Experience can come in many different ways. You can get it yourself (sometimes the hard way) or you can hire experience to help you get on track. That’s what Brian Freifelder has done and states it is the real reason his business is doing so well. “Iron sharpens Iron” as it is said, maybe you need to get some help?
Anna Hill- Accounting we will go
RA Sourcing Secrets- Brian and Elizabeth’s sourcing group
Chance to win the one extra ticket for the sold out 2018 Resonate conference in Atlanta Georgia. May 15th & 16th 2018- text RESONATE to 44222 (you are responsible for your own airfare, lodging and transportation)
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 Hey just wanted to offer you a chance to get to the resonate conference that’s sold out that’s coming up in May. It’s May fifteenth and sixteenth in Atlanta. I bought an extra ticket and I’m going to give it away to someone who subscribes to my newsletter. Yes, you’re going to have to subscribe. You can text the word resonate to [inaudible] the word resonate to four, four to two to. It’s going to ask you for your email and that’s what it’s going to take to get entered into the drawing. It’s one ticket. I paid for it personally. Um, you get to hang out with me. Is Monday the 14th and includes a cocktail party in, includes lunch both on Tuesday and Wednesday. And an includes an incredible dinner Tuesday night. And I just can’t wait because I think it’s one of the best conferences. What I would want you to described it last year because bunch of people ask me, hey, what was it like, very technical and the attendees were younger.
Stephen: 00:53 Now I’m an old dude and compared to that they were definitely younger, but they were so technical. Uh, one of the guys I was talking to is selling on 16 different channels, the details and the intimacy because you’re so close to the speakers, you get to talk to them, you get to ask and go deeper and it’s just really, really a valuable conference put on by seller labs. Yes, they’re one of my sponsors of the show, but I bought the ticket so you know, to be fair it is sold out. They didn’t give it to me, but I want to help them because I think it helps you. And so for me to get a chance to see Ezra firestone speak, I’ve not seen him speak personally face to face. I’m dying. Bret Bartlett a. When you see James Thompson, I’m from prosper show, Peter Kerns. I’m. They’ve got this expert coming in who’s doing a talking about instagram and she is talking about instagram influencers and how to use them for your products.
Stephen: 01:48 I mean this is really, really intense stuff. It’s, it’s held in an amazing place. This was a new venue in Atlanta. So you’re responsible for your own hotel, your own flight, your own transportation to the event. But the ticket itself is paid for. I paid for it because I’d like to hang out with you. So if you’re interested in it, all you have to do is text resonate to [inaudible] and it’ll ask you for your email. That’s the cost and you’re gonna get subscribed to my newsletter, which I think is a valuable newsletter. But then again, maybe I’m biased, but if you want to come and hang out with me in Atlanta, it’s going to be in May, coming up quick. So I’ll probably choose the, uh, the person pretty quickly. So any questions, just send me a note. And Steven and e-commerce, momentum [inaudible] steven and e-commerce momentum.com.
Speaker 2: 02:33 Welcome to the e-commerce guys will focus on the people, the products, and the process of e-commerce selling today. Here’s your host, Steven Peterson.
Stephen: 02:47 Welcome back to the e-commerce momentum podcast. This is episode 200 and eighty nine. Bryan fry, felter. Yes. Brian is back. Now you’ve got to go all the way back. Way, way, way, way back to episode number 13. To hear Brian’s story. And if you’ve not heard Brian’s story, please go listen to that first, stop this now go back and listen to it because I want to help you understand the kind of person we’re dealing with. This is a true, um, pull yourself up by the bootstraps hostler. Put your head down. Do the work determined person who is going to win, who was taught early to win, really taught early and really has learned how to win and went through some challenges and he talks about them. And back then he had the. I use this phrase, it’s my praise, is a scarlet letter you know, around his neck and you’ll understand what I’m talking about when you go listen to that, but my God, what a difference.
Stephen: 03:43 Two and a half years of putting your head down and doing the work, what it can do for your business, paying attention to the important things, being willing to invest when you’ve probably money was probably tight. We didn’t even get to that, but he took some leaps of faith, took some advice from really smart people, took some help and has really ran with it. And it’s paid off and he’s just such a great guy and he’s so real and so genuine, and it just so cool to see him. So successful. So well deserved. Let’s get into the podcast. Right. Welcome back to the e-commerce momentum podcast. Very excited about today’s guest because it’s been a long time. It’s been a very long time since we’ve gotten a chance to talk on here. We’ve talked socially many different times over the years, but it’s been two and a half years just about Brian Freifeld. Welcome Brian Number, team. Dude. Think about that.
Speaker 3: 04:41 And yonder. Yes, it’d be, uh, one of the first ones. And I kind of delayed it at the time.
Stephen: 04:47 You did? Yeah. You, uh, you, you may be chase you a little bit. Um, let’s go right there immediately. You know, go back to episode number 13. This is the episode number. And Brian was. Brian had a scarlet letter around his neck, is that, that’s not an unfair description, right? Two and a half years ago, if your account was suspended, you were looked down upon like, oh my God, he must be terrible business opera. He must’ve done everything wrong when quite frankly, you know, in our discussion we talked about so many people I’ve interviewed had been suspended and it’s generally not because of things they’ve done wrong. It’s because things changed and outside of your control and your account got swept up in it, right? Is that fair?
Speaker 3: 05:33 Summer of 2015, I think there were some changes that Amazon, uh, just some changes with seller performance and I’m starting to hear some people are getting suspended here and there. I got caught up in July, which I got lucky because I was able to get back on relatively quickly, but there were people getting suspended in August of 2015. They were taken like a month, if not longer than that to back on. Um, it was a crazy time period for anyone selling on Amazon.
