Rolando Rosas 5:07
It’s it’s, you know, there’s so much that we could go in and put a my long list on what? What’s deficient at Amazon like I just the other day, we saw missing images on a lot of products, the secondary images main one was there, but all the secondary one. Turns out there are no notifications when that happens. As of today, hopefully, I know that they’re Amazon, people that listen to this, Amazon, if you’re listening, please give us some better notification. But like you’re saying things happen. And they’re happening even faster, Steve. It’s just like, you know, it used to be somewhat of some calm waters, and you can expect some storms. Now it’s very choppy. It’s just choppy a lot. And like you said, you got to be a good operator, would you say that’s the key right now on Amazon is being a good operator of your of your business on Amazon.
Steven Pope 6:05
Not that anybody wants to hear more about the aggregators. But I think, a study on how if, if you’re only good at Excel wizardry, you can’t sell on Amazon effectively, right? Like, what’s in the blood of good Amazon sellers, historically, has always been tenacity, and grit. And if you don’t have tenacity and grit to overcome the bullshit that Amazon puts you through the first brick wall, you’re just you’re done. You’re done. You can’t get past that first brick wall, right. And that’s what happened. We saw even even big companies like THRASS do, they didn’t even restock their best sellers. That’s how dysfunctional they became so fast. So Amazon sellers have always had to be scrappy, they’ve always had to figure out how to find the worm in the morning, even if it hasn’t rained. And and it has produced, it’s always produced, and Amazon still does produce, it’s still half the economy in the United States, there’s no question of whether you should be on Amazon. The question is just how and what? And where do you take your right products at the right time to find the consumer. So some of the mistakes that I made, I think are repairable I think are preventable. And so the reason why I’m sharing some of my mistakes is because I know that if I share my road rash, it’s going to do two things. One, it’s going to help the next guy not make the same mistake. And two, it’s going to make me lots of money. Because when people start sharing their stories, and saying, Hey, this is what I’ve done, here’s my story. And that authenticity, it translates to more people signing up for my agency at My Amazon Guy. And that’s what I’ve always found to be true. And that’s why I take that position as an education company.
Rolando Rosas 7:50
And you know, I think what is also true, is that this is way more difficult than people make it seem to be, you know, I’ve heard people say, Oh, it’s easy. No, it’s not. It’s easy. If you are selling something you use have a complete side hustle, that is like a weekend hobby. If and I really know when I think about I was thinking about our conversation today. And you know, there’s different types of sellers, if you’re in this to, you know, get some of your merchandise off out of your house or your garage and sell on the weekend. You know, you can kind of take your time fumbling through it. But if you’re a professional, and you’re going into this to make money as a living, you have to treat it. Like there’s nothing else in the world that matters in terms of getting my product launched. Sustaining and growing. It is not a weekend hobby, I want to I want to echo what you say about that because it is not passive income for anybody that’s listening to this. It is not passive income. And Steven is a good example you do not treat this like passive income. You can’t
Steven Pope 8:57
treat it like passive income. The moment you do that, then you make big giant mistakes, you make assumptions, and then you stop paying attention right now, during my favorite time making money on Amazon as a product seller. I took a trip to China I was doing my reorders from my mobile phone sitting at the Chinese circus watching some dancing bears. I’m like man, I’ve made it this is amazing. Well the thing about that is if I could do that while sitting in China who else could also be doing that the Chinese for starters, then all of a sudden Pakistan got got its up rising and could sell on Amazon and then all the retail arbitrage aspects and we go into
Rolando Rosas 9:39
that because I want to I want to talk about reselling and retail arbitrage don’t give that too much away because I want to jump back into that a little bit.
Steven Pope 9:45
Alright, so I’ve got some some of my soaps here. You know, I started to launch ridiculous things, right? Like the thing that you have to do is ask yourself how much money am I willing to lose to prove myself wrong? Right. And this is an example of one of my work So choices I came out and I was like, Oh, I you know what I’ll do online something for teenagers so I did dirty socks, right? I did wool and and the Pimple Popper
Rolando Rosas 10:15
ridiculous I love your sense of humor with with all these products.
Steven Pope 10:18
Oh, it gets better. And then there’s monkey farts.
Rolando Rosas 10:20
Oh my God, that’s sorry.
Steven Pope 10:25
Teenage boss, would you like to guess how many of have sets of these that I sold?
Rolando Rosas 10:29
I have zero idea. But tell me less
Steven Pope 10:32
than 50,000 units. And so that was a big, you know, just a big monkey fart right there. Oh
Rolando Rosas 10:40
my goodness. Oh my goodness. I wish I had a monkey fart noise? No, no.
Steven Pope 10:49
No, no, it was a terrible, terrible watch. Now, I also have a lot of really good ones. And I did quite well selling, you know, some traditional men sense, right? Like, that was my best and. And I was like, Oh man, if this works, then surely the seller thing will work. Right. And that’s the number one trap I see a lot of sellers do is they get into SKU expansion. But they do it horizontally instead of vertically, they expand the same soap into 100 cents, instead of selling the soap plus, I don’t know the deodorant, right? And if and if you look at other brands out there that have made that transposition, they’ve done quite well. Now there’s also counter-arguments you could pull up dude wipes right now and his LinkedIn feed and the CEO of dude wipes is like all day long, we tried to expand on these other categories and realize we’re just a wipe company. Right? But but when you’re first starting out, I would say multiple variations of the same product is inferior to product expansion. So hopefully that’s the takeaway for somebody is they’re thinking about, Well, should I get three cents? Or should I get one cents and try to other products. Without a doubt in my mind, I would try three unique products.
