Our guest on the 6th of July, 2020, on the sellerboard show was Carlos Alvarez. Carlos is an Amazon seller with more than $100 million in sales per year.
In this episode, Carlos revealed how he made this happen and what exactly he is selling.
Watch the full video here: https://www.youtube.com/watch?v=NEuCY3TqgqY
Hello, everybody, welcome to the next episode of the sellerboard show. My name is Vladi Gordon. And my today’s guest is Carlos Alvarez. Carlos is a nine-figure amazon seller. That is more than $100 million in sales per year. Think about this. And basically, we talked about his path last 15 years in e-commerce and how he got to this point, he created multiple brands and sold more than 12 brands, and had ups and downs. And at the moment is a huge seller in different categories. One of the categories. Surprising the interest is it’s live insects. It’s selling live insects on Amazon, like worms, and roaches. And so I don’t know, I was blown away. I didn’t even know this exists. So yeah, stay tuned, this is going to be really, really interesting and motivating. Before we start, don’t forget to press the like button if you like this episode, and subscribe to our show. Because we’re making these videos regularly. If you have any questions to us or to the guests, then feel free to post them in the comments. And if you’re not a sellerboard customer yet, or if you’ve never tried sellerboard, then go through the link in the description seller boards com it’s our profit analytics service for Amazon sellers. There’s one month free trial in it starting only from $19 a month. We have a ton of other tools in the package. So profit and knowing your numbers is our key. But there’s a PPC optimization module in the inventory manager and money-back model which will go ahead and search for lost and damaged goods where Amazon owes you money and help you get this money back. And a lot of other stuff. So check this out. And now let’s start the show. Hey, Carlos, how are you doing? What’s up, man?
I’m glad we made this happen.
Yeah, we rescheduled it a couple of times. Right. busy busy days, right.
Um, so tell me like from your business’s perspective? How’s it going? Like, did you see a crisis or something like this or more sales less so
I initially when this hit. And for me when I say when this hit I refer to the emails from Amazon, which was we’re not accepting any new non essentials. We’re not even prioritizing nonessentials for shipping. That’s when the hit when I got hit hard. Prior to that e-commerce sales were spiking, just because of what we were anticipating to come. When that happened. A few of my brands, you know, they got hit between I lost about 40 to 60% of revenues just overnight. And then I also have div you know, a strength of my businesses over the last decade and a half has been diversifying off e-commerce. So I’ve used money, profits, thankfully that I did Jeff Bezos gives to me. And then I open up other, you know, brick and mortar, like businesses are off Amazon businesses and those traditional brick and mortars when they start getting shut down with those one to zero income as well. But you still have overhead employees. So that was my situation there. Now,
the thumbs nice, Carlos. I think you’re a well-known person in the scene. But just for those people who don’t know you, tell us a little bit about yourself. And then what’s your background in FBA and Amazon? Sure.
Yeah, definitely. We only have an hour right now.
we can do two or three.
I’m no specialized schooling, I was just going nowhere fast as a kid, and I was holding down odd jobs with you know, delivering subs selling cigars, working as a dairy clerk in a supermarket. Plus, starting to, you know, trying to find odd jobs all around that I could get extra money to make my very expensive ex-girlfriend happy. So I one of the income things that I stumbled across was eBay back then. So I started selling stuff on eBay and I just hooked on the process. So as my eBay process as my eBay business grew, or basically, a better way to say this, since we’re talking is since the revenues coming in a group, I assume what I can now start dropping the sub route or I can start dropping the dairy clerk and I can focus more on the eBay business and let it grow. That kept going. And eventually my friends and family saw that I was doing something that did not end me up in a bad place on drugs or something like that so they supported me and they pulled up about 80 not about $81,000 to help me launch this business better you know maybe hire someone get more inventory that sort of thing they did I immediately went to this new supplier I had been dealing with called pleasure chest reps named Elvis known to this day a great guy, it was an adult novelty factor in China. And the most profitable product I had was this ring that a guy puts on we’ll leave it at that and then you get it for 16 cents and sell it for like 20 something bucks.
This was private label, right?
