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Everybody knows that you can’t sell supplements on Amazon, right? What’s your next product going to be, cell phone cases? 8-figures later, Kevin Pasco is continuing to prove the prevailing wisdom to be anything but.
OK, he might have gotten into the Amazon
game somewhere between the golden age of Amazon’s wild west days and today’s
hyper-competitive market, but the road that he followed to success only becomes
more relevant with each passing year.
On today’s episode of the Serious Sellers Podcast, Helium 10’s Director of Training and Customer Success, Bradley Sutton speaks with Kevin Pasco, a proud Canadian and an expert on Amazon branding strategy who helps us understand what it takes to make it in the supplement niche today on Amazon. Along the way, we also receive a tutorial on how branding is an integral part of scaling your business, as well as a closer understanding of why relationships are a true cornerstone of wholesale business agreements.
Kevin got into supplements for the simplest of reasons; he wanted a great natural product that he could trust. After that, it was a question of how to make that happen. He knew that he wanted a product that was honest and transparent. At the same time, he understood that in order to sell supplements, it would be important to take that idea of transparency one step further and shrink the supply chain in such a way as to be able to keep a close eye on the quality of the production and distribution process.
That ultimately allowed him to not only closely monitor and fine tune the development and production of the product, but also keep a close watch over the timing of inventory movement and overall efficiency of distribution.
One of the real positives about the supplement niche on Amazon, are the large margins that abound in the category. Kevin put that high ROI (return on investment) to use immediately, using the cash windfall in an aggressive branding and launch campaign offensive.
The question was, how to make his product stand out in a competitive Amazon product category full of what I’ll kindly refer to as, energetic sellers?”
Branding his supplements in such a way as to make his product stand out as a well-packaged, extremely high quality, locally produced item was the first step. Then, rolling out a thoughtfully marketed product listing on Amazon, filled with dynamically great content and photography further distanced him from the other possibly complacent Amazon sellers. Lastly, a dynamic launch campaign funded by those big margins gave him a big eCommerce voice.
Kevin’s attributes an understanding of
his specific niche, a strong idea of how to differentiate his product from the
existing products already out on the Amazon market, and a sound knowledge of
the eCommerce game as reasons behind his success.
Maybe you aren’t looking to get into the supplement market, but it’s certain that everything that Kevin did in creating success for himself in a very challenging market is directly translatable to whatever product you might be considering.
Listen in and find out a little more about Kevin and his way around the Amazon marketplace. Then, put his advice to use, and create some success (and money) for yourself on Amazon.
In episode 59 of the Serious Sellers Podcast, Bradley and Kevin discuss:
- 02:00 – Everybody Knows You Can’t Sell Supplements on Amazon, Right?
- 02:30 – Kevin’s Origin Story – His First and Only Product
- 03:30 – His Secret – Create Great Natural Products that You Trust
- 07:30 – Implementing a Geographically Short Supply Chain
- 08:40 – The Problems of Abundance
- 12:07 – 50% Margins Allow for an Aggressive Branding and Launch Strategy
- 14:05 – Launching a Supplement is Still Possible but Early Momentum is Crucial
- 15:54 – Using Marketing and Branding to Differentiate Your Product
- 17:25 – Quality is Still Key
- 19:47 – How to Leverage Off-Amazon Experience
- 21:20 – On Amazon, Keywords Trump Brand Recognition
- 24:50 – What is Financial Excellence?
- 27:17 – What Does Kevin Think About the Direction of Amazon?
- 29:41 – The Review Takedowns of 2016-2017 and TOS Changes Reward Flexibility
- 31:22 – Wholesale Helps Establish Relationships and Involves Very Little Risk
- 32:45 – How Does Kevin Source Wholesale Customers?
- 33:50 – How Can Someone Contact Kevin?
Enjoy this episode? If you found this episode helpful, be sure to check out our previous episodes for more insights to become a successful Amazon FBA Seller! Don’t forget to “Like” our Facebook page and subscribe to the podcast on iTunes or on Google Play Music!
