#204 – Arbitrage and Off-Amazon Warehouse Tactics to Help You Level Up Your Amazon Game
Want to get started selling private label on Amazon? One of the best ways to create the seed money required to jump into e-commerce is selling products through a process called arbitrage.
Arbitrage is an investment tactic in which an investor profits by purchasing a product at a lower price, then immediately turns around and sells it at a higher price in a different marketplace.
With the world’s shipping channels being temporarily affected by the current pandemic, another thing that gives Amazon sellers a little advantage is access to an off-Amazon warehouse.
Maybe you’re lucky enough to have a little space of your own, or you’re using a third-party logistics company. But either way, having a way to shorten your own supply chain will help you to deal with the fluctuations that are a big part of e-commerce at the moment.
In this episode of the Serious Sellers Podcast, Helium 10’s Director of Training and Chief Brand Evangelist, Bradley Sutton welcomes Andy Slamans, someone who knows all about selling on Amazon, as well as both online and retail arbitrage.
Andy has also maintained his own warehouses since 2017. Because of that, he’s perfectly poised to offer Amazon sellers the important tips and tricks that will help them level up their own e-commerce game.
In episode 204 of the Serious Sellers Podcast, Bradley and Andy discuss:
- 03:20 – Andy’s Warehouses and E-Commerce are Both Growing
- 06:11 – His Seattle Warehouse has Dramatically Shrunk the Supply Chain
- 09:00 – An Off-Amazon Warehouse Minimizes Your Risk
- 10:47 – 30K in Two Weeks with a Single Retail Arbitrage Product
- 14:19 – What are the Risks of Retail Arbitrage?
- 16:13 – Amazon’s Rolling Reserve
- 20:38 – Andy’s Method for Finding Product Opportunities
- 23:556 – Getting the Best Bang for Your Buck
- 28:11 – Identifying the Golden Gaps
- 29:36 – What Makes Andy Say No to a Product?
- 33:43 – Early On, Boots on the Ground Give the Best Results
- 36:41 – Selling “Dead Tech” at Higher Margins
- 38:14 – How to Contact Andy
Enjoy this episode? Be sure to check out our previous episodes for even more content to propel you to Amazon FBA Seller success! And don’t forget to “Like” our Facebook page and subscribe to the podcast on iTunes, Google Play or wherever you listen to our podcast.
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- Freedom Ticket: Taught by Amazon thought leader Kevin King, get A-Z Amazon strategies and techniques for establishing and solidifying your business.
- Ultimate Resource Guide: Discover the best tools and services to help you dominate on Amazon.
- Helium 10: 20+ software tools to boost your entire sales pipeline from product research to customer communication and Amazon refund automation. Make running a successful Amazon business easier with better data and insights. See what our customers have to say.
- Helium 10 Chrome Extension: Verify your Amazon product idea and validate how lucrative it can be with over a dozen data metrics and profitability estimation.
- SellerTradmarks.com: Trademarks are vital for protecting your Amazon brand from hijackers, and sellertrademarks.com provides a streamlined process for helping you get one.
Bradley Sutton: Want to know how to make some quick money on Amazon without a big investment? Today’s guest is going to give us one of the options. And it’s a way that I use to grow $30,000 the last couple of weeks on one product with a net profit of $9,000. How cool is that? Pretty cool, I think.
Bradley Sutton: Hello, everybody, and welcome to another episode of the Serious Sellers Podcast by Helium 10. I am your host Bradley Sutton, and this is the show that’s a completely BS-free, unscripted and unrehearsed organic conversation about serious strategies for serious sellers of any level in the Amazon world. We’ve got a super serious seller here. I mean, he has a sense of humor too, but he’s serious in the sense that he’s a big baller, Andy, back on the podcast. How’s it going, Andy?
Andy Slamans: Good. Thanks for having me back, Bradley. I always enjoy talking with you on the Serious Seller Podcast.
Bradley Sutton: Love it, love it. Now, we’re not– usually when we have guests on here, we’ll go a lot into their backstory and their history, but we actually have had Andy before. It’s been a little over a year since he has been on the show. So guys, if you want to learn more about Andy’s backstory, make sure to check out episode 72 of the podcast and you can get some information, but this episode I wanted to kind of like, see what you’ve been up to the last year and then also really double down on a couple of things that you talked about last time, but that I’ve been trying to delve into mainly like retail arbitrage and online arbitrage here. So first of all, Andy, how have you and your family begin through this ridiculous year of 2020?
