Selling on Amazon without Investing a Fortune with Brad Degraw

Episode 140 – the numbers keep cranking up there – and we are doing great here in mid September in Shenzhen, China. Catching up with family a ton over the weekend – but squeaking in today’s recording between English book reading time and baby birthday parties!

So today, let’s hop on over to USA domestic selling on Amazon. Not yet ready to invest in large MOQs with Chinese factories – don’t let that get in your way – Brad Degraw is on today to explain how you can get started with low upfront investment

√ http://amazonsherpa.com/
√ Kellysearch.com
√ Mikesblog.com

This is what it is all about – taking action in your business. Just do it. I am loving my video blogging – getting into some fun video situations and just doing it. People ask how they can do it too – the equipment, the setup, etc etc. It is always the same – just do it. Take something you already have, and make it work. As you get more comfortable and more experience – then you can step up your game!

So I hope today’s show motivates you – maybe not just for Amazon selling – but for doing something in your business. Take action – get it going and remember, life is short and every day is a new beginning.

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One tip, if you know who you’re serving and what they want you’re 90% of the way there.

Mike: Episode of a one four zero one hundred forty shows the numbers just keeps going up there aren’t they you for being here with me today we are doing great here in mid September and change in China and I’ve been just catching up all over the weekend with family time reading English books to kids and baby birthday parties still Anyways let’s go on to today his show right off the bat we’re going to go hop over to us a domestic selling on Amazon this is for people that maybe aren’t yet ready to invest in large M.L. cues the Chinese factories to get their own brands but only they gave it away bred to grow as on the show today he’s an explain to you how you can get started with a very little or almost no upfront investment to get someone on Amazon so he shares some great value. Day care buddy tuning into that global from Asia podcast we have with us Brad Degraw thanks for coming on Brad

Brad Degraw: Yeah Thanks for having me.

Mike: Sure we we’re just talking before recording you know you’re over there in Denver I’m here in China to the global world so it’s great we can still make these these topics available so do you mind is reducing yourself to our listeners before we get started.

Brad Degraw: Yeah absolutely I’m Brad Degraw my specialty is Amazon and we create products and then we launch them online and China is a big part of that.

Mike: definitely I know so we’re currently dealing with a lot of Chinese suppliers are domestic US players are.

Brad Degraw: right now it’s about half and half our motto is we do whatever makes sense and sometimes the products they just make sense to be made in the U.S. and then other times it just makes sense to have a made overseas.

Mike: Great so maybe give some people some of your some of the you know brief history of your Amazon business six Endeavor.

Brad Degraw: Sure well I actually started four years ago with one hundred dollars and a wifi I connection I got fired from my normal job and I had to do something maybe put on a time go back to work or start a business and so for me I started with a business called arbitrage was just buying existing brands merchandise low and then selling high and that evolved into you know creating bundles so instead of doing singles we did multipacks and eventually private label where we stuck our own label our own logo on a product and that was fun for a while but then it evolve even further to making unique products custom.

Mike: Yeah I mean it’s it’s definitely an evolution though right I think it’s I’ve I’ve had other friends too that started with arbitrage like literally I see their pictures on Facebook they’re buying stuff from a Target or Wal-Mart and then selling on Amazon this as something stymied I heard last people even at Christmas time earlier and do you think that still is working.

Brad Degraw: yeah still a business model that works the challenge is it’s not a real business it’s just it’s a glorified job because if you stop if you get sick or you stay at home a day that’s a day that you’re not going to make money so you know my wife does it even when we go to the store to buy groceries she’ll swing by the clearance section have a cart or sometimes two carts full of Clarence stuff to send in Amazon.

Mike: awesome that’s great to see at a family there of a business business opportunity

Brad Degraw: She is a hustler.

Mike: Yeah hustler is the right word for sure awesome and then private label maybe I think people are familiar here on the show but Celeste. Yeah of course the nextlevel where you followed a product that is working and then you maybe ask the factory or the supplier to put your own brand on it so there’s a much customisation right so maybe give people an idea here.

Brad Degraw: yes so Amazon’s or simple simple machine there it’s a whole platform full of customers ready to buy merchandise so you can use some really basic tools to see where people spending their money on Amazon and the thing that you need to do from there once you find some ideas is look at those one two and three star reviews so that’s people’s mistakes spectate So if you don’t know where to start it all start with a market that’s a group of people or passion about a specific problem fantasy desire you’re taking notes underline those words problem fantasy desire so it could be diabetes they could be curly hair it could be sports and outdoors recreations fitness and then we focus on what are those products what are the mistakes spectations and then we communicate those with the suppliers so for example if it well there’s one that we’re looking at it’s buffalo beef jerky So it’s it’s jerky made out of bison and the problem is the packaging the the packaging is not sealed properly and the meats actually getting contaminated Well that’s a simple fix in the process we don’t actually have to fix the product it’s the packaging of the product and then we won’t be selling you know contaminated meat.

