I have watched Dean transform or as he says- retool his business over the last few years. He can show you can reflect, reset and set out on the right path. Oh, make sure it is the path for you. (not someone else’s)
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 I’m excited to talk about my sponsors today, Gaye Lisbey’s million dollar arbitrage group. Amazing, amazing group. This is a teacher. This is Gaye, she was a teacher. She is a teacher. Still. You need to learn. This is the type of environment you want to be in because she’s going to help you understand why, and I think that’s the hardest part of this business is understanding why. Why is the red one popular when the green one isn’t? Well, there’s usually a reason and what gay does is probably parse that better than anybody and she’ll explain the reasons for those things. I think that’s really powerful. Yes, she puts out a list. You’re going to get a good use of that list if you get in the group. Now here’s the deal. The group isn’t always open, right? So you get on the waiting list and you can join the waiting list through my link.
Stephen: 00:00:46 I’m doesn’t cost anything to get on a waiting list and if you like her service, which I find that most people do that, that’s why there’s not so many openings. Um, you’ll be with her for a long time. And so it’s amazing freedom.com. She’s part of Andy Slam. It’s group amazing freedom.com. Forward slash momentum. And you’re going to get in the waiting list. That’s all I can get you on right now. You can use my name and see if that gets you anywhere. But what I like about in the uh, what I like about what they teach in that group or the things that are going on, you know, the current things. I’ve seen a lot of stuff going on about stores going out of business. Well here’s where an opportunity is, here’s why you want to do this. Hey, be cautious about this, you know, with toys r US coming out, you’ve got to think about this and that’s the learning that you need to do.
Stephen: 00:01:30 And Gay is better than anybody else I’ve seen. So I’m amazing. Freedom Dot com. Forward slash momentum will get you to the waiting list. Then hopefully we can get you in the group and then you’re going to see me in there. And uh, we can chat anytime you’re ready. Karen lockers. Group solutions, the number for ecommerce solutions, four ecommerce.com, forward slash momentum. It’s going to save you 50 bucks. Karen’s our account manager. We recommend her to everyone because she’s done so well for us. I mean that’s quite frankly the reason we’ve been paying her for last few years, but she’s become an important part of our team. Her and her team are so involved in our account. I just see the emails coming back and forth, hey, we did this for you. I just saw two listings today. I’m like, wait a second. Why did they show up?
Stephen: 00:02:09 I didn’t put any listings up. They got a. They got a set off to the side by Amazon and they reactivate them for me. You know what I mean? That’s the stuff that just happens when you have a strong team and I can’t recommend Karen enough if you use my code. Momentum. Karen pays me. I don’t want to hide that. Of course we all know that, but you’re going to save $50 and it’s a great opportunity to really, really build out your team with somebody you can trust. It’s why I recommend them. So solutions four ecommerce solutions, the number four e-commerce dot com, forward slash momentum. It’s going to save you $50. Oh, and by the way, she’s going to do an inventory health report. Why is that important? Well, guess what fees are going up. Is your inventory health number declining like ours is?
Stephen: 00:02:57 Well, here’s why and what they can do. What I like is I get a spreadsheet from them and it says, Hey, here’s a bunch of inventory. Here’s what we recommend. And I’m like, Yup, refund. I mean delete a return to us, blah blah blah, whatever it is and it’s or destroy and it just happens. That’s what I like. The other thing that I have Karen helped me with a lot is creating new listings. You know, we do a lot of the research ourselves. We upload our images and then boom, magically the listing goes live and I don’t have to worry about it. Those are the services that Karen offers. CanNot recommend her enough solutions. Four ecommerce.com forward slash momentum. Save 50 bucks. Use My code. You save $50 a month every single month and it’s a great service. Plus you get that free inventory health report. I think it’s a really powerful way, so I can’t.
Stephen: 00:03:45 I’m so excited how many people have been joining her because I see it and I’m excited because the messages I get from people saying, hey, this is great. I finally feel like I can focus on something else because Karen and her team are watching this for me and you know, I highly recommend her. Next up is scale a lambs and scope and we’ll set it wrong. It’s, it’s amazing. I mean it really is amazing when you sit back and think about, hey, I want to get this product up and it similar to this product and that’s what that product does well. Well therefore, if that product as well, they have the right keywords, they’ve chosen things correctly, so guess what? You scope and you could see all that stuff and that’s what the most powerful thing in the world is to copy somebody who’s done it right.
Stephen: 00:04:28 That’s what you want to. You want to take advantage of that, right? I mean, it’s fair to see and so therefore you can take and apply it to your listing and immediately get that same benefit. That’s what scope does for me. Sellerlabs.com, forward slash momentum. It’s going to save you $50 on the service. Oh, by the way, it’s free to try, so sign up, try it and say, oh, this is how it’s done. Boom, and then you’re going to. The light’s going to go on and you’re going to be like, man, I can get my products out there. I just can’t wait. Can’t wait. So we’re labs.com forward slash momentum. The other day I bought another domain. Yes, I bought another domain. It’s almost like A. I’m admitting guilt, but it’s because I had an idea and it was something that was a pretty good idea I think is going to go pretty far.
Stephen: 00:05:18 And so what do I do? I go to try Godaddy.com forward slash momentum and save 30 percent. So domains aren’t very expensive. You get a few services, it adds up a little bit and I usually buy three years. I usually by privacy, by the way, I recommend that to buy that, you know, it’s not that much money, but when you can save 30 percent it makes it that much sweeter and it makes it easier when you’re buying domains and especially if you buy a bunch of domains. I am a domain collector and so I do tend to do that, but that 30 percent makes it a lot easier and I use go daddy because what I like is I can pop in and address I’m thinking and it’ll say nope, nope, could try this version or try this extension and then boom, there it is.
Stephen: 00:05:58 Hey, you better hurry before it goes away and the right, you know, and so try Godaddy.com, forward slash momentum save 30 percent. Also want to mention about grasshopper. Who was that? Just talking to somebody the other day and they were like, Oh yeah, use this company called grasshopper. I’m like, Dude, did you buy it through my link and save 30 percent? Hello? No, they missed that. So save 30 percent. It’s try grasshopper.com. Forward slash momentum. No surprise there, but you’re going to save 30 percent and what the real cool part about that is they’re using it for their private label business and it gives them virtually a second phone on their current phone without having to get another number. They can make up a vanity number. They don’t have to go and do all the grief and signed loan contracts. Pretty easy stuff, and so if you’re creating a brand that you want to identify, you want to look professional, you want to look like a real company. Grasshopper is a great tool. It’s an app you put on your existing phone and boom, you now have a customer service to. You now have a sales department. You’d have a manufacturing division. You could forward it to somebody else. You can have it go to different voicemails, different departments, and it’s all included. So try grasshopper.com, forward slash momentum. Save 30 percent.
Cool voice guy: 00:07:13 Welcome to the ECOMMERCE moment, didn’t gas, will we focus on the people, the products, and the process of ecommerce selling today. Here’s your host, Steven Peterson.
Stephen: 00:07:27 Welcome back to the ECOMMERCE momentum podcast. This is episode 313. Dean Kagan. I love talking with Dean. I love watching Dean’s transformation. I’m fortunate enough to kind of have some inside track on dean in his life and Amazon I’ve, but watching them for several years. We’ve known each other for several years now, and I finally was able to get them on a, in an interview. I don’t think he would have done it three years ago. Um, and I think that’s fair. I think that’s cool because it wasn’t in that place and it’s not a place of success that I’m always looking for it. I liked the story. As you guys know, I love a story and Dean has a good story and his story is different today than when it was. Let’s get into the episode.
