Our guest on the 21st of December, 2020, on the sellerboard show was Gary Huang from the 7 Figure Seller Summit.
After interviewing over 30 different Amazon sellers, Gary took out 7 key takeaways from his summits as well as awesome tips, which he shared with us below.
Watch the full video here: https://www.youtube.com/watch?v=EDWJ0hBTi_E
0:07
Hi, everybody, welcome to the next episode of the soundboard show. My name is Vladi Gordon my today’s guest is Gary Huang from the seven-figure seller summit. And Gary is going to talk to us about seven key takeaways from his summit. So he interviewed over 30 different sellers and basically will share some tips with us today. Summary of his event. So stay tuned, this is going to be interesting. Don’t forget to press the like button, comment below if you have any questions. And if you are not a sellerboard user yet, then make sure you check out our software sellerboard com it’s an accurate profit analytics tool for Amazon sellers for just $19 a month. And on top of the financial analytics, we have a lot of bonuses, for example, an inventory manager a follow-up campaign tool for reviews and feedback. We have a refund file finder for like lost and damaged goods. So you can get your money back which Amazon owns owes you for like, damaged and lost goods. We have a bid automation module, which you can use to optimize your PPC campaigns. And a lot more, so make sure you check out our free trial. Now let’s start the show.
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Hi, Gary, how are you? I’m good. How are you, buddy? Doing good. Thanks. Thanks for joining.
1:41
Yeah, it’s my pleasure. So Gary, tell us a little bit about yourself. Yeah, definitely. Well, I am the founder, and I’m the host of the seven-figure seller summit. And, you know, we were voted the favorite Amazon conference and event of 2020 and seller poll. So I’m just super excited to be able to come on. And I thought that you know, I interviewed over 37 figure sellers, so I thought they will be maybe valuable to your audience if I can share the top seven takeaways, you know, so they can grow their Amazon businesses also. Oh, that sounds amazing. Very cool. Let’s do that. But to start to talk us through your biography a little bit. How did you get into this Amazon topic? Definitely. Well, a quick overview of my background, I was born and raised in the US. I’m from Los Angeles originally. And I like to say that I was made in the USA and I was exported to China. So I don’t know if you guys can see my face. You know, I’m ethnically Chinese. But you know, my parents were immigrants to the States. I was born in the US. So long story short, um, I was in China, I moved to China in 2008, in Shanghai, and then I found a job in sourcing. So I was the point person in our consulting firm, I’ve visited hundreds of Chinese factories, I’ve seen the good, the bad, the ugly, I managed clients, sourcing campaigns, multimillion-dollar campaigns. So I did that for many years, I really learned the ins and outs of sourcing. And later, I decided to come up with my own business called 8020 sourcing. So I had a blog where I continue to run it where I teach people, best practices sourcing from China. And then later,
3:31
I got into e-commerce. Actually, this story is a little out of chronological sequence. But I also have an e-commerce background, I first started selling on eBay in about 2005. So at this time, eBay was number one. And then that’s how I got first starting in e-commerce and then in 2008, because of the financial crisis, I decided to make the move to China. And then I stopped that business. And then about 2015 I saw Amazon was blowing you off, there was the FBA private label thing, and I’m like, Hey, I know that stuff. I wanted to get back into it. And you know, why not? I’m on the ground in China. And you know, I’m at the source. So I put two and two together and then that’s how I got back into e-commerce selling on Amazon in about 2015 2016. So that my e-commerce background and then in 2018, you know, I was visiting a lot of these Amazon conferences in Hong Kong global sources summit. You know, we met a lot of our I think common friends there. But at the same time, my family you know, my wife and I, decided to have a baby. So I was grounded. I couldn’t fly to these events as much as before. So this was 2018. And then that’s why I decided why not invite the seven-figure sellers to teach me and to teach everybody else, you know how to do it. So that’s kind of the Genesis behind the seven-figure seller summit. So we’ve already run three summits so far, um, and the last one was in August, and then we’re running the next one in February 2021. The
5:01
Okay, so let’s get into it.