Andy Slamans: Yeah. Right. You just kind of surviving, I don’t know. It’s been okay. Maybe because I work from home mainly, and so not a lot of difference there. But yeah, definitely the challenging part for us is we haven’t been able to travel like you we like to travel as a family. And I love traveling to Amazon seller conferences and we both know over the last year, those have not been existent.
Bradley Sutton: Exactly, exactly. It’s tough. Your family is actually almost like a complete mirror image of mine. `I think you’ve got a son and daughter almost the same age as like mine are 16 and 19 now. Yours too?
Andy Slamans: Yes. Yes.
Bradley Sutton: And so does your son play any sports?
Andy Slamans: He does. He’s a football player and now he’s in basketball. So he’s in basketball season.
Bradley Sutton: I live in California because you’re still in Pennsylvania. Yes. You see, like they there’s been no school sports here. So like this was supposed to be the year. My son was really going to get to take a step up here. He’s probably, I would say maybe even conference player of the year for his basketball conference, but they haven’t even had the football season yet and they just announced another delay. So they can’t have basketball until the football season has happened and they haven’t even had that yet. So like, I’m really worried that sports are going to be canceled overall here in California.
Andy Slamans: Yeah, I mean that, and it hurts kids so much and I hope it gets cleared up. Hopefully the vaccine gets disseminated quickly.
Bradley Sutton: Yes, absolutely. Now we’re not here to talk about our kids’ sports accomplishments as much as I’m sure both of us would like to hear, but we’re talking about serious strategies. And so I would, first of all, like to, I heard through the grapevine, I don’t know if this is true. Did you get like a new warehouse or did you upgrade your warehouse? Are you still in that same one?
Andy Slamans: Yeah. So we’re just, we keep accumulating more space there. I think we’re up to 25,000 square feet now, thankfully. The business has grown like a lot of online folks. And then, uh, and then we also now have a third-party warehouse in Seattle, as well as Texas. So trying to reach all areas of the country within two to three days.
Bradley Sutton: So this is for like customers who are using you to fulfill and things like that and to store things, or this is for your own business as well. You store your stuff at these different warehouses.
Andy Slamans: Yeah. This is for our private label brand. We have a brand I’m on building with my nephew partner, Nathan, and so yeah, we actually do a lot of merchant fulfilling to customers direct, as well as like we saw like kind of the writing on the wall. And I know you’ve talked about a number of times on your podcast that delivery services like UPS, FedEx, they’re struggling a little bit, and Amazon, we know what’s fascinating, their Prime is no longer two-day Prime anymore. I don’t know if you’ve noticed that you’ve probably talked about on your podcast, but it’s becoming like three-, four- or five-day Prime. And a lot of times on various listings. Now they’ll actually list a merchant fulfilled ahead of Prime, depending on the location of that seller. So, I mean, we just see that that’s a big need for sellers as you grow.
Bradley Sutton: It’s unprecedented. Like there’s always been like, okay, well, if you’ve got a Prime listing and then you’ve also got a SKU that’s fulfilled by merchant. And, like if for whatever reason, the fulfilled by merchant SKU is like maybe $4 less or something. Yeah. Maybe that’ll get the Buy Box. Or if the inventory is like in transit or being checked in and it’s not fully checked in, maybe the fulfilled by merchant will have the Buy Box. But now what I’m seeing is you’ll have– it’s a hundred percent available in FBA and it’s the same price as fulfilled by merchant. And the fulfilled by merchant will get the Buy Box because their shipping times are kind of delayed. So in Amazon’s mind, they’re like, we’re going to show the fulfilled by merchant because actually the merchant fulfilled will get to the customer before the prime. And that’s just, that’s never happened in my personal experience, I’ve ever seen before this year.
Andy Slamans: Yeah, absolutely. I never thought I would see the day that that happened. But again, that’s probably a COVID related situation.
Bradley Sutton: So, then the reason why you have the diversified warehouses, is that, are you doing one of those, like, I don’t even know if they have it anymore, but like seller fulfilled prime, prime on-site, or that’s just to save money on just regular postage and shipping fees so that you can geographically ship things out closer.
