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Ben launched his first brand on Amazon with a business partner and for a variety of reasons explained on this episode the brand just never took off.
Listen to this episode to hear the mistakes that he learned from with his first brand which helped him better position his second attempt for a big success. Ben's wife was able to quit her job to focus on the business and he'll soon follow next.
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Get involved and ask a question about selling on Amazon and Chris may answer your question live on a future episode of Sellercast. Also, if you think you'd be a good guest for the Sellercast podcast feel free to tell us more about you and your company here.
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Podcast Transcript
Intro: Hello, everyone. Chris Guthrie here, host of the Sellercast podcast. In today’s episode, I speak with Ben, who has been selling since the early part of 2015 and who’s doing very well, tens of thousands of dollars per month in sales. And he has some very unique ideas about how he’s able to build his business along with goals for his future of growing that company. So make sure you check out this episode and listen to all what he has to say, the strategies he’s using to launch his new products, some of the failures he’s had, the first brand he launched, and a whole lot more. So check that out. And you can also go to the show notes by going to Sellercast.com/9. Let’s go ahead and start the show.
Chris Guthrie: Hello, everyone. Chris Guthrie here, and we’re back with another episode of Sellercast. And today we have Ben on the show. Ben, welcome.
Ben: Hey, thanks.
Chris Guthrie: Thank you so much for joining us.
Ben: Thanks, Chris. It’s great to be here.
Chris Guthrie: Yeah. We chatted a little bit before we started recording this episode. And it’s nice catching up. And I’m sure we’ll continue chatting after we’ve recorded this. The very first question I’d like to ask is just how long have you been selling on Amazon
for.
Ben: I’ve been selling on Amazon since – My first product for my first brand went live in March. And as I’m sure I’ll mention here in a few minutes, started realizing that wasn’t a good choice. And I pivoted to my current bestselling brand. And that went live in May, so since this spring.
Chris Guthrie: Okay. I want to come back to both of those topics here in a bit. So since the spring—and then we get into numbers as well—what are you doing volume-wise?
Ben: So right now, volume-wise, we’re doing about 2200 orders a month and about 60,000 in sales.
Chris Guthrie: That’s great. So that’s just from the spring of 2015?
Ben: Yup, that’s all from actually the main brand in May of 2015.
Chris Guthrie: Okay, awesome. I mean that’s a great start. And that’s part of the reason why I wanted to speak with you just because I think that a lot of people when first started going, they launched the product and they didn’t do well with their launch, so they’re not getting a lot of sales. Or you know the number of things that can potentially go wrong. And it seems like for such a short period of time, you’ve already done pretty well. So we’re going to dive into that.
Let’s come back to the two different brands thing. Why do you have two different brands? Are you still selling the first brand? That’s the first question.
Ben: I actually am selling it. Basically, one of my friends and I decided. I’d heard about selling on Amazon back in October in a podcast. And I was like, “Okay, that sounds kind of cool.” So I told my friend, “Hey, do you want to do this?” Didn’t really flesh out the partnership that much and he’s like, “Yeah, I’m on board.” So we delved into it, picked the product really fast. And in hindsight, it was a product that was very quickly becoming saturated because that had been highlighted in one of the courses, actually. So bad product to pick. And also, the partnership… great friend, but but he just had other commitments. And it just really became difficult to both work on that together. So the product is still around, but I’m actually in the process of liquidating it right now because it’s not worth my time to try to salvage it. So from that experience though, I said, “I think there’s a lot of potential within Amazon.” So in May, I actually launched another product on my own with my wife, who actually has a marketing, PR background. And that brand has been our main one, and we’ve been growing that ever since.
Chris Guthrie: That’s great. So then did you use a separate Seller Central account? Or did you have that in the other accounts that you already had created?