5:03
Tell us about this. Secrets, or hex? Yeah, definitely. So well, I just first want to share these are just my top personal takeaways from the summit. So, you know, these are things that I’m using to implement to help me grow my business, but everyone is at a different stage. They’re at their business. So number one is mindset. Okay, number one, one of the speakers, Leon Hirshhorn, I really love what you shared about mindset. He said that failure is not the opposite of success. It’s part of success. And then Ron shared that, you know, no entrepreneur’s first thing is going to be like a massive success or a home run, you know, it’s not like a straight line to the top. If they fail in one thing, they can do something else. Okay. So I agree with this. And in fact, the majority of the seven-figure sellers I spoken with their may success was not their first business. So similarly, Kellyanne’s video, she exited her Amazon business for over seven figures. She shared that when she created her brands, there were a lot of peaks and valleys. Okay, there are a lot of ups and downs. Okay. So the takeaway is that, you know, failure is not part of, it’s part of success. It’s not a straight line to success. So that’s number one. In terms of mindset. So did you have failures in your private label? Yeah, definitely. I mean, definitely, man. I mean, the, you know, with the first product I sold, it was Apple Watch strap, you know, this was about late 2015 2016, when it first launched. And this one, you know, this one, we this one went? Well, this one, like we actually created a six figure business in our first year. But after that, I launched more products. So I got into like, you know, posture support braces. And then, you know, at that time, when I first started selling, it was selling really well. You know, we were selling like, like, up to like 15 units a day. And then I started like getting more and more into it. But at the same time later, a flood of competitors came and then I didn’t,
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I didn’t make a five-star product, I was getting by on like, you know, 3.8 3.9 stars, and then later, all these people overtook me. And then that’s, that’s when I learned that hey, you know, like, not everything is gonna be a home run. So that was one of the failures because I didn’t make a five-star product and to be any because I was kind of greedy. I’m like, hates, you know, 3.9 Star Wars only 15 a day. That’s good enough. But without That one wasn’t a success. I mean, there many, many others as well. You know, we had some successes, we had failures. But I think the important thing is, you got to keep going. You can’t just let that one failure just like you know, and your whole journey. Okay, so failure is part of success. I like it.
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Yeah. Okay. So should we move on to number two? Yeah, let’s go. Okay, cool. So number two is having to do with selecting a profitable product, because a lot of people this is like one of their biggest struggles, right? And then I really love what Sharon Evan said, and Sharon Evan is a seven-figure seller and a mama printer. She’s a mom, entrepreneur based in Israel. And then she said, when finding profitable product ideas, she tries to be a big fish in a small pond. Okay, a big vision, a small pot. And then, when she looks for products, she says that she doesn’t rely on software tools when selecting product ideas. In fact, she showed that when she first searches for products, she looks for products that solve a problem. So Sharon believes that when solving a problem, you will find a way to sell that product. And then she niches it down. So Sharon finds a product that everyone is selling. And then she sells to only one specific type of buyer for this. So in other words, but everyone else is like a small fish in a big pond, Sharon chooses to be a big fish in a small pond. So take for example, like a fork, like a kitchen utensil, okay, so everybody has one. And you know, you guys have one in your kitchen. So rather than aiming to sell a generic for it to everybody, which is too competitive, she instead focuses on a specific niche with a problem. So for example, she focuses on the senior citizen, the elderly market, or the special needs market, okay, so she would take a product with the fork with a lot of demand and create a product that has like an easier grip on it to solve the problem of senior citizens. For example, they have special needs, you know, maybe they have arthritis, they can’t use a regular fork without pain. So she does that to create the special needs for it to try and, you know, so to help them when they when they eat. And then after identifying the niche product, then she performs the keyword research using the software tools to validate this demand. But the key is, is not to disqualify a product idea just because it’s too popular with too competitive. In fact, there could be opportunities in the sub niche within that category that you can dominate So focus on this
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specific customer and solve their problem. And then this is,
