#089 - Everything You Need to Know About Wholesale with Alex Kay I The Amazon Wholesale Podcast

#089 - Everything You Need to Know About Wholesale with Alex Kay I The Amazon Wholesale Podcast Speaker 2: All right, guys, welcome back to another episode of The Amazon Wholesale Podcast. This week, I've got Alex Kay with me, otherwise known as FBA Boys on Instagram. He's someone that I actually found on Instagram a very long time ago. You've been on Instagram for a while, right? And I found you there pretty early on. You've been posting content and posting value for a long time, specifically about wholesale, which is why I wanted to have you on because we're pretty much doing the same thing. Only difference is you're in a warehouse. I use prep centers, but Aside from that, methodology is very similar. Kind of the way we teach is also very similar. So wanted to have you on and kind of just talk wholesale and kind of where we're headed in 2025. Also, Corey, well, thanks for having me on. Speaker 1: I'm happy to be here. Happy to be able to connect with other wholesale sellers and just try to provide as much value to other people watching on YouTube as possible. Speaker 2: Yeah, no, I appreciate that. And you just certainly do a lot of that over on Instagram as well. And that's, like I said, that's kind of how I found you. And then were you, I think at one point, were you running the account with your brother, like early on? Was it your brother? Speaker 1: Yes. Speaker 2: That's right. Okay. Speaker 1: He did his own thing. He went actually back to school. So you wanted to do that. Now he's kind of taking a gap year of travel a little bit. So bless his heart. Speaker 2: Nice. Yeah, good for him. Well, I know when you started that you were, you and him were putting out a lot of content. I know you were, you're kind of getting into the warehouse game at the time. How long ago was that? That was at least years ago, right? Speaker 1: A while ago, yeah. So we got our first warehouse in, I want to say it's 2019. Speaker 2: Wow. Speaker 1: And it was funny how I found the warehouse. So I was on Facebook marketplace looking because I was just, UPS was coming every day to my mom's house. Mom's like, this is ridiculous. And she's like, you got to find a space for this because, you know, neighbors are looking at us weird, like something's going on. Like, you know, UPS just fully backing up the driveway. And I was on Facebook marketplace. I found someone That's looking to sublease a warehouse. It was a thousand square feet and he was like, hey, I'm looking to sublease 500 square feet of this warehouse. I'm just starting to, you know, this night, I think he mentioned maybe mentioned Amazon or e-commerce and I messaged him right away. I met the guy and it actually turned out to be a thousand aces there. Speaker 2: Oh, no way. Actually, I feel like I remember, I feel like I remember seeing that on Instagram because didn't you guys post that I think at one point? It's like you guys, you linked up and you're like, oh, like, yeah, that's wild. That's actually so wild. Speaker 1: So Dan became a really good friend of mine early on and I saw him literally from his OA days in 500 square feet and like I remember he was growing at such a rapid rate that he's like, all right Alex, I need more than 500 square feet. There's the unit down the hallway that's 2,000 square feet. Do you want to take the whole thing, 1,000? I said, all right, sure. You know, I was getting momentum too. He took that space and he was there for like a year or so and then he just He just kept on going and he's like, you know what? I'm going back to Massachusetts and getting a huge warehouse and just gonna run it up. Speaker 2: That's awesome. Speaker 1: And he did that and we've been friends ever since. He came to my wedding. He's a really great guy that I know I can call at any time and just say, you know, I'm having an issue with this. And he's an awesome guy because we literally, his desk was in the back. Mine was in the front. Speaker 2: Like we were in the trenches together, working with them. Yeah. Speaker 1: So it was, it was cool stuff. But, Yeah, Dan, Jeff, really cool guys and Jake as well. I don't know if you know Jake, but guys that I was kind of surrounded by at an early stage in my business and ultimately I think that's a big contributing factor of where I am today because I was immediately surrounded by people that were just getting it done that I can learn from and stuff like that. Speaker 2: 100%. I mean, you and I both preach that, right? It's like the more you can get around other people who are doing this business and especially that are doing this business at a high level, not only the higher are you going to go, but the faster you're going to get there, right? It's only natural that if you hang around more Amazon sellers, you're going to get better at selling on Amazon. Exactly. Speaker 1: Yeah, exactly. Speaker 2: I'm glad that at least the early stages of your journey, you met other sellers, because I've shared this before on the podcast. For my first five years of selling on Amazon, I knew two other Amazon sellers. And one of which I'm still tight with, the other one I don't really know anymore, but it really took me five years to start kind of building that network and meeting other sellers. And it sounds like you did that early on, which is great. Speaker 1: Yeah. And it just immediately, even, you know, we were paying a thousand, we were paying like $1,200 for a thousand square foot warehouse with a lopping dock. You couldn't beat it. It was a loading dock, but it was perfect. And it gave us that immediate ability to open up distributor accounts we couldn't open up because we didn't have a loading dock. And at the time, I didn't even think about prep centers or anything like that. That was like, I don't even think, again, I didn't really have much of a network when I was operating two years in my mom's basement. You know, it was just kind of like, all right, buy the products, flip it and send it in. Speaker 2: Yeah. I mean, back then and really in the early stages, it's like, you don't know what you don't know. And I was the same way. I mean, we had a warehouse at one point, right? We bought that warehouse. It was about 2000 square feet, operated out of it for, I want to say about seven or eight months, and then ended up selling it and then outsourcing everything to a prep center. But I mean, I remember when we got the warehouse, it didn't even really cross my mind that a prep center was an option at the time. And up to that point, I'd been prepping out a storage unit. So like, if anything, I should have gotten a prep center before we even got the