#093 - Building Trustworthy Business Partnerships with Eric Castellano I The Corey Ganim Show

#093 - Building Trustworthy Business Partnerships with Eric Castellano I The Corey Ganim Show Speaker 2: All right, welcome to the first episode actually of The Corey Ganim Show. So we've got a good guest with us this week. We've got Eric Castellano from Amazon Lit. He has been a guest on the show before back, I want to say it was episode like 52, 53. So this was, you know, going on a year ago. One of the better performing episodes we've had by far because Eric and his partner Sebastian are very well known in the Amazon space. Big time wholesale sellers. We're talking, you know, 60, 70 million a year, I think are the type of numbers they're putting up. So wealth of knowledge. Wanted to have him back to not only talk all things Amazon Wholesale. Of course, we're going to get into the deep end. We're gonna talk a little bit on the business and on the details and on the changes we're seeing in Amazon. But we're also gonna learn about Eric, the business person, what he's investing in, where his plans are for the next five years and beyond for his business, and really just get into him as the entrepreneur and as the business person as well. So with that intro, Eric, thank you so much for coming back, man. I'm looking forward to chatting with you here. Speaker 1: Yeah, 100%. I'm always grateful to have a conversation. But it was, yeah, at least a year ago that we last chatted, man. Speaker 2: It was. Yeah, for sure. And guys, again, we'll put that episode in the show notes. I want to say it was episode 51 or 52, but definitely go back and listen to that one because that was very tactical. We went deep on some specific Amazon tools and tricks. So yeah, that was a great episode. Now, Eric, for those that haven't yet listened to that episode, kind of catch us up to speed on your evolution in this business as a wholesale seller over the last, I think you've been at it almost, what, 10 years? Is that right? Speaker 1: Yeah, 13 years. We started in 2000. Yeah, we're coming up on 13 years this July, July 7th. Or no, July 11th, Slurpee Day will be 13 years. Speaker 2: Nice. Speaker 1: It's been a hell of a journey, a hell of a journey to say the least. Speaker 2: Well, catch us up to speed on that 13 year journey, right? And kind of how you got from where you started to where you guys are today. Speaker 1: Yeah, a lot of, I think the main thing that got us to from where we were in a basement, like a lot of new people start at their homes. And to where we are today in a 50,000 square foot warehouse doing 60, 65 million a year in sales, like you said, with like 30 to 40 employees, a small overseas team. I think the biggest thing that allowed us to do that basement to, you know, five different warehouses to where we are now is our ability to make mistakes and continue to pivot through those mistakes instead of letting those mistakes, you know, ruin the business. It's very easy as we know to make huge mishaps in your Amazon company that could potentially lose you thousands or even tens of thousands of dollars, but it's all about mitigating that risk and navigating around it. That's allowed us to thrive and get to where we are today. Speaker 2: Well, and that's just really good advice, especially for anybody that's getting into the space, right? As we know, in 2025, Amazon is getting harder than ever to navigate as a platform. And there are a lot of mistakes that people make unknowingly, right? They get their account suspended or get them in trouble. But you mentioned some of those mistakes as being reasons for kind of where you are today, pivoting from and learning from those mistakes. What would you say is the biggest mistake that stands out in your mind that you made over that entire 13 year journey that really stuck out as a learning lesson? Speaker 1: Yeah, so there's a lot of them, but the one I'd like to reference now was a more recent one, maybe two years ago. It was a, when Amazon first started allowing placement toggles for charging placement fees to get them sent to certain areas and regions. And we were having issues scheduling appointments. So we turned on that placement option, which at the time it was charging us about, I want to say about 15 to 20 cents per unit being sent to Amazon as an average. And our average truckload has about 12,000 units. So you're talking 12,000 times, let's just call it 0.2, $2,400 a shipment, right? So we turn that setting on for about a week to get our shipments relocated to different fulfillment centers. And we forgot to turn it off for six months. Speaker 2: Oh no. How much did that cost? Like how much did it end up costing you? Speaker 1: $80,000. Oh my God. Speaker 2: Yeah. That's, that's a big hit to take, right? Even for guys your size. What's the learning lesson there? I'm sure you updated the SOP. What action did you guys take as a result of that? Speaker 1: Yeah, 100%. So first is figuring out where the issue took place. And from our standpoint, it was management. It was Sebastian who forgot to turn it off, right? So now anytime any important setting is changed in Seller Central that needs to possibly be turned off down the road, A calendar reminder is created and all management is shared on that calendar reminder. So it's like, hey, this needs to be changed on X date and five people know about it so it doesn't slip through the cracks. Speaker 2: Yeah, I think having the five people on the calendar invite is a good fail safe, right? Because even if, you know, two of them are on vacation that week, like other people are going to see it. I think that's a good way to mitigate things like that from happening in the future. So that's a huge L man. You know, a lot of people would be, you know, not necessarily afraid to admit that, but they just wouldn't want to admit that. Right. Because I feel like so much of what we see on Instagram, on YouTube, everywhere else is people sharing their wins, which is great. You know, we want to celebrate everybody's wins, but at the same