A startup mindset sometimes does not come naturally but gets built up by learning from experience. Stephen Somers shares his journey to success.
Intro: To teach people how to build a global business using a private label on Amazon.
Also provide key services for sellers like global freight, translations and photography. Only to people in-house.
Most people outsource this – they actually have it in-house.
The mindset for starting a PL business
Stephen is based in Wexford, Ireland. Not a tech community!
Robert Ricky is from Northern Ireland.
They have been working together for 10 years.
Robert was Stephen’s mentor.
Started different businesses.
Stephen was a complete beginner – but he wanted some freedom.
He was previously the data entry clerk!
Didn’t have experience on his own.
Tried different models, didn’t stick to anything.
He was very green, searching for “make money online”.
Finally considered affiliate marketing.
Came across physical products on the internet.
Looked for courses – not as many or as sophisticated.
Considered drop shipping.
Looked at owning a website.
Met his business partner.
Selling on Amazon, eBay.
They then had 2 warehouses, 8 staff members – all Merchant fulfilled.
Stephen checked out his operation.
He saw the warehouse in operation – and got excited about it!
It looked like a legit business.
Stephen quit his job, got his €3K retirement package, and worked with Robert in his warehouse:
Read the E-Myth Michael Gerber and saw it in action
Learning: copywriting, learning HTML.
Fulfilling themselves was stressful.
Started considering FBA – Fulfilment by Amazon.
Shipped products over to the UK
Got deals from Wholesalers – a lot of Philips lighting eg: lightbulbs.
Once moved to FBA, conversions and sales were much better.
It took time – worked on it together for another year.
Just Stephen and Robert in the warehouse – let go of all of the staff.
What if we start selling different products in different niches?
They started to build a process around identifying them.
Private labelled and imported them.
The company basically became a private label company.
Kept doing some wholesale products – but they weren’t that profitable.
There was a small number of products doing the pushing.
They had to find people in the USA who had companies with warehousing.
Then slowly moved them into FBA – even though they had competitive items.
Now they are too competitive.
They saw they could sell lots of products with low sales in multiple countries.
Issues with tax and bank accounts.
Doing nearly $2M in revenue then at 30% net profit before tax at that point.
Robert started selling online in 1996.
He Didn’t need warehousing any more. Did this for a number of years.
About 5 years ago now, a lot of people started teaching courses.
They looked at what people were teaching.
Fortunately, they had their own way of doing things.
Robert is amazing at the numbers thing!
He started teaching.
Then other groups.
Then over 2 years shared with more.
5 years later- 6000 students.
Now want to offer services – shipping from China.
LCL -less than container load – freight forwarder will do this for you.
It’s expensive and you’ll get a load of charges by the time it comes into the port.
They tried partnering with Freight Forwarders.
But now they’ve cycled the money from the course back into the freight company.
They run containers for China-US, China- UK, China- Australia.
People join the network.
Then they can pre-buy shipping credits by the cubic metre.
Because they know how much they will pay – control warehouses etc.
Some students are big sellers – they may use Superhero freight
When Stephen met Robert, eBay was bigger than Amazon which was why they were doing MF.
Robert broke down the money side of PL.
They wanted to invest, then aim to double our money within 9 months.
What Stephen learned is: being realistic.
You have to purchase products, they have to be produced and imported.
You can run PPC to get initial traction.
It takes time for the listing to bed in.
The real world doesn’t work that way!
Internet Marketers do come in and give big figures.
Sometimes people do come in with big figures quickly – but they have plenty of capital.
Robert didn’t have lots of money available.
He had to decouple from a business partner.
They had to make it work because they both earned £750 a month.
Stephen would have kept the day job if he had his time again!
A student is on track to do $1M in sales.
They’ve put the money down.
Most of the products have all been winners – that isn’t common.
6-7 out of 10 in Stephen’s case succeed.
Out of the 3, 1 sells slowly.
1 is a loser.
1 will take 18 months to sell through.
$1000-3000 depending on the price
Get it in and get it selling.
If you get your goods made in China.
Say you split 60% to the US, 40% to Europe.
Now you have proven real data back from the market.
You may have to reorder at that point.
You can show real figures to a bank.
Say you get an overdraft at 7% or 10% on a bank loan
If you’re making 100% “profit on investment” pre-tax.
These are real businesses.
Go in expecting to put in capital.
If you think about an Olympic ski-jumper, they have to go downhill first.
Any business has a downward movement of resources to start with.
A lot of people have only spent their life working in a job
You’ve been buying food, clothing, petrol, electricity as expenses.
You don’t get a return on this!
You don’t know there is such a thing as getting a return.
That’s the investor mentality.
People just pick any product
MPSH doesn’t follow trends
They are not expecting to sell a lot a day.
Sometimes it happens but you can’t expect that going in.