warehouse. But yeah, everybody's got their own journey, and it's cool to hear yours. So where did you go from there, right? Early stages, you get into that thousand square foot warehouse, what's next? Speaker 1: So we started growing out of that space pretty rapidly. It was funny because my neighbor in the unit next to us, I don't know if you know, but he's a big sneaker reseller, Oscar Solz. Speaker 2: I don't think so. Speaker 1: Big B2B sneaker reseller. And he was growing rapidly and he was like, we're moving out of this unit and it's another thousand square feet. And I said, all right, well, we need the space. So I got permission from the landlord to cut a giant hole in the side of our 5,000 square foot space to expand it to 2,000 square feet. Now we're working out of 2,000 square feet. And then eventually we just kept on growing to the point of we grew out that space. I was looking for other warehouse space and I came across a buddy that reached out on Instagram named Robert and Robert said, Hey, I have some warehouse space we can sublease to you if you're interested. And this is even funnier. This was actually Diana's warehouse. Speaker 2: Oh, I know Diana. Yeah. I assume we're talking about the same Diana. Yeah, yeah, yeah. I know her. Speaker 1: So next thing you know, I'm in their warehouse and I feel like this person jumped like, you know, it's like, all right, this is too big. All right, I'll hop in here. Speaker 2: Yeah, like a kid in a candy store almost. Speaker 1: Yeah. And I was like, all right, whoever will take me, you know, all right, sounds good. Yeah. If you have more space, I'll go there. Speaker 2: Yeah. Speaker 1: And learned a lot there, learned a lot about operations and systems and stuff like that. And just slowly operated in Jersey City, but the commute was horrible. Everyone's heading to Manhattan. We were on the eighth floor. So we had to use the freight elevator. Speaker 2: Oh, that sucks. That's actually terrible. Speaker 1: And it was just, it was very difficult. So a buddy of mine that I met at a trade show said, hey, I'm down to split a space if you're down. It's closer to you. And we got the space here in South Jersey. This is 8,000 square feet. We split it 4,000, 4,000 and it works out perfectly. And it's temperature controlled. It's nice and warm in here. There's enough space to bring stuff in and out. And, you know, just slowly bouncing around, slowly growing to a different size warehouses. And now it's just becoming the challenge of, all right, now with all these new fees and everything like that, how do we continue to get this momentum and continue to grow? Year after year with when we're being thrown all these obstacles, you know, that's the big thing this year. Speaker 2: And I do feel like when you've got your own warehouse, I mean, very similar to your journey. It's like you've got to be scrappy and you've got to kind of, you've almost got to be forward thinking in the sense that it's like, all right, I've got say 2000 square feet right now. I know at our current pace, we're going to grow out of this place and let's say three months. So how much space do we need next? And we need to go ahead and start looking for it. So like, I like how you were kind of always on the prowl. It's like, Oh, Hey, Diana's got space. We'll get in there with her. Oh, this guy wants to split a space. Okay. Yeah. We'll get in there with him. Like I think a lot of people, when they try to get their own warehouse or when they're thinking about getting their own space, they kind of have this like perfect picture in their head of like, Oh, we're going to have this. Exactly, 5,000 square foot space and it's going to have two loading docks and all this. When in reality, you got to take what you can get, especially in the early stages and especially if you're not ready to sign a three-year lease or a five-year lease on a 50,000 square foot place, which most people aren't. Speaker 1: What a lot of people don't talk about is finding other sellers that you trust and you know to go split a space with. Like taking on a warehouse yourself is going to be a lot. There's other options to do this type of stuff. You can split it with a friend of yours that you trust. You can start collaborating on things with that person. Everyone's very cautious of, well, this is my product. I don't want anyone to see it or anyone of my friends to see it. Speaker 2: Right. Speaker 1: And you have to get over that. You know, you have to get over that by saying, hey, if it makes more sense for two Amazon sellers to tackle a little larger facility, we can split it so it'll be cheaper. Go that route, you know. Speaker 2: Yeah, I mean, there's really teamwork plays into pretty much every aspect of what we do, right? We've talked about it on the group buy front, that combining resources with other sellers can get you better pricing on certain products, but at the same time, right? Partnering with them to get more space or to share a warehouse and to get really just get more resources than you would be able to get on your own can be done in like multiple different ways. So I think that's a great move and that's obviously served you well to where you guys are now. So maybe lay out what does the business look like today, January 2025? How much space do you guys have? What's revenue look like? What's the team look like? Give us all the details. Speaker 1: Yeah, so right now kind of how we're structured is we're around 4,000 square feet. We have two full-time employees. I have one that manages everyone and then we work with a temporary agency to bring in workers. So right now we have five people out there because we're working on this 13,000 unit shipment. So it flexes. We flex employees depending on the demand. Revenue wise, we kind of teeter between anywhere from $350 to $450. We did kind of take money out last year because at the end of the day, I wanted to pull a chunk of money out just to put in a mutual fund and say, all right, there's money here. Something happens, right? You know, just, I don't want to over leverage myself in this business. And I know a lot of people do, and sometimes I even get caught up doing it, but to have money start to be parked in other places, I think is smart. You know, something a friend of mine told me, he says, every Amazon payout you get, take 10% of that and put it into a business savings account. Put that away. You know, and then you can start to see actual money start to accumulate because in this business, we're so focused on reinvesting every dollar back into profit. We don't actually see anything. Speaker 2: That's really good advice and I've actually been recently been one, doing that exact thing and