Stephen: 00:08:13 All right. Welcome back to the ECOMMERCE momentum podcast. Very excited about today’s guest, uh, been chasing them for a while, trying to tame him, trying to get him to stay in one place. And it’s virtually impossible. He is everywhere. Dean Kagan, welcome dean. Thanks Steve. It’s true. You are, you are very. And don’t take offense to this. You’re very intense, very focused, um, and yet you’re everywhere. Is that, is that kind of you? That’s a pretty fair statement. Yeah. And, and, and it’s not a negative. It’s who you are. The thing that I appreciate about dean, his dean is very self aware of who he is and he doesn’t apologize for it. You’re like Jason t dot Smith. You’re not apologizing for who you. Are you aware of who you are? I think that’s healthy instead of pretending to be somebody you’re not agree.
Dean: 00:09:03 Oh, absolutely. I find that if I’m trying to be somebody that I’m not, that I’m, I make bad decisions.
Stephen: 00:09:10 Me Too. I tried to be cool a few times. It didn’t work. You’ve met me. I’m not cool. I know it. I’m okay with that. I liked that. I’m not cool now. So let’s talk about Dino and dean in, during the Chicago area. Is that where you’re from or.
Dean: 00:09:28 Yep. I was born and raised here. And the only differences, you know, a lot of the people that live in Chicago, they kinda work their way out to the suburbs,
Stephen: 00:09:38 but now Chicago is the suburbs. Right? Somebody just told me that they said Chicago is one of the most expensive cities. It just gets bigger and bigger. Yet there used to be nothing there.
Dean: 00:09:48 So there’s been a lot of transformation like 25 years ago. There was a lot of areas that were on the down and out and many of those areas that were you didn’t want to go to. They’ve are now the most exclusive areas.
Stephen: 00:10:02 Oh, that’s funny. You know, I Chicago, like the United States murder capital of the world or something like that. Or a murder capital of the United States.
Dean: 00:10:11 Yeah, I think there’s been a number of burger places that got their start here at some point or another Burger Burger.
Stephen: 00:10:20 Okay. I said murder. That’s not cutting that dude. We’re leaving at it. This is. This is. This is how men communicate. I say Burger or murder. You say Burger, right. So you didn’t eat your lunch, did you? I’m cutting into lunch time. I work out. See that’s what it is. You’re angry things. So. Alright. So Chicago is known for Burgers. What would they be known for? What Burger Company would have started in Chicago?
Dean: 00:10:48 Um, well they didn’t actually start here, but um, the very first model of a Mcdonald’s, you know, cool. When Ray KROC started is in a suburb of us desplaines.
Stephen: 00:11:00 Okay. So that was there. All right. On the other famous burger joints there.
Dean: 00:11:04 Not that I can think of off the top of my head. Not that people would be familiar
Stephen: 00:11:08 move from burgers to murders, murders two murders. But I did, I just heard that though that Chicago and I’ve been in Chicago. It’s stunningly beautiful. The architecture is phenomenal now. Maybe because I went to northwestern for a little bit. I mean those areas are stunning. Yes. Did I miss the bad, bad, bad, bad?
Dean: 00:11:28 Well, you were probably if you went to northwestern in Evanston. So when I was in high school, when we would cut classes, that’s where we would go. Gold rocks out there and we’d, you know, go by the beach, bring her lunch. It is a beautiful area there. As you go further south, there are ir. Is that a, are a little bit worse than if you go much further south. There are some very bad areas, but even those are becoming rehabbed.
Stephen: 00:11:55 So what happens, you know, because I think about that, um, what happens to those people that are displaced? Do they adopt the new environment or do they move and just bring their challenges elsewhere or what happens?
Dean: 00:12:09 What did you say? From my understanding, some of the. There was one area called Cabrini Green, which ones are really a lot of people that went from there. I think they built some section eight housing and they just made it more available to those people.
Stephen: 00:12:26 Cool. So they pulled them up, hopefully pulled him out of that and maybe they’re doing better. Good
Dean: 00:12:31 transition to do at least a nicer environment, you know, whether or not that gives them a better employment. That’s a whole nother story. Right.
Stephen: 00:12:39 Okay. So we went, we covered burgers and murder with two important subjects when you’re talking to customers. So what was dean going to be when he was in high school, other than we already kind of gave us a little hint. You cut classes. So, uh
Dean: 00:12:51 hmm. You know, I actually started with a focus on accounting and what I realized that accounting is quite boring in my eyes. Hey. So what I did is I started to shift more to finance because I realized that the analytics were where it was at.
Stephen: 00:13:11 Was that interesting to you?
Dean: 00:13:13 The analytics were interesting. Um, what I found when I got in the corporate world was that, um, dean Kagan and month end closes. They don’t work together. The pressure, is that what it is? I think it’s the pressure and I like to kind of do what I want when I want and when you’re involved in the cycle of where you have to be available for the clothes and all the different steps you need to be there in certain dates and you can’t, you can’t go on vacation, you can’t take a day off. And then there’s different other periods of the year where you have to be available. And finance was more analytical and I found that to be more enjoyable.
Stephen: 00:13:54 Okay. So the, the, the lack of the structure of the attendance, not the lack of structure, because the finance is finance, the math is the math, right, and not math. You’re not going to be a, you could be creative and come up with a new technique, but it’s generally they’ve been established for a long period of time. So that piece of it you can handle. Is it the authority piece and is that why you’re self employed? I mean, is that something that when you look back, you think about that? That was a clue right there that.
Dean: 00:14:24 Yeah, I’ve always had issues with authority all along the way. But um, I don’t know if that was necessarily the reason that I went with the analytical piece. I just, I found that more fascinating and I could. There was a little element of creativeness within the, uh, the finance area that you don’t necessarily get when you’re doing, you know, income statements and balance sheets.
Stephen: 00:14:47 You’re not supposed to be creative. Creative accounting is bad. That’s a bad, bad day. Companies like Enron, those guys did that. That’s bad.
Dean: 00:14:54 That’s true. Uh, the creativeness that I found in finance led me into, um, luckily getting involved in mergers and acquisitions.
Stephen: 00:15:04 So what was, when you thought of before you got in there, what did you think mergers and acquisitions was? I mean, what was your frame of reference?
Dean: 00:15:12 Did you have one t? Boone pickens.
Stephen: 00:15:15 Oh Wow. So you went right there. That’s huge. I mean that’s,
Dean: 00:15:18 that’s a book from him and I actually read one on the art of the deal. Trump. So those were some older books that kind of got my thinking started and it sounded fun.
Stephen: 00:15:31 Did it sound fun to be an acquirer or a seller? What was, what was more attractive to you? The acquire part. Ah, okay. Ah, so finding a jewel, recognizing the value in it, and then negotiating the best deal that’s attractive to you?
Dean: 00:15:47 Yes. And all the, all the steps that led up to the deal closing and add after that.