Ben: Yeah, I know there’s a lot of discussion, “Oh, you have two accounts. They’re going to shut you down.” And, “Oh, you should mask your IP address.” But I just emailed them. I said, “Hey, look, I have one LLC with a partner, and I want to start a second LLC with just myself and my wife. Is that cool if I log into both of those in the same computer?” And after a few days, they were like, “Okay, yes, that’s fine.” So I have two separate seller accounts for that.
Chris Guthrie: Okay. And it sounds like that’s not going to be a problem in your case. And that whole discussion we don’t need to get into, but if you’re going to be liquidating the inventory for that first product, you basically can probably even shut down that account anyway.
Ben: Exactly.
Chris Guthrie: Yeah, okay. And on the partnership side, I think that’s interesting. I know that in general, partnerships are hard to make work. I know that from just past businesses, trying to make it work, so far for me, it’s done all right. But then I’ve always had some things that have just crashed and burnt. And I think that that’s almost a challenge in and of itself. I mean beyond just, okay, you partner with someone, they lost the interest or whatever, do you have any suggestions in terms of how that partnership went for people that are thinking about partnering on an Amazon business going forward? Or maybe based on experience, you’d say, “Don’t do it.”
Ben: I think a partnership can make sense if it’s the right person, but it has to be in an environment where it’s true synergy, where 1 + 1 is not equaling 2, it’s equaling 3, because partnership is the most expensive cost you’re going to have in your business. You’re losing 50 percent or whatever you agree to on any profit you make. So you have to make sure that if you’re going to do a partnership, it’s worth your while. And I would definitely go into it with a lot of caution. If you know someone well, I would almost say that’s a warning sign because you’re going to be more drawn to work with someone you know well, and that might not be good. If you’re both the same, you don’t want to work with someone similar. Usually, you want to have a contrast of ideas person with someone who is more of an implementer.
I know Ryan Moran talks about that a lot on his Freedom Fast Lane podcast. And there’s a test, I believe, the Kolbe test, that you can actually take to see if both partners are a good match for each other. And that’s something I would recommend. I haven’t done it since, and open to partnerships in the future. But I found that it’s a lot easier, and right now more efficient, just to ride it with myself. And my wife is definitely my partner in that regard. I didn’t really have a choice. But it’s been the best experience ever. Just proceed with caution.
Chris Guthrie: Okay, well, that’s good. I think you’re the first guest on with a husband and wife team. Well, I guess I didn’t ask that question for other people, but husband and wife team on the Amazon business. That’s cool. You mentioned she had a marketing and PR background. So what’s your background then?
Ben: My background is computer engineering, computer science. I’m currently a program manager, doing that. Hopefully, we’ll be moving into this space full-time. Actually, my wife is in a process now of leaving her job to start doing this full-time because she has got a real knack for the marketing side of things and social media etc.
Chris Guthrie: That’s great. So you’ve already got one of your two partners here on the way to doing a full-time thing, so that’s cool. Another question I was going to have is what are your long-term goals. So she’s already going to be making moves to do this full-time. What are your long-term goals for the actual business itself then?
Ben: Long-term goals are, one, I would like to hit a seven-figure valuation on it and potentially sell it by the end of 2017. But next year, I would like to hit $100,000 in sales early winter and then ramp all the way up to $250,000 in sales by the end of the year.
Chris Guthrie: Okay. So $100,000 by around this time next year.
Ben: Yeah, actually, by early winter because we have some products in the pipeline right now that I think post-Christmas can propel us to that $100,000 mark.
Chris Guthrie: Okay, cool. That’s great. The other question that I had is what would you define your million-dollar valuation. In an earlier episode, I spoke with Corey, episode 3, I believe. And he had built and sold a couple of different Amazon businesses for about $365,000 in cash. I know you’re looking for going a larger valuation. What do you think it would need to be to sell for? Would you want to basically sell for a million dollars? Or is it 2 million dollars? What would that be for you?