Stephen: 06:01 You credit a Scott Margolis with a lot of help and I want to applaud sky. He’s a great guy. He’s helped a lot of people, but you credit him with really helping you make some adjustments in your business. Can you give us some specifics on things that you’ve changed, um, that, you know, we might all say, of course you can’t do that, but back then, you knoww, w Brian were talking a little in the pre show. Both of us have been around for, I’ve been 2011. I started selling Fba. You’re gotta be darn close to that or before that. Right? And the rule, we used to buy everything and send it all in. That was it. I mean, we’ve all heard Chris Green said he used to buy tools and never even bagged them. He would just send them it. That’s the way it was. And when they scale, they had to put rules in place to help them manage their growth. Right. That’s reasonable and fair. Unfortunately, when you have inventory sitting in there and you have processes in place, you’ve never adjusted them. You just don’t keep up with the. You’re just feeding the machine, feed the beast as everybody says, well guess what? You know those rules didn’t apply. Now there’s a rule in that applies. You’re magically supposed to follow it. It’s like, that’s not as easy as you think. Fair. So Scott helped you get some of the straight and narrow, um, get, get some things back online. Talk about that. Will you?
Speaker 3: 07:17 One of the first times I ever talked with Scott, he pretty much gave me an idea. He showed me some different reports on Amazon and pretty much said, hey, you need to be on top of these. Uh, it’s important that, you know, if you want to keep your health in good shape that you know what’s going on with your returns, an order defect rate. Um, and I mean he pointed out, uh, at one point when I was stickered now I’m coming right now. I might be going back to stickered at some point, but uh, he pretty much pointed out how I can add a flyer in there and kind of intercept customers from reaching out to Amazon. And he just gave me a lot of different pointers at the time, which really helped. I guess kind of, um, I guess clear up, you know, some, some of the business.
Speaker 3: 08:02 Um, I have different, uh, I have um, things in place now that kind of, uh, like for instance when I have a return, I’ll reach out to the buyer if it’s effective or not as described. And I’ll say to them, hey, you know, I’m really sorry for the issue. I just wanted to check in with you and see what was wrong with it. And um, by knowing this, it kind of gives me the opportunity to prevent me from selling too many of this item before, you know, I potentially get a performance notification or get suspended for it.
Stephen: 08:32 So let me, let’s break that down a little bit more. So if you’re selling, I don’t know, I’m kool-aid bad example, but it’s kool-aid and the customer gets it and they message you and say you message them and say, Hey, what’s up with that kool-aid? And they come back to you and say it was hard as a brick man, there was, you know, whatever, something was wrong with it or whatever. If you have two of that same kool-aid sitting there, even if it’s in date, you run a risk of every one of those people and then they will shut your account down, write all you need is four or five of those and you will get your account shut down. Right? So there’s an example of food. Now you don’t sell food, but it’s just, that’s, that’s a perfect example of being proactive instead of kind of turning your head away and saying, well, I pay Amazon to do the customer service. Right?
Speaker 3: 09:20 Exactly.
Stephen: 09:21 Well, do you pay them to do the customer service to you? Is that something that you’ve realized now that that’s not really true
Speaker 3: 09:29 to customer service, uh, or you’re saying, do I pay Amazon?
Stephen: 09:33 I mean, because in some ways that was one of the big attraction, right? Because the negative with Ebay is you get a million customer questions, right? That’s what they do. Hey, can you measure that shirt from this to this or can you do this and that. What we’re used to is the attraction for Amazon was that they handle the customer service because they were Amazon customers. Not your customers, so technically they handled it right. And so that was nice, right. They, especially when they were not as big as they are, they would handle the customer service now, now they get back to you when it comes to you. But, but did you make that mistake?
Speaker 3: 10:05 It’s hard to put a value on Amazon, handling our customer service, um, because I’m selling on Ebay at this point and I can’t stand getting the five to 10 messages per day where, yeah, they’re asking like a, you know, I know this is a size small, but can you measure it for me or can you measure from the one end to the other? Um, so with Amazon, especially with items that I guess, you know, aren’t delivered to the right address or it didn’t make it on time. Um, it’s definitely nice to not have to deal with that.
Stephen: 10:35 He does and you know, we don’t know how many of those we get, but it’s gotta be voluminous, right? Because think about you as a buyer, you’re probably inquiring and wondering, Hey, you know, where’s this and that kind of thing. So it, you know, add that to the number of customers you have multiplied by that and you see how big it is. So yeah. So, so yeah, could you imagine the staff that you’d have to have, um, I just saw this as a side note, so we just got hit with a foot of snow in our area. Will you, you didn’t get as much as we did. Brian’s over towards Philadelphia. I’m a middle of the state. We’ve got about a foot this time and uh, one of the companies is going to outsource 270 jobs to a call center in Tampa and somewhere else because they had so many snow problems and their business, cause they’re a nationwide company so they’re going to outsource those jobs because it’s affected them. They had so many people call off and shut down because the roads get shut down so much that they’re going to outsource those jobs. And so I think about running a customer service operation to that size. And can you imagine what, how you know, how difficult that must be,
Speaker 3: 11:42 especially if you’re in a, in the north and you have things preventing you from being able to work. It probably doesn’t make sense.
Stephen: 11:51 Let’s use another example. You and I are in a group with, um, Dan went worth and how many times has he gotten feet of snow up in Boston, right? What did they do in their business? Right. It just affects their business. Well, imagine if you had to have a customer service team in their handling these questions about shipping and all that kind of. Josh. So again, I’m with you. We don’t put enough value on what Amazon does for us. However, that doesn’t. Where I was going with the comment was it doesn’t allow you to walk away with wash your hands of it, I guess. Fair.
Speaker 3: 12:22 Yeah. I mean there are situations where, um, you know, maybe the person got a pair of shoes or a shirt where there’s something wrong with it. You really can’t expect Amazon to answer those questions. I mean, that’s really for you to figure out what happened and fix it for the customer
Stephen: 12:36 so it’s not a hundred percent and I think that’s the mistake where people make and that’s what I was going with it. So I think people just say, oh, I pay Amazon to handle that. Well, no, that’s not true. You, you pay them to handle the delivery issues and stuff like that, but the rest of it really is on you. Um, and do you have a process to deal with that now? You didn’t have a process back then and those would use credit, those changes, these, you know, subtle but real changes with the growth of your business too because there’s a cost. But would you say it’s the real reason you’ve had growth?
