410 : Dan Wentworth – Team work really does make the dream work when selling on Amazon
Is it too late for you to have RA in your business? I talk with Dan who runs a virtually 100% RA multiple 7-figure business in multiple states. So he would say no it’s not too late. He would also tell you it is not easy. Sure buy an item and sell at a higher price. Works right. Well start adding zero’s and employees and multiple states to that and it gets complicated. Fortunately (he would say he was blessed with this opportunity) he was prepared by his corporate life to take on such a monumental undertaking. Strong family (Smarter wife ) and real focused discipline in team building has paid off.
Here is transcript- It is automated so it is not perfect but it does seem to get better over time.
Dan: [00:00] As most people in Amazon know that they’ve somewhat SLPs, but it’s a flowing system. This, the shipping, you know, they’ve had different types of shipping. Inventory labs will change something or, or seller central will change thing. So there is some flexibility in it, but basically they’re the same. Yeah.
Cool voice guy: [00:17] Welcome to the e-commerce momentum podcast where we focus on the people, the products, and the process of e-commerce selling. Today, here’s your host Steven Peterson.
Stephen: [00:30] Hey, it’s me. It’s Q4 got to bring up my Amazon seller tribe. Um, this is probably, you know, one of the last chances you’re going to get to join this year. So I’ll run this for a couple of weeks. But, um, the, the good news is you could still get in, right? They are allowing people in, but at some point they’re gonna cut it off. So I suggest you join today. Try it with 14 days for free. Okay? So you don’t like it, you don’t get value drop. Um, however, don’t only measure on the value of what you’re buying, measure on the value of the impact it has on your business. And what I love about this group, the Amazon seller tribe is the amazing way they invest into your business. They will help you with all the questions. Go out and check out, uh, amazing freedom.com forward slash momentum dash arbitrage.
Stephen: [01:14] Look at the testimonials. Those are real people. Reach out to them, right? You can kind of figure out who they are and go out and figure out, uh, an SM. Is it real? Are they really helpful? Will they help my business? And you will be blown away again. You get 14 days free if you join through my link only and they do pay me. So I don’t want you to, I don’t mislead anybody. Um, but I believe in him. I’m in the groups, you’ll see me and you’ll get to talk with me too. So amazing. freedom.com, forward slash momentum, hyphen arbitrage. I know it’s a lot momentum, hyphen arbitrage. And you’re going to get 14 day free trial on the daily fine list. Make a purchase, get your money back and then say, huh, I can do this again. Wash, rinse, repeat, wash, rinse, repeat.
Stephen: [01:59] Amazing. freedom.com forward slash momentum arbitrage. They are going to close it. Q4 is here. It’s going to happen. Get ready. Welcome back to the e-commerce momentum podcast. This is episode 410 I’m bringing back, Dan Wentworth can never get enough to end Wentworth. You know, eh, I’m going to kind of at a loss because I sit back and I think about our first interview years ago and how, you know, I thought to myself, man, what an outlier. The way he was able to take this, you know, his experience of being a DM, run an a whole bunch of stores and apply it to the business. Man, it’s just amazing. But then I watch him taken, develop people and get the best from them, really strong leaders and get them to give you their best. That’s such a talent. I don’t have that. That is, that is a talent.
Stephen: [02:47] Very rare to find. And he was able to do that. Now, um, it blows my mind to hear why they’re up 40%. And so you’re gonna have to listen to the episode to hear it, but it will blow your mind when you sit back and think about it. It’s very, very logical and it’s not reactionary. It’s intentional. And I think that’s the, that’s quite frankly the reason that they’re doing so well. They’re very intentional in what they do, but it’s not just Dan or Michelle, it’s everyone on their team and that just doesn’t happen again. It’s intentional. Let’s get into the podcast and welcome back to the e-commerce momentum podcast. We’re excited about today’s returned guest. I’m, this is his third time on the show and it’s funny, it’s been more than a year and change almost. Well, it’s a definitely a year and a half since we last chatted and at that point his business was exploding and you know, it was all about people and development and, and what they brought to the team. Um, and now you’re up a measly 40% from a huge number. Dan Wentworth. Is that true? It is, yeah. We’re having a good year. And by accident, just, just luck would have it. Right.
Stephen: [03:59] What’d you say? You know, let’s start with this because you know, last time we chatted it was all about staff development and people taking on key roles and that kind of thing that that hasn’t changed, right? That consistency in the last year and a half when you look at your leadership, it’s pretty much the same. Correct.
Dan: [04:13] It is. It’s leadership hasn’t changed. But as we brought these people on, I’d say probably with the fruit of that that we’re now reaping is that those seeds that will plant that is that they’re starting developed, taking over a brand or adding brands to our line up. So we got basically our core brands are pretty flat or up slightly, but we’ve just added a lot more.
Stephen: [04:35] Oh, Oh. So that’s interesting. So rather than, Oh, that’s interesting. Rather than, um, you know, taking an existing brand and pushing it further and you know, out reaching out, they were able to take and just keep it pretty steady and then take other ones and bring them in and replicate. Is that kind of the way?
Dan: [04:55] Exactly, yeah. It’s a very similar pattern that we use. We’ve, when we explore a brand, we’ll test it out, get to know the brand, and then some fail and we’re out. But others grow. And in probably 40% of our businesses from new business, uh, over the last 12 to 18 months. And different categories. Yeah. Some, some are similar categories and we’ve taken what we’ve known for the brands we’re in, but then it’s all some, a completely different categories. Yeah. That we had never touched before.