Andy Slamans: Yeah. So that’s the main reason we merchant fulfill probably about 50% of our products. And they’re larger, they’re oversized. So we wanted to be able to reach those customers in a much quicker way. And then the other one, like the warehouse we have in Seattle, it’s great because the shipping times from China are so much faster. So we’re like in Central Pennsylvania, when I place a container order, it can take anywhere from 45 to 55 days, by the time it gets to Baltimore, whereas in Seattle, it’s usually getting there in about 15 to 20 days. So, being able to shorten that supply chain definitely is very advantageous for cashflow.
Bradley Sutton: Okay. That’s interesting to know. I mean, just in general, it’s almost a necessity nowadays to either be able to store your own products at your facility and ship them, like either in your garage or if you’ve got a warehouse in the back of your house, like I do, or you use a third-party logistics warehouse, just because of that 200 inventory limit, like everybody in the past, the beauty about Amazon is I’m going to buy a thousand units. I never even have to see one of them. I’m just going to send it directly from the factory to Amazon, but you can’t do that anymore because, for the time being, you’ve got that 200 inventory limitation for new items. So like, if you guys are not able to store your products locally, you’re kind of screwed nowadays.
Andy Slamans: I’m surprised Amazon really didn’t institute that sooner. Because look, they don’t want to be like a storage facility. We all know those storage facilities nationwide are growing like crazy because people have so much stuff. Amazon wants stuff that they’re going to get into their warehouse and they’re going to ship out. Right. So it only makes sense for them to institute those types of numbers. Now it’s not a perfect system. It’s still computer algorithm can get messed up sometimes, but it’s actually, I think very smart of them to do that.
Bradley Sutton: Okay. So guys, we talk a little bit about doing fulfilled by merchant and warehousing in that last episode with Andy. And I’ve talked about that throughout the last couple of years, even before COVID, I’ve always been a big fan of dual listing your items because regardless, even under normal circumstances, guys, remember if you’ve got a 15, $20 product and you don’t, and the customer does not have prime when they add it to their shopping cart, they’re going to have sometimes five, six, seven, eight, $10 shipping fee added to it. And then when they see that they’re like, Oh no, I’m not going to buy this. So, always have both, if you have the ability to have both SKUs that you’re offering, because it’s to save you from some lost sales that you might be getting from people who don’t have Amazon prime as well.
Andy Slamans: Well, honestly, this too, it minimizes your risk. If you have all of your eggs in the Amazon warehouse and something for whatever reason happens, you’re just at a lot more risk, whether your listing gets shut down and you have to recall all of those units by having it in a third party warehouse, it gives you a lot more leverage.
Bradley Sutton: Absolutely. Absolutely. Now let’s talk a little bit, let’s switch from warehouse to arbitrage and just for people who are new and maybe they only know about private label, what exactly do we mean when we use the words online arbitrage and retail arbitrage?
Andy Slamans: Yeah, sure. So that’s how I got started on Amazon, and it’s the old adage buy low sell high. There are still a number of Amazon sellers that have really multimillion dollar businesses. I actually work with some, and a good friend of mine he’s going to do over 10 million and it’s basically just buying that stores, buying that outlets, buying at Walmart, buying at Target big box stores and then reselling those products. And the whole arbitrage part is it’s supply and demand. And in one part of the country, Walmart may be clearing out their toy section. And that availability at that price is not going to be the same as another part of the country who’s not clearing out their toy section. And so, the Amazon it’s so powerful and the prices are still at a premium that it’s just a great model. I personally think it’s the best model to learn Amazon, to learn the ecosystem, to understand what the best seller rank is because you’re selling those name brand products that you don’t have to run the best part is you don’t have to run any PPC for it. Right.
Bradley Sutton: Yeah. I’ve been recently getting into online arbitrage, retail arbitrage, and even like some drop shipping. And it’s just opened up my eyes to like the possibility. There’s this one product that I was doing earlier this month is, it’s called this monster jam megalodon storm something remote control car. Right. So I saw it was going on sale in Target and Walmart for like 43 bucks. And then it got sold out on Amazon for whoever is the regular seller. I think it might be an Amazon fulfilled or Amazon vendor central product. And just in like a two week period of time, I generated $31,000 of sales on this one product. And it was selling on Amazon. I was selling on Amazon from 95 to $105. And I was buying it retail from Walmart and target for only $43. Now I was doing some drop shipping where that even gave me more profit because Target and Walmart were offering free shipping. So it was basically $43 is all as pain. And then, but then like when it ran out, like it ran out at Walmart and Target online. So what I did was I could see on target and Walmart, that it was available in local stores and me and my kids, we just went all over San Diego, over a couple of days and just tried to buy as many as possible. And then we would just ship it ourselves and we would still make money, even though now we’re paying like $10 shipping, but I was just like, I was like, how is this real life? I mean, how could this much money be made? I think I grossed, yeah, I grew up $9,000. I’m looking at my Helium 10 Profits account right now on this one product in like about three weeks. Now, I’m sure you have even better examples. I remember you had one from Home Depot, you talking about as before, and you were doing something that with a Nerf product this year or something.