This I’m gonna call it white label because I wasn’t creating a brand around it. I was just removing their logo from it. Okay, that’s it. And that was I hadn’t heard a price a matter of fact, the term private label didn’t even exist back then in the Amazon space. We’re talking about close to 15 years ago. Okay. And for a while, it was just called White labeling. So the idea I decided I’m getting $81,000 of these I’m going to be the next Bill Gates This is it. I go to the factory they obviously don’t have that much in stock I got frustrated because I didn’t understand how a factory didn’t just have 80 grand and stock of a product and I look for somebody else on Alibaba money Alibaba is totally different than what it looks like right now. And we were talking about a decade and a half ago and I found someone named moose monsy say factory in Hong Kong showed me picture had all the supplies and sent them the money and he stole everything from me so I mean they there’s no factories in Hong Kong they’re all in mainland China. You know, a simple Google searches I like to say could have debunked at this place didn’t even exist because later on I eventually send an inspector and like it’s an office it’s a closed office building like there’s nobody there.
Oh my god. And I didn’t want to invest everything or Yeah,
yeah, I was all in except for the inventory I had obviously because I was still I was doing enough to have quit my different jobs. So I still had that inventory in the mix. I just blew everything else that was loaned to me. And I didn’t want everyone to know. So I started selling off the things that I had which again were not much I the most expensive thing I owned and I ignorantly thought, well this is just going to get me out of everything was this Movado watch I like the brand Novato and I think come to find out the watch brand new was like 1200 bucks and a pawn shop or something was offering me 150 or something on my oh my god. So I went to go sell two of my reptiles and Burmese python a Colombian red tail bow I like snakes and okay the person in front of me in line is a reptile shop where at this reptile Pet Shop just had reptiles was paying $25 for 50 live worms. And long story short, I wind up getting into selling live insects. In my house I bred them my ex had enough she left I got the business to a point where I was sending out from the house by about 30 units a day at 55 bucks each.
You’re sending them like via DHL or UPS United States Postal Service
yeah USPS Priority Mail two day delivery if it was really hot on the other end, I put a cool pack inside of it. If it was cold on the other end, I put a hot pack wrote in fourth Oh, yeah, dude. roaches, two types of worms and crickets what the time it was you’re making crickets until they got wiped out. But the code enforcement eventually gets wind of this and they’re threatening, you know, tell me to throw everything outside of the house. At this point, I had to have about three and a half million, you know, crickets alone. So imagine what that sounds like. Right?
Oh my god.
I find a friend has half a warehouse he loaned me I go in there I continue the business. I work it you know sleeping on the floor 90 hours a week. I didn’t even really I didn’t know my numbers. I’m not sure I know my numbers to this day for that business. But I get approached to sell my business and I wind up exiting for $2.6 million. And then with that I just I partied until I realized oh my god, if I keep doing this I’m going to go broke.
actually selling them on like Amazon live insects
isn’t eBay and Amazon. Yeah, if you go to Amazon now a lot of people don’t realize if you go to Amazon and say you search for look for superworms a matter of fact, if you look for live superworms you’ll pretty much every single listing for the first few pages is mine.
Oh my god.
Yeah. The weird thing about that category is it’s very like it was when I started so if you go there, you’re going to see you know, several brands But there is no patent or trademark that you can put on your worm. It’s a type of insect. So it’s all merchant fulfilled. So everyone sells on everyone’s listings. It’s extremely Wild, Wild West.
Oh my god, I’m looking at the category page right now. You’re right.
Yeah. And you do roaches, worms. Crickets. Do a lot.
Okay, I’m so shocked. So tell me Is it a good product to sell? No, actually,
it’s amazing. I actually sold that business it exited it. I sold a bunch of businesses since then when my non-compete ended, I got back in the insect business. And now it’s, it’s my largest. As a brand, it’s my largest revenue source with yet last year, breaking a little over 40 million in gross sales.