Rolando Rosas 11:58
And I think you’re getting at the heart of what I really want to ask you, which is profitability being profitable is a difficult task. And I talked a couple of months ago to a former Amazonian His name is Nick Gezzar. And he said something to me that I will never ever forget coming from somebody that worked at Amazon, he said this, he said, You must be prophets obsessed as a seller on Amazon, because Amazon’s not gonna be profit success for you. They want profits for themselves. But being profits obsessed as a seller has to be at the core of what you are doing on Amazon. Otherwise, you know, is it three variations? One variation, vertical expansion, it has to make sense dollars and cents at the end of the day, and not just top line sales, like people like throwing, I’m a seven figure. So I’m an eight figure seller, I’m a 200 figure seller, right? Who cares? Because at the end of the day, whether you’re seven figures, six figures or 10 figures, if you’re not putting money into the bank, that you can take home with you after you pay the tax man, pay the warehouse, people pay the payroll pay, give Amazon what their do it doesn’t matter. You won’t be in business very long.
Steven Pope 13:16
Yeah, I mean, I can look at my mobile app right now and be like, Oh, look at my big bar chart. And it makes
Rolando Rosas 13:21
a lot of people like putting there that that that? Yeah, look at that seven figures.
Steven Pope 13:28
Yeah, but if you’re not even closing as much as you could make on a full time job, then what’s the point? You’re just working for him a sign at that point, right 100%.
Rolando Rosas 13:37
And I got some that I want to share with you, that highlights how difficult this task is just looking at top line numbers or show us that infographic. This is from marketplace pulse just a couple years ago, at the very top of the pyramid roughly around 50 ish sellers, point o three at a are at that 100 million or more. But slide all the way down to the bottom 23% or so of the about 3 million ish, you know, we don’t know the exact number of sellers, but somewhere in that neighborhood only 23% represent making 100 That just in sales. And if you were to take the profits out of that that’s not enough to live on. It really is not. You got to climb up that pyramid if you are planning on making a living it and if it were that easy to be even in the million dollar seller and look at around 4% of sellers. And then you jump up to the 5 million I think that’s the 5 million is when you’re in a different stratosphere now. And you’re you’re you’re hitting on all cylinders. You’re finding that expansion that you’re talking about or the vertical integration or the ecosystem and you maybe have a team or two or three or 410 people behind you, but look at that, less than 1% Get to that 5 million mark, that shows you how difficult it is on Amazon. I was reading an
Steven Pope 15:06
article the other day about how to go upstream as an agency. And if that shard, you study that you start to ask yourself questions, okay, how many of those are enterprise accounts? How many of those are mid market? How many of those are small to medium business? And predominantly, like most of the people that I serve at my Amazon guy, we have about 400 clients, almost all of them would be considered SMB, small to medium business. And it’s a very different model and a lot bigger of a pie that we saw on that that pyramid. And sometimes Amazon feels like a pyramid scheme, I swear. But like, it’s interesting to see that there’s not a whole lot of mid market and enterprise going on in Amazon, there’s just not. And if you want to be serving that customer base, you got to be outside of Amazon, if you’re running an agency, that which is an interesting thought by itself. But I also look at this as kind of job security in a way, right? Like there’s always Amazon is always going to exist. We said that about Blockbuster and a lot of other Kodak companies too. But like the concept, the marketplace concept will always exist unless we go hyperlocal and and 15 minutes cities, but that’s for another debate. So in the meantime, though, the model is proven, it’s very successful. I wish that there were other partners out there other marketplaces that could give Amazon a run for its monopoly. But but there is some good to the monopoly as well, right? One day shipping two day shipping prime this prime that across the country, there is not a second delivery system that can match Amazon today. Not even it isn’t
Rolando Rosas 16:43
not not even close, Walmart would be the second closest. But you know, what’s interesting about what you just said, Steven, is that Amazon, somebody said this, and I thought, Oh, it’s just fascinating. So Amazon is really becoming more and more of a logistics company, you think about hundreds of warehouses. They have trucks, they have planes, they have the ability to move packages, and now they are receiving your packages as a business in direct competition to UPS and FedEx. And so their growth, I think will come more from that logistic side to move things around the country. More so than the market. The marketplace is a is a is that thing for them. But the logistics is a way to pull things around through their system. If
Steven Pope 16:45
Amazon is a logistics company, I just have one question. Why did they send my five pound hot sauce bottle? I just want to know because like, when I launched this and I had 1000 of these, I ship them to Amazon paid them to do the prep work. And in my mind, I’m thinking oh, they’re gonna bubble wrap it, they did that. Then they’re gonna put the FN SKU sticker on they did that. But then they sent it out in padded envelopes sitting in boxes, like what the fridge I don’t know if Amazon could be qualified as a logistics company now, maybe not
Rolando Rosas 18:00
as maybe not like a prep company. That’s may not be their forte, like you said, Yep.
Steven Pope 18:05
But they but here’s an interesting fact. They make more money now today on AWS on PPC spin on Amazon, and they do on fulfillment fees, which is probably why they announced more fulfillment fees, and Afghanistan to multiple locations, or were tacking on more fees.
Rolando Rosas 18:25
Well, you know, it’s a big that is a really big discussion. If you belong to any Amazon seller, group, Facebook or any the fees, I’m hearing more fines being used as the word to describe the new fees, their fines, you know, if you have too low inventory, you have too much inventory. On both sides of the spectrum, you’re gonna get doing too much inventory storage fees, right? Too low now, you’re gonna get hit as well with fees. So I think as one of those things that is going to come into the mix your story about profitability, how do you become profitable when you’re right now, if nothing changes, you’re gonna get dinged on both the upper end lower end and in between moving things around in and out of Amazon.
Steven Pope 19:16
I’ve never seen the Amazon community so upset then this this year in 2024, right, like, there’s upsetness about when they couldn’t ship stuff in or storage limits and we heard the rounds of upsetedness but this current round is going to knock some people out. Hell it knocked me out. Right I was already going to be knocked out for other reasons but, but like the ability to find 25% gross margin at a bare minimum to start before you get down to the 10 to 15. net net is an important concept to really Chase nowadays right now. Grocery sellers I don’t even know how they could even potentially survive on Amazon today. I’ve no idea right like I I tested it out, I tried to hot sauce, and man, I couldn’t take the heat.
