Transcript
Jim: Good to have you again. We’ve got quite a story unfolding here. I think you’re our only four-time guest.
Rich: Oh, really?
Jim: I have to go back and look, but I’m pretty sure, man. There’s very few three-time guests. Four-time guest, man, that’s pretty cool, and you’ve got an important announcement to roll out, but for those who don’t know who you are – I just did a bit of an intro, but put it in your own words. Just recap the journey for us for a couple minutes. It’s a fun story.
Rich: Sure, yeah. We’ll go back first two years ago I quit my job and went full-time, and since then things have been incredible. Our business is just going crazy. We’re building an awesome team, but to go back even further, we started six years ago selling on Amazon. It was a fluke thing. I was on Facebook and saw a post from a buddy. He had mentioned how him and his brother were just killing it on FBA, and I had no clue what he was talking about, so we dove in there and looked into what he was talking about, and long story short, we found the MySilentTeam community and ended up starting our Amazon business six years ago, almost – gosh, I guess it was six years ago late October, so it’s almost exactly six years ago. We started in the fourth quarter.
My background in the corporate world, I worked for a distributor, and so we dove right into wholesale right from the start because that’s what we knew. That’s what I had been doing for years, and it’s what made sense to us, right, so we dove right into wholesale. We did that exclusively for the first four years of our business, and then it was shortly after I made the leap to go full-time that we started adding in some of Jimmy Smith’s Replen methods. We added Replens and then we just added the methodology of sourcing Replens into our wholesale approach. From there just the business has exploded, right? When I quit my job two years ago, we were doing a little over a million a year pretty consistently for three straight years, and then last year, we did 2.6 million. We’re coming up on that. By the end of the week, we’ll be at 2.6 million this year.
Jim: With a full Q4 ahead of us.
Rich: Full fourth quarter of growth this year, yeah, so we’re hoping that we can push out another million dollars with a solid fourth quarter.
Jim: Going for 3.5+, man. I love it. Having seen the posts that you guys are making and the exciting products that I know you guys are diving into and constantly finding new winners, and how much of that is private label now? How much of that is your own product?
Rich: Very little. Our approach to private label is using our wholesale and Replen products. We do have our brand registered on Amazon, and we use the successful products that we find in wholesale and create unique bundles and private label bundles with small private label branded products to go along with it, right, so we’re finding products that we’re already selling probably 10 times or more a day and then we’re creating our own unique bundles with those products, with the manufacturer’s permission, and we’re launching those as our private label bundles is how we’re approaching private label.
Jim: That’s such a beautiful way to do private label. Just allow me to rant for just a second. If you’ve listened to more than 20 episodes or so of this podcast, you’ve heard me say over and over and over again, don’t start with private label. Start out with the low-hanging fruit. Replens, then move into wholesale. That’s going to uncover incredible low-risk private label opportunities instead of the way that the rest of the world is teaching this thing. When you get on YouTube, for example, and say I want to learn to sell on Amazon, you’re going to get hit in the face 50 times in a row with people selling you a 5 to 10,000-dollar course, want you to buy 5 to $20,000 worth of inventory and hope it all works out a few months from now. It’s just not necessary. These are low-hanging fruit models.
Our progression looks more like start with Replens, put some money in the bank, learn the basics. You were comfortable in the world of Wholesale, so you started there, which is just another notch above. That’s where most people need to go. Once you understand Replens get into wholesale, and that’s what we’re going to talk about today a lot more, but you guys have dove in there, and you found a creative way to find numerous wholesale winners, and that’s what we’re going to talk about, but that’s the progression. Replens, wholesale, then work your way up into the higher reward, higher risk – but if you take your time, it’s not higher risk – private label opportunities. You guys are a textbook perfect example of doing it the right way, slow and steady into the bigger opportunities. What’s your margin overall too? Since we’ve dropped some big numbers on folks, do you happen to know offhand about what margin are you guys looking at?
Rich: Yeah, so our gross product sales margin is right around 19%. We do probably have a higher overhead than most because we’ve got a pretty big warehouse. We employ ten people. When we’re talking net profit margins, we’re right around 10.5% overall.
Jim: That’s before you guys pay yourself or after you pay your own salary?
Rich: That is before we pay us, but it’s after we pay everything else.
Jim: Exactly. Good. I always like to help clarify and create a good image for everyone. Still, a phenomenal business that comes pretty close to running itself at this point. You guys have got the right people in the right places, and it’s just an autopilot stream, pretty close to it. I know you guys just got back from a trip. You’re getting ready to take another trip here in a few days with the family. You’re just enjoying this stage of life. What are your day-to-day commitments to the business? What’s your reality of running a 3.5-million-dollar per year Amazon business for you guys right now?
Rich: For me, it’s really – it’s up to me on a day-to-day basis, right? I think the beauty of my business is it is completely built out and runs itself now. When we last met in – the time before in October of 2020, I had built out everything except for purchasing, right, and I was still holding onto that.
Jim: That’s right.
Rich: A few months ago, I hired a buyer, and we tried – we tried at the end of 2020. The buyer we found wasn’t the right person, wasn’t a good fit, but a few months ago, we did it again. We hired one, and this one’s working out for us, and so now my office manager, Richard Cluff, who’s my original employee from back when I quit my job, he is trained to pretty much run the show. I can step out for weeks at a time. I could step out for months at a time, and it would still just keep rolling along. My involvement now today is really what I choose to do. I’ll come in – and I’m here at the office most days when we’re in town. I’m here to answer questions and to help guide and lead the team, but most of the time now I’m focusing on Coaching with Jim Cockrum, coaching, and then we’re also doing our workshops and stuff like that, so most of my time is focused on other tasks now where my Amazon business is just running itself.
Jim: Multiple income streams, and you guys have a party, entertainment business on the side as well that’s starting to pick back up, thank God, right?
