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Pancham: When I was in the corporate world, some of my colleagues and friends had a desire to quit the corporate rat race and start something of their own. Now starting something on the side while you’re working your full-time job is not an easy task. And in most cases, it does not make sense to quit a full-time job without knowing what you’re going to be doing after quitting. At the same time. I have met so many entrepreneurs….you know when I meet them at the conferences who started by doing something on the side as a hobby which turned into their full-time passion. One such side hustle is becoming a seller on Amazon. There are many ways to sell on Amazon. And there are pros and cons to each approach. We are going to talk about one such approach today. If you had invested $1,000 in the Amazon stock back in 1997, it would be worth $1 million today. Yes, $1 million. Hindsight is 2020. Many people wish they had invested in the stock back then. My guest today is going to talk about a way…How can you become part of Amazon’s success today?

Dan started out working a regular day job in a small town in Kentucky in 2011. He began selling on Amazon with only $600 and grew it into a multimillion-dollar business in just a few short years. Today he owns a business that has sold over 500,000 products on Amazon, and done well over $20 million in sales has generated millions in profits, and only works one hour per week due to the unique business model he created that allows him to almost completely automate the entire business. Dan now uses his freedom to teach people all over the world his exclusive business model through his elite online training program known as The Wholesale Formula. Dan, welcome to the show.

Dan: Hey, man, thanks for having me on.

Pancham: No, thank you for your time. Are you ready to fire up my listener’s break out of Wall Street investments?

Dan: Oh yeah.

Pancham: Dan, before we begin, do you want to give us a quick overview of how you started in this business?

Dan: I kind of got shoved into it. But I had a normal, you know, normal day job. I ran kind of the sales and purchasing departments for an online retailer that sold toys and games. And in 2011, right at the very end of 2011, I got terminated from that position. And I, you know, for a few months before that I had been selling on Amazon. And so it kind of forced me to go full time. And I’ve really jumped through all the Amazon hoops, like as far as different selling models, but the one that’s really worked for me is where we’re at now. And not only not, you know, not only I’ll explain what that is, but you know, not only is it working, it continues to grow and present itself and even bigger opportunity in the Amazon space. So the model that we currently use is called Reverse Sourcing Wholesale. And what that is, it’s finding products that established products that are already performing well on Amazon, developing a relationship with those manufacturers to become an authorized seller, and then selling those products for a profit on Amazon.

Pancham: Wow, sounds so simple. All right, so let’s get into the weeds of it, right? My listener base, there’s not, you know, know much about this particular strategy at all. So, can you break it down? Like, what does that mean? Like, when you say products that are already doing well, you are going and contacting the sellers, the manufacturers and build relationships with them, and then try to sell them on Amazon. Right? Is that correct?

Dan: So you know, if you go to Amazon, you know, any Amazon page, Amazon tells you something called a bestseller rank. And you know, the Amazon bestseller rank for that product. And what that means is, you know, let’s say that you look, you’re in Home & Kitchen, and Amazon. But let’s say you go down, you scroll down, you say that this product has the best seller rank of 33,000 and home and kitchen. What that means is it’s the 33,000 Best Seller in Home and Kitchen. But if you use a software like Jungle Scout, which is what we use, that’ll tell you approximately how many times per day, a product that’s ranked 33,000 sells. So, you know, now let’s say that we can, we can determine that this product sells 250 or 300 times a month. And we can look at a graph. There’s another program called Keepa. And it shows you the historical sales of a product. So let’s say that we go back and we say that this product has been selling, you know, 300 units a month, for the past two years. It’s a pretty good product at that point that you know, there’s generally nothing going to change that’s going to significantly alter that. Right?

Pancham: Right.

Dan: What I want to do is we see that the product is an opportunity, like because the vast majority of products are underdeveloped on Amazon, and brands are missing the link to actually do it. So if you look at the Amazon Marketplace in general, there’s a phenomenon called Private Label and that’s where people introduced their own brands into the marketplace. And they, you know, they do the marketing behind it, and the Amazon, SEO, and all that cool stuff. And what’s been happening over the past few years is those products are starting to beat out established brands. And it’s not because they’re a better product, it’s just that they have a better driver, right? Like the person that’s driving that product and kind of making the decisions behind it. So what that’s created is an opportunity to start working with these brands. Right? Now, if I can go on there, and I can identify that a product is selling well, and it has an established, you know, established history of sales, but that it has an opportunity for growth. And I can tell, you know, I can talk to them about what those opportunities for growth are. Like, it makes sense that they would want to work with me. Right?

