285 : Mike Rezendes – Reezy Resells Resets Book Business Model and expanding your Amazon Merch account
When it comes to busy no one beats Reezy! He is everywhere at all times giving everything he has and leaves nothing on the table. I really enjoyed the discussion regarding changes necessary in the book business that can be blessings in disguise. He sees the opportunity where others see doom. Remember those are the guys that made it big in the stock market or real estate crashes in the past. They bought, they were optimistic. So curl up and do nothing or look the changes head on and adapt, pivot and come out even stronger.
Mentioned:
Reezy’s Phone # (209) 83Reezy
Sponsors
Gaye’s Million Dollar Arbitrage List
Transcript: (note- this is a new tool I am trying out so it is not perfect- it does seem to be getting better)
Stephen: [00:00:00] Wanted to take a second and recognize my sponsors this week, you know, [inaudible] million dollar arbitrage as edge and list group. That’s a mouthful. It is. But guess what? It’s a great opportunity. You can build a big Amazon business. You don’t need a lot of capital when you start. I mean we all started, you know, um, most of it started selling books and then you move into retail arbitrage that is the place that you can turn your money the fastest and online arbitrage. And so by having that skill set, by learning those skill sets, you can get the best bang for your buck. And so gaze group will help you learn online arbitrage. It’s, it’s more than just a list service. They’re going to give you a whole bunch of actionable inventory every single day. Write Monday through Friday. However, there’s also a mentorship that goes on and that mentorship is so important because sometimes it’s great to know what to buy, but it’s more important to understand why to buy it.
Stephen: [00:01:02] But yeah, that’s that. You know, learning the fish are just getting fit. You really want to learn because ultimately you want to strike it on your own and this is a great way to do it. So how about seven days free trial. About a free trial, right? Very, very cool. So it’s amazing. Freedom Dot com. Forward slash is the mouthful. The word momentum. You’ve got to use a hyphen and you put in the word arbitrage. So it’s amazing. Freedom Dot [inaudible], forward slash momentum dash arbitrage, and you’re going to get a free trial in gaze group. You got to tell her I sent you, right? I also have the link in the episode, but it’s such a great opportunity. So she has amazing, amazing. I’m in that group so you’ll see me there and amazing, amazing person who’s there to answer your questions, who’s there to help lead you and help guide you.
Stephen: [00:01:50] And that’s what gay does. She does it every single day. The testimonials are real. Go take a look. You will be blown away and again, it’s a free trial. I have the link on this episode to reach in your seller labs, Jeff Cohen and the team. They have blown me away with this scope project. We use this all the time for our business. We do a lot of private label. We also do a lot of wholesale and wholesale bundles or multi-packs, that kind of thing, which a lot of people do, but we use a scope to help us figure out what are the key words and so it’s really simple. You basically figure out where you’re going to sell, what you’re going to sell, what category, find that lake product, find the top couple sellers and find their keywords. Boom magic. There you go. You copy the best because it’s working.
Stephen: [00:02:39] And guess what? That’s a proof of concept and scope allows you to do that. So it’s seller labs.com, forward slash scope, seller labs.com, forward slash scope. Use the code word momentum and you’re going to get a couple of days free trial and you’re going to save a little bit of money and you’re going to get some free keywords. It’s worth every penny. I’m in that group. Come and check me out. So our labs.com, forward slash scope. Again, use the word momentum solutions for e-commerce. Karen Lunker, great, great, great group. I’ve been using them for a long time and I guess it’s over two years and I’m in there and I pay just like everybody else. Yeah, she’s a sponsor my show, but she makes me pay and I got the same $50 discount that you can get. Oh, by the way, you’re going to get that through my link and my link only.
Stephen: [00:03:25] Oh, and you’re also going to get the free inventory health analysis. Great Way to start 2018, get your inventory in line and Karen will help you do that. We use them for everything basically, uh, you know, long-term storage fees coming up. Guess what, show evaluate. She’ll make some recommendations and I’ll say, yeah, check, check, check, check these out, this return, blah, blah, blah, blah, blah. And magically it’s done. I love it, love it, love it. I love the fact that they take and get rid of stranded inventory for me. I see it in there. And then next time I go in and it’s gone. Love it. Love it, love it. Got An ip infringement, she’s going to help you work your way through that. This is the kind of service that you get from Karen Locker, that’s solutions for the number for e-commerce solutions for e-commerce dot com forward slash momentum, right? So you’ve got a forward slash momentum and you’re going to save $50 a month, 600 bucks a year by just clicking that link. She pays me. I don’t want to hide that. I never do. I’m always upfront about that, but it doesn’t cost you anything additional and you’re going to get that inventory health report. The only way you get that is through mind link the solutions, the number for e-commerce dot com, forward slash momentum.
Cool voice guy: [00:04:39] Welcome to the e-commerce momentum podcast where we focus on the people, the products, and the process of e-commerce selling. Today. Here’s your host, Steven Peterson.
Stephen: [00:04:53] Welcome back to the e-commerce momentum podcast. This is episode 200 and eighty five percent is reezy resells man. Oh man, I am pumped. I just. The more I talked to this guy, I mean I’ve gotten to meet him in person a couple times, but he just. There’s something, his vibe, he’s just, he just emits such a positive can do attitude. There’s nothing stopping them. There’s no excuses. I’m gonna adapt. I’m going to overcome. I’m going to succeed at all costs and man, Oh man, what a great. A great story. Great Guy, and I am just so pumped and we really address these big changes in Amazon book specifically to books because he’s a big book seller to and really I think he does a great job explaining it in his analysis and others that he’s talked to and brings it all together and I think we end up at a really cool place and the world is not ending. There are other options. Let’s get into the podcast. All right. Welcome back to the e-commerce momentum podcast. Very, very excited about today’s guest because we have a celebrity amongst us, truly somebody who has embraced who he is, is never going to apologize for who he is. I don’t know if that defines him. It clearly has sculpted him. I think that’s the right word. Microsoft does. Reezy resells. Welcome Michael.
Reezy: [00:06:19] Hey, what’s up steven? I’m not. I’m not a celebrity. You have definitely created a following, you know, let’s, let’s speak, let’s call it what it is. I know you’re embarrassed by this, but people connect to your story. They do because you know, I mean, life’s hard. I just did a talk in Canada about personal branding and the whole talk was about about your story, not your product, right? Because people connect with stories, so I understand that, but I like to tell people I’m just the guy who spends way too much time on the Internet.
