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AS 80: How Brandon built two 6 figure monthly businesses, in under 2 years

03 Mar 2017

Coming live from StarBucks his name is Brandon Young,  who has not one, but two amazon businesses that pull over a million dollars yearly. He does cross platform, and is international. In advanced, our audio had some background noise and was not 100% perfect, but the amount of golden nuggets and insights in this episode is invaluable to all amazon sellers and e-commerce sellers.

 

 

In this episode, you’ll learn:

  • How to build brands into the future
  • How to scale your amazon business
  • How Brandon dealt with multiple amazon suspensions
  • How persistence is key
  • Strategies to selling on Amazon
  • Diversifying your Amazon business into Walmart, Wish, and Wholesale
  • Many of the ways about navigating an Amazon suspension
  • Confusion with Amazon suspensions
  • Our frustration with Amazon suspensions
  • Growing an Amazon Business to newer heights

And lots more!

DAVID ALADDIN: Great to have you on the show, Brandon!

BRANDON YOUNG: Yeah, thanks for having me, I appreciate it! It’s a little bit of an awkward day, because, you know, Fridays what I do is I take my son down to school in Miami and I usually work remotely down there, but today he had the day off because we have a few doctor appointments, so he’s hang out with me.

DAVID ALADDIN: Very cool!

BRANDON’S SON: Hi!

DAVID ALADDIN: How is it going? So, you are live from Hollywood, Florida or Hollywood, California?

BRANDON YOUNG: Hollywood, Florida!

DAVID ALADDIN: Very cool! I am from Naples by the way. Can you take us to the beginning, before your first company? Where did your journey begin?

BRANDON YOUNG: Well, I mean… So, for the few years before I started ecommerce and online, I was doing consulting for startups, so I would help people that had ideas formulate those ideas into viable businesses. So, a buddy of mine actually reached out, said that he wanted to get started with a business, leave his job. He had some job insecurity issues and told me that he was very interested in doing the Amazon thing. We had a couple of buddies that were doing Amazon and doing really well for, you know, previous year or two. And so, you know, the two of us started looking into it, I started doing some research and we would share some ideas back and forth. And they were doing retail arbitrage stuff.

At that time I, you know, I was looking at more of a way to make it a sustainable business and scale it rather than, you know, doing retail arbitrage. Just simply because, to me, RA is more of a job than a business, if you are not out there sourcing and you are not home processing things, then you are, you know, you are not making money. And so, I started looking at wholesale, liquidation, private label. I realized that private labels are a little bit further down the growth curve, but we started pretty much with liquidation and, you know, finding some sources. We get a little bit of online retail arbitrage.

We reached out to some brands. I used some of my previous contacts within the, you know, an industry that my parents had a business when I was growing up to reach directly out to manufactures and directly to suppliers and seeing whatever their own margins are. And so we started growing the business from there. So, that was about July of 2015.

DAVID ALADDIN: Oh, very cool! So, two years into this, right?

BRANDON YOUNG: Yeah, not even two full years into it now. And at the time I was, you know, dating my now wife (poor Audio) actually from China. When we were looking at the private label side everyone was like: China, China, China! You know, to quote Trump, right? And so, we decided to start looking at what connection we could make there with the strength of having her on the team. So, we went to China last April, we went to fairs, we went to electronic trade shows in Hong Kong, we spent about a month there. We visited factories for couple of weeks in Shenzhen, Guangzhou and Dongguan. And we decided to pull the trigger on launching our first two products and creating a brand. And since then we’ve got two brands, we are launching a third brand, we’ve got about 15 different products and we’re launching five or six more in the next two months.

DAVID ALADDIN: Holy cow!

BRANDON YOUNG: Yeah, the private label accounts are doing, you know, a hundred and fifty thousand a month and growing. We just got into Europe, so we don’t even know the impact fully of that yet. Our first shipment actually lands in Europe next week.

DAVID ALADDIN: Great!

BRANDON YOUNG: Yeah, man!

DAVID ALADDIN: So, there’s a lot going on! You guys are straight hustling! It’s only been two years and you’ve got two brands and you are launching another. Why do you guys want to launch multiple brands rather than one brand a multiple it?

BRANDON YOUNG: Well, so, we’ve have one electronics brand and then we have a toy brand. And so, we usually…It’s just for different verticals. When you have a different niche you don’t want necessarily electronics brand to be, you know on a toy brand. Plus insulates, it helps with future growth. Like, we are thinking ahead, so we are already thinking about, you know, big box retailers and opportunities. So, we’ve got exclusivity on a couple of our products. We are working with our manufactures. We are doing, you know, ODM at this point. Originally we started with stuff straight out of the factory and just putting our stamp on it. And now we are starting to work with the factories to modify it, to make it ours and get exclusivity on different designs. And so the advantage would be…if we can show, let’s say best five for example that we’ve got one of the best selling products in out category and we’ve got great reviews, and we can prove that demand through Amazon, it makes it a lot easier for us to have that conversation with them about getting into their store. And so we are thinking ahead along those lines already.

