#315 - From $20 Million To $220 Million In 3 Years: Osaid Abuelnasr Shares His Story

#315 - From $20 Million To $220 Million In 3 Years: Osaid Abuelnasr Shares His Story Speaker 1: Welcome to episode 315 of the AM-PM Podcast. In this episode, I'm gonna be speaking with Osaid. Osaid moved from Canada to the United States about three years ago and his business that he does with his brother has exploded from 20 million to over 220 million in just three years. We're gonna be talking about his journey, some of the challenges and some of the pivots they're actually making in their business. This is gonna be a great episode. Enjoy. Unknown Speaker: Welcome to the AM-PM Podcast. Welcome to the AM-PM Podcast, where we explore opportunities in e-commerce. We dream big and we discover what's working right now. Plus, this is the podcast where money never sleeps. Working around the clock in the AM and the PM. Are you ready for today's episode? I said, are you ready? Let's do this. Let's do this. Here's your host, Kevin King. Speaker 1: What's up, everybody? I'm here this week with someone that's actually taken their company from $20 million just a few years ago to over $220 million. That's right. $20 million to over $220 million in just three short years. And one of the guys that's been responsible for helping this company do that is Osaid. Osaid, welcome to the AM PM Podcast. Speaker 2: Thank you for having me. Great to be here. Speaker 1: So this is a company that you're working with now that you said your family started like 14-15 years ago, is that correct? Speaker 2: Yeah, so I mean, 13 years ago, my brother Ammar started the business as just a wholesale phone trader. And it started off, it's a really funny story. He started flipping phones from Kijiji, which is a Canadian Craigslist. So buy a phone from a wholesaler, flip it on Kijiji, make five bucks or whatever. It's kind of like arbitrage before arbitrage was a thing. And then it grew from there, started talking to some phone carriers and whatnot and doing wholesale distribution. And it is where it is today. I mean, we were at 20 million in 2019 in Canada, and that's when we decided to really move the company to the US. And it just blew up from there. Speaker 1: So, for the first 10 years or so of the company's existence, it just grew from him just buying wholesale phones and flipping them on the Canadian Craigslist to then getting partnerships. Did that turn into any stores or was it always just a mail-order, direct-to-consumer type of thing or what was it in Canada? Speaker 2: Well, so some of the products actually ended up in stores. It kind of grew into a distribution company. So, we're doing a lot of logistics where we distribute product and, you know, we're direct with some brands. We were direct with Google. We're currently direct with Ring and we're direct with Amazon on the Fire TV sticks and all that product line. So it really started off from phones, but it kind of grew into consumer electronics in general. And actually our biggest category is consumer electronics today, but we're not trying to limit ourselves into one category. So that was from, you know, 2009 up until I would say 2017-ish, 2018-ish. It was really just wholesale and distribution. When I joined in 2018, I noticed what they were doing on the wholesale side. And I'm like, well, you know, we really should do this on Amazon because we have a lot of great CE product, consumer electronics products. And we started off on Amazon.com and Amazon.ca and started taking the same products that we would ship in bulk to other wholesale companies and B2B companies and really listing it all over Amazon. And it just blew up. Speaker 1: So how did you did you have to go to what people always ask about that like if you're selling You know, stuff for all these big brands, Bose, Canon, Dell, Dyson, Sonos, SanDisk, Ring, Xbox, the whole gamut there that you guys have partnerships with. Do you have to go to them and get specific permission for each one of those that you sell on Amazon or other places? Or do you have a blanket thing that, hey, you can distribute this anywhere? Or what kind of regulations or hurdles do you have to go through to actually be able to do that? Speaker 2: I mean, there's many hurdles. So you don't have to have permission for every single company that you're selling. There are certain big ones that you do. For example, Apple. Nobody can sell Apple unless they're approved by Apple on Amazon. Apple is one of the hardest ones to get for brand new. And I would think it was about three years ago, they completely stopped everybody except a few handful of Apple sellers that have been approved by Apple. They're basically grandfathered accounts. They stopped everybody from selling and it was crazy because everybody in the reselling space that had all this Apple product now can't sell it. So a lot of people that I actually knew in the business Started reaching out to me and being like, hey, can you sell my Apple stuff? And I'm like, yeah, we'll send it up to Canada because the regulations in Canada are different. You can sell in Canada, you can't sell on .com. And we started selling on .ca. After that, Amazon also, typically .ca follows .com. So like three years or three months, sorry, after .com put in that regulation that, hey, you can't sell on .com, they gated it, .ca followed through. So for that three months, we actually had like an arbitrage opportunity. So there's always opportunities within Amazon. But to answer your question, you know, it's really brand specific. You got Microsoft, you have to have approval, you have to have invoices, but you don't necessarily need an LOI. You don't necessarily need a letter of authorization from the brand. Speaker 1: So you started in Canada, and then people, were you selling in the US from Canada? Or