Pancham: Right. Right, right. So let me break it, like, even a simple thing for my listeners. So not all the stuff on Amazon is actually sold by Amazon. Right?

Dan: Actually, yeah, it’s kind of crazy. The last statistic I reviewed said that there were 516 million products. That were listed on Amazon.com. And of that Amazon was only a seller for 18 million products. There’s, you know, approximately, you know, and that was like from 2018. And that margins got even bigger since then. But, you know, if you look at that there are 498 million products that Amazon doesn’t carry the present and opportunity for everyday sailors like me. Now, another thing that people probably aren’t aware of is just how much of the Amazon Marketplace is actually dominated by third-party sellers. Like, this was Amazon’s I think it was one of their quarterly call meetings, and they were talking about the growth of the third-party platform. And currently, third-party sellers sell 53% of the products that are sold on Amazon. Not Amazon themselves. So the vast majority of sales are done by third-party sellers at this point.

Pancham: Got it got it. So when I go on Amazon, a lot of times I see you know this thing called, “other sellers” and I click on that I see a bunch of sellers, and sometimes it shows “FBA” – Fulfilled by Amazon. So what does that mean? Like, you know, it’s sold by Amazon or it’s sold by someone else. What does that mean?

Dan: Okay. This is a great question. So Amazon started a program called Fulfilment by Amazon or FBA. And I think this was in 2011. Or maybe 2010, is when they rolled the program out. And what that meant is you could…anybody could send their products to Amazon’s warehouse. Amazon would store those products, pool, package, ship those products to the end customer and provide customer service. So whenever I say…that our company has done, you know, $25 million in sales, but your mind, I don’t have a warehouse. I have a two-person operation with a couple of virtual assistants that are based in the Philippines.

Pancham: So are you saying that…there is no…So these $20 million products? You’re actually you’re not doing anything with the storage of all these and where does it go and how does it get sold?

Dan: Yeah. So we utilize…there’s there are a couple of different ways that our products are handled. So whenever I order a product from a manufacturer, they either ship that product directly to Amazon for me if it can go in for Amazon standard. Like, you know, there are some things, if you’re going to ship glass bottles into Amazon, they have some type of rules and guidelines as to what you have to do before you ship those in. And it’s, you know, wrapping or whatever. So like, if I were shipping that into Amazon, I couldn’t ship it directly unless it was packed correctly. And in those instances, we use something called a prep center. And that’s just a third party warehouse that processes all your products for you. So I think it’s currently that 65% of our suppliers send our products directly to Amazon and then about 35% of our suppliers send it to the third-party warehouses that prep it and get it ready and then they send it to Amazon for us.

Pancham: And those third party warehouses is something that you have to coordinate with? Do you actually select them or it’s as selected by Amazon?

Dan: Oh, we select them. Yeah, okay. This is a third-party warehouse that we hire on a contract basis to handle out the workflow. We hire them.

Pancham: Right, right. Yeah, okay.

Dan And there’s a lot of options for those like it. And it’s kind of crazy because you know, since 2011, like in 2012, 2013, like that kind of stuff didn’t exist. There weren’t prep centers and processing facilities and stuff like that. Third-party ones, but since that point, like there are hundreds and hundreds of companies that perform a service that you can choose from, and it’s actually really competitive.

Pancham: Awesome. Okay. Correct. So, let me ask you this question. Let’s say I’m a guy who’s listening to this show, and was like, you know, that sounds great. But, you know, one question I would have is, why would a manufacturer want to work with me when they’re already have so many other people reaching out? Or, you know, why can’t they sell themselves?