Oh, my God, okay, go on, then. Then just continue where we stopped the sale of your business and party, right. So I,
I get this money, which is not $2.6 million after accountants and, you know, everybody puts their hand in it, and you pay taxes and everything, I was still left with a nice amount of money, but it was nowhere near that 2.6 still, with no experience in managing money and having more money than I’ve ever had in my life. Recently single, um, I think it’s important to say here too, that throughout this whole process, you know, right now, you know, if you have software that helps Amazon sellers, or if you sell on Amazon, that’s a really cool thing. you’re seen as almost like, you’re entrepreneurial. And it’s pretty bad. You know, it’s awesome, bad in a good way. But 15 years ago, that was seen as a very juvenile hobby. It was not seen as a solid career move by your significant other, you know, they didn’t, Nobody looked at you and said, Wow, this is going to be a very financially stable person that can raise my kids. So it was a very unsure time selling the business. In addition to the revenue, it validated things for me. So it gave me confidence. So now when I go to a networking event, you know, I didn’t have to make up these two sentence-long description of what I did. So I didn’t just say eBay or Amazon now, I was like, Yeah, I sell on eBay or Amazon-like I dare, you know, tell me something. So I with this newfound confidence single, recognizing what flirting was I just hoard hoard around Miami is what I did for a little while. And I just bought things that are out of character for me to buy, because I’m not into materialistic things. And I at one point, quickly realized, if I kept doing this, I would be broke by that time next year. Okay. And I didn’t want that. So the only thing I knew how to do was Amazon. And I didn’t say well, I create brands, I’m really good at creating brands, because it’s hard to even though it is it’s hard to refer to the insects as a brand of products. I still hadn’t had experienced sourcing physical products for a PL brand. And I but I knew how Amazon worked. And it worked totally different than it works now. And it’ll work totally different next year than it does now. But I knew how it worked. And I decided to partner up with a few people who saw my success. And we started a beverage Schilling company. So whiskey stones and all these different things that would chill your beverage like corkcicle stuff and all that. And it was a combination of starting our own brand, as well as reaching out to brands that we saw, were not even on Amazon. And so that would be wholesaling. And we’d reach out to them and they’d be happy to sell to us. And they were shocked at the volume we did because they were accustomed to selling like a master box to a store that might carry their stuff. Whereas we were buying pallets of this stuff. And my business exploded, it just exploded the Pl side of things quickly reached. You know, again, like 12 to 14 million on the wholesale side of things hit about 14 million. Your revenue, gross revenue, gross revenue, yes, gross revenue. And it’s important to note that I did not have the foggiest idea what my profits were like, I did not I didn’t even know that was a thing. And that’s scary. So I just knew money was coming in. I was wealthy, I was able to pay for stuff. And
But what started creeping in was that I’d pull up to gas stations with, you know, whichever girl I was with at the time, and I would cycle through them the last four numbers of all my credit cards in my head. And it wasn’t four points. It was four, which one would not decline, I think. Right? So imagine that imagine having at this point, it’s like four businesses like two pills and each one you know a smattering of wholesale and all of them. And we’re pulling some big numbers and I was a real jerk back then, like you couldn’t have a sentence. You couldn’t have a conversation with me without every sentence me, at least alluding to I’m some sort of millionaire because there were millions cycling through and I just really went to my head, complete opposite type of person than what I am now. And I had a business partner pull some shady stuff, I go to a friend, and I’m like, hey, look, I can’t lose my millions. I need to get a lawyer. But I need to make sense of this, like, How much? How many millions are we worth? So this person, fortunately, to this day, I don’t know their background, but they did know how to get numbers and make sense of them and plug in things like cost of goods, you know, just all kinds of things that I had never heard of. And at the end of a weekend, and a lot of pizza, he tells me, Carlos, he goes, the good news is you don’t need a lawyer. The bad news is, you’re not a millionaire. As a matter of fact, you’re broke, what you are really good at is moving money and not making money online. And I was like, what, is there a difference? Is, is there a difference? And that was a game changer for me?
Oh, my God. And like, once you do, then how did you? Well get the cash.