Speaker 3: 13:10 I had a totally different business back then when you were less interested me in 2015. I was still doing media at the time. I was doing clothing shoes, which is what I sell primarily now I’m back then though a few of the items or at least one of the items in my suspension was for missing parts, was part of the description of what was wrong and every now and then I would sell a DVD or video game where the disc wasn’t in the case and um, it just kinda happened here and there, um, you know, you sell enough of these items and every now and then a disk is in there. Um, so that was mentioned as part of the suspension at the time. What I wanted to do was try to prevent any issues that I decided to stop selling used items at that, at that point. Um, I kind of felt like I may not have been suspended if it weren’t for the used items. Um, so I pretty much just completely took over my use cds, dvds, video games, and moved them over to E-bay and said, you know what, I’m just going to new to new new items at this point.
Stephen: 14:17 That’s the difference for Your Business,
Speaker 3: 14:21 I think. I think, uh, I eliminated a lot of issues moving those items out,
Stephen: 14:26 know there might not be as profitable, but if your account shut down, profits me nothing right now because you don’t sell anything.
Speaker 3: 14:33 Yeah. You know, uh, the other thing is, um, now that I don’t do use media to make more money now, um, because it was a very tedious process of getting those items together. Um, I haven’t, I mean, I didn’t scale the way I guess I should’ve. I’ve found doing clothing shoes to be much more scalable and um, I do grocery and a few other things here and there.
Stephen: 14:57 So that’s a good point. So you brought your average selling price up, I’m assuming. Yeah, exactly. So you can sell a cd for $10 or you could sell a pair of shoes at $99 and yes, you might make on that cd, you might make $6 net profit, right? That’s not unrealistic, right? Amazon takes their piece and you know, you paid a dime for it. However, on that pair of shoes that you paid $40 for, you know, you’re gonna make 30 or 40 bucks. That’s a lot of cds that you have to sell, right? I can’t do that. Man
Speaker 3: 15:31 was five or six stores and people would come in and they’d sell a cds dvds for like ten cents to a quarter each. Um, if it was a good title, something with value on Amazon, we’d pay more for it. I mean, we, we try to pay fairly, um, and we get that item in. We’d have to log into our computer, we’d have to then clean it. So we have, I still have some disc cleaning machines here. Um, you get it cleaned off. We can get a refurbished. We get the case changed on it. There’d be too many hands touching this to make, you know, three, four, five, 10 bucks in this stuff. Whereas with the inventory that we buy now, since we do primarily retail arbitrage, I mean, you’re talking you by my guys, drop it off, it gets prepped to get sent into Amazon and then you make money on it. I’m big difference between the two. Business models are, I need to have a lot more money invested in inventory at this point than I did back then.
Stephen: 16:27 You brought up something that’s kind of current. A lot of people are under the belief that they should have a retail store. I’ve seen that. That in a warehouse, right? Those two things are real popular. Um, right now warehouse, especially with all these new fees coming, but, but you’ve run a couple of retail stores. Can you talk a little bit about what it takes to run a retail store? Because everybody’s attracted to it. That’ll allow me to get wholesale customers. Brian, if I have a hotel wholesale or my. If I have a retail store now I’m legit. I can get Lego and Lego is going to sell to me and then I’m going to put it here, but I’m really going to sell it on Amazon. Um, can you talk a little bit about what it takes to run a retail store? Especially in the city? I mean, in, it’s not cheap there, right?
Speaker 3: 17:07 It was actually a chamber where I was in the city. Then I’m being. I actually do have a storefront now for something totally different, uh, which, uh, I, it, you know, we, uh, we’re definitely talking about how they were going to talk about it. I’m dying to hear about it. That’s another interview. We’ll do that in the future. But I’m a, I’m not a big fan of stores. Um, at least my model at the time doing used inventory was, you know, I buy low and sell for a little more if it was really valuable and sell it on Amazon. I’m for the people that are trying to get a shortcut into wholesale and that are trying to, you know, establish accounts. Um, and then, you know, maybe they’re planning on buying a particular brand and maybe they’ll sell it in the store, but maybe most of it’s really going to go on Amazon.
Speaker 3: 17:57 I don’t know if I’d recommend that unless they have an agreement with the sales rep or with the company that they can do that. Um, but when it comes to an actual storefront, unless you’re in a really good location, unless you have a really good way of getting people in there. Um, I mean typically it’s not a, I can’t speak for others, but I kind of think it’s a waste of time compared to just, you know, find the stuff wholesale, selling it on Amazon or [inaudible] or doing online arbitrage. I’m storefronts are allowed to work. You need employees. Uh, there are a lot of headaches when it comes to dealing with people. So I’m not a huge fan of stores.
Stephen: 18:36 Well, he, he, here’s what I would say to you towards the rest had a very good store front. So they thought and now they’re going into business. I think about all the storefronts that have closed retail is very difficult. It’s like creating a website and then saying, OK, Brian, I’m building this website is going to be unbelievable. I’m going to sell, I’m going to put an Amazon business. OK, go ahead, build the website and you’re going to sell shoes. Good. Nobody’s going to see it. Nobody’s coming, right? You have to build traffic. You had to get that audience there. Well, retail stores no different. You know, think about the investment that toys r us or my case bond on one of the companies closing here, um, how much money they invested, figuring out that location. They got teams, they’ve got experts, marketing people that have figured out this is the optimal place for the optimal price to put a store in and they failed. And so steve is going to just decide, hey, I see a good place for a store and I’m going to go put one up and it’s going to be successful magically. I don’t think so.
