#095 - Everything to Know About Amazon Wholesale with Kris McCauley I The Corey Ganim Show

#095 - Everything to Know About Amazon Wholesale with Kris McCauley I The Corey Ganim Show Speaker 2: Hey there, guys. Corey Ganim here. Welcome back to The Corey Ganim Show. So this week's episode is a little bit different in the sense that I'm actually the one getting interviewed this week by my good friend, Kris McCauley. So I've actually had Kris McCauley on the podcast before. He was one of the very first episodes that we ever did. I want to say episode three or four maybe. And then we had him on again recently within the last couple of months. Kris is someone who I'd say about five or six years ago, I actually used to pay him for consulting on the Amazon Wholesale side. So this is when I was newer to Amazon Wholesale. I was getting into the business and he had been at it for quite a while at that point. And I would pay him for 30 minute or 60 minute consulting sessions and he really helped me out. Quite a lot in the early parts of my journey telling me, you know, showing me the ropes, helping me avoid certain pitfalls and whatnot. So he's super knowledgeable when it comes to selling on Amazon, specifically Amazon Wholesale. He's also worked with a couple of other people and helped manage their storefronts. So he has experience helping other sellers. And he's also one of the smartest people I know when it comes to cryptocurrency investing. Kris has a pretty large YouTube channel. It's just his name, Kris McCauley on YouTube. Last I looked, he has about 120,000 subscribers. So a pretty good sized YouTube channel focused on, like I said, cryptocurrency. He has a ton of, a lot of his older videos are focused on selling on Amazon and he does quite a bit on the side hustle side. So he talks a lot about side hustles, different ways to make money online, And he's got a community of folks that are running side hustles called Side Hustle Society. So if you're not familiar with Kris or you don't know who he is, I highly encourage you go over to his YouTube channel. Give him a subscription, follow him because he's someone that I've been following for six years now and someone who I consider a friend at this point. So, hope you guys enjoy the episode. If you do, be sure to leave us a five-star review. If you're listening on Apple or Spotify and if you're watching on YouTube, give us a thumbs up and subscribe to the channel because we come out with one of these episodes of The Corey Ganim Show every single Wednesday and we have for the last 94 weeks in a row. And we're not slowing down and we're not stopping anytime soon. So thanks for tuning in and I hope you guys enjoy the episode. Speaker 1: Hey everyone, thanks a lot for joining us. I have a second time person on the channel. His name is Corey Ganim. Corey, thanks so much for coming on. How do you want to introduce yourself, man? Go ahead and take it away. Speaker 2: Yeah, thanks so much for having me, Kris. I think the other time that you and I sat down for an interview for your channel was actually in person there in Santa Barbara. So it's been a couple of years since we did that. But as far as introducing myself, so I'm Corey Ganim. I'm 29 years old. I'm a full-time Amazon seller, have been for almost six years now, and specializing in the wholesale business model. So buying products in bulk from manufacturers and distributors, selling them on Amazon. And then I have a community of other sellers who, just like me, are practicing the wholesale model and doing it at a high level. So that's kind of the quick and dirty of what I've been up to. Speaker 1: Yeah, so two questions just gonna get right to it is one is how much do you make like in terms of just revenue? Like generating revenue per year. What do you average or what do you shoot for? Speaker 2: Yeah, good question. So lifetime, I'm over 13 million in sales on Amazon with this wholesale business model. In 2024, so we're here in January of 25. So last year in 2024, we did just over 3.2 million in revenue. And so in terms of profit, so I was able to take home a six-figure salary, pay myself 120K a year. And then even after that salary was paid and all of our overhead was paid and all of our expenses were taken care of, Still had about 5% left over, about a 5% net margin, which is pretty common in this space at scale, right? It's not a high margin business. It's more of a high volume business. Speaker 1: That's awesome. And can you get more into what exactly wholesale is on Amazon? I think people may be familiar with wholesale real estate, but this is not that. Speaker 2: Yeah, it is. It's definitely a little different from the real estate wholesaling that some of your viewers might be more familiar with. But the concept of selling wholesale on Amazon is pretty simple. So it's called wholesale because we're buying products at wholesale prices. So we are not necessarily the wholesaler ourselves. We are the retailer. But we're sourcing products at wholesale prices, either directly from the manufacturer or from an authorized distributor of that manufacturer. And I mean, again, we're just buying in bulk, right? So we might buy a thousand of this book, for example, at $10 a unit, turn around and list it on Amazon for $23 a unit and make, you know, two, $3 profit on every sale. That's kind of just the general gist of how this business model works. Speaker 1: And, you know, some people may be wondering, well, you know, like what's, Kris, you've