Stephen: [00:06:52] You do, so this is the second time you’ve been on your episode number 16. I had to go back and look number 69. A little over two years ago.
Reezy: [00:07:01] Crazy. Just makes me feel old or feeling will appreciate this. I’ve got socks older than you. There’s a funny story. Kelly sends me a note and he’s like, Steve, did you like the socks? I’m like, what are you talking about? He goes,
Stephen: [00:07:18] you had mentioned on one or 10 or 15 of your podcast. I have socks older than somebody that’s a silly reference I use. He mailed me socks. I’m like, dude, I get so many packages. I never noticed this terrible. I feel terrible. So I do have socks older than you. I could use more socks. Somebody wants to sell me stuff, send me more socks even though I sell. So I should be careful with that. Um, so, so back then were, I mean you were, you were selling multiple things, but you were a bookseller. I mean you had scaled a successful book business unit partner. Ah, you had multiple locations. You were really, really, you know, building a groups of books together, bundling your own bundles and really having success with it. And that was a couple of years ago and you were selling sneakers and stuff like that too.
Stephen: [00:08:06] But right now I think your business has evolved a little bit, but I had to have you back on because of the big changes that are going on in Amazon. So why don’t we do this? Let’s catch up to where we are in where you were selling up until a couple of weeks ago, what’s going on in your life. And then I specifically want to talk to you related to books and then other merchandise because I know you sold that to related to these material changes because these are big changes, right? These are, these are, I call it a pivot point. This is a pivot point in your business in most people’s business.
Reezy: [00:08:40] So a lot of stuff is exactly the same. I was just getting into shoes on episode 69 two years later. Now I sell much more shoes. Um, I buy, I’d probably buy like about a hundred pairs of shoes week minimum as, as much as 200 pairs. And I still do books, but not as much as I did before we lost one of our book locations. We just lost supply. Um, it just, we just can’t get it anymore
Stephen: [00:09:11] to demand change
Reezy: [00:09:14] I think. I think demand is really similar. I just think that there’s, there’s more competition and what will go into more about the, um, it’s more, uh, the, the booksellers are cannibalizing each other due to the pricing, right? So, and that’s because of what we’re going to talk about in a minute with Amazon’s fees. And stuff. So I’m still selling books, still operating in three locations, selling much more shoes and now I do a lot of online arbitrage using tactical arbitrage and more retail arbitrage. And then I did at that time. Um, but pretty much it’s the same. I’m admittedly heavily distracted from my business because of what we’ve talked about before the call just being. So I’m having Shiny Object Syndrome wanting to do, do I start wholesale? Do I start private label will let me do this and this. And I do a lot of merchant by Amazon. So I’m, I’m in tier 1000 on Merch by Amazon, have 800 shirts listed. I probably sell between like five and 10 a day. Right now I’m my best day. I sold over 30 shirts in one day. So I’m still learning that process. Um, fortunately I have a designer for that and I have recently hired an uploader. So that is, you know, that was taking me one to two hours a day every single day. And so that getting off my plate is like a huge, a relief.
Stephen: [00:10:40] And now I can go past that because that’s a good point. I haven’t had anybody talk about that. So you had a point in your business, something that you kind of enjoyed and you got into it and it was going well and clearly you’ve done well with it. But now it’s gotten to the point. It’s pretty large. Pretty significant. So you outsource the design. I don’t know if he ever. Did the design yourself or did you. Did you always outsourced
Reezy: [00:11:04] period of time? I did simple like text-based designs myself, but I’m not skilled so I wouldn’t have to look every, every time I want him to do anything I would have to look up on Google how to do this in photoshop
Stephen: [00:11:15] and that’s just time suck. And if that’s not your thing. And there’s some people that just comes natural and they love that. That’s their lane. And so you outsource that. Very smart. The uploader. I’ve had an uploader for a long time. So tell me what was the pivot point for you to do that? What does it roughly costs, if you don’t mind, and then what time you saved? Again, just so we can qualify and quantify.
Reezy: [00:11:37] So, um, another thing that I neglected to mention is between episode 69 and now my wife started going back to school full time and um, and, and we don’t vaccinate our children and California passed the and the no vaccination public school rule, so we were forced into, which actually we like a lot now homeschooling my, my now six year old daughter, so my wife goes to school five days a week and I’m home with my six year old and we do homeschooling five days a week. So my time is, is super at a premium, right. I only have like one day a week where I can go out of town to source stuff and that’s, you know, that’s at the cost of, of uh, not hanging out with my wife while she’s home for the weekend.
Reezy: [00:12:24] Right, exactly. I would have to take one of them and go out of town and my daughter also has, you know, thankful to somewhat of the success I’ve had. My daughter is able to. Do, you know, what kinds of activities, gymnastics, art class. I’m just tons of different skills, like an activity every single day, ballet, tap and jazz, all kinds of stuff. Right. And so my schedule was kind of based around that and um, the merchant by Amazon was becoming, you know, now I can do 50 uploads a day. I’m soon to be put into the tier 2000, which is 100 uploads a day in 50 uploads a day, was taking me one to two hours a day to upload depending on, you know, did I have 50 really similar shirts in the same niche or did I have, you know, 10 of these, 10 of those, you know, that takes longer if they’re different.
Reezy: [00:13:11] Right. And so I just found myself many nights I would be tired and I wouldn’t be at the computer racing the clock, you know, from [11:00] PM after everyone went to bed to midnight trying to get, you know, trying to get my uploads in before the clock turned over because Amazon runs on California time. And um, it just became too stressful. Um, and I think I’m finally at that point in my life where I realized that I’m like, look, I want to grow, I don’t want to work for my business, I want it to work for me. I don’t want to service my business, I want it to service me. And so one to two hours, I don’t have too many hours. I might have only, you know, for two to eight hours a day that I can actually be productive. And that’s way too much of it for me to be using, you know, 12 to 25 percent of it to, to get one certain tasks done.