were you just selling just in Canada in the beginning? Speaker 2: Oh yeah, 100%. I mean, the U.S. was actually taking most of our product and it still is. The U.S. is really where the consumer is and it's also kind of the most leveraged consumers too. So there's a lot of credit in the U.S. and the U.S. consumer consumes like no other consumer in the world. I mean, when I was in Canada, five years into having a credit card in Canada, my maximum credit limit was 5,000. I came to the US, I just applied for my social security number, I got a $2,000 credit card. They don't even, they didn't even, you know, when they check the social security number, it doesn't hit them back with anything because there's nothing there. And now my credit cards in the US are like 10x of that in Canada. So any US consumer consumes way more than any other country. And they're highly leveraged. So yeah, we were selling in US a lot and still am. And typically what you see even on Amazon is Canada's about 10% the size of .com. Speaker 1: So you're seeing that. I always tell people it's about 5%, expect about 5%, but you're seeing about 10%. So if you do, if you do, if you do 10 million on amazon.com, you can, you're expecting to do about a million on amazon.ca. Speaker 2: Exactly. And I mean, I think it varies category to category, but ours is branded products. So for our product, you're talking about stuff where the marketing is already there. And we're piggybacking off the marketing that these brands already have done. Whereas if you're creating your own audience, it might be 5%. Speaker 1: That's a good point. Yeah, that's a good point. When you say that the brands have already done the marketing, are they controlling the listing and you're just jumping on as a seller? Are you able to actually contribute to the listing, improve the listings, or do you actually control the listing in some cases? How does that process work? Speaker 2: So when I'm selling a Google product or a Microsoft product or any other product that's from a highly recognizable brand, the brand actually controls the listing and you can make edits all you want all day long and you'll get the same response from Amazon. Hey, we put in your request to edit this listing. We sent it to the brand. The brand is under no obligations to approve it. So you can't really edit those listings. But when you're selling tier two and tier three brands, then Amazon, based on the size of your account, may take into account your suggestions on the listing. Speaker 1: What's an example of one of those tier two or tier three brands? Speaker 2: Tier two or tier three, I mean, W Box is one of them. W Box is a company owned by Honeywell. So it's really not that known, but they sell cables and whatnot. So if you're looking into getting into the wholesale flipping game, it's actually a lot easier to start with those brands. Because starting with a big brand like Google, you're going to need a whole lot more capital. Speaker 1: So with like a Google or Microsoft, since they're controlling their listings, do they listen to you ever? Are you able to say, hey, if you guys just added these seven keywords, we could double the sales? Or if you did this and this, add this A plus content? Or do they just basically have their corporate rules and their corporate blinders, and they just do their thing, and you just have to pray that it works? Speaker 2: It's a mix of both, honestly. It depends on the brand. And it depends if we have a direct relationship with the brand. And if we have a direct relationship with the brand, And they tell us, hey, we don't even want you selling online. We will never sell that online. So we protect our relationships with the brands. But at the same time, if it's a brand that we're indirect with, then, you know, that we're not governed by anything. We will sell that online. And in that case, you can't really go to them and tell them, hey, we want you to edit the listing because you're not an authorized seller in the first place. But if we are an authorized seller, then yes, we will have direct contact with the brand. And we'll tell them, hey, you know, we noticed that there's a mistake here and a mistake there. And those brands make a whole lot of mistakes. I mean, Microsoft Surfaces, we're selling on Amazon forever. And anybody that bought a Microsoft Surface knows that this thing doesn't come with a keyboard. But the pictures all show a keyboard. And the customer messages and the returns all come with the same exact comment. Picture shows keyboard. I got a laptop without a keyboard. And we contacted Microsoft about it so many times. Now, I think if you go into some listings now, actually, they changed the picture. There's font at the bottom that says, hey, accessories not included. Speaker 1: Wow. So are you doing FBM and FBA or primarily one or the other? Speaker 2: I do 90% FBA. I mean, I think you're actually losing money for the most part if you do FBM. For one, Amazon controls the buy box algorithm and they influence it heavily into putting your offer in the buy box if you have FBA. Unless you're the seller fulfilled prime, if you have SFP, you have nothing to worry about. But I mean, in order for you to go and buy an account that has SFP, probably cost a couple hundred thousands, if not a million dollars. All those accounts are grandfathered. Nobody's being approved for SFP anymore. So I always do FBA if I can. Unless it's a huge item, I do, you know, FBM. But then there are, Amazon's also coming up with stuff around that where you can do bulk this now and pick up in store. So pick up at the distribution facility of the merchant rather than picking up in a different store. Speaker 1: So you have to do then on most of these listings since you're doing mostly wholesale authorized selling, are you just one of like a hundred different