two, advising other people to do that as well, right? So I'm sure you're aware of the book, Profit First by Mike Michalowicz. Yeah, it's a great book, right? So all three of my business entities, I operate with the Profit First principles and It allows you to do exactly what you said. You take a chunk off the top every two weeks in the case of the Amazon business, because that's when we get paid by Amazon. And you set it aside for yourself as profit. And so the percentage that I've been doing, so if I get paid every two weeks by Amazon, I've been taking anywhere from two to 3% of that disbursement and literally just peeling that off the top as profit, putting it into its own separate money market account to sit there and accumulate interest. And then every quarter, Whatever is in that account, I just take it. I literally just transfer it into my personal account, right? That's the profit. That's essentially like my dividend. That's kind of how I see it every quarter. And the percentage, if you're just starting off, I tell people, I say, hey, put 1% of each disbursement, right? Or half a percent. But put something, because like you said, it's like you want to take money off the table, but you want to do it strategically and you don't want to do it all at once because then it really hurts your growth and you don't want to do it too late when maybe you've already got too much debt and it doesn't make as much sense. Speaker 1: Yeah, exactly. Because everyone gets caught up in, all right, now I need to buy more inventory, I need to buy more inventory, but then sometimes you don't buy the best inventory. Speaker 2: Right. Speaker 1: And then you're caught up in this place where you don't feel like you're making any progress And you're just turning inventory and it gets to a point where you're like, why am I even doing this? Speaker 2: Exactly. And especially at scale, that 2% or that 3% of each disbursement, you're not going to miss it. You're not going to feel it. It's nothing. So you might as well go ahead and put it aside and take it for yourself. And I like your strategy. You're saying you turn around and buy mutual funds. I've been buying some index funds and also just trying to pay off my house. Bottom line, use that money to buy assets. Buy something, but don't go buy a watch or something. That's what a lot of people do, unfortunately. Speaker 1: Yeah, exactly. You know, just being strategic with the whole play and, um, you know, the, the atmosphere of Amazon's change when you move to, I honestly think you, you really can't treat it like a side hustle anymore like you used to. Speaker 2: Completely agree. Completely agree. Speaker 1: This is like, you're either committed or you're not. Like this is, there's a lot involved. Speaker 2: Yeah. And so elaborate on that further. Like, what do you mean by that? And I mean, side note, I agree. Right. And I think we agree for some of the same reasons, but like, what's your take on it? Why is it, why is it more all or nothing these days than it ever has been before? Speaker 1: I just think coming from a logistical standpoint, the more inventory you can ship at once, the better you're going to be off in regards to shipping rates and everything like that. We used to send every 5,000 units, we used to book a shipment. Now it's turning into like every 5,000, 15,000 units we have, we create a ship. Because we're just trying to maximize if we can fill a trailer if we're doing a middle of a split or if we can get a rate on three or four pallets going to North Carolina. It just comes down to you need to be buying a lot more inventory nowadays than it used to be in like 2018, 2019. You just bought stuff, you SPD'd it, you shipped it out the door. I'm not saying that SPD is still not a great opportunity, which it is, but there's, I think it definitely a gap that's opening up between people that do SPD and like LTL. Like there's slowly this gap that's opening up, that it's getting harder to make the jump from SPD to LTL than it used to be. Speaker 2: That's a great point, right? And really just to summarize the gap between I'd say newer and less advanced sellers, the gap between those sellers and the large, established, legitimate, profitable sellers, that gap is getting larger. And what's happening here, at least it's my opinion, that as that gap gets bigger, it's going to push out a lot of those smaller sellers, kind of exactly like you said. You can't necessarily go online and within seconds find something that's profitable in a wholesaler's catalog. We're on an online website if you're doing online arbitrage, not like you could even a few years ago due to a lot of these policy changes and freight being more expensive and Amazon fees having gone up. But that's not to say that it's not like people get started every day, right? There's always going to be new people that start and are successful. I think the takeaway that I'm hearing from you, Alex, is If you're going to get into this business, jump in with both feet, take it seriously and understand that if you kind of half-ass this thing, it's just not going to work. Is that kind of what you're saying there? Speaker 1: Exactly. It used to be like, all right, I'm going to try to do this a little bit on the side. Fully involved if, you know, you talk about it all the time, contact, you know, 30 distributors a day or a week. Like I come from a cold calling background. Like I have no problem ripping the phone all day long. That's right. You know, my first job, I was 16. I was calling for donations for the Illinois Fire Department in New Jersey. Speaker 2: Love it. Speaker 1: It was, and we were hooked up to an auto dialer. So every time someone would slam the phone on the, you would hear it and you'd be connected. Speaker 2: That's like no time to sulk. It's just like, oh, that hurts. All right, next. Speaker 1: It was time to take like a sip of water and have a breather. And I was getting paid like, you know, minimum wage after taxes by $6 an hour. And like, just that was my first job. So then, you know, I got another job as I also got another job, we were selling privacy patrol, identity theft protection. Speaker 2: Was it door to door? Speaker 1: No, it was on the phone. My boss, I found this out and I told him on the last day, I said, what we're doing here is not right. I'm quitting. That's what I said to him on the last day. What we would do, my boss would do this, and I found out later after I was in the job a few while, he would send out mailers saying, hey, claim your free You know Tokens or whatever by calling this number and he would target low-level income things and say well with these free coupons You're gonna get subscribed for