Dan: You know, well, I mean, it’s the same reason that their products are currently in the developed right like if I go on Amazon, and I see that these products doing, you know, say $150,000 $200,000 a year in sales, on average, the listing just looks bad. It has one picture, it has a title, no bullet points, that kind of stuff. If those things are handled properly, and that’s the difference is, you know, the private label sellers that are developing these small, micro-niche brands that are outselling the bigger brands on Amazon. It’s all they’re doing is they’re marketing their products better. You know, they’re, they’re taking better product pictures, and they’re updating titles and stuff like that. That’s the opportunity for them is that they understand that there’s lots of growth potential. Brands don’t want to take time to learn how to do all this stuff. Like that’s not their goal. And then you’re probably asking yourself, like, I don’t know how to do all this stuff, like how can I provide value? And it’s for us, it’s just…We have a network of people that we work with, like, you know, as far as providing value and stuff like that. I’ve never taken a picture for our brand, ever. But we have contractors that we work with, that we’ve tested their work and say have been able to see their work and know though they do amazing quality stuff, and that’s who we utilize. So it’s not about our ability to be like the best picture taker, the best Amazon writer or whatever, it’s just the fact that we know you know, somebody, an expert in the space that provides every single level of service to the brands.

Pancham: Got it. So, I understand that. You know, the brands, which are the manufacturers, which don’t have the capability or the knowledge to do all this stuff, you help out those guys and they help themselves make their brand better and sell more. But what about the brands, which are already doing this stuff good? So those brands are probably already out of reach, or they’re not out of reach?

Dan: It’s kind of funny, because once you realize that, we picture all these things where we assume that a product listings good, right? And the vast majority just aren’t like the vast majority of products on that product listings on Amazon are just significantly underdeveloped. If you look at it. It’s even products that Amazon carries themselves like they’re very bad at maximizing their own platform. Like if you look at a product developed by a third party marketer versus a product listing that was developed by Amazon, the third-party marketer’s product listing is better every time. So there are so many opportunities of this, that it’s almost I mean…I’m not kidding, man, it’s almost endless, like I can get on, you know, on Amazon, look around for 20 minutes and I can find 100 products. And I’ll bear in mind that each one of these hundred products can represent anywhere from if you want to talk about in terms of sales…If you want about the terms of sales, like each one of these products may represent between 30,000 and $3 million in revenue. And that’s in 30 minutes, I can find 100 products that need my attention or would immediately be able to be helped by us working with him.

Pancham: Got it. Got it. Alright, so let’s get into the needs of this particular business thing. How does this work? So let’s say I’m a new guy, and as you said, you teach this to people how to do this. But let’s say I’m a new guy, I picked 10 products. So what do I do? I start reaching out to those manufacturers, and I’ve tried to build relationships and then help them? What are the steps involved at a very high level?

Dan: Okay, let’s talk about just the general components that can kind of talk about the outsource-ability of it. Right? Like, how easy it is to outsource? So, the first aspect is, is finding the right products. And that’s where a lot of people struggle to is, why do people, whenever they get on Amazon, like the struggle to get started? It’s because they don’t know what they’re looking for. Like, they don’t know why this product is a good opportunity, and this one is not. And that’s what we’ve been able to learn over, you know, the past seven, I guess it’s…gosh, it’s crazy. At this point, it’s nine years. Like time just flies so much. It’s just the things that we’ve learned over that period of time. Right? And there’s like 3 basic criteria that I can tell you about and kind of why, why we use those to funnel products in. And it’s the first one is the products not sold by Amazon. And it’s I just don’t like competing with Amazon. They don’t play fair, and they don’t have the same rules. And but they don’t fair. Right? But you, whenever you realize that in that marketplace, again, there are 516 million products, they carry a million of them. And there’s quite the gap. So the first rule is I don’t like products that are sold by Amazon. The second rule is I like products that are sold by multiple sellers. Now bear in mind, that one’s pretty counterintuitive, right? Like, my goal with every product that I carry is to become the only seller of that product. You know, my business currently has, you know, 10 or 12 exclusive accounts that we work with, where we’re the only person selling that product on Amazon. But even though that, that’s my end game, I want to start with products that are sold by three sellers or more. And my logic is, is that you know, there’s so many companies and brands, like there are literally hundreds of millions of brands. Like there are hundreds of millions of products that are on Amazon yet. Like it’s crazy to think about how many in the world how many things you can buy. Right? So whenever you start putting that in perspective. It’s like we want brands that have, you know, I don’t want to just reach out to every brand in the world otherwise, like that would take more time than I could possibly ever dedicate. So instead, it’s, you know, I want to, I want to work with brands who are likely to want to work with me and have us have a history of working with third-party sellers. So we’re looking with brands that have three more sellers, and then we’re looking for products that sell 30 or 40 or more times a month. And the reason is, is I don’t want to. The worst thing you can do in this business is to park your money into a product that’s not selling.

