Today I’ve got someone really special on the show, Will Tjernlund. Now I met Will at the StartupBros conference and I’m really glad that I did.
He and his brother Andrew made about 7.5 million dollars from Amazon and their own stores last year making him one of the most successful Amazon sellers that I’ve had on the podcast so far.
And the best part is that his business is just a 2 man operation with him and his brother. Today, we’re going to go into depth on how he got started.
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What You’ll Learn
- How Will got into ecommerce and what made him start selling while he was still in college.
- How many products Will was selling in 2014 to achieve 7.5 million in revenue
- How Will came up with what to sell.
- How he got his start
- Will’s strategy is for entering new markets
- Will’s main criteria for selecting a product to sell
Other Resources And Books
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Welcome to The My Wife Quit Her Job podcast. We will teach you how to create a business that suits your lifestyle so you can spend more time with your family and focus on doing the things that you love. Here is your host, Steve Chou.
Steve: Welcome to the My Wife Quit Her Job podcast. Today I’ve got someone really special on the show, Will Tjernlund. I met will at the StartupBros conference and I’m really glad that I did. He and his brother Andrew made about $7.5 million from Amazon in 2014 in their own stores last year making him one of the most successful Amazon sellers that I’ve had on the podcast thus far.
The best part is that they are basically a two man show with just he and his brother. Now you might be wondering how that is even possible. Well, Will sells his own private label items, buys from manufacturers in China, and then sends his products directly to Amazon for fulfillment using FBA. And today we are going to go into great depth on how he does it. With that welcome to the show Will, how are you doing today?
Will: I’m doing pretty good. How are you doing?
Steve: I’m doing good. It’s good to hear. We chatted a little bit before the interview started. There’s a lot of stuff going on with you. I did want to, I was very curious on how you kind of got started in ecommerce, because I understand you did this while you are still in college, right?
Will: Yeah, even kind of before that. I’ve always been kind of looking for gaps in the market and always looking for different ways to make money ever since I was in like high school even. Me and my buddies were doing black [inaudible 00:03:29] out of my basement the whole grade, every Friday that kind of thing, always finding a way to make money. And I actually started selling online when I was still in high school.
I worked at Target and I would buy all the Nintendo Wii and Xbox 360s when they were in high demand, and sell them for about 30% more on eBay. That’s when I first started selling online. But then from there, my brother graduated high school in 2003 and soon after that he started private labeling from Alibaba and selling on eBay. And so even when I was only 13, I saw it was very possible to import and make money selling online.
Steve: So your brother was the first one that kind of got to get you into this?
Will: Yeah, at a grand scale like I could not believe it the first time even when I was 13, when he showed me Alibaba and saw the prices on there, because this is way before any kind of private labeling and stuff people were doing now, and a classic example will be like if you just saw Alibaba today and you saw like the price of tablets on there. You go, wow you can get like a android tablet for $12? This is crazy. They go for $200 in the stores, because we just didn’t know back then like what kind of quality assurance and all that kind of stuff that factories were doing.
Steve: What was like the first product that you imported over to sell?
Will: The first one I personally imported all by myself was like my sophomore junior college and it was actually a marijuana vaporizer pen.
Steve: How did you come over that Will?
Will: No, seriously though, it was one of those things where I was just constantly doing the one tab Alibaba, one tab Amazon and just looking for random crap. And I got on the tobacco products, and then from there they all qualified themselves as tobacco products. But I saw that they were charging $100 and I go, well that can’t cost $100 from Alibaba. It ended up costing like $7. So that was like one of my first big products.
Steve: So you were in college, where did you store the stuff. I assume you had– you shipped it to yourself.
Will: Yeah. I would just have the stuff air freighted or myself. Then from there I was– I was even doing FBA when I first started doing like my sophomore year in college. There’s actually a post office on my campus. So I would just have a backpack full of vaporizer pens that I would drop off on my way to class.
Steve: I see. So was this for eBay or was this for Amazon?
Will: I was even doing a little Craigslist.
Steve: So can you kind of describe why you decided to use both platforms?
Will: I just kind of– it’s the– I always think in terms of why not? I knew that eBay sold well, and I knew Amazon sold well. For me to just– I was pretty much create the listing once, then copy and paste all the descriptions and photos and all that stuff over. So for an extra whatever 10 minutes of time, the potential value could be thousands of dollars.
Steve: What’s your take real quick on just Amazon versus eBay, the type of customers and selling on those platforms?
Will: I hate eBay more than anything. I hate the all the customers. They are all terrible. Etsy is like the anti-eBay. Where in eBay you deal with every single individual customer, they are always asking for tracking information, and they are always bugging you about the kind of intricacies of your product, where on Etsy, the customers are always overly nice, they are super optimistic.
You tell them I’m sorry, the shipping is going to be three weeks, they go, “Wow, that’s great. I’m just happy it’s not four,” kind of thing. If I sold 1000 items on eBay in one day, my life is going to be miserable trying to flip through all those orders. If I sold 1000 times in one day on Amazon, I don’t even notice.
Steve: Yeah, I mean I had the same experience in eBay. Everyone there tends to be cheaper buyers.
Will: I compare to people who shop on eBay are more Wal-Mart shoppers, and people who shop on Amazon are more Target shoppers, where the Amazon customers are willing to pay maybe that 10% more to get like the automatic two-day shipping and have them more quality experience, where the people on eBay are shopping more for deals and they are wiling to deep dive and try to find those diamonds on the raft.
Steve: Do you still sell on eBay today?
Will: No. we sold over a million dollar in 2014 on eBay, and we quit even though it was all automated through our fulfillment and everything. My brother and I quit selling on eBay in 2015, because we were spending just as much time on eBay as we were Amazon, but selling 7 times as much on Amazon.