privacy patrol for $29.99 a month. Speaker 2: Oh, that's shady as hell. Speaker 1: These people would never cancel it. Speaker 2: Really? Speaker 1: They would target like people that are older and stuff like that. And I got to him and I said, Hey, I'm quitting. Like what you're doing here is, is wrong and disgusting. Like I, I can't do this. Speaker 2: Yeah. Speaker 1: Um, and then I got another job selling term life insurance to businesses, cold calling for term life and disability. And it's like, that's brutal. Speaker 2: Absolutely brutal. Speaker 1: Eventually, I, you know, I worked at a distribution company that would sell to Amazon guys and I was like, all right, wow, this is easier. And I'm like, right, why don't I just sell on Amazon myself? And I made that jump. And then when it comes to calling these distributors and brands, it was a walk in the park because I was asked, I was saying, hey, I want to give you money, you know, for a donation. Speaker 2: Exactly. And that's what I think a lot of people don't truly grasp is like they're very intimidated and they're afraid to make these calls to suppliers. When in reality, they're calling as the buyer. How many businesses can you start or how many professions can you be in where you're cold calling, but you're trying to buy? It's like, hey, hello, sir. I know you don't know me, but I'd love to cut you a check for 25 grand today. That's basically what we're saying to people. The fact that newer sellers are afraid to get on the phone and have those conversations is baffling to me. It's easy for us to say because we've done it so many times and we've done it for so long. But really, once you have a general pitch down, which you and I have given a million of those, whether it's on Instagram stories or YouTube or wherever, it's not hard to put together a quick pitch. It's literally just like saying the words to another person. Like it's truly like shockingly simple. And to kind of cap off our earlier conversation, right, you're talking about like making the calls and treating it seriously. It's like, it's literally running a business. Like that's what you're defining. So like for somehow for the last, I guess the SBA program has been a thing since the year 2000. So for the last 25 years, A lot of people have gotten away with Amazon, with it being just more of like, you know, something they do on the side. It took about 25 years, but now you've got to actually treat it like a business or it's not going to work, which like, shocker, but that's how every other industry in the world works. It just took a while to get to us, I guess. Speaker 1: So it's just it's funny nowadays. I did like a video and I just did a video on TikTok talking about like, you know, people call these brands, they have $500, you want $6, I'll give you a dollar, I'll take a pallet, I'm gonna bank the price and I'm gonna kill the brick and mortar. That is like what they're hearing on the other line, some of these distributors and that's why they're getting denied like no assets on Sunset. Speaker 2: Well, and that's why it's so easy to stand out from the pack too, because like you said, when you call a distributor and you say, hey, I'm an Amazon seller, they're thinking everything you just said. They're like, all right, this guy's going to buy 10 units. He's going to waste my time. He's going to tank the price. Then the brand's going to get pissed at me. And then I've got to go deal with them. Then I got to deal with my boss. That's everything that's running through his head when in reality it's like, well, no, I mean, yeah, I sell on Amazon, but that just so happens to be one of my sales channels. I've actually been doing this for almost eight years now. And I actually took a quick look at your website. I see you guys carry this brand and that brand. And I've got a couple of specific products here. And the quantities, and if I can just maybe shoot this over to someone there in sales, if pricing makes sense, we can get an order in today. Who should I talk to? Right? Like that's literally the line. And you like write that down word for word and just say that a hundred times and you're going to make money. Like it's that simple pretty much. Speaker 1: People get so flustered. Well, I used to be a sales rep at a company similar to like a massive grocery distributor. Unknown Speaker: And we would get calls. Speaker 1: And within 15 seconds, I would know if this is your first call about and you're an Amazon, they would even start off. Hey, I just signed up for Amazon. I'm looking to open up an account. Speaker 2: Oh my God. Speaker 1: I'm buying products and like my salesman, I'd be entertaining because I was new there. And my sales manager looks at me and he's like, you're working on a commission. You're wasting your time. Speaker 2: Yeah. Cause they know they're like, this guy is going to be gone next week if he makes it that far, unfortunately. Speaker 1: And then I wouldn't talk about to my sales manager. I got a huge client. He's going to be spending, you know, a hundred grand a month with me. Like I'm going to be getting so much commission. And then my sales manager would be like, yeah, all right. We get that all day long. Speaker 2: Meanwhile, it's a guy who just opened his Amazon seller account three days ago. Speaker 1: And he wants 50% off the invoice. Speaker 2: Right. Speaker 1: You know, like it's, it's funny to be on the other end of it, of the, of the, the, you know, the sales rep side, because you really related to my Amazon business because now I know really what reps are looking for. And because I was in that position for two years. Speaker 2: Well, let's dive into that because very few people have the vision of being on the other side, right? So you yourself, you said you were a sales rep for a large grocery distributor. Is that right? Speaker 1: Yes, yes. Speaker 2: So then what is it that you look for on your end when you were a sales rep? What is it that these people call you up and say, yeah, maybe they're an Amazon seller, but you're like, okay, this one's legit. Like what are those green flags? Speaker 1: Yeah. So a couple of things, just to give you an idea, we would get hundreds of applications. Yeah. Speaker 2: That's what I want to know. I actually want to know like a lot of details here. Speaker 1: Because we would say, all right, you know, the boss would be like, all right, check the leads list to see what's coming in. Just hundreds of little comments say, oh, an Amazon seller, ready to get going. We're just trying to like filter them out to anyone that had any sort of experience. Speaker 2: Yeah. Speaker 1: We were, our job was to call some of these people, but we never