Rolando Rosas 20:03
And what are your clients telling you about that? Because that’s a really interesting point there to do what you’re talking about you, you have 400 plus clients, and I’m sure they’re coming to you with, like Steven houses as it’s gonna work, right? I’m barely surviving or whatever. What is what’s the feedback from your clients on this particular on this specific topic? So
Steven Pope 20:26
we’re always asked to come up with the strategy and the direction and the vision. And sometimes we don’t know the answers yet. And this is one of those times we did simply have no idea how this is going to play out. We’re collecting the data, we’re putting our ear to the ground, and we’re trying to find out I don’t know, to be honest, I think Amazon is going to have to change the policies because it’s going to knock so many people out, it’s gonna knock too many out. And Amazon’s gonna have to retool itself, I think that their competitors tick tock and Teemu I can’t believe I have to say that that out loud, right. Like, I really just don’t like the fact that our only chance at Amazon being knocked off monopoly status is the Chinese government like that is not a good thing at all. But it’s better than nothing in some regards. But without some competition without some damage to their own profit and loss statement. Amazon is going to continue doing what it’s doing, which is maximizing its investment, which is taking leverage off the table, right? We saw this in every sector known demand that’s ever occurred from railroads to oil to when Walmart went in and put all the mom and pops out of business scale, and then leverage right scale first, then take the leverage. And that’s what Amazon’s doing. You can say Amazon has entered its maturity phase. Right now. It’s going to go all in on profit from here on out. And they’re going to, they’re going to maximize every profit dollar that they possibly can. Now, are there some interim solutions? Are there some tenacity and grit we can throw at the windshield here to see what sticks? Yes, we can look at using Amazon’s own logistics company to avoid some of these fees, which means turn more of your business over to the monopoly. We can say hey, diversify your portfolio and launch a Shopify site. But in reality, nobody does that. A lot of people say they do. But in reality, they don’t actually sell even 10%, maybe even 3% of what they do on Amazon on an alternative platform like Shopify. And it’s interesting to see that like we’re always having like we hold our breath, we see Shopify as hitting, hitting it hard. And all of a sudden, they’re they’re not able to compete with Amazon. And then all of a sudden, Shopify and Amazon get in bed together, because they’re both worried about tick tock and T. Foo. Right?
Rolando Rosas 22:45
They wave the white flag ship of ShipStation. My brain went to ShipStation. Next, but but Shopify bought a logistics company saw how difficult how hard, how unprofitable it can be, to be in the logistics business, to then sell it at a much lower price than what they originally bought, isn’t it? We’re done with this. Let’s get out of that. Let’s go back to talking to Amazon. Like you said, it is so hard. I mean, tick tock only has a handful of warehouses right now. Right? To do fulfillment. They’ve got a long road to climb. I mean, Walmart structurally, structurally, has the bone. Right? Right. They structurally they have smart people. They’ve been in the retail business for a long time. But Amazon has a huge advantage on them. And I’m not sure this is the thing that I don’t I’m not sure Amazon has that DNA about them where they’re, you know, testing, tinkering, experimenting, what how do we get better? How do we change that? And Amazon is, is I would, Walmart is still in the retail business which is slower, longer timeframe, you know, you build it little by little block by block, which is completely different than Amazon.
Steven Pope 24:02
I basically wrote off Walmart because Walmart bought jet. I don’t know what, seven years ago, six years I don’t even know. They did nothing with it. They couldn’t integrate the tech with their POS, right. Their POS was a POS. And so they literally don’t know how to use the tech, they don’t know how to operate as a marketplace. You’ve never ever heard of the concept of a native born Walmart brand. And you never will. Every day a new brand is born on Amazon. Why? Because if you pay to play, you pick up the advertising, you could be a number one bestseller in the first 30 days get a badge and sell 1000s of units. You cannot do that on any other platform. You cannot do that on Walmart. You cannot do that on target. Shopify. Nowhere can you do this unless you have a multi million view count tick tock viral real and you’re selling you know, the slime you know, like, like, like that. But like unless unless you have a viral hit like that which the Chinese are gonna know Knock off anyway, and you can’t sustain post viral, then you can’t grow that fast. And you can’t natively build an entire brand on one of those platforms. But what I will say is this for the brands that do succeed outside of Amazon, it’s a very different picture. It’s a very different world for them, because they don’t have to rely upon Amazon. They don’t have to pay all the fees. But but we’ve also seen what happened to first party sellers on Amazon and vendor Central, where every year, it was like highway robbery where they increase the fees, they made it harder for you. And today, I was forwarded over a proposal from Amazon to one of my one P clients. Who who said, Amazon is asking us $250,000 for premium A plus content. Is it worth that? Steven? And I said, No, you get it for free on three P on right. So Central, right. So like there’s like, that’s the level of rip off SNESs that Amazon is doing to vendors and sellers alike. And we’re now starting to see the one P treatment which has been like that for years, enter into the three P network arena. So I would say this, if you could count on anything from Amazon as a three P seller is that it’s it’s always going to get harder, there’s always going to be more and more increased fees. So the only thing that you can do as a seller is shrink inflation, raise your prices, inflation, or find and discover new products and keep yourself nimble and innovative. While also never putting all of your eggs in one basket, don’t get a warehouse and then being sucked into the world of logistics as well. You said you
Rolando Rosas 26:40
said that you said on your video that and we only showed literally like 20 seconds later on that video. You said something about your the warehouse business that I also heard a good friend of ours mutual friend Chad Rubin say, years ago, he got out of the warehouse business because he said I gained weight. I almost lost my marriage. The state was coming down on me from false labor claims did like he’s like No, not in the warehouse business anymore. And I heard you say, yep,
Steven Pope 27:10
then there Yeah, I paid $26,000 a month in warehouse fees, we invented a new way to manufacture gun holsters, we were cutting the soap directly in the warehouse. And basically, we’re a manufacturer and boxing it up and shipping it out. We were etching our tumblers in our manufacturing facility in our warehouse. But I gotta tell you, it is so difficult to do all of that you have to innovate, you have to buy the machines, you have to pay for the labor. You know, weather events happen, and you’re shutting down, right, like, all these tables have coming in to work. It’s just a lot of lot of work. And I’m a marketer having to deal with this. Whereas bullshit over here. And guess what, I wasn’t good at it. I was pretty bad. And I had to hire a partner and we just didn’t work. It didn’t work out as well as I thought it would.