Speaker 3: 19:29 You really need to have a niche or an angle for doing it. Like in my case it was kind of like a game stop or Fye or whatever, you know, by selling trade types, three and a half price books. Um, I mean our angle was we’d buy low enough that I’d either resell this stuff or a little bit of a profit in store or if the price was high enough, um, I’d resell on Amazon. Uh, and I could see like if you’re going to run maybe, um, you know, a store where you’re buying things at a very small percentage of what it’s going for, like, um,
Stephen: 20:06 gamestops that way. Right. I mean they don’t pay very much for when they are buying games from generally.
Speaker 3: 20:11 Yeah, they, yeah, they’re, they’re pretty lousy when it comes to what they’d pay a, I was going to bring up a plato’s closet, which um, uh, we have a few in my area and they pretty much pay. Um, you know what, I forget the number. I want to say they pay 10 percent of the MSRP and they sell for 30 percent. Um, that’s a good, that’s a good angle to have. Um, you’re pretty much, let’s see, you have someone coming in with a $50 pair of pants so they’re paying $5 for it and selling it for $15. Um, if your store that deals with maybe liquidations, um, but if you’re a store that sells the same, you know, inventory is like a walmart or a target, unless you’d like a specialty store. I just don’t really see why you’d start something and try to compete
Stephen: 20:55 herself a job and now the job has to be open. Well look, look, we just got shut down for a couple of days with the snowstorm. What happens to all those retailers? I mean, I, my heart bleeds for him because, you know, they know customers. We actually went to get a coffee and Mcdonald’s was closed. I mean, now imagine that Mcdonald’s was closed of all places you would never expect them to close and what they did. Well, how much money in sales is that? And yet there are mortgaging their lease and all that equipment still has to get paid for. Right? And uh, that’s a, that’s a, those are devastating things that happen and end or you want. Then you have employees. And let’s talk about employees now. I know you still have some now, but, but going backwards when you’re running a retail store versus what it takes. Um, our employees from a warehouse different than the are for retail.
Speaker 3: 21:41 So all of my employees from the stores actually still work with me. That’s very cool. It’s basically friends and friends of friends, so, um, but I’m not a huge difference. I mean, you know, I have tasks set up for them and they have to follow them, um, but running a store has different challenges to it which is dealing with people. Whereas with my current business, they’re pretty much just dealing with me. Um, before you had a different dynamic when you had actual people coming into your store and just different situations. I mean we had situations where someone would steal from us and they’d have to get me on the phone and say, hey look, you know, this person is stealing and what do we do? We kick them out. Do we call the police? Like what exactly do we do?
Stephen: 22:31 So that just doesn’t happen anymore. So yeah, customers have you had, that would be a big thing. Looking back, do you regret those times? I mean, can you build a uh, have they helped you get to where you are? You know, those challenges suspended, running the stores, shutting the stores down, painful as that is. Fortunately you kept the people and that, that obviously was intentional on your part. That’s a very cool thing for you to do. But do you credit that learning or do you see that as failure?
Speaker 3: 23:05 I kind of saw different late actually from a scanner monkey and late 2013 I saw a lot of people were having success with retail arbitrage and um, I just thought given where we were at the time that it made more sense to go in a different direction, um, and experiment and like 2014 was a partial disaster cause that was when I went from one store to two at that point and I lost a lot of money trying to get that second store going and trying to basically we knew we kind of needed a warehouse space at that point. So we took our first store and try to turn it into our prep area. Um, so I mean, we were at a certain point and knew that we needed to expand things and take things in a different direction. And, uh, you know, when you’re feeling your way around some times, sometimes I screw up, so 2014 wasn’t the best year. Uh, but from there on out, um, once we close the first store and got into a warehouse and I’m kind of a, I gave, you know, my guys different things to do and we kind of, you know, got on the right path at that point.
Stephen: 24:08 One of the other things that I remember when we read the scan power conference a couple years ago, I remember you showing me your numbers and your stats and your reports in these excel sheets and the way you verify that. I sat there like, honest to God, I’m like, what? This guy just attend mit because you were, you were showing me stuff and I’m an account and I’ve been doing this stuff for a million years. You’re showing me stuff that I’m like, oh my God. He knows his numbers better than anybody I’ve met. He knew every little detail. You had everything documented. What would you. Who got you on that path? What, what led you there? And would it help others to go there too?
Speaker 3: 24:47 I absolutely love my spreadsheets. You do every day? Yeah. I’m, I’m, I’m at least in Google sheets. Uh, you know, adjusting something in there. Um, you know, it really helped me actually in 2014 was anthill of accounting. We will go through and being an accountant,
Stephen: 25:05 we were just together in Vegas a couple weeks ago to when I met her, she bought a, someone on her team and Oh my God, they’re meant for each other. She’s got that heart of gold.
Speaker 3: 25:15 Yeah, she’s great. She actually does my bookkeeping at this point. I love it. I actually approached her in 2014 and I just said, hey, look, like I don’t know what I’m, I’m, I’m doing things wrong right now. I said I was profitable and things are definitely in the wrong direction at this point. And um, she just, uh, you know, she said, look, you know, let’s get, you know, a perfect inventory count and everything in your stores. And she really got me, uh, you know, I started to get everything set up in spreadsheets and um, you know, she said I needed to have a better accounting system in place. Um, so once I started to, you know, get all my numbers in the right place and seeing what was going on with the business, um, that really set me in the right on the right path.
Stephen: 26:00 So she’s really become a part of your team.
Speaker 3: 26:04 Uh, yeah, I mean, um, you know, with her, we’ll get on skype sometimes and just kind of, you know, talk about the numbers. Um, so it’s been very helpful having someone there that you know, that understands the business and can point out, you know, what I should be doing to improve things,
Stephen: 26:23 her understand e-commerce because that’s one of the biggest challenge when you talk to people who are not sellers, they have no clue. They think retail. And I’m like, Nah, it’s not quite retail because there’s other things, right? Um, you sort of manufacturing in a weird way, in an odd way and you’re looking at you like what? And then, um, you have all these moving pieces and her service is only a couple of hundred dollars a month. Most people would say, well, Brian, you know, how can you afford it? Could you look back, I mean, would you be a successful, you know, I’m trying to pull out the keys to your success and I know there’s 100 reasons that you’re successful, not just one, but would you give credit for, uh, putting the money out there and bringing somebody into your team like that for a, a big part of your success?