Mike: Got it Got it so yeah I mean is there I guess a system or I think some mazes maybe picking a product there they’re passionate about or interested in or and then checking those reviews for that for those opportunities.

Brad Degraw: well not just it’s OK if you’re not specifically interested in this I sell some women’s health products that I could never really be truly interested in could never really work. It’s about finding something that’s a motional buying is truly an emotional experience once we get away from commodities like bottled water toilet paper you can get into an emotional experience like luxury bed sheets you know it’s an experience that you’re going after rather than just filling a very basic need so we’re big fan of problems fantasies and desires because those problems fantasies and desires we carry with us through our whole life so we can sell them more and more products because those problems fantasies and desires they really don’t change that much yet
Mike: Yeah that that make sense so do we have an example for each each of those three that we could we just

Brad Degraw: Yeah let’s dive into it so I’m a dad my kids nine years old and every dad’s fantasy is I’m the best dad in the world I’m a better dead than my dad wasn’t my kids going to have a better childhood experience than I did so when he was a toddler I bought him a product called Your Baby Can Read and the funny thing is it’s basically flash cards but I said one hundred eighty dollars on this flash cards and I watched a few youtube videos that have made him myself for you know less than ten bucks but I bought him I invested that money because that’s what the greatest dad would do and he’s nine and he’s now reading Moby Dick so it actually works I get to fill that fantasy. Problems can be for example weight loss here in America people it’s a stereotype that we eat too much we move too little and obesity is a challenge so there are tons of great influences of saying you know let’s let’s slim down let’s let’s try to take care of bodies so problems fantasies desires we also have a line of sexual wellness products we don’t need to go deep into that but there. There’s there’s some excitement in the they aspect of having an enhanced orgasm so problems fantasies desires.

Mike: Cool, Thanks for that and see said like one hundred dollars I think a lot of people are always kind of overwhelmed or feeling they got a by inventory or invested in the product quite a bit I know that’s always a stumbling block maybe people ideas of maybe less capital upfront.

Brad Degraw: sure yet there are there’s a whole myriad of options if capital is one of the constraints then focus on something that’s inexpensive to make and has great margins so there’s in this opportunity he’s Think of the materials especially like in China you know all over the world plastic pretty much cost the same the thing that you’re saving on in China is potentially labor and maybe some environmental compliance so you can do plastics you can do silicone or so many great materials that China is fantastic and they can pump these things out for pennies recent example we had a product that’s just one piece of silicone and the United States would have cost us close to fifteen thousand dollars for the mold in China we called and we negotiate a little bit and they said that give us the mold for free basically they baked it into the price and so we ordered six thousand pieces full or Arlanda cost with the product in the packaging everything soup to nuts with delivery we had the product landed for about fifty cents a unit

Mike: awesome area very very exciting and so do you think people should go to China right away think or are for be maybe not I don’t know I’m fifty fifty with this you know depending on their level of expertise and.

Brad Degraw: I’m a big fan this is what sets us apart from a lot of folks I’m a big fan with starting to. Mystically if this is your absolute first time it may make more sense to find a product that you can start in the U.S. because ultimately over time your business is built on relationships. And it’s not about the nickels and dimes so it may be easier for you to have better communication faster relationships here in the U.S. where it’s easier to jump on a phone call native English speakers you have the same culture same time zones versus maybe jumping on Alibaba late at night and trying to have you know a chat conversation or send emails.

Mike: True true exactly like get a lot more wide options for times to make phone calls and in communication and plus they just kind of understand you I think a lot of times when you’re first time buying from China or another culture a country or language you know people kind of don’t understand there’s a lot of communication that needs to be done to get over that that that barrier that difference so you know like American do American you can kind of just maybe briefly explain on a phone or an email and they kind of get it but yeah I think with China you really should be more clear exactly what you need.

Brad Degraw: yeah in the U.S. They kind of assume the right thing more naturally in China for example if you say OK I need a product insert and this is what it needs to look like when you send in the digital file if you didn’t tell them exactly how thick the paper maybe then they’ll go with the cheapest option which can be tissue paper which is not appropriate for most product inserts but in the US they would go with the most common option and so yeah it’s just easier for the folks here on this side of the ocean to make the right assumption .

Mike: So yeah I kinda like the idea you know for the theme of our talk today’s you know starting with low capital so may be the people work and try to get there soon type jobs may be incorporated America you’re saying they’re searching online finding reprice have bad reviews or are funny nose problems fantasies and desires like you mention which is a great great three point list and then there’s their finding a supplier do you think it’s a wholesaler I guess basically I’m trying to think maybe some actual items for a new newbie trying to get in again.