Steve: Okay. Amazon is it all FBA or do you do any merchant fulfilled?
Will: The only merchant fulfilled I do would be most likely if I’m like drop shipping.
Steve: Okay, okay. And you pretty much only drop ship when you are testing the product or?
Will: Either when I’m testing it or say like, I sign up a deal with a distributor where their catalogue has a thousand products. I only want 50 of their products, but the other 950 I have available for me to drop ship. So I might as well throw up a merchant fulfilled listing for all those to see if I can get anything. Even if those things sell maybe one unit a day, it’s still an extra thousand units a day.
Steve: Yeah, I know, that totally makes sense. So, I know the listeners out there are very curious on how you actually come up with stuff to sell. If you can just kind of talk about your strategy for finding stuff that will make you a profit.
Will: All right, so I can go all day about this. Cut me half when you need to. But basically I’m just looking for items that have high proceed value with minimal down sides. I make sure that the product can always be liquidated. Example, say if I’m buying a set of four drink coasters for a dollar, and I usually sell for $20, if I sell them for $4 and break even, they will fly off the shelves and at least I know I can get rid of say 100 units I order as a sample.
I always make sure they can be liquidated, and I always try to have minimal moving parts and minimal electronics in it. So like my perfect product is the drink coaster, because nothing can go wrong with it. I’m not really worried about quality assurance or anything like that. It’s just going to be a square piece of say wood, and there’s not going to be anything else to it. I really like kind of products that just nothing can go wrong and products that are super simple where I’m either selling a hunk of rubber, metal, wood, or plastic.
Steve: So when you say liquidate, do you mean liquidate on eBay or Amazon?
Will: Either or, just liquidating in general where something where I can charge such a low price that people can’t help but buy it type of thing. Whereas I give everyone selling a product for $30 and I’m just trying to sell for $4.50, there’s no way that I don’t at least just get rid of my inventory.
Steve: Okay, so that implies that your margins, you require something on the order of 8X then?
Will: Not necessarily 8X. It’s more kind of a proceed value type of thing. It’s different per each product category. When I’m selling something that’s like more home and industrial, that kind of product has a lot less price fluctuations than maybe say like a fashion item. And so that one I can only charge maybe 20% below market price, and still liquidate it pretty quickly because everyone has the same exact price, as opposed to drink coasters where some might be five dollars, some might be $100.
Steve: Okay, and so can you give us an example of your ideal products. So with coasters, I mean, I don’t know that’s like a real product that you just mentioned?
Will: Yeah, exactly. That’s a perfect product where I’m walking through Target, and I see some men drink coasters a four pack of them for $25. And I go, that doesn’t make any sense because a cinder block cost like a dollar. So I go and look that product up on eBay, I mean on Amazon real quick.
And I go wow, they are selling concrete drink coasters and they go for about $20 for four pack. That still doesn’t make sense to me. Then I look it up on Alibaba store, and I go, wow, those things are four pack cost a buck. Well, if I order 25 packs, it’s really hard for me not to at least just get my money back kind of thing.
Steve: Okay, do you use any sort of tools to find these products, or do you just go through and flip through Amazon.
Will: Yeah, I don’t use any tools. I feel like when everyone uses the same tools, it draws the same conclusion for everyone. It’s hard with these analytics tools, and an example I always use is the drone landing pad, and still no one sources yet even though I’ve used that example a million times, but there is two listings currently on Amazon. If you throw a drone landing pad, you’d be the third one on Amazon. It’s just like there are certain products like that where you would be shooting and fishing a barrel not to source that product and try it out.
If you looked it up on one of Amazon’s softwares it would say that there’s a very low sales velocity and that you shouldn’t even try it, but that’s because not enough people are offering quality product yet, because the only drawn mini pads are like one foot by one foot landing pads and not like what the customers really want. So the software can be kind of deceiving because it won’t show sales for products that aren’t there yet.
Steve: So how did you find like a drone landing pad for example?
Will: I just continuously click the also bought with button.
Will: And so I will go and I will see – I was looking at drones just to buy one myself just to see what kind of price they are at, and then I see like also bought with XYZ and I’m like, weird. I didn’t think about drone accessories. Then I looked up drone carrying cases, and then after looking at the shipping and the pricing it’s like, oh, there’s no money to be really made there and it’s like okay how about drone spare parts.
I was like no money will be made there. It’s like, oh what about a landing pad. Then I looked it up, and there’s no one selling it and it’s merchant fulfilled with reviews. It’s like, wow, I could just come in here and just dominate this market if I wanted to.
Steve: Are you worried at all that if there’s not that many people selling it that the demand might not necessarily be that high for it?
Will: No, because I know the demand is going to keep going up with drones just in general if you look at Google trends. Also, I love the idea of products that fly under the radar, instead of selling the silicon baking mat and try to sell a hundred units a day, and constantly finding a few people piggy backing on your listing and fighting off all these competitors.
I love the idea of selling say a 50 dollar drone landing pad that I get for ten dollars that I make $25 a unit, and I sell for a day. I’m sneakily making a hundred bucks a day, 36 grand a year off of this drone landing pad, and people look it up and go 4 a day, that’s not worth my time.
Steve: Okay, so I was just curious then, so for your seven and a half million revenue that you did in 2014, how many products was that?
Steve: 1700? Holy crap! When you sell these products, do you ship them direct to Amazon, or do you ship them to yourself first and analyze them or look at them?
Will: Ship them to myself first. I still don’t fully trust any of my Chinese suppliers to do everything correctly, and I would hate to have a container get denied at Amazon. It doesn’t cost that much more like an insurance policy for me to have it stop it at my place beforehand, or my pre-fulfillment place beforehand.