time, I think there's a lot to learn from the losses. But now, you know, speaking of wins, are there any wins that come to mind for you guys recently? Whether it's In the Amazon business, or you know, it could even be. Well, I know you have one in your personal life, but what else you have going on that you consider a win? Speaker 1: Yeah, so wins on the Amazon side. We had a product in the past 18 months that just crushed. I've been talking a lot about it on social media because there's just no opportunity to sell it anymore. It was Celtic Sea Salt. I mean, that product in a 12-month period has made us over $500,000 in profit. So, I mean, that's a win in itself. Speaker 2: Yeah. And what's the price point on that, right? I can't imagine it's a very expensive product, probably just incredibly high volume. Speaker 1: Yeah. It sells on Amazon for $14.99 and we were sourcing for a third of that price. So there was a healthy $3 to $4 margin on every single sale. But to your point, it was selling 30,000 units a month. Speaker 2: Right. Yeah. Like ridiculous volume. Speaker 1: Yeah. Speaker 2: Yes, nice man. That's huge. Speaker 1: Yeah, we crushed it with that. But I just got reminded of probably our biggest loss ever and it was an investment in an inventory management system. It cost us about 1.2 million dollars and after two years of integrating into our business, we completely nixed the entire project. Speaker 2: So what happened there because I have I've heard of similar stories where You know, companies will pay huge sums of money for these custom software implementations. And then they get three months in and they're like, wait, a Google sheet and like a $50 a month tool is actually more effective. Like, is that kind of what happened here? Speaker 1: Yeah. So we hired the same company that like designed LAX baggage claim. Right. And they also take, yeah. And they also take care of some of these like big car manufacturers, the way they manufacture their products and their assembly lines are set up. So, that investment in itself was close to a million dollars. And in addition, we needed to hire a data scientist to sort through all of the data and we were paying him about $350,000 a year. And we kept both the warehouse management company and that data scientist on our payroll and in our infrastructure for almost 18 months. And then after 18 months, we just realized this is not working the way we expected it to. And we ended up building it in-house for a fraction of the cost. Speaker 2: And it's funny, so I remember you, I remember on your Instagram stories, I don't know when, I don't remember the specific time period that this was, but I remember seeing some of your stories where you were like saying like, hey, this is our in-house data scientist. And I remember thinking to myself, I'm like, that guy cannot be cheap, right? Like, so obviously huge investment. Now, what exactly was the goal in hiring him, right? Because that's something you don't hear a lot of Amazon sellers say is like, hey, I've got a data scientist on staff. So what were you using him to do? Like what data were you gathering there? Speaker 1: Yeah, so his main goal was to build us an automated reordering system that would seamlessly integrate with the inventory management side that the company we hired was implementing. So now we have a seamless inventory management system and a seamless order creation process and they will be molded together. But after we reviewed his performance, we started looking because he had a business credit card. We started looking into some of his purchases. The guy was buying 7 to 10 books a week on Amazon for months at a time. Speaker 2: For what? For himself? Speaker 1: Yeah, well, some of them were related to the Amazon business and sorting through data and coding, but others were just like general books. And we're like, listen, if this guy's buying, you know, seven to 10 books a week, there's no way he's working on our business the way we want him to. Speaker 2: Right. Especially not for 350 grand a year. I'd expect that guy to be in there busting his ass. Like that is crazy. That's wild. So what data were you using to try to build that reorder system, right? And so you said you pretty much scrapped him, you scrapped the design firm, ended up building that yourself. What did the process of building that yourself look like? Did you hire a dev team? How does that work? Speaker 1: Yeah, so we have some in-house devs and for anybody looking forward to higher development, the best recommendation for low cost development is get someone straight out of college, right? First position, they'll stay with you for 18 months to two years. You can leverage all their inexperience and kind of mold them into who you want them to be. So we hired a few freshly graduated college students and two of them are still with us four years later, which is amazing. Speaker 2: And that's almost unheard of. Speaker 1: What was that? Speaker 2: I feel like that's unheard of. Especially development talent staying that long. I mean, clearly it's a good workplace and clearly it's a good fit there. Usually the turnover I feel like is higher than that. Speaker 1: Yeah, well, we pay them well, we incentivize them, we take care of them. They're like family to us and they're phenomenal people. And then we have a small overseas development team. But this development team is all headed by Sebastian because you can hire the best developers in the world, but they don't understand what data needs to be pulled and where it needs to be pulled from. It doesn't matter. Speaker 2: So you guys end up building this in-house with the development team. So is what we're talking about, is that source correct that I've heard you mentioned before? That's kind of what resulted from these efforts? Speaker 1: That has become source correct, correct. Speaker 2: Okay. And I've heard about source correct. Obviously, I haven't gotten the chance to use it myself, but from what I understand, it's incredibly powerful. So now that it's a finished product and I