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Bradley Sutton: Today, we’ll learn
from an eight-figure seller just what it takes to make it in the supplement
niche today on Amazon. We’ll also learn how branding can help you scale and how
building relationships is the key cornerstone of wholesale agreements.
Bradley Sutton: How’s it going, everybody? Welcome back to the Serious Sellers Podcast. I’m your host, Bradley Sutton. And with me, I’ve got Kevin here from Canada. Kevin, how’s it going?
Kevin Pasco: I’m amazing, man. How are you?
Bradley Sutton: Pretty good. Pretty
good. Where about— sorry, should I say where-a-boot… I don’t know how to say it.
Whereabouts are you in Canada?
Kevin Pasco: Yeah, I’m in a beautiful Vancouver, like a lot of other Amazon sellers. There are actually a lot of other FBA sellers that are here, and it’s amazing. It’s probably one of the best cities that you could be in for the summertime. It’s gorgeous, beautiful. We’re having a great time up here.
Bradley Sutton: Excellent. And is
that where you’re from?
Kevin Pasco: No. I was born and raised in Calgary, so kind of up in the mountains. It’s kind of like a Canadian Denver, but it’s too damn cold, man. It’s just way too much in the winter. So, coming to Vancouver is a great little break from that.
Bradley Sutton: Flames fan or Canucks?
Kevin Pasco: Growing up, yes. I mean I’m not super much a Canucks fan at all, but I do appreciate any type of pride behind Canadian teams for sure.
Bradley Sutton: Cool. All right. Now, I had you on here, because I think you have got a unique story. Well, it was funny when we actually met in person for the first time; this was about a year and a couple of months ago at SellerCon in Orlando. I’m like, “man, your name seems familiar,” and it turns out, we were in the same kind of Mastermind from back in the day on ZonSquad, and it was kind of cool to meet you in person. That was actually the first time I met Paul Miller, another fellow ZonSquad member over there. I think he might’ve been the one that introduced us. But the cool thing about you is you have been working for a while in the supplement space, correct?
Kevin Pasco: Yeah, that’s right.
Bradley Sutton: Yeah. And this is
something that I just want to pick your brain a little bit, because the kind of
cliché things to say, not just in 2019 but even as far back as early 2018, is
like, “hey, yeah, there’s still plenty of opportunity on Amazon. You can do
anything you want other than cell phone cases or supplements.” You know, those
are too saturated. But you guys have taken a supplement brand from zero to, I
believe, eight figures, right?
Kevin Pasco: Yeah. Yeah. Now we’re definitely deep—well not deep, but we’ve surpassed eight figures and keep growing from there.
Bradley Sutton: Okay. So, what’s the
origin story like? Was your first venture into Amazon supplements or did you
start with a completely different thing? Take me back a few years.
Kevin Pasco: Yeah, of course. So, it was the first thing that we did. It was the only thing that we did. And it’s something that we’ve done for years and years. I definitely think it was a bit of a testament to the mindset of not really knowing what we were getting ourselves into, in the beginning, but also having the guts to stick it out. And it was just an incredible ride, and obviously, anybody who knows anything about the supplements space knows that it gets pretty crazy at times. So, we didn’t quite know that going in. It actually came from a passion where my partner Jeremy approached me, and I knew him from before this company. We’re both entrepreneurs and both are go-getter, digital-marketing-type dudes. And it came out of a passion and honestly a personal need that we saw in the supplement space; to just create great products that we could actually trust—products that actually show what’s inside and be really honest and transparent about what is put into the products and then really trying to focus on natural elements and not putting in crazy compounds that don’t need to be in there, flavoring agents and other random stuff that we want to steer clear from. That was the premise of, “okay, we want to make a brand that kind of looks and feels like this.” And it was through Ryan Moran, who was just getting into the Amazon space and just starting to talk about it, who Jeremy was friends with before. That’s when we found out about Amazon FBA. We didn’t go through the Amazing (ASM) course. We didn’t go take any other courses. We just kind of said, “oh, people sell on Amazon? Okay, let’s see what we can do.” And we figured it all out ourselves. It wasn’t until after that we started taking courses, to understand just what the trends on the market were, but it was a big kind of grand vision of ‘let’s try and create as big of a company as we can” while at the same time being somewhat naive, which worked out great. We didn’t listen to anybody saying, “don’t do supplements.” I know that’s recommended a lot to new sellers. I guess whether we had a bit of luck…
Bradley Sutton: What year was this?