Rich: We do. That’s been dead for a year and a half. Back in the day, we were doing 30, 40 events a month, and then COVID came and shut everything down. We probably did maybe a dozen events in the last year and a half. I think we’ve got 24, 25 on the books for October, so it’s coming back. That’s in full force again, which is a double-edged sword, right? We’re already so busy with fourth quarter. This has just not been on our minds for over a year and a half now, and now it’s just coming back in full force. We’re considering selling the event business, but –
Jim: That’s what I was going to ask you. It sounds like it might be a good time. It’s on the upswing.
Rich: Yeah. I’ve already got a couple people interested. The event business, we actually have three separate businesses within the one business. We have a bubble soccer, and then we’ve got two photobooth divisions.
Jim: Yeah, you had that photobooth at our last event. That was so awesome. We had such a good time with that thing, just that little – when you said photobooth, I thought it was going to be this big contraption. It’s just this little iPad size thing on this little stand, and people taking pictures and posting them on social media and all the fun poses. Yeah, you guys play with it all the time there in the office too there I’ve seen.
Rich: Yeah, selfie station.
Jim: Yeah, it’s so cool. You’re entrepreneurs at heart. The timing of selling – you had the gym and you sold it right before COVID. Whoever had that had a bit of a mess on their hands, I’m sure, but the timing couldn’t have been better. You guys have stepped in and out of multiple businesses, but this is the one you’re passionate and excited about. I just want to mention I may have mentioned this in the introduction already, but episode 221, episode 317, and episode 365. Those are the last three times you were on the show, and if people want to go back and study the progression, I think it’s pretty interesting to see where you guys have come from and where you’re going. I want to start to transition – there’s a lot of things we could talk about, but the main point today is, man, let’s talk about wholesale because I know we’ve helped thousands of people launch very successful businesses – some of them are multiple seven-figure businesses – just with the Replens model. Some people are very happy there. They’re happy to stay there. Where wholesale starts to plug very nicely into that model, and I’ll let you put it in your own words. Why is wholesale exciting? If you’ve got a Replens model rocking already, what does wholesale bring to the game that you don’t have otherwise?
Rich: I think the reason I love wholesale so much is the stability of the model and also the scalability, right? When we first started, we looked at arbitrage and not even from a Replens standpoint but just from clearance and seasonal, and I didn’t like it. For me, it was too much hustle and it was just too much grind. I wanted something that was more – something I could automate, something that I could build systems around. When we started six years ago, it wasn’t arbitrage. For me, coming from the world of wholesale, it just made so much sense because I could build systems around it. I could spend ten minutes and I could place purchase orders of $5,000, $10,000 and the product would be here within a week. I just couldn’t do that with arbitrage. It would take me a full week or more to go buy that much product and scale and stuff. I think it brings a level of sustainability, scalability to the business that arbitrage didn’t.
Now, with the Replens model, that’s changed. That’s brought that into arbitrage. I just think you could do it, in my opinion, and some may argue, Jimmy may argue with me. I don’t know. In my opinion, you could do it a little bit better. You could do it a little bit quicker, and almost less risk, if you will. Because the reason I think so is because a lot of the brands that we’re working with, they have a brand MAP price in place, which is a minimum advertised price. You don’t see your competitors tanking the price, lowering the price to where it’s not profitable. We’re working with brands that don’t have MAP in place and we work with them to get that put in place. We don’t see a lot of the price fluctuation, if you will, in wholesale that you can sometimes see in Replens. The lifespan of our wholesale products is longer than what we found with the Replens products.
Jim: When you say lifespan, I know what you mean, but explain.
Rich: We’ve been doing this for six years. I’ve got products and brands and manufacturers that we work with that we’ve been working with the entire time. We found these brands six years ago and we still have a very solid relationship directly with that brand, that manufacturer. We’re still purchasing from them six years later. You may find that with Replens, but I think it’s a little harder to find that sort of lifespan, that sort of sustainability, with a Replens staying profitable for that long.
Jim: I think you just hit on something. It’s a thought I’ve never had before, but as you were explaining it, it just occurred to me. Wholesale is basically Replens with relationship, meaning, when I need more, I just let them know I need more. We’ve all agreed, hey, here’s the bottom price. Here’s what I pay. You may end up being the only seller. You guys are on some wholesale accounts where you’re the only ones selling the product, aren’t you?
Rich: We have a few. Typically, with some of those, we do end up merging those to more of a PPP model where we’re managing their account for them. We do have a few. A lot of our wholesale stays in more of a semi exclusive where when we help them either get brand registry or put MAP price agreements in place, we become one of maybe two or three sellers instead of one of ten, or 15, or whatever. We do have some exclusives. I would say the majority of our wholesale, though, is more of a semi exclusive where we’re one of very few that have permission to sell their products.
Jim: Great clarification, because I think some people think the holy grail is my own product that I control. It’s got my label on it. It’s branded. We have those success stories in our community. I mention it all the time. Death Wish Coffee is one of our student clients, top ten grocery item on Amazon, not just the top coffee, a top ten grocery item. We understand that world. That’s a little harder goal to hit. That takes some timing and some energy and a lot of money, some risk. The models you’re talking about here, the stuff we’re talking about, these are more everyday common guy can jump in there, do the work, do what it takes to build the business you’ve got. It’s much more replicateable, if you will. I like the transition from Replens into wholesale, the relationship aspect, meaning now you’re talking with – instead of just pulling it off a shelf, hiring a shopper to go to the store, buy your list, you’re saying, hey, some of these hotter items, let’s contact the manufacturer. Let’s get a list of products that they have. Let’s see if we can wholesale some of this, and getting into that arena. One of the things I want to transition into next is it’s not just a matter of stumbling blindly and helping you find wholesale products. You guys have really dialed in a system. This is what you guys teach as part of the multiple day experience at the, help me get the website right, workshop.
Rich: Replens Wholesale Workshop.