Reezy: [00:14:02] So good way to look at what I’m paying right now for my uploader. I pay, um, I have a Venezuelan va that I got um, as a, from a referral from my graphic designer who’s also Venezuelan. It’s her friend and I’m paying her $52 and fifty cents American and the hour to upload shirts. And she’s only on day like this is the first week that I hired are Steven and um, she’s only on day four or five and it’s taking her. It took her four hours the first day to upload [inaudible] designs, which is not that, that’s still only [inaudible] sense of design and the next two days after that, it only took her two hours to upload design. So two hours is only ten cents a design, which I’m pretty ecstatic about. If she gets even faster, it’ll be less than that. But
Stephen: [00:14:54] for, since the way you’re describing it, so you broke it down into a true variable cost, right? I mean, in theory, right? I mean, it’s a real variable cost. When you scale to the next level, you can have a plan. I mean, to me it’s a genius move. I mean, it’s exactly the right way to do it and you’ve got to a point where it was painful, so it kind of forced you to do it. You had to make a decision.
Reezy: [00:15:15] That’s honestly, that’s how I work because I am, I’m the world’s worst planner. I’m the world’s worst scheduler. I’m always like five minutes late for anything and I just, I don’t know if that’s because how I grew up coastal California or whatever, but um, I never, I’m, I’m just a creature. I’m like, I’m comfortable. I’m less likely to change it up, but when I start losing money or when I start getting really frustrated is when I finally figure it out. Right? Like I, for example, I never, uh, I never knew how to juggle my entire life and then one day something just happened and I think my friend was juggling some oranges or something and I was like, I could do that to give me the damn oranges and you know, in about 10 minutes I learned how to juggle and it just, it. I was thinking about that the other day and I was like, why? You know, I always wanted to juggle, which sounds super trivial. It’s just like a little thing, but why did I wait so long to figure it out? And when I really put my mind to it, it took me 10 minutes to figure it out. And I think a lot of my growth comes from situations like that.
Stephen: [00:16:24] I’m going to pause on it again because I think this is so applicable to so many of us, right? Who’ve gotten into all these different things and you know, is this. This is weird, right? These big giant changes that Amazon and Ebay both have made some big changes this past two weeks, but Amazon specific, it’s going to force us to make changes that quite frankly will probably make us better businesses. Why does it have to. Why do we have to have that event to force us? I mean, that’s really the art, right? The real outliers, they don’t need that event. And that’s what we all got to strive for is to figure out how to not make that event. Make us make a choice, make a choice. Because it’s time, you’re mature enough, you’re ready to go. In our pre call, we were talking about some of the big changes that you may you’re going to be making because of the input from others, right? Looking at them and watching the really successful people say, you know, Michael, you’ve got to outsource your business. Right? I mean that’s hard to hear. Is it because you should be able to do at all.
Reezy: [00:17:23] It’s huge and even even with things like Youtube, which I really love doing and I specifically love editing videos more than filming them or whatever, but it takes me so long to do it. It takes me, hold on. There’s a truck, it takes me like four to four to 10 hours depending on how intricate I make the video. And if I want to release three videos a week, I, you know, I only have, like I mentioned, certain amount of time I can’t be using it to edit video even though I like it so much, youtube just doesn’t pay the bills so it doesn’t make sense for me to, to do that with my, you know, like I got an exercise, I got other stuff to do.
Stephen: [00:18:01] You don’t do with that and that’s the problem
Reezy: [00:18:03] I outsourced it to. Or you wouldn’t do it or you just wouldn’t do it? Well, I would continue, but I would definitely have less videos and youtube, youtube is a game of um, of more, more videos, more if you only do one video a week, you know, you have 52 chances for one of them to go viral or to, you know, to blow up if you do two a week, you know, 200 percent chance if you ask why. People who do daily videos are much more likely to do well on youtube because they’re just having so many at bats. You know what I mean? It makes sense. But yeah. So my outsource that to the Philippines for $4 an hour and I’m really, I just, you know, it’s just, you just have to understand what your value is. You know, maybe even though I like making videos, I am, I’m the star of the show, like without trying to sound too douchey or whatever.
Reezy: [00:18:56] And that’s my job is to be the guy on the camera, not necessarily to be the guy editing the video. Even even if I really like it, you know that the consumer, the audience doesn’t give a shit. Like there’s a, you know, like if I make it as good as I want or if I let the editor do it, his might be 80 or 70 percent as good as mine, but the viewer can’t tell the difference. And even now I still get comments from people that are like, wow, you’re editing is really stepping up. Like you’re getting good at editing. And I’m just like, I know that I’ve had, I had videos that were way that are way better than our older, but people don’t watch every single one, you know. So, um, it’s just not worth it to. It’s a, I don’t know the name of it, but there’s a lot of scenarios like that. People, they are sticklers. You worry about this, worry about that when really you just need to get things done. You know, I’m, I’m starting to learn that I would rather accomplished more things at a much lower percentage of greatness than to complish. You know, a couple things at like monumental, like Zeus level of greatness because that’s not what’s gonna get you noticed or bring you like overall success. What will is, you know, a billion baby steps.
Stephen: [00:20:10] The other thing to think about too, I mean I agree a hundred percent. The other thing to think about too is technology will catch up and we’ll change the way you’re running your business today is not the same as it was two years ago when we talked. Tactical arbitrage is a good example. Didn’t exist two years ago and so now all of a sudden, or maybe it was just coming out, but now Alex is. Alex has modified that I have to have him back on. He’s modified that in so many different times. It is night and day from when I had it. I still have it from what it was to what it is today and so in the editing world, in the technology world, the software I’m using today for my podcasts, I don’t get complaints about my noise ever again because the software is amazing, right?
Stephen: [00:20:52] It wasn’t there two years ago and so I think that that’s part of it is that it will advance and eventually it’ll catch up to you and then you’ll get to make a choice again. You, what do you want? And then again, maybe, you know, I always think of Joel Olsteen who’s a preacher and he always said he was a technical guy behind his father and he always loved that world and now he’s out in front because he was forced to and now he’s a preacher. Right. And he’s a really good for you. So it’s just interesting to. How did you get there? All right, so you outsourced again. So I think we’re getting a common theme from Michael that outsourcing seems to make your life easier,
Reezy: [00:21:28] right? Yeah, definitely. You have to. And like I said, we’re all guilty. It’s just I never, I never, it’s so there’s so many levels to it. Steven, like I up, like when I last spoke with you, I think I would still sourcing books myself manually. I’m not sure it might have been right around that time, but I broke my foot in a, a semi drunken bachelor party, skateboarding accident and I was, I was forced to outsource the store thing, which I never thought I could outsource.