Stephen: 00:15:52 You know, I heard somebody say something this morning, I’m very successful man with somebody else’s poses, the Joe Rogan podcast, and the guy was talking about how he met this old guy who would trade places with them for a second and give up all the money that he accumulated just because he would like to go through the process again. So when you said that, that’s very connected for me because I think. I think it. We do have to pause for a second and recognize that we’re going through one of the most incredible times in history and you and I are knee deep in it right now. Anybody listening to this, you have access to some of the coolest times to be alive because the barrier for you to be in business now dean for yourself, it’s gone, right? Yeah, there’s time or there’s money, but even if you don’t have either one of those, you could still figure a way to be in this business that didn’t exist for your parents. I guess unless they were a service person or maybe they were a carpenter or an artist or something like that, but then they just traded time for money. Correct. Where today, so process was important, important for you then, or attractive to you then would you say that that’s still important to you?
Dean: 00:17:01 Processes? Everything for me?
Stephen: 00:17:03 Hmm. Yeah. You and I were in Chicago. No, where were we in Atlanta? We’ve been in Chicago together, but when we were in Atlanta recently, we were talking about that, that you’ve really put effort and energy into figuring out process. You say that that’s one of the biggest gains that you’ve had in your business. That’s still when you think about it, the biggest catapult?
Dean: 00:17:26 Yes. Um, because process means efficiency to me if you. I mean there’s the office, there are some things that you can automate and repeat, um, because you want to, you want to keep your error rates as low as possible, but being able to automate, especially like in my case, my average day is p is on the lower end. So in order to keep costs down, I have to keep all the labor that’s put into each unit at the lowest possible and the best way to do that is to find ways of automating and you need a good process to be able to do that.
Stephen: 00:17:59 You know, thinking back, I remember I was an accountant and I can relate to the. You had to, couldn’t go anywhere for clothes. I couldn’t go on vacation and forever. I mean it was just the, it was, it was accepted and I did it for 20 or 30 years, so I get it right. But we also used to do time studies. I was just talking to somebody about that. We used to literally stand there with the little stopwatch when we were doing manufacturing and we would literally time each step of that process and we felt these little. Back then it was manual which fill out these little tickets and then somebody would put it together and then look at efficiency and all that kind of jazz. Every one of them. But we’re doing that now. Now today it’s automated, but every one of those things I always call them touch points. Right. And so have you gotten to the place where you just think of everything as a touch point because I know you do a lot of merchant fulfill or, or Fba fulfill yourself prepping. Um, have you thought about it that way? Is that the way your mind works?
Dean: 00:18:53 It is because we do do these benchmark studies is what I would call them. I don’t know if you use the same term but we just do it in excel. So for prepping for example, there might be certain units that are higher volume units for us and we will do a titan study and it’s not going to be to the second, but we’ll just say, okay, start time is this minute and end times this minute. How many, how many did you bag in that in that timeframe and our poly or the poly bags where you’re doing a heat sealer, you know, more efficient or is it just easier to use the resealable bags?
Stephen: 00:19:27 And so what have you learned from that? Because I think this is, this is to me when, when you read e myth, this is working on your business, when you’ve got the, when you’ve got the big picture going right, moving and it’s polished, but when you want to get down into the margins does, this is where you make margin, right? This, this little stuff. And everybody’s saying, Oh, you got to stay in the big picture. You know, don’t, you know, don’t, don’t miss the forest for the trees, but the, this is where the profit is made. When you start getting into this level, that efficiency when you get there and at some point it’s not worth it. If the person’s going to be there for half an hour and you got 10 minutes worth of work and you’re paying for half an hour, different story. But when you’re paying, especially the volume of how many skews do you have? I think people need perspective.
Dean: 00:20:10 Well, right now, after the removals, we have 2,800 active Sku’s that aren’t Amazon right now. Prior to the removable, um, a little over 4,500.
Stephen: 00:20:24 And at one point, what was your peak?
Dean: 00:20:29 Probably $6,000,
Stephen: 00:20:31 6,000 and these are small smaller items and so correct. Yeah. And so you’re talking, I mean just a lot of small poly bags. I fair. I don’t want to, I don’t want to give away anything but to me that’s almost, you know, I mean because you grab a handful
Speaker 6: 00:20:48 and you might have 12 different skews if you’re not careful. Right. If you don’t pay attention to that stuff, that can get away from you very quickly can.
Dean: 00:20:56 Right. And that’s where part of the process comes in. I mean our, our invoices we get from our vendors, we’ve actually worked it out with a couple of the vendors will, they were, we’ll actually put our internal skew on the invoice. So when you go to check stuff in, you know, when my employees do that, it makes it a lot easier.
Speaker 6: 00:21:16 So how, how did that conversation go? I mean, were you with them from a long period of time or if you do bring a new account on, is that part of the conversation up front? Hey, could you just, could you do this for us? Other vendors do this for us.
Dean: 00:21:29 Yeah. I mean, I, I don’t know when I learned that very early on, I would always just have a very comfortable conversation to the point like you and I are having right now. You know, it’s not just a matter of here’s your products and what can I buy them for, but what else can, what else have you done for your other clients that you might be able to do for me, whether it’s, you know, um, discounts, whether it’s, you know, some places that if you buy a case pack, um, you have to find out what the quantity is going to be so that you get the discounted price or what if I hit a certain volume for the year or do I have to order a certain volume per line item, you know, just try to get as much information upfront before you establish the relationship. And then I, then I usually have some backup questions that I wait till I established the relationship and not necessarily push them for more, but just try to develop the relationship so that they know I have more of an interest in them than just buying product.
Speaker 6: 00:22:27 Well will give us an example of what a, you already did of the previous questions. Now give us an answer one example. What you would ask later on. Maybe it would be the inventory question. I guess,
Dean: 00:22:37 um, it would probably be outside of getting terms with a, with a vendor, which is, you know, like net 30. I would want to know if there’s anything that they could do. Let’s say pictures. Do they have images that are available because that’s not something every vendor has the ability to do. And if they do that, do they do them in house? So if I want to do, let’s say a bundle, can they do the bundle
Speaker 6: 00:23:01 for me? Wow, that’s a great idea. When, when you talk to that vendor, do you also then say, Hey, I know you’re selling to 10 other Amazon, Ebay sellers, whatever. If I do this bundle, would you let me just do the bundle?
Dean: 00:23:17 I haven’t tried that, but the whole topic of exclusive exclusive has come up and I do have something worked out with one of my vendors when they get new items in, I am part of a smaller group that will get first dibs on it and they even send me free samples in some cases.
Speaker 6: 00:23:38 I think that’s so powerful and that’s a great way for a company that just doesn’t know how to figure it out and doesn’t want to hurt the with others. Just say, okay, yeah, let’s do a smaller buying group and so there’s four of us. You can trust four of us and here’s my store name, that kind of thing. I’m at a gentleman on a previous episode and he talked about, you know, uh, the vendor would actually call them and say, hey, we’re going to split this four ways, do you want it? And he said I had an opportunity to buy one or the whole thing. And he said that was very cool to get to that level of relationship, but even just to be able to get to buy one when there’s only four is a big opportunity.
Dean: 00:24:15 Another thing I established with one of the vendors is, um, for awhile I would, it would take three, four business days before they shipped to me and I said, you know, that’s causing me a little bit of a challenge just in terms of workflow, is there anything that you could do, you know, even if I have to pay to speed up the process. And they said, you know what, we’ll just put you on priority shipping. We haven’t done that. And I was like, well, what’s that? They said, well, generally you send us the invoice and because of the volume we do, we just prioritize your order ahead of the other customers. I was like, that’s very helpful. And so now I generally get one business day shipping
Speaker 6: 00:24:52 at no extra cost at no extra cost. And so. And you didn’t throw it in their face, hey, I’m your number one customer. Listen here, I’m looking elsewhere. No, not my style. But that’s just so important because I just had this conversation with someone else where it was, hey look, you know, why won’t you know, you don’t, I’m doing you a favor by selling your stuff. Well guess what, those days are gone. Now they have an opportunity to sell it themselves for God’s sake. If they want to say it’s absolutely true. You have to really work that relationship. Have you been able to take the relationships with any of your accounts further than just a transactional meaning meet them at a trade show, a have lunch or dinner with them or anything like that?
