Episode #45 Show Notes: Will Tjernlund Interview Part 1 of 2
How did you get into Amazon Private Label Selling?
Will’s brother started selling on eBay around 2003 and ordering from Alibaba. Will was 13 asking million Qs. Aged 16 he did different forms of RA selling on eBay using his dad’s CC! He started selling on Amazon Full Time about 3 years ago.
Where are you at today with Amazon Private Label?
Will has sold $10m in 3 years. He’s outsourced the part where he has to be there. He’s travelling and running his business from his laptop (like Greg Mercer! – see episode #42)
How did you do that?
Some wholesaling from US brands and Canadian brands and Private Label. If he can see a risk free dollar to invest for $1.20 in a couple of months, that’s where he’ll go. Basically he’ll follow the cash!
How do you know where the cash is?
1. People do a bunch of research for 2 months, order a sample, test it, brand it, get logos made, finally get nice packaging, get 2000 units into amazon, give away a few hundred units.
2 Will might call a US based brand, lots of products on Amazon, 100+ reviews but they’re not Prime.
He’ll call them, say, “Your account is not being well run, so most of your customers have to pay for shipping. We can run it better.”
He’ll order lots of product. He can see if that they sell $50k, he can buy $5000 worth and flip it in 10 days and make $2500 while the other person is still doing their research!
Do you just go after individual keyword opportunities or build a brand?
If you see a wholesale company where say 10 of their 100 SKUs sell like crazy -Will often will Private Label one of those so as to offer the illusion of choice to the customer. But he will sell both the wholesale product and his Private Label product.
So it’s going after a microniche?
If you can take over all the listings on one page, it’s very valuable. Make all the listings individual rather than Parent-Child IF it is a low-competition keyword.
Do you just not bother with Parent-Child relationships?
P-C makes a lot of sense if you’re after a competitive keyword because you’re trying to drive all your sales to one listing. But if you have a low-competition keyword, it makes more sense to own the first page.
Does that take a lot of capital to invest?
If Will sees that a brand sells $50k a month, the first order was still just $5K to return $7.5K. Then you reinvest for $11K and then keep doing that. Turn the cash around as fast as possible. Go after their hottest sellers and this is much easier.
Example: One brand Will bought from recently had an average selling price of $150 for its products.
He ordered about 50 of their hottest selling products and sold those out within 5 days. It’s all about turning your cash as fast as possible.
For those just starting on first product, how can you use this approach?
Fake it till you make it! Find products sold by a wholesaler that are not being presented properly on Amazon. Make a free one week Shopify store, put in pictures of products and prices. “willsshovelstore.com” and an email.
Email them and say: “We’d love to sell your products. I’m looking to Place an order for $5000 right now. “ If it’s a $5m company, that’s over 1% of revenue so you’re a salesman’s dream.
Then on to the next?
Yes! You cut so much BS out: creating the UPC, photos, listing creation etc. because they already exist! So you just accept products in, send them back out to Amazon and then move on to the next brand.
If Will calls the brand and spends 2 hours on the phone and ends up making $40,000 profit in a year, that’s $20,000 an hour income!
He’s not wasting his time building a brand. Getting cash in, not spending 2 months to make a logo.
Michael made a similar mistake starting out, which took 5 months to go live. The competition goes crazy, you don’t know if it will sell out- it’s all risk, little reward. Will takes little risks and gets rewarded multiple times: the aim is to make 20% return 6 times a year[=around 300% annual ROI- Michael] instead of trying to find one home-run product that will make you a million a year.
It’s a lot easier to sell 1000 products once a day than 1 product 1000 times a day.
Isn’t the downside of that getting cash tied up in inventory?
So just order a week’s worth of inventory. A lot of US brands will have just 3-10 day lead times.
So a really different model than everyone is teaching?
It’s hard to teach Amazon in general because everyone has different education, cash, cash flow, they have different responsibilities in life…it’s hard to write one course that suits everyone.
Are you basically saying you would do wholesale first and Private Label afterwards?
More times than not, it’s super obvious. Say Will buys a product from a wholesaler for $40 and they want him to sell it for $150. If there’s that much margin, it must be bought from manufacturer for $10-15. Will goes Alibaba and confirms his suspicions. Then he’ll source it and sell a Private Label version for half the price. A lot of the time, customers want the half price product as much as the named brand version. So you’re selling it on price not brand.
For those just starting on first product, should they go for wholesale or Private Label (ie look on Alibaba etc.)?
Alibaba can be great, Will advises going after the lower-competition products. If you’re making $10 profit and selling 10 a day, that’s amazing, that’s $36K a year.