I did what I’ve done several times over the years, when confronted with a nasty learning experience that some people take for granted. I have a GED, I walked out of elementary school. I, you know, now I’m always learning stuff. And but when it comes to like bookkeeping and accounting, what I learned is hire the right tools and the right people. That’s it, like, I just realized, it’s not my thing. I hate it. But it’s critical to the success of my business. And but in other aspects of my business, you know, things like cash flow, we take for granted, um, interest on credit cards and factoring that in if you’re maxing out your credit cards, and just carrying that every month, you know, what is your true profit on a product, it’s just simple things that that I didn’t know. That I didn’t know. Then, whenever I was confronted with a situation like that, moving forward, I call it peanut butter and jelly. And I just realized I’m in trouble. It’s time to peanut butter and jelly this. And that is cut everything, everything. And literally, in most cases, this was a literal thing. Stock up on peanut butter and jelly. If I was splurging, it was the $5 footlong. And subway, I had the memory. You know, each day they had a new special, I had it memorized, I loaded up the veggies because I could split it into a salad like it was cut everything. And when you do that, you know each time it would take depending on how severe the problem was 468 months a year, and you pull yourself out of it and you learn from it. Fortunately, a lot of my more severe instances like that one happened at a time when almost no one was selling on Amazon. So pulling out of it was sometimes as easy as you know, me going to a friend and saying, Hey, can I borrow $5,000? I’ll give it back to you on such and such whatever. And I had already seen you do some good stuff. So you get this 5000. And I could literally turn it into 15 and five, six weeks.
But like how do I mean, if you run into such a situation? And by the way, I think there are a lot of people with the same problem are moving a lot of money without especially you know, when you’re growing. It’s normal that you’re that you don’t have a lot of cash, right, because you reinvest everything, right. But like what do you do in this situation? So you’re moving tons of money? And okay, of course you can borrow some money. But like, what do you do with your existing sales? How do basically sort this off? Did you reduce your product line or?
Yes, yeah, absolutely. At the same time that I learned, that was the major thing that I learned in that instance, was cashflow, that what cash flow is that it was a term that it wasn’t a term, it’s a term I learned to this day that you will always have to pay attention to and understand. It’s a demon. You know, the other thing that I learned there is that it’s almost unhealthier. Like if you if I purchase $1,000 of a product, and it doesn’t sell, I’m out 1000 bucks. But it’s almost unhealthier to grow too fast and not know your numbers, because you’re, you’re tricking the banks and your cards and your friends into that this, this facade that you have, and they invest more in you. And you get saddled with even more debt. Whereas if you just ordered 1000 bucks and you got stuck with it, you’re down 1000 whereas in this case, it wasn’t that I was down 1000 I owed for cash advance companies. I owed six different people. I couldn’t
keep up. Yeah, so
what I learned is growing too fast is just as damaging. And I had to pare back massively on the lines and let them sell and get that profit and I had to structure a plan that fortunately I had people around me that knew how to even structure them. I don’t think I could structure one like that to this day. It was just it was something that requires, you know, a brilliant mind and or some brilliant tools to plot out and get you out of
how many people were you, your company
at that time. There was I’ll just call it three business partners and each of the businesses and we’re at about four or five businesses. So there’s about 15 of us, okay? And with no rhyme or reason, none of us with business experience everyone going in a different direction in life. Some people thinking, you know, when the money comes in, let’s calculate the profit. Oh, that leaves 3000 profit. That’s 1000 for each of us take it out. Immediately, like the minute of disbursement, there was disbursements going out to the other bank account checking accounts tied to that bank instant, boo. And that’s what happened for a long time. And I think that’s what happens with a lot of sellers to this day.
I see, like, the new thing now, I
I do too. And what bothers me, I think most about it now is we have a lot of people. You know, I’ve cracked the code with Amazon. And I’ve been selling for a year and a half, and I’m an eight-figure seller. And I’m like, Yeah, I’ve been there. I’ve done that. Like, let’s do some really quick numbers, you didn’t have cash? How much did you have to take on to scale that? So what realistically your eight figures is right now is you’re making significantly less than a schoolteacher and probably qualify for food stamps, yet, you’re giving this image that you have eight figures, and you have a mansion and a yacht, and you’re carefree on your finances. And it’s just not the case. It’s not possible. It’s basic math.
Yeah. Okay, so go on and what happened next, my next biggest mistake through the years was really business partners. Actually,, I encourage everyone to read this book called The founders dilemma by Noah Wasserman. And I wish somebody had like, smacked me upside the head with this thing. Back then, but I, to this day, I have over 16 business partners, you know, we all we do is trade lawsuits with each other, it’s very toxic, and the businesses became more toxic, the more successful they got, it wasn’t that we were dealing with failing businesses. So a recurring theme of mine over the years since then, was creating brands. And immediately partnering up with some business partners, who had no complimentary skills or no knowledge of Amazon whatsoever, they were just willing to put up a little capital with me in match. And I would say we’re all equal partners. So there was no accountability. There was no org chart. There was no plan. And I continue doing that I just continued cranking out brands. So I’ve, again, I’ve sold I’ve exited a dozen brands at this point. I currently have five brands, my business model now, I have had the live insects. A coffee accessory brand, which is pretty much on the way out. I have a food brand. For trail mix. I have a wine accessories brand. And I think I’m missing one. But yeah, I’ll remember it but Oh, and a cigar accessories brand. So I have those brands and they comprise the brands 85% of my business and 15% of that is still wholesaling.