Kevin Pasco: Yeah, this would’ve been late 2013 and launched the brand in 2014.
Bradley Sutton: Okay. And then you
launched on Amazon USA, Amazon Canada, or brick and mortar?
Kevin Pasco: No, it was just amazon.com. We didn’t get into Canada until years later, so it was just amazon.com for at least the first couple of years.
Bradley Sutton: Okay. And then, at
that time, were your products manufactured in Canada, USA, or where?
Kevin Pasco: Even though we’re both Canadian, we live in Canada, we have our head office up here with all these people, most of or in fact all of the manufacturing up until just recently with Amazon.ca is all down in the states. We wanted made in America; we want FDA approved, and we just didn’t want to deal with the headaches of importing ingredients or products. So, yeah, we’ve got products made down in the states with great manufacturers.
Bradley Sutton: Okay. And I think that actually makes it easier. If you were at all manufactured in Canada, you’d have some importation and a whole bunch of rules and regulations that you’d have probably had to jump through going either way: made in USA going to Canada or made in Canada going to USA just because it’s North America and there are NAFTA and all that other stuff. There are still a lot of requirements as far as the government side, right, when you’re talking about supplements?
Kevin Pasco: Yeah, especially as you are a bigger brand. If you’re just starting out and you’re small and you’re placing an order for 500 or a thousand units, I think you can get away with it. You don’t really have to worry about the regulations as much. And I say that as just it’s something that you can do in the beginning to test out, but the problem is if you continue with it. So, let’s say if we manufacture in Canada the whole time and import into the states, when we do eventually get big enough, now you start coming up on the radar. You’re going to have to go through additional testing; there might be import fees, plus there’s a huge variance in price. What people are pricing ingredients in Canada can be different from the states even though it’s the same ingredient, because it comes from a different place and just there are so many little nuances when it comes to the supply chain that it’s ideal if you can have it as close to home as possible. We sell a lot in California. We ship a lot to California. We have products made in California. California is great in a lot of ways; they’re not great in some others like taxes and Prop 65 stuff. If you can geographically make your supply chain smaller, like physically smaller, so the distance traveled isn’t as far, it’s obviously a lot better for timing, inventory turns; it that just makes your life a little bit easier. You’re not flying stuff all around the world, which I know that you don’t really have the luxury to do if you’re importing from China, but if you’re made in the USA, you’re able to get things a lot closer to home.
Bradley Sutton: Yeah. It helps you with your ROI too and your lead times, and you don’t have to order six months of inventory at once necessarily and just be sitting on it, because you got to order enough for container or different things like that. So, it definitely helps—the made in the USA. Now, for the naysayers out there who say, “okay, Bradley, you said that this was going to be about somebody telling us about supplements. Even though everybody says not to, but they started in 2013 where you could sell anything you wanted on Amazon and be successful, but I don’t think your guys’ products all were launched in 2013, 2014. I’m sure you’ve launched products in the last couple of years, right?”
Kevin Pasco: Yeah. Actually, in the beginning, we were slow and the biggest problem, which is a great problem that someone—I forget who—said is that when you can have problems of abundance, it’s a good thing. Our problem of abundance, in the beginning, was keeping up with stock. I mean, we would order a thousand, sell out. “Okay, let’s order 2500. Okay. Sell out. By the time we’d get more, we’d just always be going out of stock. It would hurt our ranking. So, first of all, we couldn’t even keep up with the demand for the existing products, let alone putting money aside and resources in order to launch new products. But yeah, eventually, after a couple of inventory turns and being a little bit smarter with cash management and just trying to get sales as high as we could, then we got into launching new products, and I think in the first two years, we may be did six or eight, maybe 10.