Stephen: [00:22:03] It can be as good as you. Nobody would ever be as good as you. Right?
Reezy: [00:22:06] Right. I wake up the day after I broke my foot and I’m just looking at my giant purple eggplant foot and I’m just like, well, I’m, I’m not making any money today. Like this can’t go on, you know, either I can wait three months. Three months is 25 percent, 25 percent of the year. Right. So it’s like, that’s, that’s intense. That’s like as an entrepreneur you can really quantify that and be like, no, this isn’t going to work. Right. And so, um, I took one of my shippers and I trained them to, to start sourcing for me and it worked out fine. It was easy. It was, I don’t know why I was waiting for.
Stephen: [00:22:43] Well, uh, the, the, the enemy of good is perfect, right? Is that the phrase I think it is because a point is you’re waiting for perfect and you’re never going to get there. Right? And so that’s, that’s the key in. And what does that tell you though? I mean, is that a fear? I think that’s what it is. It’s a big fear about letting go of that control and so far you gave us three shining examples where you’ve been able to completely, you really had no choice but to make those decisions or really it was going to be painful and every one of them has worked out. How about documentation? How, how serious is your documentation when you’re outsourcing these processes?
Reezy: [00:23:26] Um, it’s, well, once I know I want to outsource it, then I’ve documented it and so that’s, that’s pretty easy. Like, um, I just recently training the uploader. For example, I just recorded myself screen, recorded myself doing it, uploading 50 shirts while speaking into the. And that was the only training I gave her. Here you go watch this video and ask me any questions that you have and are you ready to go? OK, here’s the keys and then let me know when you’re done so I can check your work and OK, fix this, fix that. Like she uploaded some,
Reezy: [00:24:02] um,
Reezy: [00:24:03] some Easter shirts and she put the word holiday in the key words and I was like, no one’s going to search for holiday. Swap that out for the word a bunny and, and so, you know, just little stuff like that, but uh, an hour and a half to record the video and then I just gave it to her and um, and she, she speaks, she could understand English but she’s too uncomfortable. Like she didn’t want to go live video chat with me because their English is not that good. So it’s if we’re, if we’re chatting, I’ll talk to her. I’ll have my microphone on, but she types back, right?
Reezy: [00:24:43] Um,
Reezy: [00:24:44] but a little bit of a length. Yeah, there’s a little bit of a language barrier. Sometimes things get misspelled. Like my designer is also Venezuela and she had a shirt that says, ah, I keep spitting beer in my mouth and I had to send it back to her and say, this is spilling. It’s supposed to be spilling. We are in my mouth.
Stephen: [00:25:01] Do you know, you think about this though? I guess my point with this is that you spend an hour on the, an hour on the, the process documenting the process. Maybe even give it two hours total, right? That if you did every module of Your Business Trend, Dr Smith on and he is a process guy. He created a course and he said, you know, Steve, the reason I created the course, it took us a few minutes because we’ve had that course for our staff forever and so we just use the same things that we use for our staff training and put it out to the public and boom, everybody bought and so that documentation is the next key to and it’s really the key into what we’re going into now, which is what I want to talk about. Amazon changes that, outsourcing that documentation, all that process. We’re at a place at a pivot.
Stephen: [00:25:47] I think it’s a y in the road that you have to make a choice and you’re going to have to make a decision. If you’re a bookseller, it’s, it’s. I remember telling somebody, tell me if you remember this. When I was a bookseller heavy in the old days we used to send our books to is one warehouse and we got a book rate so when we were shipping or books that would go in a box of just books and we got a dirt cheap rate to send it by ups I mean to Amazon like three cents a pound or some crazy number and so at one point a couple years ago they changed it and they said, oh, your books don’t get a book rate. They just get mingled in with your sneakers or whatever. Right? Whatever was going on. And then all of a sudden a four pound book which used to cost twelve cents, now is costing. Got Probably 35 and so a dollar 40 to send that same book. It was extra dollar and you’re like, oh, OK, well it’s still worth it or I can make money. But then the fee started up and then the one copy of everything went away.
Reezy: [00:26:47] Right.
Stephen: [00:26:51] That was a year or two ago. Right? So that was a change. That’s a price increase. And now we come to this place where 180 days now in book world, how many of your books, I mean, do you ever think about this, how many of your books that you send in cell within 180 days,
Reezy: [00:27:11] 30, like 40, 50 percent? No more. Say like 60 to 70 percent. So 25 percent of my inventory is books older than six months and a good portion of those might actually be over 12 months old. I just did a show with Caleb on my youtube channel where he, he ran all the data. He actually used my inventory health report as the analysis for the projected costs of everything. So it was really insightful.
Stephen: [00:27:44] He’s a genius. And so you now know what you gotta do and you’re going to have to make a choice, right?
Reezy: [00:27:51] I got to get out,
Stephen: [00:27:53] right? Because you could suck it up and leave them in. And how quickly will you lose money on almost every book.
Reezy: [00:27:59] Right? So I’m going to go from paying approximately $4,000 twice a year in long-term storage fees to pay basically double that altogether. So I wouldn’t be paying an extra, an extra 8,000 a year in long-term storage fees and that’s not including the new fifty cents a month per month. That’s over, that’s over 12 months old. So that’s doubling the fees without even accounting for that. And then it’s like OK well I don’t even pay fifty cents for books. So why would I pay fifty cents a month for a book? It’s going to have to have a forecasted profit of, you know, at least like $30, 20, $30. Because me and caleb were talking about it before. Like during the single act exemption days you would pay two cents a month per book and that was it. And so a year would be like 24, let’s just say a quarter. And if you’re going to make five bucks profit off of a book, you could literally store it for 20 years until you would break in. Which is why we didn’t, which is why we had 45,000 books at the FBA warehouse because we didn’t give a crap
Stephen: [00:29:10] isn’t the other problem that you’re going to have for the next 18 months? Is every bookseller’s staring at the same thing at scale. Like they got to liquidate. So all the books you think you’re going to make money on, your competitors are going to have. Many of your competitors are going to cut their price. They have no choice.
Reezy: [00:29:28] Right? So there’s a whole fleet of very popular books where some of these books, you can’t even make money most of the year, but you would buy them and hold on to them because you know, at a certain point of the year, the demand for like let’s say like how to kill a mockingbird or like um, I dunno moby Dick or whatever. These are bad examples, but let’s just say like, you know, during school books season, textbook season, like school that’s required reading for schools. So they’re, you know, hundreds and hundreds of those copies are getting ordered. And then the price jumps up to a point where you can make a couple bucks a copy and by then you probably have like 10 or 12 copies of it because it’s super popular and you get it for a quarter. Well now there’s going to be the race to the bottom every single month.