done this before too. Why are you having Corey on? Well, Corey is super knowledgeable. He, um, you know, I think I want to get into the way that you do this, uh, in terms of, you know, you're going directly after some brands. Like, are you working, you know, a common question that when I, when I talk to people and tell them that this is what I do, They will tell me, you know, like, well, how exactly does that work? Are you, you know, are you buying directly from the brands? Are you working with distributors? Why are people selling to you? Why aren't they just going on Amazon and just selling it themselves? Speaker 2: That's a great question. And that is one of the most common, I wouldn't call it an objection that people have when they're considering getting into this business, but it's more of like a limiting belief that people have when it comes to getting into this business, right? So just like you said, Kris, they might say to themselves, well, Corey, this business model sounds great, but why don't these brands just sell on Amazon themselves? Or why don't these distributors just sell on Amazon themselves? Why do they need you? And why do they sell to you? And the answer is pretty simple when you think about it, because These brands and these distributors that a lot of them have been around for a long time, some of them decades, some of them even longer, they have a very specific skill set, right? And for the brands, it's typically their skill set lies in creating and marketing really innovative and And you know, popular products in their niche. And for a distributor, their core focus might be just selling products at scale to other retailers, as many products as often as they possibly can. And you'll notice that in neither of those descriptions was the word Amazon mentioned, right? Because Amazon in and of itself is an entirely separate skill set. It's an entirely separate sales channel. As you and I know, and as anybody knows who's sold on Amazon for any length of time, Amazon is a completely different beast from every other sales channel and every other platform that you might work on. The bottom line is these brands and these distributors need an Amazon specialist that they can work through or that they can sell through, that can represent their products on Amazon in a professional light. So we kind of come in and fill that gap as the quote-unquote Amazon experts so that these brands and these distributors can just keep focusing on what it is that they do best, which is either creating a lot of new products and marketing those products or just selling as many products in bulk as they possibly can if you're a distributor. So I hope that's a good explanation. I hope that makes sense. Speaker 1: Yeah, for sure. I think that you did a great job with it for sure. And some of these distributors or brands may even sell on Amazon themselves. Like I know, you know, they may have A really crappy listing or, you know, and sometimes they can even pay you in product or, you know, they, they see that you're not just a regular Joe Schmo that you actually know how to run your store. And they may be like, okay, well, Corey over here seems like he really knows what he's doing. Let's go ahead and, you know, work with him. Speaker 2: Yeah, and a big key to a lot of that is just providing value, right? And figuring out what they need help with and being able to help them with those things. And that is something that a lot of people that are newer to the industry and that are newer to the space don't really seem to understand, at least not at first. Is they jump into Amazon Wholesale and they start calling brands and they start calling distributors and everything about their pitch is just me, me, me. Can I open a wholesale account? Can I buy this product? Can I get a discount? When in reality, they should be asking, they should be flipping the question on its head and asking these brands and asking these distributors, hey, What makes a good Amazon partner in your eyes? What is it that you're struggling with? What is some old inventory that maybe you're having trouble moving that I can help you out with, right? It's finding ways to provide value and doing things that other people aren't willing to do in order to set yourself up and position yourself as the person who's actually going to be a partner to these suppliers, not just another reseller who's taking a chunk out of the pie, if that makes sense. Speaker 1: Yeah, it definitely does and you kind of touched on this but this is something that I get asked a lot and I'm gonna ask you is How do you find these brands? How do you find these suppliers that are And I'm here to talk to you about what is it that you want to work with that want to work with you? What's that process like? Speaker 2: Great question, because it is a process, right? But it's more of a science than an art. So good thing about the whole finding suppliers process is it is pretty cut and dry. There are a few very specific criteria that I look for. And then just a kind of a note to the audience here. So guys, towards the end of the interview here, I am going to drop a link to a free Brands help you find distributors. It's basically my exact framework and my exact workflow for doing this. And kind of as a treat for you guys who stayed till the end, I'm going to drop the link at the end of the conversation here. But just kind of the quick and dirty process. I use a tool called SmartScout, which is just a software tool. It's