Andy Slamans: I mean, I’ve sold, over the past year. So this is the sixth year that I’m selling on Amazon now, a Nerf guns, Legos, Nike shoes. I mean– Disney products, almost everything that’s out there. If it’s out there, I’ve sold it before. But what I love about it is especially folks that are new to Amazon, you know that I’ve taught folks how to private label, and how to get into the private labeling business. And for me, teaching folks how to private label, it’s a challenge, especially folks that don’t have a lot of business experience or a lot of capital. So if you come in with business experience, if you come with capital, I think getting into private label is a great way to go. However, if you don’t have retail or business experience, it can be a challenge. And doing arbitrage. I mean, from day one, we run a group where there are literally almost on a weekly basis, new sellers who’ve been selling less than a year who are climbing over a million dollars in gross sales, doing exactly what you’re talking about, and these are new sellers. So I think that’s what the great opportunity is for arbitrage.
Bradley Sutton: Absolutely. Now here’s a question though, because everybody would be doing it if it was just completely easy, but here’s the thing. It’s not exactly something that anybody can do. And there are risks involved in it too, like returns and people upset and people not getting the product. Can you talk a little bit first, just we like to keep it real here. Amazon is not all unicorns and rainbows, what are the risks and some of the bad things that you’ve had to deal with that people need to know about before they just like, go all in and like, Hey, I’m going to be arbitrage for life.
Andy Slamans: Yeah. Yeah. So, like any business model there’s, there’s challenges and some of the unique challenges now to doing retail arbitrage on Amazon is a newer seller. You’re gated in a lot of categories. So it’s going to take some grind and grit to get ungated in those categories. Now, thankfully, there are ways to do it. You basically just purchase products from a wholesaler, so you have to have a sanitized invoice. And then you have to open up multiple cases with Amazon because a lot of times they’ll say no. So, getting able to sell in those categories, getting able to sell those brands. It does take a little bit of work. And so, yeah, it’s not the easiest thing ever, but out of all the business models that I see out there, as long as you’re willing to put in the effort, because like you just said, like even shopping, not everyone are natural, born shoppers, but like that takes some patience, you’re waiting in line. And then the actual shipping part of it is not easy, until you start to grow to a level where, you know, you can drop your products off somewhere and have them prep it, send it into Amazon. It’s actually when you’re shipping and you’re bending over, and if you don’t have your tables at the right height, your lower back is going to hurt a little bit in the night, but as you grow, just like any business again, though the right way to grow is you start to hire folks that are going to do that. And, you utilize what you’re best at, which is, I personally think for all Amazon sellers sourcing products.
Bradley Sutton: Yeah, absolutely. Now one of the biggest reasons, I mean, it’s kind of like almost a paradox. It’s a great way for somebody who wants to do private label, but they don’t have enough funds to like drop 5,000, 10,000, $15,000 in a private label product. It’s like, Hey, build up your cashflow, but, correct me if I’m wrong, but a hundred percent of new Amazon accounts don’t they have in the beginning the first few months, like a rolling reserve on your sales.
Andy Slamans: Yeah, and it’s interesting too, Amazon does that differently. Now, like some new accounts they have like daily payouts, I don’t know what their rhyme or reason is, but yeah, you will have a rolling average. And so, my advice always is you have to look at it as a real business. If you are at that level where you’re just bootstrapping, you’re going to just have to understand that you’re going to snowball all of your profits back into the business. If you want to grow it, if you want to become a million dollar business, within 12 to 16 months, then just be ready to have an income from somewhere else. So, that way you can just keep reinvesting all your profits right back into the business.
Bradley Sutton: Okay. Okay. So in your experience lately, I know you deal with a lot of new sellers as well. Like what is that reserve been lately and how long until it gets removed? Like, is it 50% of your sales or is it just a set dollar amount or what have you seen lately?
Andy Slamans: Yeah. So I think it’s– don’t quote me on this, but I want to say it’s about 30% and they hold it for like a rolling two weeks. So, they basically release it every two weeks. That’s how it actually is on the private label brand that we’re building right now.