Jim: Replenswholesaleworkshop.com, thanks for that. That’s the experience where people fly into town for a few days, spend time, see your warehouse, see your product, see your team, talking about growth, team growth, and all the aspects of running the operation. We’ve pulled a piece out of that, the wholesale training where we’re actually saying, hey, here’s how we find wholesale companies that are willing to work with us, excited to work with us, and we start to build a relationship with them. We’re calling that provenwholesalesourcing.com. That’s a domain name we’ve used before. There’s another course that’s still in the Proven Amazon Course, beautiful course, but a completely different strategy from what we’re talking about now. Start to talk me through this provenwholesalesourcing.com strategy that you guys have come up with. What’s it entail? What are the magic pivot points here that you guys have discovered? Also tell me, how many products have you guys found using these strategies? How effective is this for you?
Rich: Yeah, absolutely. To just piggyback on what you said about relationships, it really is about developing relationships with the brand. We go from developing a relationship with maybe a store manager who is removed from the brand. He may be able to purchase from the distributor or from the brand, but that’s still one relationship removed away from who’s making the product and who actually controls the supply chain and the pricing and all that. In either case, Replens or wholesale, it is about relationships, but we’re getting to a little bit closer relationship that has more control over pricing –
Jim: An important distinction, yes, I love that, because this is a relationship model, even if you’re just doing yard sales and retail arbitrage scanning barcodes, which by the way, we have people who’ve built $100,000, $150,000 in their pocket businesses with that model. Go for it. That’s hustle. Sometimes you come home with empty pockets. I didn’t find anything today. You struck out. That’s why we like the Replens. You never strike out. They’re all relationship models. Thank you for that distinction. Because we never want to get away from – we never want people to think you can do this just keeping to yourself. Get to know the store managers. Get to know the neighborhoods where you yard sale. Tell people, hey, if you ever have a yard sale coming up, I’ll shop it early. Relationships matter. Yeah, great distinction. I’ll let you keep going.
Rich: The biggest mind shift that I like to teach in our workshop here is that we’re going from selling Walmart’s products or Target’s products or whoever the retailer is, going from selling their products to then getting permission from the brand to sell their products and working directly with them. The whole background or the back bone of wholesale and the way we approach it is developing relationships, lasting relationships with these brands. It’s a struggle. If you talk to anybody who has dabbled in wholesale or struggled with wholesale, they might tell you, “We’ve reached out to 100, 200 different brands and nobody wants to work with us.” I think we’ve built an approach upfront to a value-add approach and in a criteria that will weed out a lot of those brands that won’t work with you. Right up front, we’re developing a website, a value-based website, that sells our service as a partner. We have a website that doesn’t even have a single product on it.
If you look at it, if you go back to my presentation at the Proven Conference, part of it was I did a Google search of the largest third-party sellers on Amazon. We looked at the top four. Of those top four, three of the top four had value proposition, value-add type websites where they were just selling their service as a partner and helping brands extend their reach in sales by using Amazon and Walmart and other third-party platforms. That’s what we’re doing. We’re building a website and we’re building a value-add approach to building a relationship and then helping those brands extend their reach and grow their online presence.
Jim: Just to add some evidence to what you just said, some confirmation to what you just said, Rich. There was a large candy and snack show that came through Indianapolis. Indianapolis, my hometown, is a pretty big convention town. Typically, every weekend, there’s something coming through. This was a big candy and snacks and I went down and saw a few people from the community, hung out with them a little bit. I went booth to booth and just struck up conversations with the owners of mid sized brands. These are $5 to $30 million dollar businesses trying to sell their pretzels or their whatever. Without exception, every single conversation I had, assuming I was dealing with someone who is higher up in the decision-making process, when I told them, “Hey, yeah, I understand Amazon better than the next guy,” they didn’t know who I was, they’d never heard of my podcast. I’m just a guy walking up and saying, “Yeah, I understand the Amazon ecosystem pretty well. We help people sell there. We sell there ourselves.” They said, “Can I get your number? Can I use you as a contact?” I’ve had some of them reach back out to me and ask me questions.
The world is confused by Amazon and we’re the ones that can help answer those questions. That’s your gateway in. I love that you said the value-add. That’s a huge asset that we have just having listened to this podcast. You mentioned the PPP earlier, the Proven Product Partnering. That just means one of these partners that you’ve gone to, instead of selling their product on your own account, you’re selling it in their account. You help them get set up and you get a percent. That’s the model. It’s one of the things we teach in the Proven Amazon Course is the PPP model. I want to make sure people understand that because it’s just another way you can bring value. I don’t care whose account is used when we sell these products. If I’m getting a percent, that’s beautiful. It’s such a low-risk proposition. I love that you focused in on how can we bring value to this brand and benefit from that.
Rich: That’s the primary approach. Once you’ve got that down, you’ll have a much higher success rate when you’re reaching out to brands and distributors and trying to get permission to sell products.
Jim: Right, you’re not just saying, “Hey, do you guys take on Amazon sellers?”
Rich: Oh, yeah, because as a whole, brands, companies, they don’t like Amazon sellers. They’ve heard the horror stories of the bad actors and people who don’t follow MAP pricing agreements and who are just in there. They’re just, me too, they just want their cut, their piece of the pie. Our whole approach is, hey, I know you have this existing piece of the pie, but here’s what I’m going to do. Here’s what I can add to to make that piece of pie bigger for you. I think that’s why we have such a high success rate in our approach. There’s lots of things that go into our high success rate, but one of those, and I’d say the most important, is our value-add approach. Secondarily, I think that approach, what gives us success, is things like having a commercial address and having the team that we have and just the experience that we bring and stuff like that. The value-add approach is definitely the most important part.
Jim: Let’s talk specifically about what it is people are going to get if they get into the provenwholesalesourcing.com offer, which we’ve priced ridiculously low, because not everyone wants to get on an airplane and travel and pay thousands of dollars to stay in a hotel. That’s not for everyone. Many people want to do that and we still offer that, but if someone just wants the course, the meat of this wholesale training, what all are they going to get? You mentioned a website, for example. I know there’s a software tool involved here. Let’s start talking through some of the specifics.