Speaker 3: 27:09 She wasn’t doing my bookkeeping it, uh, she was nice enough to really get on and talk and say, hey look, you know, this is what you need to do. Um, but, uh, I mean, having her as a bookkeeper now has definitely been very helpful as well. Um, because I mean, you know, back in my Ebay days and my earlier Amazon days, I did not have a good accounting system in place. Um, so I think that’s a very important part of being in business is having a good system.
Stephen: 27:35 So what’d you do with different? Would you, knowing what you know today, right from day one, would you put the strong accounting system in place?
Speaker 3: 27:41 Of course. Yeah. I mean, if you’re, if you’re going to be in business, you have to.
Stephen: 27:45 I hope people hear that, right? So invest. I mean, it’s not a cost of doing business, it’s, you know, quite frankly, you’re getting that much talent for a couple hundred dollars a month. That’s a deal. Right? I mean, especially because she’s experienced. Right? I mean think about that, right? You know, to bring in experienced, you know, um, if you were bringing in a, I’m not a coach, what’s the right term? I want to use a, a, a consultant, right? How much would they charge? Right. And he or she’s consulting you every single month for a small fee. To me it’s a very worthwhile. We’re given a lot of accolades. Margolis and in a hill, you know, but they deserve it. You know, and I, I agree with you that she’s, she took the Gary v approach help everybody and then she earns the right to ask someday. Right. And more than likely you probably approached her, hey, would you help me love it? OK, so, so we’re going to credit that with getting your business really going, changing your inventory mix, which I think is a very strong getaway from the things that are real touchy and sketchy. Right? I mean, so is that now your notion if there’s a chance that there’s a. If you get an inkling that that could be a sketchy item or sketchy line, you just completely run the other way.
Speaker 3: 28:58 For the most part, I mean the riskiest items you can be selling when it comes to retail arb, since I’m doing most of the off price stores. So for people that don’t know, I get most of my inventory from Marshall’s, Tj Maxx, Ross, Burlington coat factory, and these stores, they don’t actually put the use of the item you’re buying on the receipt. So you’re dealing with a store code or store ID number. And so it’s a little bit dicier than you know most stores out there.
Stephen: 29:32 But you can mitigate the risk by doing certain things. And that’s part of a year because you have a group that you guys help people source at those and we, and I’m gonna let you pitch it, but you can mitigate some of that by techniques, right? There are some things you can do by, you know, with receipts and photos and stuff like that. Right? There are ways to mitigate somewhat
Speaker 3: 29:54 in late 2015 I started taking pictures. So what we do is we take a picture of the actual item that we bought and then we take a picture a well the picture has the upc on it and then it also has
Stephen: 30:07 Marshall’s UPC, whatever they’re showing.
Speaker 3: 30:09 It has Marshall’s, um, Marshall’s store id and then the actual use of the item. Um, and that way you can backtrack your item. Um, there are other ways to backtrack. I tell everyone that you should put the date that you bought the item in the skill. So for instance, if you bought that item on March 20 second 2018, he bought it from Marshall’s, I would put [inaudible] zero 3:20 to Mars and then I’ll put a sequential number in there. And then I’ll put the price in there, um, by doing that, you at the very least can backtrack to the date that you bought the item and if you’ve taken pictures, um, you can also get the store idea that way and find your way back to your receipt that way.
Stephen: 30:49 That is extra work. I’m that old Brian Fair.
Speaker 3: 30:54 Uh, yeah. I mean I’m in 2015. I wasn’t doing anything like that. Um, so yeah.
Stephen: 31:02 Is it, you know, just thinking about this, is that because, you know, I, should I go back to the days when we would just buy everything and send everything in. You know, you just got in anything you’d got you just send it in. It didn’t really matter at that point. And so you built that mode, just keep feeding the beast at all costs. Just more inventory. Brian Wright, just faster, faster, faster. Um, and so you take shortcuts and they weren’t short cuts at the time. So I don’t want to sound like this is wrong. They just weren’t necessary at the time. Now they’re necessary. And so to go back and add them into your processes when you’ve been in that other mode is very, very difficult. And I think that’s why a lot of people get stuck and don’t make it past this point, but Brian’s here to say that if you do pull back, right, because you, you injected a lot of hours into your business in non-value added work, taking pictures of receipts and doing all that crap and putting those extra skews in and get more stronger books and all that stuff. You don’t see a return like, you know, you don’t see a dollar return immediately on that. These are long-term investments into really growing a real business. Is that right?
Speaker 3: 32:06 When it comes to taking pictures? Uh, it’s, it’s kind of like insurance you never want to use. I mean, you know, you don’t wanna you don’t want to keep your cost to a minimum. And obviously your labor goes up when you have people taking pictures, but at the same time, um, I don’t think anyone would disagree that it’s basically insurance and it’s something that you want to do if you’re going to source these stores.
Stephen: 32:30 So, so go ahead and pitch your course. So you guys have done a course and you have a group, um, that will help people source it, those stores, right? You still have that group.
Speaker 3: 32:38 Yeah. Yeah. So
Stephen: 32:41 Elizabeth, I think last time I was on the podcast, I don’t know if we had had those groups yet. I’m not sure. Elizabeth Thompson, I, uh, we were apart of a group called deals done, right? It was one of Chris Green’s a Bolo groups back then, um, that actually closed in 2015 and Elizabeth and I had some demand from people that were in it and uh, they were asking if there was gonna be another group similar to it. So Elizabeth and I who were doing off price stores back then, we decided to start a Marshall’s Tj maxx group and a Ross Burlington coat factory group. Um, so yeah, we’ve, uh, we’ve been lucky enough that it’s been, um, over two and a half years now. And Yeah. Yeah. It says something. If you’ve been able to keep a group going for two and a half years, do you still have customers that were. Some of your initial customers, yeah, we still have a handful of people from something. I mean, nobody’s sticking around. They’re not going to give you their hard-earned money on that. She brought them results and consistency. So what’s the name of the group? Brian?