Reezy: [00:30:13] The long-term storage fees are rolling monthly because what happened previously was it was once a year, there was a long-term storage fee, so you could wait until maybe a week after the long term storage fee, then send everything in and all that stuff would not get charged a one year storage fee when the next year came around because it would only be like 11 and a half months old. And then when it finally did get charged for the one year, it would almost be two years old, just two weeks short of two years. And then the same thing with the six month storage be it was essentially, you know, most of your books without even doing it on purpose. We’re probably nine months old when they finally got charged a six month storage fee. Well now the oldest it’s going to be is like six point eight months old because it’s going to be a rolling from when it was actually sent in charging every single month and that is going to cause us to look at their books every month and let’s say either all the time, which I think might be all the time because people are lazy, especially people who have large portfolios of inventory.
Reezy: [00:31:11] They don’t want to like have to manage it so much to where they’re like, OK, for two weeks we’re just going to try and get the most we can and then the next two weeks we’re going to slash the prices down on the popular books. Like they’re probably just going to leave it on slash mode all the time. Which means all these books where you could actually make a couple bucks on are probably going to make you zero bucks on for the next couple years. Yeah. Well I mean who knows if it’s going to get worse, it’s not going to get better. Right?
Stephen: [00:31:39] So that also done. So the answer is OK, pull your books back or easy. Put them in your garage and ship them yourself, merchant fulfilling. But in this scenario you’re telling me though that book is never going to recover because would you want to to kill a mockingbird for $4 free shipping from Amazon within a day prime or you know, or you want me to do that plus three 99 shipping plus you know you’re going to wait for it.
Reezy: [00:32:08] $4 shipping would lose you money. So I think it’s about if you sell, let’s say that book for example, for $7, Fba, I think you make 30, thirty cents payout, which depending on how you shift it there and how much you’ve paid and your labor, et Cetera, that may or may not make you like fifteen cents, ten cents or break even or lose money. So seven bucks is like the threshold. But the thing is is if you have to pay fifty cents to get a book destroyed, that means that now we can put it to like the, you know, eighty cents less than that. So like $6 and twenty cents would still probably save you a couple of pennies versus pay fifty cents to get it destroyed.
Speaker 5: [00:32:52] Wow.
Reezy: [00:32:54] Which is probably what’s going to happen. So I am actually unsure like this month really sucks because I have to get my books in order and, and get taxes done. And at the same time I have to trim what I already thought was a trimmed inventory, which is like 15,000 items now. Have to trim that down again. And I imagine when the dust settles, I’ll probably only have 10,000 books at Fba. Um. Oh yeah. And really just have to change change the, uh, the sourcing criteria. If we’re going to sell it Fba, we have to, it has to have a higher profit margin
Speaker 5: [00:33:32] and um, and a better rank and um,
Reezy: [00:33:35] you know, and merchant fulfilling is like seriously in the question is how I started. Um, I personally don’t want to do it. I hate it. I hate, um, because FBA allows me to make the same or similar money up until recently. Yeah. Without having to hire employees or having a warehouse. And you’re right, some people live in like greg for example, he lives in Ohio where he can get a warehouse for very cheap. I live in Santa Cruz, California. I cannot get a warehouse for very cheap, you know, if for me to get a warehouse that’s even affordable, I have to drive, you know, 30 minutes away from where I live. And to me that’s not why I own a business so that I can commute a half hour to and from work every day. That seems like a form of slavery to me.
Stephen: [00:34:20] So Greg Murphy is who you were talking about and he is a super mega book seller and he is, I don’t know what percentage, I haven’t talked to him about this in a few months about what percentage of Fba he moved towards. So he’s a huge merchant fulfill operation, but he also had a large FBA business. And do you see sellers like Greg and other, cause he’s, you know, he’s probably got a couple of hundred thousand books online but there are so much bigger than him. You see them completely moving. Like you said, a, there’ll be an Fba category and everything else is merchant fulfilled, long long-tail books, you know, the, the real, you know, they’re not going to be a Fba anymore, are they?
Reezy: [00:35:01] I don’t know. There’s a couple of arguments about it. So I think this changing pricing is going to have the largest effect on the very popular books that have low margins of profit, one to $3 profit and that have low ranks. I think those are going to be affected the most. Right? And they’re honestly like, my average sales price is I believe $14. And so, um, those are a huge part of my business model books that sell between eight and $12 or even eight and 10. Right? So I, if I sell 200 bucks a day, probably 100 of them. I only made a couple bucks on each one, you know. And um, I do think that most people are probably going to have a, a, a, you know, if it’s over $20 we send it to Fba, but I have yet to know or understand that will these books that take two years to sell, will people be merchant fulfilling them and then no one will be an Fba them. And then the FBA demand is still there because the customer wants that. But then the price will go up to and then it will actually be worth it to send them in.
Stephen: [00:36:13] I have no one or two. If it does it, that would be an evolution. It wouldn’t happen overnight. Wouldn’t be a faucet turned on. Right. That would take time to catch up. But I agree with you. Or the other thing I was thinking about this as I was planning for this call, you know, book demand has declined. I mean, that’s a fair statement, right? There’s no question the book, the demand has declined if you’re this, you know, I’m an emba and I used to be the CFO, many different companies and these are the kinds of things that would go through my head. I’d be sitting there saying, you know, we’re looking at a declining business, um, that we could squeeze more money out and there’s a, there’s a, I have an idea how we could squeeze more money out, but it’s a declining business. We only have so much room on our shelves. Should we look for businesses that are growing, not declining and those businesses that are growing are blah, blah, blah. I don’t even know what they are. They’re ring doorbells right there. Their technology stuff, right? We could put that on our shelves because they’re looking at profit per shelf space, I’m assuming, right? Any good finance person would write whatever they have, whatever their commodity is. They’re saying, hey, profit per square inch, we get more money. We used to be books and that was the thing. Now, not so much because it’s a declining business.