know you guys are using it internally, I think I remember at one point you said maybe you have plans to sell it in the future, but like how does it work, right? From A to Z, what does SourceCorrect do for a wholesale seller? Speaker 1: Yeah, so first step in the process, this is the most advanced UPC scraper known to man. So upload catalogs, sort through profitable ASINs based on your requirements. But the biggest difference between ours and say the other UPC scrapers in this space is it builds a database for you. So if you don't have an ASIN connection to a UPC, you make that ASIN connection to the UPC and any future catalogs you upload, that information will be pulled. It also cross-references other wholesale catalogs within the UPC scraper to negotiate better pricing. So if you have a lower price from supplier B, but you added it on the order from supplier A, you'll get a red pop-up. Hey, this product is cheaper from this supplier, right? Additionally, it allows multiple buyers to work on the same purchase order at the same time and see what products were reviewed while working on those purchase orders. So nobody's doing double work. With the click of a button, it exports the file, sends it to the distributor. And then all of the listings are created through Seller Central. So it replaces like an inventory lab or a go-to lister or whatever software you're using. And then you can print all the FN SKUs, put in the shipment and complete everything all in one software. Speaker 2: That's huge. So the big takeaway for me, it's like one of the things that we do, still manually, that obviously this would automate. Is when we find a good lead from say supplier A, right now my team is going through an, all right, what's the price on supplier B? What's the price on supplier C? Even though we've likely sourced that product or that lead from those suppliers before. So it's just creating repetitive work. We're having to go back every single time. So this would, I mean, that would save our team a ton of time just in that feature in and of itself. Does it automatically create listings? Like you submit the PO and then the listings are essentially created instantly? Is that how it works? Speaker 1: Yeah. So there's a few stages of the PO, right? There's the initial stage, which is like the order stage. Then there's the hazmat stage. Which puts all test queues through Amazon to make sure there's no restrictions for transparency. Speaker 2: That's huge too because we do that manually right now like that. That's a huge time saver. Yeah, continue, sorry. Speaker 1: And then the next stage is pricing, right? Cause you know how you negotiate pricing with suppliers. So you get an invoice back, you update all the pricing with the click of a button. If all the pricing matches, it updates automatically or you could go one by one. And then the final stage is order completion where you put the expected ship date and it adds it to our staff meeting form. So everybody in the warehouse knows when that product's coming in, what products are on that PO. And how big it is. Speaker 2: Nice. Yeah, that's I mean, like I said, I could see that being a complete game changer for a number of the reasons listed there. Now, so is that something you guys are you ever planning to sell that standalone? Or is that going to be something you guys keep internal? Like what's the plan with it? Speaker 1: The goal would be to offer it standalone. I mean, but we've also, it's a, it's a massive overtaking in order to offer it right now. We have about 60 active users and they're all inner circle members that use it. And right now it's the only way to get access, but the goal would be eventually to launch it publicly, of course. Speaker 2: Nice. Well, and I'm sure, I'm sure that would be a, you know, pricey in terms of a monthly fee, right? As it should be because Sounds like the amount of time saved from the manual work required would be worth hundreds, if not a thousand plus per month to be completely honest. So I'm sure that'll do well whenever you guys do decide to launch it. I have a couple of questions for you, almost like a little non Amazon related. So first and foremost is what is it exactly that you're investing in? Because I have seen you on Instagram, On your stories, I feel like I've seen you screenshot the crypto wallet there. So it seems like you're investing in a few different crypto coins. Is that the main thing or are there other things you're kind of putting some profit in as well? Speaker 1: Yeah, so one thing I learned maybe, I think way too late to actually learn it, but I realized maybe four years ago that I need to take a lot more money out of my business and put it back into investments like you're talking about. Because for years I took a low salary. I mean, it was six figures, high six figure salary, but it just wasn't enough to continue to dump funds into the stock market, cryptocurrencies, investment properties. So right now, I have a rather large portfolio of cryptocurrency, my main being like the big ones, Bitcoin and Ethereum, but then I also own, you know, DOT and Chainlink and some of these smaller cryptocurrencies. And I have an investment strategy where if the market drops, I'll put a large bag, thousands, sometimes even tens of thousands of dollars into a specific project. And then I have a weekly automatic investing strategy of $300 a week, where regardless, it's going into 150 into Bitcoin, 150 into Ethereum. And I've been doing that for years. Speaker 2: I love that strategy. We're totally on the same page, especially when it comes to like the auto investments. So it's $300 a week, you said. I set this up probably two months ago, and I wish I would have done it years ago like you, but I just set this up two months ago. I think it's $20 a day into Bitcoin. And, you know, even since, you know, the last two months, like it adds up. Right. And I think the key is making it automatic, because if I had to go in there and do that myself, I'd never do it. I'm sure. Same with you. Right. We're busy. We forget. But I