Bradley Sutton: Okay. Okay. So then what would, I’m not saying that to the new sellers, no, you absolutely under no circumstances could use arbitrage if you’re new and it won’t work out. No, I’m sure that there’s a path to it, but what would your kind of like Andy’s five steps be of how somebody, even with that reserve, how they can still stay a little bit profitable and build up some capital using the arbitrage method.
Andy Slamans: Yeah, sure. So similar to private label, you make your money in the buy. So the first thing, just like, I’m sure you always teach us, you have to understand the best seller rank. Amazon’s the only platform that gives that no other sales channel gives us the BSR and you can extrapolate so much data from that BSR. And now there’s apps that you can use that will help you extrapolate that data even faster. And so you have to, you make your money in the buy, just like the product that you’d mentioned earlier, you saw the buy price and you saw the sell price on Amazon. So you went really deep. And in order to grow an arbitrage business, what we generally counsel is at first, you just stay shallow. So, you don’t go as deep as like you went, but you’re a seasoned veteran seller, but if you stay shallow, you’re going to learn a little more. But then as you grow, there are opportunities where you are going to have to take risks, just like you did, and you’re going to have to go deep. And when you hit that product that you’re able to go deep on, and those mortars are good, that’s when your cashflow is going to increase tremendously. Rather than staying kind of wide and shallow, which I think most it’s the smartest way to do it if you’re a new seller, just starting on Amazon.
Bradley Sutton: Okay. Okay. Good to know. All right. So now somebody is like, all right, I just heard that from Andy. It sounds pretty good. I think I might be able to do this, I want to get started. Now, let me just tell you what I did recently. First of all, I’ve got like this team of people who work on it, and I didn’t teach them how to do it. They like do it. They came to me like, Hey, we’d love to use your Amazon account and we can help you find deals and stuff. And so they like use whatever they’re doing. I don’t even know how they do it to find these. But some of the stuff that I’ve done is like, when the black Friday deals came out with Walmart and Target, I would just kind of like scan those. And then I would use Helium 10 and just Amazon to kind of like, look what’s the situation on Amazon. And I could see that somewhere out of stock, I could use the Helium 10 Chrome Extension, and I could see the history of the price so that I could see, Oh, wow. This thing normally is this price. And now it’s this price. I know there’s going to be some opportunities. So I would like do mainly looking at those black Friday deals to see what I could get at a discount. But for Black Friday is only once a year. Cyber Monday is only once a year under the rest of the year. How does one find these opportunities in order to know what they can, what they should source.
Andy Slamans: Of course, yeah, sure. So we actually, we run a number of lists. So, we have VAs that are constantly searching various websites and looking for those arbitrage opportunities. And then they mail those out to our members every single day. So, some of our members belong to 10 lists. So every day they’re getting eight to 10 potential what we call online, arbitrage opportunities. And so that’s what I do. I don’t do much retail arbitrage anymore just because I’m too busy with my private label business, but I will still do online arbitrage. And my kids actually will do the shipping and they’ll send it in my Amazon account. So that’s one way. So there’s a number of online arbitrary sellers that have their own VA’s, who they trained on how to go to different websites, right. To be able to find those buys. And, again, like a lot of times online arbitrage is a little harder because it’s like easier fruit to pick. And so, when you buy that product, there might be other sellers who’ve identified that opportunity as well. However, just like anything, like, as you grow, as you get better at it, there’s amazing opportunity. A guy I partnered with Gary Ray, he’s going to sell $2 million this year and it’s all online arbitrage and he doesn’t touch any of the product. And so, at the end of the day, he’s going to make probably about 150,000 from that, but he’s not doing any of the work. So he asked people that are sourcing the lists, people that are shipping packing. And so, yeah, there’s a ton of opportunity.
BradleySutton: What does he do then? So, so he, his team finds opportunity and then they listed on Amazon and then if there’s a sale, then they buy it and then they ship it to the customer or?
Andy Slamans: No, he actually is acquiring the product. So he sends it to a warehouse. So that warehouse will label it or de-label it, send it into Amazon. And, when he buys it, the margin is there. He’s not buying and hoping that it’s going to be there. It’s actually physical product that he’s sending into Amazon.
Bradley Sutton: Wow. Okay. That’s pretty much, what about you yourself? We’re coming up on the end here of December. What do you think your revenue will have been for this year with the different models? Be a private label, online arbitrage, et cetera.