called them. We were too busy dealing with our main clients that were spending a hundred, 200 grand. Speaker 2: Right. Speaker 1: We're not, if anyone's putting in an application to distributor, don't expect to call. You're going to have to call them. The only time someone actually opened up an account with us, if they called us and they said they put in an application and they cross-referenced it with what email they signed up with, that allowed us to kind of review and have that conversation with them. Or the one thing that would pop in my eye is we had someone knocked on the door and said, hey, I'm looking to buy. Speaker 2: That's just, I love that. Go deeper into that because I've been screaming that from the rooftops for people to do that. Speaker 1: Yeah, I was sitting on the sales rep and it's funny because when When people would knock on the door, all the sales would be like, all right, you're up. Speaker 2: It's like, who's gonna go deal with this guy? Speaker 1: Usually it's this guy coming straight from the flea market looking to try to flip a couple things. So this one person that I saw on the camera, I said, all right, I'm gonna give this a go. So I met with him. He's like, oh, he put an application, but he never heard from anyone or this and that. I said, all right, what are you doing this and that? He's like, we're actually exporting to overseas, to Korea actually. And just started having a conversation with them, understood that he is aware apps. He's been in business for a while. And for me, it's like, oh, I got a guy who's going to work with me. Speaker 2: Right. Like that's a lead. Speaker 1: And I'm like, that's elite. And then he ends up, we were doing more than grocery, but I was selling him around 200 grand a month worth of Dyson vacuums that he was exporting. Speaker 2: Wow. Speaker 1: To create for that market. They had like a similar Amazon marketplace in there. So that became one of my biggest clients. And my focus was on him. It wasn't on the guy coming in for 500 bucks to spend. This is another thing that a lot of people don't understand. We would have weekly meetings of inventory that we needed to move. If we were able to move that inventory, we got what was called a spiff, which was a little bonus on our check. So what I talk about in my community is saying, hey guys, talk to your reps about the stuff that they're struggling to move. The stuff that might be the expiration dates within nine months, maybe you can move it within 30 days. Talk about those conversations with your rep and saying, you know, do you guys have an inventory you're trying to move? Because I know from personal experience that sales reps going to get one pat on the back from his boss. To a possible little bonus or a little, you know, here you go. Thanks for moving that stuff. Speaker 2: Right. Speaker 1: And he's going to feel better about showing up in the office and helping you out because you're helping him out. So that that's a big thing as well. Asking him, you know, what can I help you move? And even my reps will reach out and say, hey, I need to move this stuff. What price do you need? And being able to say like, all right, I'll do this for you and just get me on the next one. I've done that so many times. Speaker 2: Yes, it works. Speaker 1: So many times. Speaker 2: Dude, so, so much game right there. So guys, if you're, I mean, we're 28 minutes in, go rewind the last four or five minutes because there's so much that you can learn from that conversation and from your insights being on the other side. So there's a few main points that I picked out. So first and foremost, As we know, submitting an application or a contact us form online You're better off just not reaching out at all in a lot of cases. You really are because not only are they not going to respond to you, but a lot of times, especially if you mention Amazon, they're going to see that and automatically discredit you, right? So sounds like the best way, as we know, is to just show up in person because if you show up in person, they can't ignore you. There's no sales rep or there's no company that's going to shoo you away. It's like, well, hey, I'm a customer. Do you even want to talk? There's no company that's going to do that. Everybody, really regardless of where you live, unless you live in the smallest town in the country, there's going to be a couple of distributors if you live in a big city, lots of distributors in a warehouse district somewhere in your city. Just drive around that warehouse district, knock on doors. There's nothing wrong with that. Even if you look stupid, nobody's going to be rude to you in person because you're in person, you're face to face. That's the first takeaway that I got from that. And then the second main one is your point was a great point about asking your rep and say, hey, what do you need help moving? What can I help you get off the shelves? And I think doing that is most effective at the end of a quarter and the second most effective at the end of a month, right? So right now it's January 23rd. Really within the next three, four or five days, I'm gonna start calling up some of my sales reps and say, hey, what do you guys need to move? What do you guys need help with? And just like you said, a lot of times, if you can help them, they're gonna get a bonus. They're gonna get kudos from their boss and next time you need a price break or you need to get prioritized in the shipping queue or something like that, they're gonna hook you up and they don't forget that, right? So that's, I mean, two very, very good tactical points there. I love that. Speaker 1: Yeah, yeah. And it's just, it was a fun, I loved working there even though I was getting paid 15 bucks an hour and I was like, why? It was crazy how much, even with all the... I never hit commission even though I was doing 300K in sales a month. Think about that. You're working as a sales rep, you're doing 300K a month and you're not getting commission. Speaker 2: So what did the payment... Well, two questions. What did the payment structure look like? And then second question, are you buying from that distributor currently? Speaker 1: Oh, that's a great question. Speaker 2: I'm like, I was really curious. That was one of the first things I wanted to ask, but I don't want to cut you off. I just, I'm sure you probably are. I would be if you can. Speaker 1: So, um, that payment structure was weird. It was like, all right, first you have to, whatever we're paying, maybe you have to break that. And then whatever profit you make, you get 10% of that. Speaker 2: Of the gross profit? 