And then with my wholesale suppliers I think a lot of them don’t know I’m selling on Amazon. I don’t want them just to send straight to Amazon, because then basically I’m teaching them how to cut me out of loop.
Steve: 1700 products and you use the same strategy you are trying to fly under the radar with these products.
Will: Yeah, it’s way easier to sell a thousand products once a day, than to sell one product a thousand times a day.
Steve: Interesting. So then it doesn’t really matter I guess when you look on Amazon you don’t see that many listings, you just go with your gut is what it sounds like.
Will: Yeah, with my gut and like very small low risks moves over and over again. Where I’m not sitting there going and buying a crazy amount of inventory right off the butt, I’m sitting there ordering 20 units, then 100 units then 200 units, then 1000 units kind of thing where I never get caught with like my foot in my mouth, because I ordered too much and I don’t know what to do with the inventory.
Because it’s all about basically once you get product selection down, which is not– it’s like one of the more difficult parts, the whole entire Amazon game basically just comes down to cash flow, and how can you hold the perfect amount of inventory where you have enough cash on hand to keep growing, but at the same time you have enough cash to replenish your current inventory.
Steve: What are some of the price points that you like on Amazon then? Do you have any guidelines there?
Will: No real guidelines. More times than not, I tend to lean towards more expensive products, because I like the idea of knowing like I’m getting a size more cash every time I sell a unit. So instead of me saying, oh I did a thousand dollars in sales doing 20% profit margin after everything, I’ve become more and more tuned to saying, I sold four units and I made a hundred dollars. I put a hundred dollars new in my pocket from those four units, as opposed to saying I did 400 in sales at a 25% margin.
Steve: Does that imply then that your price points is in the order of hundreds of dollars then?
Will: Yes, my brother and I our average price point was like a $130. But it was the kind of thing where, that kind of skewed as I explained earlier because of say they had those thousand skew catalogues we would get, and we’d only source a 100 items, and then have 900 items or whatever as an example drop shipped.
More times than not we are drop shipping those one because we don’t want to tie up cash in them because there are hundreds and hundreds of dollars. My brother and I we are selling some products that are like $2000 each.
Steve: Oh, wow, and you’re fronting the inventory for that?
Will: Yeah basically we are just sitting there having a merchant fulfilled and say as soon as we see a sale come through we just email the supplier and say we have a drop ship to this address. And so we only spend the money once we’ve already made it.
Steve: Oh sorry, I meant like the ones that you actually store at Amazon using FBA. Like what’s your price point?
Will: Oh we try to be lower. It really comes down to like you prefer under a hundred dollars. But at the same time it really comes down to sales velocity. So how fast can I get that dollar 20 back in my bank account after I spent that dollar. If I sell say, some of my products were selling like say 15 units a day. I don’t mind that it’s a more expensive product because I know I’m flipping my inventory quickly, where if I know I’m only going to be selling five units a week, then I’m probably going to back off on ordering so many units of that if that makes sense at all.
Steve: Yeah I know. It totally does. And so if you can, can you just walk me through a typical example of how you proceed from product inception all the way to the sourcing process?
Will: Yeah, I will give you an example of a product we used to sell. We used to sell knee scooters. When someone injures their foot, and they scoot around, if you’ve ever seen those instead of scratches.
Steve: That sounds like an oversize product.
Will: It is. It’s like a 3 foot by like 1 foot by one and a half foot box.
Steve: So you don’t care about that either.
Will: No, because the thing is that they are such low competition in margin. So these things were going for like 200 to 300 dollars on Amazon, and we can get one for 60 dollars landed. So like there’s plenty of margin we made there. Even after everything we were only making 40 bucks a unit, it’s like that’s still a pretty good margin.
With the knee scooter was my cousin broke his foot, and he had to get a knee scooter. And he emailed my brother and I since he knows we like buy stuff online for a living and said, “I’m having trouble finding this knee scooter for anything cheaper than like $200 to $300 anywhere online. Do you think you guys can find anywhere cheaper online?”
And so we went and looked all over online and couldn’t find a cheaper, and we go, that’s kind of bizarre because it’s just like less moving parts like a child’s bike, and a child’s bike doesn’t cost that much. Again it comes down to perceived value, like why does this cost so much for no reason?
So then we looked it up on Alibaba and saw that after shipping and everything we can get them for 60 backs landed. It’s the kind of thing where we go, well crap. We only have to sell maybe half of a 20 foot container to break even. That’s not going to be too difficult.
And so we ordered I think it was a 20 foot container which was 210 units, and what got tricky was we sold 5 units that very first day between eBay and Amazon, and so then it took us 60 days from us ordering to getting the items in stock at Amazon. We are looking and we go wow, we ordered 210 units, five units a day for 60 days, that’s going to be X300 units. Even though we only sold five units of that container, we had to go buy another container already which was kind of an annoying thing to do.
Steve: So what are your guidelines then when you are sourcing? You mentioned before you like to start out with really small quantities. It sounds like here you start out with a 20 foot container?
Will: Yeah, that’s the thing where it’s hard for me to give guidelines, because I do something different almost every time where with these knee scooters I looked and I go this is a product people need not want. This is a product where we can just kill people price wise, where we can go, oh you are selling this for 300, I’m going to sell the same exact quality one for 160 bucks. It’s like, what are they going to do about that?
It’s like, when I show up and then two it’s a low velocity item. After I get like two sales in a review I’m already on like the first page. And so when they see mine for 160 bucks with good reviews, everyone else selling for 300 bucks, I just knew that people couldn’t help themselves. They’d had to buy ours, because it would literally make zero sense for them to buy anyone else’s. Also ours came in different colors, and everyone’s else’s in back.