Speaker 3: 33:41 Uh, this is our hay sourcing secrets for retail arbitrage, Ra sourcing secrets, a Tj Maxx Marshall’s. And then we have the Ross Burlington group. I’ll actually get you that link and put it on the webpage. So thanks for letting me pitch. Actually
Stephen: 33:55 it. Because again, I look for people. I always tell people that there were so many ways and there’s so many groups, there are so many embers, like, Oh, who’s the best? Who’s the best wholesale? Who’s the best? Hey look, they’re the best for me. That might not mean they’re the best for you or that might mean they’re better for you than they are for me. You really got to connect with people and once you find somebody that you can connect with, um, that you, that you really, you feel kindred spirits. I like to use that phrase. I’m, that’s what you do. You know, because I think you, you know, think about it, you and I all know, successful raw wholesale, private label merck have named something else, mattress, a real estate. They’re all, we, we know people that are successful and all those things, right?
Stephen: 34:38 What makes them, does that mean that you’re going to be Brian? Maybe not, you know, maybe that’s not your lane. Right? And so you’ve got to figure out who you connect with and then learn from it. It’s kind of like church shopping when you go into a new community and figuring out how you fit in with a congregation, you know. So that’s why I like people to pitch their stuff and if they connect with you, that’s awesome. Um, and I don’t benefit in any way other than you having success, um, you as the person who’s using their services. To me, that’s awesome. And I love to be part of that. So.
Speaker 3: 35:06 All right, very cool. So the past couple years has been from having these groups also cause it forces you to be better than what you were before that. That’s powerful
Stephen: 35:17 right there, what you’re saying. That’s powerful. So it forces you to have a sharp Nis about you. Tell me, tell me a little more.
Speaker 3: 35:26 So for instance, well, when we started, we had, you know, we had around 50 members and you know, members will ask questions to say, how do I do this, how do I do that? And it forces us, uh, Elizabeth and I to pretty much come up with different processes and um, it made us reflect on our business differently. Things that maybe we hadn’t thought of before. Um, it forced us to actually come up and address what people were asking about. Um, and uh, so we have Perry Kaufman and Kim Kaufman who are amazing at the time. They were asking some, you know, some very sophisticated questions and it forced me to be a better person. Um, and we eventually added them on, like I said, as, as admins. Uh, but if you have the right people in your group and they’re going to bring you to the next level so that we like to think that our group has a, we have a good group of people that will help you transcend to the next level.
Stephen: 36:22 What I also think happens is you’re starting somebody out who’s pretty sharp at a pretty high level. They’re going to challenge, they’re going to find better ways they’re going to make my bed is a lot of people contribute to that group ride. Even the people that are paying for the services contributed. So, hey, I figured out a different way and you’re all like, whoa. Very cool. Right? And so, uh, uh, in doe says, iron sharpens iron. Steel, iron sharpens iron.
Speaker 3: 36:45 Totally agree. Yeah. And I mean, uh, it’s, I mean, it’s rewarding seeing people come into that maybe they weren’t doing much or weren’t doing much off price and uh, before you know it, they start posting their numbers after a few months or after a year and you’re just like, wow. Like that’s incredible that, you know, this person was able to come in here and get to that level in such a short period of time.
Stephen: 37:07 That brings up a thought. I’m thinking about this as well because we were talking earlier about your experience in retail, right? You’re one of the few that have had a lot of experience with retail and running the good and the bad. Right. So you saw him, you were responsible, so you weren’t only a store manager, you owned it, so you had to deal with all that. What led you to get into the mattress business? Um, and do you think your experience of being a retailer has given you an advantage
Speaker 3: 37:31 when it comes to the mattress thing as a disclaimer to everyone? I just got into it recently so I can’t really get too into it or you know, how you don’t have to. I’m just interested in why. I mean, I get it
Stephen: 37:43 that you’re trying to diversify and you’re trying. I mean, I’m assuming I’m putting words in your mouth, but I assume you’re trying to diversify and not have all your eggs in one basket. Right? That’s
Speaker 3: 37:53 early 2017. I started noticing a few different Amazon sellers here and they were talking about how they’re selling mattresses now and it sounded intriguing to me. Um, and uh, I finally had a talk with someone that they gave me an idea of how much they had invested in inventory and what kind of sales or what kind of profit they can make. And I said, wow, this is pretty impressive when it comes down to, um, I have a lot more money invested in Amazon and given I figured given how much they had invested in how much they were making, I said, man, like this is a very good way of hedging my bet. So if Amazon, if I were to get banned in one day, which I would hope that wouldn’t happen. I think a lot of people would be affected if a Amazon suddenly changed the rules one day.
Speaker 3: 38:37 But, um, you know, 2016 was kind of a late 2016, was kind of a, you know, scary year because we started hearing rumors that um, you know, retail receipts weren’t going to be accepted anymore when you got different performance certifications. It sounded like Amazon was trying to weed out the Ra crowd. Um, so I always kind of had it in the back of my head like, Hey, this could end at some point. So I figured it made sense to diversify and look into it. Um, so like I said, I’m still early on. I’m still, I’m just feeling my way around right now. Um, I do see some, uh, I definitely see some potential, so we’ll leave it at that.
Stephen: 39:19 I’m going to get into that model. Um, because quite frankly, a lot of it you can’t talk about it and I’m OK with that. I’m just intrigued. Do you feel like your experience of being a retailer, did that give you an advantage? Do you feel like, did it take away the fear because you kind of knew what it’s like to deal with customers? I mean those are the kinds of things that I was going for.