Dean: 00:25:38 Yes, I do have three different vendors that I’ve met with in person. Uh, one of them I’m probably going to go actually fly out there and meet with them and um, you know, in one case I have a designated sales rep, so, and that’s for a particular area, so we have a pretty good relationship, but we email each other every day and it’s very, most of it’s personal. Um, I do know. Yeah. And I do know the owners of my larger vendor, um, and they started out of a garage, you know, they’ve been around for over 30 years. They carry probably 30 to 50,000 skews altogether. Yeah. It’s, you know, and there are a distributor manufacturer, so a lot of the stuff they do with their own name. And uh, so we’ve known each other for many years. And here’s the interesting thing. The first time I called them up, they would not do business with me.
Speaker 6: 00:26:39 How did it go? I mean, what was it? Hey, I’m dean and I want to sell your stuff.
Dean: 00:26:43 You know, I, I think they tried to profile be and they just weren’t interested. They matter of fact, whoever I talked to you, I didn’t even feel it was very nice and something came up about a year later. I and I try to get because I don’t believe, you know, I don’t know today doesn’t mean no tomorrow. Right,
Speaker 6: 00:27:01 right. Everything’s changing. I don’t care what it is. Everything changes. Especially in a year.
Dean: 00:27:06 Right, exactly.
Speaker 6: 00:27:08 And so what happened? So you went back a year later,
Dean: 00:27:11 can’t drop it there, buddy. You got to go deeper your later. And um, they, there are minimum at the time, wasn’t really that big and um, I just placed an order, like an assumptive close. They used to call it that, right? That was it. The good thing at that particular time, um, uh, I was very motivated and I was very willing to take on a lot of new items. I believe that take it on the new items was the way to go for awhile. So I ramped up the number of items and every month I was buying another 100 new skews.
Speaker 6: 00:27:43 So that is a pro tip right there. So it’s, it’s almost an investment, even if it didn’t make you money and you had to liquidate it, whatever in the long run that got you in the door. Right. I think that’s a very smart, smart thing. How much money are we talking about to break the ice? Wasn’t.
Dean: 00:28:02 Oh, um, I think at the time of the opening order was like a thousand dollars. And then the repeats, I don’t think they’d really low repeat orders, but um, at the time it was really that, you know, if you’re doing like, you know, creating a lot of your own listings from scratch, that’s a lot tougher than when there’s already an existing listing. So we created a lot of the listings that know, and then a lot of people piggyback that number.
Speaker 6: 00:28:28 So you brought, you basically opened a whole new market for them in that scenario. And so that’s when win, right? So you win, they win. Now unfortunately, as you said, others come on that listing, that’s one of the limits. Would you run into, because you, you, a lot of what you sell get sold in retail. Do you run into a lot now that the smaller retailers are also coming online?
Dean: 00:28:50 Um, that’s a good question. Uh, not so much. I mean, in our space,
Dean: 00:28:58 which is a mostly crafts, uh, I would say Joanne is a decent competitor online and a Dick Blake does do a little bit. Um, and some of the items that I’ve seen on Amazon and as well just online in general, I don’t post much on Amazon. I, I don’t know that I’ve seen Joanne, but maybe some of the small brick and mortar stores, but not, I don’t think the big players are really a big deal to us. There are certain types of items that we sell. It’s not a specific skew, but we might sell this one type of item. Let’s say that another brand which is teres, um, is a competitor of ours. We don’t, we don’t sell them because they’re in a lot the brick and mortar stores. So a lot of big backstory.
Speaker 6: 00:29:44 I heard that from somebody else that was a really smart advice. It’s like look, stay away from the lower end, especially in the craft items. Stay away from that lower stuff. If you could buy it at Walmart, that’s a sign. There’s a sign, right? A billing bolting, here’s your sign. It’s a clue. Do not buy it because that stuff is pennies. I learned that lesson in costumes, a member cost. I went somewhere and I bought huge quantities, costumes once a year, they’re worth money. Any other time you can buy them two for a buck. And these are costumes that sell for $60, but off season two for a buck. And I’m like really a note to self for an inventory note to self. Don’t buy them. So you know, I still have a bunch of. Emma needs a costume. Um, okay. So, so there’s a, there’s another good tip.
Speaker 6: 00:30:28 So that relationship, that thousand dollars, not saying, not hearing, no the second time. Making an assumptive close because you know, the other thing I think, and tell me if this is your experience too, is they now understand online so much better one year. I mean, just think of what you’ve learned in a year, right? In our world, one year is like 10 years and their world, they’re hearing every day I could buy a cheaper on Amazon. I can buy it cheaper on Amazon, I can buy right. Every day they’re hearing that stuff. And so they’re learning more and more and so they’re much more open. They realize they have to be in the biggest online marketplace no matter what
Dean: 00:31:05 that is true. And last year I met with the sales rep and I met with, there’s actually a few owners in this company and they’re all related and uh, but one of the owners, we had a longer conversation about Amazon because it affects them, you know, uh, you know, in, in my space, which is I say beating and crafts. Um, there are a lot of brick and mortar stores and a lot of those people don’t understand why, you know, certain companies would be selling to the people that sell only on Amazon. So they have to be able to explain that. And um, a lot of the conversation was whether or not, you know, that they would consider going and selling direct. And I, and they realize that if they started doing that, all the, all the retailers would have a problem with that. But the other conversation was people selling directly to Amazon. And, you know, that was the question for me because I see some of the products and I know somehow Amazon’s getting those products. And um, but it’s, you know, that that particular company said it wasn’t though, so I still have to in my mind wonder how are they getting it?
Speaker 6: 00:32:13 So they’re selling it to. I mean, you know how that works, right? I mean we, you and I both are personal friends with somebody who lives near you that sells direct to Amazon and so you get, you’re familiar with the distributor level pricing, so they get distributor level pricing and then they mark it up a little bit and then they sell it to Amazon. Amazon has no fees for themselves. Right. And so they could then sell it at cost. Steven, which is just a little, it’s still probably not even half, not even wholesale level. And still, even if they sold at a wholesale level, they’d still probably make a little bit of money, but then, you know, they have some fees that they assigned to it. So I mean that’s what happens. And however, this is my experience with that, I think it’s short lift, I don’t think. I think it’s they do it to fill the catalog and then once you fill in that catalog, they leave because it’s just not worth chasing. There’s so many products.
Dean: 00:33:06 Yeah, to a certain extent. I agree with you because I do notice that there’ll. There’ll be on a listing and I’m like, for example, I use restock pro for replenishment and there’s actually an alert that tells you that the Amazon on the listing and there’s many times where they’re on it and all of a sudden they disappear, so I have a feeling that some of that, from what I understand is if you sell directly to Amazon and you get a price increase on the class from your vendor, Amazon will not pay that increase, so then you have to make a choice whether or not you want to eat that class differential or stop selling.