Pancham: Right

Dan: Exactly. The vast majority of the time, your goal was to buy the product, sell through the product, realize your profit and then rinse and repeat. And it’s always just buying the best opportunity and that’s, you know…one of the things in our model is we focus on being very cash flow positive. In that I mean, we only buy 30 to 45 day’s worth of inventory. Like I’m never buying super deep on the product. I’m always you know, buying to hit my restock windows and then just replenishing as needed if a product starts to slow down or change, I have minimal inventory. I can just adjust my strategy as needed to move through. You know, our model is to really focus on keeping those windows as tight as possible. And to do that you need products that are selling and have a stable sales history. So you know that once you once you start finding products that fit…that, you know, you start with a pool. Like this big, and now you’re, you know, you’re down here, right? And you’re finding those products that fit those checkboxes. That’s the first step in developing a profitable wholesale business. It is finding the right product. And then the next aspect, I think, is being able to realize, you know, what’s your next hurdle? And that’s when these brands to work with you. Right? And so, the whole challenge is, I’m a new seller. Like, how do I convince these brands to work with me?

Pancham: Right.

Dan: Exactly. The one thing. There’s one skill and it’s one of the skills that we you know, that I focused on learning, I focus on teaching to my employees and like, you know, in general like it within our community, this is my goal is to teach people this and it’s easy. Hello, look at an Amazon listing and tell that it’s not very good.

Pancham: Right? Exactly.

Dan: That’s the one skill that you have to know. It’s things like knowing that there are, you know, 200 characters and a title. And if they’re not using 200 characters, they’re wasting space, that kind of thing. You know, there’s a page, there should be eight pictures on every product on Amazon eight to 10. And they should have lifestyle shots, showing them using the product. If those aren’t there, that’s a deficiency. It’s just those little kinds of triggers. Right? It’s like, you know, once you, you can follow a checklist, and this is where we start talking about outsourcability. Right?

Pancham: Right.

Dan: There’s, there’s a literal checklist you can follow on it. So yeah, it’s like, oh, this is broken. This is broken. So now when I contact, these vendors, right, it’s from a place of authority. It’s, hey, you know, I saw your product on Amazon, I would love to work with you guys. You know, I think that it would be mutually beneficial. Here are some of the things I could work with you on immediately. And it’s like now. You got to look at your traditional email to a manufacturer’s traditional contact and your traditional contact from somebody says, you know, hey, “And I would like to carry your product”. And it’s like, that’s a lot less exciting than Hey, man, I would love to help you. Do you want to work with me? And that’s what we do is we position ourselves more as partnerships. And then all these things, you know, like changing a title, adding pictures, etc. Anybody can do them. And to do it, it takes like five minutes. So now let’s say they, you know, I reached out to my account, and they’re like, “Hey, man, I would love to work with you. Yeah, we’ve been needing that kind of stuff done. Just don’t know how to do it”. And okay, sweet. The first thing I asked them is, you guys have a media kit? Or do you guys have pictures that are available that I could look at? And just see what my fit? And it’s like, yeah. So they send me their pictures. I pick which ones will be good on Amazon and I just upload them. It literally takes five minutes. And I’ve done more for them than any, you know, any sellers done for the past two years. So what do I look like? I look a hero. Right? And you know, that’s the thing about Amazon is Amazon has such a volume of traffic. That every proactive change you make to a listing will start increasing sales. It just happens. Like, you know, the more keywords you put in the title, or the more keywords you’re able to build into your listings, that’s more people that are able to find your product now and they have so many people searching for products on their website that it will guarantee an increase your sales, like one of my friends, and somebody had taken the wholesale formula. He was working with a brand and just to give you an idea of how powerful this kind of stuff is. And this was an established brand that had been, you know, they’ve been really consistent. They had been selling about $160,000 a year on Amazon. So when it contacted them…bear in mind, his business was three months old at the time, he had never really sold products on Amazon prior to this. It’s just so…He contacts them follows this formula of you know, working with them to tell them what’s wrong, how I can fix it. They set up an account with him and he just goes through and he starts making changes and he works with a, you know, they actually contracted the majority of it out to which is really cool. Like you know, he contracted it out somebody to help him write his listings because he’s ESL guy like, right three years before that he didn’t even speak English. So I keep writing listings is pretty impossible. So he just contacted somebody to write the listings. He used a lot of their pictures, used the third-party picture to place to get some lifestyle pictures into the listing. And that was it. And then within 12 months, he took that, you know, that company that he had just started in that account that had done $160,000 a year previously…like they did $1.1 million in sales by Amazon over that period over that 12 months.