think if you can set a recurring investment into any asset, it's hard to go wrong if it is a legitimate asset. It's just the consistency of that investment. So I love that, man. So you said a few different crypto projects there. Are there any that are like low key that you are really bullish on that you're open to talking about? Speaker 1: Yeah, you know, my biggest holdings are definitely the big guys, you know, but then I have like my second or my third and fourth largest are probably Chainlink and DOT. And the only reason I'm heavily invested in them is because I've been buying cryptos since 2017 and I've seen the way they fluctuate. And when you start to see these patterns and it drops 50% and goes up 100% and drops 50% that goes up 100% but you're able to pull a lot of money. Out of your investments. So I have no problem like two Sundays ago the market dropped like 30% on a lot of my investments. I put like 40 grand in and then I immediately cashed out that 40 grand for 60 grand 10 days later. So it's like a quick 20kk come up because I've been tracking these projects for a long long time. Speaker 2: So I think a lot of people listening would think like, oh, well, isn't that speculation? But I think the key takeaway here is that you've been tracking these things for a long time. You're not just you didn't just like get recommended some coin and dump 40 grand into it. So I feel like when it comes to crypto, I feel like so many people, especially you see on Twitter, right? You know, what's the what's kind of the coin of the week? And then everybody goes and dumps cash into it. It goes down 20 percent and everybody's like, oh, crypto is a scam. It's like, well, no, you've just bought the first thing that you saw. You didn't do any research, but it sounds like you do quite a bit of research. Speaker 1: I do, and don't get me wrong, I've lost tens of thousands of dollars in shit projects like some of the ones you're talking about that I see on social media and there's a lot of hype. There was this one a couple weeks ago, Alpha, I put like eight grand into it. It's worth like 500 bucks right now. So I mean, I've made some mistakes, but I wouldn't even be comfortable sharing some of these low market cap like meme coins because a lot of people get burned and I don't want anybody to be like, oh, well, Eric said buy this and I lost 10 grand and now I hate Eric. Speaker 2: Right. And now Amazon lit gets sued. Speaker 1: Yeah. Yeah. But that's the crypto side. The other side is just my regular index fund investing. Which I put about $1,000 a week into. I've been doing that for probably three or four years as well. And then it's the same strategy with crypto. If the market drops, I'm buying and investing in those index funds like VOO, VGT, VO. Some of these index funds that just track the S&P 500, the largest companies in the world. Speaker 2: A hundred percent. And again, totally on the same page. I've got my, so I've got a couple of different brokerage accounts. I don't, the only one I really use is my Vanguard one. I've got like, I think my Bitcoin's in my Robinhood. And then like, that's the only other one I have, but. And through my Vanguard account, that's where just like you, I've got an automatic investment set up. I think mine might be a thousand a week too, or it's like 500 a week, something like that. But straight into those index funds, right? And I think I'm in VOO, right? V-O-O and then V-F-I-A-X, I think. It's just another S&P, it's just another S&P index fund. I think I set mine up, it was two and a half years ago, right? And if you look at like the return, I think the lifetime return is like 18 or 19%, right? And I didn't do anything. I just set up, I set up the automated transfer one time, haven't touched it. And then you're 18, you have 18% more money. Like I just, It's so clear to people like you and me, Eric, I think like why that's a good idea and why everybody should do it, but it just blows my mind how most people don't. You know, it's like it's not obvious. It's not something people do. Speaker 1: No, it's not and I wish I started. I had a conversation when I was 19 and I had a side hustle in it. When I was 19, I put together like 40 or 50 grand from this side hustle. And I had a conversation with my brother's friend and he said, Eric, you should put all of this into an index fund and just not look at it for 20 years. And I regret, like, that's one of my biggest regrets is not listening to that guy 15 years ago, because that would be like a million bucks today. Speaker 2: Oh, you'd be, yeah, I was gonna say you'd be sitting pretty. Speaker 1: Yeah, yeah. Speaker 2: And then all my other funds? Speaker 1: Oh, go ahead. Speaker 2: Well, no, you go ahead. I'm sorry, I cut you off. Speaker 1: No, it's no problem. I was going to say all my other funds. I mean, my personal bank account strategy is keep as little money in there as possible. So before I pay any bills, my investment strategy is first, right? So automatic deposits to crypto and my index funds. And then in my personal checking account, I keep $500 to $1,000. Everything else goes into a high yield savings account. And then when rent is due, I pull it from that high yield savings account and pay rent. So this way I'm always collecting a 4% interest. On any money that's just sitting around. Speaker 2: That's smart. And so that high yield savings account, what sort of rate are you getting on your money just sitting there? And is it paid every, is it paid every 30 days? Is it like quarterly? How does that work? Speaker 1: Yeah, it's paid. It's paid every 30 days. The rate I started at was 4.3. It's since dropped to 3.9. But I mean, I got hundreds of thousands of dollars. Speaker 2: It's better than nothing. Yeah. And when you've got a lot of cash in there like that adds up significantly. Speaker 1: Yeah, I mean my average interest on that a month is about $1,500. Now, you obviously have to pay tax on that interest. Speaker 2: Well, I mean again $1,500 on your money that's literally just sitting there. That's pretty good, especially