Kevin Pasco: But the following 20 products were launched all within the last two or three years, which is kind of the new version of the company, which has an office and employees, and we’ve got all these resources and excellent financials and just everything is all behind us. But in the beginning when, yes, it was early and it was like the wild, wild west, which was great, but we didn’t have enough cash to make new products. And even when we did, sometimes we didn’t know what we were doing. So, we were kind of testing and figuring it out. And most of our products back then for sure surpass our expectations, but there were some that just kind of did okay. And in the grand scheme of things, I guess that’s all right, but it’s not like every product we have was just an absolute blockbuster that was, you know, breaking down doors.
Bradley Sutton: Okay. Yeah, that’s
good to know. Now let me give you a couple of different scenarios and let me
get your roadmap or strategy for each of these scenarios. Let’s say here we’ve
got person A. Person A does not have a brand. All right? They haven’t sold
offline or online, but they have a really good “in”. Their brother-in-law’s
cousin runs a supplement—it’s not called factories. What would you call it?
Kevin Pasco: Yeah. Like a production facility.
Bradley Sutton: Yeah. They run a production facility here in California. They can get really great deals on supplements, and they’re like, “hey, it’s logical. I want to launch on Amazon.” So, number one, would you even suggest it? Is it true that just a hundred percent, if you’re brand new with no brand recognition, you just probably shouldn’t start on Amazon? But if the answer is “hey, no, there is an opportunity,” how would you go about picking your first product? How do you go about finding supplements where there is possibly still an opportunity?
Kevin Pasco: Yeah, for sure. I’ve thought about this, and I think the brands that I see that are popping up seemingly out of nowhere in the last year or two, they’re doing incredible numbers, they’re crushing competition, they’re a real kind of shock to the marketplace and even the ones that do launch and actually ended up doing okay, just they’re the ones that are a bit different from the ones that launched and fall flat on their face, which is most. The difference that I see there is really not with the supply chain. It’s not with the quality of the product. Though that is important, that’s just a numbers game, and like you said, if you have an “in” with a manufacturer, okay, that helps a bit because your COGS (costs of goods sold) are going to be lower.
Kevin Pasco: But generally, why people pick supplements in the first place is even without that relationship, COGS are generally pretty cheap. Margins are great. You can be up at 50-60% on some products. Let’s say you pick something that gives you a 50% margin, so you’re doing great in terms of an ROI. Now it actually comes down to branding, knowing how to launch efficiently on Amazon. If you’ve got a big, huge budget, you can throw money at the Amazon game and eventually be successful, but I think it’d be smarter to come in with an “in” that has a unique brand. There’s some different language. There is a different take on maybe an existing, already-popular product and you’re able to use that to get into the hands of people., make them go, “oh, this is different than all the other 10,000 white bottles out there that as I’m scrolling through Amazon, they just pretty much all look the same.”
Kevin Pasco: I think that’s going to take generally a good marketer. Ideally, someone who kind of knows the e-commerce game a little bit and can look at the different categories and see what’s trending and see why products move. I think that’s something that I really learned through this company: you’ll grow a lot for many different reasons, and it’s good to know why you’re growing and really pinpointing that because you want to be able to obviously duplicate it, but you want to be able to foresee what’s coming up. So if you can be really thoughtful and mindful about how you can grow and ideally launched in the first place, without having too-strong expectations, so that if you do fail, you’ll be agile enough that you can improve and make it better, then I really think that’s the way to go.