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you know, called being a big fish in a small pot. That’s interesting. So what does this probably means that the pricing is going to be different, right? Because if you’re a niche in a, like in a deep niche, you probably have some more bandwidth with respect to the margin, right? Yeah, yeah, I’m glad you asked this question Vladi. Because this actually leads to the next takeaway, talking about the pricing and the marketing of this. And then one of the big takeaways that I thought was super interesting, is when you’re marketing try to sell up and sell down to add product skews, and to scale your business. Okay, so, Chris Davey, he’s a successful seven-figure amazon seller who recently doubled his sales from last year. So in his masterclass in the seven-figure seller summit, he shared, he shared the sell up and down strategy, and most sellers only to think to check to see what’s selling on Amazon right now, make a slight tweak to that product and sell it. But Chris, he thinks differently. And he says that you need to think beyond what you’re selling on Amazon. So for example, if all the products are priced low, he asked himself, you know, can the market accept a high-end version of that product. So he argues that in America, especially most of the middle-class families, they actually have a budget to spend when shopping for a product. So if all the products are low, in fact, there could be a prime opportunity that you can come in with a more high end or a more expensive version of that product to capture that market. So he does this by researching off of Amazon for similarly type products to get ideas how to create the high-end version of this product. And then similarly, he does the opposite, if the market is filled only with expensive versions of the product, if it is then he tries to sell a cheaper version of the product in order to capture the other end of the market where most people are ignoring it. So but the key is to sell up and down to think beyond what you’re selling on Amazon. So you know, in terms of the pricing, you can actually, you know, go up or go down when it comes to that. That’s interesting. I was thinking about pricing, like a race to the bottom, right, because normally everybody’s trying to sell down. And at least for like commodity products, that’s often what happens, right prices cannot. But yeah, you’re right. There’s also this, like, upper part of the market, who searches for premium, but tell me like maybe also from your own experience.
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You know, there’s often this tip like, from experts, and
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you’re researching about product selection, they say, okay, build a premium product, right. But what if everybody builds a premium product? Right? You kind of get competition between premium products. Right? Yeah, that’s their way around it that what what are your thoughts about this? Yeah.
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Yeah, if everyone’s building a premium products, do you mean in a specific, specific niche? Everyone is selling really high priced items? Yeah, well, it’s not like they’re not necessarily need to be high priced, but rather premium. Right. So you’re here like from, from Brock research webinars, you know,
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just don’t sell yet another? I don’t know, jump rope, build a premium job. Right? And then you can sell it for more money, like, making more expensive. But what if like, yeah, cuz everybody listening to these tips, right? So everybody starts to build a premium jump rope? Without a no. Golden? Yeah, I think I mean, on one hand, you can try to build a premium product. But on the other hand, you really have to look at the customer, like, what do they really need? Right? I mean, you can’t just build like something premium, just for the sake of saying it’s premium, you have to, you know, what I do is I look at the customer reviews, you know, what sort of pains or what kind of problems are the competition dealing with? And then how can I solve those problems? Right. So, you know, I don’t think it’s just a matter of saying, Oh, hey, I’m just gonna build something in like a better material. But, I mean, you have to look at the customer demand, right, what they need, you know, that that’s the way that you can you can justify the premium product. Yeah. Yeah. Sounds good. So it’s not basically not just the picking and, I don’t know, golden color or something. It should be really
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another problem, an additional problem that you’re solving, right? Yeah, yeah. Yeah, I would, you know, I always dig into the reviews. I mean, there’s a goldmine of information there. And just looking at the competition, you can see, you know, what else, you know, what, where what’s missing, you know, maybe there’s something that they used along with this right to make to go along with this product, right? And then you can bundle it or something that makes sense, right? And not just like, you know, if you’re a