people selling? Are you a lot of buy box rotation or in some cases do you have the exclusivity or how's that working? Speaker 2: Actually, it's crazy because this world is ever-changing, you know. The buy box, it used to be so easy to win buy box when I first got into space five years ago. Now, it's extremely difficult. You've got to come up with strategies. You've got to make sure you're using the best repricer out there. And sometimes, the best repricer is not a rule-based repricer. So, you definitely don't want to be using a rule-based repricer that prices down a penny every time. For one, you won't win against Amazon if you only price down a penny. You need to price down two bucks, three bucks sometimes. Two, sometimes you have better ratings as a merchant, so you don't even need to price down. You could be a dollar higher than the competition and still win buy box. Speaker 1: Because you have better seller feedback score. Speaker 2: Exactly. Better seller feedback. Your inventory is there. Sometimes both of you are doing FBA, but your inventory has been there for longer. So Amazon prioritizes that inventory and says, hey, you know, if you buy from this guy, you're going to get it tomorrow. But if you buy from this other guy, even though they're both FBA, you're going to get it in three days because that guy's inventory is still in the receiving process. So you've got to make sure you have the best repricer in place. And even within the repricer, There's so many strategies, I mean, but you got to make sure, you know, you got your smart repricer, that's your AI based, and then you got your rule based, and you got to make sure you're fighting the anti-shared buy box methods. So sometimes Amazon will say, hey, you're winning buy box, and the repricer stops. But you're actually not winning buy box, you're only winning buy box and three zip codes. So you're looking at your listing and you're saying, hey, why am I only selling three units when the rank on this item is super high? Helium 10 is telling me the last 30 days sales is 100. I only sold three units for the last 15 days. It's because you're only winning buy box and three zip codes, which are the closest to your fulfillment center. Speaker 1: To where Amazon has the stock, you mean? Speaker 2: Yeah, so I'm in Dallas. So anytime I ship to FBA, usually I ship to DFW 6 or DFW 1. So, typically, sometimes I ship outside of those, but typically just those two fulfillment centers. And so when you're shopping from Dallas or anywhere from Texas, Amazon will display myself as winning the buy box. But if you're shopping from California, it will display another third party seller that has their stuff at a, let's say, ONT8 or ONT6, which is a California fulfillment center. Speaker 1: So that makes sense. I follow that logic now because me as a private label seller, I ship for, I'm in Austin and oftentimes Dallas is the primary source for a lot of our stuff and I ship to Dallas and because I'm the private, only private label seller, Amazon is then dispersing that based on their algorithm. So that, okay, we're going to take a thousand units that ship to Dallas and they're going to say, okay, we're going to keep a, 50 of them here in Dallas and 70 of them we're sending to Florida and 60 of them we're sending to New York and whatever their algorithm is that they figured out. But in your case, because you're sharing the buy box and you're based in Dallas, you're shipping them into Dallas and there's some other guy on the buy box that's based in California. He's shipping them into Ontario and Amazon's like, why do we, we don't need to move these things around because, so we'll just, Your supply will supply the people that needs to come out of Dallas and that guy will supply the people that needs to come out of California. It works something like that, right? Speaker 2: Exactly. And this is called a shared buy box. So it's based on geography. And a lot of people don't recognize this. And I hate when it happens to me. And most repricers out there actually have a flaw in the logic where the repricer actually doesn't recognize it because the repricer is based on the feed that Amazon gives them. They don't scrape Amazon. It's just an API connection. So Amazon says, hey, this guy's winning buy box and that guy's winning buy box. But how many zip codes are you running it in? The repricer has no idea. And I hate when this happens. And I actually found it out by total luck. I was really pissed off about this item I bought. I paid a million dollars for and I'm holding the inventory and I need to turn that inventory around quickly. And I'm getting upset because I'm like, hey, Helium 10 says I should be selling thousands of these and I'm not. So that's really when I found out that, hey, if I change the zip code, I'm no longer in the buy box. So I started playing around with my rules until I made sure I won the buy box in every zip code. And to do that, you usually just have to reduce a bit more on your price. Speaker 1: Or you could potentially actually instead of shipping everything to Dallas, actually say you want to pay a little bit extra and ship something to New York or to California or something so that you're supplying that local warehouse as well, right? Speaker 2: Yeah, but the problem with that is that when you create an FBA shipment, they pick where you're shipping. Speaker 1: Yeah, but you can actually override that by actually paying a fee and actually ship it to a certain place a lot of times too. Yeah, and there's some software that does. There's a way to do that. There's a software tool that will let you almost pick your warehouse. Speaker 2: So I know about the software tool. I met him actually at Prosper. I met those guys. They told me they do that. I didn't believe them. But now that you're telling me about it, I