Reezy: [00:37:23] I think Moreso it’s just Amazon nudging us in the right way to say, hey guys, we’re not a storage storage, we’re in the business of selling stuff because if you, right, if you analyze the amount that we pay for a cubic foot of storage, it’s not that much even per year compared to if we actually sell stuff, they make way more off of us if we sell stuff. Right? So they still, they still want us to sell stuff, but over time they’re getting more strict and more strict because they realized how people are gaming the system. Like you said, we’re just like creatures of habit, right? We’re going to do the least resistance to what we want to do. And um, and so they’re just learning, you know, we’re financially motivated. The sad part that I think about is a lot of these really big book companies that probably do not micromanage their Amazon account as well as they should. It’s going to take them a year before they realize, Oh crap, we’ve been paying way too much in fees. And so that’s going to affect the whole market for like the next year. Those low a margin, good ranking books are totally screwed.
Stephen: [00:38:35] So,
Reezy: [00:38:36] so is the answer, you know, let’s close it out on the books. What’s the answer? What’s your plan? What are, what have you heard from like a Caleb and other booksellers? So it’s bottles certain dominant, adjust the dollars. This rank this amount. Boom. I personally have already started not trying to send in books to Fba that I can’t sell for at least $10 and if it doesn’t have a um, a sales count or a score of like five a, m, I’m concerned with it, especially if it’s a lower. If it’s only a $10 book, you know, if the east score is five, which means that four or five times in the last six months. But the profit is like $20. That makes me feel better. Versus the profit was only going to be a couple bucks, right? Um, but I definitely see there being a future for hybrid because a hybrid business model, because books are so cheap, like you said, people are.
Reezy: [00:39:37] People have always been throwing books away, right? So you can get books for cheap, but you might need to get creative in the sense of like a renaissance brick and mortar type stuff to where I’m not saying you need to have a dollar bookstore like Jesse Forbes or Greg Murphy. But you could have maybe, you know, for example, where I live, it’s like, it’s, um, it’s like liberal creative, artistic community. Maybe I could open a retail store front somewhere if I could find a good one and we would process fba books in the back. But then, you know, most of the, it would be a bookstore, but like maybe it’s also a café. So it’s not just the bookstore, it’s like a café, which I believe like their synergy and I do love coffee and books. Um, so I’m not sure, but I think you’re going to have to get much more creative as a bookseller in the future.
Reezy: [00:40:30] Especially because if you’re a bookseller, you’ve known this for a long time. There are so many books you get for since, since before the fees were bad. You’re like, OK, here’s the book. I know people like this. I literally just saw someone reading this book, but you can scan it and you can’t make any money on it. That makes no sense because the bookstore has 20 copies on the shelf and they’re selling it brand new for $16. So you know, you could sell it used for like one to $4. You just have to have that hand to hand transaction. Right. And Yeah, I’m just not, I’m not taking your spot on really. It’s a, you’re just gonna have to get creative or decide to, you know, maybe maybe you’re only gonna sell textbooks or whatever, but write books. Books aren’t going anywhere, at least probably for, I’d say 10 to 20 years because the.
Reezy: [00:41:21] I personally think the textbook industry is going to probably have a shift to electronic books. Ebooks very soon. But at the same time I think that they’re gonna have a huge problem that they don’t foresee with piracy. And so one kid in the college is going to buy the book and then he’s going to just copy it to everybody. So where they used to sell 500 copies per campus, they’re going to sell five copies of digital books and you know, yes, they make more money on each digital copy than physical copy because they don’t have to transport or produce it, but the physical books as a way for them to control the, the supply. And they also liked the ebooks because it kills the secondary market. UK, there’s no used Ebook, right. So, um, but I think that will backfire and I know personally because I’m a reader, I have a kindle half the time or 75 percent of the time I go to pick up my damn kindle, the battery’s dead and I want to read, I want to read right now I’m going to the bathroom, I want to read. That’s where I do most of my reading and the kindles dead. So I grabbed a physical book. So. And I, you know, I read to my daughter physical books. I think most people still like physical books. So I think a bookstores are probably a good idea for people who want to be in the book selling business.
Stephen: [00:42:39] This, I think you’re spot on, I think that you’re going to see a resurgence of that comfortable bookstore, right? That place where it’s an event, you go there, it’s a destination and you know, don’t, don’t miss out partnering with the right business. If you know of a good coffee shop that’s hip, that has a good location, that has a good history because most of them fail. But if they make it, you know, don’t be afraid to consign with them. Work out a relationship where I have a friend who sells vinyl records in a few different stores. He doesn’t have a physical location. It doesn’t need one because those stores happen to have that right clientele where that product matches. Don’t be afraid to finding that coffee shop by you where they were. You share 50 percent, 50 percent of sale, whatever it sells for. They get half right. I mean, you think about that book. So I’m reading a bill o’reilly series, killing all the different things, right? And so these books, or $26 right now, if I went to, you know, even on Amazon, these hard cover books and you know, you can buy it, there’s somebody who would pay for $5 or $6 for that book, that coffee shop would love to make $3 on a product because guess what, you know, they’re not getting that margin on a lot of stuff that they have on their shelves. So it
Reezy: [00:43:50] could be a. well, I mean we, we know that with what Amazon is doing to the consumer and training them, everything is shifting to online. It’s just super convenient. And so I think the service industry is one of the only businesses that’s actually safe from the, the Amazon Armageddon or whatever you want to call it. Um, you know, like I wouldn’t want to open a retail store, but I’m obviously used the books have a great margin, but I would not focus on. It’s a bookstore I would focus on. It’s a community, it’s a destination. We’ve got Wifi in partnering with the service industry or having a dual business like in one I think is very, very attractive to me. Um, because, you know, you will pay people pay for. That’s what, that’s what online business is all about. You’re paying for the convenience, right? You can make a coffee at home or you can go to the café and pay someone else to make it for you.
Reezy: [00:44:45] You’re paying for convenience, right. You’re saving time. So, um, if I had a bookstore, it would definitely not be just a bookstore. It would be a bookstore slash café, a bookstore slash café slash pizza parlor. Um, you know, I might, I might have, you know, an open microphone nights, you know, and have people come in and read poetry or play music or whatever, just anything that could provide. It’s kind of like social media, but any way you could provide value to your community that would draw them in and, you know, then maybe they pick up a couple books while they’re there.