Stephen: [05:23] And in our pre-call we can’t, I don’t want to say the brands, but you’re talking about similar brands. So you know, if a Steve’s water bottle brand is selling well then Dan’s water bottle would likely sell well to. So therefore wash, rinse, repeat. Right. Same concept. Okay. Yup, yup, yup. Um, let’s talk about, I want to talk about successes of course, but I want to talk about singles because I don’t think it was like a miss. Like, so let’s, let’s talk about your operations. So first off, if somebody is interested in finding out about Dan, go back to episode one 72 and you’re going to hear as crazy story how he, he had a little bit of responsibility working for CVS, just a little bit a 17 stores. Uh, so that’s a little bit more than that, but he was a district manager and, and then he was able to apply that in this business. Right. By, you know, hurting type a cats. That’s really what you’re doing because leaders of each operation, you have three operations. Third, they’re type a and they’re like herding cats. Correct. Correct, correct. And so that applies coming from CVS over to this, um, leading leaders is way harder than it is leading. I don’t want to make this derogatory, but workers, it’s a different type of leadership, right?
Dan: [06:37] It is. It is. We, we, it’s funny you mentioned that because we’ve talked about that as we’ve had, um, as well, I think we’re gonna start getting into, now we have an operation in Chicago. We had an operation in California until recently. And then we have our, our strongest portion of our businesses here in Massachusetts and, and um, and Adam, I like, uh, VP said one time, he said, imagine if we were all here in the same building. I said, as good as that sounds, we’ve got all, we have all very strong personalities that like to lead our businesses. So to bring us all under one roof, while it might sound you bring in a lot of intelligence into one room at the same time we bring, like you said, type a personalities or
Stephen: [07:16] it’s herding cats. What percentage? And it’s a good question. What percentage of, uh, management would you say that you give each operation? So for example, you know, your Massachusetts, you’re there lots of days, not every day. Um, but I mean, is it 10%, you know, and the 90% is up to the individual of that particular location to get my question.
Dan: [07:38] Yeah, I do. Yeah. They’d given a lot of autonomy.
Stephen: [07:41] So I mean, could you, could you say it’s, uh, could you say a percentage? I mean, could you guess,
Dan: [07:45] say 90 10 is probably a pretty good one. So those a couple of ways we communicate. One is we have like a Slack channel. It’s like a discord or a Facebook messenger on steroids where we’ll communicate daily. So we’ve got some communication going there, but that’s not a lot of direction. That’s just up.
Stephen: [08:03] It’s just communication both ways, right? It’s both ways. Yep.
Dan: [08:06] Yeah. And then once a week we get together for about an hour and a half to two hours on a Skype call. We’ll bring all off full-timers in. So usually it’s about eight or 10 people in the meeting. Um, and that’s, and that’s basically where we’re giving direction and we’ll get feedback from the other branch too.
Stephen: [08:22] And so direction meaning what? Hey, you know, we’re going
Dan: [08:27] [inaudible] this week. This brand is down, this brand is up, the ROI on this particular brand isn’t cutting it. Are we making bad decisions? Chicago for example, you might be buying too much of this or, or you, you know, or, or you’re killing it an issue. You really need to pick up more. That type of thing. Analyzing the business I guess.
Stephen: [08:47] And I would say that’s one of the things that you do better than most. Um, and I’m making that broad of a statement. I guess I’m comparing it against me. Let me say it against me. You way better than so that way we don’t, I don’t wanna offend anybody cause I know there are outliers all around. And one of the things that I think is interesting that you use both inventory lab and scan power for your business where most people use one or the other. W when and you recommended me to add back inventory lab cause we use scanned power, been using it forever. I love Chris green and Paul Rutherford had been using them forever and I can do our accounting from it. It gives me a cost of goods and all that kind of jazz. But your comment was, um, and this is not a criticism of scan power, but inventory lab allows you to go back and evaluate how you thought you were going to do versus how you actually did.
Dan: [09:34] Correct. Correct. Yeah. That’s a great point. So we do like both tools. Um, we’ve used inventory labs from the gecko, so going on five years now, but probably our favorite part of enrich our lab is the analysis of our post sales, uh, business, you know, so, so it’ll break down supplier profitability. So we know how each branch is performing, how each brand is performing. And we’ll also, we can break down [inaudible] profitability and skew profitability. So we analyze those a lot to see what our winners out, what our loses are, where do we make bad decisions
Stephen: [10:07] and, and you can then, that’s what that one and a half hour meeting is to make adjustments, Hey, this is working or this isn’t and why not? What do we think?
Dan: [10:16] Exactly. We farm that we, we take that information as supplier profitability, VA’s and profitability. We have a VA kind of pull it together to do a little more utilization on it, analyzing on it. And then we’ll, um, we’ll share it, those meetings, which can power go ahead.
Stephen: [10:30] Well, no, I was going to say is that that right there, you also have your best and brightest in there who can also offer feedback on why or why not something’s performing well or not. Right.
Dan: [10:40] Exactly. Yeah. They might be, they might say, well don’t forget we, you know, this particular stow was 50% off all month. That’s why it’s a rock looking like a rock star this month or, or we’re not able to shop in that store as much. They did. So a management has changed. They don’t let us buy what we used to buy.
