On the show today is Nathan Hirsch of FreeeUp.com to talk about how to outsource Amazon.
If you are running around and there aren’t enough hours in the day to run your business and your life, this is a sorely needed interview. It is all about how to outsource Amazon tasks. Nathan shares with us his story of going from a broke college student to Amazon drop shipper, to creating FreeeUp. He did it all with an attitude of strategic trial and error. He explains why it’s important to know whether you are hiring somebody to do something you do know how to do but is repetitive, or hiring somebody for something you don’t know how to do and that isn’t worth your time to learn. The first person to hire in Nathan’s business model is an outside expert to help you move forward. Then start with outsourcing to one assistant at a time.
Nathan was a college student looking for extra beer money when he started buying and selling textbooks. He felt that the bookstore was ripping everyone off. Soon enough he had lines out the door of people selling their textbooks to him. That soon led him to Amazon because, as he says, “you don’t sell books for very long without learning about Amazon.”
Thinking books were soon going to be a thing of the past, Nathan began experimenting with other products and drop shipping. He ended up running a million dollar business out of his college dorm room. He hired friends, making good and bad business decisions and learning along the way.
Once Nathan graduated, he did his Amazon business full time and it was growing and doing very well. But he realised he was spending too much time on HR activities. He was using UpWork at the time and had a great remote team, but wanted a more efficient way to hire, and so FreeeUp was born.
FreeeUp is different from other outsourcing platforms because it isn’t a job board where you have to post the job and then sift through all the applicants. Instead, FreeeUp does the vetting for you and they introduce you to one worker they have pre-vetted who meets your requirements. They only let in the top 1% into their network so you get that experience of being able to hire top talent quickly, which is so important as a business owner.
Nathan recommends starting with outsourcing pretty early, but waiting until you have some sort of revenue stream. If you’re still in the idea phase, don’t hire yet.
He does believe in bootstrapping at the start—he even wrote a book on bootstrapping called Free Up Your Business: 50 secrets to bootstrap million dollar companies—but advises once you start having a little bit of revenue you should start investing it back into the company. The best way to do that is with good people.
There are two main ways to do that. Either hire someone to take something off your plate or hire an expert to do something that you don’t know how to do. If you have tasks that you do repeatedly and you have systems and processes in place, and your time isn’t focused on the right thing, because you’re doing these tasks instead of focusing on the company, then you should hire lower-level workers and put them in place to free up your time.
If you are approaching something that you don’t know how to do (e.g. marketing or creating a video) then you should hire the mid-level or expert-level workers. They are more expensive but you don’t have to train them and there’s an opportunity cost if you learn how to do it yourself because it usually isn’t worth your time as a business owner. The best business owners have a hybrid of both.
Many people are too obsessed with trying to find the cheapest way to do stuff and are very afraid of spending money. The problem is that they are not taking the opportunity cost of that attitude seriously enough. Cheap becomes expensive. Trying to save money in the short term can cost a lot in the long term, especially if you pay somebody too little, invest a lot of time training them up, and then they leave for a higher paying job elsewhere. They take that time and training with them and you have to start all over again.
A lot of times people are scared also of the trial and error approach. Know that you will put money into a lot of different things. Some won’t work out but some will be very successful. If you have a very small budget and are afraid to put any money into anything, there’s no way you will succeed or move forward. Be quick to fire people and replace them if they’re not doing a good job, but get new people into the team to see what goes well. Not everything you try will be a winner so spread your risk. Cut the losses and follow up hard on the things that work.
In the first 6-12 months of running a business, Nathan does the majority of the work putting his own hours in. You don’t have to outsource the work. However, you can hire an expert to do a 1 – 2 hour audit or be an on-call consultant. They can keep you on track and save you thousands for perhaps $50 per hour of their time. Or you might be able to get a mentor to do it and that won’t necessarily cost you money. Mentoring or consulting with an expert can save you months of wasted time and a ton of wasted cash. It’s a no-brainer as a business owner. Learning from other people’s mistakes is quicker, cheaper and easier than making them yourself.
In the early stages, the only outsourcing he does is that expert consulting to keep him on track, or hiring a worker for any one-time stuff that comes up. The next step is to create a list of everything you do on a day-to-day or week-to-week basis and put it in order from easiest to hardest. If you’re running an Amazon business, the easiest stuff is the customer service emails. If you’re doing FBA, there might not even be that many. Other things include bookkeeping, creating listings and doing keyword research. As the business starts making money he will hire an assistant part time, and then full time, and then a second assistant to do those tasks. That’s the approach he takes over time.
There are many factors to outsourcing so it goes back into the trial and error approach. There is no one way to outsource Amazon tasks, but the key is to be strategic so that you minimize risk and give yourself opportunities to succeed when something does work out. Minimize the risk, maximize the possibilities and think like an investor.
When to create the Standard Operating Procedures for your business will depend on the type of people you are hiring and the tasks you are getting them to do. If you’re going for the cheapest of the cheap and hiring those $2 or $3 per hour workers who have no experience, then you need a Standard Operating System when you outsource Amazon tasks. Do not let them into your account without it. But if you hire someone with years of experience through FreeeUp for say $7 per hour, you might not even need a SOP because they already know how to do it.
SOPs are very important. The problem with creating them in the early stage of the company is that they change so much. If you are creating the SOPs in month 6, within 3 months they’re likely outdated. The time spent creating them is an opportunity cost for going out and getting clients at that early stage. As a new business owner, you’ll be learning and changing your processes.
Nathan advises that you get smart people in, have basic procedures, and then figure the systems out with them. Have them provide their feedback, knowledge, and experience. THEN create the SOPs and hire people to follow them.
Knowing when to be flexible and when to get rigid with SOPs comes down to knowing what results you are getting. How many problems and issues are happening in the business without SOPs? Are the results inconsistent, or going down, or are the consistently going up? If it’s inconsistent or at the same level, continue to improve. You see that it’s continually working, then it’s time to standardize it. If there are problems then you keep evolving and building on what you have. When you have gone a month without those issues, get it in writing as the fundamentals of a good Standard Operating Procedure.
You can find out more about FreeeUp here: https://freeeup.com/how-it-works/
Or check out Nathan’s book here: https://freeeup.com/free-up-your-business/
Get $1/hour off your first life, on your first hire by going to amazingfba.com/freeeup