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selling a spatula and you bundle. I don’t know, like a teacup. I mean, that doesn’t really make sense, right? But if you’re selling a spatula, maybe you know you need like a spatula rest someplace to put that greasy thing on the kitchen counter, right? I mean, that solves your problem. So, you know, maybe you can have, you know, like a different color. But yeah, anyways, I don’t want to go too far deep in the rabbit hole. I know we have limited time. So what else have you got? What’s the next? Yeah, so the next one, I think, is really interesting. Because when I pulled a group of about 27 figure, Amazon sellers, you know, what was the number one mistake you made on the way to success? I’m overwhelming the number one
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mistake that they said the top mistake is that they admitted they hire too late. Okay, so in terms of scaling, you need to hire so you can work on your business, not in your business. Okay. And you know, many of these sellers said, not outsourcing quicker and trying to be a superwoman, which results in working in your business rather than on it. That was the biggest mistake. Others said, trying to do too much myself, it’s still a problem. That was their number one mistake. And then Roddick, she’s a seven figure seller based in Estonia. She said one of her top mistakes is she made on the way to seven figures wasn’t hiring soon enough. And then once she realized this, she started to list anything that is repetitive, three to four times a month. And then this became a list of tasks for her future employees. And then she created standard operating procedures and then taught them to her hires. And then she shared that we as entrepreneurs, we were creators. So we are always bringing more money in. Okay, and then we’re hired to bring new money. So we need to buy more time. Okay. That’s why we need to hire people to help us. Okay, so, I mean, it’s not Yeah, so I mean, it’s not so simple. I mean, there’s like, if you want, we can get a little further deeper into this. Does that sound good, buddy? I mean, I think I totally agree with this, in general in on once the business is operating already, it’s definitely a good thing to do need to, like, outsource everything, basically, until you don’t have nothing to do. So you can only work on creative stuff, right? But like my problem when I was a sailor,
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I had a bunch of problems as well. Right? So I mean, how do you hire if you’re like at the beginning? So I mean, why do you need to have more, either if you’re an investment face, then need to invest more, right? So or if you’re like,
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you have tiny profits or small profits, then hiring would mean like, you’re, again under zero, right? So Well, what do you think about that? What’s the right point in time when you need to hire somebody versus, you know, use yourself? That’s a really good question. I, if you’re just starting out, I would recommend that you first learn the ropes, just, you know, learn the process of Amazon, before you try to hire because if you don’t know how to, you know, let’s say, do customer service, how can you expect to hire someone and train them to do it the right way, if you don’t know yourself? Right, I mean, the same thing with
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you know, like managing reviews, I mean, I think that in the beginning, you have to, you know, know have to learn this, you know, how to deal with the negative review, you know, how to try to, you know, anticipate this what to do afterward, you know, what to say to them, how to try to match the negative reviews to the, to the cut potential customer. So, in the beginning, I actually, I wouldn’t recommend that you hire first until you learn the ropes yourself, and then also until you have some profitability. So obviously, you know, using tools like seller board to try to give you like a clear picture, like, Hey, you know, at the end of the month, I have a couple of 1000 in profit, you know, I can either decide to invest that into more inventory, or pay myself or maybe hire, you know, part time VA for a couple 100 bucks to start. And then, you know, try to scale that way, but I wouldn’t do this outright, you know, from day one.
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Okay. Agree. Great. All right. So let’s move on number five.
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Okay, number five.
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I want to talk a little bit about profitability. Okay. I’m sorry, one thing I forgot to mention about the summit is that we have five days over the summit, and then each day, we have a different face. Okay. So, you know, the first day is talking about mindsets, okay. And then, you know, day two, we talk about marketing and branding. You know, we’re talking earlier like to sail up and down. Day Three is about scaling. Okay. And then, you know, day four is about profitability and day five is about exit structuring your business to sell it. Okay.