It’s like I just knew there was like four different ways that we were going to just knock the competition off the pack. So I was willing to do a bigger order right off the butt, where if I’m using concrete drink coasters, they might be more competitive and I’m not really sure what the sales velocity is, and it’s a product that people want, not need. I’m going to order maybe 20 units because I’m not sure about it.
Steve: Okay, with these scooters then, that’s like a pretty large outlay, but you were confident– how were you confident that the quality was the same as the others? Did you actually buy the competition and compare the two?
Will: No, we did get one– we did bite the bull and get one air freighted to us very quickly. I was like, test driving it around like a little warehouse and that kind of stuff, and beating it up pretty bad, nothing happened to it. I was like trying to like rough house it and everything seemed fine. It seemed like a great product. But this is why we don’t source them anymore, is because everyone needs a new scooter for about 3 weeks. And so everyone returns it when they are done, and gets their money back.
Will: We had about zero negative reviews, but 75% of them got returned. What does that say, kind of thing?
Steve: Right. I’m just curious. Are you only selling in Amazon or do you have your own site?
Will: I have my own sites, but for like a different private label brands. They are basically there for legitimacy. They don’t really make any money. It’s kind of thing where I don’t know that much about SEO or like social media marketing, or any of that kind of stuff where the amount of time I’d have to spend to the returns is not worth it to me.
Steve: Okay. So let’s go with your coaster example, because that seems like something that is more obtainable for someone who doesn’t have a whole lot of money to invest. So let’s say I only have like $500 or $1000, how would you proceed?
Will: Okay, if you had say 500 dollars, I would go and I would try to find lower competition products and that’s something that’s like in a top 100 BSR or anything, I would try to find lower competition products for anywhere from one to four dollars on Aliexpress. And buy these items for one to four dollars, will sell from anywhere from 15 to 25 dollars on Amazon. You are going to be looking for stuff on Aliexpress with a big price discrepancy. You are going to be looking for stuff with free shipping and shipping that’s in 15 days. If you can find products like that, you can basically undercut the price enough that you can make yourself competitive no matter what.
Then I would go and order with that $500, I would order say 20 units of five different skews. So say in that, like say that can be at five dollars a unit landed. That’s even on a high end. From there you send in those five different skews, 20 of each unit into Amazon, set up the Amazon PPC and sit back and wait for two weeks. During those two weeks, you are just trying to see if, if you flip a generic sample with no reviews, and you get any traction at all on Amazon, you know you are on to something.
Like a typical example is I put up a listing of a new product I’m trying on Aliexpress. I sell maybe two or three units the first week, and in the next second week, I end up selling seven units, and I go, “Wow, I sold ten units in two weeks and I have zero reviews, a crappy picture and a crappy product?
Now that I know that there’s demand for the product and I know that I can compete, I’m going to start keep continuously flipping my Aliexpress product while I start working on my Alibaba order. Because of the time zone difference with Alibaba, it takes forever to go back and forth which is prior and takes forever to get all the details ironed out, and so you might as well keep selling and making cash from Aliexpress while you go through that whole process.
Once you are done with the Alibaba process and you actually have your order in hand, say two months later. You can go back to that listing from Aliexpress, you can reupload the photos, reupload the title to a new private label title, and have this listing with reviews and with sales history to launch your new private label product from.
Steve: Okay, so the five skews then, you just run with the winners and then you just liquidate the crappy guys that don’t sell.
Will: Yeah, and then repeat that process every month. So, this basically came from– My brother and I had 1700 skews at Amazon, and we kind of looked at it and go wow, it’s an 80/20 rule to the max where the top 100 units make up 90% of our sales. Then our top ten units make up like 65% of our sales. It’s like, wow, wouldn’t it be sweet if we only had like ten skews and we are still making millions of dollars.
This would be like the easiest job of all time and it would be so easy to manage. The only way we found only those ten skews is through testing all those products. And so once I started working by myself this past May, I’ve started just testing tones and tones of products from Aliexpress trying to find my ten true winners out of the 1700.
Steve: So you guys sell 1700 and it sounds like to me that you want to reduce that number to just a handful.
Will: It was more than 1700 if you include all the drop shipping. But yeah, it’s the kind of thing where 1700, it’s an easy way to build up a bunch of revenue and make a bunch of money easily, but now I’m spoiled enough where I can focus more on my lifestyle than the cash flow. That’s where I’m more worried about. So it’s cool making all that money with my brother, but it’s not cool working in a factory over 40 hours a week. And so I’d rather make 100 grand working an hour a week than ten million dollars a year working 100 hours a week.
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Steve: So back in 2014 you guys were still a two man show, right. I would imagine to house all these products, like four or whatever five million dollars worth, that’s a pretty big warehouse and you have to go through each product?
Will: Not necessarily, because we were really efficient about it. We could get a container in and have it out the same day.
Will: So we would get a container in and then me and my brother would just mad men unloading this container, labeling it, making sure everything looks legit, stacking it out on pallet, wrapping the pallets, weighing the pellets and having all the weights and pellets and everything labeled by later that day where then we could call the freight company, the third party whatever freight company, and they could pick it up and bring it on its way to Amazon later that day if we got it early in the day. So the longest our inventory ever sat at a warehouse was like 20 hours.
Steve: Oh wow, okay, you guys are sick. I think I saw a picture of your warehouse. It’s pretty big.