Stephen: [00:45:21] I think, uh, I think what you’re describing is being creative. Um, and he came into my warehouse. We extended my warehouse, another 6,000 square feet, so now we’re over 12,000 square feet combined. Him and I and that creativity allows us a lot of options. I’m like, he’ll be there tomorrow and bring some help in and the work will shift and change and yet he’s not bound by it, you know, it’s kind of like, you know, working together and now there’s gotta be a trust factor there. But I think that that creativity, you know, I was thinking about this today with somebody. I think this, tell me if this is a good idea. So you’re a private label seller, right? And you’re selling, I don’t know, you’re selling Pretzel Cups. I got my pretzels on the thing. Right? And Your Pretzel Cups are great, however you’re buying them by the container, you’re shipping them in from Amazon, from China directly.
Stephen: [00:46:10] Now you say, Oh, what am I going to do? I can’t really put them all there because now I’m looking at it’s going to eat into my margin so much. I really don’t want my own warehouse on blah, Blah Blah. Well, what if you came to Steve and said, Hey Steve, I’ve got these things, would you become a wholesaler of my product? Right. So now I don’t have to worry about my account getting shutdown. Right. That’s a big fuss, right? So there’s somebody else selling itself. My account gets shut down. You, um, there’s somebody else selling it. You agree to map, right? Oh, and though you’ve got to rent space in your warehouse for my product, you know, or whatever. Get creative with that. And all of a sudden, because that’s a deep relationship, that’s a trust relationship. But from a couple of points, once again, your account is, say your product is safe because Mike only had his account tied to it. Well now he’s got to give up a little bit, but he’s bought insurance to make sure his product doesn’t get shut down. Number two, he doesn’t have to open up his own warehouse in California where it’s $20 a square foot a year. I don’t know what it would be. Warehouse Twenty,
Reezy: [00:47:11] I’m not really good at.
Stephen: [00:47:16] It’s less than $5. You know, where we are much less. And so you sit back and you say it, there’s a couple of things. This is the creativity that needs to occur and then again, you can outsource some, you know what I mean by partnering up with the right people and stuff like that. So I think that that’s the lesson, is it, I mean it, but we’re back to being forced to do it. Mike, that’s really the issue.
Reezy: [00:47:38] Well, I agree with you and I actually have thought about trying to make a local coalition because I know several local sellers in Aflac all partnering in on a warehouse and there’s definitely trust issues, especially if you’re a private label person, you know, and they, you can’t un-see your product, do, you know,
Stephen: [00:47:57] can be signed. I mean there are legal things
Reezy: [00:47:59] that, that’s, that’s where I was going next is that get your contracts in place. Like I, for my entire life, I’ve always been a handshake dude. And I recently had a, an issue go down where, um, it just, it just went really bad and I had to, I had to remove myself from the partnership and um, that business is still profitable. And it’s essentially because of all the work that I did and it’s ongoing with recurring profit and I just had to let it go and now I’m not even, I might not get, you know, three or four months of my cut and we didn’t have a contract and it’s all in that person’s name and it’s just, it’s just terrible. So no matter what your deal is, if your best friend, it’s your mom and your brother, get a contract in place because I’m not saying you have to enforce a contract or to someone or whatever. But when, when the sea hits the fan, you know, you can say, hey, we have a contract. And I think for most people that would coalesce them into actually fulfilling their end of the deal versus just saying, you know, what are you going to take me to small claims court, you know? And that’s most likely not worth it in most scenarios. So
Stephen: [00:49:11] just get your contracts. Even if you’re going to walk away, you’re going to have a bad taste in your mouth forever. It’s never going to feel right if you didn’t. If the agreement said this is what happens when it’s dissolved, let that happen. And then that’s what happens. Then you can walk away saying, OK, that was the way it’s supposed to happen. Yeah, I wish it didn’t go there, but it was resolved and we went on as opposed to feeling sick forever on it. All right, so let’s close up. I want to know what you’re doing now. You’re outsourcing and outsourcing and outsourcing. You just were at a big seminar where you were a speaker and you kept hearing from the really, really, really successful people outsource Michael Outsource. Michael. So what’s next on your list? What’s, what’s next?
Reezy: [00:49:55] Cro. So currently I am, I am getting the, uh, the merchant by Amazon fully outsourced so that will run itself and that’s going to scale out to other, um, print on demand websites like etsy, even with printful or red bubble, et Cetera to public, right? He public, et Cetera. And also scaling our shoe business. So we’re going to have a couple remote buyers that are going to be buying food for us, like on their own time. And then just setting goals for me and my business partner, like, look, we’re going to each buy a pairs of shoes a week, um, and then growing the account like that, and then the new shiny object that I’m going to pursue his wholesale and private labels. So I think, um, I’m going to pursue private label. Well my business partner pursues wholesale and that’s what we’re going to. We’re going to split it up and then just report back to each other, but at the same time we have a couple of really creative ideas for the future of books and how we’re going to operate them. So I’m excited. Um, but I know that this year, you know, I’ll be happy to make the same amount that we did last year. Obviously I’m, I want to go more, but it’s just, I’m thinking more like a three year plan.
Stephen: [00:51:10] Then you’re structuring it, that outsourcing of that merchant business that’s going to pay off for the next 20 years. But you’ve got to go through the pain. That’s the lesson, right? I mean that’s the real pain this year. And get stagnant because you’ve got to pause, you got to fix this and you’ve got to set it in place. But once you noted going forward, it’s like a snowball, right? That’ll grow over time because it’s not relying on you. Which was the bottleneck, which is saying it to me. I’m the bottleneck. Right? I mean the funny thing
Reezy: [00:51:38] to me is that merch by Amazon is very similar to books and how you have to be a long time ago. It’s a portfolio game. It’s all about having more designed. Right? And the fixed, the fixed rate fees are ridiculous though. Like let’s say, let’s say you have a thousand shirts I’m listed and you sell 10 a day at $5 profit a day. That’s five. That’s $50 profit a day. Well let’s say now you have 10 x that right, $500 profit a day. 10,000 shirts. And I paid $4 a designed for a for sure. But I also, I liked, I merchant ate them, I make, I get variations, right? So when it’s all said and done, I’m probably paying, I’m paying like a dollar Max per slot. That’s build because there’s, there’s five garment types, I’ll do an inverted color version of each one, a distressed version, you know, it might even be less, it might be like fifty cents a design, right? So if I have 10,000 designs, I probably paid somewhere around $5,000. So that’s insane to have a fixed rate cost of $5,000 that produced this $500 a day. That’s insane.