Rich: Yeah, absolutely. We walk you through in the first part of the course is about the relationships and about the value-add. Then when we start getting into more of the meat, which is the software tool we’re using. SmartScout is an incredible tool. For those of you who are not familiar with it, it was developed by a guy named Scott Needham. Scott Needham is the CEO of BuyBoxer, huge Amazon third-party seller. I think they’re doing over $100 million a year. Their approach to Amazon, at least initially, was wholesale. Scott developed an internal software to improve his wholesale sourcing within his team. They used that for a while and now they made it public and now selling it so that we can use it. It’s a really powerful tool. We’ve played around with – we used Jungle Scout for years. Helium 10 is another great tool. These tools were pretty much created by and for private label sellers. They were created by private label sellers to help you data mine and look for opportunities within Amazon for private label opportunities. SmartScout was developed by a wholesale guy for wholesale. We found great ways to use it for Replens and online retail arbitrage and stuff like that, but primarily, we’re using it for wholesale to data mine the criteria we have for wholesale.
Jim: One quick thing I want to insert here because we’re talking SmartScout and you and I have been talking to Scott Needham. He’s been to some of our events and our conferences. I’ve been on the phone with him several times in the past few months setting up basically the best price you’re going to find anywhere and the best offer you’re going to find anywhere on SmartScout in anticipation of us launching this course, because you’re going to need the course and you’re going to need SmartScout. Silentjim.com/ss, as in SmartScout, that’s going to forge you over to this special offer that they put together. Again, you’re not going to find a better price anywhere on the planet for that tool. We asked them, please, give us the best deal you possibly can, the unbeatable low price and offers. Go check that out if you want. I love that you contrasted it, too, with other great tools, tools that many people on our team swear by, love, and use. Jungle Scout, Helium 10, those are some good products, but they’re not built for people looking for wholesale sources. I want to dive in a little bit more into why SmartScout is something – you called me up once you started using it and said, “Dude, you’ve got to check this out.” I know Scott sent me, this has been probably well over a year ago, Scott Needham, the founder of BuyBoxer, SmartScout’s developer, sent me one of the first copies of it. I went through and I saw some interesting potential in there, but I didn’t see what you saw as a tool for sourcing wholesale opportunities. Talk us through a little bit, what’s so special about this SmartScout as a wholesale sourcing tool from your perspective?
Rich: Part of our approach to wholesale is trying to find the right companies that will want to work with Amazon sellers to begin with. I like to say we have most success, honestly, with smaller either emerging brands or more unrecognizable brands. I like to say, if you’ve never heard of the brand, they’re probably a good opportunity to approach them. You’re going to have a hard time calling up Nike or Johnson & Johnson, those big brands that you hear of every day, you call those guys up and say, “Hey, I’m an Amazon seller. I want to sell your product in Amazon.” They’re going to say no. They don’t want to deal with you.
If you call up the company that maybe they are doing $1 million a year. In the terms that we’re looking for, that’s small. On Amazon, that’s nothing. These are guys that could really use some additional help selling on Amazon. You can build out your source criteria with SmartScout to find the exact companies that you’re looking for within different categories, within a certain size range, reviews. You name it, you can probably find it within SmartScout. It is just an incredibly powerful tool for extracting data. I know you like to think of Keepa as a very powerful tool for extracting data. SmartScout does not, in any way, replace Keepa. I don’t want that to be misunderstood. You still have to use Keepa. SmartScout, I think, is just as good at data mining Amazon and extracting usable information for us, and in this case, for finding brands to contact and to set up wholesale accounts with.
Jim: Let’s dive into the weeds just a little bit. I love that you brought up Keepa. Back in Episode 369, I spent a whole episode talking about why I love Keepa. There’s one thing that they do that no one else does, SmartScout included, to my knowledge. They scrape hundreds of millions of listings on Amazon every day. They must have a massive backup server somewhere and they’re tracking the product rank. That’s useless for this conversation of wholesalers because you’re looking just for smaller wholesalers. SmartScout is the one that – they’re all using the same data, but these guys have really gone through and looked at specific businesses so you can say, okay, what’s this business doing? What’s this brand doing? Keepa doesn’t let you do brand research. The other tools aren’t as good at that as either as what SmartScout is because SmartScout was founded by a guy who’s looking for wholesale opportunities. He came at it from that angle. That’s why it’s important. Give me some ideas on how many companies you’ve found. Let’s just build some legitimacy around this. I asked you for a number earlier and we never got back to that. How many wholesale opportunities have you guys found using these strategies?
Rich: We started using SmartScout in the beginning of the year. I can’t remember, probably February timeframe.
Jim: It hasn’t been around all that long.
Rich: Yeah, no, I think it’s right around a year old. I think it came out about October, November of last year. We started using it earlier this year. I just dove in. I saw a promo video, I think, on YouTube or something. It really piqued my interest. I dove in with Richard, my wholesale sourcing manager, and immediately saw the wholesale value in it. Trained our virtual assistant on how to do it and essentially just put her right to work sourcing, reaching out to brands. I wish I would have put a number to it. I don’t know how many accounts we’ve set up since starting it. What I can tell you is I’ve had to limit my virtual assistant in how much she does this because she finds and sets up too many accounts too fast, faster than we can actually evaluate prices. Her task now, and we’ve had to hire a second one since, so now we have two VAs doing it, but she can only do this process and search and reach out to brands the first week of the month. The last three weeks of the month, she has to actually spend the time going through the price list and evaluating price lists and websites and finding profitable products from the accounts that we set up. Our hit rate, our success rate, is probably about 1 out of about every 15 brands that we reach out to for an account.
Jim: Which is incredible, for those of you who have tried to do wholesaling before and those who have been through other trainings, they’ll tell you. You may have to reach out to 150, 200 companies and you’re going to get one that hits every once in a while. You have a 1 in 15 rate rocking right now. I want to clarify something else, too, that this may be one of the first episodes some people listen to. You aren’t going out finding products that just aren’t on Amazon yet. You’re not looking for products that have never sold before. You’re looking for products that have some good momentum and you’re saying, hey, I can come alongside and make things go a little better for you here. Talk me through that. When you say you’re going through a list of products, let’s say you call up a wholesaler, yeah, hey, we’ve only got one Amazon seller or two right now. We’d be happy to make you the third one. What are you looking for that gets you interested and excited? They send you their list of 50 products. Talk us through that. What happens next?