on I'm sure you set aside a portion of that as an emergency fund as well, right? Like you keep a certain amount in reserves each month or not each month, but just in general money that you're like, hey, I'm never going to touch this in case, God forbid, worst case scenario happens or, you know, I need it. Speaker 1: Yeah. So I've separated into two high yield savings account. The one that is kind of like an emergency fund with lower funds, just I don't know, maybe 20, $30,000 in it is connected directly to my bank account. So if I need to transfer anything I can. But my main high yield savings is a separate company. So I really, in order to access it, I have to log into a completely different website. So I don't even look at it. Speaker 2: That's smart. I mean, because that way you're not tempted to pull it out or you're not tempted to touch it. You just sit there and let it grow. Speaker 1: Yeah. And then the last thing is property, which I don't own any yet, but my goal 2025 is to get some rental properties. Might be section eight, might just be like a triplex or a duplex or a quadplex. But I would pull those funds out of the high yield savings account to make that investment. Speaker 2: And I think that's smart, right? And that's something I'm trying to get more heavily into myself is real estate and investing in other people's syndications mainly, right? And letting them run those investments actively. Where would you be looking to buy property? Like there in Jersey or surrounding areas? Speaker 1: No, hell no. Hell no, not in New Jersey. Speaker 2: It's expensive in Jersey. Speaker 1: Yeah. Landlord friendly states in the middle of America. Speaker 2: Yeah. Fair enough. Nice. Well, so in terms of, this is more out of my curiosity, your crypto portfolio all time, are you, I assume you're up all time. What percentage are you up? Speaker 1: About 30%. Speaker 2: All time? That's, I mean, that's solid. Can't get that many other places, you know? Speaker 1: Yeah, all time it's it's great and if I didn't do all the buying and selling that I did over the years out of fear now I understand the market and it's like The only reason I'm selling is to pull a profit and cost average down. But in the beginning, like 2019-20, I would buy at $5,000, sell at $7,000, and then buy at $7,000, and then it starts to drop and sell at $4,000. And like I didn't make any money buying and selling. I made all the money holding it. Speaker 2: And I feel like that's how it usually is when it comes to, you know, not just crypto, but stocks too. You know, everybody says like, don't try and time the market, whatever. There's some crazy statistic about the funds that are actively traded. I guess what would those be mutual funds? And that it's something like 84, 86% of mutual fund managers don't even beat the market. Like you're better off just putting your money in index funds and letting someone else manage it. But yeah, I think that's a trend across crypto and stocks and it's just like park your money and wait. That's kind of my take on it. Speaker 1: Park your money and wait, man. I'm looking at the 24-hour volume in crypto worldwide right now. It's almost $100 billion was traded in the past 24 hours. Speaker 2: And what would that have been even two or three years ago? Obviously, crypto has only gained in popularity. It's only going to continue to get bigger. What was the market even just a couple of years ago compared to now? Are you able to see that? Speaker 1: Yeah, so the market cap right now is about $3.3 trillion. And like three years ago, right after COVID, when there was that crazy boom in crypto, it was almost equivalent. It was like 3.2, 3.1 trillion. But then in between, in that low period, it went to the low twos. So 30% of the market cap was completely wiped out. Speaker 2: Jeez. Yeah. It's so interesting to me. I get crypto as a concept and I understand the value in Bitcoin. And like I said, I'm buying Bitcoin. I've had people who are really smart with crypto try to explain certain aspects of it to me or explain certain projects and I'm like, I just don't get it. Sometimes I just don't get it. I don't know if it's just me, but some of the stuff I feel like is complicated and the stuff they're trying to do, it's just over my head. So I think I'm just going to stick to some of the bigger ones like Bitcoin, Ethereum. One guy I know, he's so bullish on this coin called HBAR, Hedra, I think is what it's called. Apparently they used it in Elon Musk's recent rocket. It's what was the chip powering the rocket. I don't know, something with Elon Musk. I'm like, whatever, I'll buy some. But he's super bullish on that one. Speaker 1: Yeah. And listen, there's a ton of opportunity in so many projects. But like right now, I don't know if you heard about the Argentina president. I think his name is Miele. It's like M-I-E-L-E-I. But he created a cryptocurrency for Argentina. It got a multibillion dollar market cap. And then insiders within the Argentinian government started exiting their strategy and pulled hundreds of millions of dollars out of it. And because of that, I mean, the entire crypto market tanked last week. Speaker 2: I didn't see that. I didn't see anything about that. That's crazy. So they basically, yeah, I mean, they basically just rugged the citizens of the country, it sounds like. Speaker 1: Yeah, it's crazy, man. It's crazy. Speaker 2: That is wild. Well, yeah, lots more to come on the crypto front, I'm sure. Now, so just to kind of switch gears a little bit, I know that recently you had a baby, right? Speaker 1: Yes. Speaker 2: What's their name again? Speaker 1: Antonio. Speaker 2: Antonio. Do you call him Tony? Speaker 1: I call him Tony and his middle name's Tito, which is my grandfather's name. So sometimes I call him Tito as well. Speaker 2: Tony Castellano sounds like somebody straight out of The Sopranos. I feel like that is... If that's not a, just like a New Jersey mafia name, if I've ever heard one, that's incredible. That's awesome. Unknown Speaker: Yeah. Yeah. Speaker 1: We love