10% of gross profit? Speaker 1: Yes. Speaker 2: Got it. Okay. Speaker 1: Problem was, is that, they, you know, they would kind of check, Oh, we, we pay a little more for that than we actually did. Or this can be bamboozled on the right. Speaker 2: It's like just at least what I would do is just like give you a draw, like, you know, like a thousand, $1,500, $2,000 a month draw, and then pay, you know, pay commission on top of that. I mean, I think that'd be better. I don't know. Speaker 1: It was funny. The day I walked out was, I think I was 20, I'm 21 years old and I said to my boss, I said, you know, I can't do this anymore. Like I'm working, like I'm really giving it my all. I can't make any commission. I've been here for like a year and a half. Like I'm just, I told him, I'm just gonna, you know, I'm gonna do this on my own. And I remember him, I remember me leaving and I said, and he goes, what if I paid you $100,000 a year? And I said, sorry, I'm just, I'm going to try to get this on my own. Speaker 2: So how much more for context, how much more was that a hundred K than what you're making at the time? Speaker 1: I was making $15 an hour. Speaker 2: So I, I at one point was making $15 an hour and I think that came out to like 32 a year, I think 32 K a year or something like that if you're working 40 hours a week. So he basically offered to like what, three X your salary and you just said no. Speaker 1: And then after that, he said, you're never going to make it in this business. Speaker 2: Damn. So then that begs the question, do you do business with him? Do you buy from him? Speaker 1: So I'm doing my Amazon thing. I'm in my mother's basement. I'm furious. I'm like, I'm going to make this work. And I had a great relationship with my sales manager. It wasn't the books. And I messaged him and said, hey, what's going on? How you been? And he's like, oh, everything's good over here. And I told him, I'm buying, I'm buying from distributors. And he's like, why don't you start buying from us? And next thing you know, We start by from them showing up to the warehouse. I know all the warehouse worker guys. Speaker 2: The boss is probably furious. Speaker 1: He was furious. Rolling his eyes. Like I would try to avoid him. I would go in on Fridays cause I knew he would take off the boss. But like, you know, just people, guys like that, they just don't want to see you succeed. They like to keep people in that job. But I had a great relationship with, um, I'm with my sales manager and next thing you know, he starts offering me stuff that's coming in in a few weeks or a few months. Speaker 2: Then you really get the hookup because you do have a relationship there. Speaker 1: Geez, I was at his, his son's freaking, um, like what, like christening thing or whatever. So like I became really good with him and then me and him, we just really started ramping it up. Um, and we just kind of took off from there and just, uh, they were my main, main supplier for four or five years. Speaker 2: That's awesome. Wait, so do you not work with them anymore? Speaker 1: I don't because they, I'll just be straight up with them. They wore heavy into like closeouts. Speaker 2: Oh, okay. Got it. So they're not, they're really not, I guess, probably buying direct from a lot of the brands that they have. Speaker 1: They did, but Amazon didn't really like them. I had a current supply chain from them, but Amazon does not like their supply chain. Speaker 2: Interesting. Why is that though? Would they give you invoices from the brand if you needed them? Speaker 1: They they weren't getting it from the brand. Speaker 2: Okay, then that makes sense. Okay. Speaker 1: Yeah, fair enough It was very like it was the stuff was good. The stuff was excellent, you know up there, but Amazon did not like it. So like We probably haven't been buying them for like two and a half, three years because we're concerned about any issues. Speaker 2: I feel like really like two to two and a half years ago is when the whole like supply chain crackdown really started. Like, because I was, I want to say, yeah, it was probably about a good two years ago because that really two years ago is right when I started getting active on social media. And I remember that March, so really like I guess two months after I started getting active on social media, we go to ASD. It was really big that year, a lot of people there. But then we started to realize it's like, wait, a lot of the suppliers here, their supply chain is sometimes it's suspect, sometimes it's fine. But it's like you never really knew what you were getting. And right around that time is when Amazon started saying, you know, just getting a little more stricter with their requirements and the documentation they were asking for. And I remember we went back, I guess, one or two more times. But after the last time, I'm like, you know what, we've got to like, we have to really be solid with our supply chain, right? It can't be, it's not worth risking the account over at this point. So I think a lot of people are, at least a lot of smart sellers are making a similar move. It's like, it's not worth, We're continuing to make profit from a supplier that might get you shut down at some point. Speaker 1: And I have buddies that still buy from them and stuff like that. And they said, you know, oh, my account's falling, this and that, but I'm just, I have too large of an operation. Speaker 2: I'm not, yeah, I'm not willing, I like to sleep at night, right? Like I just, I'm not willing to risk it. There was a point too, and I'm sure you've had gone through phases like this where like, You know, you're trying to liquidate a product that maybe the supply chain is not up to par, but you're just getting it sold and you're not gonna restock it. You just wanna move on. It's like every time I check my email, I swear to God, I was anxious. It's a horrible feeling. It's like I literally couldn't open my email without legitimately feeling anxiety. And I'm like, when that is how things are, that's when it's got to change, right? I remember being like, all right, we're selling through this product. We're never buying anything like this ever again. I have to do this legit. Speaker 1: Exactly. So it was a good, if that's like that period between 2017, it was like, why, you know, we bought it. We were buying from V-Stock. Speaker 2: Yeah. You could like back then. Yeah. You could get, you could do just about anything right at one point. Speaker 1: V-Stock, liquidation.com and just buying from random places and flipping it. Speaker 2: Yeah. Speaker 1: It just didn't matter and now they've really tightened the ship. But yeah, we used to buy a lot for beef stock. They had like a lot of health and beauty, like nail polish removers and stuff like