Rich: Just to back up a little bit, actually, in our search parameters, we’re actually looking for brands that already have two or more FBA sellers on them. The reason we’re looking for two or more is because we’re trying to weed out right up front all the private label products. We’re trying to weed out all the brands that already have exclusive agreements with a third-party seller. Our search criteria that we’ve developed over the last several years really helps you avoid that 1 in 100, 1 in 200 success rate. Right up front, we’re going to be looking for the right brands to reach out to based on the search criteria that we use.
Then once we start digging into getting a price list, there’s so many ways to use SmartScout even within a price list to then qualify each individual brand. Because sometimes we’re going to set up accounts with distributors or companies that represent multiple brands. Then we can further use SmartScout to qualify brands and to qualify how well the brand is doing and the products they’re selling on Amazon to know which ones to dive into further. We’re looking for products where our cut – we want to be making at least $20, $30 profit per product that we’re buying from this company. If it’s just one product at $20, $25, it’s probably not enough to justify setting up an account there. We’re probably going to need five, ten products that are doing that as a whole. If you went to a Walmart or Walgreens and only found one product there, you probably wouldn’t waste your time.
Jim: You’re not going to send a shopper there to pick up that one item once a week, quantity two. It’s just a waste of time. When you say $25 profit, are you talking about per sale, per day, per week?
Rich: Per month. I’m totally fine with that number – that’d be great. We have probably a lower or a higher risk tolerance than a lower criteria than most because of the cashflow we’ve built up over the years. I’m totally fine finding a product that makes $2 profit per sale. As long as I can sell that a minimum of one time a day, then I’m good because that volume and that product plus the other five or ten products that that brand has, then we’re going to make some really good money with that. I’ll even go as low as $1 profit per sale on small and light products. Just to clarify, that is $1 after all of my expenses.
Jim: Yeah, warehouse, employees, taxes, everything.
Rich: We build our expense right into RevSeller. I basically calculated what it costs me to run my warehouse per sale and then we build that cost in. I need to be making that $2 profit per sale after all of my costs.
Jim: Beautiful, you mentioned another one of our favorite tools, a tool that launched from our community, basically. One of the students in our community put it together and we’ve used it for years. RevSeller, if you go to provenamazoncourse.com/revseller, it’s a great tool that puts right on the screen, if you’re on amazon.com, don’t even have to be logged in, right on the screen it shows you, if you buy this product at whatever price, you put your price point in, it tells you here’s what you’re going to make if you sell it FBA, if you sell it FBM. You build in your own cost. I’m curious. What have you guys got – you may not know off the top of your head, but you’ve put in there a price per pound, I’m assuming or you’ve set it up?
Rich: Yeah, so we’re using $0.15 per pound. We switched to almost exclusive LTL shipments now. We were averaging about $0.32 a pound before that. Now it’s about $0.15 a pound. Then our costs are right around $0.65 per unit sold. We’re selling upwards of 18,000 to 20,000 units a month. We’ve been able to really lower the cost of the prep just based on the scale that we’re doing it at.
Jim: Because you’ve been able to scale, yeah, that’s beautiful. That’s just good to get a feel for the numbers of what’s a $3.5 million a year business, what’s the scale – because those numbers are probably twice that if you’re talking about a $10,000 a month business. You’re not able to do the LTL, the less than truckload shipping pallets. Not everyone is shipping pallets yet. We’ve got training in the Proven Amazon Course on that topic, but not everyone is there yet, shipping in –
Rich: If you’re using a prep center, you want to build in the prep center cost.
Jim: $1 or $1.50 a unit, whatever it is, yeah, but you can put all that into RevSeller so you’re able to make great decisions, rapid fire style, when you’re looking at an item, or you can use SmartScout to look at a whole bunch of them at the same time and make the decisions. Where’s the winner? In this list of 150 products, where’s the winners? You can identify them very quickly. That’s what you’re doing. If you had to take a stab at how many products you’ve found, just give me a general ballpark. We’re talking dozens, a few hundred? What are we looking at?
Rich: It’s definitely in the range of a few hundred because we found some brands – when we first started, one of our big home runs right off the bat was actually a major brand where – I say this, I don’t want to intimidate people with wholesale because the whole idea of teaching wholesale is it’s not intimidating. You can find brands with low minimum order quantity. This one just happened to be one of the first ones we found with SmartScout and it had a minimum order quantity of five pallets. I say that, but I don’t want to intimidate. That’s not the norm. With this brand in particular, we added over 100 SKUs right off the bat. We have found other ones. What I love in our approach is our first approach is brand direct. We use the criteria with SmartScout to data mine and find products with brands that fit the criteria. We’ll approach that brand directly, but inherently in our approach is we’re finding niche products in niche brands. In this case, this brand does not sell direct to anybody. They referred us to their distributor. This is an account that we actually locked in while we were at the Proven Conference. We were directed to their distributor, which happens to be a niche distributor. The distributor basically told us, hey, we don’t typically sell to Amazon sellers, but I love your approach. Checked out your website, you look legit. I do see how you can add value to us. We’ll set you up an account.
We set up an account with these guys. This is a really cool one where we were able to negotiate a discount. Because our virtual assistant was sourcing these products and she came back and said, “I’m finding a lot of products that are 5% to 10% profit margin,” which is below where we want to be. We instructed her go ahead and make note of all of those. Everything that is 0%, breakeven and above, give us those back on an Excel sheet and we’ll take it from there. She did her research, found I think it was like 30+ products that fit this criteria, and then we took that back to the distributor. Basically, our approach was, hey, these are the products we want to purchase. This is the quantity we feel like we could buy from you on a monthly basis. In order to do so, we need X price. I think the discount that we requested was like 20% off. We didn’t get the 20%, but we got almost 10% on every product. Those products that were in 5% are now 15% and those are good enough for us. We added a ton of products there. What’s great is the products that were already 25%, now they’re 35% and they’re really good profit margin. That’s another one that we found. We added 31, 32 products from that distributor as well. We’re probably in the range of 200, 250 SKUs that we’ve added to the business since adding SmartScout.