Brad Degraw: Sure yeah here’s the place to start for someone brand new pick a market first and it’s a specific problem fantasy desire you can watch news here in the U.S. people are freaking out over mosquitoes it’s summer there’s more mosquitoes that’s normal However this year there’s you know a deadly mosquito by or someone just recently died in the US and it affects the health of people’s families so if you can sell a product like that with a high emotional charge to it every parent is happy to spend a premium for the citronella candle on the wristband and all the mosquito type products and these are very inexpensive to make so read the one two and three star views find a way to make the product just a little bit better and it’s based on their customers feedback you don’t have to be very creative you can go after barbecuing that’s a big thing outdoor gardening or so many great products that you can go after for not a lot of capital.

Mike: and then U.S.B. factures I’m curious if it has some topics about you know race shoring was one of the topics bring in manufacturing back to America were as you suggest people to find these American suppliers we do things a little bit different than most folks we don’t use Google for this we use this a tool called reference USA and it’s a list broker service I use a library card that makes this olbrich and for free if you don’t have a library card or you know have a university I.D. You may actually have to pay for the list and it’s called info USA if you’re paying for it and it’s reference USA If you get it for free again and if you’re a little bit thrifty just go get a library card and that library most likely has already paid the subscription for you and then from reference USA you could do a keyword search like plastic water bottle manufacturers and then it will spit out a list it’ll give you the SIC code so it’s a six digit code that is relevant to that type of business so be one code from a new factures another code for distributors another code for wholesalers and other code for retail outlets so you want the one that’s to manufacturing you punch that in and you can get a specific for your geography or nationwide generally speaking the Midwest is a great place to manufacture because the cost of living is low and it’s easy to get to both coasts and then we just call him up if you want I’ll give you the script we use as well.

Mike: Sure why not yeah or preview.

Brad Degraw: so I’ll send this to you in a digital formats a people can just look at it on a screen but the basic points are this we call up and we say we’re looking to buy a specific type Marxist ice let’s say B.P.A. free baby bottles.
Mike: Oh great

Brad Degraw: Is this your first time ordering with this or you already in the system no I’m not maybe you can get me over to sales they get you over to the sales department and you’re really going to ask three questions because this is not a scheduled call they’re busy playing pokémon or filing a report or going to lunch or doing other things so you just say hey I’ll be very brief I didn’t schedule the call just got three questions and then you can go back to your day first thing is how do you like to get paid now you’re not really asking this because you have Salut we need that information we’re trying to do is frame up the conversation so that sales person now has a higher interest in what you have to say so they are going to charge you a little bit extra for credit cards that’s OK it’s worth it in like an hour. Three percent.So once you get through how do you get you guys paid the next one is what is your lead time from the time I pay you to the time your a to ship what your turnaround time so it could also be leadtime or production time same thing. The third question in there loving you right now because you just said you’re going to pay him twice and the third thing you’re going to ask is What’s a realistic first order sometimes it’s called a in a queue and Mischel order sample order that’s all the same thing basically how many units are they going to put in a box with your name on it this first go round and I ask them what’s a realistic number because they know how they buy the materials if they’re buying if they have to buy three thousand ounces or eight thousand board feet they know how they buy the materials so it makes more sense for them to tell us the realistic emote Q If we tell them we’re going to have to pay the full amount for all the materials they bought they’re just going to ship us less units does it make sense

Mike: yeah this is great I mean I love it I certainly come first e-commerce business also with you know U.S. suppliers and wholesalers and I’m happy to hear they are given nice strategies because yeah I think I think it’s great you know. Just just in time inventory and lower maybe factoring runs an easier to customize So it’s it’s very interesting.

Brad Degraw: it’s the best way to do it especially for getting started because we’re not crossing a border every time you cross a border there’s a little bit of a challenge and some inefficiencies So it’s time inefficiencies and money and efficiencies there’s costs associated with that so having the things made nearby just like he said quicker turnaround time every now and then it’s nice to meet your suppliers whether it’s a good visit like a everything’s going great years lunch or whether it’s more abrasive right I really need inventory you’re killing me because we’re sold out and. We’ve been sold out and you’re back ordered please expedite my order do whatever we can to get some inventory out the door.

Mike: Exactly cool so yeah this is a great trade topic I know a lot of people will benefit in and then scaling up is pretty much easier to you I guess you just try find a good you know good guy just stick with the right you focus on sales and marketing or how you deal with that.

Brad Degraw: Here’s another thing that folks sometimes miss on suppliers you don’t need one good supplier you need three. And the reason for that is once your sales take off.