DAVID ALADDIN: But…So, I am like in a similar situation. Like, I’ve had exporting retail reach out to me, but I’ve got this major issue, lost my products, or all of my products were labeled for Amazon, there are not labeled for UPC code. What do you guys…Like, what’s your plan there?

BRANDON YOUNG: Oh, so that’s a simple fix. You just register with the GS1 and then you get to your UPC on there and you create a unique GS1 UPC. You have your factory start putting that on there instead of your Amazon if it’s going to be for that and… You know, it’s really something. If there’s an order for best buy you have your factory, put the UPC. If it’s for Amazon, you have put your AMZ, right?

DAVID ALADDIN:I see. So, when you go big retail you create specific orders for that retailer. There are other issues too going with a big retailer. The requirements, the certifications that you need as well, you know? Have you had issues like getting two million dollar liability and stuff like that? Dude, these are things that have been coming up and I just don’t know how to navigate the wires!

BRANDON YOUNG: Yeah, I mean, there are probably thousands of people that want to sell you insurance that you know (inaudible) you got to listen to your podcast that might know somebody that want to sell you insurance. So, really, that’s a yellow pages or a Google issue. Don’t know if yellow pages exist anymore, but you can just Google sell me liability insurance.

DAVID ALADDIN: That’s so true! I guess there are a lot of things to do around the business and figuring out what to do and what your priority is the biggest issue. Okay, so, what about funding these external projects? With the big retail boxes they won’t pay you out for sixty days or whatever…

 

BRANDON YOUNG: So there are cash flow issues there obviously. So, with regards to cash flow issues, I mean, you have options for capitalization. And you know, we’ve been fortunate, you know, we do okay with other investments before we got into this and between my wife and I, we were able pretty much to self-capitalize everything. We’ve had some broker’s issues there because obviously any time you are expanding and growing, starting your own private label, your capital turnover time is a little bit longer. Then let’s say if someone’s doing typical retail arbitrage or wholesale… But usually go a little bit deeper on your inventory you have to give at least 30% in advance. So, you are looking at maybe a two months cycle under capital versus, you know, maybe a two to three weeks cycle on a whole sale account retail where you can just go pick something up, send it in and sold, right? So, some solutions that we know of, I mean… If you’ve got proven records, there are lenders out there that specialize in lending to Amazon sellers. I am trying… I can’t remember the name of hand, but I remember one that would help you with daily payouts. They just keep you… They take 1% of whatever they give you. And they’ll give you up to 80% of what your accounts receivable is at the time. So, that way, you don’t have to wait two weeks for your money from Amazon, that’s one solution. Another would be like a cabbage which would just be a lender.

DAVID ALADDIN: Those guys are like loan sharks by the way.

BRANDON YOUNG: Cabbage, yeah… Sometimes it’s expensive to grow and you have to kind of weight against what your opportunity is. The margins that we are seeing… I mean, Amazon’s really like a gold rush, it’s incredible. Like, where else can you take capital and make, you know, 25% on your money inside 30days? And really, that’s… Really, I would say that’s pretty average for an Amazon seller if you are doing it right. If you are running out of capital and you’ve spent every dollar you have every two weeks, every months, then you are doing a good job.

DAVID ALADDIN: So, you are slightly different than some of the sellers that I’ve talked to. It seems like you are well diversified, you don’t have cash flow issues at all. Can you discuss some of the…how did you get to this point before . . . ?

BRANDON YOUNG: So, before we were doing liquidation, we started with wholesale at that time as well… So, it’s not that we didn’t have cash flow issues. It’s just that we had a certain amount of capital and we were just investing as much of it as possible every two weeks. So, we would just put two sources, or three sources that we had at that time, we would try to manage the inventory, make sure that we constantly had inventory… So, it was a little bit of a balancing act. I am sure that people go through that on different scales. Our just happened to be where we started with, you know, seventy-five thousand or a hundred thousand dollars rather than the typical person who might say: let me give Amazon a try with ten thousand, or fifteen, or five thousand, you know? But it is a curve. I know. I am friends with a guy on Facebook that does Amazon who left his job. I met him when I first started. I joined a few Facebook groups and became Derek’s friend. I don’t know if he listens to your podcast, but I am meeting him in Vegas for the first time at Prosper, going to buy him some drinks and hang out. But I’ve seen him grow, because he does retail arbitrage and he’s growing into a wholesale, and he was working full-time while doing it for maybe the first whole year that I knew him. But we would have weekly hangouts, like group hangouts, with a few different guys. These guys were doing a lot of different things that I was doing, but I was learning from them a little bit more about the processing and the backend of Amazon. And I’ll diverse a little bit here.