it, man. Speaker 2: That's so funny. Well, I mean, how are you balancing? Cause like you, you guys are doing so much stuff. Like you obviously you have the Amazon business. You've got InnerCircle, you've got eSellers.ri, you've got SourceCore, you've got so many different aspects to your business. Now you've got a newborn baby. How are you balancing it all, if at all? What is that like for you right now? Speaker 1: Yeah, so it's a challenge. And I'd like to preface this with I think that paternity leave for fathers should be mandatory for every single business in the entire world. Because my ability, I've been home, I had the baby three and a half weeks ago. I've been to the office once or twice just for a couple hours in between these three and a half weeks. So I've been home with my wife and my baby. For a full month coming up and it has been such a blessing and the amount of attention that Antonio needs to put that on one person which is usually the wife in most situations. I think it's just it's a lot. It's stressful. It's emotional. It's overwhelming. The baby is crying. It has a lot of needs and I think having both parents home like we've been able to do because Fortunately, I've been able to set myself up where I'm not forced to be at the business every day. It has been such an amazing experience, man. Speaker 2: Dude, I bet. Obviously, you've got a very supportive partner there who's, I'm sure, taking great care of the baby. For example, when we're on this call right now. I'm not a parent myself yet, but I hear it is quite the tough job. I'm sure being able to have you there in addition. is huge and that's good. Good advice on paternity leave. I feel like dads are kind of thrown to the wayside during that process, right? Like all attention goes on the mom as it should, but obviously there's a big role for the dad to play even in those early days too. Speaker 1: Yeah, and my wife Catherine, she works with me. She's my personal assistant. Like the event we're hosting at our warehouse, she's planning the entire thing. So, you know, we're juggling back and forth. Hey, she's like, I got to complete these presentations. Can you watch the baby? I'm like, I got the baby. And then I'm like, Hey, I got a call with Corey. Can you take care of the baby? I got the baby. So it's cool. Yeah. Speaker 2: So what is it like with her as your assistant, right? I could see that getting a little, it's so funny. I joke with my girlfriend. I'm like, Oh, like she was like, Oh, can you hire me? I'm like, what? You want to be my assistant? She's like, no, I don't want to be your assistant. Is there any, you know, any tension there? I'm sure there is from time to time, but like, how does she like that? Speaker 1: There, there definitely is some tension, but we, we, we manage it very well. And a lot of times, so we have this saying in our relationship, same team, right? So like, if we're about to put together an Ikea desk, like before we start high five, same team, like we're on the same team team here, regardless of what happens, let's work together and make this happen. But she is a savage when it comes to organization and just putting shit together. So it works. And don't get me wrong, it is stressful at times, but I think the benefits definitely outweigh the cons in my specific situation. Speaker 2: Sure. Sure. Well, it's great that you guys have a relationship, you know, where you can have that dynamic. I'm sure that some people that could work really well, some people wouldn't work so well, but that's cool. That's really cool to hear. Now, and also I understand you and Sebastian are business partners, right? You have been for a long time. Is Ted a partner as well? Is he an equity partner? Speaker 1: Yeah, Ted is part of the business. Speaker 2: Nice. Okay. I'm curious about that. I kind of want to touch on that for a couple minutes because I've had, like, for example, I had a guy, you might know him, Carl Jacoby. He spoke at AMC United this past year, but I had him on the podcast a couple of weeks ago, and he came on and talked a lot about a partnership that he had with a couple of other people in his wholesale business. They got up to, I think, $40 million a year. And because of a bad partnership, it fell apart, right? And he talked about and kind of warned the audience against getting in partnerships unless it's under very good circumstances, right? Where you truly complement each other and it truly makes sense. Now, you've had business partners for it sounds like 13 years now. If you look statistically, you're in the top like 0.0001% of partnerships because like marriages, most partnerships dissolve and more partnerships dissolve than marriages. So can you give us some insight into like that partnership? How is it structured? How do you guys complement each other and how have you been able to essentially stay married for lack of a better term for like 13 years? Speaker 1: Yeah, so number one is a partnership agreement, right? Before you get into any partnership with anybody, there needs to be a legal document That breaks down the roles and responsibilities of each person and the purpose of that partnership agreement is if for God forbid you ever have to eliminate that partnership you can say hey in the partnership agreement you agreed to do X Y & Z you haven't delivered on any of this we I want to abolish this partnership. So that's number one and then number two is an open form of communication. Fortunately for me and Sebastian, we've been friends for 25 years, right? And so our friendship always comes before business. And I can't recall one time in the past 13 years where Sebastian and I got into a disagreement or an argument over a business decision where it lasted more than 10 minutes. And the reason why is because our end goal is financial and time freedom for generations to come for both of our families. So regardless of how I feel or he feels or Ted feels, we understand the underlining goal that we're trying to achieve collectively as a partnership. And so that is at the forefront of every decision