Dan: So Garrett, man, his business had one wholesale account that he didn’t own. He didn’t own the wholesale account, right? Like that’s the company that owns that he just all he did was had an agreement with him that says I can buy and sell your products. And he sold his company, which was that account, and the SOP’s that went with it. He sold it for $450,000

Pancham: Amazing.

Dan: It’s crazy. Right, you know, and bear in mind that this guy didn’t understand Amazon at all. It’s just following a formula and just plugging stuff in and making sure that you know, and that’s, that’s another thing is like, within our community, we’re always abreast of every change, like, because we have thousands of people within our community talking about this, because it’s their livelihood. So like, if something makes a change, you just go and you, you fix it. Now, whenever you start talking about outsource ability, you know, like I, like I mentioned earlier.

Pancham: Right?

Dan: Finding out what’s wrong with a listing is following a checklist. The same thing is true for finding products, right? So my product process and it’s how do you run a multimillion-dollar business and literally work an hour a week on it? And it’s, I don’t know, look for my products. I have virtual assistants in the Philippines that go through and they’re able to just follow our checklist and find those products and they find all of our leads. So then what they do from there is they find all the contact information for those companies. And this is not rocket science, like, yeah, find the product. Let’s say I find a product that I like…What we do is we Google the name of the product on Google and go to their website and we say that a lot of the times the website will say wholesale and you just fill out the little form and they’ll contact you and let you know and then you start that dialogue. So we are our virtual assistants will find you know, hundreds of leads will send hundreds of emails out and then that’s whenever we start getting responses. And some of those responses are, “Hey, we’d love to work with you”. Some of those responses are, “Hey, you know, we have enough sellers right now”. You know, if it’s an important account, I talk more about the reasons they should want to work with me and I convert who I convert. But it’s you know, it’s very little with us there’s very little touch points. And internally, you know, we hired we’ve hired two people to handle the interfacing with brands. So like, the calling of the brands, etc. And right you know, they’re able to do all of that, you know, once your business is up and running…

Pancham: So, what do you do? So once you let’s say there’s a brand that agrees to sell with you And then at that point, you basically start buying their inventory, like buying this stuff and sell them directly to Amazon. Like put them in. That’s what you do.

Dan: Right. So, let’s say the company says, “Yes, they want to start working with us”. We go ahead. We place an order. We have them send that product to Amazon, if possible. Once it goes to Amazon, the product starts selling on our side. Right? Then whenever we get low enough, all we have to do is place our reorder. So we would call them back and be like, Hey, guys, we’re, you know, we need more products than Amazon. And then it’s kind of rinse and repeat that process. And that’s it after that, basically. Yeah, but as far as like, you know, tracking inventory, we don’t even do that. Like we have a software that tells us like it tracks our sell-through rates or average stocks, and it keeps track of lead times, etc. And it’ll just tell us like, “Hey, guys, you need to place an order for this many units now. And this is a 45 day stock”.

Pancham: Right? Wow. So really, I think my next question would be like, “How much capital do you need?” Obviously, that depends on how much you know how many products you want to work with, and what’s the price point on each product and all that, like, how much capital do you need to kind of to start this thing?

Dan: You know, it really depends. I think it depends on what your kind of income goals are. Like, for example, you know, my brother when he got started, His goal was he wanted to earn enough extra money just to pay for a really cool vacation every year. Like he had a good job, like he didn’t really, you know, and they just wanted a cool vacation. And he asked me, he’s like, what would you start with? And I was like, 2000 bucks, man. Like, you can really get roll-off 2000 bucks. And Jeff, you know, with that $2,000 in his first year, I think he ended up making about $35,000 in profit which beat his goal of paying for his vacation.