Ben: I think a million would be a great starting point because at that point, with that amount of capital, you can have a lot of other things to invest it in and other business that cash flow, basically trying to create a sustainable environment to do this full-time. I can even go to more or less part of like why I decided to get into this to begin with.
Chris Guthrie: Yeah, sure, go ahead and dive into that.
Ben: Yeah, so in that vein, I had a really interesting experience when I was in grad school in Boston, I got to participate in this startup competition at Harvard. So myself and some others formed a team. And we actually were finalists in the [...] challenge, we got some money. And it was a medical device app. And we were pursuing venture capital, money. But it became very complicated very quickly. There’s HIPAA compliance and some patent issues, a lot of things happening. And eventually, I actually had to separate ways from them. And it was a great experience. I learned a lot, really fast-moving. It was more like your Silicon Valley-esque startup. It was a little discouraging. I was like, “Man!” I poured my heart and soul into that for months on end. And it’s like either you make it big or nothing happens. I was like, “That sucks.” You could spend two years working 8 hours a day and walk away with nothing. And some of these guys I’m with are like super geniuses. I was like, “I don’t know if I can ever be an entrepreneur. It’s a lot more than I thought. I definitely don’t want to run a Subway or something. So okay, I’ll just work for corporate America, whatever.” Before that too, I always had strong ambitions. I wanted to be a CEO or something. But after that, I kind of shifted my perspective a little bit. And I’ve since really wanted to have time for relationship, for people, for a wife, to have kids some day. And I realized what it takes to be super successful technology startup. You give up a lot of life to accomplish that. And likewise, to be on top of an organization, to lead a corporation, that’s a lot of time away from family and friends. So I was really trying to rack my brain like, “Okay, how can I use these ambitions I have in something that can actually give me more balance, potentially?” And that’s when I started exploring other entrepreneurial ventures out there. And I stumbled upon this Amazon model, which I know a lot of people drives them to do it, and this whole Digital Nomad model, really, which is doing things online and the ability to generate lots of passive income through different means, to then have freedom to live wherever you want, to work your own hours. I know there’s a lot of risk, but it’s definitely a lot less so than that disruptive technology model. You’re now trying to be the next Facebook. And if it works, you’re a billionaire. You’re trying to make a good living. But do so in a more balanced way. So that’s what really initially drew me to this whole business model.
Chris Guthrie: That’s awesome. I think you have a similar philosophy. I know that for me personally, I’ve been an Internet entrepreneur for nearly six years now, actually over six years now since I left my last job. But I have similar rule framework. I have three rules. Any business I start has to have (1) the freedom to work wherever you want to. Rule number (2) is the freedom to work whenever you want to. And then rule number (3) is the ability to scale. And so I know on the Amazon side that works,and also with Salesbacker and other things we built, meets those rules. And that’s a similar philosophy. That’s great.
Let’s talk a little bit more about your business. You mentioned within a short period of time, you’re already up and doing really well. So I think that we should spend a good chunk of the time talking about how you were successful in getting to that point. So you picked that first product, it didn’t go well, maybe because of the partnership, maybe in part because you mentioned before the product got a little bit saturated. What did you do differently for your second product, the second brand, rather?
Ben: For the second product, I decided – For the first one, I’m almost ashamed to admit this, but the way we discovered it was using a tool that was given as free to anyone who was an initial signup for one of the courses out there. So I like to be a freeloader for information. So the tool is free. I’m actually self-taught and I haven’t taken any of the courses. But it was basically identify the product that the masses were also identifying, so very stupid. So I said after that experience, “You know what? I should just try to be creative. I can be creative.” So I thought about looking at what was selling, ways to improve upon it. And it’s kind of cliché, but I think it needs to be said repeatedly because I see so many products being launched that are exact same thing as everything else I was selling.
Chris Guthrie: Me too products, right?