Stephen: [10:58] And so those things are, they’re talked about. So that to me, that’s the reason to add it back in. That’s why we’re going to add it back into our business because it, you’re right. I mean it, and it’s funny, we were just together and I was telling you guys, I mean it’s, it was easy when it was just me. I mean it’s, you know, you didn’t have to analyze, you didn’t have to talk to the team because it was just us. Right now we have a couple of guys working for us who you met. It changes things. Right? And, and I and I, to be fair, I owe it to them to give them the correct feedback to say, yes, you do do more of this. Or Hey, that wasn’t so good and here’s really the reason why.
Dan: [11:32] Yeah, precisely. I mean that’s, the numbers don’t lie. So, so you can go in afterwards and it’s either working or it’s not working. You know, somebody who can be very high on a particular brand, but if it’s not paying off, if you know, if it’s not paying off and that’s okay. I mean, brands come and goes, you know, sources come and go.
Stephen: [11:52] Well you were talking about your,
Dan: [11:54] your one operation and I want to say which location wasn’t coming in as strong with a particular brand. And so how does that conversation go? And then what, what are some examples you can do to help improve that? Well, I’ll, I’ll, I’ll throw one out there too. So California, we did close off operations earlier. They fear up there, um, while it was still performing. And it was a business that was run on its own and independent operator might be very happy with the results. We just thought we always run out of money before we run out of product. Fine.
Stephen: [12:24] It’s, I mean, yeah, I think any person listening to this can relate.
Dan: [12:28] Right, exactly. Always. So we just felt like we could invest better here with our money than California. California has a lot more expenses. Uh, the communities are a lot more difficult. So for my example of Nike wasn’t performing, we sell Nike. That’s no secret. Um, Nike wasn’t performing out in California like it was out here. And so we tried to analyze it. And what are the Ian running the California operation brought to our attention. It’s like every store I go to is just swamped. You might have 10 to 12 bulk buyers in there with their families just completely annihilating the store. It’s like a free for all when the door opens on, whether it’s markdown down day of friends and family. And then the other thing is it’s going to take him two hours to get to the next door. Even though he told me 10 to 12 miles away.
Stephen: [13:15] So while you would sit back and say it’s just the, it wasn’t as profitable of revenue, so it was profitable revenue, it just wasn’t as profitable. You can get a better yield doing this other thing. Correct. Yeah. That’s a maturity in your business, but that, that doesn’t come without pain. Right. That’s a relocation issue.
Dan: [13:33] It was, and it was a little bit heartbreaking that he’s in my nephew out there. He became, took up surfing. I mean, he just loved the California life. So we did it. We gave it two years. Um, it didn’t seem to improve. Took Chicago about a year to really get off on its own and [inaudible] stock growing after two years, California was pretty stagnant. It was growing, but it wasn’t, it wasn’t fast enough. So it was a difficult question.
Stephen: [13:57] You know, and, and how I, I imagine, and you know, we were talking to the pre-call about, um, as a bed bath and beyond announced they’re closing 60 stores out of 1,060. I think I read something like that. Does that mean they failed with those 60 stores? I’m sure in CVS you had to evaluate and, and, and reevaluate. Um, does that mean they failed or does that mean it ran its course or the competition changed or the market changed?
Dan: [14:20] Yeah, any of the above. I mean, you have a CVS and you drop a Walgreens directly across the street. I to say that still is not going to suffer. Right. And sometimes the market just gets saturated or the business climate changes, you know,
Stephen: [14:35] but recognizing that, recognizing it and then being mature enough about it because usually ego gets involved, right. At least on the small scale businesses rather when you have a board of directors, I guess it’s easier, but, but when you’re this close to it and like you said, this is a family member that had to it really challenging.
Dan: [14:53] It was, I mean, watching only as we’ve talked about though, the numbers don’t lie. So as we’re sitting there week after week, you know, we did a lot of coaching, we did a lot of root analization we did, okay, let’s try other brands. You know, what’s out in California. That’s not here. He introduced a couple of brands to us that are still doing really well. So there was a lot of plastic came out of there, but at the same time it was a, it was a tough, it was tough to pull the trigger to make that decision.
Stephen: [15:18] How different, I mean, I guess this is a maturity and this is an experience issue, but having that conversation as opposed to being when you probably were a fresh manager, you blame the management, right? You refresh district manager, you know, you blame the manager when now you’re taking an evaluating the market that’s gotta be refreshing for him to realize, you know, they do realize it wasn’t me, the cause of this, this is outside of my control. I tried, you know, whatever I took the coaching and that kind of thing. That’s, that’s different, isn’t it?
Dan: [15:46] Yeah. Yeah. I mean, like you said, through experience in years and having been on the wrong end of some conversations. You try to, I’m sure there’s still some doubt in his mind that he could have done better out there, but we, we did our best to reassure him, uh, that there wasn’t him. And he’s in, in all honesty, he has come back. He’s, he’s worked into the Massachusets called in and he’s a rock star.
Stephen: [16:09] Yeah. Right. So why all of a sudden he’s a rock star. He’s a rock star. It just, you know, so that’s, that’s most people, and this is awful, Dan, tell me the truth. Think back to your corporate days. You would have discarded that person. Correct?