From every Amazon seller there’s, we all share maybe 20% of what we do, because we are dealing with Amazon, right? And that 20%, that’s really important for us to discuss and learn from each other. The other 80% might be unique to us, it might be our own business model, it might be our sourcing, where we are sourcing, you know, what we are buying, what we are selling, right? But that 20% is the goal. That’s where you can improve your business. It’s how to properly deal with Amazon, get your shipments right, you know, get that supply chain tidier, lower your cost across the board, those things. So, that’s kind of what I was learning how to do for the first year with these guys when I was, you know, when I was sitting at home.

These are the guys that had been doing it for years and they have learned so many tricks and tips, and had come across so many issues that, you know, everyone comes across with Amazon that I may not have come across yet, that I have finally came across and they have already dealt with it. So, now I am in a group on Amazon for million dollars sellers where you have to…it’s verified, you take screenshots with your account and your face in the picture and stuff. And to me, that’s the most helpful group I’ve ever been in. The guys are very open, they talk about what everyone’s been asking questions and if you ask a question you’ll have ten people chime in and offer advice.

That type of community is really, really cool and it helps, it helps a lot. And most of the guys if you are doing a million dollars, you’ve expanded beyond Amazon or you’ve gone international or you are experiencing a lot of the same things that I am going through and so we are all kind of in the same boat at that point. It’s really, really a neat environment and a cool community. But, you know, to see people start with $5000 like Derek did, and then go from 5000 to growing his business and I see him every two weeks, he pulls his money in cash, it’s just something he does… Yeah, it’s weird. He takes out like 30, 40, 50 thousand dollars in cash and then puts it next to his gun and says: all in, you know. And I just love seeing that! But I’m just like: you are crazy, man! Like, he lives in Detroit, like he’s going to get shot!

DAVID ALADDIN: I have never been on a farm and on a countryside, and he’s got like his rosters and then the gun on the wooden table, owns cash… Very cool! Okay, so, I guess when you start accumulating so much cash every two weeks, there’s been like a lot of suspensions going on. Does that worry you? I hear a lot of Amazon seller get suspended these days for all sorts of reasons…

BRANDON YOUNG: Yeah, so, we’ve been suspended. So, our first…it seems that happened in fourth quarter. So, let’s say we, we started I guess July of 2015, so, that first fourth quarter for us… Yeah, not last year, the year before. So, November of 2015 we got suspended. And we were down for over two weeks. At the time, we already scaled up. We were doing it for less than six months and we were doing about 50 to 60 thousand dollars a month in revenue. And it hurt! It was… We were ramping up for fourth quarter, we were out there and for black Friday I had plans to spend, you know, probably 25.000. And really fourth quarter is the only time that I do retail arbitrage, and even then it was like something where I wasn’t doing it too much. I was already getting off of it and more on the wholesale and liquidation side.

But for fourth quarter, I mean, it makes sense to do retail arbitrage, especially when you have black Friday and things. So, I had plans to spend 25.000, but my account was down and I didn’t know what was going on. I’d never gone through that before. And so I had a contact through one of the groups, and I still owe him for this, but Bryan reached out to me and he’s like: look, this happens, I’ve been through it, it sucks, but, you know, this is what you do. And I’d submitted my own I guess plan of action which they want you to submit. But I submitted my first plan of action and I didn’t do it properly for whatever reason, you know. They auto kicked it back usually the first time, or the first X times anyway. But I have later learnt that, you know, there are certain things that they want you to have in there, and I think a better understanding now. But Bryan helped me re-write it. It took him even twice to do it and probably the fourth time I submitted I finally got my account back. And I got it back Monday morning which was a cyber Monday…

DAVID ALADDIN: Jezz that was an adventure doing it!

BRANDON YOUNG: Yeah, I had the biggest day I ever had at the time. I think I did almost $12.000 in one day. And I just was so relieved to have my account back, but it scared the living shit of me! And I don’t know if the language…I know it’s a podcast… But at that point…

DAVID ALADDIN: It’s okay.

BRANDON YOUNG: Yeah, at that point we’re like okay, we need to diversify and that’s where we started to really starting to get more serious about private label thinking about other platforms, thinking about international. We opened a second account at that time for the private label specifically. And we wanted to diversify as much as possible, so that if we ever got hit by the suspension bug again, that we wouldn’t absolutely just screech us to a hole and murder us.

DAVID ALADDIN: I can tell it destroyed you. I mean, you even knew little details like it was Monday.