Will: Yeah, we have like a – it’s kind of confusing, I was worked out, but my family owns a manufacturing company. So they have like a manufacturing type of warehouse where it’s like we don’t go anywhere near for like safety reasons. But we got our own little section because they moved over to lee manufacturing and had a bunch of extra space. We use their extra warehouse space and knocked down a couple of walls to add some more loading dock doors for ourselves.
Steve: I’m just curious, you are doing all these products, have you ever had any problems with quality control and dealing with vendors?
Will: I haven’t really had much to deal with quality control. The only kind of issue I’ve ever really had is when I either get like a few samples and they just suck, and I just basically throw them away. It’s a price of doing business. Or I once get a container of these products where the two sides didn’t fit. But I had already ordered say four containers in the past year from this company, and I was a good customer and I told them that “Hey, you attached the wrong part to it. It doesn’t fit properly.” Without question for free, they air freighted out the right part and we got it all fixed and everything was fine.
Since I had a past history with them, and I would spend tens of thousands of dollars with them, they had no problem just to admit that they are wrong and just air freight the stuff out there. I have very good relationships with all my suppliers. So I have no problem asking them to bend over backwards for me at this point.
Steve: Do you think the reason for that is because you pick really simple products like your coasters example, right?
Will: Yeah, that’s the main, main reason is that I really try to go out of my way to perceive any problems ahead of time. Then when I don’t perceive the problem ahead of time, it’s something stupid like the knee scooter where people just return them like in 30 days which I just had no idea. I didn’t think about that.
Steve: Did you end up liquidating those knee scooters then?
Will: We ordered a second container, sold all those and then we thought about ordering a third container and said F it, we don’t want to waste our time anymore.
Steve: Okay, and so with your vendors then you mentioned that you start out with like 20 units and that’s like from Aliexpress, right?
Will: Usually. Yeah.
Steve: Then for your second order, you said you graduate, I think you said like a hundred units or something like that.
Will: Again, it’s a really case by case kind of thing where say, if there’s $100 a unit, I’ll probably just order another twenty again and just keep ordering 20 every week, because I don’t want to tie up my cash flow. But if they are a dollar a unit, then I might just order 500 because it’s like I just don’t want to waste my time ordering again.
Steve: Have you ever run into any problems where the vendor like after that small initial order that they want you to order like 500 units for example?
Will: Well not on Aliexpress, because you don’t really talk to the vendor at all. You just …
Steve: Oh, this is all in the context of Aliexpress.
Will: Yeah, I don’t order from Alibaba and tell them I’m going to order a large quantity, that I’m going to actually private label and do like a little bit customization to it and all that stuff, because that process takes long. I hate wasting two months of emailing back and forth. I want to make money now kind of thing.
Steve: Okay. You mentioned before I asked you this whether you had like your own store for your own website. You made it sound like those are just place holders I guess or brand pages?
Will: Yeah, they are basically there if I ever want to make an ecommerce site, like it’s indexed on Google for a certain amount of time, so it looks better and two if anyone ever like searches the brand name, something at least pops up and it looks like a semi legit website and stuff. It’s something like my business partner and I will make a square space site in the afternoon, and then that’s good enough for us. It’s not like we are spending a bunch of time on it.
Steve: Are you showing your products on there with links to Amazon listings at all?
Will: Yes, that’s exactly what we are doing. We are doing like the add the cart button and the add to cart button links to our Amazon listing through a super URL.
Steve: Here’s one thing I was always curious about. Are you worried about Amazon kind of pushing you out and going direct to your manufacturers at some point?
Will: I don’t think worried is the right word. I know it’s going to happen. I’m just ready for it. I have grown up in a weird time where I was born in 1990. And so I’ve seen like [inaudible 00:32:08], like Yahoo, AOL and Myspace like go out of business over night. I’ve seen a bunch of tech companies come and go, and that’s basically how my whole life has been.
I’m so very used to the idea that like Amazon might just come in and wipe everyone out and take away all the third party sellers, and then ten years from now Amazon is going out of business because the rejects is going crazy or something. And so it’s kind of thing where I’m always have the kind of mind frame that this is probably not going to be there tomorrow, so make as much cash as you can today.
Steve: Are you doing anything to kind of prepare when that happens, or are you just prepared to gradually lose this over time and come up with new things?
Will: Well, if you can’t beat them join them. I’ve been selling a lot to Amazon.
Steve: You mean with the vendor program?
Steve: Can you just describe that real quick for the listeners who don’t know what that is.
Will: It’s basically you just sell to Amazon instead of on Amazon. It’s a little bit more annoying because they place like multiple purchase orders a week and you kind of have to have the inventory ready to send to them or to back order it. But it’s a very wise thing to do if you have a very hot selling product and you are competing for the buy box, because if you sell to Amazon, Amazon will basically control the buy box, and yes you will make a smaller profit margin, but controlling the buy box 100% is pretty sweet. Amazon will buy a lot from you. They will pay you fairly fast, so it really clears off the cash flow issue.
Steve: Can you talk about like the decision making process or was it just clear cut decision to sell to Amazon for you?
Will: It just kind of like…
Steve: Because there’s pros and cons I would imagine, right?
Will: Well there’s definitely cons, but it’s how do you take advantage of Amazon’s greed. Do you know what I’m saying? And so you think and they are going, okay, Amazon wants to have every skew possible, and they want everything for like low prices. If I see a product that’s not on Amazon yet, and I can get like a wholesale say account with them, I can take that catalogue of a thousand products and upload it to Amazon saying, “Hey I had these thousand products and you want to buy them for me.”
And if Amazon even looks at them and goes “Wow, we don’t have any of those products yet. Yeah, we want to add to our catalogues, can we get three units of each?” Those sell out probably instantly within like a week, because Amazon promotes its own stuff a lot more than third party sellers. Then I sold 3,000 units to Amazon that week kind of thing, and I did nothing besides copy and paste like a spread sheet over to them.