mean, it's worth looking into because you definitely want to be shipping to multiple fulfillment centers. Speaker 1: In the past, a lot of times, if you're private label, Amazon really didn't frown on that because people were getting where they would split it up. They'd say, I'm in Austin, ship some to Dallas, ship some to New York, and ship some to Washington State. It would cost me an arm and a leg to ship those to New York and Washington. I'd rather ship them to Dallas and let Amazon deal with it, distributing them out. People were overriding that and saying, no, I don't want to ship to Washington and New York. I just want to ship to Dallas. They were using these software tools, third-party tools that would allow you to do that. But I'm telling you that on your side, maybe the reverse is actually beneficial where you actually send it in to Washington. Then you're competing against the local Washington guys and getting some of that buy box there. I don't know. I don't know if that works. It just came to my head is that maybe a workaround to actually grab more buy box share and not have to read. I don't know. You have to do the math. Like you said, if you lower the price enough, you can kind of gain it. But I don't know where that breaking point is there, but that might be something worth exploring for sure. Speaker 2: Actually, sometimes like if you lower the price enough, what you'll see Amazon do is they'll create an FC transfer. So they transfer your inventory internally. If your price is not competitive, sometimes they won't even receive it. You're talking about a typical listing that I sell on has 35 to 100 to 300 sellers. One of them being a Fitbit watch. It has 300 people on there. Speaker 1: How do you forecast on that? How do you forecast how much you should send in? If there's 300 sellers on a Fitbit watch, And you're Buybox rotating, Roblox sharing. How do you go, well, I'm looking at Helium 10 and it says, I'm just making up numbers here, a thousand of these are being sold a month and there's 300 guys on there. You know, are you saying that, okay, there's 300 of us, each one of us is going to sell three of these thousand? Or are you like, no, because I know if I do this, this and this, I can sell a hundred of those thousand. How are you forecasting all that? Speaker 2: Yeah, so the best way to forecast is using the Helium 10 extension. You've got the graph at the bottom of the listing, which shows the price trend. So you got to take in your cost and say, hey, you know, based on my cost, I'm not going to have any issues competing. And if I'm not going to have any issues competing, I know I'm going to make 90% of the sales. That Helium 10 says I'm gonna make. Because sometimes, yeah, people do compete with you and whatnot, but based on our strategies, we know we got the best strategies in the business. I mean, we've been in it for five years, just trying to come up with the best strategies to kind of just always win the buy box. So really, we just look at our cost and we say, hey, well, based on this, based on the price trend, we're not gonna have any issues. Let's send in 100 units or 300 units. We always do 45 days sales. Because that keeps inventory in stock, keeps your IPI high, you won't have any issues when Q4 rolls around and you're out of stock, you can't send in any more inventory. Speaker 1: What about with the repricers and stuff? On some of these brands, they have a map. They have minimum advertised price. You're not like Apple, for example. Apple doesn't allow you to discount more than, I think it's like 3 or 5% or something at the max. And even then, they have rules around how and when you can do that. So how do you account for that kind of stuff? And how does that affect buy box sharing? Because it's not just about being the lowest price in that case, because everybody can only go to a certain point on some of these brands. Speaker 2: So map is actually the elephant in the room when it comes to Amazon. Brands hate other merchants that don't follow their map because what ends up happening is people go into Best Buy and they, you know, pop up their Amazon and they go like, hey, well, I can buy it for less than Amazon. And Best Buy's usual response is, we don't compete with third-party sellers on Amazon. But sometimes what will end up happening is even Amazon starts competing with the third-party sellers if they're not restricted to map. And that's when Best Buy has to match their price. And Best Buy sends a charge back to the brand saying, hey, we had to price match because everybody on Amazon is selling lower and we couldn't move any of our inventory. So we need a charge back. We need a refund for this many units or the difference, the price difference. So brands actually hate it. Speaker 1: So you're saying that when Best Buy does a price match, if I go in to buy a TV at Best Buy and I'm like, look, I can get this for $100 less on Amazon and Best Buy says, OK, we'll match it. Best Buy is not eating that $100. They're charging that back to someone over the TV. Yeah, to the brand. Speaker 2: And the brand absolutely hates it because Best Buy keeps having to match these third-party sellers or sometimes they match Amazon themselves because Amazon's not restricted to mapping some of their contracts as well. So Amazon actually protects themselves as well from the perspective of third-party sellers where when they're making a contract, a 3PL contract with a brand, they tell the brand, hey, if you're not able to control your downstream, that's not our problem. We're not going to respect your map. Unless you're Microsoft or whatever, of course, Amazon's going to respect your map. But yeah, there's chargebacks happening all the time. So anytime Best Buy price matches, they don't eat that up. They send that back to the brand. They tell them, hey, you