Andy Slamans: I’m a hundred percent in private label. I actually, I have a brand that I’m in the middle of selling, so we’re pretty close. I’m working with the guys– recombrands.com. I don’t know if you know them at all. They’re actually in Southern California. Um, so it’s a terrific company. We’re really close. It’s a brand that I’ve had since I started selling on Amazon basically, but it’s one, like I just kind of just been milking along and haven’t been real passionate about, however, it has a lot of potential. So, fingers crossed. I’m going to hopefully within the next few weeks, get a definite offer from them. So I’m excited about that, but there’s a brand that I’m building with my nephew. We’re going to do 10 million by the end of December on Amazon, as well as on Shopify, about two and a half years ago, we sat down and we said, Hey, look, where do we want to spend our time? So, we do offer a number of Amazon services for Amazon sellers. We like it, we enjoy it, but we said, Hey, look, what is going to give us the biggest bang for the buck when it comes to our time. Now we’ve been building smaller, private label brands. He had his Amazon account, I had my Amazon account and we said, you know what? We see the space, we see what other sellers are doing. We said, let’s just go all in and build a brand the right way. So that was two and a half years ago. And now by the end of this year, we’ll be at 10 million. And hopefully by end of 2021, we’ll be at 15 to 16 million. We see a lot of room for growth. And because of COVID right, and all the online shopping habits, how much they’ve increased, it’s almost like we, you know, fell again at the right place at the right time. And really e-commerce is in a golden age. So that’s what I’m excited about. Look, it’s what you talk about all the time, right on your podcast. If folks really want to be all in, there is tremendous opportunity to build and grow brands on Amazon.
Bradley Sutton: I love it. I love it. All right, guys, quick break for my BTS. Remember BTS means whatever you want it to mean. Bradley’s 30 seconds or Bitcoin training sucks. I don’t know whatever you want it to mean, but here’s my 30-second hack, and this is going to be about the canonical URL. So the canonical URL, what is that? If you go on any link inside of Amazon, if you’re on a desktop computer and you’re searching around and you hit an Amazon listing, look at the URL on the top. And it’s usually five words there as part of the URL. And those are a lot of times just random keywords taken from the title of an Amazon listing. But one of the ways that works like 75% of the time in order to kind of like lock in your canonical URL to hopefully get some rank juice on and off Amazon for those keywords is to make the first five words of your title and then follow it by a dash. All right. So it has to be full words, not like a, and, or the, or in. Or do these short words or numbers, five full words, and then a dash right afterward, wait for 48 hours and check your URL on Amazon. And you should have a new URL. And that’s your canonical URL that is index on Google and search engines, like being, et cetera.
Bradley Sutton: We’re switching gears a little bit here, going back to private label, which is just as good, but I think anybody hears, there’s a seller who has sold eight figures of product. I think they would be interested in your strategy too. So what, how did you find the one that you did with Nate? How did you find that niche that it’s in or that brand, like what made you choose it? What was your process there?
Andy Slamans: Yeah, so, I mean, we’ve always, again, going back to the BSR, we’ve said like, look, don’t reinvent the wheel. Don’t try to prototype, we’ll come up with something that’s new. That’s just not our strength. So we follow the BSR heavily and then look for those niches that aren’t hyper-competitive. So for us, like, that’s how we found the product. And then with this brand, we wanted to do it the right way. So we made multiple trips to China. Now having private label for six years and working with different factories in China, we felt like it was time that we actually begin to establish relationships and find the right factories to produce our products. And so, I mean, that was a big investment, a big investment of time. When you travel and for me, it was always, it’s super hard because I don’t like being away from my family. But that paid big dividends by going to China, by visiting those factories, which is not the most sexy thing to do. Like, some of them are way out in the middle of nowhere. It’s dusty kind of dirty in the factories. But I think that’s really allowed us to build the right foundation.
Bradley Sutton: Excellent. Excellent. Now, what signifies opportunity to you? When you’re using whatever your methodology is. Some people use Helium 10, some people just are searching on Etsy, or some people just go on Amazon. What are the characteristics that to you means, Hey, there’s some room for me to enter this niche.