Kevin Pasco: I think that does take a bit of a specialized skillset. Launching a brand-new supplement company these days is a hundred percent possible. We see them pop up all the time. Some of them do really great numbers, but from what I can see, there’s some momentum behind them already. Either they’ve got enough money; they’ve got the branding experience, or they’ve got a great team that’s able to propel them forward. It’s generally not a place that I would see a beginner launching; though if you are a beginner, taking a look at this space and following it and watching the new brands pop up, seeing what they’re doing with the products, looking at the reviews, you can learn a lot from that without actually being in the space.
Bradley Sutton: Okay. Makes sense. Now, obviously, you probably wouldn’t suggest somebody start off with like Garcinia Cambogia or like that. I would assume that whether somebody is new or maybe an existing company, an existing brand, looking to expand like you guys. What was your research process? Obviously, somebody could just go into Helium 10, use Black Box and look into health and supplements and maybe look for a keyword that has pills or capsules to kind of narrow it down and say, “Hey, show me something that is making this amount of money or that has this demand” or whatever to get to something. But I think in supplements more than other categories, it’s more of, you can correct me if I’m wrong, but more of a key to do off-Amazon research as far as what’s trending in diets or what’s trending in the health world and things like that to find up-and-coming trends as far as what people are looking for in for supplements. Would that be a correct assessment? What’s your suggestion on how somebody can find something that’s not completely saturated like a Garcinia or something?
Kevin Pasco: Yeah, I would agree with that. I think on top of that, you do have potential going into something that does look saturated though the way to differentiate is either with incredible marketing and branding, which is one way to do it. I’ve seen some brands in the space; their products are pretty much the same as everyone else. They might be a little bit different, but their branding is great. Their language is spot on. They know exactly who they’re going after, why they’re going after them, and how the product can help. And I think when you have that marriage, people just resonate with the product. It’s like if you ask anybody, whether they bought from Amazon or not, like anybody in your family or your friends who aren’t crazy health nuts.
Kevin Pasco: I mean they might not have a six-pack, but they’re kind of interested in health and you tell them like, or you ask them, “why did you buy this protein? Or why did you buy this multivitamin?” They’ll usually say, “well, it just, it sounded the best” or “I like this one because it has, you know, this ingredient which I read on a blog, it’s good.” Generally, there’s some connection that people get. Sometimes it’s through an ingredient which can be recommended to them by a doctor, for example, or other times, they can’t even tell you why. They’re just like, “I don’t know. The label looked cool. I thought it was great. It said multivitamin, so I bought it.” I think the product has to resonate from a branding perspective. But then you can also go on the quality side and let’s say that hookup that you had with your cousin who works at the manufacturing facility, maybe they can get you an ingredient, for example, like a vegan version of a fish oil or something like that where you know that there could be demand because vegan is trending a lot.
Kevin Pasco: Fish oils sell a ton, but it’s very saturated. They’re all the same and it gives you fish burps. Well, if you could change one part about the product, literally being able to say on the label, “Vegan whatever,” it gives you a huge advantage because as long as your product quality backs it up. That’s the thing that is actually doing the selling for you. There is an opportunity in the supplement space, what it comes down to these nuance things. It’s either branding and marketing or it’s going to be something on the supply chain which can be copied by competitors and then you run into a different problem there. But I do think that is possible. And doing, like you said, offline research or looking at blogs or even looking at what’s recommended by doctors lately, looking at what a general family doctor is going to recommend for, well let’s say, someone over 50 and then look at those products and see how you could align there.
Bradley Sutton: Okay. Makes sense. So,
what about though on the flip side. I made a joke about Garcinia Cambogia, but
what if you are an existing brand just haven’t sold on Amazon? I think the path
is a little bit easier. And the reason why I brought up Garcinia Cambogia is
last year or a couple of years ago, I was working at one of the top diet pill
companies in all of the US and I took over their Amazon side. I was like, “Hey,
let’s use your brand recognition and let’s make a Garcinia Cambogia.” I did a
little bit about what you’re saying about differentiation. I actually added
Forskolin, I don’t know how if I’m pronouncing that right, but added Forskolin to
it and then I added… what is this thing that makes you not hungry? What was
this something that kind of acts… Konjac root, Forskolin, and Garcinia Cambogia
all in one, which by itself is still not enough really to get you on the
roadmap. But what I did was I leveraged the brand recognition, the brand awareness.