know, you guys need to refund us that difference. And sometimes it's even worse where Best Buy is not even able to make any sales because everybody on Amazon is pricing so low. Because the consumer is smart. The consumer is looking for the best price out there. And, you know, they're really watching out. So if Best Buy is having to hold on to inventory for longer than You know, they need to. That's also another issue that they're going to have a discussion with the brand about. Speaker 1: So, when you're doing wholesale, you're working on some pretty tight margins. I mean, as a private label seller, you know, I'm looking at 20-30% margins end of the day, you know, after all things said in most cases. But as a wholesale, what's a target that you're shooting for and what sometimes is actually the reality? Speaker 2: Oh, I mean, 5-10% in my business. I mean, I did tell you in 2019, we were at $20 million gross revenue. 2021, we hit $208 million. So we actually 10X the business in three years. But what we're looking at in terms of margin, so usually when I throw that number out there in conferences and whatnot, that's actually what I told you in Helium 10 sell plus scale summit. Everyone thinks, you know, this guy's making bank. The reality is I'm making five to 10%. If you're doing 228 million in private label, You're keeping 30 million or so, maybe even 50 million, but we get to keep, I mean, 10 million, 20 million at best. And we have a lot of overhead. We have a 25,000 square foot warehouse. We have to worry about a lot of investment into the space. Speaker 1: Yeah, that's what a lot of people, and you look at some, one of the biggest wholesalers, you know, just went out of New Jersey, I'm sorry, out of Brooklyn, just went under, you know, that because it's a tough, they were doing crazy numbers and it was a tough, it's a tough business, but you get to ride the backs. I mean, you don't have to build brands, you know, if you're private label, you got to build brands, build recognition. And do things, but you can just, you know, everybody knows who Apple is or Microsoft or Dyson or Fitbit or whatever. And so you can just ride that. But do sometimes you wish, man, I see that these Dyson vacuum, these Dyson hairbrushes or whatever are selling really crazy or these vacuums are selling really crazy. Well, if we just came out with our own private label brands, like that was similar to this, we could come in here and take a piece of the market. Do you ever look at things like that? Speaker 2: Yeah, so I was actually just at IFA Berlin and I was also in Dubai Gitex show. And there's always that one hall that has all the, I'm going to use your example, the vacuum cleaners, that has all the vacuum cleaners. And I always pass by that hall. I always skip everybody there. You know, if you want to compete with Dyson and iRobot and all these, Shark, for example, You better be sure you have a whole lot of money to throw out there just in terms of branding and marketing. I often meet a lot of people on Amazon that say, hey, my goal is to create a brand. Yes, you can create a branded audience. But in order to create a true brand, that's millions and millions of dollars in marketing that you're not going to reap the rewards for until you exit that business. That's what iRobot did. So I often tell the sellers that I meet, they're just finding something on Alibaba or sourcing from China. They have a sourcing agent. They always tell me, hey, I want to create a brand. And I'm like, you don't need to create a brand. Sell on Amazon. It's the biggest marketplace where there's the most search volume in the whole internet is on Amazon. And they're like, yeah, I want to create a brand. I'm like, no, you're not creating a brand. You're creating a product. Later on, it can become a brand. So I always pass by those vacuums that I'm like, yeah, I'm not I'm not interested. I don't want to do distribution for them. I don't want to do logistics for them. Because they just won't have a chance against, you know, so few that will have a chance against iRobot and, and Dyson's and whatnot. Speaker 1: But there's certain categories on Amazon where the brands aren't dominant. I mean, you got, you know, I don't know in Dyson's case, it may be, but in some cases you can see that, hey, this Dyson vacuum cleaner is just crushing it for us on a wholesale basis. What if we just came out with the cheap private label version of this? And yeah, we're not going to beat Dyson and we never expect to beat Dyson. You know, they may be ranked number one and two and three, but There's enough depth here that if we're ranked number seven and eight, we can still make bank and have increased our margins and have something that we know we have the data because we sell this or is that not something that you've ever considered? Speaker 2: Oh yeah, I mean 100%. If you're talking about categories where there isn't that one big dominant player, that's often where I actually recommend people in private label to look into. But I just used that vacuum example. But yes, 100%. I mean, we've been looking into that. We've actually been hiring people. I actually just had an interview with somebody I met at Salon Scale. Where I told them, hey, you know, we're very well capitalized. What we're trying to do at Bassani right now is hire people that are private label owners themselves and operators. And we're hiring them. We're giving them a full-time salary. We're giving them our entire suite of products, whether it's logistics, WMS, everything. And all they have to do is launch their brand using capital that we provide them. So it's kind of like an aggregator, but instead we've actually been operators since 2018, 2017. So yeah, that's something we're looking into. I actually have six employees currently that we put through the Freedom Ticket