Stephen: [00:52:47] Nothing can do this vending machine. There’s not even a slot machine in Vegas that’ll give you that exactly why I love merged so much and I get it. But you’re still getting to do the best part of it, which is to manage it really, and be creative and dip your toe in it, but yet you’re not bound by it because the best thing I do is outsource and it’s 10 times better than I am. I’m never. Was that good? And it’s just a wonderful thing. So you also have a podcast, a youtube channel. Um, how often does that, is that weekly?
Reezy: [00:53:20] Every Monday at six Pacific Eastern, I do a live called reedsy talks. Um, previously it was just me talking q and a live calls and now I changed the format to where I bring on other entrepreneurs and people that are successful in different fields to just talk about, you know, their world, their success tips for other people interested in that. And it’s mostly resellers, but I’m, I’m, I’m anxious to get out of that niche a little bit, you know, I’ve interviewed a crypto currency person and next week’s show I’m actually, I’m interviewing a woman who makes a living doing coupon in like in her garage if you know, it will be full of diapers one day and then she sells them all at the flea market the next day for like a lot of money, but it’s all, it’s all essentially free through the coupons, you know. So, um, it’s exciting for me to just, you know, to talk to other people doing different stuff and share that with people.
Stephen: [00:54:21] All right. And that’s six to nine Pacific time. Correct.
Reezy: [00:54:25] Um, it’s, it’s six. It starts at six Pacific or nine eastern and it’s usually a, usually a two hour show. I do put them on my itunes podcast, which you can check that out as well. It’s a little bit behind. So you know, the last episode I posted, it’s probably seven shows ago, so if you want to be current, you get on Youtube, watch the live show where you can get your questions answered or you can just catch it on the itunes, which I understand a lot of people don’t have time to watch youtube. I personally don’t really watch much youtube myself. I’m a podcast guy, which is why I love your podcast also. Um, so yeah, just I appreciate anybody that subscribes to my channel or you know, listens or consumes any of my content in any way. It’s, it’s really awesome to be able to, like you said, to get messages from people that say, you know, thank you for this or for that like I didn’t realize I have or how much that would affect me and how that would make me feel. But that has been able to, to, uh, to serve other people and provide value to other people has really changed my life and I feel very fulfilled to be able to help others.
Stephen: [00:55:33] When you think about this, if somebody reached into your life at a young age when you were going through all your challenges, what could it have done for you then? Right? And so to now have that opportunity, that’s the way you got to think about it, trying to people that you don’t know how vulnerable or where they are in their life. As you know, some stories can get kinda crazy, right? You could. So that to me is the power. You never know who you’re connecting with. The notes that you get are just, it’s, it’s, it’s unbelievable. Um, and you’re very giving and I know you’re not selling anything, you’re just giving it away and your large on instagram too. So I’m going to have links to youtube. I’m your instagram and everything. Dude. I appreciate it because I knew I needed a good book seller who knew what they’re talking about. Who’s looking at this objectively? Yes. This is tough. This is a however, this might be where the creative people, that why whenever they make that left might just take it to the next level. I mean, do you don’t sound like your world is collapsing by any stretch of the imagination?
Reezy: [00:56:38] Yeah, definitely not. I’ll find a way, but just like you were saying, man, you never know how you can, how you can affect someone or how you can help them. Just today, um, I opened a box that someone sent me an inside the box with a copy of Gary v’s new book and I was like, OK, cool. I already have three copies of this book. I’m literally giving it away. But then I opened it up and there was a letter inside of it and it’s signed by Gary v to me directly and it’s one of my followers. They drove out to his book signing and they had the thought to have him sign a book directly to me and then they mailed it to me. So it’s like, that kind of made my day today.
Stephen: [00:57:19] That’s the hair on the arms on my legs or my arms or standing up. Oh man, that’s incredible. Think about that. It’s a very powerful thing. Dude. I’m inspired. I’m ready to go. Talks Mondays, six PM Pacific. That means it’s on [9:00] eastern time. US old guys go to bed, but I can catch it the next day to Michael. Man, I appreciate it so much. I’m going to. I guess that’s the best way to get you to write this on youtube or do you want. Do you have, will have a better place for the contact.
Reezy: [00:57:51] You can email me reezy resells@Gmail.com. If you guys want to, you can call me two zero, nine 80 three reedsy and all answer the phone and help you out with whatever you need help with. Um, obviously that’s dependent on my availability or send me a DM on twitter or instagram. That’s probably the quickest way to get ahold of me. But I’m here for you guys
Stephen: [00:58:14] man. I appreciate it dude. I’m so glad we get to court ketchup. Can’t wait to see you again. Hopefully I’ll catch up with you later this year. Uh, I wish you nothing but success. I’m, I’m inspired. I’m ready. Piece. Told you how could you not be pumped after talking to him, I’m literally jazz. I’m going to go out there and I’m just. My family are looking at me like, what is wrong with you? Go to DECAF, but you can’t talk with somebody like that who’s just so enthusiastic who just so passionate about what he does. How could you not get inspired? Hearing the stories about, Hey, I’m going to be home with my six year old because that’s where I need to be. I’m giving up all these other things. You had forced me, but you know what? There’s a lesson there, man. Oh Man. Telling you love it.
Stephen: [00:59:00] Love it. Make sure you check him out. Reezy resells. Reesie talks a Monday, six Pacific. I’m on Youtube. I’ll probably be in bed because that’s [9:00] my time, but I’ll catch it the next day. E-Commerce momentum.com. E-Commerce, momentum, [inaudible]. He don’t forget what’s going on with seller labs and scope. It is unbelievable right now. These keywords and how you really need to focus in on them, right? So you got to get your stuff selling faster once it last time. You went back and take a look at your number one competitor to see what keywords they’re using, because guess what? If they’re a larger seller, they’ve got a lot more resources than you do, but you’ve got scope right? If you don’t, you’re missing it. So our labs.com, forward slash scope. Use the code word momentum. Save 50 bucks, but more importantly, get your stuff selling faster. Avoid those fees. Just get it selling faster e-commerce momentum, Dukkha, take care.
Cool voice guy: [00:59:54] Thanks for listening to the e-commerce momentum. Just all the links mentioned today can be found@ecommercemomentum.com. Under this episode number, please remember to subscribe and like us on itunes. OK.