Andy Slamans: Yeah. So, I mean, we like to talk about the golden gaps, when you use a search term on Amazon, what comes up on that listing are on that page for the search results. When you search massage gun, we all know there’s going to be like 50 pages of almost the exact same thing. So that’s not a game we want to get in. We do not. We understand some of those massage guns are selling a million dollars a month, but that we don’t want to get in that hyper competitive game. When we search for the main keywords for whatever product we’re trying to sell, we hope that a vary results will come back on that search page, because then that tells us there’s opportunity. Again, as long as we see one or two listings that are doing a decent amount of revenue. So for us, like, we don’t want to put time in a product unless we see a listing on Amazon that’s doing revenue of at least $10,000 or more. And then we definitely want to stay away from those hyper-competitive. We rather have a higher price product, with less competition than going for those hyper competitive niches, like supplements or like something like a massage gun.
Bradley Sutton: Yeah. Okay. Well, you just made me think of another question is like, we always sometimes think about, Hey, what are the characteristics of opportunity? And like, what gets you excited? But let’s flip the script. What’s the opposite. What are things that you look for where you might have stumbled on it, but you’re like, Nope, I’m not going to go here because this is hyper-competitive like, what makes you say that something, is it the number of reviews? Is it the sales velocity? Is it maybe how many people have the same exact kind of images? Like what are those things that you look for?
Andy Slamans: Yeah. So, first thing we’re going to look for is, are they running video ads? And, I know you’ve talked to a number of people that talk about video ads. So if we put in that search term and the search populates, it comes back and there’s no video ad on the page, then that tells us there’s an opportunity there that whatever sellers are selling that product, if they’ve not taken the advantage of video ad yet, then they’re probably not very good sellers. So, that tells us then that we can probably come into market better than what is currently on Amazon. So that’s kind of one tell then, of course, we’ll look at the other placements for PPC. We know that the PPC is still the Black Box. You don’t know what you’re going to spend for click until you get that product in Amazon until it’s live. There are some tools that will estimate it, but at the end of the day, you need to have that product.
Bradley Sutton: The Amazon suggested bids are so much like 50% of the time they’re complete garbage, so you can’t go off.
Andy Slamans: Right. Right. Yeah. So, and then we’re going to look and see, like, does it look like there is a lot of private label sellers, are there a million badges on the second image, or even on the first image, like the best seller badge, the typical kind of spammy stuff. And if we see a lot of those, then we probably aren’t going to get into that product or into that niche, because we don’t want to do battle again with other sellers who are kind of savvy in that way.
Bradley Sutton: Interesting. Okay. Good to know. So let’s say, somebody who’s listening to us, right. I want to give you a couple of different avatars and you give your solution. So, there is somebody out there right now who is been selling on Amazon private label already for like six months, but they’ve only been able to launch one product because they’re still trying to scale up, maybe they’re making, they’re projected to do a hundred thousand, 150,000 for a year so nothing, they can quit their job over, but how can they leverage retail or online arbitrage to help them scale faster? What would be there? What’s your, Hey, take this step, take this step and then go for it. Is the first step trying to find a VA who, who does this, or can somebody do it on their own? Or what does that avatar do?
Andy Slamans: Yeah. So, basically you’re asking me like, how do they build cashflow or how can they increase the capital?
Bradley Sutton: Yeah. They’re already doing private label, but they just heard us say that, Hey, you could scale your private label business even faster by building capital through online and retail arbitrage. So what would that kind of person who’s already somewhat successful on Amazon, but nothing they can quit their day job over, how can they get to that point using those methods?
Andy Slamans: Yeah. So again, like when you’re talking about online or retail arbitrage, online arbitrage, you’re going to have to– we just suggested, like, you’re going to have to figure out how to do it yourself by– there are various tools out there in the space that you can use that will help you identify those potential opportunities by running on the various websites, right. In the comparing those sales to Amazon. So that’s one place to start. If you’ve learned how to do it yourself, then, like you just suggested by hiring a VAs and you can train them how to do it. So that way, you’re getting lists. That can be a little bit challenging though, unless you’ve hired a number of VAs, you always have to be careful when you’re hiring VAs the source, because that VA may be working for five other sellers. So that list that you think is dedicated, it could be being disseminated to five other sellers. Right. And so, that’s something that you always have to be careful about. And then if you’re here in the US, the best way, again, what I suggest is if you have the time, the boots on the ground in the stores, that’s going to be your best opportunity. So if you’re just starting out, what we always say is just go to the clearance shelves first, or go to at the end of the season, using different categories, they’re going to clearance out like a Walmart at the end of Christmas, they’re going to clearance out there toys. That’s how I actually started and really built up my capital fast. I hit a clearance sale at Walmart. All the toys were in the lawn of garden section, and I was buying them like at 25%. So, if you want to do it fast and limit your competition, then I think doing RA is a great way to go.