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So the next takeaway is profitability and then focus on
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be on these silent killers of profits, okay? What these people call silent killers, okay? And you should really In other words, you should grade and you should fire your skews. Okay? So I spoke with Tyler Jeff coat. He’s known as the seller’s accountant, he works with a number of seven and eight-figure Amazon eCommerce store owners, okay. And when I asked him for the common mistakes seven-figure sellers make, he said many of them don’t great and fire their skews, he warned to be wary of silent killers, or products that keep you in the red, okay, products that are not profitable, you’re losing money. So in other words, watch out for products that you sell that not only you’re not making money, you’re actually losing money. So he recommends that sellers find a tool with a dashboard to track your profits to track your sales and your profits and losses. So if you find a skew that’s underperforming, he recommends that you put it on probation, try to rehab it, you know, try to turn that thing around better behavior, where you can look at ways to improve its profitability. But if that doesn’t work, he says that you need to kill it, you know, put it out of its misery so it can stop killing your profits This way you can take that money, you know, you don’t want to throw good money after bad money, right? So you can invest that in your winners. So I think that that’s, that was a really smart insight. You know,
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we’re talking a lot about profit killer soon, because profitability is our job is a no, but I wasn’t thinking about it in terms of product. So rather like okay, killer is maybe something that returns right, something which causes
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expenses, right? But actually, that’s a nice way to think about it. Of course, you need to kill products as well, you know, cuz sometimes it’s not like,
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a fee problem or something like this month, but just the product problem is
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great, and fire products. Sounds good. Yeah. Yeah. Yeah. I’m curious. I mean, would you have any benchmarks like, you know, when it comes to grading and fire firing products, you know, with all of your, your experience in profitability at seller board, I think the ultimate goal is profit, of course. Right. So and it’s the ultimate benchmark, because
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other than that, okay, I mean, in Europe, there are some situations when you probably might not want to sell too much, like make too much revenue without profit. Because for example,
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I don’t know like a lot of German sellers are selling in Austria, and sometimes selling too much in Austria would mean you have to meet some new regulations in Austria. So there, you might want to say, Okay, I’ll kill the product and in that country, list, even if it’s profitable, right, but that’s rather an exception. Other than that, I would just look at the profitability and take all expenses into account, like the storage fees and the returns, it’s a pretty, pretty big profit killer. And the BBC ads, of course, knew you need to find a way to attribute all the costs to the product. And actually, to a variant as well, sometimes, like product might Don’t be profitable, but maybe you can bundle it with another one, or like making a larger bundle, like if you’re selling. I don’t know, let’s say, socks, maybe not profitable to sell one pair of socks, but it is to sell three or five pairs of socks to share the shipping cost, right? Yes. Right. So
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yeah, but yeah, basically take a look, make sure you account for all expenses and then attribute to them to every single product and then you can basically get a clear profitability picture. Yeah, yeah, definitely. That’s great advice. Yeah. But I know actually also from our customers
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especially at the beginning, you know, when somebody signs up for from software,
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sometimes they would say, okay, there’s an error somewhere here because I’m negative for the product and then we take we take a look and we explain Okay, you forgot this and this and this and this. So bad news. This is an unprofitable product. Right.
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So what yeah, that does happen that sellers have unprofitable products or as you said, killers, right silent killer. Yeah. And don’t even notice right. Right. Right. And then you know, you can use a you know, a tool like sellerboard, you know, to instantly bring that up to the surface. Right. Right. So I like this one definitely. Yeah, okay. Excellent. Excellent. If you use that please cite that to us
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check out more at the seven figure seller summit
24:52
Well, I think that’s absolutely good idea to check out your summit. So yeah, yeah.