Jim: In the last few months, you haven’t been using it a full year yet, far from it.
Rich: Yeah, and we’re very strategically looking for higher selling price products. That one that I just mentioned where we added 30 SKUs, our average selling price on those products is over $300.
Jim: Yeah, that’s tremendous. You’re not afraid of those higher price point products.
Rich: I’m not, no.
Jim: Are they heavier?
Rich: Some of them are. In fact, some of them we actually had to remove from our purchase order just based on the weight and the shipping cost and stuff like that. There was further evaluation to do after we placed the PO and had to remove some. They are. Some of them are heavier. Some of them are still small and light. We have products that are this big that are selling for $3,000. They may only be selling four or five times a month, but I’m fine with that, too.
Jim: Yeah, you like seeing those pop through, for sure.
Rich: Those are huge, great products. We’re just able to find – we had a hard time finding those products before. That’s one thing I love about SmartScout is it’s really helping us dial into finding the types of products we want because you can build out that search criteria exactly like you want. I’ll give you the basic search criteria, but what I tell all of my students is you’ll want to customize this to you, make it unique so that you’re not searching for the same stuff that everybody else is and finding those unique products that still meet that criteria of a niche brand, a niche product, that don’t have too many Amazon sellers but they still have enough to where that brand does tend to allow Amazon sellers.
Jim: Exactly, and there’s millions of these products out there. Some people may be thinking, oh, well, you’re finding 150, 200 results. Everyone is seeing the same – no, we’re talking every day thousands, if not tens of thousands of new products pouring into the market. There’s no way we could train enough people to keep up with the opportunity.
Rich: No way. We could have 10,000 people take this course and there’d still be enough products to go around for all.
Jim: Yeah, with products coming and going constantly and new products coming on the market. I love that we’re not talking about – some people, I feel the need to emphasize this, some people think that winning on Amazon means taking a product that no one’s heard of before and somehow finding a magic market and the magic keywords and the magic listing and hopefully making it big. That’s interesting stuff. We actually teach that. That’s private label strategy. That’s not what we’re talking about right now. We’re talking about when your assistant is going through that list of products and she’s looking for winners, she’s looking for ones that are already selling well. You guys want to get in on the game, get in on the action. Instead of three sellers, hey, now there’s four. Now I’m sharing a piece of that $1,000 a month profit. Instead of three people sharing it, now there’s four of us sharing it. That’s fine. We’re all playing about the same price range. The buy box is rotating. We’re all playing nice. If someone tanks and sells their product out, we just wait and now there’s just three of us again selling the product. That’s the Replens game. You’re just playing it at a higher level where you’ve got a relationship with your source. Instead of buying five or ten at a time off the store shelves around you, you’re buying maybe a case of 20 or 50. You’re placing slightly larger orders which improves your profit margins. It’s really the Replens game done at a slightly more serious level as far as the sourcing goes and the relationship aspect, too. Does that sound fair? Is that a good assessment?
Rich: Absolutely, yeah. We use so many – there’s so much of the Replens methodology in reviewing price lists and websites. I think that’s what makes – those who’ve been doing Replens and understand Replens, it puts them at an excellent position to have success with wholesale because you have that perfect methodology of sourcing already behind you. When you look at a price list, yes, if it’s a big price list, you do want to send it through a scanner and see what hits the UPCs. That’s a great first approach, but you still do want to take the Replens methodology and manually source it and still find those two packs and three packs. You do the same stuff with wholesale.
Jim: Yeah, manually search through and look. For those who don’t know what the Replens training is, the Proven Amazon Course dials it in. It takes a few hours. Some people it takes a few hours. Some people it takes them a few weeks. You go through it. Basically, you grab any product from anywhere that’s got a barcode on it. About 30 seconds from now, you can know with extreme confidence if that’s something I’d be interested in selling or not. All I have to know is what’s the name on the bottle. Show me the barcode. You may or may not find the barcode. You can search by the keywords, too. Then you’re diving in just a little bit into data using Keepa, RevSeller you talked about, and now SmartScout to see if it’s a wholesale opportunity, too, at the same time. You can know very quickly, is this a product I’m interested in, yes or no? The ability to make those fast decisions and to analyze a lot of different products quickly, that’s the magic. Let’s talk a little bit about the website that you said you have because some people will be like, oh, I have to build a website? What are you talking about? Are we going to help people with that? We’ve got it pretty dialed in. What’s our offer going to be there?
Rich: Yeah, I don’t know the price point on the website. I do know that we do have a web developer in place that’ll help people just throw it together real quick. You can make a few customizations. If you use us, it’s just going to be the basis of the value-add that we add as a wholesale supplier and maybe some of the consulting services we offer.
Jim: Just make you look legit.
Rich: Absolutely, which you can also get on Fiverr. You can hire someone. That’s what I did.
Jim: Build your own WordPress site if you want to. That’s perfectly fine. We’re saying, hey, we’ll host this for you. We’ll build it for you if you want. Pay us a few dollars and we’ll take care of those details. We have the team in place to take care of it. Just to make you look legit, because you need that if you’re going to approach wholesalers and say, well, where’s your website? I don’t really have one.
Rich: Don’t worry if you don’t have products because you don’t even put the products on there.
Jim: No, don’t need to put products.
Rich: It’s just your value.
Jim: Just contact info and a picture of a pretty building.