that. Like, yeah, bring them in. Speaker 2: Yeah, I mean, that was back when you could go to a show like ASD and there were so many deals to be found because again, supply chain didn't matter. Like you could literally walk through and drop half a mil in a day, like easy, easy. But nowadays, the deals are still there, but I'm not buying them, right? Some people are, but I think it's just such a big risk at this point. Speaker 1: Yeah. It's moving more towards very, very large distributor that's authorized for its brands. I've been lucky that early on, we've established some good brand relationships where we're one of five people that sell this product. I have conversations about potentially moving exclusive because we've been working with them for four or five years. It's getting harder to land those brand accounts, I'm not going to lie, but because five years ago people weren't really calling brands like they are today. It was a different conversation. So we've kind of embedded our feet in a handful of brands that we have great relationships with that are some even local to us that we're able to even visit and I have a call next week with one in regards to We're moving the five guys off the listing and be their sole seller because I'm the local guy, you know, like again, that in person, you know, so That all came from down below, but there's still tons of opportunity. I've called a brand maybe a year ago and I got a nasty, nasty person on the phone basically saying, oh, don't worry. This is just how it is. Speaker 2: Yeah, yeah, yeah, of course. Speaker 1: But then I ran into them at a trade show and it was a completely different conversation. Oh, hey, how are you? Speaker 2: Of course. Again, back to the in-person. For somebody to be rude to you in person, especially when you're approaching them as a potential customer, that brand is not going to be around very long anyways, if that's how the people are treating you. You know what I mean? Speaking of trade shows, myself and my community, we're going to the Great American Outdoor Show in Pennsylvania on February 1st, I think. I guess that's a week from this coming Saturday of when we're recording this. I'm pumped to get to this show. It's the first one I've been to in probably the last, I'd say 10, 9 or 10 months. And yeah, just walking around, talking to people, getting face to face. And also just showing people how it's done too. I mean, Elise, I know this is the case for me. I'm sure it's the case for you. It's like when you're teaching it, especially if you're teaching in person, it just solidifies your knowledge so much more. It's like I can confidently have a conversation with a brand at a trade show, not only because I've done it so many times, but because I've taught people how to do it. And now they've done it successfully, which has reinforced my knowledge. And then it's kind of like a repeating cycle and I know you see the same thing in your business. Speaker 1: It makes the world of a difference. Some of our biggest accounts we've met at trade shows and not just brands but also distributors. You talk about Expo West, Expo East, Fancy Food Show. There's a lot of opportunity there but You know, people just don't want to make that next step or are scared. First, trust me, I was nervous going to my first trade show whenever that was. It's nerve-wracking. You know, you don't know how to approach a situation. I was never, I never joined any community or got mentored by anyone, so I kind of always just did things, figuring it out. But showing up to that first trade show was like, you know, you're nervous about how that, and then like, no, Amazon sellers, buddy. Speaker 2: Yeah. Speaker 1: It occurred. Speaker 2: And then you're like, oh man. Speaker 1: And he's like, all right, wow, I'm just going to go cry in the bathroom, okay? Speaker 2: I mean, my first show was the same way. And I remember thinking this to myself at the time, and this is the advice I give to people too, is like your first trade show, really the goal of the first trade show is to learn and get the jitters out. If you leave your first trade show with some good connections and with some profitable suppliers, like that's a bonus. And really my first trade show is telling myself, I'm like, all right, I want to just get here, walk around, talk to people, kind of get the butterflies out of my system. And I remember the first day of that first trade show was tough. I'm like nervous, timid, didn't want to talk to people. Even though like you, I've had tens of, like no exaggeration, tens of thousands of cold calls made. But in person is different, right? And then the second show you go to, it's a little easier because you're like, okay, I recognize the lay of the land. I've had these conversations before. Third one, easy. You're walking around talking to everybody and it's just like next thing you know, it's like, oh, it's six hours have gone by and I've been You know, talking to like a million different people and it's just a lot of fun. There's a lot of energy at trade shows. Speaker 1: Well, it also helps shape those nerves if you go to the same trade show the next year. Speaker 2: Yes. Speaker 1: You're already working with some of those guys because then you can cross reference. All right, I'm working with them over there. Speaker 2: Yes, so true. Speaker 1: What's the difference here? Is it a money thing? A lot of these people, you know, their whole personality changes where they say, Oh, he looks at a brick of order, but if you drop half a million dollars in their face, they don't, they don't even care. Speaker 2: Very different story. Yeah. Speaker 1: Like alright, sell it wherever. Speaker 2: Right. And the other thing too is, like you said, if you go to the same show multiple times, it's like you start to see the same people, right? And if you go to other shows in that same industry, chances are you're going to see those same people at those other shows. And, There's countless times where, you know, you do this enough over the years. It's like, oh, that's, you know, Jeremy, I've talked to him at three different shows. You know, we're still trying to get in with them, but he definitely recognizes me and I'm confident that when they do open up a new seller spot. It's probably going to be me because I've talked to him in person four times now, right? And I've followed up with him on the phone and I've sent him gifts and I've done all the things that you should do in like a follow up situation. Speaker 1: And another thing is potentially having, you know, reps that maybe you work with at the trade show that you're currently working with can introduce you to other people that they have that industry