Steve: Let’s say you said to Amazon, “Hey, I don’t want to use– I don’t want to sell direct to you,” and then they go with someone else, are you pretty much screwed at that point?
Will: That’s why if you have like a legitimate private label brand, there’s really nothing they can do about it. So that’s basically the only time you wouldn’t want to sell to Amazon is that you have a legitimate private label brand, you are the only one on the listing and you are selling 30 units a day.
If you sell to Amazon, you may go up to 40 units a day, but then you are going to lose your profit margin. You are going to make any money in that. If they go and they try to source any of your competitor’s products to try to like run you out of business, there’s nothing you can do about that. At that point, if you are competing with Amazon like that, then I would just sell yours to Amazon too.
Steve: So by legitimate you mean something really unique that no one else is offering.
Will: Yeah, if you are just selling some crappy yoga mat with just like your logo on the corner, or you are selling something like meat cloths, or like barbecue gloves or something like that where you are adding zero value and there’s nothing unique at all about your product, then yeah, I wouldn’t blame Amazon for taking down all those similar listings and just having a few barbecue gloves. But if you actually have something somehow unique, then yeah, I doubt they are just going to [inaudible 00:35:39] your listing because you are competing with them.
Steve: Can you give us an example of something that you are selling direct to Amazon or?
Will: Yeah, I’m trying to think of something on top of my head. Because it’s like we were selling like those knee scooters directly to Amazon. Once we kind of like things started slowing down a little bit, and we thought that might boost sales, but also with mostly like my brother just signed a big contract with a wholesale company that has 10,000 skews. He uploaded those 10,000 skews to Amazon, and Amazon first order from him was for 500,000.
And so my brother made basically like 100 grand of that being a middle man. That 500 grand is already sold, it’s not like you are sending 500 grand in the inventory and to wait to sell it for months, its already sold because Amazon bought it from him. It clears the whole cash flow issue.
Steve: So here’s a question on that, a perfect example, why don’t they just list their stuff on Amazon and instead go through your brother?
Will: Because, this is where it gets kind of slimy. Have you ever read “The Everything Store.” It’s Jeff Bezos’ biography?
Steve: No, I haven’t read that.
Will: He explains in there a story about wood stove knives. Have you ever heard of wood stove knives?
Steve: Yes, of course.
Will: Okay. Most people I tell this example to have never heard of it which is like okay, I know you’ve heard of it.
Steve: Are they not married? I mean the real one registers for those.
Will: Exactly, so Wood stove knives was contacted by Amazon. This is back like 2008 or 2009. They were contacted by Amazon saying, hey we want to sell your knives. They say– say wood stove buys 10,000 knives to a knife store for $100 and then they are supposed to market it for $400. They sold their knives to Amazon for $100. Amazon went around and sold them for like $101 on Amazon.
Wood stove just freaks out and goes, “What the heck are you doing? You are screwing over like a hundred year history of our family selling to all these different brick and motor shops, you are screwing up our whole entire supply chain, all our wholesale accounts, we are not selling to you anymore Amazon. Amazon goes, “I don’t care. There’s a million Mom and Pop shops already have contracts with you who will sell directly to us.”
And so all these Mom and Pop shops sit there and sell all their stuff to Amazon, wood stoves are trying to contact these 500,000 distributors they had throughout the world, saying who is selling to Amazon. They can’t figure out who it is. Amazon is still selling them at break-even prices. Most more times than not, big large manufacturers and distributors don’t want to sell to Amazon, because they are afraid of them undercutting mat pricing, and they don’t want them to screw up all the distribution channels. It’s basically, you are sitting there being kind of like a middle man for Amazon to make sure they can get inventory, they can’t get their hands on personally.
Will: Again it’s taking advantage of Amazon’s greed.
Steve: Do you see like the Asian manufacturers selling direct on Amazon?
Will: A little bit. I don’t know. It’s like no offence to anyone anywhere, but like from a lot of Chinese businesses I’ve dealt with, they are a bunch of idiots. Like they would never– they are very good at following very strict directions, but I don’t think a lot of them are like good at thinking outside the box and thinking about like, “Oh look, we are selling a crazy amount of these products and he’s having us label them for Amazon.
Maybe we should cut this guy out of the chain and just sell these directly on Amazon, because it’s easy enough for them.” It’s not blocked in China, Amazon is in. they just look it up in Amazon and go, “He’s getting $40 a unit? We are selling to him for $4 a unit. Why don’t we just cut him out of loop? He already showed us how to label it for Amazon.”
That’s happening to maybe 1,000 different suppliers throughout China and not one of them has just skipped the step, and instead they put up these super crappy listings on Amazon that are merchant fulfilled with like 70 day shipping. It’s like obviously they don’t understand how Amazon works, how the customers work, how prime works, anything. It would take them a half second to look it up, but they just don’t think that way.
Steve: No, I agree. They are actually really good at copying stuff, not so good at—but here’s the thing, whenever I get on the phone and I notice someone has perfect English, that’s when I get worried.
Will: Oh yeah, that’s for sure. I even thought about is a consulting job just doing my rounds around Shenzhen and Guanghou and just teaching everyone on how to sell on Amazon, and just making billions of dollars and screwing over everyone, because they just like shooting fish in a barrel.
Steve: Yeah, totally, yeah. Let’s take a step back. I want to talk a little bit about this before we go. Do you have like strategy for getting your first sales on Amazon? Do you use any strategies and reviews services when you launch a product, or do you just let it ride?