not associated with Amazon. It's a third party tool, but it does have data on every single brand and every single product listed for sale on Amazon. And I use what's called the Brands tool within SmartScout to jump in the tool, set a couple of very specific filters at the column level, basically to show me, hey, show me brands that Amazon themselves are not selling, that other third parties are selling, which means that they're a good validated product if other people are selling it. And then show me products that, you know, aren't either carried by the brand themselves or they're not dominated by that specific brand. So bottom line is you're able to filter out any brands that make good candidates for me as a wholesale seller to go and source. So that tool SmartScout, like I mentioned, really makes it super easy. Speaker 1: That's awesome, man. And I want to ask you, what keeps up an Amazon seller at night? What's their main problem? And I want to answer that maybe from someone in like from a beginner's phase, because you've seen a lot of beginners and then maybe more so from like an advanced person such as yourself. Speaker 2: Yeah. And there's really, I hate to say it, there's a lot of potential things that could keep an Amazon seller awake at night and cause them to be anxious about their business or unsure about kind of what the future holds. But the good thing is, is a lot of these fears can be remedied by just either running a legitimate business or just having proper documentation and paperwork. And so let's kind of dive into those now. So newer sellers, sellers that maybe they just started selling on Amazon or they're a couple months into the game and like what keeps them up at night, what are they worried about? Usually for them, it's getting some sort of account health violation or some sort of section three violation, which is basically Amazon's stolen products policy within their terms of service. Because they purchased inventory from a sketchy wholesaler or a supplier that they don't really know is legitimate or not. So at the end of the day, 90% of the problems that we face as Amazon sellers can be fixed by making sure that we're buying from legit suppliers. So either directly from the brand themselves or from an authorized distributor of that brand. And really anybody else that falls outside of that supply chain, You're leaving yourself open to liability if you buy from outside of that supply chain. Now the only exception there is if you're buying from a large reputable retailer like Walmart or like a Target or like a Dick's Sporting Goods for example. Amazon is obviously familiar with those companies so Amazon will accept their receipts as confirmation that product is legitimate. But where you get into hot water and where especially a lot of new sellers get into hot water is they buy from sketchy suppliers off Telegram or off WhatsApp or off Instagram. And they have no way whatsoever of verifying the authenticity of the inventory that they're buying. All right, so that's the main thing that keeps new sellers up at night. When it comes to experienced sellers like yourself or like myself or like any of the folks inside my mastermind community, the thing that keeps us up at night, or at least me specifically, is cashflow and just general capital constraints. Because, Kris, and I know you know this because I know you've seen both sides, us wholesale sellers, there's basically two ends of the spectrum and you're either on one end or the other. On the one end, which is where all beginners start, is you've got More available capital than you have profitable products to buy. So you're always looking for new profitable products to buy. You get to the point where you land on the other end of the spectrum, which is when you have so many profitable products to buy and not nearly enough capital, in which case you've got so many opportunities and just not enough money to buy them with. And when you get into that second position, it's really easy to overextend yourself, to over leverage yourself and to have poor cash flow. So for experienced sellers, the thing that keeps them and myself up at night is managing cashflow properly and making sure you're not over leveraging yourself and getting into too much debt. Speaker 1: That's great advice. I wish I would have heard that when I started. Speaker 2: Me too. Speaker 1: Because it's really, it's really easy. You start seeing all these products and you're like, oh my gosh, this is a 20% ROI. Like if I throw, you know, a hundred K at this, I can make 20 grand and you know, but you are already, you know, you've already spent 200 K on these other products. And I want to ask you to like, why would someone want to get into this? Like, that's my first question here is, is what would be, What's a reason why someone would want to get into becoming like venturing down this path? Speaker 2: Yeah, so it's a really good business model and a really good option for people who want to get into e-commerce, but they don't necessarily want to start from scratch in creating their own brand and having to market their own brand and do all of the things associated with launching your own brand from scratch, which is a lot of times called private label, right? It's a different business model for selling on Amazon. So the beauty of wholesale and the reason why people should consider getting into this business if they haven't already considered it is because we are able to piggyback on the existing demand