Pancham: Wow, amazing.

Dan: Yeah. And then you know, but the more money you have, the faster you can kind of get going. I mean, it’s, you know, can you operate it you can operate it scale more quickly with more resources.

Pancham: Got it. Got it in terms of time. It’s again, like how much time I know you spent one hour a week. But someone who’s starting out, like how much time do you think that person needs to spend to get this going?

Dan: You know, you can say it’s one of those things where I think you can spend as much time as you want, right? It’s like How comfortable are you outsourcing early, and the more comfortable you are doing it the faster you do it. So like, whenever I was working initially I spent like 60 and 70 hour weeks when I first got started, and it was just because I was really bad at delegating stuff. And I was super scared to do it. But now I’m super comfortable with it. And I think like I would be much more efficient. But one of our students here’s a good example. And this guy, he had owned a previous business and you know, he was comfortable making standard operating procedures, processes.

Pancham: Right?

Dan: And he set his business up and within three months and was generating over $100,000 in sales a month and then it was able to scale back within five months to 30 minutes a day. Or so it’s you know, it can be super-fast if you’re comfortable outsourcing. If you’re not comfortable outsourcing like you know, I would say it’s one of those things where you’ll probably be in your business for, you know, three to six months until it’s pretty operational, and then you can start pretty easily scaling it back.

Pancham: And that’s just and bear in mind when I say involved in your businesses, I’m saying like, you know, maybe a couple of hours a day at night, or an hour a day or something like that, like, it’s not like, you know, doesn’t have to be a full-time job for you. Right, right. And the expense ratio on this thing is pretty low, right? Like, if you’re starting out, let’s say you have $100,000 in revenue, the expenses are there, what’s the percentage? How does it vary, assuming that you’re outsourcing?

Dan: Sure, sure. Well, it depends, like, you know, our focus is on profit, or like, we like to target profit products with a 30% ROI or better 30%. Okay, and, you know, sometimes we dip under that whenever it makes sense. Like if you know, you can make you know, $75,000 and it’s going to cost you you’re going to be operating two points under it’s like, Yeah, can I make it happen? Yeah, but you know, it’s more of like, that’s kind of our target. Is 30% ROI is a good average gross margin, I think is probably 20 is probably between 20 and 25%. And you start talking about your net margins. I mean, you know, it really is just efficiency, right? It’s like how efficiently you can operate to kind of close that gap. And originally ours, we weren’t operating very efficiently. But we’ve really done well. And closing that gap. I think, Last I heard ours was like in the 15-16% range, which is that net margins, which is pretty dang solid.

Pancham: Yeah, I know, it’s pretty solid. And then you can rinse and repeat right? How quickly you can turn that capital around. And, you know, do it again and do it again. So that 15% I don’t know if that’s annualized. This is one cycle.

Dan: So that’s 15. That’s 15% per cycle is

Pancham: the cycle is let’s say two months, then you can do it six times a year. So that’s 90% right there. Like can I in terms of the right like

Dan: No, I mean, the snowball effect and in compounding effects you can have in this model are crazy because it is such a cash flow. We’re in a business like bear in mind, like you know, let’s say that If I operate on my 30% margins, and I hit my 30%, targets for ROI spend, let’s say we’ll use the blanket example. If I spend $10,000, I spent $10,000, with a 30-day anticipated inventory. Let’s say I hit my numbers in 30 days, I bring back $13,000. I reinvest $13,000. 30 days, I’m bringing back 17, something. Like that, you know, you can literally double triple your money in the first year in the first year if you’re able to hit the products. Now, obviously, it always doesn’t work out and there is that odd deal scenario, but it’s possible. And that’s ultimately kind of how we got started, you know, ours was, whenever we started in 2011, it was with a $600 credit card. Like that was Yeah,

Pancham: that’s amazing.

Dan: And within the first year, we did $840,000 in sales without extra capital investment.

Pancham: Amazing

Dan: Right? So I mean, you can, you can snowball it fairly well if you are just really kind of focus in on picking the right products and develop those relationships, keep your margins consistent.

Pancham: Right, cool. So I guess my last question on this thing before we move on to my next section of the show would be that what are some of the things that you need to be careful about before investing in this business, like getting started in this business? And can people lose their initial invested capital?