Rolando Rosas 28:05
Now do you lean into that? When you say, You know what? I’m not I’m not good at that area. You know, let’s say I suck at sales. I’m terrible. I hate the phones. I don’t like talking to people. Do you recognize that? Like I’m in the general sense? Should I as an entrepreneur, recognize except that I’m suck at sales, or I suck at this other area and say, I need help? Or I need somebody that can do that for me because I can’t do it? Well,
Steven Pope 28:33
I mean, you got two choices, right? Choice one, stop doing it or choice to get good at it. And there are certain people who who decide choice to where they focus on it, and they get good at it. The challenge with that is it’s slower, it’s harder, you have to get some road rash, you have to get go through all the pain and the and the bristling involved in some of that, that level of work. So it’s significantly easier to just simply pivot. And there’s a lot of debate about having multiple streams of income and diversified portfolios versus go all in on that one skill that makes you just world class in the world. And for me that one skill that just makes me world class is iteration, like my spirit animal is a hummingbird. I can iterate faster than anybody I know if I have a meeting with my team, and I’m like buying the day, we’re going to have results. They look at me like a deer in headlights. But it takes a couple of rotations where I train them how to how to keep up and how to iterate real time communication like the Borg on Star Trek, and being able to articulate fast, small failures so quick, that you’re swimming from one location to the next. You’re flapping your hummingbird wings so quickly. You can’t see them. But it’s okay if you miss the network next year on that first flower because there’s 17 other flowers in that bush that you’re going to hit and that same day, right. So that’s where I’ve learned that I’m really good at now. As you He pointed out though logistics and retail is the opposite of all of that, right? And I can’t iterate how to manufacture something by the hour. That’s very different than the digital world of marketing where I can my where my my hands, my keyboard where your hands can type 125 words per minute and keep up with my iterating brain. But the warehouse is like, dude, an hour ago, you told us to put these boxes over here, and now you’re telling us to move them again? Yeah, I am. And that’s just doesn’t work.
Rolando Rosas 30:32
Let me let me give you let me give you something here. Let’s say that’s the bad guy. The warehouse is the bad guy. Yeah, I have no idea. What do you know where that’s from?
Steven Pope 30:41
I don’t, but I’m also every warehouse. Everywhere else ever has seen me as the bad guy. I’ll tell you.
Rolando Rosas 30:48
My favorite wonder my favorite movie for with Al Pacino. Scarface he’s in the restaurant. And he’s saying that’s the bad guy. And he goes on with the rant. But you’re you’re so right. You know, warehouse is in we’ve we’ve toyed with the idea of maybe we because you want control at the end. And you’re like, I want to. But that control comes at a big cost. Not just monetarily, but emotionally. Mentally, there’s something there. And I remember years ago, talking to Chad, share this with Alice like, Oh my God, and it scared me half to death. And then the as you grow, you’re like, god dammit. Why can’t we just have it? We could fix this in our warehouse and you start falling in love with that concept. And I want to ask you about something that a lot of sellers and we touched on it a little bit earlier. They fall in love with the idea of an entrepreneur being a fancy car, you know, maybe they’ve seen a lot of dudebro videos, where you know, these guys are racing around in cars and planes and they get the idea that oh, I can do that too. It’s it shouldn’t be that hard because so and so did it. I want to show you something that I saw on the internet the other day that kind of exemplifies this Ori roll that video. This is Kenzo. He’s become a multimillionaire at 19 selling products on Amazon. Regan
Guest Speaker 32:24
is listening. I’m pretty sure gross and about $550,000 by the Porsche GT three Rs, a Porsche Cayman S, sl 65. I have a Ferrari F 12 Berlinetta. So
Rolando Rosas 32:38
so if you see this, if you’re just you know, whether you’re a beginner or you’re further on, you’re like, What am I missing? Yeah, what am I missing? This guy’s got all the fancy cars. And he’s doing this on Amazon. By the way, there’s a longer video he talks about selling all this stuff on Amazon. He showed his warehouse 550 a month, but I want to know how much he’s making on that. 550
Steven Pope 32:59
or I mean enough to buy those cars or at least, right for right now. For right now. Yeah, and I have to be careful here because I did show up on LinkedIn with the Lambo. I do own an RA right now. So you know, and I paid it with I paid cash for it. So it is possible, right? Like it is possible to win and win big on Amazon. But I’m sure you have some questions ready to ready to roll here but but at the same time, it’s a question of source of information like should you buy a course from that guy? I don’t know.
Rolando Rosas 33:36
You don’t know. Now he goes on to talk about his his strategy is retail arbitrage. And you have some things to say. But we’ve done really well for years reselling. And I’ll invoke my good friend Chad again, Kim and I have butted heads on this topic of, you know, private label versus retail versus reselling. And, you know, it’s got its own headaches, right? Whether you’re doing reselling or retail there’s no there’s nothing you can escape the problems of Amazon you can escape the challenges you can try different problems but yes, and there may be there may be a little bit less issue or on some things or another. But you did you mentioned in your video that we showed earlier that you know you’ve pivoted in you’ve found a way that still allows you to you know be in the trenches with Amazon in in obviously your agency but you know, doing some retail arbitrage because there’s still a need for you know, wipes and toothpaste and, and tweezers and other products, everyday products that people still need that can be found somewhere and put back on Amazon.