Dan: [16:21] Absolutely. We would have eliminated the California and we would have cut the woods ever running at loose at the same time.
Stephen: [16:29] Yeah. And, and blame them though. That’s the reason, you know, it was, uh, it was Bob’s fault. I mean, it was just, you know, he couldn’t pull his weight, you know, so we’re out of there and it’s not me. The district manager’s fault, of course. Right. You put Bob in that position. You did, you give him the tools to be successful. Let’s talk about that. Um, tools to be successful. You, you’re still operating out of a little thousand square foot building. Uh, I know, I know you have a second location for overflow, but you’re still operating out of this little building. Dan, why aren’t you up to the 20,000 square foot warehouse? You need that. So, yeah,
Dan: [17:04] we don’t need it. We want it to be honest with you. Who wouldn’t, you know, we’d love, we don’t have a loading dock. We carry everything in up steps through the doors, but, um, we’re efficient and it works. Um, not that we’re not open to finding something better, but right now it’s, it isn’t a direct need for us.
Stephen: [17:22] Well, how do you, how do you pull back? Because I would say that’s, that would be one of the hardest things because I would sit there and say, Dan, if you do this, I mean, in my mind, I rationalize this stuff in my head about Steve, right? And be like, Oh, if we do this, this is going to do this. How do you pull that back? Is it a Michelle? Is that what it is? It’s, it’s probably a combination of Michelle and Adam. Okay. Oh, Adam’s in the same boat. Yeah, yeah,
Dan: [17:46] yeah. Adam. Well he just, you know, he’s, he’s, which it isn’t easy for him because he has a very similar personality, but he will try to talk me down. We don’t need shiny Dan. We don’t always need shiny, you know, that’s what he’ll say. Yeah. Because I mean, but we look at the same time, we’re not, uh, we’re open. If we find an ideal location that is centrally located, we would probably move, cause we have the thousand, like you said, no, we’ve got another one that’s about 700 square feet for overflow, but to run, you know, a multimillion dollar business out of those, we laugh at ourselves a lot saying really this is, this is a multimillion dollar business and we’re running it out of this little little, little hole in the wall.
Stephen: [18:25] But you and I both know some multimillion dollar businesses that have closed, who had big giant facilities, right?
Dan: [18:34] That’s correct. Yeah. We not, I don’t think a bigger facility. I don’t think it’s the expense that keeps us out of it. I think it’s just basically w w we’ve got a very efficient system now and it’s working, so we don’t feel really restricted.
Stephen: [18:48] Well then let’s talk about efficiency because I would agree. I would say if there was a reason that you, I mean, it’s people and process. Correct. I mean, it’s really what it is. It’s people in process. Um, and it’s you putting the people in and giving them the tools to be successful and then giving them the leash, uh, that 90%, that 90% earned, or is that understood when they start? It is earned. Yeah.
Dan: [19:11] They’re under the, they’re under the microscope at the beginning.
Stephen: [19:14] And do you pair them up? I mean, so like your Chicago guy, did he pair up with somebody to learn the basics?
Dan: [19:21] Yeah, so Chicago, um, both of them, all Chicago, Chicago was with us from the start. He was with us from eBay. Um, and when we branched out and that, but my nephew Ian, who went off to California, he saw what we were doing in Chicago. He came to me, approached me. He was just in between jobs. He said, you know, I’d like to do that, but I was in California, so he came with us for six months. He worked as with in house, did everything from sourcing to prepping, you know, inventory labs, the batching. He did the whole nine yards, sorry, all off standards and then he just brought them out there and applied them
Stephen: [19:54] and applied them. And these are documented standards? Correct. These are not just random
Dan: [19:59] as most people in Amazon know that somewhat SOP, but it’s a flowing system. This the shipping, you know, they’ve had different types of the shipping inventory labs will change something or Marcella central will change things. So there is some flexibility in it. But basically they’re the same. Yeah, and we’ll do that with each new fulltime employee as they come along. They are paired up usually with someone that’s doing a job that they’re going to be replacing until eventually they’ll take off over a small piece, small pieces. And depending on the precedent how many they’ll go from that.
Stephen: [20:30] One thing that was surprised me is that you’re actually thinking about branching off again. You’re actually open to it. I don’t know that you’re thinking about it. You’re looking, I guess your eyes are always open for that. Does that fair? Absolutely. Now one would say why? Why would you want more, Dan?
Dan: [20:49] Oh, it’s not the responsibility. For one thing, it’s, it’s a great opportunity for whoever does it. Ian out in California was, like I said, it was a lifestyle change for him. He had always wanted to be, he hadn’t left his home, stayed more than half a dozen times. So it was an opportunity. So someone else who we have competence in wants to have a lifestyle change and can make us money and be just as profitable because there are some areas in the country that we’ve looked at that we know we could do very well in. Um, why not? Yeah, why not? And we’ve got assist and there’s no strain on our system with Chicago. It doesn’t, it, you know, you’ve got always have personnel issues, you know, but he handles his own hiring out there. So you didn’t, we don’t had a lot of strain by adding a branch forgot us.
Stephen: [21:32] Oh. Because the infrastructure is already a step.
Dan: [21:34] That’s right. Yep. [inaudible] the only, the only thing is it has to be able to at least tread water with what we’re making for profit for the amount of, well no, not out of the gate. No, we gave, we gave, we gave it a year. I was shooting at six months when he went out there, but after a year we kind of knew and I’d say probably the last year that we stayed out there was just because he loved it so much out there and it wasn’t costing us any money. It just wasn’t good. It just, it’s like stock, you know, where do you want to invest your money? I’d rather putting in a better return.