So tell me Can Can you tell us some more numbers about your current situation?
My current situation on Amazon for the last two years? We might my partners and I broke 100 million in gross sales. The year before last we did slightly better. Last year, we took a matter of 100,000 which I hate to minimize and make it sound like it’s not much you know, some people’s entire business is 100,000. I think that’s a huge success. The year before last, we had about an 11% profit margin. And last year, we just hit 9%. Well, yeah, just last year, we took a bath on the first quarter of the year we had an issue with a new program Amazon had called one vendor and they forced one of our brands into this one vendor relationship. So we lost three months of sales on Seller Central until that picked up. But the what we’re paying less in fees now throughout the year brought us to about the same number and then this year. This year’s going to be interesting. I don’t I don’t know. I think
we’ll hit about
the same, possibly even more because again, I think we’re at a net gain. Due to the craziness of the following year though. I’ll probably take a massive hit in gross because I plan on removing. I’m getting a lot of lucrative contracts on the insect side of things to refine the insects into protein powders and inclusion into breads and stuff like that, but there’s no market for that particular refinement in Amazon and For me to really double down and focus on that and where the numbers are, it’s going to require me to utilize and maximize the facilities that I have. Which means stopping the live insects selling to the reptile owner. And yeah, to the reptile owner, I’ll probably still keep a small portion of it to just fulfill for poultry farmers. I like the refinement process and for inclusion into fish flakes and turtle food, bird food, but the live insect port, which is a really high gross number, I will probably I’ll probably stop next year, which will put a huge hit on my gross. Yeah, but it’ll do wonders for my profits. Oh my god.
So honest, like you said 100 million gross sales.
Did I guess right? This is 100 and then six,
and a lot more zeros. Oh, my God million in gross sales.
I believe this makes you the largest seller on our podcast.
All right. I like to hear that. Well, you know what? I used to never ever share my numbers. And I feel like it’s and I really don’t like sharing that gross number because I personally know it means nothing at all. So it means not so but what’s happened nowadays is people like I run I organize an Amazon seller Meetup group, the largest one in the world. I do marketing consulting, like all these different things. And just amongst social media nowadays, if someone asks you a question, and you answer it, it seems your gross revenues are your qualifications. And if you don’t have these, what they consider now I don’t even think seven figures is that amazing to people anymore. It’s like seven figures is not really moving the needle for anyone in Amazon anymore. Eight figures or higher. No one even mentions nine figures which is 100. But it’s just what it is.
I was selling myself before I sold my business and I never got to seven figures. So that wasn’t a great seller. Although it was profitable.
Let’s go friend that who wanted to sell on Amazon and his only goal was to make an extra like thousand dollars a month to I believe it was to supplement something to put his kids through private school. And to this day, years later, he makes about 900 to 1200 dollars a month in profit. I consider that person wildly successful, wildly successful and they have a well oiled machine they know their numbers perfect better than me. And I so yeah, the number the number doesn’t mean that the number for what is it revenues. Revenues equal vanity profits equal sanity. true statement revenues equal vanity profits equals sanity.