Ben: Yeah, just like – No, there’s such a minuscule chance of succeeding in this because everyone is rushing in. So for that second product, I said, “How can we make this unique?” Let’s identify something that is selling well, but let’s also see what people might want. So look at what customers who bought this are also buying “X” on Amazon, it shows you at the bottom. So that was our approach to the second one. And it worked really well, actually. That’s been the model we’ve followed. And actually, at this point, it’s only three products we have but that we’re trying to create for our other products as well.
Chris Guthrie: Okay, yeah, that makes sense, all that idea of not trying to launch a mutual product, trying to differentiate, looking at what people are saying about the products they are buying, and then trying to differentiate. Did you have some type of an initial framework in terms of the numbers you were looking for? For example, do you think you know a primary keyword is whatever? And then that primary keyword you’re looking at the number of listings that you’re selling or not selling, and then trying to make a decision in somewhat that way? Or was it less scientific in that manner?
Ben: I’m an analytical guy. I like numbers. But with this, you can almost drive yourself mad if you try to overanalyze things. I definitely did that in the beginning. But like with anything, the more time you spend doing it, the more, I guess, vision you have. And initially, I didn’t have a vision. So I kind of had a rule, that was I wanted to identify something that’s selling around, there are multiple sellers doing like 20 to 30 and up a day, so that’s strong volume. And I’m going to sell something that’s a little different, and that worked well. However, since then, as I’m sure you’re aware of, Amazon has gotten decently more competitive. It’s really difficult to find things that sell well that you can launch and get selling well, unless it’s very different. So since then—and I believe you talked about some in one of your earlier podcasts—I adjusted to that philosophy. And instead of going for home runs or triples, which my first two products have been—I’d say home runs or triples, each doing like 30 to 40 a day—I’m now looking for some that are doing… can I get 10 a day, because those are a lot less competitive because there are just a lot more products that sell 10 a day, and a lot of people don’t think it’s worth their while. So that’s what I’m shifting to now because I’d rather have 10 products doing 10 a day than a handful doing 50 a day. I just want to spread it out and just capture more sales overall.
Chris Guthrie: Yeah, that makes sense, okay. So then once you picked the second brand, I understand a little bit more about how you picked it. And I think it makes sense. And I think people listening can use that for advice if they’re in that stage. Or if they’re struggling with their first product, they can apply that as well.
What did you do to launch your first product? What type of strategy did you implement?
Ben: The first one, we did the whole buildup of Facebook page, paid for likes, and gave interesting content. So people are engaging with the page. And then we did a bunch of giveaways through that. And that was a good experience. But kind of an inefficient use of our time. The way I operate now is for any hours spent of business, I want to spent that hour doing the one thing that will give me the biggest return on my time, and that Facebook route is a terrible return overall. So first product, okay, learning process. And a lot of people you see go through this evolution.
A lot of people with their Facebook pages, now people are cutting that out and moving on to some review groups or other services out there that do that. And I’ve found the best is just to network with a bunch of review group admins on Facebook. Some are free. Some are like $30 or so. Push the promos through them, and also through Tomoson. It’s a network of bloggers who will review your products as well. And they do write some pretty high-quality reviews. So I found the review groups on Facebook and Tomoson have been a pretty adequate platform to do a launch. And if your page is optimized, after a few reviews, turn on pay-per-click and kind of get the ball rolling.
Chris Guthrie: So how many products do you have now, before I ask the next question?
Ben: We have three right now.
Chris Guthrie: Okay, so then in any of those three products, did the strategy you just shared not get you the results that you were looking for? Or did it pretty much always give you like an initial trickle of sales? And that led to further reviews. And then you were using Salesbacker to help send emails to get more reviews type of thing. Was there any situation where that didn’t provide you the type of results you were looking for? Or so far, your products have been good.
Ben: Yeah, it definitely has helped about every time to get ranking even, exactly. Salesbacker is a great service, and once that’s turned on, it’s just helped create more reviews for our other organic customers at that point, a certain percentage of those, then leave reviews. And that just keeps building the momentum.