Program. And these are very creative people. We actually vetted them. And they said, hey, you know, my dream is to Build up this product and whatnot and we're like go for it. You know, you'll have our full backing. They have a full-time job, funding, anything they need and all their job is to create products. Speaker 1: So it's like an incubator in a way, sort of. Do they get a piece of the action? You say they get a salary, but do they also get a piece of the action if they're successful? Speaker 2: Yeah, so we negotiate with each and every one of them to give them obviously, you know, a piece of the overall profit of the product. Speaker 1: That's cool. That's an interesting concept there. That actually is cool. For a lot of people, that might be a great opportunity for someone that can come in and learn from someone that's already doing it and have the support and the financial backing. Like you said, you get the logistics and everything in place already. They may not make as much money as if they did it on their own and were successful, but they probably have a much better chance of succeeding by doing it that way. And actually, perhaps even growing bigger than what they could on their own. Speaker 2: Yeah, I mean, I met somebody at Sell and Scale Summit who has their own business. I think they're roughly taking home 90K from their Amazon sales. So that's profit. And, you know, they just told me, hey, you know, it's hard to keep turning around this cash. And, you know, we need the cash flow and whatnot. There's a potential for a merger. Or where you guys can acquire our company and provide us your funding. Or another opportunity they wanted to explore is just to come on board full time and just launch brands that they've been thinking about. And they presented a case study with the brands that they wanted to launch and we took them on board. Speaker 1: What do you think that's going to go as far as that? Do you think that could become 5-10% of your business or grow bigger? What are you hoping to see this kind of program go? Speaker 2: Yeah, so I mean, my goal behind going to all these conferences and networking is to find people like that. And my goal is to kind of, well, we want to keep the legacy business, which is a wholesale trading. But my goal is to actually find a lot more people like that, because we don't want to be in the 5 to 10% game anymore. We're trying to go for the 30-40%. So I think we're going to have a lot more people on staff that are launching brands left, right and center. And each one of those business leads becomes, you know, the lead of their own brand and they have full control over their brand and we only support them and give them the full suite of our products that we have in-house, being from logistics, WMS and our international distribution capabilities. Speaker 1: So if someone's interested, someone listening to this is interested in actually talking to you about that, how would they reach out or what would they do? Speaker 2: Yeah, I mean, they can reach out, I mean, on my email at osaid, that's O-S-A-I-D, at basatne.com, B-A-S-A-T-N-E.com, or my Instagram, osaidabu, O-S-A-I-D-A-B-U. So that's really where we see the vision. I mean, the thing about aggregators, you might join them, but you know, they're really financial institutions. And I think we're doing a whole lot more organically. Speaker 1: I always say, back on what you were saying about a lot of people think they're a brand. To me, this is just my rule. This is no hard, fast rule, but if you don't have at least 3,000 searches a month for your brand name on Amazon, you're not a brand. That's just kind of where I draw the line is that people think I created this brand, I got this logo, this cool name, but unless people are searching for that specific thing and outside of you doing promotions or search find buys or something like that, but true organic searches, if you don't have at least 3,000, then you're not a brand. And we look at that too. Like when one of my companies, we do licensing. And so we license like Body Glove and we license a few others. And we actually look at that before we do a license to see how strong this brand is. Because there's actually some brands out there that people know but people aren't searching for them by that name. And so the more they're searching for it like Fitbit or Bose or Apple, the more valuable that is. And that's what a lot of people I think just don't understand is there's a lot more to branding than just a name and a logo and sticking in on your stuff and having a few hundred people that are in your Facebook group that always buy your stuff. Speaker 2: Yeah, that's true. And you know, there's a lot of actually brand protection around it that has to go around. So I mean, on Amazon, you need a lot of copyrights and trademarks. And, you know, that's something that aggregators look for as well. Like, they want to make sure you're, you might have a patent, a trademark, something to show who you are. But you know, it really goes beyond that. Brand protection is a huge thing. That's something that we're investing in. We're actually launching a service called Informed without the I. And Informed really deals with the problem that we were talking about earlier in the podcast, which is a map problem. A lot of brands are seeing their listings hijacked. They're seeing people completely tarnish their brand reputation. And that's what Informed is about. Speaker 1: So this is like a software tool that people will be able to subscribe to or something? Speaker 2: Yeah, so it's a software tool. In the beginning, we're not going to open it as a subscription based. I think we're thinking of it more as a consultancy based application where it's really going to be tailored to bigger brands first until we figure out the exact formula that we need to