for these brand name products. And the name of the game is just finding them at a profitable price. So again, in the wholesale business model, I'm not out here talking to factories in China and getting test samples made and creating the packaging and designing this product from scratch. No, what I'm doing is I'm saying, hey, I want to sell this I'm the CEO of Carmex Lip Balm, for example. So I'm going to look up some different distributors around the US, not overseas, that carry this exact product. And I'm going to get quotes from a bunch of them until I find a quote that is profitable enough for me to sell on Amazon. All right. So again, I'm just, I'm basically tapping into the existing demand for this Carmex Lip Balm on Amazon. And as long as I can find it at a profitable price, I'm going to sell a lot of them and make money every single time I sell it. So that is the main reason why I think people should consider wholesales because it's a little lower barrier to entry than something like private label and it's extremely scalable, especially if you have capital to deploy and especially if you're a good salesperson and you have the ability to get on the phone and negotiate and have these conversations with legitimate US-based suppliers. Speaker 1: Yeah, I mean it's like the ROI is gonna be less than a private label brand. But technically though, it's like when you look at the time it takes to launch the private label brand and you have to like do samples and like all this stuff. You could have flipped your money so much faster through the wholesale business model because I get asked that all the time. They're like, oh, so you buy from China? Speaker 2: Nope. Never once have I bought. Speaker 1: Not saying any of these companies don't do any of their manufacturing in China. I'm sure that happens, but I'm actually placing orders a lot of the time just here in the States. You know, so that's great that you point that out. Speaker 2: Well, and another just to kind of further contrast the two business models, because a lot of people get into Amazon with private label, right? They hear about private label and that's how they start. When in reality, that is the worst possible way that a brand new seller should start selling on Amazon. If you're brand new, starting from scratch with no e-commerce experience and you jump right into private label, I'd say your chances of success are in the 3% to 5% range on that first launch. And that's so, think about it, that is a 3% to 5% chance of success on a launch that is probably going to cost you minimum $15,000 if you do it right. So you're going to spend $15,000 on getting samples made and then getting on your first production run created and then on getting Those products shipped into the States and through customs and into Amazon's fulfillment centers. And then you've got to create your listings and your photos and your A plus content. And then you've got to dump hundreds, if not thousands of dollars per month into PPC advertising on Amazon just to sell your very first product. So we're talking three to six months. 15 to $30,000 or more spent on this launch before you have a single dime of revenue. That is how it works in the private label model. And in the wholesale model, you spin up an LLC. You start calling distributors or brands. If you do that every day for a week or two, you're going to have some profitable accounts. You place the order. Within 30 days, you should have purchased and sent your first profitable purchase order into Amazon. And within 45 days maximum of you starting from scratch, you'll start making sales and you'll start having revenue and you'll start getting feedback with which to improve your process. So it's a much tighter feedback loop and much quicker time to revenue than private label. Speaker 1: Yeah, I completely agree. And to kind of, let's say, you know, cause there's a bunch of different ways to sell on Amazon. And since we started, you know, coming up on like eight years ago, it's crazy that it's been that long, but there's also another way that I'm curious your take on this is, and some people that may be watching this is, and I used to talk about it on my channel where you go to other retailers to purchase products and then you flip that on Amazon. But the way Amazon's evolving is that I'm asking you, do you still think that that's a viable option in 2025? It's called retail arbitrage or online arbitrage, basically any type of arbitrage. Do you think that that's a viable business model with the way Amazon's requesting documentation these days or what's your take on that? Speaker 2: Yeah, so I definitely still think that arbitrage, whether it's retail arbitrage or whether it's online arbitrage, I still think that both of those are viable business models in 2025. I just think that Amazon is making it harder to succeed with those business models. And there's a couple of reasons for that. The first is Amazon's increasing, I guess, increasingly difficult requests for supply chain documentation. So, for example, if you source product from a target, let's say, and Amazon asks for the invoice, well, you can give them your receipt. But then sometimes Amazon will ask for your supplier's supplier's invoice, right? That's not an uncommon request. And if Amazon asks for your supplier's supplier's invoice and you bought from Target, for example, because you're doing retail arbitrage, well, you're never going to be able to get Target's supplier's invoice, right? Forget