Speaker 6: 00:33:41 Well, the other big hassle is Amazon makes you take the returns. They do all these different things. Most vendors that I’ve talked with have not had a good experience. Other than that, they write big checks and there’s one guy, it was a shoe company or whatever. He’s like, Steve, they give me 7 million bucks. That’s how I stay in business. Can you do that? You can have it. They’re gone. Give me 7 million bucks. I’m like, I’m out next both right. And, but it’s, it’s fair. I get it. Because you know, the one thing that you would probably say, I know you would cash flows one of the biggest challenges of this business, right? It’s not finding stuff to sell. There’s plenty of stuff to sell. It’s managing cash flow. And in your case inventory with so many skews, what can sweat those, those manufacturers are having the same issues.
Speaker 6: 00:34:24 Cashflow, right? Think about it, if you got terms from them, they say they may have had it made in China, right? They had to put a percentage down. And then usually when it ships, um, whenever it’s received, they got to pay the rest of it. Now they are out all that money. In the meantime, they had all their r and d that they spend all the money, all the marketing, all those other dollars. Then they bring it in, they sell it at a trade show or however they sell it through the catalog, whatever. There’s huge costs with that. They sell it to you, it takes a while for you to buy, you buy and you get terms. So now they’re sitting on them. How long has it been since they put their first nickel out until they see a dime back.
Dean: 00:35:03 That’s true. You know, here’s the interesting thing in my industry, um, and I’ve heard this from not just one set sales rep for the company or the bigger one because uh, uh, one of my favorite ones is more into beads. And then I have another one that is in the Bulls and I have a few others, but the other, the two bigger ones, but the bead company. So they bring in stuff, let’s say from checklist wacky. Okay. And um, what happens is they bring the stuff in. The sales reps try to introduce it to the brick and mortar stores, but the brick and mortar stores on the, on the, for the most part, they have no interest in buying these new products
Speaker 6: 00:35:39 because they’re sitting on a store full of inventory, right?
Dean: 00:35:43 Yeah. They’re sitting on a whole story of inventory and they only have so much space. So a little bit of the way that they get to tell stories is some kind of display packaging, you know, to present the whole because a lot of times they’ll bring in a series of beads, but there might be 200 colors. Ideally they want the store to buy the colors or as many as possible. So they’ll do a sample, they’ll put them on a display or something. But what if they bring all that stuff in and nobody, none of the retailers want to buy it. So they do have to find ways of getting it out there. And that was part of the other, you know, when I met with them last year, um, we talked about that. So I’m doing things, I’m working with a, you know, my va to help automate the listing process so we can work with the vendor and establish a stronger relationship.
Speaker 6: 00:36:34 One of the other things, and this is a similar, it’s just connected to that. Another way you can add value is contextual photos because let’s face it, on Amazon, that’s what’s missing on most listings, right? They have a picture, it’s a great white background photo and there’s nothing showing you how you use it. Well, we all know that that’s the way you improve sales, right? People want to see it. Oh yes. It’s A. I’m giving an example. I don’t want to give away anybody’s products. Um, it’s a, it’s so hard because I know everybody’s products. It’s a chair. Here’s a chair. They want to see somebody sitting at it at a table or a desk, depending on what it is that gives you the appearance, you could see what it looks like with other colors and you want to have that kind of thing, that contextual photo, right?
Speaker 6: 00:37:14 That so people can know what it is. Well, so we do that because we sell a particular product and we have, we take our own pictures anyway and so we’ll actually share them backwards with them and then they use them in their catalogs or on their website to sell to other vendors, retailers, not Amazon sellers, but to other retailers. It doesn’t cost me a dime. We’re already doing it, but from a relationship point of view, we get to add value to them, especially since you know, recurrent, because we’re selling to the most current people, the online sellers who are, you know, popular and you got to only only opportunity we have to sell to them is through visual or written word. It’s not like we can try and have a salesman. They’re selling right and making the pitch and so the picture is so important. They use them and it’s pretty cool when you see your pictures in their stuff and it’s like, oh, that’s awesome. And then when you see them, it’s a different conversation because how many Amazon sellers are doing that for their vendors? Very, very few. All right. So how did you decide that you were going to get into this Amazon world? I mean, here you are in finance. At that point, when we last got on that subject, you had not because did you do actuarial work too?
Dean: 00:38:33 Well, from the idea of finance. Um, I hit, I had a few jobs in my twenties and thirties, you know, nothing that really interested me. I’m right about the time we got married, my wife and I, um, which we just celebrated 20 years. Oh, that’s awesome. Congrats. Love it. Thank you. So, uh, I started working for Abbott labs as a temp contract work and they were going to offer me a job. It wasn’t really thrilled and I got this offer from a company called ADP the payroll company and they said they hit a four week Gig so that at the end it was over and he said, but you’re going to do mergers and acquisitions. Well also you had a note with excel. That’s what they told me. And for someone that doesn’t have a degree in finance that did not work, you know, one of the investment banking firms to get any type of job in m and a is pretty much impossible.
Dean: 00:39:28 And uh, so here I am, freshly married in taking a job with only four weeks exposure. Well, that turned out to be a, it turned out to be eight weeks. They gave me overtime because the guy that was running the department didn’t really have time to see me during the day. Why don’t we just stay a couple of hours every single day afterwards and they come in an hour or two early. So it turned out I was making some pretty good money back then and then they, they offered me a job and I got involved in corporate strategy and business finance, you know, in terms of the merchants and acquisitions during the due diligence doing in, working with the other target companies for integrations. So wow, it was a fascinating job, but I got to work with some very interesting people.
Speaker 6: 00:40:12 Hmm. I think the more you get exposed to different companies, different people, that’s when it gets interesting and then all of a sudden you’ll be like, Ooh, that one excites me more than anyone else. Oh, I should pursue something in there. Did you deal with anyone that was into a ecommerce in any way in your, your experiences?
Dean: 00:40:35 I did. They, um, they, uh, the corporate at a corporate level because I worked for one division with ADP. It was a car dealer area. Uh, they sold software turnkey systems to car dealers, but I’m the corporate ADP. It gave our division about $2,000,000 to work on developing a website which actually turned into the car part. I think they sold it out to Yahoo. I’m a couple of years later. It actually didn’t really do really well for us in terms of the amount invested versus, you know, what we got back, but it, you know, I got to be friendly with the guy that did that. And um, who is the product manager. But also I learned about a process, the process that he used, the process that we were using for a mergers and acquisitions, and that’s what I found fascinating because if you have the right process you can do more. Hmm. And so
Speaker 6: 00:41:34 for you, that was everything that we have already been down this road talking about this, this, this clicks, whole bunch of boxes for you. Right? This checks who, that’s me. That’s me. Is it a personality trait when you think about it? Um, that you have, have you thought about that?
Dean: 00:41:54 You know, I, I have thought about it because if you, if you’re on facebook and you see people starting out, most of the people that I’m finding that have questions, they’re trying to figure out what to sell. And that’s never really been an issue for me. Um, it’s always been about best practices and if I’m doing something a certain way, what can I do to improve it?
Speaker 6: 00:42:16 Don’t go, don’t leave that. Yeah. Why do you think that mean? What did you think that, that gives you advantage? I mean, it has to be an advantage, right? What do you think that that gives you, because as you said, you already chose your lane, right? So that once you get rid of that, now you’re, what, what do you think that that does for you, what you just described?
Dean: 00:42:40 Well, I’ve always kind of looked at it as, as an efficiency thing and you’re lowering your cost per product, per unit sold.