You want to be able to stay up and if your supplier your only supplier becomes backordered or finds that you’re at the bottom of the list you need to be able to get the phone to supplier B. AND SUPPLIER C. and get your orders going so make sure that when you’re recruiting suppliers you have three and then yeah our general rule of thumb is once we’ve sold through half the inventory we pick up the phone or send an email that says let’s do another production run Now your second order it may need to be bigger if your first order was five hundred units they may tell you you have to do it a thousand or two thousand units on your next go around so that’s why it’s nice to have three suppliers because you have five hundred from the first one five hundred from the second one five hundred for the third so by the time you go into your fourth production and you’re OK to go thousand or two thousand units.

Mike: Yeah

Brad Degraw: That make sense?

Mike: Totally totally. Sometimes I just think of the challenges with more olds and things like that is it’s it depends I guess if it’s if it’s an old required or not or or is there a solution for that.

Brad Degraw: yeah molds can be a little bit pricey and when few have someone that did a great job on mold keep using them and there’s really not too much that can go wrong with that because your products probably just one fail and it’s done so those are kind of and you get what you pay for does it make sense to cut corners on molds so if you’re dealing with any. Lasting houses get a really good one and keep them.

Mike: cool this is good so yeah you are living more about your seaven doing this and how’s your how are your business is you have multiple brands like you said and even the kind of fun ones earlier how is that business going.

Brad Degraw: they’re all going very well Amazon’s a little bit non-linear So you have some ups you have some downs but overall they’re really doing very well the nice thing is once you have a client base you can communicate with them and ask them of these three products which would you be most interested in you tell me hey we have something coming up for the next season and here are some options so that’s awesome because we use our customers to help us figure out what what else to produce another thing this is the next turn around the track is Amazon’s one platform there are others you can make a choice to expand digitally across maybe other platforms in the U.S. or even Amazon in other countries but what we’ve picked is reaching out to brick and mortar stores and actually get into the old school parking lot cashier stores and that’s been an interesting ride as well.

Mike: yeah that’s we’ve had a couple people talk a little bit about about retail stores which is you know I guess mom and pops are led to actually easier right than a big box retailers is they have to get through to the owner decision maker and make a pitch to them but yeah I always I always like diversifying to write like having a logical or a line purely on Amazon which is a totally amazing thing to start with but I always like to recommend people to diversify a little bit.

Brad Degraw: but yeah that’s that’s our system and that’s how we do it so yeah you can follow this and get started yourself there’s no reason why anyone couldn’t get started you just have to make up your mind that this is what you’re going to do.

Mike: Exactly and yeah I mean I think well it’s like anything of being an entrepreneur or starting a business is is a bit overwhelmed at the beginning you know and there’s always easy excuses and reasons why they you know people feel like it can’t work for them and they’ve but always tell who’s got to start making making mistakes you know are just doing it you know not being afraid to to learn as you go and engage yourself go in.

Brad Degraw: and that’s that’s truly the key is there is enough margin that you’re going to make mistakes everybody makes mistakes and Walmart makes mistakes Nike makes mistakes you will make mistakes but don’t worry there is enough margin to make it work correct.

Mike: Great Ok Brad and I know you have you do a lot of speaking and you have courses and sharing a little bit more about some of that.

Brad Degraw: yeah absolutely. In fact it’s interesting timing how this all played out tomorrow we’re launching a course with Rich Dad while it’s it’s a course on how to make money on Amazon from home starting with very simple budget and tools and we walk through all the steps of the training so that’s that’s the first place I’d steer people also we have a free newsletter fee one wants to jump on you can find us at A.Z. done for you dot com just reach out and I’m happy to get anyone’s if you want feedback on what’s going on happen just take a look at what’s going on your business and give you some feedback.

Mike: Awesome thank you so much Brad and it’s been a pleasure to have you on the show.

Brad Degraw: Absolutely, Thanks for having me.

Mike: And that’s what it’s all about it’s just taking action in gaming is done whether it’s a tech startup selling in Amazon or even video blogging which I love video blog and lately some people here enjoy it too it’s Mike’s Blog dot com or flog dot com A couple the domains so just get into some situations just guessing. Things get things done People always ask you know are want to videoblog you know I want to Amazon on all I want to this it’s just you know do want to find roadblocks find barriers to just let them get things done and have excuse but I think it’s just about getting it down to just picking something that is doing it so as you get more caught me get more experience then you can invest in more inventory or invest in like fancy cameras or other thing so I hope today’s show motivates you whether it’s for a sauna Amazon or start your own business or you know just improving anything in your life it’s just get started today and do it and just try to measure and track it remember life is short and every day is a new beginning so I would love to hear from you if this helps you and just keep on listening and we’ve got more shows coming up take care.