So tell us more about your other businesses like you mentioned brick and mortar stores and I know you have an agency right and marketing
agency as well. So I have um, in the very beginning of Amazon, I also got a bunch of accounts suspended and I would find loopholes to get reinstated. Fortunately, a few of my brands in the coffee space actually in the cigar space did so well on Amazon that I was able to get in front of the right people at Amazon and just say hey look hypothetically asking for a friend if they had some suspended accounts like how could that get fixed? everybody laughed and they fixed everything for me so I don’t have any you know x hanging over my head for linking purposes. But it was a wake up call like it never failed I would get up in the middle of the night use the bathroom you grab your phone to check sales and you see that dreaded you know your accounts been suspended. We’re holding your money for 90 days apologize for the dog and kids in the background to just oh no, bro. I’m so I that just gave me such bad acid and did like did wrecked havoc on my blood pressure that it was just like, I can’t be one email away from disaster. Yeah, and I started getting a percentage of profits. And I would save them to invest in other non related non Amazon related businesses. So I would open different, you know, pet grooming stores, carwash dance studio, just whatever the case may be over the years. And I also tried to look at them like saying, well, this store right here. Let’s say let’s call it a pet grooming store. And this Pet Grooming store right now is open. It now has fixed overhead, which is pretty expensive. And online. I don’t have that. But on the wholesale side, I know that there’s a lot of wholesale vendors that will not sell to a reseller online unless they also have a brick and mortar store. Yeah. So since nobody can get those accounts, and I now have that brick and mortar store, and it’s legit. It’s not you know, not hanging a sign on the door and saying, Hey, we’re here and it’s a cover. What? How lucrative would those be since there’s less competition and it’s been amazing. It’s actually been a very lucrative model on that side. So I would I be able to create These stores, have them pay for themselves just off the wholesale products, whether anybody walked in or not. And then I was taking a step further. And I was like, wait a minute, if I have this foot traffic here, and I’m able to invest a great deal more in marketing, because of this wholesale stuff and get traffic, how easy would it be to leverage this foot traffic into launching a private label product in that niche.
what started off is really just diversifying became an extremely lucrative way of doing business for me. And that’s really been my model over the years in launching products is you know, I’d love to if possible, start a brick and mortar store, leverage all the wholesale accounts I can because I have the store in that niche and then launch a private label product based on the traffic around
So I have I have those stores. I also about nine years ago, I started I have two agencies, one of them’s Amazon specific so Bluebird Marketing Solutions provides you know, a tizzy services on Amazon whether you’re getting started need to find a product, PPC management, SEO, product detail page creation, full account management, that sort of thing. And, and then, almost four years ago, I started the Wizards of Amazon, Amazon Meetup group, which is turned into the largest amazon seller Meetup group in the world, we meet 18 times per month, five in Spanish 13 in English now we’re on zoom, obviously.
But it wasn’t before that it was a physical, right.
Oh, yeah. And we’ll be going back to that in a couple I’d say in about a month when I feel safe to come back out.
What where is it located?
South Florida. Miami, Florida, Broward Fort Lauderdale.
Okay, cool. We’ll put the links in the description, by the way. Yeah,
definitely. I appreciate it.
Well, can’t wait. You know what, I can’t wait to have you back on the pod on my podcast either. I also have a podcast Wizards of Amazon. It was actually it’s been the podcast that’s done better than any of my other episodes. Actually.
Seriously, oh, I’m very happy to hear this.
Anytime. You’re yours. And there’s an app called glorify app. It’s like a Canva alternative, if you will. But for e commerce sellers. I think it’s an amazing app for design. Your episode and the episode with Omar from glorify just neck and neck. Oh, nice.
Thanks so much. Thank you. Sure. Well, Carlos, this is an amazing story. And it’s very, very motivating. So thanks a lot for sharing. Tell us like where can our users find you other than the links that we’ll provide in the description.
Some of the easiest ways to get a hold of me. One is I share my number. I mean, nobody uses it, but it’s 3059021 to eight, three texts works a lot better. Okay, I’m very active on Instagram at Wizards of Amazon, I’m really trying to grow that profile. So I am very active over there be an easy way to get a hold of me. And then all day long. I started an Amazon seller group chat on telegram. I’m very, very active. And you can reach that by going to Amazon group chat, calm, okay. And you’ll find our telegram group, so it’s extremely active, and you just tag me. And I’m very cool. It’s on my screen right over here to the left, like it’s open all day. Nice.
Look, I’ll definitely check out your Instagram and telegram and in the podcast and everything else, I already know. So the links will be in the description, guys. Thanks so much, Carlos. Yeah, definitely.
Thank you so much, man. See you
next time. Bye. Bye. Absolutely. Thanks so much for watching, guys. I hope you enjoyed this episode. If so, then please press the like button, subscribe to our channel, and let us know what you think in the comments. I’ll see you in a week. Good luck.