But I think the big thing is to be aggressive. I see a lot of sellers who do a test order of 300 or 500. In my opinion, that’s a waste of time. If you’re going to do this, you should be ordering a minimum of 1000, even more if you want to risk it. I usually don’t like going more than 1000, in case the manufacturer is bad or screws up. But to go much less than that, you don’t have a lot of firepower because what’s happened with one of my products, actually, I only launched with 500, I gave away 50, it caught fire, and then I ran out of stock. That’s a very frustrating scenario. So I’d like to give away a lot initially just to get the ball rolling, maybe 50, maybe 100. And I love delaying profit, basically, delayed gratification. I still actually haven’t taken a dollar of profit out of business. I’m trying to spend every dollar as I can in a way that will invest it, because I think that’s the best investment, back right into business.
Chris Guthrie: Yeah. And I think that’s a similar approach that a lot of people do when they aren’t getting in a position where they want to move full-time. And I think that you’ve got to get transition where you and your wife are both working on the business so that she can go and then you can go after that if you wanted to. So that’s cool.
Then the other thing I’m curious is—actually, this is just as an aside— you mentioned trying to focus on just the one thing to maximize your time. Did you read that book ‘The ONE Thing’ by Gary Keller?
Ben: I have not, but I’m a big fan of… I did a seminar ‘The 7 Habits of Highly Effective People’. They talk about the four quadrants of time. And what really struck me is that anything that’s urgent for the most part is not important. You’ll have pending emails, Facebook notifications, someone is writing to you like, “Hey, I have a question about your product.” And then everything that’s important is usually not urgent. And once I experienced that paradigm shift, it’s allowed me to try to have a laser focus. Each week, I plan my week, and I’ll have like one or two specific goals for each day of like this needs to happen today. And it’s usually something that is important but not urgent at all. And I just make sure that happens no matter what. And I found that has helped move me forward because I see so many sellers focusing on things that don’t really further their bottom line that much. I can go into that more of common pitfalls I see. But I’ve tried to focus on what is the best return on this hour of my life I have right now.
Chris Guthrie: Yeah, that’s great. I think that quadrant is also based on what President Eisenhower said where he was talking about – I’ve tried to find that quote, actually, while we were doing this, but I can’t find it. Anyway, I think that philosophy makes sense because if you’re so busy, focused on the things that are urgent but not important—I think you could lump emails from people into that—then that’s really going to dominate your day. So it’s easy to follow that routine. It’s great.
Let’s talk about some of the pitfalls. I want to get to some sourcing and some of the other stuff that you’ve done launching-wise. But what are some of the pitfalls that you see beyond just not ordering enough products?
Ben: I can speak about this because I’ve made most of the pitfalls myself, so it’s learning from experience. And I don’t want to convey that I have it all figured out. I’m definitely still very much in my beginning stages here. But I think by looking around, I’ve tried to immerse in as much data as possible. There’s honestly a myriad of pitfalls, but some ones in particular that I always scratch my head about a bit is I guess trying to set up other channels quickly. I my opinion, there’s no better sales channel right now than Amazon. I know that’s changing. It’s getting more competitive. But still, in my opinion, every hour I spend trying to further my Amazon business is the best return on my money right now. I don’t think it’s worth getting into Shopify. In the future, yes, I’d love to. I think it’s good for resiliency. And we’re trying to address this now. So if need be, we can drive traffic to that Shopify site. But for the time being, I don’t think it’s worth spending a lot of time on that.
Chris Guthrie: And just to interject there, I agree with you. I think it’s a certain number. Whatever the number, your goal for your business may be different what that number is. But I believe once you’ve hit close to that number, then you can look at alternative options. But it just feels like if you’re, say, only doing $5000 a month or something and then you’re already thinking about starting a Shopify store, there’s still plenty more where that came from if you try and drive more volume on Amazon.