BRANDON YOUNG: I’ll tell you what, man, it’s scary when you go from all these plan you are sitting on dollars and you are projecting out, and even though I was only down for two weeks and you know. And if you look at the revenue I lost, it was probably, you know, probably $30.000 or so, I’ve projected out that my actual loss was probably closer to 40 or $50.000. And that’s because if you take what we didn’t spend on shopping on black Friday, if you take how we didn’t compound our capital after that, you know, it really…it put a big bump in our growth chart. And you know, if you think about the fact that from that point forward we were still spending every dime we can make and compounding it for the next six months/nine months, we had less to spend because of that. And every dollar that I didn’t make that day didn’t compound. So, I think every day that goes bay I probably lose more and more money from that single event. Eventually they’ll catch up, but as I am speaking to you, I am still losing money from that event.

DAVID ALADDIN: Let’s just make the opening statement to Jeff Basis: chill on the suspensions! I’ll get on my knees and beg. But I haven’t met a seller, or I am sure I have, but…that hasn’t gone suspended. And it’s out businesses that are on the line.

BRANDON YOUNG: I’ll tell you what. So, here’s what happened. So, got hit a second time, again in fourth quarter, again on that first account. Luckily our other account was probably doing about the same revenue at the time. We were doing six figures, but…we were doing less. So, we were doing probably 150 on the first account and…I don’t know, about a hundred on the second account. But the account that went down was our bigger account, was our first account again. And reason was from intellectual property rights violation.

So, this is a big topic that a lot of people are dealing with, especially if you do retail arbitrage or the liquidation where you are dealing with known brands. Or even wholesales, like, sometimes if you don’t have the proper agreements when you are doing wholesale, you just…you are buying through distributor and sometimes the brand owner will not know that you have that distribution right yet, and he’ll file the complaint just, you know, randomly. So, we had the complaint in the middle of 2016 and it was from a brand that I wasn’t really selling anymore. So, I was like; oh, whatever, I don’t really care, I never bothered to take off my account. I was either lazy, stupid, or all of the above. And so I had another complaint in October from a different brand, actually was the same brand and they issued like two or three complaint on two or three different ASINs right? So, now I have three or four on my account, but that’s a brand that I am still trying to liquidate, I still have like probably 500 to 1000 pieces of inventory and I am just like maybe across 20 different SKUs.

And I was like: alright, let me reach out to them. Less than a week later, probably at the beginning of October…no, in the middle of October, I got an e-mail from Amazon saying that my account had been suspended, I no longer have my selling privileges because of intellectual property rights violation. And then they listed the e-mails. So, what one of the brands has done is they hired a consulting company out of the UK who was filing all of these complaints against any seller that had their products below a certain price. So, if you are… They said that either you are an authorized seller and you were violating the math agreements, or you are an unauthorized seller and therefore they are just violating you immediately. Now, the thing is I don’t need to be an authorized seller to sell on Amazon.

There are laws that protect me there. What they think is that you are selling inauthentic goods if you are selling below a certain price. So, I immediately get on the phone with the guy in the UK, I e-mailed him, he didn’t get back to me and I get on the phone with him. And I talk to him, and I say: hey, you sent these violations in, what’s your basis? And he told me: it is like…well, you…I just…anyone selling below a certain price based on a 100% on your price. I said: here are my sources and I am buying from these sources, I will send you invoices. And he’s like: okay, I am familiar with those that are no problem, I’ll be out to withdraw it. And I said: every single day I am out I am loosing, you know, $7-10.000 in revenue, you are causing significant financial damage at this point. And so within a few hours he actually had an e-mail sent to Amazon to withdraw the complaint. Now, that’s his end, he’s already caused the damage. But Amazon doesn’t do anything.

So, I e-mail Amazon and I am not even thinking like plan of action at this point, I am thinking: okay, the complaint was A, A was withdrawn, let me e-mail Amazon and tell that it’s been solved, please give me my account back. No responses, or that’s not the proper response, or whatever! So, okay, they want a plan of action. So, the first thing you do in a plan of action is you acknowledge that…what was wrong, what the complaint was. You know, I realized that you suspended my account because of X, right? And then you have to tell them that you are going to fix X or that X has been corrected, and you have to explain why X happened in the first place. And then, you have to explain why X will never happen again, okay? So…

DAVID ALADDIN: I see the complete frustration.

BRANDON YOUNG: Now, it still took me almost three and a half weeks, almost four weeks to get my account back. Again, I didn’t get my account back until cyber Monday at 4pm. Exactly a year later after I got back my account from the previous time! And again, I had the biggest day I have ever had on Amazon!

DAVID ALADDIN: You know, sometimes, I wonder, the amount of stress that it puts, you know, when you are in the situation where your account is completely shut off, you got hundreds of thousands, maybe millions of dollars on the line, and the bigger these things grow, the worst these situations compound as well.