Stephen: [22:06] Do you and Michelle then have to oversee that or are you able to take and have Adam and Brett and your whole team kind of get involved in a new location cause they have different skill sets.
Dan: [22:18] Right. We have gotten a little above. We’ve had our team fly out to the other location and help get it set up and structured the same way. But we’ve also, Michelle and I have just gone out so, so, so basically what I’ve done for both operations, I went out, I flew out ahead of time, checked with all the, we have a bunch of brands that we, a size that we shop from. I checked with each store manager and make sure we will welcome in the area
Stephen: [22:44] right up front. Yup. You don’t hide the fact?
Dan: [22:47] Nope. Nope. Right. Here’s what we do. What do you think about it? Cause I know the stories here and how, you know, we have w we have pretty good relationships here. So, um, you know, we’ve got a little bit of push back or a little bit of uncertain cause at the time that we did it, especially with Chicago, it wasn’t all that common. Now it’s, you know, bulk buying is a lot more common than it was. So, um, but both areas were open to it. They wanted more business. So yeah,
Stephen: [23:11] it’s not a, Hey you need me kind of thing. It’s like, Hey, can we work together kind of thing.
Dan: [23:17] Yeah. Yeah, exactly. He, I just say, Hey, you know, you guys didn’t do, have some people come by in a lot of quantity because we do it out East. Um, we have someone who wants to come on in here and do it out here for us. Would you be open to somebody to come in and buy any quantity?
Stephen: [23:31] Have you been able to drop a store manager’s name to say, Hey, go call Steve. He can vouch for us right now. We actually haven’t dropped a name, but I’ve dropped stores that we shop at. Oh, okay. Everybody knows stores by volume, ah, particular location.
Dan: [23:46] They’re like, ah, they, they beat us last.
Stephen: [23:48] Now you know why? Right. You’re that guy. They talk about how you stay. I always laugh because I told you that story this weekend. There was a girl at one store, Nomi is a soap guy and she got a big award because of the all that we bought. She was like, she loves [inaudible]. I’m the, you’re the one who got me that award. You know, that was pretty cool. Um, it, when, when you think about adding another location, are there any limits that would stop you from going anywhere?
Stephen: [24:20] Well, I mean, I mean right now, you know, you’re open to looking. I mean there are, are there, well are there reasons you wouldn’t go to an area? Maybe I’ll say it that way.
Dan: [24:29] I, they they’d have to have plenty of outlets available or we shop, you know, 80% probably 70 to 80% is outlet. So they’d have to have pretty good within their radius to shop with.
Stephen: [24:42] And what does that mean? Pretty good. More than one?
Dan: [24:45] Yeah. Oh yeah. You’d have that within two hours they’re going to need to get to at least four different outlets, whether the two hour drive
Stephen: [24:51] and not necessarily at the same day sometimes,
Dan: [24:55] right? Not necessarily. It all depends on the type of strike we’re doing. You might be in one store for three or four hours, so you’re going to get to stores and there might be a quick strike where like a friends and family and Nike are going in and you’re buying limited quantity. So you need to have as many stores as you can.
Stephen: [25:10] Another thing I wanted to ask you about, when you are thinking about where you are now, are there any things that you would starting over again that you would just do from day one? For example, inventory lab or scan power or uh, scanning tools or a van or you know, that kind of, or a position, maybe a key position of an administrative position or anything that you would, you would absolutely. If you had to start over again, do from day one that maybe you didn’t do
Dan: [25:37] well, it’s a great question. I hadn’t really thought it through before. Um, we’ve seem to have grown so organically that almost everything we’ve added in without, without giving it a lot of deep thought seems to have come along as it’s needed.
Stephen: [25:51] Oh, so what you have now might not have been needed eight years ago or 10 years ago. Okay.
Dan: [25:56] Like I had a suburban that holds 225 pairs of shoes. That was all we needed at the beginning. And then as we started down low, which not to overload, we’d get a trail or the trail that filled up, we wanted two groups to grow in different directions. So we ended up buying two Nissan vans. But I wouldn’t have bought those up front.
Stephen: [26:14] Okay. You wouldn’t know. And the other thing I think I can say and know the answer is that you wouldn’t have leased him for sure. No. Right. There’s no chance you own your vans outright. Now you happen to pay cash for them. But, but still it would, you have bought a, you know, $1,500 van if that’s what you could afford. Yes. You’re not above that.
Dan: [26:35] Now we bought a second suburb and that was our first attempt. So we had a suburban and we loved it. It was, I had probably at the time, 270,000 miles on it. We’re like, this is great. So we’ve got another one, same year, only a hundred thousand, 130,000 miles on it thought it was a brag and it was a baby, but it was, it was buying somebody else’s problem. Right? Yeah. So we realized pretty quickly that that wasn’t the way to go. And, and I, I’m not into buying new vehicles to be honest with you. We’ll buy him a year or two years old. We did buy these vans new just because of the issues we’ve had with, with a previous work.