connection with. Speaker 2: Exactly. Speaker 1: You know, it's not just, Cold hard like Amazon. Oh, this is my buddy Alex, you know, he's been buying from me for X amount of years. I wanted to introduce the two of you. That conversation is going to be completely different than someone just woken up cold. Speaker 2: It's, yeah, it's not even the same conversation, like you said. And the good thing about these brand owners is when you take the BrandDirect route and you start selling some of these brands, these brand owners know each other. So, I mean, I know I've been referred to other brands from brands that I've worked with. I know plenty of people who, it's like they start working with two or three brands in a given, like Jonah is a great example, right? Jonah Hodges over on Instagram, his whole business model is BrandDirect. He's very specific in like the bike, kind of like outdoor, but like almost more specific like biking and cycling niche. And I know for a fact he's picked up brands on referral from brands that he's already working with. Especially when you get that niche with it, it's like, oh, Jonah's the guy who helps bike brands or Jonah's the guy who helps outdoor brands, which is a little more potent than saying, oh, Jonah's the guy who helps people on Amazon, right? It's like, oh, he knows my type of brand. He knows my industry. Therefore, he's probably the one who's best suited to help me grow specifically. So yeah, that's a great example of referrals. Speaker 1: And when you're in that niche, then you know all the details and all the wording. And for example, bikes, you know, the pedal stuff, you know, like, and those guys like talking about that stuff. Speaker 2: Exactly. Yeah. You just like ask a couple of questions, shut up and then let them go. Speaker 1: And the next thing you know, you're in, you know, he's talking about the gear is changing on the new oil they've just came out with and like, they just love talking about how great it is. And you say, Oh, well, have you done, you know, have you incorporated this as well? And just feeding the fire, you know, excitement that they have, , you know, just that it helps. Speaker 2: It does. Yeah. And like we said, I mean, if you can do this in person, then all the better. Speaker 1: Yeah. Speaker 2: Now, where are you headed into 2025 and beyond? We're at the end of January 2025. What does this year look like for you, both with business and just in general? Speaker 1: So I got a couple of things going on. Well, first, just trying to continue to grow this Amazon business, maybe focusing on more brand direct, but positioning from leveraging distributors to get more brands. It's always been a thing for me. Delegation is a big thing for me this year. I've set up my VAs in regards to restocking, creating purchase orders, everything like that. I want this to be really fully operational without me. Our community's doing great. We love everyone that's in our community and just helping everyone out like that. And then my wife and I, we decided to start a new project of a private label this year. Speaker 2: I saw that. Yeah, I saw that on Instagram. That's awesome. Speaker 1: I'm super hyped for that because once she comes from a pharmaceutical biology background, I have, you know, I can put it, you know, I can read an Amazon payout. So there that's handy. Speaker 2: Yeah. Speaker 1: I have a lot of networks and, you know, family and stuff like that that have been in those type of industries in regards to manufacturing and stuff like that. So you then network within my family. We have a lot of history with, you know, my dad and experience he has. So we're going to try to pull everything we have together and just create something. But again, it's a risk. At the end of the day, it's a risk. You know, we could dump in 25, 35, 40 grand and break even or lose money or lose it all. But that's, that's being an entrepreneur, just taking the gamble and shooting your shot. And if it doesn't work, you won't, you know, and getting around the like minded people. Speaker 2: I mean, you're right. There's risk in every business. And that's one of the reasons that I like wholesale to private label is kind of like you said, it's like, well, hey, we could invest 20, 25, 30 grand and maybe not see a return, maybe lose it all. Whereas with wholesale, it's like we're buying stuff that we know that other people are already selling or that they're already searching for and they're already buying. But on the other end, private label, while being higher risk, is very high reward because if that product launch goes well and if it takes off and if you start building that brand, then that's an asset that's worth money, right? You can actually sell that and exit that. And I mean, I've argued before you can exit a wholesale business 100%. I know people who have, but it's just a little bit of a different beast and requires Just a separate, just a little bit of a different skill set, right? I think private label is a great add-on to your existing wholesale brand and I think you guys are gonna crush it. I'm looking forward to seeing the progress. Speaker 1: Yeah, no, we're excited for that. I've just been doing this for so long, you know, seven, eight years. I want to just have something, a different challenge, you know? Speaker 2: Yeah, I agree. Speaker 1: Something that, you know, was like, all right, how are we gonna figure this out? Because, you know, at this point, we only have so much money to buy inventory. We're not taking any loans with the interest rates where they're at and all of this stuff. We're just going to continue leveraging our credit cards and just continue to go at this speed and try something new. This is the year I want to just try something new. Speaker 2: I love it. I think it's a good strategy and I'm sure it will play out well. So, for people who want to follow you on that journey as well as learn more from you when it comes to wholesale, where can they connect with you and find out more about you? Speaker 1: Yeah, Instagram is FBABoys. I'm also pretty active on TikTok too with FBABoys. So, TikTok, Instagram, those are the two main platforms. I'm happy to answer any questions you guys got. Speaker 2: Awesome. Well, Alex, I appreciate the time and for the audience here, guys, if you enjoyed this episode, leave us a five-star rating on Spotify or on iTunes. And if you're watching over on YouTube, like the video and subscribe because we come out with one of these every single Wednesday we have for the last 86 or 87 weeks. Haven't missed a week, not planning to anytime soon. Alex, I appreciate the time and we'll be back next week. Speaker 1: Corey, awesome. Appreciate it. Yeah.