This is a brand that’s on TV all the time and is in all the Walmart’s and
everything. And then boom, I was able to get it to one of their top products.
And I think, just like by itself, it’s a six-figure product for them. So, what
advice do you have for people who maybe are a little bit stronger off of
Amazon? Don’t you feel that they do have an advantage than as somebody starting
new and then if so, how can they take advantage of this advantage?
Kevin Paco: Sure. Okay, so I see two ways. I think if you’ve got an existing brand and let’s say you’re doing all right with it. I’ll just label “all right” as doing at least a million dollars a year in sales, something that’s significant. You’re not like a small-time operation, but at the same time, you’re not one of the biggest brands in the world. I think you’ve got some strengths because you’d already have manufacturing down. You’d already have ideally a team; you would have, customers; you’d likely have somewhat of an audience; you’d have feedback on your products; and you’d understand what customers want and what they like about your products and what they don’t, which I think is all great and that’s a huge leg up on someone who doesn’t have that and it’s just starting. But the other thing that you don’t have is maybe you don’t have labels or a brand image that’s optimized for Amazon. Maybe if you look at what’s on retail shelves, generally the brand name is the biggest item on the label. Nothing is usually bigger than that because when you’re in the store, you’re looking for a brand first and the brand recognition has to be really strong to anchor you in. It’s the opposite on Amazon. So it’s very keyword-driven. When you look at a lot of the products in this space, the keyword is actually the biggest and the brand name is smaller and that’s to anchor people in because they’re searching on a keyword basis. So if you’ve got, let’s say, a hundred SKUs that are selling it to retail, and they’re just designed for a different experience, you’re going to have to do some extra work to get your Amazon game up to the retail game or pass it because your labels are designed differently. While at the same time, it is such a different space.
Kevin Pasco: We all know that playing the Shopify game and Facebook ads is almost, I wouldn’t say it’s a completely different, skillset, but there’s a huge difference between that and Amazon FBA. Let alone doing traditional retail or anything that is offline in terms of different business models. I think there are things that you do have going for you, but you’re going to have some other challenges and some other hurdles to get over. And that’s just the nature of the space. It’s so competitive on Amazon. You’ve really got to be at the cutting edge to be able to make it work.
Bradley Sutton: Okay. Now just
switching gears a little bit. You’ve given us some good insights on the
supplement industry, and do’s and don’ts and what you could do, but just in
general, for Amazon businesses, you mentioned starting off with just a partner
and then eventually now, you guys have an office and a lot of employees. What
were some of the hiccups that you had along the way? How did you build to an
eight-figure business? What were some of the roadblocks that maybe you can warn
people about or on the flip side, doesn’t always have to be doom and gloom, but
some of the really cool things that like “once you guys implemented this, oh my
goodness, it’s at two x sales or something like that.”
Kevin Pasco: For sure. There were a couple, and the first two that come up off the top of my head, which are very, very significant for growth because we would grow, grow, grow for a couple of months and then hit a plateau for a little bit, and then, we fix the problem and then just skyrocket and double again. But then, we hit another plateau because it was a different problem. So, the two that I’m thinking of is in the beginning, it was a supply chain. It was figuring out how do you get the product faster, how to balance our cash flow better in order to place the orders. Some of it was out of our hands where we just didn’t have terms with the suppliers. I mean, as hard as we pushed for them, we couldn’t get them, which meant that we couldn’t order early enough. Then, we just had to deal with that reality.