Rich: It goes a long way. You’d be really surprised how well that speaks to brands. We’ve had numerous responses, either through email or on the phone, that have told us that the main deciding factor on why they decided to work with us, because they don’t like to work with Amazon sellers, was our first – the response, looking at our website and seeing how professional it is and the value that we can bring to them. First impression is – I like to think of it as my online resume. It’s that resume I’m handing them. They look at it, and right away, they know, okay, I want to talk to this guy or I don’t. Right away, they look at our website, our resume, and say, yes, we want to talk to this guy. This guy could really help us.
Jim: Let’s talk through who this is for. I think we’ve hit on it. Let’s be real specific, who it’s for, who it’s not for maybe. I’m talking specifically provenwholesalesourcing.com, new course, brand new content, never been taught anywhere else in the world before. We’re basing it off of the SmartScout tool. You’re going to need, and while you’re thinking about your answer, I’m just going to bullet point through here some things that people are going to need. You’re going to need to buy the course, provenwholesalesourcing.com. If you’re a coaching student or if you’re a Proven Amazon Course student, by the way, look for a great discount on that. You’re also going to need SmartScout. Best price in the world, silentjim.com/ss, as in Smart Scout, silentjim.com/ss, you’re going to need that. You’re also going to need a website to do it right. We’re going to help you with that. We’re going to make it no brainer or you can build your own based on the stuff we’re going to show you in the course. That’s about it. Now, what knowledge do I need to be able to jump in because I don’t want people coming in completely green, never sold anything online before, and think, oh, this is the thing to do. You’ve got to get, we’ve mentioned, the Replens training, that basic Proven Amazon Course, the heart of it for new sellers is that Replens training. You’re going to need to understand the basics of that or we’re going to be talking maybe a little over your head potentially. Talk us through that.
Rich: I’m always going to push wholesale. That’s where I started. I think almost anybody can start there. I do agree, though, that you probably should have a base understanding of Replens, of selling on Amazon. If you just signed up for your Amazon account yesterday, a lot of what we’re going to talk about probably is going to go over your head.
Jim: You need an operating account and sold a few things. That’s a good baseline.
Rich: Yeah, absolutely, but you can have success in wholesale without having done Replens. I think you’ll have more success in wholesale if you’ve done Replens and had success there. You can do what I did and you can just start in wholesale.
Jim: That’s true. That’s what you guys did, $3.5 million in just a few short years.
Rich: I probably had the advantage of having worked for a distributor for ten plus years before I did that. I honestly think that this is an offer that fits almost everybody in the community. The community has been so Replens minded and Replens focused. If you’ve listened to a dozen podcasts, if you’ve gone through even the first 25% of Jimmy’s Replens course and you start to put that stuff in place, you’re probably ready for this. I think it’s going to be offered at such a low price that I think you’d be crazy not to, honestly. I think wholesale, honestly, is for everybody, even if the goal is to get into private label and do that more advanced stuff, I love our approach to private label with wholesale. Because we’re using our wholesale products, there’s zero risk in our private label approach. If I can’t get that product to sell on my private label listing, I’m just going to pull it back and then I’m going to sell it on the wholesale listing that I’m already selling against already, so zero risk with that approach.
Jim: Zero risk of an angry spouse saying, “Get that stuff out of my garage. What are those 4,000 units sitting there?” Zero risk.
Rich: I mean, you’re going to need at least $1,000 or $1,500 initial investment for SmartScout, for the website, for just the background stuff.
Jim: The course and for some inventory, too, that $1,500 is going to go a long way. That’s a good fair number. Someone is like, “I’m down to my last $500. Is this for me?” No, what you need to do is hang out in our free Facebook group, listen to this podcast, get out there and hustle, hit some yard sales, do some retail arbitrage, scan some barcodes and some clearance aisles. That stuff works if you’re going to hustle. You can put $100,000 in the bank doing that. We’re talking about that next level up of I’m ready to go a little deeper on some products that maybe buy more than one or two at a time kind of scenario. I want to get out there and buy 10, 20, 50 at a time maybe even and low risk.
Rich: Like I said, don’t let wholesale intimidate you. We find brands, distributors, all the time that they have a minimum order quantity of $100, $250, $500. Don’t think that you need $5,000+ in the bank to get started in wholesale. You don’t. You can get started in wholesale if you have $500 because you can go find two or three suppliers that will allow you to place small enough orders to be able to start with them, for sure.
Jim: I love the ongoing continuing story that you and Shelley have built, beautiful family. It’s all over the last several years has been built around Amazon. You guys have stepped up as great leaders. You mentioned the presentation you did at the conference. You guys were phenomenal at the conference just a few months ago as we’re recording this. Theprovenconference.com is where you can find the videos there. Yours is one of, I think we’ve had about 30 videos, multiple sessions, tremendous session. What else do you want to leave folks with? What else do you want to share here as we start to wrap this up? Again, we’ve been talking a lot about transitioning into wholesale, the opportunities that are there, provenwholesalesourcing.com. There’d be links to everything we talked about in the show notes, by the way. Is there anything else you want to leave people with to decide, is this for me, or maybe we can paint a little clear picture who is it not for if we left anything out? I think we did a pretty good job there.
Rich: I think we did good. Probably one last thing is I do want to let everybody know we’re still doing the workshop here in Mesa. This wholesale course is not to replace the in-person workshop. It’s just cutting out the wholesale aspect of it and making that available to a lot of people. You’re still missing the advanced Replens training we’re doing, the time in my warehouse, the team building. There’s so much value that we deliver here at the workshop that if you really want to hit the ground running and you have the investment to make the investment in that, I would still highly recommend our workshop, people are having incredible success with.
Jim: So many testimonials. That’s a lot of the testimonials people are going to see on the provenwholesalesourcing.com page is the people who have been out there live and experienced this. They’re coming away saying amazing glowing things about the experience. We’ll have both those offers. If someone wants to hit the ground running and come out and actually hang out with you guys for a few days, that’s awesome. For people that say, I can’t spend a few thousand. I’ll spend a couple of hundreds and maybe get this thing rocking. That’s why we created this Proven Wholesale Sourcing.
Rich: You can come check out this wholesale course for a few $100. Come check it out, see that it’s legit, see that it works. Then later come out and visit me.