Dan: I think it’s pretty hard to lose your initial investor capital if you target products that are that have established sales histories. Like really, you know, is it possible to lose your money selling on Amazon? Yes, but like in our model, it’s very, very unlikely that you lose a significant portion like here’s, here’s an example. Let’s say I look at a product and it’s been selling really well for a year. And I buy it what like, what’s the worst-case scenario this product? Like? It’s not that it just dies? Like most products just don’t die overnight? Yeah, it said, the price drops. So like sometimes on a product if the landscape changes, we may lose 15-20 percent, but we recoup the vast majority of our money. You know? We do it. We just hooked up to my company a bunch of mistakes, right? That’s really what you’re betting on now in my kind of model more like private label, where there, you know, they’re buying a product that’s never existed on Amazon, they’re trying to build their brand, and, and create demand. Like sometimes those guys fail to create any demand for their product, you know, and they just lose their full investment. It’s pretty brutal, I think to be good at that particular you know, the private label side of Amazon, you have to be a great marketer. Whereas to be a good wholesaler, you don’t really have to be like you just have I feel like honestly, you just have to have a pretty good heart like you just have to want to help people. Right? And that’s what we do is we the focus of our business is really just helping these brands continue to move forward. It’s cool because I’m at this point in our Amazon careers, were able to work with brands who kind of like follow our mission and our ideology. So it’s like it makes me feel better, like knowing that I’m helping brands that I share values with sell better on that platform.

Pancham: Got it. Got it. Alright, so we’ll move on to the next section of the show, which I call, Taking the leap round. I ask these four questions to every guest on my show. So my first question for you Dan is, “When was the first time you invested outside of Wall Street?”

Dan: It’s going crazy because I’ve had a…my entire career has been entirely based in non-traditional investment, right? I’ve done less investing into what you would consider something traditional. So my first foray into it was in college when I set up a video game business, nice. Like I set up an eBay business and was doing probably $150,000 a year in college. Wow, silly vintage video games on eBay. And then after that, I like started trading and selling Magic the Gathering cards, and I’ve probably done to date well over a million dollars and sales in that area, like personal sales in that area. So I’ve done a lot of non-traditional investing.

Pancham: Good. Now, so I had a very good friend of mine who was into magic.

Dan: Ah, super cool.

Pancham: Yeah, he used to go to competitions and all that so cool. So my second question is what fears you had to overcome when you first invested outside of Wall Street. I guess in your case you were in college. In college, no one has fears.

Dan: Oh man, we can talk about when I started my business because that’s a big shift. Yeah. For us. You know, honestly, it was about being able to delegate and outsource stuff. Like if I would have been willing to hire employees faster, and bring in people to help me like if I would have focused on process first. That was my problem, I guess is I focused initially on getting the work done and not the process, which made me uncomfortable, bring on employees that could help me. So if I would have focused on process first and then brought on employees to help me I would have grown three times faster, but it was kind of that fear of handing stuff off and realizing that wasn’t going to be perfect,

Pancham: Right? No, this is so true. I’m in my investing business. I’m just trying to set it up. I recently quit my job. And this is exactly what we are focusing on. Being able to scale in our investing business. And that’s why we’re spending time and energy in creating SOP’s.

Dan: Yeah, if you don’t, I mean, you just end up doing so much backtracking and so much retraining, and it makes you so inefficient.

Pancham: Exactly.

Dan: And it’s interesting because I think that’s just true across any business. I don’t care if you’re

selling on Amazon. You know, doing stock stuff, running a physical retail store, like it doesn’t matter. All those things, processes are important.

Pancham: Absolutely. All right. My third question is, can you share with us one investment that did not go as expected?

Dan: Yeah, I mean, I can I can share a funny one.

Pancham: Sure.

Dan: So whenever we were looking at scaling our business like originally whenever we like I said, we kind of ran the gamut of models. When we started selling on Amazon initially, we were going into retail stores and buying products and then taking it…until Amazon…its called retail. It’s a model called retail arbitrage.

Pancham: Correct

Dan: And, and, ultimately, the problem was that kind of like monopolized our time, and that’s whenever we started looking for other models. And one of the businesses that we started that didn’t go so well was a company called…it’s actually, you know, still in business still doing well. We ended up selling it. But it was a My Little Pony website that sold my little pony collectible. Because whenever we were selling products on Amazon, like an out of print My Little Pony that you could buy in the store for $5, she would sell on Amazon for $45 or $50 bucks.