Speaker 6: 00:42:47 So, so for you, it gives you profit in this case that you could use for other things to invest in other things, right? Because if you’re, most likely, most of your products are probably map. Um, which is good. Right? Does that, is that fair?
Dean: 00:43:01 It’s not all. Some of them, it’s really not as much as you do.
Speaker 6: 00:43:04 Oh, okay. Alright. So then, well then that makes a difference and then that’s the answer. Okay. So because it was all map, then the only thing he could do is produce more profits and that’s great. I mean, don’t get me wrong, of course you’re there to make a profit, but if you were taking that profit and then investing in and other things to help advance, it’s almost like a, uh, uh, uh, was, uh, Peter Peter calls it a flywheel. It’s almost like a fly with it. Right? And you’re just accelerating and accelerating. Peter Current says that. Um, and so, so thinking about that, but in your case, it might also give you an advantage to be able to lower the price and therefore get more sales.
Dean: 00:43:42 Yes. Either profit or lower the price. Yes. And I can give you a good example and it’s kind of a silly example, but so years ago when I had this guy working for me and I’m very smart guy, and um, I remember that I told him he had to go find something that we sold and they, it was like in a box and there are probably 30 or 40 different things in that box. There was no order to that box. Now that’s not the typical way I would normally keep things. But in this particular case, that’s what he had to go through. He spent 30 minutes going through this thing, trying to find the item that we sold that was probably $10 and I’m like, we can’t do things this way. We have, we have to have a better way. And I knew that location numbers were the way to go and I spent time researching, you know, best practices and warehousing and you know, location numbers and the way to do it. And we were able to automate that process to the point where we could, do, you know, I could probably do 60 orders in like a 20 minute time in terms of picking small items, picking them off the shelf, package them up and labeling them. I could do it very fast because we built a good system. This is merchant fulfilled. This was. Yeah. Well we were doing more merchant fulfilled. We would be up to two, 300 orders on a Monday.
Speaker 6: 00:44:57 No kidding. Yeah. Well in that scenario you have to be efficient. There’s no, there’s no other option. Now, how much of your business now is Fba?
Dean: 00:45:09 About 95 percent.
Speaker 6: 00:45:12 How hard was that transition? I mean, you probably fought it for the longest time. Oh No. Steve, you don’t understand. I’m the best packer. I can pull. Like you said, I can pull 60. No problem. I’m quick. I’m this. How hard was it for you to transition? Be Honest.
Dean: 00:45:29 The. For me it was very hard. It was for a different reason. I didn’t want to learn Fba, you know, I, I think I was about 49 at the time. Fifty and I didn’t want to spend all this time learning about the process and uh, all the different rules and how to, how to pack it right and how to box it up and how to send it in because it was very different because in order to do it right, I didn’t want to commingle because everyone had told me that that was bad. So I’m starting at Econ Chicago, the first one. That was when people started putting it in my head that this was something that I should do, needed to do and had to do. So I just thought I just was open minded and I listened to a little bit to, you know, everybody from Chris Green when I first got there, um, as to why a had to be, you know, doing Fba to a variety of other people that were already my friends that said that that was probably the best way for me to go.
Dean: 00:46:31 And one point I do need to bring up is that right around that time in my category, they had switched from the 15 percent to the $1 minimum. So since a lot of my items were literally under $7, merchant fulfilled, um, there was no reason to sell those on Amazon anymore because of the $1 minimum. And um, it was a very frustrating time for me, um, when they came up with that pricing and there was about a three day period where I just had to think about what I was going to do. I shut all my listings down and came up with a mathematical formula to overcome that $1. So I replaced all my items to account for that. But, um, it still didn’t generate the revenue drop off was too great between that and the shift to Fba and I had to be open minded to it.
Speaker 6: 00:47:23 When looking back, would you say that that is another pivot point in your, another one of those, uh, you know, points of that your business went a different direction and it turns out it was the right choice. I mean, thinking back like, you know what I mean? So you were forced to kind of make some of these choices. Anyway.
Dean: 00:47:47 Tremendous pivot point. I also started doing more networking at the time,
Speaker 6: 00:47:52 but it was scary. It had to be scary.
Dean: 00:47:54 It was very scary, very scary. And I, uh, at the time I was already going to a, we have a monthly group. I’m in Chicago that started out as a very small group, uh, that, uh, where, you know, it was an Ebay sellers group that it’d be kind of became more of an ecommerce group, but a lot of those people are hardcore Ebay and a lot more people were starting to get an am is out and talking more about Fba at the time. But a lot of people were still hesitant to take that lead,
Speaker 6: 00:48:24 but you did. And to me day we say success leaves clues, right? And so by getting around those other people with that, you have confidence in when they say, do you trust me, this is going to work, blah, blah, blah, blah, blah. That’s what makes the difference. People like mark vine or rich Siack, you know, those kinds of people. And so again, we’re back to this conversation and this is, I think everybody who listens to this show is going to say the same thing, Steve. This happens in every call. It’s your network is your net worth,
Dean: 00:48:54 right? True. And, and Mark Levin is a good example because I was, I was afraid of prepping. So I literally boxed up a few things, you know, drove out. I called market advanced. I said, can he make a little time for me? And we were just becoming friends then. So it’s still a new relationship. And here, here’s a person that just took us time and I showed them the different items and he went through his different supplies and show me what would work with those items. And that in itself really took a lot of their fear of doing it, you know, away. And then, you know, various facebook groups. I’m like Amazon, beginning in Amazon for beginners and scan power at the time, all were very helpful and you know, answering the question here or there. And so. And those were, you know, the rules where the barrier to entry for me.
Speaker 6: 00:49:44 Yeah. Oh, we’re back to this rules because you’re a rule breaker. You don’t like rules, you don’t want to be putting a box or I don’t. And this is very rigid. I mean, let’s face it, there’s no gray area in theory. I mean, I know they choose to enforce certain rules. Depends on the day, depends on who you get, but generally speaking, it’s one way to do it right or wrong. There’s no gray area. So that’s tough for you, dude.
Dean: 00:50:07 Yeah. But then I have people that do most of the work, you know, I automated the process so that the biggest challenge
Speaker 6: 00:50:14 was that easier for you then? Wait, I don’t want to lose that. Yeah, that’s easier. So, so wait, this might be a big moment here. Hold on. Okay. When you are that type of person who can’t fit in a box, who likes to break the rules, just hire who can follow the rules
Dean: 00:50:30 if they follow the rules and they’re also a little more organized because I have adhd and what happens is I kind of make a mess of things and I don’t mean like, I mean literally a mess. So things will be all over the place and I think the people that work for me do a much better job of checking in all the items from start to finish. What happens with my mind is I’m trying to do six different things while I’m checking everything at. So they could do that. They could do all the prepping. They do all the distribution. They, they get box everything up. Um, my son just started working for me. He’s 19, so he, when we get an invoice from the vendor, a whole take everything and added to the uh, the new shipping plan, so that makes my life easier and it kind of, it’s kind of like getting a promotion when you will that work for you. You could do the more creative stuff for in the business and be working in the business, the nanotubes or on the business instead of in the best
Speaker 6: 00:51:26 and that, that is definitely your forte. I mean we’ve, we’ve already established that hence the reason, you know, finance versus accounting and so working to your strengths and hiring your weaknesses is the best. I mean, I know we’re going to sit there and say Duh, but I, I just have not heard anybody say that that way when they are, you know, I mean quite frankly in our world there’s a lot of people that are adhd seems like they’re jumping around, they’re just hyper and they’re, you know, an and make sure they hire that level person for that operations. I love it, love it, love it, love it. When you think about your skill sets then that you bring to the table now, what, what are they different than what you thought they were? Well, I mean, what’s, what’s easy for you to get what I mean?