BRANDON YOUNG: Yeah, it’s…it is painful!

DAVID ALADDIN: I forgot, you know, when you are in that situation, you are browsing the forums, and you are looking at similar cases, and there’s million dollar sellers that never get back on. And I guess that’s the biggest feat I have, never getting back on when that nightmare situation happens.

BRANDON YOUNG: So, I reached out… What I did is like about a week into it and like two correspondence again with Amazon with no luck, I reached out to CJ Rosenbaum, who’s the Amazon seller attorney. I was going to go with someone like Cynthia Stine, but because it was a legal matter with intellectual rights, I felt better going with an actual attorney.

DAVID ALADDIN: Yeah, he was on the show.

BRANDON YOUNG: Oh, yeah! Yeah, he’s a really cool guy. I finally met him in Orlando with the T-adviser event and had, you know, had a nice conversation with him. But I hadn’t met him in person or anything before that. But, you know, he wrote something for me and we went back and forth, but they denied his first one. Finally, I don’t know if this had anything to do with it, but I was out in Vegas, I went to Retail Global last September and they had, they had a pretty high up from Amazon there. And so I met with him, he had a table, we were able to converse some. So, I was talking to him about suspensions and I was talking to him about what we’d do in our different accounts and things. And he gave me his card, he was like: if you ever need anything, let me know. And I don’t know why I didn’t think about this sooner, but I was like three weeks into the suspension…like almost four weeks.

DAVID ALADDIN: Three weeks is huge, yeah.

BRANDON YOUNG: Yeah, three and a half weeks into the suspension and I e-mailed him on Friday…no, on Saturday, on the Saturday after Thanksgiving, so before cyber Monday. And I said: you know what, I wouldn’t be reaching out to you if I didn’t have, you know, if I had another option. I’ve hired an attorney, I’ve spent $2500, but I’ve had them withdraw the complaints, really the reason my account is down…there’s no reason my account is down still and it’s just simply because… And Amazon even enacted a new e-mail for these specific complaints. And I e-mailed them with no response. Sent like three different e-mails to that e-mail address…And I am trying to remember what it was, but it was…It will come to me. But it was a specific e-mail address that they have put in place specifically for these types of complaints for the intellectual rights violations or for brand owner violations. But I e-mailed them with no response, so I was just like: look, I wouldn’t be reaching out to you, here’s what happened, here’s my latest plan of action, and I rewrote what CJ did and I added to it, and I was like: look, we are doing a lot of business and it’s fourth quarter, this is killing me and we…you can tell by all of our metrics we’ve never done anything shady or wrong with our customers, our feedbacks are a 100% and you know, we don’t have any math agreements, we didn’t violate any laws or rights, and really were are down for no reason, and please help! Yeah, and so that Monday I am sitting in my car, I dropped off my wife to pick something up somewhere, and I am sitting there, and I am going through my e-mails, and e-mail pops up that says: your account is back! So, I don’t know… And then like, I don’t know, ten minutes later as I am getting that e-mail and I am reading it, and I am almost in tears, I am so happy, I am just like: oh, my God! Our business! It’s a huge relief it is back! Whatever… My wife gets back in the car and I am talking, and I show her and I am just like: yeah, we are back, our business is back. And I was like: I wonder if my e-mail to this gentleman had anything to do with it, whether he reached out on my behalf or anything, and I was like: maybe I should e-mail him and let him know m account is back. And she’s like: well, if he didn’t do anything, it’s going to be a little awkward, right? And I am like: I don’t know. And then, less than 10minutes later I see his e-mail comes in and he’s like: hey, I just reached out to this department, they said they are working on it.

DAVID ALADDIN: For real? That’s awesome!

BRANDON YOUNG: So, apparently he got the ball rolling, or he had them bring special attention to my account and they were able to see that you know, I did deserve to get my account back, and it was back. And it’s funny because three weeks later I finally get an e-mail back from that same service that they put in place for this specific reason, saying that my account…or that my request was denied and that…for whatever reason. So, like I was already back and running for three weeks in the middle of fourth quarter, but that same department within Amazon denied me again, three weeks later.

DAVID ALADDIN: I’d feel a lot of time talking about this subject, but it’s probably…I think it’s the biggest subject that faces all Amazon sellers. Yeah, we can solve it. But how long can we suffer for it? And because all of us have been suspended, it seems like no one is strong…you know, can avoid this kind of situation.