and it makes those internal decisions that are sometimes complicated Usually much easier to navigate. Speaker 2: Well, I mean, it's just like how you said you and your wife operate, right? You're on the same team. Same with you, Sebastian and Ted. It's like you come to a disagreement which By the way, for the audience, right, happens in business all the time, especially with partners, like you're going to disagree. And a lot of times it might be ugly, right? But at the end of the day, it's like, hey, we're on the same team, right? Don't let it boil over for more than 10 minutes. And as long as you keep those lines of communication open, I mean, It would take a really big issue to break apart a team like that. So that's fantastic advice. And you also mentioned the partnership agreement, right? Now, I'm sure that there's people listening to this who are like, well, I have a business partner. We don't have any sort of partnership agreement. It's going well right now. But now that I'm hearing this, it's like, well, what do we need to get in place? What details do we need to cover? And one critical point that I want to point out because I went through the process of buying out my partner, which is my dad in my Amazon business. And, you know, one of the things luckily we had in our operating agreement was a buyout clause, right? It's like, hey, if one person wants to buy the other person out, in our case, it was, I think we had to pay 3x profit pro rata to their ownership percentage, right? Yeah. And that was like the buyout price that we had laid out in the operating agreement. So Eric, what other, like what other clauses, what other specific pieces of info should be in that agreement to make sure that you're in the best position to succeed? Speaker 1: Yeah. So definitely an outline of the roles and responsibilities. And I would say Obviously, the buyout clause is huge, but those roles and responsibilities are really going to outline and make or break your ability to either exit the partnership or be in a position where you're forced to stay into it, right? And then additionally, you want to include a timeline for the partnership. And typically, the timeline will be indefinite as long as the partnership exists, right? This way, there's no agreements that are expiring on an open partnership where it's active business. And then an allocation of shares in the partnership, right? So the way the business should be structured, like if it's an S-corp, you can allocate shares to individual owners. And the way our, or rather the way our business is structured LLC, which is owned by S-Corps and those S-Corps have shares of that business based on the percentage of the partnership that they own. So breaking down those percentages is also a huge part of the partnership agreement. Cause it's like, I want to know who owns what percent of the business. I got 50, he's got 20, you got four, like whatever those numbers are, it needs to be outlined. Speaker 2: 100%. And again, I think there's so many people that they operate under assumptions with their partner that, oh, well, you know, this is, we're 50, 50 partners, right? And then you get two years into the business and it's doing really well. And then one person thinks they should own 70% versus third, right? Like there's just so many pitfalls you can run into down the road. And you've all, there's also considerations I think that people need to take into mind as well. It's like, well, hey, Is one of us going to be putting in capital? Are we both going to be putting in the same amount of capital? Is somebody working for sweat equity? Is somebody bringing some skill set or set of resources to the table that justifies them getting more? There's so many considerations. And like you said earlier, communication around those things is key and getting it on paper from day one. Otherwise, it's not a matter of if you're going to have problems, it's a matter of when, in my opinion, if you don't have all that taken care of from day one. Speaker 1: Yeah. And I think too, what's really cool is nowadays with like ChatGPT, I mean, you just pop in there, hey, create a partnership agreement, explain a brief of the business, break down the roles, right? And the portions of ownership and say, hey, whip this up as a legal document. I mean, and they're going to create the most amazing partnership agreement and then obviously go in and tweak it, but it's going to be phenomenal. Speaker 2: That's so true. And I feel like I keep forgetting, I don't know how I keep like, when I think about an agreement like that, my first thought is, oh, go to an attorney and have them draft that up. And I'm like, no, duh, like just use ChatGPT to do it. It's going to be. 85 to 90% is good, so that's a great tip. Also, not legal advice for those listening, just an FYI. Speaker 1: Whatever you whip up on ChatGPT, send to a lawyer to review for a fraction of the price of them writing it for you. Speaker 2: Yes, that's a very good caveat there. That's a great point. So Eric, like you said, you guys have been in the game for 13 years now, right? That's a really long time to be doing the same thing, which I admire big time. I feel like at this point, I look at people and I'm not as impressed with their things. I'm more impressed with how long they've been doing a certain thing. You know what I mean? If I see somebody, I'm like, oh, they've been at the same thing for 10 years. I respect that guy, even if he's not crushing it, crushing it. So for you guys, you've been at it for 13 years. Let's say five years from now, what do you see yourself doing? Are you guys still in the e-com space? Are you still selling on Amazon or are you pivoting and doing something completely different? Speaker 1: Yeah, so five years from now, I'd imagine we would still have an Amazon business, but in five years, it would be much more scaled down and streamlined. I mean our original goal was 100 million a year. We now want to reduce our revenue by about 20% which is like 10 to 15 million just because it's a lot operating at such a