Bradley Sutton: So then for that person, who’s already generating some money. What would be a good budget like to start like, Hey, your first month, be ready to put $4,000, $5,000 on your credit card. As far as from buying these products, like what would be a realistic starting point for that kind of person?
Andy Slamans: Everyone I think is going to be different. It’s, it’s going to be, you know, kind of on your risk tolerance level. Uh, but if you’re able to put in two or $3,000, that’s a great way. And again, you’re buying name brand products, and you’re buying off of the Amazon BSR. So, you definitely have to have a working knowledge of that. But if I buy a toy that’s ranked 4,000,and send that in Amazon. And as long as I’m price matching what the current price is, that toy is going to sell within one or two days. So you got to know the range, you got to know the categories to understand what your term rate is going to be. But when you’re buying name brand products at low BSR, you know, you’re going to blow through that inventory quickly.
Bradley Sutton: Okay. All right. So there’s one cohort or one avatar there, let’s say somebody who’s listening now that they’re not selling on Amazon yet. Their end eventually is to get into private label. And they’re working a tough job. They don’t have much money at all. Let’s say they’ve only got, maybe two, $300 room on their credit card or just room overall that they want to start with the retail arbitrage, what should they do? Should the first step be just clearance aisles and in stores, or should they look at the online thing and just focus on one product and put all their 200, $300 in one product, or what would your advice be for somebody?
Andy Slamans: I know it definitely start in stores. And now you’re kind of talking to the bootstrapper who doesn’t have a lot of money, but hopefully you have more time. If you have more time, then you can buy cautiously and to make sure that you’re getting those right margins. Remember we said at the beginning that you really make your money in the buy. If you have less money, what you need is more time. And how I started, I went to thrift stores and I went to garage sales, and they’re still viable today. And you know what? You can sell a lot of items used on Amazon. And if it’s the right item, if it’s dead tech early on, I sold thousands of dollars’ worth of dead tech that I would get at auctions and that I would get a garage sales. So your margins on those are massive. However, it’s going to take you more time, right? It’s like a treasure hunt. It’s going to take you more time, but you’re going to find those products that have higher margin, which then is going to allow you to build capital.
Bradley Sutton: Love it. I love it. You’ve been giving us some great strategies throughout this. I thought we were just going to talk about the retail and online arbitrage, but we ended up talking about private label. We talked about warehousing and fulfilling by merchant. This is great. It’s always great to have you on the show. Now we have the, I don’t think we had this last time you were on the show, but we do this thing called the TST, or the TST 30-second tip. So, what is something that you can say that’s highly valuable, highly actionable, but will be 30 seconds or less?
Andy Slamans: Yep, sure. So one of the things that my partner and I have worked hard on this year is building out a team. So we realized we were the bottleneck to our business. So just since the beginning of the year, we now have 40 full-time team members who we have a graphics team, customer support, operations, marketing, product launch, inventory, social media team, and that has allowed us to scale up. And so if you are growing your business, don’t be the bottleneck. Be willing to delegate some of the duties that you think that only you can do. And that’s going to allow you to scale a lot faster.
Bradley Sutton: I love it. I love it. And if people want to reach out to you to find out some more info on how you can help them and help them either with their retail arbitrage or with warehousing, or just Amazon in general, how can they find you on the interwebs?
Andy Slamans: Yeah, sure. So I’m on Facebook. That’s probably the best way. The group that we partner with that teach people how to do online retail arbitrage called the Amazon Seller Tribe Phenomenal group. That’s where I hang out mostly. Again, working with sellers who are building million dollar businesses, just doing retail and online arbitrage. So you definitely look me up on Facebook or you can search the Amazon seller drive.
Bradley Sutton: Awesome. All right, Andy, we definitely want you back on the show maybe end of 2021 beginning of 2022. And let’s see how that brand exit was, how that worked out for you. That’s so much like the rage nowadays is being able to sell your Amazon business for a nice payday. So, I’d love to hear about that and see how your eight figure brand is doing as well as see what’s new in retail and online arbitrage as well.
Andy Slamans: Hey, Bradley, thanks so much for having me on and I can’t wait until the events start to open up again and I can come up to Helium 10 and visit you there in the headquarters.
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