Stephen: [27:10] Well and again, you’re setting your team up for success, right? If they hit the spend time chasing down mufflers and whatever else breaks and stuff like that, um, I think that’s a pro tip. And they’re not that expensive if you’re not buying because you’re not buying one to go on vacation. And these things are not luxury vans. Right? Do they have air conditioning? At least
Dan: [27:29] they, they do have the air conditioning, the air conditioning and power windows with it. Two things my guy said in an auxiliary Jack [inaudible].
Stephen: [27:37] What’s an auxiliary Jack? Oh, so they can plug in the radio cause they probably have no radios. No, there’s no Bluetooth. There’s definitely no Bluetooth in them. That’s a shame. So the, the, and these are huge numbers, so multiple, multiple, seven figures. But let me just make sure I’m clear on this because you have foundational brands that you’ve been doing. Like you said, Nike’s one of them. Yeah. And you’re not seeing growth there. You’re seeing virtually the same, maybe lesser margins, right? Yeah. Because it gets a little tighter. However, still foundational sales, the correct, the opportunity has come to take those skill sets you’ve learned mastering those brands and applying them on other brands. That’s, that’s where your growth is coming from. I hope people hear that. That’s
Dan: [28:25] how has that, that’s exactly right. That’s where it’s all coming.
Stephen: [28:29] So then the cap, I mean there might be more than a eight brands you sell or the 12 brands you sell. There might be a few other brands out there. You’re thinking
Dan: [28:37] and new brand. So, so a little inside information, we have a incentive for anyone who brings a new brand or a saw, I saw a brand might be a brand, you know, whether it’s, you know, uh, under armor or, yeah, either say under armor or it might also be a particular store. Like there are off price stores or, or a small niche stores that we might, we might drop out. So if they bring that brand in and they get a piece of the final number in much larger piece, right? The annual number. So at the end of the year, this stored in X amount that you’re going to get 2% of our net sales for that particular store.
Stephen: [29:15] And what does God says mean? I want to make sure that people understand it, what net sales means
Dan: [29:19] it’s is total sales coming through Amazon. So it’s not net profit. And so I shouldn’t even say net sales, I should say gross sales. Less returns. Yeah. Right. So they realized, Nope, Nope. [inaudible] returns the big number. No, not for this particular bonus. So, so this is just an annual, it’s only 2% which is I say only, but you know the talking thousands of dollars of bonuses first year only. Nope. They’re there. They’re in it. As long as we’re selling it. Wow. First three months, they don’t get anything. That’s when we’re testing a product out brand. You know, if it doesn’t work, they’re out. But if, if we decided to stay in it, anything after the first three months, they get [inaudible].
Stephen: [29:58] What a great incentive. So he’s, one of the challenges is wondering how you get people to go out and scout, right? How do they, how do you get people to test for you? That’s it. You put your money where your mouth is
Dan: [30:09] and, and, and so I guys are very highly competitive murders now too. So they all want to [inaudible]
Stephen: [30:15] we don’t have, we don’t want to get there first.
Dan: [30:17] Yeah. And we don’t have the time or the money to fully invest our, our, our, not only our, our money, but also our focus. We can only handle a couple of brands at a time. So we have a bunch of them selling them in a, in a waiting block. So I think that there is potential for a lot of growth.
Stephen: [30:33] Oh. So just because I bring you a brand or a location, you might not adapt it right away. Just because you can’t, capacity wise, you’re, you’re, you’re at capacity but it’s in the pipeline and uh, and they’re always pitching you like, come on, let’s try this one. Let’s go back.
Dan: [30:48] Still encourage them. If you want to give it a try, you know, go ahead, bring some in and we’ll see how it does. And you know, if all of a sudden we’ll get in a 110% ROI, which is one that just got brought into us about two months ago. We’re going to say, okay, he had jumped into the front of the line. We’ve got some resources for you.
Stephen: [31:02] Does that mean that you cut other things if you have limited funds?
Dan: [31:06] Yeah, I mean limited. It’s all relative. I mean, actually I uh, you son was up, Nick was up and he, you know, we told him what our budget is so it doesn’t seem, that seems like a massive number. So you’re like, what do you mean you have limited funds? But there’s so much product out there that we still run out. We get paid every two weeks. We don’t have an older accounts so we don’t get daily payoffs. So we take it, we pick a percentage of that payout and that’s what our budget is for the following two weeks.
Stephen: [31:30] And that’s what you have to do. So. So there’s a a pro tip though that means that a stuff’s fallen on the other side. If all of a sudden this new gives you a better margin, you kind of walk away. That’s a maturity. That’s the California story, right?
Dan: [31:42] Well yeah and, and Nike used to be honest with you, we take our funds from, cause it’s still, Nike is still our biggest money maker, but it’s also become one of our lower ROIs.
Stephen: [31:53] Hmm. So you just distancing yourself. I mean
Dan: [31:57] I said I want to reiterate, it is still our number when you add all our, cause we do Nike power on next. You put where we have a couple of branches. When you add all that in and it’s still our dominant brand, but we’re just finding things to replace it with better ROI.
Stephen: [32:10] Um, does that help you sleep better at night?
Dan: [32:15] It does, yeah. It absolutely does. Because we had trouble with Nike at one point when Nike getting on or if you remember that it was a couple of years ago, everybody they would show it looked like they were shutting down the brand because Amazon had gotten into bed with Zappos who had been to bed with Nike. So it looked like it was, they were closing the door on that. They’ve never played out that way. But when that happened, that was probably the wake up call that that prompted. I can’t say that for sure. But
Stephen: [32:41] that’s like a risk mitigation though, right? It’s a risk mitigation.