Dean: 00:52:11 Yeah. That’s actually an excellent question. You know, I, I think over time that’s changed a little bit. Um, I found that early on I, when I first started, I only had about 30 skews. Um, we, we focused on my, my wife was making hair bows at the time. She started making them for my daughter and she was buying the parts at Walmart and I started sourcing some stuff while I was still in the corporate world and I kept sourcing better sourcing better and I found that Ebay was a great way to, you know, sell it. But my skillset at the time, once we got started was to grow the skews and all that busy work, you know, uh, I found was not the best thing for me to be working on because while it grows the business and you’re adding skews, I didn’t. I felt that I lost some creativity. And when I started doing the FBA and do it all the steps of Fba and I was prepping in the beginning, I found that I was losing some of my creativity. So now I like to be able to think outside the box. I like to be able to plan ahead.
Speaker 6: 00:53:20 And so by not tying yourself down and so your day you might have one or two things scheduled, the rest of it is open. You never know what you’re going to be working on, but you’re always working on it. Very observant. Yes. That’s cool. And so for you, I mean, and, and I’m, I’m here to tell you is that a couple of years ago, Dean and I had breakfast a couple of years ago and it wasn’t going so well, but I just saw you a couple months ago and it’s night and day different. And so to me it’s a very cool. It’s just so cool that I get to see that, you know, to get to, you know, have breakfast, have and have these conversations, have a little teeny piece of that world to see it. And then to see you figure it out, it’s just like, it’s so rewarding for me. Um, and as a seller just to see other people be successful. It’s very cool. Um, and to me, what you just described I think is a whole bunch of people’s problems. They’re so busy sourcing, sourcing, sourcing, sourcing, everything. Steve, you got to source, you know, not so sure you got to take and maximize what you get from your current sources. Then I would argue sourcing is everything, right? I mean, do you feel like you’ve maximized every opportunity with every product you sell? No. Nobody does.
Dean: 00:54:39 No. Because there are so many different components for each item that you need to work on it. You have to be able to source, you have to be able to get the listing where Amazon likes it. You have to be able to replenish, reprice, and now with this whole thing that they’re doing with inventory, the IPI, the inventory performance index, you need to spend and invest more time and the items that are already there. So you have to work on all those pieces for each individual skew that you work on until you start adding more items.
Speaker 6: 00:55:07 So it’s not go wide anymore in, in when you get to the wholesale level or private label, it’s more go deep Ra. It’s different. And I understand that and I don’t want to go there because I just don’t think it’s, it’s, it is apples and oranges when you’re talking about this side of the business, right? Because that’s fast turns. Turn it, turn and burn. It doesn’t matter what you sell, it doesn’t matter. I sell everything. Okay, great. But when you’re in this world of wholesale, um, it used to be that it’s key is volume steve. I’m a wholesale seller. Volumes. Everything. I’ve got to have a lot of skews I’ve got. I mean I’ve had guys on the show, 5,000 skews, 6,000 skews. Not Little Beats. We’re talking any other flashlights to water bottles to scissors. I’m looking at my desk. That’s not the plan anymore. What this inventory management is, unless you’re, unless you’ve got a big staff.
Dean: 00:56:00 Yeah. You would need a bigger staff for that. Yeah.
Speaker 6: 00:56:03 So when you look at where you’re going, how, how clear are the clouds for you? Now I know what they were three years ago, how clear are they now?
Dean: 00:56:14 I’m actually a little less clear. I, I, you know, I, I, uh, I was more multichannel. I am not so much right now, but thinking of doing it, um, I’m looking to probably bring in either an operations manager or maybe develop a relationship with somebody else. Oh yeah.
Speaker 6: 00:56:34 Well the weight. All right. So we all know what an operations manager is and that would definitely fill in this stuff that you’re not good at this because it’s basically fired myself. You’re not interested in it. Let’s say that. Not that you’re not good at, you’re just not interested in it.
Dean: 00:56:45 That’s the high level pieces. I want to look at the metrics and see where we’re going and then be able to delegate the parts that, you know, I’m not so good at. I don’t want to do or feel that I shouldn’t have to do.
Speaker 6: 00:56:57 All right. What would it look like in the other scenario that you described?
Dean: 00:57:02 Okay. So I probably wouldn’t spend as much time in purchasing replenishment because that’s a very significant amount of my time. I would work more with the vendors that I have, developing relationships and I would travel more like that person we were talking about that lives five me and, uh, establish more relationships.
Speaker 6: 00:57:22 So it’s really a partnership and that person, the other person would handle that other side of the business. Similar. Yup. Yup. That would probably be something of interest to me yet. And when you think about what that person would look like, what would they look like for you?
Speaker 6: 00:57:38 Because I think that’s a reasonable question, right? I mean carrie reasonable cause you’re a type your type A. are they a type a. and I will talk about that. A group of Eddie and Greg, what blew me away about both of them. They’re both type A’s. Yeah. It blows me away because I would think once you know less, uh, you know, less than charged than the other. No Way. I don’t know how they, they both are very strong, smart personalities, very both capable of everything. I mean, they’re like outliers both. And that’s very rare to see a couple make it work, but they do, right. And it’s cool,
Dean: 00:58:14 right? And it probably happened over time, you know, you probably have to define roles and stuff like that. And um, I mean I’ve had a lot of people work for me, but it’s usually, you know, um, people that are not going to be looking to make a lot of money. And most of it, everyone I’ve had is part timers. So it’s never really been a challenge for me to find anyone. But over time the skill sets that you require and the skill sets that you need for an operations manager, you also have to know the direction you’re going to. Because if you’re doing, if you’re doing Fba, you really need someone that understands Fba. And right now we’re actually switching a little bit back to mf because of the cost of doing the inventory performance index. Um, there’s a lot of items that I just don’t want to put it at Fba, you know, I don’t need to have a five or $7 item there.
Dean: 00:59:00 I got to go higher. But you own them. And so you got to support them and we still own them and we have to do something with them. And then a lot of this stuff came back in good condition and believe it or not, a lot of the stuff’s already back there because a criteria for sending it back. But um, it was still a lot of work. So I had a develop a little bit of a short term strategy to decide, you know, what we’re going to do. And there’s definitely some items that, you know, we compete with on Amazon. Extremely low rank, like under maybe even a thousand and some of them and I still feel we should solve, we should have available because there’s going to be a time where they do sell and when they do sell they’re going to sell in volume. So I still want to have some of those items.
Dean: 00:59:43 But it’s a, you got to Redo things a little. You have to Redo your facility. You have to have space to process orders where right now we might be doing only Fba. You might have to have a split shift where maybe you do FBA operations for a period of time and then you go back and do your MFA operations later in the day, and then there’s multichannel, so you have to have somebody that could, you know, that is able to, um, make adjustments quickly, you know, and is willing to learn rather than somebody that learns a certain amount of rules and then is only able to stay with those rules and not change on a dime.