about it. So Amazon is just making it increasingly more difficult for these smaller scale arbitrage sellers to succeed. But the ones that are doing it legitimately, the ones who keep really detailed records of their receipts and their order confirmations and their packing slips and all of the proof that they paid for the product and where they got it from, I think those sellers will be fine for a long time to come. It's just, it's increasingly becoming a much more professional marketplace. And unless you're doing private label or you're doing wholesale with the brand or with authorized distributors, or you're doing arbitrage and keeping very, very detailed records, I think that there's not going to be a place for you on Amazon if you're not one of those three people. Speaker 1: I think that's great advice. And yeah, good to know too. I just have been out of the game for a while, so I wanted to know your take on that. But I want to ask you this too. So knowing what you know now, and let's say it's 2025, and let's say you didn't know how to sell on Amazon. You had zero skill. Do you think that the ROI, would you still invest in learning the skill of selling on Amazon? Or is there something else that you'd be like, I think I would do that instead? Or would you still stand by learning how to sell on Amazon? Speaker 2: Yeah, absolutely. I mean, and for a number of reasons, right? It's not just because I think selling on Amazon is like the greatest business model of our time, right? You can make that argument for a lot of different business models, but what I think I think there's still value in learning how to sell on Amazon. And I think there always will be because the skills are transferable. It's not like for the last seven and a half years, all I've learned how to do is navigate the Amazon platform and sell things specifically on Amazon. Absolutely not. So many skills and made so many connections that if I quit selling on Amazon tomorrow, I would be able to start a seven figure business within a year guaranteed and anything else just because of the skills that I've learned in this business. Because again, we're not just flipping things on Amazon. We're learning how to make cold calls. We're learning how to follow up. We're learning how to be persistent. We're learning how to develop thick skin. We're learning how to pitch. We're learning how to negotiate. We're learning how to meet people in person, right? There's 15 to 25 soft skills I can name just off the top of my head that you get and that you build from being a good Amazon seller. So even if there's better business opportunities that come along, which of course there will be, I still think Amazon selling is worth it and always will be because at the very least of those soft skills that you learn over time. Speaker 1: That's awesome, man. I want to ask you too, I probably should have asked this earlier, but How many hours per week do you work on Amazon and how big is your team? Like how many people do you employ? And then the follow-up question to that is how many hours are they working collectively, your team, like combined? Speaker 2: Yeah, and I'm glad you asked that follow-up because if you were just asked the first question, hey, how many hours per week do you work on your Amazon business? My answer truthfully is probably about 60 to 90 minutes per week on the Amazon business itself. But I'm glad you asked the follow up where you said, well. Okay, how many hours do you work, but how many hours does your team under you collectively work? And again, just because I'm only working an hour or two per week on this business doesn't mean that work's not getting done. I've got two employees on my team, one of which works in the 50 to 60 hour per week range, and the other works about 20 hours per week. So you're talking what, 80 to 82 hours combined between the three of us every single week in order to sustain a seven-figure business. And that's something that obviously took a lot of time to get to this point and a lot of systems and a lot of training. But like I said, 60 to 90 minutes per week is what I'm dedicating to the actual Amazon business itself these days. Speaker 1: Nice. Okay. Um, and where I guess, man, where can people find you at? Like where, where can we reach you? Where can we, you know, get, get up with you? Speaker 2: Yeah. So I mentioned that guide earlier, that free resource guys, that's going to help you find suppliers. It's also going to help you learn how to contact suppliers, learn the shipping and the logistics process. A lot of good stuff contained in this guide, but specifically, Finding suppliers is the first day. It's like the biggest module. That's over at freewholesaleguide.com. And then if you guys want to just follow me more closely or more directly, I'm here on YouTube as well. I'm at Corey Ganim on YouTube. And that's really the two best places for people to find me. Speaker 1: Yeah, guys, you should really check him out. There's a ton of people here on YouTube and just social media that are Really just, you know, talking out their asses and he is not one of them. So like he'll give you just get all the breakdown, check him out. It's awesome, the content Corey puts out. So give him a follow. But thanks a lot, man, for coming on. And yeah, appreciate all that you do for all these people wanting to get on Amazon. Speaker 2: I appreciate you too, man. Thank you for having me back. Speaker 1: Yeah, no worries, man. All right, till next time.