Dan: [32:44] Yeah. I think, I don’t know if we were, if this would be for call we were talking about, it’s like stock that you just want to spread your funds out in as many different [inaudible] kind of risky, you know, some might be a little more prone to IP infringement, inauthentic claims. Others might be something that they in returns, you know, you, we’ve got a whole bunch of different types of returns.
Stephen: [33:03] Well, you know, I sit back and I think about, um, like people looking to build a business. What’s your advice for exactly that? That risk mitigation? I mean, used to be, you know, uh, don’t go deep, go wide. Right? Uh, that’s not your model, right? I mean, it really isn’t.
Dan: [33:22] We run a little different than most, most of them. I think most of the Rico retail arbitrage people, we, we find a product that we like to want to go deep in it. And you’re not afraid to go deep? No, no. It all depends on how long, you know, we’re not going to go and if you have limited funds, you’re not going to buy enough. That’s going to take you four months to turn it over. But we’ve turned about Oh, more than half of our inventory over every month.
Stephen: [33:47] Right. You said about six weeks is about how long it takes you to get pretty much through. But again, you have very stringent buying. I mean, do you, do you hold that? I mean, is it, I’m sure you do an outlier, I’m sure you do a flyer. Um, but generally for staff purposes, do you hold them to those numbers once you’ve all agreed to it? This, like it’s outside of our limit. We’re passing.
Dan: [34:09] Yes. Unless they have a really strong gut, then they will probably get a share it with, would they either supervise, you know, one no, go up the line with it. Like, okay, I understand this stuff, but the shoe is ranked 200 I mean you’re going to sell a hundred a day and I know we’re only making you know, X ROI, but we can turn them over so quick. I think it’s worth the investment and we can be talked into stuff
Stephen: [34:32] and this is one of the things that Dan does probably better than others, is he’s not looking at profit. He’s looking at return of investment. Um, and if you know you’re going to turn that in 60 days in, that means how many times a year can you turn that money? Right?
Dan: [34:44] Right. Yeah. And then that shoe, for example, that the low rank one, you can probably turn that one over five times in a month, in a month if you could keep finding it. Yeah. Lo, you know, if you’re under, if you’re under a thousand and in shoes that you’d have trans pretty quick.
Stephen: [34:58] And so what’s the yield, right? I mean, so yeah, it’s only a 30% margin, but you know, five times a month, what’s that yield? Right when you get done. I can’t do that math that’s automated. I’m out.
Dan: [35:11] Peter turns in yield, you know, as long as you coming out with the numbers big or at the end, you know, go with that number.
Stephen: [35:17] So thinking about, you know, you, you get a, you give a lot of advice because you become the Sage of the old guys. I’m out there in the RA world. What, what’s your advice, uh, you know, you, when you speak at conferences now a little bit here and there, or you speak in groups, maybe I’ll say it that way better. Um, what’s your advice that you give people now?
Dan: [35:39] I, I encourage all, so, so I have come across a lot of RA sellers and if there’s one, and I don’t want to generalize cause there’s some people don’t really well, but it’s, it’s spreading themselves too thin, chasing too many rabbits at the same time.
Stephen: [35:53] So like for example, uh, we had a store that was closing and yeah, you can go pick up a few in a few and a few, right? Yeah. But it’s so limited, right? Especially when you have a liquidation company involved or whatever. Right. So very limited. Your idea is, Hey, go, go master that brand, spend it all there. And then when you have the excess funds, then go do it. And if you take that approach, you don’t, right. If we, I’m sorry, say that again. Well, if you don’t, I mean if you don’t, if you, if you really spent your money there, you’re running out of money, you’re not going to have to go, wait, that’s the point.
Dan: [36:28] You’d spend your money. Yeah. If you can spend your money in two brands, why do you have to spend your time chasing 10 brands, you know?
Stephen: [36:35] Does that go against your diversification though? Advice?
Dan: [36:39] Well, no, because you growing cause then you’re going to get as, it’s now you’ve mastered that and you can get it down Pat. And once you’ve learned it, then you can grab the third one and the fourth one and the fifth one. No, that, that actually plays into the growth.
Stephen: [36:50] So do you think that’s where then maybe that’s the answer. Do you think that’s why most people struggle is they’re trying to diversify before they’ve mastered the one brand?
Dan: [37:00] Yes. And then I don’t think you become a master of any of them if you just, you just popping in, you know, we’ll see. We’ll see resellers that come into a Nike store and they walk out with a pairs when we’re in there buying 300 so another thing is not that they have the capital buy the 300 but at least there’s enough in there that they could have spent the a thousand dollars if that was a budget for the day.
Stephen: [37:21] Yeah. W and that’s my question is how long did it take you to figure that out? Cause I think, I think, yeah. Yeah. And people compare and that’s gotta be hard for you. People compared themselves to you. But they don’t have an Adam. They don’t have a Brett, they don’t have any and they don’t have a Michelle. Right. I mean that’s a challenge though. And they didn’t have skills sets at the level they do when they started. These have all been developed over time. We’re back to the beginning of the conversation. The same management’s in position for a year and a half, two years, three years, four years, five years. They get better. Right. Iron sharpens iron, right?