Kevin Pasco: I think, the first thing you want to do is launch and you want to focus on marketing because you want to get a certain level of sales. As soon as you start to see some consistency, start looking ahead three to six months and try to figure out, okay, well if we have this much money now and this much inventory and growth continues at this rate, in three months we’re going to run out and our cash is going to get low, and you can try and forecast and simulate that way. And then building on that, the second thing that threw a huge wrench in things and we had to spend a lot of time fixing was getting, I call it financial excellence. And what I mean by that is that you need to have your books in order. You need to have proper accounting, proper inventory tracking, proper forecasting, and working with a good CPA to figure out like what’s the actual health of the business but then also where we are going.
Kevin Pasco: All the tools that are out there are great to look at just from a pure sales perspective of the markets at this level. We could have a product at a hundred BSR; we’ll sell this much. All that stuff is great. But on the other side, none of that factors in expenses or changes in the manufacturing process or all these little nuanced details that come into play when you’re actually launching the product and when you’re actually selling it. So, what we found, and Amazon does not do the best job at giving you reports and inventory levels; they make that job really difficult. But I think getting those numbers by working with a great CPA or doing like what we did and build out an in-house financial team, and we had a handful of people who their sole job was saying, “all right, well if we’ve got tens of thousands of transactions every single month, we’re balancing cash flows, multiple manufacturers, there’s cash getting thrown all over the place.” How will you be smart and actually act like a real business, and treat it like you’re growing for years to come rather than, “this is just a quick thing for us,” and then pop up numbers and sell, which there’s nothing wrong with that at all, but even if you do sell, your buyer’s going to want great financials and that’s going to be something that they’re going to want to look at and do due diligence. I think either way you’re going to need to have great financials.
Bradley Sutton: Okay. That a good
point. And that’s probably one of the reasons—for those who know—I never really
wanted to launch my own private label product. I just did consulting and
working for other companies, but I hate accounting, and I hate that stuff. But
yeah, like you said, it’s kind of necessary. I mean, if you really want to get
things done the right way; you can’t understate the importance of having
professionals working on your numbers because whether you’re a six-, seven-,
eight-, nine-figure seller, it means nothing if you’re losing money at the end
of the day. They’re the ones who’s going to help you with that. Kevin, now
we’re in 2019, what are your views on Amazon in general? Where is it going? Now
that you have started off in Canada, obviously it’s tiny, probably, I would
assume compared to what you’re doing in the states, but what’s your forecast on
how, just in general, Amazon is going to be for people who are looking to sell
on the platform?
Kevin Pasco: For sure. Yeah, when it comes to Canada, I think it’s proportional to the population. We’re about a 10th of the size-ish of the United States. So, if you think about it, it’s a 10% cherry on top. If you’re doing 10 million a year on amazon.com, aim for a million on Canada, and there’s some pretty cool stuff that you can do over there just because there’s less competition right now. I think as more sellers start to stockpile cash and they want to deploy it and just grow the brand period, they’ll come over to the platform as well. And we’ve already seen a bunch come over. I definitely think there’s a good amount of opportunity on that platform. And with Amazon as a whole, I think one of the things that kept us sane being in this space for years—it’s coming up on six years now—is the perspective and the mindset and the understanding and the give and take. The amazing thing about being in the space, and to be honest, Amazon and most marketplaces that have volume, is you get to learn an incredible amount.
Kevin Pasco: You get to see what’s working and what doesn’t. You get to have the opportunity to play even if you screw something up. I mean, if you get it wrong and you bomb on a product or whatever, as long as you have enough cash and you don’t bankrupt the company, you can go off and try again. There’s enough opportunity out there that you can keep pushing and keep going. Six years in after we launched the company, I wasn’t even looking more than two years ahead. So, it’s incredible to have a living, breathing company that is just blossoming into something that is much bigger than myself. And it’s all because of this Amazon thing, which I think is really incredible. And then, on the flip side, you have to roll with the punches. For a couple of years there, a little while ago around 2016, 2017, the review takedowns, the TOS changes, there was a bunch of turbulence within about a two-year period, which rocked a lot of supplement sellers.