Speaker 3: 39:37 I think. So I’m having a retail store and actually paying a monthly rent and utilities and then dealing with people. I knew this was going to be a similar situation. Uh, so I was in Philadelphia when I had my stores before, um, in the suburbs. Now I’m in Bucks County, uh, so, you know, I kind of knew it’s probably a little bit of a different class. I’m selling a higher end item. I’m not so much dealing with, uh, I mean before with a buy, sell and trade. I mean, I was dealing with a lot of people that were um, you know, just trying to sell whatever they could to get some quick money so I’m not really dealing with that crowd anymore.
Stephen: 40:13 And so this, uh, but there are similarities. Well, I mean, would that dissuade some, should somebody be dissuaded from doing that and going that direction if they don’t have that experience, probably.
Speaker 3: 40:25 Um, you know, the tough thing is you have to be halfway decent at sales if you do have a storefront and you need to be able to persuade people to buy things. Um, so besides being able to actually run the store, know your numbers, um, you do have an extra skill set that you need and included on top of it early. So you need someone hired that, you know, has that skill set.
Stephen: 40:44 If you have someone who’s hired, now you’re giving up control and then you also then give a potential profit. So that minimizes the potential. But all in all, have you been pleased with the results so far?
Speaker 3: 40:56 Like I said, I just started so I can’t go out. I’ll let you know in a future interview directionally you feel like you’re going the right way about that. Give me that. You really can’t compete with Amazon. Amazon is like the best opportunity out there right now with Amazon. You have to have a lot of money invested to really see results.
Stephen: 41:16 OK. And so what you’re saying is the investment you make there versus the result you’re seeing is, is different, but yet you’re seeing, um, something so. All right, very cool. Again, I think it’s so smart that you are to vesting and does it, do you feel like it keeps you interested? Me because it’s gotta be pretty cool. I mean it’s just gotta be new. It’s exciting. Shiny. That’s gotta be pretty cool.
Speaker 3: 41:41 Learning a totally new skill. It’s, it’s, it’s a new challenge. Um, so we’ll see where it goes.
Stephen: 41:49 Well, how do you feel, I mean, how do you manage a, you have a new baby, how do you manage that, adding another business to an already complicated business life? How do you, how do you manage that? Is the reason that you chose this kind of business is because it allows you to. Some of that.
Speaker 3: 42:05 My wife is exactly thrilled with all the time I’m spending right now. But uh, yeah, I mean, um, you know, the good thing with Amazon is I don’t necessarily need to be working all the time. I’m like, it’s possible for me to take 12 to 24 hours off, if not more than that sometimes with Amazon other than if I can stay on top of my messages. Most of my business is somewhat on autopilot in that I have people that shop, I have people that do the prep and the shipping. Um, so I can step away at times. Um, the mattress thing, I mean, yeah, I kind of bought myself a job and I do have to point out that uh, uh, one of my best friends is basically running it with me. Um, he’s one of my shoppers also, so we’re just kind of trying to make that business work and you know, have a hedge in case Amazon warrants workout
Stephen: 43:00 cause I’ve seen some other people do in real estate and different things. I just think it’s smart that you have something else and again, if it can keep you interested and if you build that lifestyle, right, your wife’s going to force you to build that lifestyle business no matter what. Right? So to me that’s not an unhealthy thing because if, if you’re forced to make this work around your schedule and that means you have to adjust your schedule to keep the quality of life that’s a healthier life. Looking back, looking way back, which is more stressful, the business you have today or running your retail stores in the buy, sell, trade,
Speaker 3: 43:33 the buy, sell trade was a different kind of stress. I mean, we didn’t make as much money back then. So, you know, I’m, I’m a lot more pleased with where we are now. Um, there’s a stress though with Amazon that I think the reason that I do, I’m liking the mattress business so far is you don’t have, you don’t have Amazon on top of, with the mattress is uh, one of the selling points, you know, from my friend that pointed this out to me. He said he doesn’t have to worry about being suspended or getting banned. Um, it’s his own business with Amazon. Like I said, you know, I have a lot of money invested and if I, if I get shut down one day, that’s a lot of inventory to have to have sent back. So I don’t sleep at night, you know, knowing that Amazon at one point I could change and it’s like you said sometimes the rules one day.
Stephen: 44:25 Yeah, they’re going to change. And to be fair, you know, there’s four warehouses in my town of Amazon’s, they’re full, I mean, so they’re gonna change, hence the reason they’re raising prices so much because they have no choice, right? They have to figure this out. And the only way that seems to be working is to penalize those of us who keep sending stuff in. Right. And what did I read? There were 300,000 new sellers added last year. I think I read that somewhere. And it’s like whoa. That’s a lot of new sellers to make it. Yeah. You know, and I think that, you know, everybody, it’s easy to get started. It’s not easy to continue. And here’s Brian here to tell you that, you know, on teen years later and going through suspension is businesses that much stronger. I love the fact that you’ve, you’ve, you’ve identified a bunch of different points that you’ve tweaked. I don’t want to say you fixed, you adjust it because I don’t think they were broken. They weren’t broken at the time. They just weren’t complete. Or they change the rules and they change the method and you adapted and hence your business is doing. What are you going to have your best year yet?
Speaker 3: 45:28 Two thousand 17 was my best year, 2018. I mean, I don’t really plan to make many changes at the same time. Some people look to, you know, double their business each year or you know, really adds so much, uh, in sales, um, 2017. I really wasn’t that focused on growing that much. I’m kind of a, you know, slow and steady wins the race. I’d rather have a little bit of money in the bank and not have to worry about, you know, Amazon loans and credit cards and all that. Um, and I plan to do the same thing in 2018, uh, because I’m, I’m comfortable with where things are at. Um, we’re all making some money around here. Uh, but I don’t wanna I don’t wanna, you know, have all this money invested in and have something changed one day and regret, um, you know, that I don’t have money to pivot. So, so I tried to have, you know, some money in the bank and uh, not have too much invested that I can’t survive if things change.