Will: I use it as PPC and just let it ride. I’m usually going after super low competition products, or very specific products where I’m selling each HP190SL, which is like a specific model of someone. You know what I’m saying where’s it’s like someone is going to search HP190SL and even if mine has zero reviews, it’s going to be the first one that shows up because it’s such a specific search.
Steve: Okay, so all of your products that you sell in your store, kind of follow these guidelines so that you don’t actually need to do like a zone blast or something like that for example?
Will: Yeah, I don’t really believe in zone blast or a lot of those give away services. I’d rather, like I was saying earlier, fly under the radar and sell a thousand products once a day. Those are kind of my ways, it’s dumb really kind of trying to grow my business quickly, because it’s just the easiest way with the least amount or work on my end.
Steve: So on that note then, when you are doing your research, how many sellers do you like to see on Amazon for a given product?
Will: It really depends. It really depends on their price because– they is going to be a thousand sellers if they are all selling for $100, and if I can make money at $50 then I don’t really care if there’s a thousand sellers. I go compete with them. Like my wooden sunglasses, I sell just because I can go in there and totally undercut everyone’s price, and so that’s why I’m luring not because of my style. But then another one is where it’s I know I can’t cut the price down as much. I need to make sure there’s not as many sellers out there, so it’s a balance.
Steve: What is your strategy going forward assuming that Amazon is going to push everyone’s prices down to like the minimum?
Will: Strategy moving forward is I’m going to start my kick starter most likely in 2016. I’m also going to build out a few of my brands and actually try to do some legitimate marketing for the ones that are really selling. I’ve also looked at selling some of my private label items to brick and motor stores, and all sorts of different things. I’ve just been looking at every single thing I can, and listening to every business podcast I can that’s not about Amazon, and trying to use outside business tactics and apply them to Amazon.
Steve: I guess what I was trying to get with that was, are you going to try to invent your own unique product that’s kind of tangible?
Will: That’s what the kick starter. That’s what I think about with that is I’m going to take some products that has already been made on Alibaba, just add a few quick little things to it, and say I’m coming out with a brand new product. If I can create say 20 to 40,000 dollars, and pay for that first container, I’m just going to make a killing, because once you can get up to the sea freight level, you pay so much less per unit.
Steve: It sounds like you feel like that’s kind of like the way to create a lasting business going forward, right?
Will: Yeah, it’s no way you are going to be able to have a business where you are just slapping your brand name on it ten years from now.
Steve: Okay, to prepare for that– so it obviously requires a much larger investment, that’s why you are mentioning kick starter.
Will: Yeah, the kick starter is not only the investment, but it’s also the proof of concept. It’s also that I get everyone’s emails from kick starter. So as I come out with more products in that brand and that niche, I can sit there and spam out to say a thousand people who funded me over and over saying, hey now we are coming out with this version of it, now we are coming out with the waterproof version, and just doing that over and over again because now I have actually a built in base.
Steve: That was actually my next question. Do you do any marketing for your Amazon products outside of just Amazon’s visibility?
Will: No, I don’t at all. It’s something I’ve done in the past. I’ve done something like Google PPC and that kind of stuff, but it’s too expensive. But if I actually had like an email list of people who are interested in my products, I think it would be a totally different thing.
Steve: Do you try to gather any emails or having people register for your products? Do you have any inserts in your products?
Will: No, well not really inserts. I have like I go and visit print and I get a bunch of really high quality stickers that have like a logo on it, have our website and have like our Instagram and all that accounts. I stick those outside the packaging, so it looks like it’s actually part of the packaging.
That sticker also has like a UPC coat on it. It’s like a super nice glossy looking like sticker that’s maybe the size of a deck of cards. Yeah, it has our logo, it has our UPC, it has everything on it. And so like we can label that one fell swoop and then two, Amazon can’t get mad at us for like us trying to drive traffic to our website instead of Amazon, because it’s actually a part of UPC label we have to have it.
Steve: So let’s say people do go to your website, are you doing anything special on your website like do you offer coupons in response for emails or anything like that?
Will: No, honestly. The amount of traffic we get say like four visitors a day or whatever, it’s not something that I will really spent too much time on.
Steve: Okay, so it is literally just a brand website, and so even if you were to drive traffic there, it doesn’t really matter that much.
Will: Yeah, if they got ten thousand visitors today, I don’t know if our sales can go up on Amazon really, because it’s like – they are really not that awesome at all.
Steve: Here is kind of a question that I have been curious about since we’ve been experiencing with our store. Prices in China have been increasing pretty dramatically from year to year. Are you looking in other countries to source besides China at this point?
Will: Yeah, I only do China usually because it’s the lowest price I find in Alibaba. If someone says they can give me a higher quality lower pricing in Vietnam or in Canada, or anywhere, I don’t really care, I’ll just buy the lowest price at the highest quality. I can care less what country I do business with.
Steve: Yeah, but are you– how would you find those other vendors like in Vietnam or Pakistan for example?
Will: Alibaba does have a bunch of other countries on there. But then to go into like the different trade shows and all that kind of stuff and just through my networks now that I know enough Amazon people, and I know people who have designed their own products enough times that it– I can go and I know people I can contact who’s like, “Hey this guy has made back pack before.” I can go to this guy about back packs.
This guy has made cosmetics before. I can go talk to him about the natural cosmetics. I’ll go talk to someone like that and kind of pick their brand and see what they know about the industry and say, “Oh no, yeah, you definitely want to go to source it from Vietnam.” You don’t want to source it from China. Then I will go with that. So it’s just kind of– I’m totally open to it, but I don’t have any specific way how I target non Chinese countries.
Steve: Have you traditionally then just used Alibaba and trade shows for your vendors then?