attack all the smaller brands. But it's something that our direct brand partners are having issues with because they keep coming up to us and say, hey, who's so-and-so selling this product? Because they're not authorized. We can't service the warranties. And they keep selling below map. They're tarnishing the brand reputation. And we're able to capture all that data and provide it back to the brand. And that's something we're working on. We've already invested half a million dollars in the software. And yeah, you know, it's not based on API. So it's based on full real time data. Speaker 1: Wow, that's a big database. That's a lot of horsepower to do that. Speaker 2: It's huge. I mean, and the applications for it is endless. I mean, the same engine that we built to capture all this data, we're going to use it for other applications as well. I mean, a repricer is possibly one of them, but it could go much beyond that. I mean, one thing that we do is we actually go into Every person's offer on Amazon, every offer on Amazon, in the buy box or not, and we do the 999 trick. I think a lot of people know that trick, where you add it to cart, change 999, and you see how much they have in inventory. And from the delta, then we do it every 15 minutes. And from the delta, we can tell how many they sold. And when we tell how many we sold, we can aggregate that across all the sellers and get the exact number of sales that happened during that time period. Speaker 1: So from growing in 2019 from 20 some odd million to now 10xing that basically in three years, what was the biggest contributor to that? Is it you got some new licenses? You got the Apple license or I don't know, the Microsoft license and that just exploded sales? Was it just adding more licenses? Was it doing this, like you said, switching from just wholesaling out to stores and other distributors to actually going to Amazon? What was the big driver of that catalyst to 10x in three years? Speaker 2: I mean, in 2019, we were very Amazon focused. We were selling a lot on Amazon and in 2020, I got hit with my first suspended account. And that's when I decided, you know, from now on, Amazon is going to only be 10% of my business. 90% is going to be everything else. And I think the biggest contributing factor to our growth was really moving to the U.S. We were initially using freight forwarders and logistics partners in the U.S. But as a wholesale distributor, you know, that really limits your growth. And when we moved to the U.S., we got a whole lot more access to capital, to funding. We have good relations with many of the major banks. The U.S. consumer consumes like no other. It's crazy what we were able to do here. We went from 20 million in 2019 in Canada to 228 million three years later. And honestly, I would say most of that is just making the move into the U.S. market. Speaker 1: So a lot of that's coming from outside of Amazon then? Speaker 2: Yeah, Amazon's only 20 million. Speaker 1: 20 million of that? So you have deals like Ingram and stuff like that where if I'm some small little Apple authorized reseller that I can and I need three Fitbits and or not three Fitbits but three Apple watches or something they're getting out you're the one fulfilling it out of your warehouse in Dallas? Speaker 2: We're actually currently in negotiations with Ingram regarding a deal that we're doing with them. But yeah, we have deals with all the big distributors like Likewise, which formerly used to be Brightstar, and many other large players in the field. Speaker 1: What's the biggest challenge in doing it, in doing the wholesale versus the private label side? Besides the lower margins, but what do you think is the biggest challenge? Speaker 2: I think the biggest challenge is establishing that brand relationship. I mean, you want to show the brand that you really care about their brand, that you're there to protect their brand and not to harm them. I did mention that, you know, sometimes we're indirect with a brand, we will sell online without authorization. But, you know, once you go direct with a brand, you're really trying to establish that relationship and show them that, hey, you know, I have, I'm not just another flipper. Those brands don't really need you. I mean, if you're Microsoft, anybody can sell Microsoft Surface Laptop. What makes you different? And that's really what we had to build out. That's one of the reasons why we built out Informed, because we want to add value to the brands. We want to show them we're not just flipping their products, but we're also, you know, doing R&D and partnering with them at every journey of the product lifecycle. Speaker 1: So a lot of this is about personal relationships then with the people at those brands. Speaker 2: Correct, yeah. Speaker 1: So are there any side benefits? Like if you're the biggest seller of Dyson vacuum cleaners, do you get invited to their Christmas parties or any kind of cool events or their box at the Dallas Cowboys Stadium or something like that? Speaker 2: Yeah, I mean, I've definitely been invited to a few suites. But I mean, I would say the biggest benefit is the cash back that you would get from some of the credit cards you use. I mean, it's a whole lot more money that you're spending over a short amount of time. Speaker 1: So by cash back you mean that your company is actually buying a lot of inventory using credit cards to get the airline miles and the cash back and stuff like that. Speaker 2: I mean sometimes it would be using a credit card. Other times obviously it's a wire and whatnot depending on the specific deal. Speaker 1: So where do you see the company going? Where do you see this going? What's going to happen next? Speaker 2: So actually Basane is kind of Splitting up into many different business units. One business unit I mentioned to you