It’s so much easier to go after a lower competition product than after a product selling $50K a month. A lot of the time they are being sold by someone making a loss to keep the competition at bay.
Will likes to see one listing with 300-400 reviews (shows demand) and lots of listing under it with 20-40 reviews (competition is low). With giveaways Will can get that number very fast and get the 2nd Place spot. The 2nd listing down can sell as many as the 1st. The 1st may just have been there longer.
What are the biggest problems you see with people launching their own Amazon business?
Just not getting started in the first Place! Analysis Paralysis on research. Working on the business without making cash.
The other thing is cashflow. If they have $5K to invest, they order $5K of product, that means they don’t have enough cash to order new inventory before running out of stock. If they have a 30 day lead time, and invested all their cash in inventory, selling too much too quickly can be a problem.
What’s the solution?
The solution is to only put half of your investment cash into any order.
For example, Will and his brother ordered a container of knee scooters for $40K. That was 210 units. The lead time was 60 days from ordering to in stock at Amazon.
On the first day, they sold 7 units. If you do the maths, that means 210 units would sell out in 30 days (no. units/units sold per day) So they had to go back to the supplier that week and place another $40K order.
If you only had $40K in the first Place, you’d have to wait until you’d sold ¾ of your inventory before placing an order, which means you would be out of stock for 2 months. If you sell 20 units on the first day, do your multiplication!
While generally taking out a loan to start an Amazon business is not good, when you have proven sales, and you need to get back in stock, this is a good time to get a loan from family or friends.
Will has been talking to private equity firms who want to lend to Amazon businesses because they love proven cash-producing products because they are tired of investing billions in startups with no turnover!
What are the other big mistakes do people make when launching their products?
Not thinking through:
- How will you get on page 1?
- How will you stand out? What will make the customer buy your product over someone else’s?
Will will often do it via price but also it can be being differentiated.
What are others tips on differentiation?
Size – if everyone is selling a 10” pan, sell a 6″ or 12” each
Colour – If everyone is selling a black product, sell a pink one. Even if the demand is lower.
Will sometimes stands over his mother’s shoulder to observe her buying style.
She doesn’t really care about 3 vs 5 bullet points, she doesn’t know about all the reviews- she’s not in an Amazon bubble! She takes about 2 seconds before hitting the one-click checkout button.
You need to stand out quickly via something visual – people aren’t interested in reading text.
What other big mistakes do sellers make?
That’s about it. Either sellers don’t have enough cash or they try to sell a product they can’t rank for. There are few other problems. Getting ripped off by a Chinese supplier is very very rare- but Will gets many emails saying “I sourced this super competitive product and I have 5000 units, what should I do?”
If you recognise you’ve got into an over-competitive product, there isn’t much you can do. You could try giving out lots of units and spiking the sales rank but otherwise, sell them as a job lot on eBay!
You should have started smaller or tested demand some other way. So the mistake has already been made.
Be “Young Dumb and Stupid” – a lot of smart people try to over-complicate Amazon – just sell a good product at a good price, then move on to the next one.
The biggest things to differentiate yourself are product selection and good cashflow management.
Will listens to no Amazon podcasts and instead reads general business books and applies general business principles to the Amazon model and it “turns out pretty decent” [$10m in sales!]
How can people contact you, Will?
HOW TO SUBSCRIBE TO THIS PODCAST
A podcast is a free downloadable audio show that enables you to learn while you’re on the go. To subscribe to my podcast for free, you’ll need an app to listen to the show from.
For iPhone/iPad/iPod listeners – Grab your phone or device and go to the iTunes store and search “Amazing FBA”.
This will help you to download the free Podcasts App (produced by Apple) and then subscribe to the show from within that app. Every time I produce a new episode, you’ll get it downloaded right on yt sentence.
For podcast enthusiasts – If you already listen to podcasts and have a podcatcher that you prefer, the feed you’ll need to add is: http:// amazingfba.com/feed/podcast.
For those who don’t have a mobile device – You can always listen to the show by clicking the audio file at the top of this page.
If you have any queries, just go to www.amazingfba.com/ask
Watch Amazon Master Seller Will Tjernlund – Part 1 Of 2
[video_page_section type=”youtube” position=”bottom” image=”” btn=”light” heading=”” subheading=”” cta=”” video_width=”1080″ hide_related=”false” hide_logo=”false” hide_controls=”false” hide_title=”false” hide_fullscreen=”false”]https://www.youtube.com/watch?v=orMRu-q1J1g&feature=youtu.be[/video_page_section]