down, instead of being hostile, have true business conversations with those people. And if you have a few people that are part of your multinational sales team, that are assigned Amazon, along with 30, other accounts. You’re You’re, you’re doing yourself a disservice. Don’t be hostile, don’t go straight to the attorneys, go to the organization. Sit down, talk about it, there might be a business strategy, that you’re just not open to, because you’re just too fearful or you’re not knowledgeable enough about the about the platform. There’s good players, and there’s bad players, they’re not all the same.
Rolando Rosas 1:21:49
Not everybody on Amazon is the same.
Dave Kelly 1:21:53
Don’t put them all in the same basket, you might be losing out on an opportunity for you to grow your brand. And to take market share away from your brand competitor.
Rolando Rosas 1:22:05
Absolutely. Dave, you know the game. If you were to ask me, and I’ve had conversations with some of these brands, the game on Amazon today, it’s all about digital real estate 100%, how much of that digital board Do you occupy? If you only have one listing or two listings, and you own the entire thing on those listings without the let’s call it ammunition from other authorized sellers that can work the game like you can, then you’re missing out, because although you may control your listings, if we had 100 global texts that were doing what we’re doing, we conquered the digital space on Amazon, we own it. So somebody’s gonna land on one of those 100 global texts. And just like in Monopoly, boom, they gotta pay you. And the idea is, could I blank it page one and two? Why just two listings? Why just two results on page one? You can’t? Can you win with two results? Absolutely. But why not the whole thing? Why not page one and two. And so when you look at how Amazon operates. And that’s why ads are all over the place. Because the understand that the digital real estate for them is to control who’s there. And right now they’re doing it through ads. So it’s harder and harder to show up on page one. So why not have the best strategy possible to conquer as much of the page ones out there for your product as possible. And you can do that, when you have allies that are also working together with you to create great listings, like you’re saying Great product images, and they’re working together. And it’s a win win situation. And quite frankly, you know, Dave, if we were to do the math airman’s, just talk the brands here for a moment, you do the math, dollars and cents, every company that sells through distribution, or sales through wholesale, but legitimate wholesaler like Ingram and all of these other big players, every manufacturer makes more money, when they sell in this manner, than then when they sell direct to Amazon. And they sell through the one P program, they don’t have control of the listings, they don’t have control of the pricing, and it’s expensive for most brands. So if you can make more money and be more profitable, but at the same time manage and have a roadmap for Amazon as a as a manufacturer, it can all work out for you. You just have to have the the resources in place, the people in place and the roadmap so that it works for for the brand and also for The channel plot partners that are part of the program. So, all right, I could go on and on with war stories about brand hostility, but I want to get to the next, which is what happens on Amazon, when you do try to get on. And then you’re not able to put up the listing, you’re not able to get there because they’re asking for documentation. So what happens on Amazon, when you try to get your product or you’re reselling a product, sometimes they request letters of authorization, to me request proof of invoices. And sometimes you may have to submit that two or three times. Because sometimes the people that are taking that information are doing copy and paste, there’s not always the incentive to go through the information properly. And that’s happened to us, you show, these are legitimate distributors that are within the ecosystem or the supply chain, that you’ve you’ve purchased them. And someone in mail, we can’t, we can’t understand that sometimes the formatting, there’s all kinds of little things that happen. And you may have to submit information more than once or twice. So know that that can be a challenge. If you’re reselling, and you’re no matter what brands some brands will also put up a little bit of a fight. But at the end of the day, what Amazon is really trying to protect, they’re trying to protect themselves from counterfeiters that are getting on the platform selling products that are not original product. That’s what Amazon’s trying to protect themselves. And so you may have to go through a few steps in order to get the listing turned on or even to get on the list. Dave, anything else you want to add?
Dave Kelly 1:26:49
Nothing else I can add there. You said it is sent it as best as anybody?
Rolando Rosas 1:26:54
Yes. Right. Okay. Well, the other the last thing I want to leave you with, because it is important to know, Amazon is always recruiting more more businesses. Henri. Give me this infographic here with the information this is this is the this is going to show you how is for those that are watching us online on YouTube or anywhere else where the videos being played. There’s a pyramid structure on Amazon of sellers at the very bottom, that from 2022. This is comes this comes from marketplace pulse, they were able to get some information on three P sellers, three P third party sellers like ourselves, that roughly 23% of the sellers out there are making at about $100,000 a year in sales annually. Now, I gotta tell you, after you pay the bills, after Amazon takes all its fees, that does not leave much for you as the seller. That’s the side hustle, Dev is a side hustle. Absolutely, Dave, that is a side hustle. Now, as you grow, and you sell, let’s say at the million dollar level, as of 22, only 4% 4% of all sellers, roughly 60,000 or so achieved $1 million in sales, you move up the pyramid a little bit more 5 million a year. And I think that’s between the one and five is where things can get very interesting. If you’re a if you’re moving your side hustle to a business. And now once you move up from there, between that five and 10 million, this is where things get even more interesting because at this point, you should have a well rounded team. You have mastery of the different elements and components within Amazon. So you can get to that between that five and 10 million mark. And the 5 million, 5 million and above club is less than 1% is point six, three of all sellers, you move to the $10 million club 2.22 of all sellers. So again, less than 1%, a quarter of 1% Really, and then the real big behemoths we’re talking 100 million or more. There’s, there’s there’s some out there but they only represent point 003 Of all the sellers on the Amazon platform. So you could see how hard it is to get to a level where you’re really Dave sleeping through the thing and you know, the money is pouring in. I don’t think that $100,000 The money’s pouring in. Because if you extract all of Amazon’s fees, the cost of goods, the taxes and everything else. There’s not a lot there. You’re still at $100,000. On the Amazon in the Amazon world, like you said, it’s still a side hustle. It’s not yet a robust business, because there’s a lot more that you could do and take it higher than that.
Dave Kelly 1:30:14
I’d like to see a pyramid like that. That’s, you know, everyone talks about sales. Margin or profit seems to be a secondary con conversation, maybe not as sleek or sexy. But I would like to see that on the margin side, what percentage of Amazon sellers are making the percentages of margin, it’s my suspicion that some of these multinational brands that may be part of that pyramid, on the higher on the higher end of sales, that their profits might be much lower than people realize?
Rolando Rosas 1:30:48
Well, we don’t have to go too far. Look at the headlines. And recently, the aggregator space, which bought a lot of these million dollar companies, half a million $5 million companies, they’re struggling, some have declared bankruptcy, some are being sold to other businesses, some are exiting the business. And the idea was that these group of folks that are at the aggregators, they have the smart people, they have the spreadsheet, guys, they have the MBA guys, and a lot of them are waving the white flag, not that these people are bad or anything. But it is a much harder thing to get that that $5 million level $10 million, obviously 100 million, there’s only like 50, a three P sellers, according to this research. So it is a very hard road. You can do it. You want to be able to stay curious, master all these things, bring a team of people, and you will get there. Understand you want to play the long game. That’s how you get there playing the short game, the black hat, the quick money. It’s it’s a it’s a recipe for crash and burning. And the long game is where it’s at. And you can get there too. All right, Dave, we’ve said a ton. And I know for those that have been listening to this point, they’re probably wondering, where are all the secrets to getting more information? Well, I gotta tell you, you’re gonna want to listen to part two, because that’s where we talk about advanced strategies to get you to seven, eight figures and beyond, so that you can take your side hustle into a fully operational full blown business on Amazon that will last. So Dave, and I will see you in that episode. Have a good day. We’ll see you next time.
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