Steven Pope 34:46
You could probably find some clips for me where I talk about how retail arbitrage is dead and you got to get into private label like you go back four years, five years in my YouTube feed. I guarantee you I say those things and I’m in 2024 Saying it It’s possible to do retail arbitrage and make more money doing that than doing private label. Right. And that’s antithetical to my agency position where I have entirely a portfolio of private label brands. Right? So if the guy who is, you know, got all incentive not to say the things I’m saying is saying this, that could give you a moment of pause, perhaps. But I currently am making hundreds of 1000s of dollars a month from retail arbitrage. And I don’t have the headaches of brand registry being yanked, or from all of my other challenges that I’ve already talked about, right, and all the product investment and the warehousing, and all of these other things. But I did trade those problems for different problems, right. So now, I have to focus entirely on sourcing said product, I have to worry about listing yanks or trademark infringement constraints. And those are the different problems that that you’d have to face while doing retail arbitrage. Those are very, very different things, very, very different skill sets, and different people required to manage those challenges and problems. And I think I was
Rolando Rosas 36:05
just gonna say you everyone jumped in because something just came in. And I think that part, even though your agency is focused on three PL, there’s a ton of misinformation about retail arbitrage, there’s a ton of misinformation. There’s I see it, and I hear and people send it to me a lot of misinformation about reselling as well, those can be lucrative, if done right. And those could be a source of where you are 100% gonna be in the gutter. If you don’t do it right with your eyes wide open,
Steven Pope 36:43
what they don’t show the videos and content is the $100,000 of inventory that they bought, can’t move, right. Storing in the back of the warehouse where we’re not going to take the cameras, right? That’s
Rolando Rosas 36:58
collecting dust for months.
Steven Pope 36:59
I am fortunate to say that I don’t have any inventory, I can’t move in under 90 days at this very moment. But I guarantee you before the year is out, that’ll change. It’s just inevitable, right law of big numbers, something will happen a listing will get yanked, we’ll get banned from selling a certain brand. that’s those are the problems that we trade for. Also, it’s very difficult to know, the authenticity of some of the items that you’re aiming, the sourcing and the relationship management is very tentative. Right. And the profit margins are more predictable, but they are smaller. Right, like the ability to know what’s gonna happen is very different.
Rolando Rosas 37:45
And, you know, I, you know, from our reselling of products, you know, we also see, I want to add, I want to add that for anybody that’s in the resale business, is that the brands, even when you’re working in a direct relationship with them, like, you know, you know, the President, we know the VPs of all the players in management, management changes, we’d all of a sudden don’t like you on Amazon anymore, because maybe we want to keep his more or we were they think we can keep more by that guy. Yeah, I see you and and so you have to be able to navigate that when, when the new management comes in to one of these companies. And they say, Well, you know, we don’t think any of you guys are really worth our time. And I just last week I was talking to I can’t really say the name of the company, but I would say a multinational electronics brand that you would know. And circling back a little bit on that one P topic there one P essentially selling direct to Amazon. They said to us point blank, they’re not profitable, like they want to be on Amazon. And the manager in charge for this multinational was flying to Seattle the following day, to meet with their team and wanted to know what what are their options were there in the world of Amazon that they could if they weren’t happy? And there was an article? I don’t know if you saw this on LinkedIn. Can you pull that article up? There’s an article that Brian Porter of I believe is simple, simply modern. He pointed out these perils of being one p and that he talks about the profitability again, that the one p the costs of selling the that they’ve increased in the last three years can mirrors and what you were talking about, you know, the fees are going up. Amazon will intentionally oversell, I’d never heard of this. So you have in this case, the oversold 40,000 units last year. Holy smokes Stop the presses just on that. The The other problem price scraping this is one where it’s really close to our heart because we see we see that you know the featured price should be 100 bucks, but your product is 170 Live, so you must be a bad guy selling at once if you’re trying to gouge but that’s not really the right comparison. We, and then you open
Steven Pope 40:08
up eBay, we’re gonna match it. Yeah, yeah. And
Rolando Rosas 40:11
or, you know, hey look, you’re comparing us to a product that’s three years old and doesn’t include all the other things that we’ve bundled with it, which is kind of our case. And they don’t exactly they don’t care and same engine
Steven Pope 40:23
that gets cheaper just to follow, and we’re going to work for the VA, it’s
Rolando Rosas 40:27
so frustrating. And so yes, reselling can be good. It can also go off the rails one, it can be good, it can also go off the rails. And that’s where I think we need more discussion. That’s why I love that you came on. And you given us this information, because people should have more of these open discussions about the difficulties of one p three P reselling retail arbitrage and it’s not all Ferraris, and Porsche, I don’t even know the names of all these brands or all these cars. I take one though. Kenzo, you’re listening, you want to offload one of those cars. I’ll take it off your hands.
Steven Pope 41:08
He’ll trade you for some retail arbitrage.
Rolando Rosas 41:12
No, no doubt, I want to jump into some some tactics. Because one of the things that you mentioned in this in their in your videos like you know, hijackers, competition, the fees, things change so rapidly on Amazon, that it’s hard to keep up. What advice do you have for folks that are on Amazon and want to keep up? What should they do?