Even going back to your point about the number of units to start with initial product, I think that also can vary based on the size of market that you’re going after too. I think that on the lower side, if you’re going for really low-competition products, maybe you could start with those lower numbers. But then you would have to be less aggressive with those giveaways as well. But what are some of the other mistakes that you’ve made or that you’ve seen other people make and that you’d like to share, even though you mentioned you are still a new seller?
Ben: I think—I touched on it earlier—the reason there was so much success on Amazon initially from all these courses and things is because the way people are able to differentiate was literally just by better marketing, there were similar products selling but by someone coming in and saying, “Here’s better copy. Here’s better images.” All of a sudden, buyers on Amazon are buying that product just because the marketing has been differentiated.
That’s going away now as this consolidation occurs and we have a lot of sellers that are all having about similar marketing. So then it comes down to how can you differentiate – I think patented products are a great way to do that. That’s a lot more difficult. It’s something we’re looking into. I think just identifying market gaps – It’s amazing how many small gaps are out there. But if you go through and read bad reviews on similar products or just look at what’s been bought together, you just get thinking, “Hey, maybe I can add this. Maybe I can make this a little bit better.” And it’s actually not that hard to improve a product. But I see a lot of products being put out that are very similar.
The flip side of that though is make sure if something customers want – A failure I’ve had with our first product was we added something to set it apart. But it was something that was used for people to wear. And it ended up being kind of an ugly design, to be honest with you. I didn’t realize it at the time, but no one really wanted it. So you have to make sure that this is something people are going to want. So you’ve got to fail-forward fast. And you want your first attempt to be high-quality. You don’t want to just be putting up crap and be like “I’m going to test it and see if it works.” You want to make sure it’s a decent foot forward. But you don’t want to spend six months getting your initial prototype out there because if it sucks, you’ve just wasted six months of your life. So it’s that delicate balance.
Chris Guthrie: Yeah, okay, that’s good. Let’s talk a little bit about the sourcing aspect. Let’s try to keep this to about 30 minutes. We’ve 5 plus minutes or so left. What have you done on the sourcing side? And have there been some successes or failures on that side? Because any time I talk to someone that’s doing really well, whether it’s for a podcast here, or at conferences or I’m just talking to people that I’m introduced to or whatever, they are able to get up and start doing so well successfully. I’m curious what is it that they’ve done so I can then share that with others. Is there something on the supplier side you’re able to get up so quickly?
Ben: I think it’s helped trying to find unique or products that can differentiate. So it’s finding a supplier who can work with you and is willing to make some variations you might want to put on the design. However, as things are getting more complicated, we’re now finally for the first time using sourcing agents because there are some things that we’ve identified that we want to sell but we can’t find them anywhere Alibaba, which I think is actually a good sign because it means it’s a much higher barrier to entry then. And I think what a lot of the top sellers do is they’re working directly with agents in China to find those products. So that’s something we’re looking at doing now.
Chris Guthrie: Yes. That brings up a good point. There are a lot of suppliers that are non-Alibaba, simply because they don’t have to deal with us over here, in America or somewhere else, that are newer sellers and trying to get free samples and all that. In a lot of cases, you can find suppliers that only have people that work with the businesses that speak the native language. So you have to find someone that can speak with us. So that’s an extra challenge, but I believe that the more difficult something is to source, as long as you’ve found something that’s high-quality and that has that demand, then potentially, the more barriers there will be to entry for someone else trying to compete with you. That’s cool.
Did you find your suppliers through Alibaba originally? And were you using the same supplier for your three products or different suppliers?
Ben: Different suppliers. And with that, I try to take as aggressive approach as possible, which is contact many of them, and then try to get a lot of samples, which can frankly be expensive if you’re buying 5-10 samples from different manufacturers. But I think that’s really important because there are big differences in quality, and then just picking the best one from there.