Kevin Pasco: Thankfully we were never suspended. We never got a warning or anything. We stayed a bit more conservative there., but there were some brands that we saw get taken down, just due to what was going on in the platform. Now, it seems better. It seems like the dust has settled a bit. I know that Amazon does whatever they want, but they do it at scale. So, whenever a smackdown comes, it’ll come at some point, hopefully not in 2019. If not, it’ll be 2020. They’ll make some changes to the TOS or they’ll do something that ruffles the sellers’ feathers. But that’s also the game. You’re playing on borrowed land. You don’t have to sell on Amazon if you don’t want to. You’re choosing to sell on Amazon. This is the game that’s being played, and you’re the little guy compared to them, and you’ve got to kind of roll with it and just stay adaptable and not give up.
Bradley Sutton: Okay. Makes sense.
Now, lastly, you guys said you are eight figures. Is this just on Amazon or now
have you expanded to brick and mortar at all or other retail outlets?
Kevin Pasco: No, there’s nothing in brick and mortar. Everything is all e-commerce. We’re an eight-figure brand purely just on Amazon, but we’ve got more channels as well. We actually do a little bit with wholesale though, which I think is pretty cool, because sometimes we get a reach-out to and sometimes, the emails that we get are pretty scammy, but some of the emails we get are completely legit practitioners, doctors, and naturopaths, and a lot of cool people that are just asking to buy the products all upfront and have some in their office that they want to sell to their clients. That’s a pretty cool business because though it’s not nearly the volume that Amazon gives you, it’s basically no risk, because they’re buying everything upfront. They do buy in small quantities, but the relationship is incredibly easy to manage.
Kevin Pasco: Then, you get to have these cool people. There’s a guy who owns 10 stores down in Florida, for example, and who buys a couple of hundred units a month from you. It’s fun. You jump on the phone, and you talk to them; it’s cool. You send out the order, and it’s all good. You don’t have to deal with customer service or keywords or anything there. So, we do a little bit of that, but we’re definitely doing eight figures on Amazon, as well as ecommerce website, doing some cool stuff with Facebook ads in the future and trying to keep it really e-commerce focused.
Bradley Sutton: Now, how did you get
these wholesale customers? Now that you’re big, do they come to you or do you
actually have somebody going out seeking these kinds of arrangements?
Kevin Pasco: Yeah, well now it’s both. I mean, it started from them coming to us. They would either be a happy customer, and they did buy through Amazon and they were like, “hey, this would be great to have in my clinic.” Or they would just see maybe we’d have a product with the bestseller tag, or they will be looking for a certain product, and when they googled it, we showed up. If your brand has the exposure, like I said, some of the emails will be kind of scammy, and you’ll be able to tell those pretty quickly, but some of them are legit. Once you hop on the phone with them, they’re basically asking to buy products right away, and then you start that relationship and then you can grow it over time.
Bradley Sutton: Okay. Awesome. Well,
lastly, one cool thing is that I have people on here who work for companies,
and they also want to meet new people, but you don’t have your own course, or
you don’t have a software company you’re trying to push. But I appreciate you
coming on here and taking the time, just dropping this knowledge. But if
somebody, and feel free to say no, but if somebody wanted to reach out to you
and maybe ask you some more questions or just kind of network with you, is that
possible? And if so, how could they find you?
Kevin Pasco: Yeah, of course. I always love meeting new people in the space and connecting with. There’s actually been a bunch of friends that I’ve made in the space. Paul Miller’s one of them. They are just great people, and I never would have met them otherwise. So, I definitely appreciate people reaching out, and I am toying with the fact or with the idea of doing some consulting. If anybody listening is interested in that, they can reach out to me about it, but the best place to do it, it’s probably Facebook. It’s Kevin Pasco, P A S C O. I’m also on Instagram and LinkedIn as well. Any of those places come find me, and we can chat.
Bradley Sutton: All right. Well,
thank you very much, Kevin, for joining me on this show and wish you the best
for the rest of 2019 and maybe we’ll try and touch bases with you next year and
see what new things you’ve come up with.
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