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I mean, I can’t take the credibility because it was from Tyler Jeff coat. He’s known as the seller’s accountant. So that’s where I got it from, but you can check out his one-hour session I think there if that’s useful, there’s a lot of other golden nuggets that you can, you know, take away to increase your profitability. Sounds good. So, what’s number six? Okay, number six is protecting your assets. Okay. So a lot of times, you know, we’re always thinking about, you know, almost like offensive, you know, strategy, right, how to increase your sales how to, you know, you know, you’ll have better like, you know, PPC, but at the same time, you know, you know, in some sports, they say defense wins championships, okay, so I find that especially selling on Amazon, you really have to be careful within protecting your asset and for example, brand protection. And then
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speaking with Kellyanne VDO, seven figure sellers, she shared that before she sold her business, her private label brand on Amazon was her biggest asset. Okay, so this is the case for many e commerce sellers, their brand could be worth more than all the cash they have in their bank, more than their car or even more than their home. Okay, so it’s quite risky to have all of your eggs in one basket, especially if that basket is controlled by Jeff Bezos, you know, the owner, you know, the founder of Amazon, right. That’s why many sellers, they’re looking for ways to protect their brands from hijackers that may piggyback on their listings on to leverage your bank brand to take away your sales, intellectual property theft, where unscrupulous competitors may sell copycat products, steal images, steal your copywriting, as well as the biggest risk getting suspended by Amazon. That’s why it’s very important to play defense, you know, to protect your brand. So there’s a number of ways to protect your business, including filing for a trademark for your brand and getting Amazon Brand Registry. And besides that, you can also file for a patent on your product. If you have like unique design that you created. This can protect you from copycats, and then also documenting all the details of your product and packaging, and your entire Amazon listing to have evidence in case people try to steal your IP is very important. Okay. According to CJ Rosenbaum, he’s known as the Amazon sellers lawyer, and he works with many Amazon sellers to protect their brands. Okay, so sometimes because despite the best intentions, your account may get taken down, you may get suspended and you will need to file a case with Amazon. And you can do this yourself. And sometimes, it may make sense to outsource this as well, because there are certain law firms that specialize in protecting Amazon e-commerce sellers, such as, you know, Rosenbaum, and they were sponsor of the seven figure seller summit. So similar to outsourcing other tasks that are moving money and not making money professional, they may be able to come in to save you time and increase the chances of protecting your brand and getting your account back in video suspended. So the takeaway here is to protect your brand, which may very well be your biggest asset. Remember, play defense, not just offense. I like the theory should definitely like Brand Registry and trademark is definitely a good first step in the long run. I think it’s also interesting never heard about this set document basically document the process of packaging and manufacturing the product and right because this might help you prove to Amazon that you are the legitimate owner in case you know somebody else fights Yeah, yeah, that’s interesting. Yeah, and also
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some other good advice that CJ Rosenbaum is to have like a screenshot of your product listing you know, the images the copywriting and then because someone if someone comes in and changes it, you know, there’s I mean, I’m sure you’ve heard you know, people come and change your image and then you that way you have that image evidence you can present that in your case when you open it with Amazon. So I think that could be another way you can protect your asset. Interesting. Make screenshots that’s cool. Yep. Yeah, yeah. Okay. Cool. So all right. So Vaughn Yeah, number seven. The last one. Yeah. Okay, so yeah, last but not least, okay. I think for a lot of sellers their end game is an exit you know, selling their business right? You know, maybe many people say that when you sell your business it could be you know, the biggest paycheck that you get from you know, your business rather than operating it year by year. Okay, so I wanted to share three ways to boost your eCommerce businesses selling price. So I spoke with numerous seven-figure sellers who have exited including Chad, McGill C and Kevin fee do as well as mergers and acquisition advisors and FBA brokers. And then they all agree that number one, having a track record of consistent sales is one of the essentials is one of the prerequisites for boosting your business’s selling price. So this ranging range