Speaker 6: 01:00:21 Show me what step’s next. That’s it. I’m only going to do this. Pick this up, move it here. Pick this up, move it here. You don’t want that. No, don’t want that. You know what’s cool to me though is you are working on your business. I mean, I’m listening to you. Anybody else listening is saying the same thing. What you just described is working on your business. You’re adjusting, you’re pivoting your. I think you used this tool. You’re retooling your business. I think that is so smart and I just think, you know, I think it isn’t where my mind goes. I think back to these companies that became more companies when the world wars were happening, you know, when you think about some of the toy companies and then all of a sudden they were making cannons and then they go back to making toys, right?
Speaker 6: 01:01:04 They retooled their plants so they could employ and take care of their country or whatever. You’re doing the same thing on a smaller scale. Hence the reason dean, you’re having success. Success leaves clues, dude, and you’re not saying you’re not fighting the system saying they’re changing the rules on me. What am I going to do? Um, I’m just gonna. Go get a job. No, you’re retooling your business as their business because the changes they’re making, they’re not making them to say, Ooh, let’s get even with Dean today. Let’s screw dean. Right? It’s, their business is changing and they’ve got to look for themselves. That’s not unreasonable. Right. Very cool. Dude.
Dean: 01:01:43 I hear a lot of that’s going on in China to um, that there’s a lot of places, you know, people that I know that we’re buying from there and complete factories are doing, you know, there’ll be doing one thing one day and then something completely different and they, they still keep the building, but they’ll retool everything. They’ll have new equipment and every
Speaker 6: 01:02:02 examples there. I did interview somebody who has a staff in China and he said the only way I can keep them as I have to pay them more because they’ll take the whole staff will just go and work in a different company making brooms or whoever has the most money gets this whole state. They literally go together and then he’ll lose his whole staff. So he has to pay attention. Another example where drones, Andy and I were talking about this, um, there was one time where several hundred Chinese companies making drones. Now there are like five and it’s, it’s a say credible. What do those companies do? They retooled and they make other products because I think the thing that the, at least I hope people hear this, you have a set of skills. You have developed a very specific set of skills and now for you to tweak and adjust whether it’s multichannel fulfill or merchant fulfilled versus Fba. It doesn’t matter. Split shifts. Second shift. You’re describing a way of taking the assets that you have created, this intangible assets, these skills and just real reallocating and readjusting. Very, very cool. My friend.
Dean: 01:03:04 And then were there any employees that you have, I guess you would call this a tip is you have to cross train everyone that works for you because people have to be able to step in if somebody is not available and then people that are cross training, you know, they feel a more reliable to you. And over time if things change. Like I have somebody that’s been with me since before Fba and uh, what is going to happen is we might have to go back to merchant fulfilled a little bit, but she already has the skills that, you know, I don’t have to retrain her. She already knows how to do it.
Speaker 6: 01:03:39 Well. The other thing too is that they also, when you know what the next person in your, in your, you know the next person in line it needs, you’re going to prepare it better for them because you did that job and you’re like, Oh man, this will make their job easier. Uh, okay. And so it improves all the way around when you do get people rotating, when they know that, hey, dean’s going to handle this next and he needs it turned this way. And then that way it’ll make it easier for him to do his job. People usually think that way and then it’s cool for them, you know, relationship wise. So dude, I’m pumped. I’m pumped for you because you inspire me. I mean it. People hear this. He went from 6,000 items to 4,800 items to 2,800 items all while readjusting, all while expanding because your business has expanded and yet, and yet now you’re getting ready to retool again. So I think that’s the lesson. This is not a set it and forget it business period. It’s not. Nope. And that’s part of the excitement is that you’re not set it and forget it. Now, the unfortunate part for you is there are rules. Dean, I’m sorry about that. Let’s do this. I think people, if they have more questions because especially because you’re a process guy, what’s the best way that somebody can get in touch with you if they want to follow up on anything? Yeah.
Dean: 01:04:57 Well, I mean I’m on facebook so I’m getting there. Um, I can give you my email address.
Speaker 6: 01:05:03 I don’t give out your email address, never give out your email address. You’ll be in a million list. Facebook contacts would be best. Um, and then I’ll, I’ll put it on the, on the link, just you’ll get, you’ll get a million people scraping it and then, you know, you’ll get all the weird things. Yeah, you don’t want to do that, dude, I’m very pumped. So the best thing that we do at the end of this, uh, these episodes is always look for a, a meaningful process improvement. Um, it’s a way to move people forward. I think you’ve given a bunch of tips, but think back to when you were struggling, what was that one thing that pushed you over that tipping point is Malcolm Gladwell, we’ll call it, right? It’s that point where it just because you could go either way, but this helped you turn to the right direction.
Dean: 01:05:47 So we’re 30 days into doing FBA. Um, I only had, I think 30 skews on there. I saw the power of Fba and what I couldn’t figure out was how do I order from my vendor and keep track of what city Amazon, what’s inbound, what’s coming in from a vendor in the fact that I was ordered in three times a week. So I went out and search for something that would help me automate this process that I was now doing it in excel and was extremely time consuming. And I found this a restock pro, which is a replenishment software. Um, I know other people will use stuff like skew balls or forecasts lead, but any tool that helps with replenishment process I find is helpful because it, it narrows the gap of the outages and that creates an increase in velocity or turnover or whatever you want to call it. And that’s driven the business. I mean it was significant increases. I was having 20 slash 30 percent monthly month over month growth and even even this year, I mean we expect to be 50 percent ahead of last year. That’s, I mean I don’t, I don’t know how that’s comparing to for others because I know a lot of other people are having good years, but 50 percent growth for us and small items is huge.
Speaker 6: 01:07:00 It’s phenomenal. And, and what, what’s beautiful about that is it, that is a set it and forget it other than seasonality, seasonality. You have to, that’s a different math, right? That’s different. But generally it is a set it and forget it type of model and that, that gives you the ability to work again on these other things. Oh Dude, love it. Love it. Love it. You, uh, I’m so excited to see where you were, where you are, and then hear the enthusiasm in your voice. Yes. You know, here’s a. here’s one more little observation. While you described that your clouds aren’t clear for you, I don’t hear panic in your voice. I don’t hear crisis. I hear I’m figuring it out and I’m going to try some different things where three years ago, to be honest, let’s be candid. There was a little bit of panic in your voice pro. I’m sure there was. You, you put your head down and did the work. Oh, I love it, my friend. Thank you so much. I wish you nothing but success. Take care of so much for your time. What a great guy. Great Story. You heard us is growth at the end. Um, that’s an optimist. And what’s cool to me again, is that he wouldn’t have been that guy three years ago. And if you listened to the last couple of interviews, you understand this is a road.
Stephen: 01:08:16 This is not. There are, there are outliers that come in and knock it out of the park. Man, I don’t want to downplay them. They’re outliers. They probably would do that. If they went to learn how to ski, they’d be automatically upon the board there, that type of people and I’m not. So when I look to myself, I talk to people like me, I think who I’m not an outlier, not never have been, but I’m willing to do the work and to me, when you look at it as a long game and you’re looking to build something longterm, something that you could, you know, thank you for future on. Um, I think dean is a great example of what you got to do. His adjustment has repivoting his retooling. I love that term. Retooling his existing business is a very healthy thing for you to do. Look inward and swallow hard and make turns, doesn’t, it’s not the end. It’s just the beginning. ECOMMERCE momentum.com, ecommerce momentum.com. Take care.
Cool voice guy: 01:09:07 Thanks for listening to the momentum podcast. All the links mentioned today can be found at incomers momentum. Doug, come under this episode number. Please remember to subscribe and the lake us on itunes.