BRANDON YOUNG: No, no one is beyond reproach when it comes to Amazon. It’s their ball, their field, they don’t…like, you are really nothing. I mean, you can be doing ten million dollars a year and they won’t think twice about getting rid of you. So, as long as you constantly have that in the back of your mind and you know to diversify… Again, you know, that’s one thing that I would stress to people: do it legally, like Amazon will allow you to have more than one account, and play by the rules. You know, like even if you play by the rules, you can get hit like we did. You know, there are going to be things where you mess up in the beginning. Your account is going to get some strikes on it. You are going to mess up when you first start on Amazon. And either you are going to send things in that you didn’t grade properly, or maybe you bought something and you didn’t realize it was missing pieces, and someone is going to complaint you sold them something used as new, and you are going to get these marks in your account, and it’s going to happen. You are going to send all new products that you manufacture, and you still going to get someone say that you sent them the used one somehow, and you are going to have to defend yourself. But regardless on whether you are on the right, and whether you did it, it’s going to be a black mark on your account. So, know that in advance.

My biggest recommendation to sellers would be to request a second account for the purpose of selling a different vertical, create brands in that vertical, never mingle the accounts, get new bank accounts, get a new business, get a new ISP. I am serious when I say I have ComCast and ATNT in my office, I have two different ISPs internet service providers. I have two different computers that never log into the other account, they are only dedicated to each account. I have a cellphone that’s only dedicated, I have T-mobile with four lines,  and one is specifically for one account, one is specifically for the other account, and then I have two personal lines with my wife.

So, plan ahead, understand that you need to diversify, get different accounts and then also diversify into the private label, diversify into wholesale, diversify into Europe, look at getting into other markets like Walmart, Jet you know, eBay. Don’t put all of your eggs in one basket, because it’s going to happen. If you are an Amazon, you will be suspended at some point.

DAVID ALADDIN: I want to go back and watch that last like 20seconds you just said, because there’s a lot of awesome golden nuggets. When you separated your accounts completely, did you also use like a different address or…? Because your both computers are both with the same address…

BRANDON YOUNG: Yeah!

DAVID ALADDIN: Okay, so everything is completely separate?

BRANDON YOUNG: We have a different business address I rent. I actually rent an executive suit at an office building where I get all of my returns sent. It is my business address. That’s where I go and pick up my mail, and pick up my returns, and that is the mailing address for that business. And it cost money. I mean, you have to invest and understand. But you know what? It’s the greatest thing we’ve ever done! I mean, we wouldn’t have survived last year through the fourth quarter if we hadn’t. And now that account does more than my wholesale account. And it’s by a lot. And it’s going to continue to grow because, like I said, I mean we are working on third brand, we are working on Europe, we are launching, you know, two to three new products every single months is our goal, and we are very aggressive. I mean, I’ve got… My wife and I, we’ll do this full-time, and we’ve got two full-time employees and a part-time employee. So, it’s…we are growing and scaling a legitimate business.

DAVID ALADDIN: So, are you going to get a new office for the third company?

BRANDON YOUNG: Yeah, so, the brands we are keeping on the same private label account, we are looking at a third, getting up to third account. We would have to get a different executive suit, a virtual office somewhere. We would have to open up another bank account, another business. And you know, talking about that, we are going to do taxes a third time and having to…there’s a lot of expenses involved in that, so… At this point we are not looking at the third account.

DAVID ALADDIN: No, I think it’s smart!

BRANDON YOUNG: But it’s… Yeah! Within six months I would say we’ll be there.

DAVID ALADDIN: Wow! That’s an insane amount of upload. You got to build your feedback up to that account. Everything is completely new. All the profile work…

 

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DAVID ALADDIN: I love talking about diversification because I think it is an extremely important topic. So, you are in Walmart now … how is that diversified?

BRANDON YOUNG: So, what we use … so it is funny because when I was at Retail Global that is when we really started looking at diversifying and SellerCloud was out there as one of the presenters and I can’t say enough about Retail Global because it was fantastic, I mean, big shout to them and the biggest thing for me where all of the … they have some great courses and different tracks in learning and stuff and you can definitely learn a lot from that. But the different service providers and software companies and shipping and logistics’ companies, you know, a lot of the different companies that had set up out there were fantastic. I spent one whole afternoon where I skipped a couple different tracks and I went out there with my wife luckily and she was able to see a couple of the conferences and take some notes but while everyone was in and I had the full attention of the vendors, I went around and visited every single vendor – what do you do, let me get you a brochure. Because I had in my mind what we wanted to do with regards to our growth and our strategy and our plans and I knew that I needed help doing that with different providers; I needed a logistics company, I needed someone to help with currency exchange, I needed help with software for cross platforms. SellerCloud was out there and I met the owner, he happened to be out there, the actual guy that owns and started the company and so I set up a call with him afterwards, we talked and it was the solution that we went with just because it was more affordable than some of the other solutions that were out there. I will tell you what, the UI on it is a little rough, it is a hassle to navigate, I hope that they improve that but it gets the job done. We are able to sell on Walmart, we are able to sell on Jet and they have dozens of other market places as solutions that they offer to you but right now, we will be just stuck with Walmart and Jet and we do Wish … we fulfill on wish.com, we do all the fulfillment ourselves through merchant fulfillment, not through our 3PL?