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from having at least 12 months of consistent sales, up to two to three years, and the longer the better, okay, so that’s number one having a consistent track record of sales. Number two is, the more top-line revenue or the more cash flow you have, the more This will open up potential buyers. So according to Chris, shift, furling $1 million is the absolute minimum EBITDA or Earnings Before Interest tax depreciation needed to get sophisticated buyers to wake up, once you hit the 1.5 to $2 million range, this will open up even more buyers at $3 million is a different story as you will attract another level of buyers, okay. So
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Moreover, if you want to boost your EBITDA by having proper financials, you know, actually knowing your operating expenses, and lowering your Amazon tacos, as well as cost of goods sold. Okay. So speaking of cutting your cost of goods sold, one of the key themes is working with your supplier, okay, supplier relationships, visiting them. Obviously, I know we’re in the middle of the pandemic, we cannot visit them, especially they’re in China. But I still make sense to have a, for example, cost down meeting where you can put the product on the table and look at ways to make things more efficient to cut costs. Okay, so we’re having these, what’s that executive is the cost down meeting, this is the Gantt officially cost down meeting? Yeah, it cost down meeting is where, you know, over time, let’s say, you know, you’re scaling your business, you’ve been working with this supplier, for example, a Chinese supplier for a number of years, and you’re growing your business, but at the same time,
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you know, in the beginning, you may not be getting the most efficient costs, you know, terms of the whole supply chain, right, maybe there’s that one thing that that material, maybe you can change that a little bit, or maybe there’s a one part that’s always causing a defect that’s causing negative reviews, I’ve done this myself for my products, actually visiting the factory in China, and then looking at the product, the identifying ways you can make him more efficient, making, you know, ways that you can cut costs. I mean, it’s, it’s really like diving deep into the weeds. I’m not saying you know, I do not recommend this for like a new seller, you know, you don’t have to fly to China to do this. But over time, you know, that saving that maybe 50 cents, you know, from your cost of goods that could boost your profitability, maybe like, you know, 5% 10% bottom line. So, you know, having these types of meetings, they’re really good ways to make sure you’re, you can lower your cost of goods increase your profits.
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Actually, I have a question about this one. So it’s basically about finding ways to lower the cost together with the supplier. Right. Like another way to lower the cost would be to tell the supplier, Kay, give me a better price without changing nothing. So basically,
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you know, reduce your margin. Right. So you can, and that’s, and I know, that’s kind of complicated, because
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I’ve heard that if you put too much pressure on the supplier, they start saving somewhere. And basically, it results in the worst quality. Right? So I don’t know, what’s your take on that? what’s the best way to identify this? boundary? Okay, now isn’t enough? Yeah, yeah, that’s a really good question.
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It really depends on the product and how much margins your supplier has, I would say, I mean, this boils down to, like negotiations as well. And also, it boils down to relationships, you know, how good of a how strong of a relationship you have with your supplier. And then in China, there’s this term called Guan xi, where it’s kind of like a mixture of
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the time that you’ve been doing business together the respect you guys have for each other your growth potential, and also there’s the issue of saving face, you know, like, because China is a very, you know, they called the up the conscious and called menza. Like, you can’t, you don’t want to just like directly insult them and say, Oh, your product sucks. Maybe you have to kind of like there’s like an art to it. It’s an art and a science. Okay, but going back to your question, body, I would, I would number one, um, be where a price floor because what you say is true. A lot of times if you want that product, you know, they’re selling it for $5 you want it for $4? You know, maybe, you know a lot of Chinese suppliers, they say yes to everything. Okay, so they’re like, okay, we can do it for $4 but they may cut a corner over here, they may change the material from stainless steel to aluminum, okay. And at the end of the day, you know, if you know, once you realize that you complain, they said, Oh, you wanted it for $4 right, we assume that you know, you can take that
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You know, so I mean, that’s why it makes sense to have a cost down meeting where, you know, everyone’s, you know, in the same place, and we’re kind of more transparent with like, Hey, you know, maybe we can, rather than replace it with aluminum, maybe you know, we can add, or maybe we can change the coating or you know, something else. That’s my,
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you know, we have the cost down meeting. But yeah, long story short.