Steven Pope 41:36
So this is an easy thing to answer a brand by themselves. And if they become an isolationist, we’ll see this problem sometime in the next year or two. Whereas an agency like mag, I see all of those problems on a daily basis across 400 accounts. And so it’s easy for us to intermingle information and transfer it from point A to point B, all ships rise together, and go go with a group in that sense. So either hiring an agency, joining a group of other Amazon sellers, mastermind, or otherwise, hiring the right people to begin with, but at the very least, just following the suppose of gurus and experts with Lambos, on the internet, and making sure you see what they’re saying, because a lot of the people out there are transparent, and do share their mistakes as well as their wins. And you can take for it from what you want, right. So if I, if I go out and say, here’s what I did, here are my results, you can decide for yourself, you want to replicate, you want to do something completely different and opposite. But there’s a lot of good content out there, it’s very difficult to navigate through that content. And that’s where a lot of competitive advantage can be gained by having those relationships or by being an agency, and just simply seeing it being in the trenches. But but this is the difference between blue ocean and red ocean strategies, right? So whether you’re an agency or a brand listening to this, if you chase the red ocean, you’re just gonna copy what everybody else is doing. And that leads to commoditization and lower margins. But if you just go blue ocean, and you ask customers, what do you want, you give it to them, and then ask and confirm that I give you what you wanted. That concept will work no matter what business you’re running anywhere in the world. I’ll impact that with another set of questions you could ask what should we start doing? What should we stop doing? What should we do more of this framework? Is the core to everything that I do as a business owner, I should stop selling direct at my age of sage brand on Amazon, I should start doing some retail arbitrage. I should do more of my agency. Right? That’s where I came to those conclusions. And I had to ask myself those questions. I had to ask my customers those questions. And I had to ask those questions of general audience or potential customers as well.
Rolando Rosas 43:53
And, you know, I hear in that curiosity. And I know I’ve spoken to several I spoke to the former blockbuster CEO, a former BlackBerry president, you have to be curious, you have to ask yourself, you have to have, you know, what’s working, what’s not working, and then be able to, you know, reflect on those things and say, You know what, that’s not working, we may have to sacrifice this, and go and double down on what’s what’s really working. And that’s the next piece that I want to jump into you about. If we were if you were looking into that crystal ball. If you were to look into your crystal ball, and you were there. And you were to make some predictions about what’s on the horizon. What does Steven Pope see?
Steven Pope 44:43
Sometimes it’s good to look backwards to look forwards. So if we look back 10 years ago, I could sell rice cookers for two cents a click on PPC on Amazon. So if we look into the future, how can that help us? Well, you might get two cents a click on a different platform that is up and coming, right. So testing out the T mu testing app, the Tick Tock and the influencers, there’s no question that there’s going to be some sort of competing marketplace that you’re going to want to pay attention to. So that’s what I see in the future. I see more fees, more maturity, more profit gouging from Amazon, no question about that. But there’s also going to be new opportunities, new platforms that come out, and you have to be ready now. That doesn’t mean pivot 90% of your forces, it means take 5% and just dabble and test it out. Right. I also think that we’re going to see a lot of, of Amazon sellers dropped out this year. And, and generally speaking, that could be good, that could be bad, we’re also going to probably see a lot of those sellers replaced by more Chinese sellers. And that’s generally bad for both the consumer and the selling community in the United States. And that’s because the Chinese, they don’t necessarily have the same incentives that we do. They’re, they’re more focused on putting food on the table today, and not a year from now. Very different culture, mentality mindset, right? And when you receive the instructions for said technology products, they’re in broken English, right? Like it, it’s like, how do I follow these instructions, right. But you’ll see that they’ll sell them cheaper on Amazon. So so we’re gonna see a lot more heavy hitting like, right now, if we pull up Amazon search page, we typed in any single product, I guarantee you 30 to 50%, depending on the category of those products are made in China, obviously, not accounting for like, grocery or supplements, maybe even supplements, who knows at this point, but we’re gonna see a lot more competing factors from the Chinese. On the On the plus side, we’re also going to see a bigger talent pool. Right? So we’ve seen a lot of the FBA people come and go and they’re looking for work, right? They didn’t maybe they didn’t go to college, maybe they dropped out of their day job. And they’re they’re tired of the grind, that talent pool is gonna have to go somewhere. So they might join an agency, they might join your your three PL brand, they might do something along those lines. We’re seeing countries like the Philippines, which is a service oriented country, produce a lot of great talent, right? So we’ve seen that my Amazon guy, I have over 400 Filipinos that work for me, I just got back in February from visiting them. And having a big annual conference, I went to all of the cool islands from El Nido to baraka and everywhere in between. And there’s just a lot of good talent that is developing and coming out to support the Amazon community. And the Philippines is just one example of many that we could cite. So I think we’re gonna have more people involved in supporting the sector. And it’s been very hard to find talents historically. And I think it’s getting a little bit easier. Is the the demand for talent high. Yes, it’s exceptionally high right now.
Rolando Rosas 47:56
We know we make no bones about it, too. We have our fingers in that that territory, and we love it. You know, we’ve gotten some really exceptional people out of the Philippines that have done amazing work with it. And I week, there’s no way we could do a 10th of what we’re doing today without without, without my team, or teams of people that are that are working with us. So I want to give big props Hold up a second to my, to my team. We’re over there. My Filipinos. That little
Steven Pope 48:27
anecdote I was on a sales call last Friday. And I had a Filipino account executive who did the sales process brought brought me in for the clothes. And on the call the brand said, Hey, Steven, I hear you outsource. And I’m like, is that a bad thing to do? Like this account executive? They’re from the Philippines. And I don’t know if they were shocked by that or not to be honest. But like, yeah, I embrace it. And quite frankly, I asked a couple more questions. I was like, so you, when have you hired Americans before? And he’s like, yeah. And I said, are they loyal? And he said, No. And then I said, you heard from her voice on our call today. Do you think she’s loyal to mag? And he’s like, Yeah, I do. And I said, you want loyal people work in your brain and account? And he’s like, Yeah, I said, Great. You want to hire us? And you said, yeah.