Stephen: 46:26 So it’s basically steady as it goes. Keep your head down doing the work. That’s really the focus this year.
Speaker 3: 46:32 Yeah. And I don’t blame anyone that, you know, takes out loans or invest money like I, I like the coffins, for instance, they’re going to blow past me soon. And I mean, when they first started in the groups, or at least I know 2016, um, I know I was doing, you know, I was doing better in 2017. I think I might have edge them out and they’re going to blow past me in 18. And I give them credit for that. I mean, if, if they’re willing to take that risk, uh, you know, they deserve to make the money.
Stephen: 47:03 But here’s the other thing to remember, there’s two of them. There’s one of Brian and, you know, uh, don’t downplay, she’s as good as he is and he is really good. Um, you know, I mean, is that fair? I mean, he’s really good and she’s as good as he is. And so, you know, you don’t want to downplay that. I mean, I, there is something to be said for that. I mean, there is, when there were two people working, it’s not one plus one equals two. It’s three or four, and especially with somebody like she’s so she’d probably five or six, so it’s incredibly talented, very talented, and you could tell by the questions he asked and just the, the, the genuine real. Um, it’s very inspiring. I mean, it really is inspiring. Great people in general. So I want to close. I’m sitting here thinking about people who are coming in this business or looking at their business.
Stephen: 47:50 Maybe they didn’t have the best year 2017, wasn’t there a year? Maybe they came off a suspension. Maybe they are looking down at [inaudible], right? What, what’s your advice for people because you’ve been there. You’ve come back. That was years ago. You’re now stronger. You just said last year was your best year ever. And yet you put all these controls in place, all these extra steps, all this extra costs and you still had your best year yet. Um, and now you’re controlling it. That’s what I heard with [inaudible]. You’re controlling your growth. You’re not looking for growth at all costs. You’re saying, Eh, I want to slow and steady. I want to keep things going on. What’s your advice for people that are staring down these other things? W, w what, what can we do to get them on this path?
Speaker 3: 48:35 You know, how much they can spend each month, how much they want to spend, how much debt they’re willing to take on. Um, know I ran things on credit cards at one point. Um, you have to know what your comfort levels are. Um, some people don’t mind taking out that, you know, 100,000 or $500,000 loan, whereas me on the other hand, I didn’t really feel comfortable, you know, taking out. I had a, I think I had a $60,000 Amazon loan for a very short period of time and I paid it off right away because they said, you know what, I don’t really want to have this debt. Um, but knowing your numbers, you have to have an idea of what kind of profit you have coming in and you have to have an idea of what kind of profit you’re striving for. Um, for me personally, like I said, I was satisfied with the profit that I had coming in at least in 2017 and now in 2018. So if you want to make a lot more money, you might have to borrow money to get there. If you’re happy with where things are, you know, you might not necessarily need to push yourself as hard and by so much.
Stephen: 49:40 But I heard you say two things that really struck me. Build a plan which is that budget and then measure yourself against that plan. That’s really important. And so you would say Anna helps you do that, right? She’s the one that produces your financial statements. Yeah. And so by building that plan and then measuring yourself against it, to me that’s powerful stuff because you know, then you can be disappointed with the results will then you should have built a better budget, right? You got to put growth plants at. What’s it gonna take to get from this level. You start achieving your budget. That means what you’re doing is working. Now you want to grow, OK, what steps are you going to take? But you can’t know it until you know what your goals are going. So very powerful. Dude, if somebody has a follow-up question, best way to get in touch with facebook messenger, facebook messenger, you’re going to send me the link for the sourcing secrets if you’re interested.
Stephen: 50:28 There’s two different groups. One is specific to a Marshall’s and Tj you said, and then the other one is specific to Ross and Burlington and a lot of a lot. A lot of inventory in those stores. So. OK Dude, I really appreciate it. I’m really, I’m so encouraged to see where you’ve come from and if you want to go back, you got to go back and listen to episode number 13. If you’ve not heard Brian’s story selling cds out of crates at 15 years old. Real true, hustling the streets of Philadelphia and to now running this multimillion dollar business. It’s very. It’s a very encouraging story, Brian, but it’s so encouraging to me that I can hear it in your voice. How much less pressure because you know what you’re doing. You have confidence in what you’re doing and you can replicate it. I love it.
Stephen: 51:16 Very, very powerful. Thank you so much. How exciting is that? I mean phenomenal. He is just killing it and he’s killing it in such a good way because it’s just, again, I, I’m a little gun-shy on it because it’s just so neat to see somebody so cool. Do so well and it’s so well deserved. The good people do when right not always lose. And here’s a good example, but there are some pro tips in there. Remember, you know, he gave some real advice. He invested where most of us don’t want to invest, right? Do you have a bookkeeper doing your books? Right? Are you getting monthly financial statements? Did you, um, are you taking the extra steps to kind of that insurance policy on your account? Where are the areas that you’re at risk? How do you mitigate those? That’s really why were you want to reach out to.
Stephen: 52:02 And he mentioned Scott, and my goal is to reach out to him. If you are in those areas and you want to mitigate your risk, I mean charges, but guess what Brian would tell you. It’s money well spent and a hill, very inexpensive bookkeeper and I just met somebody on her team in Vegas. Unbelievable pair, I mean just an unbelievable parent who really can help coach you in ways because she’s a seller. Again, she understands that and so if you’re interested in the resourcing secrets, reach out to those guys. I have the link on the episode and that that’s a great group if that’s something you’re interested in and try it and see if you fit. I think it’s a really great tool. E commerce momentum, [inaudible], e-commerce, momentum [inaudible]. Take care.
Speaker 2: 52:43 Thanks for listening to the e-commerce momentum podcast. All the links mentioned today can be email@example.com. Under this episode number, please remember to subscribe and like us on itunes. Yeah.