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It’s not like a black and white thing. But be where the price, the price for floor, you know, you don’t want to like go under the floor. And a lot of times the supplier will change it without, they’re not as proactive and telling you, hey, we’re gonna do this to get have that price. So just be Be careful with that. Interesting. All right. So we’ve got cash flow, this is interesting, the more cash flow, we have the, like, the higher the multiple.
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Right? We have the track record, we talked about it’s the buyers, anything else help to boost the selling price?
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Yeah, um, I would say,
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another thing is having a brand that has like, a very tight portfolio of products. Okay. So if you think of it, you know, not just like one hero product, that’s, like, 99% of the sale and like other like, you know, like minions, for example, because a lot of times the buyer there, they want to like access, like a new,
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like marketplace. So maybe, you know, if you look at if you guys remember Dollar Shave Club, right, you know, like those guys, you know, they were really targeting like, the millennial dudes market, you know, like having that, you know, that rough image. And then it was a stark contrast, if you’re looking at like Procter and Gamble, I think like Gillette, right? It’s very clean cut, you know, it’s a totally different market, but the same time, you know, the multinational, they’re super weak with the millennials, because that’s like, you know, for the old dudes, right? So if, you know, the big buyer, they can just like instantly buy your brand. And then you have like, a very tight portfolio. I mean, that’s like a huge plus to them, they don’t have to, like, you know, spend all the money on research, development, marketing, and then, you know, they can instantly get that. So having a very tight portfolio of brands that complement each other, that can help your, your selling price, and the chances of you, you know, exiting, as well. Yeah, I think this is a good one. When I was a seller, I didn’t really think too much about branding, basically, I came up with one brand. And then I was picking products, just by numbers, you know, and, and, and branding them with the same name. So it wasn’t really a brand, it was just the name for all kinds of products. And they were from completely different niches. And I think in general, I mean, that might work if you’re good at it, but
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this doesn’t give you a strong brand, right? Because customers don’t know. Okay, so
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you know, is it a jump rope? Or is it something for pets? what’s the spread? It’s everywhere, right? Yeah, yeah. So yeah, I definitely agree with this one. If you can target a specific group or specific niche, that’s definitely a benefit when you’re selling the business. Yeah, and we had several, seven-figure sellers that, you know, agreed with this as well, you know, talking about starting a brand, that’s the most important thing. You know, Chad McGillis, he, he exited his ecommerce business in the pet niche for over a million dollars. And I use it one of the big things that, you know, he was able to help themselves, he had a strong brand, and large audience. And then he actually cultivated that through philanthropy, you know, he shared that he really focused on pet owners who felt their pet was part of their family, and not just an animal. And then he partnered with a charity, which helps support pet owners who pets had cancer, and then they needed surgery while their owners didn’t have money to pay for it. So you know, Chad, he decided to run a campaign where customers purchases products and showed a picture of them and their pets using the product. He donated a portion of his sales to support the charity. And then he even shared back picture of the sick animal with the customer. And then that really engaged the audience in relationships. And that is really strengthened his customer loyalty. And then this is one of the key ways that Chad was able to differentiate his brand and eventually exit for over seven figures so long. Yeah, you know, building a brand was super critical today.
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Gary, thanks so much. I think that’s it right is what seven things so tell us where are users can find you? Yeah, definitely. Well, thanks so much for having me. Milady and then I’m honored to be on the celeborn podcast. So if this was useful to you guys, I mean, this is just the tip of the iceberg. We
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interviewed over 37 figure sellers in the summit and you can find out more at seven figures seller summit.com and then you can get a free pass. And, you know, we were voted the favorite Amazon conference event of 2020 in seller poll. So we had 3500 people that attended all over the world at the last summit. So we decided to rerelease the summit. So if you haven’t seen it yet, then you can get a free pass at seven figure seller summit.com today, so you can level up your business as well and get the full interviews from what we talked about today. Sounds amazing. Thanks so much, Gary than ever Great Day. Perfect. Thank you, buddy. You too. Take care. Bye.