Rolando Rosas 49:16
It’s a no brainer at that point. No, I think I think you’re on target here. You need a team. If you’re climbing that pyramid that we talked about, there’s you have to recognize here, my weakness is in this area. I need people that can work in here and be the experts there. While I focus like in your case, you’re focusing on the agency focusing on teaching, you know, you’ve got over 2000 videos on YouTube, that alone is a feat. I mean, you’re like You’re like a teacher. I mean, you’re telling people instructing people and you know, you went out also got a company to support you in that effort as well. You know, you went and got a company that’s in the teaching and education, space and training. In doing webinars, so, you know, you recognize that’s your strength. And that to me is always I’m always debating like, should we double down on what we’re strong? Or try to put a little more effort on what we’re weak but hearing from you,
Steven Pope 50:12
it’s hard to decide, right? Like, yes, I but But what I’ve learned is that if I talk to the people that are around me, and I asked those basic questions, where should we start? Stop? Do more of we can we can figure out the answers to those tough questions. But you have to go deep, you have to ask why more than one time, right, like five times to find the right list answer in many instances, right. So what I discovered over the last six years of running a $20 million agency is that I was and always have been an education company. And so the branding behind that dictates how we make our decisions. That’s why I came out and said, I sold my Amazon brand. I didn’t have to say that I didn’t have to reveal Oh, man, you didn’t? I didn’t. But I chose to because it’s on brand. That’s what an educational company would do. Right? It makes decisions so much easier. I didn’t even have to think about it. Now. Was I embarrassed? Was I wondering how it would come across? You betcha I was.
Rolando Rosas 51:15
But you know, you’re getting it from both sides. People are saying you’re brave and bold and people saying you suck. And how can I take advice from you? Why would
Steven Pope 51:23
I ever hire you, you take and I’m like, he’s got to pull the right like, but at the same time, maybe you should hire the guy that failed, because he knows how to prevent your failure, and he’ll save you 1000s of dollars, if not more, right? There’s articulations that can be made. But at the at the end of the day, it doesn’t even matter. I don’t have to convince anybody. For those that watch, they can make their own minds up. And I know, statistically speaking, that if I’m authentic, if I might I find myself, my tribe will find me. And that’s exactly what happened when I put out all this content. And the people that apply to mag to work for me, are like, man, you really helped me at my last job, I didn’t have any SOPs, I had no support, no training, but I found your video after video after video. And I’m like, perfect. Come join us. And they joined us and then they’re super happy. And the tribe just builds upon itself like that. And so the hat that I appreciate the most is most definitely the hat of professor or teacher. And some of the greatest people who have ever lived on this earth would probably answer that question the same way. And so I think that there is a passion and a love in being able to express knowledge, take complicated dynamic situations and simplify them to the point of understanding. And the greatest teachers that we’ve ever seen on Earth can do that. And if I can be even a small portion of that exercise, then I’m, I’m reaching my own personal enlightenment that I seek. And it keeps me going right, because if you don’t have a reason to get out of bed, theoretically, I’ve already hit the IWAN button, right? Like, I’ve bought the dream house, I have the nice cars, I’ve got five kids in a pile, I’ve got money in the bank, I have trust fund kids at this point. What else is there is there out there for me. But there is there is something that is far greater than all of that. And that is teaching and helping others achieve their own personal enlightenment. And that’s what keeps me going.
Rolando Rosas 53:27
And and I don’t even know what to say to that, because that’s what we all strive for internally, right? We we want, we want to have that kind of moment where we’re like, what am I doing this for? Right? And you’re, you’re you’ve gotten to that point where I’m doing this for to teach other people and the end, like you said, you know, if I failed, learn from me, learn from my failures, because now I know what not to do. And I can share that information so that other people don’t go down this black hole. You know, who would agree with you? Or if
Steven Pope 54:01
they do at least they know ahead of time. It’s a boon. Oh, absolutely.
Rolando Rosas 54:06
I heard Steven Bartlett. And he’s, he has a podcast called Diary of a CEO he says, I embrace failure, and learn from it. And I if we’re going to fail, we fail fast. So that we know how to iterate. Right? Right. I want to learn how to how to how to do that quickly so that we get to the thing that’s going to make us really good. And I think I think you’re doing a huge service to a lot of people. I am gonna tell you, I walked around my house. This is this is no exaggerate. I walked around my house. I think you said that on a Friday or Thursday. I can’t remember when that clip when you put that out. Or I saw it on a Friday, all weekend. I walked around saying to my wife, I can’t believe this. I for a certain number of reasons. I can like what am I gonna do? He’s he’s a guy that’s in the trenches. He knows what’s going on. He’s, he’s aware of what’s happening. And it just like struck me like, wait a minute, is this a huge learning opportunity for for a lot of people, and I want people to hear that message. And I would encourage you, if you’re still listening to this on the audio side, or on the video side to go check that full 10 minute clip that that Steven posted on his YouTube channel, my Amazon guy, go listen to it, because it’s very informative. And I think you’ll get a lot out of it. Steven, is there anything else you want to leave us with,
Steven Pope 55:31
find your why there’s a good book, Start With Why that can really help you figure out what the y is that gets you up and going. Because the moment you lose your Y, your whole purpose and meaning evaporates. And you’ll start making terrible decisions. And I’ve seen this right. So there’s been some higher profile graduations for my company recently, some people that have ran, my podcasts are no longer at mag, and they’re going off to do their next thing they’ve graduated from, from My Amazon Guy. Since I’m an education company, I can say that. And, and it’s, I’ve seen some people that graduate last year, why some that graduate found a bigger y and decided to go chase that way, right. And there’s nothing wrong with that. But if you don’t have your own y, you’re going to be a lost soul. Right? It would be like coming to earth, knowing the knowing you have no purpose and no meaning beyond that. So whether your Y is personal, spiritual, whatever it is, you need to find it. And you have to exercise that y on a daily basis. Or you’re going to lose purpose, meaning and potentially a lot of enjoyment and fulfillment.