Dan: [37:54] Yeah. Yeah. And we’ve added I N too. That’s the key. You know, by myself, Michelle and I for, you know, for those that know my story, we did eBay for 15 years and I had tunnel vision. I just sold Nike and didn’t see anything, any opportunities around me. So I think the advantage to selling on Amazon now is the support you get for other groups and the either the mastermind groups or just the, the big online groups. You’ve got coaching. You’ve got people like me and I don’t do not bring any extra intelligence to this conversation. All I bring is experience. You know, we’ve, we’ve made the same mistakes. We’ve, we’ve invested, we’ve, we’ve, we’ve bought product at the end of a season thinking, okay, I’m going to sell it as soon as the next season comes, I’m buying it at 80% off. So I’m gonna make a killing in the spring. Where if you’d taken that money you spent on the product that was closing, you could have turned it over 10 times before spring cane.
Stephen: [38:47] Yeah. How many times did you, did you see flip flops in front of your face yesterday and you bought one but yet the prices amazing. Yeah. Yup. Uh, for next year. And so like you’re saying, why tie up your money but it’s a great deal. A crazy deal. I mean it’s,
Dan: [39:05] yeah. I, I won’t say I don’t get sucked into it once in a while, but,
Stephen: [39:09] but it’s farther and fewer in between. Yeah. It’s, you do a lot of not coaching because it’s not, it is not paid coaching. You do a lot of advice giving and or sounding board kind of thing. Do you find yourself getting better repeating that stuff? Kind of reinforcing? Do you know what I mean? Is that what you’re,
Dan: [39:28] I think so. Yeah. You know why it does. You’re right. It does get better. It’s because you’re having intelligent questions asked about,
Dan: [39:37] But you have to actually think it through a little bit because a lot of the stuff we did do because that’s what we do, you know, so people might ask. And so I think that’s why I’ve become more comfortable talking about it. You know, I always said I didn’t really have a lot to share cause I just went out and bought shoes and sold them on Amazon, you know?
Stephen: [39:53] But now when people, when you see people pull it apart, they’re like, Whoa, wow, wait, you do this. You do that, right? Hmm. All right. So, you know, the goal of the podcast is to help people get past stuck. So, um, is it okay if I put your contact info out there, your Facebook? Okay. So, um, I at 100% suggest anyone reach out to him if you’re stuck in any possible way because the wealth of advice, um, and information, um, is unbelievable. But I would assume that the advice, you know, maybe I’m wrong, the advice you would give somebody now who’s stuck is different than what you would’ve said a year and a half ago. Is that fair or would you say it’s the same thing?
Dan: [40:35] Uh, I probably, it probably wouldn’t vary all that much because cause we were locked into just a few brands back then. I probably notice too, how do I pick too late? A little better now? I might not have known that to say this before cause now I’ve seen the advantage from growing one brand at a time. Um, but yeah, it probably wouldn’t have been that much different. I still think it’s the same, I think learn new brand completely because what happens is there are so many of these brands that were in that there were a little ancillary replenishable items. So we never even looked yet cause we would just like a bowl going in, grabbing a product and getting out and you know, now we’ve added meat. It might be apparel, it might be equipment and it might be just odd things that we never even looked at before. But by learning that brand really well, we, we’ve, we’ve really optimized it
Stephen: [41:20] well. Do you have a advice on how to learn that brand fairly well
Dan: [41:24] just by spending time and, and getting to know the store managers and the, in the, the, the people in the store
Stephen: [41:29] mean are they telling you what’s popular? Is that, is that an example of what, how you learn there? Not tell
Dan: [41:34] it. Yeah. If you’re asking them, you know, they’re asking the right questions. Yeah. You’d just say, okay, what moves for you guys? Or, or this is a really good buy. And generally I’ll say, Pete, what’s in your store? Any crazy prices? Anything you’ve got going, what’s hot? You know, the brands change all the time. I can remember. Um, I can remember all different branches taking off where depending on what becomes popular, the you changes what sells and what doesn’t. And some of those stores that go out of business just because they’re not in anymore.
Stephen: [42:05] Yeah, yeah. Right. We were just talking about a brand that’s up and coming. Yeah. It’s an old established brand and you wouldn’t think that. And so as a, as a market change, as you can adapt and love it and then apply all this, this massive knowledge that you have to other brands, build that foundation and then apply it to other brands and then that’s where your growth can come. Oh, Dan white worked your wisdom, your wisdom. I’m gaining on you. You know that. Hey, thank you so much. I wish you nothing but success.
Dan: [42:35] Oh my pleasure. Thanks Steve. It’s fun to be here.
Stephen: [42:38] What a super guy. And again, I tell you the truth, you really need to think about, um, when you do see Dan walking up to him and introducing yourself, wonderful person, him and his wife, just wonderful people who will give you everything they have, uh, information wise. Expect nothing. Don’t, don’t want anything as a matter of fact. Um, but they’ll give you real love, real, uh, friendship. And, um, man, I, I just encourage you that if you get a chance to meet them, you, you please do because, um, it’s just, it’ll enrich your life. Um, it is a rich mind. So e-commerce, momentum.com, e-commerce, momentum.com take care.
Cool voice guy: [43:16] Thanks for listening to the e-commerce momentum podcast. All the links mentioned today can be email@example.com under this episode number, please remember to subscribe and like us on iTunes.