Will: Yeah. Like 99% Alibaba and then for like the wholesale accounts I get, that’s just stumbling upon them on Amazon where I see something selling for 200 bucks, has 200 reviews and it’s isn’t fulfilled by Amazon. It’s like I should probably source that and take over the buy box.
Steve: I see, I see. Just to kind of close this interview, we’ve been talking for a while, if you were to give some advice to people who want to try this, just to get into ecommerce and Amazon, give them a couple of pieces of advice.
Will: Don’t over think things. Don’t try to anticipate too many problems before they happen. It’s just going to make you freeze, you don’t move forward. I had someone email me today saying, “Should I start on Amazon Canada because I’m afraid I might sell too much out of the gates and on Amazon US, and I’m not prepared for it.” These are the kinds of problems that you do not need to worry about. It’s just a total waste of time, worrying about what if I sell too much and I can’t get my account under control. Figure out once you get there.
But these are the kinds of things where people try to sike themselves out, and smart people try to over think things. One of the biggest benefits I had was that I was young and dumb when I first started and I wasn’t worried about if I find LLC on [inaudible 00:47:38] and I wasn’t worried about if I was paying the exact custom fees, or any of that kind of stuff. I just got started and didn’t think about it. It sounds like that would be terrible advice, but honestly, until you sell 10,000 worth of stuff on Amazon, just don’t think about anything. Just get selling. And then once you hit that five figure plateau, then you can actually start systemizing and actually figuring out how to actually run your business.
Steve: In terms of timeline, minimum investment.
Will: Minimum investment, the more the better. At least five to ten thousand dollars, is you are going to be able to move a lot faster than if you only have say 1000 dollars. If you have 1000 dollars, you can maybe expect to be doing five thousand dollars in sales within six months, but you start with $5000, you can maybe be doing 20,000 dollars in sales in the six months.
Steve: Okay, and in terms of timeframe, how quickly can you make your first sale?
Will: That day. Like I do it all the times where I’ve thrown up listings and sold something maybe 20 minutes later.
Steve: Oh, you mean when you don’t have products?
Will: When you don’t have products?
Steve: I mean the whole process from start.
Will: You are starting from scratch? The fastest I’ve ever done it was from, with these glowing sunglasses, but they were from me ordering hitting buy now on Aliexpress to be in stock in Amazon and my first pair sold was ten days.
Will: It was very first in China. It was like 6 days from China, and then I immediately later that day got it sent it to Amazon and it was like 3 days until I was in stock in Amazon and sold later that day.
Steve: So you can literally get started in two weeks, it sounds like.
Will: Exactly. That’s why it really discourages me when people spend two weeks just doing research, because they can already know whether something sells within two weeks.
Steve: It sounds like if I can just put some words in your mouth, you like to go with the shot gun method so to speak. You just put a bunch of stuff up, see what sells and just ride the winners?
Will: Yeah, and I’m not a detail oriented person. I’m not a marketing type person. I’m a type of person who likes to take action and see results after the fact. The shock and effect works great for me where I can go try a million products, and if none of them work, whatever, if they all work, great. It’s kind of thing where if you test a product and you have to liquidate it, a looser looses once and a winner wins forever.
Steve: It sounds like the minimum investment, I mean you are not putting down large amounts of money to test each of these products either, it sounds like.
Will: No, I am. I had this, like I was mentioning, I had this marijuana glowing sunglasses I was selling that were for like when you grow in indoor rooms, and they are basically sunglasses with a key word marijuana growing in front of them. I bought 20 pairs for $70 landed and I sold them out within two weeks and did $400 in sales. I turned $70 into $400 in two weeks. So it’s like you can’t really beat that kind of…
Steve: I kind of like your strategy actually. Less thinking, more action which is what a lot of people lack actually.
Will: Exactly. That was the whole entire reason why I kind of came up with this. It’s between what my brother and I what worked. From same people go, okay, I spent X amount of money in software, I’ve ordered two samples, I’ve been talking to suppliers for three months and I still haven’t sold anything yet. What should I do? It’s like, well, by three months, you should have already tested twenty products, you should already know what sells, what doesn’t and be on your way.
Steve: Interesting. Hey, Will, where can people find you if they have questions?
Will: You can email me, just my name WilliamTjernlund@gmail.com, also Twitter at @Wtjern add me on Facebook, I’m pretty easy to find because of my last name. Besides that, yeah, that’s the easiest way to get in contact me.
Steve: Awesome Will. Thanks for coming on the show. I learned a lot and it was kind of refreshing to hear a different Amazon strategy actually.
Will: Yeah. There’s– I’ve made money about a million different ways on Amazon between drop shipping, private labeling, wholesaling, everything and it seems everyone is kind of stuck in the same ark of chambers. So I’m happy you gave me an opportunity to kind of express my opinions.
Steve: Well thanks for coming on the show. I really appreciate it.
Will: Thank you.
Steve: All right take care.
Hope you enjoyed that episode, Will’s story is awesome, and it just goes to show that you don’t need a large stuff to run a seven figure ecommerce store. Now imagine just making 7.5 million dollars with just two people. Obviously it can be done. For more information about this episode, go to mywifequiteherjob.com/episode109.
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And finally if you’re interested in starting your own online business, be sure to sign up for my free 6 day mini course where I show you how my wife and I managed to make over 100K in profit in our first year of business. So go to mywifequitherjob.com for more information, sign up right there on the front page, and I will send you the course right away via email. Thanks for listening.
Outro: Thanks for listening to the My Wife Quit Her Job Podcast, where we are giving the courage people need to start their own online business. For more information visit Steve’s blog at www.mywifequitherjob.com.