Rolando Rosas 56:48
I can’t disagree with you. You said I gotta ask you one more question, because this is the question that I really wanted to ask you. And I lost my train of thought following you here. Why? What’s the number one reason when when when clients leave MAG, and they don’t, it doesn’t work out? I think I’ve heard you say this somewhere, but and recently changed. Why? Why they they they all of a sudden, they leave and, and crash and burn.
Steven Pope 57:16
So that’s pretty much the heart of your your inquiry today. And that is profitability. 43% of clients that leave My Amazon Guy do so for financial reasons, they do not replace me with another agency. And in almost 80% of those instances of the 43% that that exit My Amazon Guy as a client are not in business 24 months later. And when we pulled the data and came to those conclusions, we were really blown away by that. Right. Flying swine seasonings. I have a great testimonial video from him, no longer sells on Amazon, right. We went in, we helped him we grew him. He made some other business decisions. It fell apart. We exited. And then he no longer existed. Also in the grocery category, ironically, with low margin low. Who would have thought wow, yeah. So so that’s what happens. It’s very surprising. Now I’m sure there’s a lot of people that will say, Oh, Steven, they just tell you, it’s financial. But then they hire the next agents. And I’m here to tell you they do not we track this. We have really great relationships, very transparent both ways. And we encourage our clients, you know, we relentlessly ask for feedback, fast, radically candid feedback. And we would know, if they went and hired somebody else we can, we can tell we can see where they’re going and whatnot. And there is a small portion that do that. But But by and large 43% It’s it’s due to financial 25%. It’s because mag wasn’t good enough. We over promised and under delivered. And then the percentage is break down from there and get significantly smaller. There is a small portion that go to another agency. Yes, that happens. But by and large financial, it’s it’s and by the way, I don’t think this is unique to the Amazon industry. This is small and medium business vector, right, small and medium businesses. They pop up really fast. They go under just as quickly. You could you could look at the restaurant industry. Same thing. For every three restaurants that pop up, only one exists. Two, three years later, right? A very small portion of success comes in that. Now the blessing is is that it doesn’t cost very much to fail on Amazon, right? You could spend $10,000 testing your private label idea and get the definitive answer on whether it’s a good idea or a bad idea. You couldn’t open a restaurant for $10,000 That’s pretty good. You can’t you can be even a pop up three for $10,000. No, right now. Not anymore. No. So so that’s why I am very open and honest about my experience on Amazon. But it’s not passive income.
Rolando Rosas 1:00:00
100% Steven Pope I wish we had four hours because I want to pick your brain can we can we upload your brain to an eight to chat GPT and and just have it stream out that what you already know. I know you’ve put out so much content but there’s a lot like ask Steven a question. I know that’s what you did for forever. Ask Steven the question and, but but so much comes up. So
Speaker 2 1:00:24
I hate to tell you, man, but I started my own chat GBT doing exactly what you used to define and only got to customers. Nobody cared. Nobody. Ai Stevens.
Rolando Rosas 1:00:34
Pope See, look, you filled fast. Yeah,
Steven Pope 1:00:36
we fail fast, way faster than my $2 million that I wasted on a hybrid software that I tried to recreate Asana high, Helium 10. And Time Doctor all in one spot. Terrible idea. Don’t do that. But but there are some fast failures that I’m proud of. And that was one of them.
Rolando Rosas 1:00:54
Well, uh, you know, I’m glad you told me maybe we should have become a client. Because there’s a lot there. And maybe there’s a different way, you know, what things will change here very quickly, because AI is moving so much faster. Maybe we leave that for next time because there’s some a bunch of AI stuff happening as well.
Steven Pope 1:01:11
What I what I will tell you this, I’ve had 700 People pay me $50 to ask me a question at my amazon.com slash coaching. And hey, so there are people they
Rolando Rosas 1:01:20
want the real thing. Yeah, they want the real thing and then
Steven Pope 1:01:24
nobody bought the AI.
Rolando Rosas 1:01:27
Yeah, nobody Not yet. Not not yet till you could probably wear those big old goggles and see Steven on the other side. And it’s it’s something like him his likeness, that actually is real. And there’s a lot happening, you know, you could imitate a voice it’s not 100% We’ve we’re playing around with that as well. Like I could I have every
Steven Pope 1:01:46
AI possible imaginable. It’s not really it’s not quite ready. It’s super. Not close.
Rolando Rosas 1:01:52
Not it’s not there yet. And, you know, maybe I could just have me on 24 hour 24/7 just spitting out podcasts that way, but it’s not there
Steven Pope 1:02:01
yet. Just have the AI run my company for me while I’m at it.
Rolando Rosas 1:02:08
Oh, my goodness, Steven, Steven Pope. We’re breaking it down today. What The Teck? on What The Teck? breaking it down? What it’s, oh, my goodness, you’re You’re too much. You’re too You’re too much. Hey, you know what, you get a, you get one, you get a clap for today, you get a second clap, North applause. Break. And I really enjoyed you coming on a second time and really sharing your story. Because again, it’s worth telling is worth being real. And saying to people, you can do this. Go when your eyes wide open, you can fail and restart. But at least it’s not all rainbows and unicorns, just like you said, look at the aggregators. If it was so easy, they would not be in this predicament because theoretically, they have this. They have the smart people on their side. They know how to move the spreadsheets around. But it’s so much harder than it looks. So Steven Pope, I really, really appreciate you coming on today. And if you want to know absolutely anytime, anytime, my friend. If you want to know why former Amazonian Nick Gezzar said these words to me about you have to be profits obsessed. You want to go check out that episode on how to survive on Amazon and why he uttered those words. You can check that out anywhere where you listen to your favorite podcast, as well as check that episode out on YouTube. So I want to thank you and I want to take thank my guest, Steven Pope for coming on today on What The Teck? Thank you very much. I’ll see you next time.
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