large scale. So five years would be a much smaller operation, smaller warehouse, smaller team. And like where I don't have to go really ever, Sebastian doesn't really have to go ever. It's just automated. I mean, there's no reason to stop it if it's working so well. The other side would be hopefully five years we'd be able to exit and sell SourceCorrect for a rather large multiple. That would be phenomenal. You know, get a thousand fifteen hundred users in there and then have one of these big organizations purchase it from us. That would be amazing. And then the consulting side, I mean, I'll always have these skill sets as long as I'm entrenched in the e-com space. I mean, I'll always be offering some sort of value and help to small and medium and large sized businesses globally, I think. Speaker 2: Does Sebastian have the same plan? It sounds like he's on board with kind of scaling the business back a little bit, because I feel like, again, in our space, a lot of what you see is just grow, grow, grow at all costs, you know, eight figure seller, then try to get it to be a nine figure seller. But sounds like you guys are on the same page as far as scaling back a little bit. Speaker 1: Yeah, 100%, 100%. If we could make it, if we could do it overnight, we would have done it already. But it takes time, you know. Speaker 2: And I assume it's just a quality over quantity mentality, right? It's like, well, hey, let's, can we keep our profit the same, but reduce our revenue by 20%? Like, I think anybody would take that if offered, right? And it sounds like that's probably more the goal than just downsizing for the sake of downsizing. Is that fair to say? Speaker 1: Yeah, and we've ran the data. We've ran the calculations, which is something we always do before we make any large business decisions. And right now we're doing about $65 million a year. The goal is to get that to about $50 million a year. And based on our analyzation, it should produce an additional million dollars in profit. Speaker 2: Wow. So just from slimming down, I assume the overhead that comes with supporting an additional $15 million a year by slimming that down, Yeah, profit would go up significantly, I would think. So that's a fantastic goal. And you said timeline for that is, what is your timeline for that necessarily? Like, let's say reducing revenue to that threshold and therefore increasing profit, the amount that you just said. Speaker 1: Yeah. End of year. Speaker 2: Oh, end of this year. Okay. So this is more of a short term goal. Awesome. I, I mean, do you think that's, do you think that's realistic? I'm sure it is. You're reducing, you're not, you know, you're not trying to grow 20%. So if anything, I think that is realistic. Speaker 1: Yeah. A hundred percent. It's just a matter of trimming the fat, right? Taking those products that aren't producing the expected margins and getting rid of them, allocating that spend to either brand partnerships or more profitable wholesale inventory. You know, taking our 25 person prep staff to, you know, 12 or 15 and just really scaling out and honing in more on the profitability. Don't get me wrong, the business is profitable, but it takes a lot to get the profits that we're making now. Speaker 2: For sure. I mean, because again, the overhead required to service 65 million in sales per year is, you know, multiple seven figures per year, I'm sure. Speaker 1: Yeah, it's hundreds of thousands of dollars a month. Yeah. Speaker 2: Yeah, absolutely. What is your, and this is just out of curiosity, what's your insurance bill on the space that you guys have? So you said you're in, was it a 50,000 square feet? Speaker 1: Yeah, honestly, Corey, I have no idea off the top of my head what the insurance on that space is. Speaker 2: I'm just, and it was more so out of my curiosity because I've worked in insurance before and I know rates can vary wildly. And I just, I wanted people to get a feel for like, I'm sure it's thousands per month is what I'm saying. Right. And I'm sure some people listening are thinking to themselves like, I'm afraid to pay for a $20 a month software subscription and there's people out there that are paying thousands a month for insurance. That level is possible and it is possible to get there. That was kind of my intention there, but no, I hear you, man. Speaker 1: Well, we'll just put it this way. The warehouse is 50,000 square feet and I won't give you the exact price, but it's over $50,000 a month to rent that space. Speaker 2: Wow. Okay. And because you're, I assume you're in, I know you said you're in Jersey, probably in this more like an industrial area, but you know, rent is not cheap over there anywhere. Speaker 1: No, no. I was talking to an inner circle member yesterday. He's getting a space. It's about 13,000 square feet and it's less than $10,000 a month. I mean, I was like, bro, I gotta get, my business would be so much more profitable if I lived in like Ohio. Speaker 2: Where is he? Cause that is very cheap. Speaker 1: He's in Utah. Speaker 2: Oh yeah, it makes sense. It makes perfect sense. Nice. Well, Eric, man, listen, I really appreciate the time. I know you got to go here in a few minutes. Where can people follow you, find out more about you, maybe learn about SourceCorrect? Speaker 1: Yeah, so AmazonLit.com or EcomProfitPath.com. Either one would be the best place and please feel free. Our socials are the same as those two names I just shared. So you're welcome to DM me. I answer a majority of the messages personally. Speaker 2: Awesome. And guys, we will put those links and his social handles in the show notes or the description below. If you're watching on YouTube, give us a thumbs up. If you're listening on Spotify or Apple and you enjoyed this episode with Eric, the first ever episode of The Corey Ganim Show, then leave us a five-star review. Eric, enjoyed it, man. I will see you in Miami for Miami Seller Conference here in about two and a half months. I'm looking forward to that. Speaker 1: Yeah, absolutely. Appreciate y'all. Have a great weekend.