Pancham: Wow.

Dan: And I was like, how does this happen? And then this documentary came out. And it was about this phenomenon called Bronies. And Brony is like a grown man who is into my little pony and goes to all their conventions and collects the stuff. And then I realized that it’s these aren’t kids that are buying these toys. Its adults. And that, you know, my concern with having a website originally was would be that kids don’t spend money that adults do. But once I realized that we went forward with making a My Little Pony collectibles website. And it did pretty good. I mean, it did pretty good. But ultimately it was just something where we couldn’t get interested in it, and then we ended up selling it.

Pancham: Nice. Nice. Got it. Got it. Thanks for sharing that. So my last question is, what is one piece of advice would you give to people who are thinking of investing outside of Wall Street that is in Main Street?

Dan: No, I mean. Do it. Like within Wall Street, like here, you understand the process, Right? Like, it’s, everything’s regulated like you’re, I feel like you’re grinding in Wall Street. Right? Whereas if you can do successful investment outside of that like there’s so much money to be made it the personal level. And I feel like there’s a lot more opportunity outside of it. So I would just tell people to find something that that seems relatively risk-free. Like, you know, the reason, the reason I think Amazon’s a particularly good investment is Amazon’s one of the biggest companies in the world.

Pancham: Right?

Dan: It’s obviously a growing opportunity and platform. That’s a safe home, but there are lots of safe ones. I mean, out there, there are lots of safe things to get into and I would, I would say pick something. Start doing it and release your creativity. Because like, if you’re successful in that space like if you’re successful at the Wall Street level like you can absolutely crush the less regulated stuff and really flourish there, I think.

Pancham: No, great, thank you. So just do it. Like Nike says, Just do it. Yeah, just do it. Right. All right, great. Thank you for sharing your knowledge today with the listeners and how you’re making everyone’s life amazing by giving them more freedom of time and teaching them about this stuff. So how can listeners reach you, Dan?

Dan: Well, we’re actually doing a workshop coming up. And this is a really cool opportunity because we do this thing about one time a year. And in this workshop, what we do is we go over our entire business model and the opportunity of selling on Amazon. We cover you know, how we find products to how we contact brands, and it just every little piece in between. So if you have any interest at all, like if you think, “Man, you know what I want to try a side hustle”. This is a 100% risk-free way to find out if this one might be the one for you. And it’s kind of funny, because when people ask me usually, you know, what is the best training? It’s like, well, the Wholesale Formula, and then like out, “What’s the second-best one?” That’s like, our free workshop is the second-best training for wholesale. It really is. You know, we, me and Dylan and my business partner invest our personal time to like, those five days, we make ourselves available to answer questions and really just try to open people’s eyes to the opportunity that does exist, because, in my opinion, man, it’s one of those opportunities that people are going to look back on 30 years from now and be like, “Gosh, Almighty man, I can’t believe I missed that Amazon thing”. Like, you know, they were the first trillion-dollar company.

Pancham: Right.

Dan: It’s just unbelievable the opportunity that we as, as humans have, and I just wish I would have known about it right? Right, because then when I got fired it was, we had to go through such a hard time. Like we had to go through such a hard time to find a business model that worked for us. And it was because there wasn’t any information about it. And that’s what this workshop is, it’s our way…For free. I mean, we just put it on for free. And we just go through and really try to help people understand if this could be something could change a life.

Pancham: Amazing. So how can they go and find out about this if they want to register for this free training?

Dan: Yep, we set up that link with you. And it’s thegoldcollarinvestor/amazon.

Pancham: Great, great, you know. So listeners, like Dan said, if you have any interest in this, it’s an amazing way to learn about this business model up. It’s free. You know, it’s not really free because you have to spend time and energy to listen to this, but it’s, it will be well worth your time. I can say that you know, my wife was interested in this and she actually…I listened to this like last two years ago and really, really liked it. So thank you, Dan, thank you for doing this training. And the link again is the gold collarinvestor.com/amazon. We’ll put that in the show notes as well. Thank you, Dan, for your time.

Dan: Thanks for having me on.

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