Chris Guthrie: Okay. What are some other things? I’m trying to think here. You mentioned before that you’re not doing Shopify. Do you even have a website for your brand right now? I know you mentioned you’ve got the Facebook like page that you used for the first one.
Ben: Right. We actually do have one because I think there are some buyers on Amazon who will do a quick Google search just to see if you’re even a real brand. And we really wanted to do the brand registry. That’s a requirement for that. But it’s pretty bare bones at this point. We’re hoping to maybe start getting a blog going, start sowing some seeds for SEO in the future once we do actually have the Shopify integration. But for now, it’s just really bare bones.
Chris Guthrie: Okay. We’ve gone through a lot. One final question I’d like to ask you is what’s something that you’re doing with your business that you believe that most Amazon sellers aren’t doing. And if you don’t have a specifically different idea than what you shared before, that’s fine because I think that just talking about differentiating the products, true differentiation of the products as opposed to just differentiating your marketing, I believe that was something you definitely talked about a lot. You talked about the strategies you used to launch your product to be more aggressive in terms of how many units you buy and everything else. But is there anything else that you think that other sellers aren’t doing that has helped you have the success that you’ve had?
Ben: I think the more capital you have to work with, the faster you can scale potentially. And my wife and I were to able to put in some of our own money, and then we have some investors’ money come in as well. Not a crazy amount, but maybe around 40 grand or so. When you’re able to dump that much in spread across multiple products, it really allows you to get up and running quickly and to start circumventing some inventory issues and other issues that come up. So that’s been something that through the aggressiveness – It’s almost like a little leap of faith because you’re putting yourself out there, essentially, by doing that. And a lot of people are uncomfortable. But ironically, if you aren’t aggressive, your probability of failing increases.
Chris Guthrie: I think that’s great. The less aggressive you are in terms of trying to get after and build a business, the more likely you are to fail. I think that makes sense because being an entrepreneur, naturally, you’re going to be more of a risk-taker than someone that isn’t, which is interesting in and of itself because when you’re building your own business, you’re a lot more in control of your own destiny, if you’re building it correctly—as opposed to if you’re an employee, anything could happen. All of a sudden, you might not have a job anymore. That’s a good point.
I did say that was going to be the last question, but you mentioned that you had investors. That makes me want to ask a few others. What did you do to actually raise the money? Was it just connections through your own personal network, or through family, through friends, through job you’ve worked at? And then how did you convince these people that hey, you should invest in this startup business? Did you already have the success of that first product, or a little bit of success from the first product, that you could prove, “Hey, I can sell something on Amazon.” Can you share a little bit of that? And then we’ll wrap up.
Ben: It was just through my personal network. I didn’t do anything fancy. I didn’t pursue a [...] loan or anything, although that’s something we’ll potentially do in the future. But absolutely, I proved that it would work. And I wanted to prove to myself. I didn’t want to lose my friends’ money if at all possible. So once I got that first product going, I was just sharing that with people, and some friends who were interested basically conveyed, “Hey, if you ever would need money to launch others or to further your line, I’d be happy to.” And at that point, I said, “All right, it seems probably that we can at least, if we had to, a terrible situation, salvage enough to pay him just by liquidating or whatnot.” So by kind of having a proof of concept with my first product, I was able to have a few friends come on board with investing money. And I’m not sure if I want to take on any more at this point. I hoping now with the holidays, to be able to flip a decent amount of profit, and at that point, be pretty self-sustained, because your risk goes up more with the more money you’re taking from people, especially if Amazon does something crazy and blocks out your whole account or closes your bestselling listing—which actually has happened to me for a few days at a time, which is a really scary situation. So it’s a very delicate balance. I don’t want to be a fool and go oh wow. And then if I fail, I lose my house. I never want to put myself out there that much, but put myself out there enough that I’m affording every opportunity to grow as quickly as I can while the consequences are still bearable.