DAVID ALADDIN: What was the software that used to get onto Jet?

BRANDON YOUNG: SellerCloud.

DAVID ALADDIN: Okay. I had some major issues getting onto Jet, I mean, I got approved and everything but just didn’t work well.

BRANDON YOUNGH: It is all through API which is like … I don’t know, I don’t know how that company is worth anything and how anyone bought it, I can’t believe Walmart bought it. It is a horrible, horrible service.

DAVID ALADDIN: They are worried about Amazon, the only thing they can do right now because they are falling behind it.

BRANDON YOUNG: I will tell you what, my other venture what we are investing in and I know it is a lot of what we are doing and how we are growing but I have been able to start to … my wife handles a lot of the day-to-day and then I have my employees so, my background with being in tech development and startup development, one of my passions. What I have been able to do is invest with one of my old clients and friends in a company that does live video technology, I will talk to you a little bit about this on chat, right, will that …

DAVID ALADDIN: Yeah.

BRANDON YOUNG: So, one of the things that we are actually creating is a retail market place that incorporates live video. So, we are coming after Jet, we are coming after Walmart and Amazon but we are going to incorporate where you can actually see the sales people and the vendors live and interact with them live so it is going to be … we are going to try and disrupt that space a little bit. I don’t know how Jet is in business to begin with but they won’t be when we are done.

DAVID ALADDIN: Do you guys have an app name for that?

BRANDON YOUNG: The tentative name right now is Shopr; my partner absolutely hates and despises dropping letters from names and it is so 2008 but so it is a tentative name but for right now, that is what we are going with.

DAVID ALADDIN: That is funny. I feel like I don’t even know how you got all this done in two years because I kind of started at the same time and I am full time at what I do and I don’t have this much … I mean I feel like I am not even comparably close to how many accomplishments you have knocked out. I mean, you have got … you went to three fairs, you went to China, there are a lot of stuff going on. How do you organize yourself?

BRANDON YOUNG: So I mean, it is … I will tell you what, from the beginning I have thought of this on this kind of scale – that is the difference, I think. I think a lot of people are like … if you are looking a foot ahead of you and you continue to walk forward, you are going to get there eventually but I was thinking, you know, I was thinking a mile down the road from the beginning.

Our six month and our one year plan were laid out two months into starting this business and it really made a difference because everything that we did was working towards that end and I think, I look back at my friends and my buddy that I originally had this conversation with and we started at the same exact time, he is doing fantastic, I mean, he is doing a hundred thousand dollars a month but he is still doing retail arbitrage, he is still doing online arbitrage. And he has an employee that is shopping for him and he has got another employee that processes for him and he shops all day and so he has scaled his business up in a way that you can with arbitrage and it is a different path. I mean, there are dozens of ways you can make money on Amazon and everyone has their own method; some people don’t want to have a million dollar business.

There are people … like my margins on my wholesale account might be half of what people are doing on their arbitrage account so they could be doing half the business and making as much money and they are happy with that, right. So I mean, on my wholesale account if I am making in that margin of 12 to 15%, I am happy but the volume I am doing is 6 figures so, you know, to me that is my goal and I am doing higher in products and things like that but some people don’t want that, you know. Some people want … they don’t want the headache of dealing with that, they don’t want to hire an employee, they don’t want to create an actual business, they are okay doing 40 – 50.000 dollars a month with 25% margins. I am thinking a little different than them, I am trying to run the world so …

DAVID ALADDIN: We have got about eight minutes left but I have got a ton of questions. I appreciate you coming on the show. When did you get your first employee and why did you decide to get it at that time? What amount of cash flow did you have at that time?

BRANDON YOUNG: So, pretty early on, you know, I brought someone on to help me process and I was working with him and it was like just from my tech background, you know, the startup mentality background I brought someone on and it was like … I was going to vest him with equity as time went on. One of the biggest mistakes that people make when they do a startup with employees is that they will guarantee them equity immediately, they are like “yeah, come on onboard, we are starting up, I can’t afford to pay you a lot so I will make it up in equity” and they will just guarantee them a percentage, right. That is the wrong way to do things because what happens is 99% of the time it is going to be the wrong person that you need to really get to the next level or you are going to have a clash or they need to leave, there is a conflict, it just doesn’t always work out, they realize that is not really what they wanted, whatever. So when they leave, they leave with that equity and they are still going to have a piece of your business and what you need to do is you need to set them up to actually vest that equity over time – “hey, I am going to give you 10% of my business, we are going to grow this business pretty aggressively but you are going to be vested over two or three years so every few months you are going to end up with some of that percentage”.