Jim: I think that’s what’s going to happen is we’re going to fill you guys’ calendar from all the people who get in here. That brings me to a point we probably should have brought up earlier. This will all be on the sales page, of course, for the course, the Proven Wholesale Sourcing sales page, but how are people getting this content? Is it interactive? We’re still mapping this out as we’re recording this episode so it may not be completely set in stone. What’s the plan here? Are they just watching videos? What all are we going to offer?
Rich: Yeah, so we’re going to do – we haven’t nailed down the exact number yet, probably six to eight live Zoom calls. We’ll have everybody join the Zoom calls. The first probably 45 to 60 minutes will be me presenting and teaching and going over the concepts, but we’ll open up the last 15 to 30 minutes, however long it takes, we’ll open up the last portion of every call to questions. We’ll be able to dive into everybody’s Q&A. It will be both presentation but also very interactive at the end so that we can make sure everybody is understanding the concepts.
Jim: Beautiful, a couple of things I want to point out here, too. One is we have coaching on all of this, which is kind of a price point in between just buying the course and flying out to Arizona. We have some coaches ready to rock on this very fast after this course rolls out. The other thing is those sessions you just described, they’re all going to be recorded. If someone is listening to this in 2022 spring or something, like, oh, man, I missed it. No, you didn’t. Provenwholesalesourcing.com has got the recordings. The live experience, I think those people who jump into it first, is going to be phenomenal because you can interact. You’re going to know the people going through the same time you are and interacting with you and your team in a live fashion as we go through with this. We’ll have some Facebook support, I’m sure, as well, that kind of thing all plugged in. It’s all on the provenwholesalesourcing.com page. This is just you and I prelaunch talking through what it is we’re going to offer with the goal being helping people just go out and find dozens of new wholesale opportunities in rapid fashion. Beautiful, I think we really hit the nail on the head with this. I think people are probably at a point right now where they’re saying, yeah, this is for me, or oh, I think I need to go study Proven Amazon Course Replens a little bit first. One of those two pockets if you went all the way through this episode, I think. Anything left on your list? Anything else you want to go over before we start to wrap this one up?
Rich: No, I think we hit it all pretty well. Now I just encourage people to give wholesale a chance. It really is, in my opinion, the best way to scale your business. It also helps you develop systems and have a sellable asset, too, the value of your business. If someone wanted to buy my business, it’s a sellable asset because of how it’s set up and the systems we have in place and how it runs itself. They wouldn’t be buying a job. They’d be buying a company that actually runs with employees that run it.
Jim: You’re exactly right. It reminds me of the episode we did not too long ago where I was talking with a guy who comes from the world of business finance who had left it. He was actually at our event. I don’t know if you talked to the AccrueMe guys while you were there or not. Had a great episode with him about five episodes or so ago. He was saying the Amazon selling model got him so excited, he came out of retirement to start talking to Amazon sellers. When he talks to people who are brand new saying, hey, I want to start an Amazon business, he doesn’t send them into private label, even though that’s where everyone goes because they think that’s a turnkey business. I can sell it someday. I can sell my brand someday.
There’s actually a middle ground here where you don’t need the risk of private label. You don’t need all the trademarks. We do all of that. We do it all day, every day with excellence for people. Humnbird, I’ll stick a link in the show notes. We can help you build your brand, get you trademarked, all that, but you don’t have to go that far with it to have a sellable asset. If you’ve got a list of wholesalers and it’s just order more when you need it, order more when you need it, that’s a turnkey sellable asset business. Now, if you’re hitting yard sales every weekend and sometimes you come home with $2,500 worth of product and sometimes you come home with nothing, that’s not a sellable asset business. No one is going to take that over from you. You can’t hand them the instruction book and say here. I don’t want to go to yard sales every Saturday. I don’t want to buy a job.
I love what you just said, Rich. This makes your business a sellable asset. I believe Replens do as well as it becomes to be more understood and we’re shaping this concept out. It’s still in its infancy, although we’ve got thousands of people making tons of money. It’s a system that operates. You can put the right people in place and the wheels turn and it makes money. The wholesale really, I don’t know, puts a nice foundation under it where you can make it make sense to a business investor. Here’s the products we order. Here’s what they sell for. I could go on vacation for two weeks and turn it over to my team. Do you want to buy this thing from me? You’ve got a sellable asset. Very well said, we probably should’ve emphasized that earlier on. Great note to end on, too. I think we’re going to give people a lot to think about. Unless you have anything else, buddy, I’m going to wrap this one up.
Rich: Oh, no, that’s it. There’s lots of brands out there that are willing to work with you. You just have to know how to find them. Let me help you with that.
Jim: That’s what we’re going to show you to do. Super exciting, all right, man, next phase of growth, wholesale for all you Replens sellers out there listing, all of you who are hitting the store shelves. Let’s get you doing some research with a cool tool that we found that we’re super excited to start working with, SmartScout. Silentjim.com/ss is where you go to get your great discount on SmartScout, but provenwholesalesourcing.com, that’s the course that Rich is going to be leading through with our team and support. We can’t wait to roll this out to you guys. So many great success stories are coming very soon from this. This is going to be great. Hope you can join us.
This has been another episode of Silent Sales Machine Radio. If you could do me a little favor, spread the word. Send people to silentjim.com, tell them, hey, these guys have so many success stories, because we do. I don’t see anyone else in the industry cranking out the number of success stories that we do, just literally daily in our free Facebook group people posting their results, sharing their excitement, great leaders like Rich and Shelley, who you met Rich today, emerging, creating new content. It’s a great time to be a part of what we have going on around here. Spread the word, if you don’t mind. That’s our only marketing that we do is asking you to share our website with some others who might be able to benefit. Until we talk again, God bless all the business-building warriors. We’re in your corner. We’re here for you. We’re rooting for you. We want to support you and help you grow. We don’t see you as a competitor. We see you as a fellow warrior in the fight. We’re here with you. We’ll talk to you again real soon.
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