Chris Guthrie: Ben, the more you keep answering questions and talking about this, I want to keep thinking of things I want to ask you. So two different things. On the investor side, this is the final question on the investing side. Did you give equity to these people? Did you give like a loan at a higher-interest rate since this is, maybe a bigger risk.
Ben: I did a loan. I didn’t want to deal with equity. Honestly, if there would’ve been equity only, I would’ve said, “All right, I’ll just take some of my retirement savings and put it into this,” because I did not want to part with any equity, so it is just a higher interest rate, 10 to 20 percent depending.
Chris Guthrie: Okay. This is the final question. I think any time you take investors, it’s going to be a different situation, but since you’ve already done it, I’m curious about the specifics if you’re willing to share. What time period did you do it over?
Ben: For two of them, it was one year. I’ll give you your money plus 20 percent interest back in a year. And another one was actually just for the holidays. “Hey, about three months. I’m trying to ramp up my inventory. We’re going to sell a lot, and I’ll pay you back in January.”
Chris Guthrie: Okay. And did you do something really simple like some type of a note, basically, where you signed out what you were doing and what the money was for? And then you sign the agreement type of thing?
Ben: Exactly, because these were friends who are best friends like my wedding. One is my brother. So it’s fairly informal because there’s a high level of trust.
Chris Guthrie: And it’s something that makes you want to succeed more likely.
Ben: Oh my gosh, absolutely, it is the best motivator when you have your friend’s money riding on it. And it’s fun too. I’m like, “Hey, if I succeed, and I think I will, I can make my friends money.” And that’s a cool thing where you can help out family and friends.
Chris Guthrie: Yeah, okay. And then final question was how did you get your listing shut down for a few days? And I say you when it could be any situation. Can you share that specific example?
Ben: Yeah, absolutely. There’s a setting on Amazon in FBA where if a customer returns an item, if it seems okay, Amazon will ship it out to someone else and package it as new, which I was totally unaware of. So a few of my products were returned and shipped out to other customers who when received them said, “What is this? This looks used.” And then they filed a complaint with Amazon saying, “Hey, I got a used item that was being advertised as new from the seller.” So after several of those came through, Amazon shut me down and said, “You better launch an investigation to see what was going on.” And ironically, it was because of the setting that they had turned on by default. But of course, you can’t turn around to Amazon and say, “Hey, [...] setting.” That’s a whole other conversation. So delicately, I was able to navigate through that situation, found out about the setting, turned it off, and thankfully, haven’t had any issues since. But that is definitely one of the downsides of being totally devoted to a channel and why I think anyone who wants to do this long-term should be considering other channels and ways to get off of this. And a big part of that is correcting contact information for your customers.
Chris Guthrie: Okay, that was great. And one other quick note on that just for people that are listening… where specifically is that setting? People might want to go check and see if it’s turned on in their account. Do you remember where it was at?
Ben: Yeah. If you go to your seller account and go to Settings, and then Fulfillment by Amazon Settings, you’ll see right there it says Repackaging Settings. And it says Repackage Unsellable Customer Returns. You want to make sure that that is disabled.
Chris Guthrie: Okay, awesome. Well, thanks, Ben. I really appreciate you coming on to talk about your success from a quick standpoint, also just your launching strategies and some of the other challenges that you’ve experienced. I think it’s really helpful. And I really appreciate you coming on to share.
Ben: Thanks, Chris. It’s been an honor to be on the show.
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Outro: All right, that was the show with Ben. You can check out the show notes by going to Sellercast.com/9. And the other thing I want to mention too is that if you aren’t yet using Salesbacker to help you get more product reviews for the products you’re selling on Amazon, you can go to Sellercast.com/now to sign up. It’s going to help you get more reviews. And that can of course help drive more sales for you. So check that out. And thank you so much for listening to this episode. If you think you have a story that would be great to share with others, then please do go to Salesbacker.com/contact if you want to reach out to me. And we can see if you can come onto the show and share your experiences as well. Thank you again for listening and have a great rest of your day.