DAVID ALADDIN: And you have got time to set those contracts up and everything.

BRANDON YOUNG: Yeah, I mean, it is … I have done it before so clients and things so it is pretty easy for me but the whole point was he worked for the first maybe four or five months and he realized that wasn’t for him and it wasn’t working out and so what I ended up doing is he had vested some equity and I just bought him out; I said “no problem”, I gave him a check for 5000 dollars and I hired somebody else. But now that person doesn’t work just for equity, I give them bonuses, I give my employees bonuses, they work hard, I want them vested in it, we are going aggressively on Wish and so developing products on Wish is unique thing and that is a whole other animal. So, they work from home, they work aggressively and they have my business’ best interest to mind because I take care of them and I need to be free to do other things and I can’t be worrying about the little things that need to be done every day and so having good employees is really important.

DAVID ALADDIN: What percentage of your business is Wish vs. Amazon?

BRANDON YOUNG: Well, Wish is something that we only launched when we got back from Retail Global in September so I don’t know, it is only a few months old. We are not doing a ton there, I mean we are only doing like 15 to 20 000 a month to this point.

DAVID ALADDIN: It is not bad.

BRANDON YOUNG: No, I mean, it is growing; for a new venture, it is pretty cool, the margins are nice there. Actually, the margins are really tight there because we have to compete with Chinese sellers, like, 99% of the sellers on Wish are Chinese. They can ship something from China to a customer in the United States cheaper than I can from within the United States. I can’t ship something down the street to my neighbor in an envelope cheaper than they can from China and it is absolutely absurd but the Chinese government will subsidies their mail system, they will subsidies any exports. So, you go on Wish right now and you shop, you will find a ton of things that cost $2 and they are $1 to ship from China, I can’t ship it to you for $3.

DAVID ALADDIN: I get it. Okay. Last question and we are out. You’ve got Wish and Walmart doesn’t allow you to go through Amazon so are you using a 3PL? How are you … that is one of my struggles too?

BRANDON YOUNG: I am going to plead the 5th.

DAVID ALADDIN: Hahahha! I already know the answer to that.

BRANDON YOUNG: I will talk to you about this offline. I know it is against Terms of Service to ship from Amazon and I am just going to leave that at that.

DAVID ALADDIN: Yeah, you got to do what you got to do. But thanks for coming to the show Brandon. It has been a pleasure. Tons of golden nuggets today, I am going to have to re-watch this specially during the diversification of multiple firms, I really liked that part. I appreciate you coming on the show.

BRANDON YOUNG: Yeah man, while you are only right across the coast, if you ever want to come over this way for lunch or something, I mean it is an hour drive, right? I am literally right across Alligator Alley.

DAVID ALADDIN: If you ever want to come across the coast and I will get you a free lunch too.

BRANDON YOUNG: I will be going out to prosper the ASD this month and then I will be going back to China in April so one of the biggest things that I can recommend if people want to get into wholesale, then I think ASD and prosper are good shows to go to. CES was a lot of fun for us, we have been to CES twice now and really, you don’t go to CES to make contacts with manufacturers or with … you know, there are some out there but really what you are going for are ideas because that is where a lot of the major tech companies are going and a lot of the major companies are going to showcase what they are going to be releasing in the next few months throughout the year.

So we go out there and we think “okay, how can we make something that people can use with that product or can we do something similar and get it to market faster or around the same time but cheaper” and add some kind of value proposition to what they are doing so like for example, Belkin might be releasing a product that costs 99$ that does something and maybe we can do something similar for 49$ and still make good money on it. You know, it has been good for us to think along those lines so if anyone is going out to Vegas or whatever, you can always reach out to me and I am happy to meet up for a drink or something.

DAVID ALADDIN: Awesome! Awesome chat! And your app is Shopr with one “r” and no “e”? Is it coming out soon?

BRANDON YOUNG: Well, that is probably three to five months from coming out but we want sellers to get onboard with that sooner like we want to get some commitment so if you are interested in becoming a seller on the app, it is not for everybody. Ideally, the seller is going to be able to be live like basically you are running a show like QBC so we want you to be able to broadcast live and showcase your products and answer questions. Think of it like you are doing a live broadcast like on Facebook Live and you have hundred or thousand people that are there asking you questions about your product and wanting to buy it but they want to see it and they want you to talk about it, answer questions about it. So that is what we are building. So if you think you have a business model or a sales model or your own brand or you want to open up a store like that and can be live, then maybe you are a good fit for what we are doing and definitely reach out to me. We need to get a couple hundred stores for our soft launch.

DAVID ALADDIN: Thanks for coming on the show! Brandon Young, Dave Aladdin – out!

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