was the incubation, where we're just investing in private label sellers and private label brands that are already existing and acquiring them. So that's one side of our business. The other side is really the software side and that's where we're really investing in informed. That's informed without an I. It's not launched yet, but we're really making significant investments and doing a lot of R&D into the software space in order to help brands and I eventually help sellers as well. And the third side is really the wholesale. I mean, we're one of very few accounts on Amazon that are approved to sell Apple renewed iPhones and iPads and whatnot. And the wholesale side will keep going. We just opened up our third facility in Dubai, United Arab Emirates. So the wholesale side will keep existing. But that's really the three pillars that I'm currently most involved in. Speaker 1: Are you looking to expand any other marketplaces, other Amazon marketplaces or are you just going to concentrate still on just US and Canada and that's good enough for now? Speaker 2: So I already sell on Walmart. I tried selling on UAE, Amazon. I think they need a few more months or maybe one or two more years to really build that out. Australia is pretty good. Amazon Germany is really good. Mexico is obviously really good. I sell many of those. But United Arab Emirates, I didn't really sell much in. I stopped it after like two months. And I sell on Walmart as well. Speaker 1: How's Walmart do? Is it similar to Canada, like 10% of your sales? Or how's Walmart do for you? 10% of Amazon sales, I mean? Speaker 2: I mean, we're doing $20 million on Walmart. We've only done $1 million on, sorry, we're doing $21 million on Amazon. We've only done $1 million on Walmart. The Walmart customer experience is something I'm not a fan of. They've been improving it, but usually the pace of improvements is nowhere near Amazon's. So they're really slow. When they notice a problem, they're really slow to get to it. But if you're doing wholesale, I highly recommend Walmart because it's just another channel. I often meet sellers that go like, hey, I own my own business. I'm like, so what does your business do? He's like, I sell on Amazon. I'm like, well, that's not a business. That's a channel. If you want a business, you're going to have to have multiple channels, whether it be direct sales into wholesalers, you're selling to farmers markets and whatnot, if your product allows you to. Amazon is obviously a huge one. You should be on there. I'm not saying you shouldn't, but you need multiple channels. You can't put all your eggs in one basket. Speaker 1: Exactly. So you said that earlier that you've had like six or something of your employees go through the Freedom Ticket. How was that experience for them? Speaker 2: I think they loved it. Actually, when I met you at the Helium 10 Cell Plus Scale Summit, I sent a picture in the group chat and everybody was excited. I put everybody through that program and I think it's invaluable. There's a lot of information on there that you need. I'm someone that's first starting up, but many of the guys that we're hiring, they're already veterans in the space. They might have exited a business before and now they just want a full-time position where they want to relax. But I still send them through the Freedom Ticket. I think that course is invaluable and honestly, I meet a lot of people in the space that want to get into Amazon selling and they're all taking these $5,000, $10,000 courses or they're in somebody's inner circle to become an Amazon seller. I'm like, how much did you pay for that? And they're like, Oh, I paid $25,000. And I'm like, Oh, man, you got to get on the freedom ticket. Speaker 1: Yeah, freedom ticket for those listening. If you're not aware, it's free if you have a helium 10. Software, any level of their software. Then you get about 60 plus hours now, I think they've added some additional stuff to it, especially on the PPC side, of training from A to Z on how to sell on Amazon. Some of it, like Osaid said, is if you've been selling for a while, you can skip over the part maybe about forming a company and some of the basics, but there's a lot of other good stuff in there that really covers all the nitty gritty of selling. A lot of courses and a lot of stuff out there just covers the sexy stuff. And they leave out the numbers and some of the unsexy, but Freedom Ticket covers it all. So check that out if you haven't checked that out. So you said you get out there and go to some conferences and stuff. I met you at Sell and Scale back in September. What do you get from going to these as a wholesaler? A lot of these conferences are more geared towards private label sellers. And maybe that's why you're going, because you're trying to switch into that. But what's the biggest benefit you get from going to some of these conferences? Speaker 2: So I mostly stick around like there's a lot of seminars in these conferences, but what I try to do is I honestly talk to everybody and anybody at these conferences. There was a seven-figure networking session that happened in cell plus scale and I sat at the table. With somebody, I've never met him in my life. You know, you'd think being as big as we are in this space, we'd know all the wholesalers because there's only a few. But it turns out he's literally 20 minutes away from my warehouse. He has a 40,000 square foot warehouse and he does the exact same product, knows every single guy that I know in the business. So, what I try to do is I honestly try to network as much as possible. I think it's invaluable and, you know, just kind of putting your name out there, say hi to everybody. There's a lot of bright people in the space and the industry is small, but it's also very captivating. Speaker 1: Awesome. Well, Osaid, I really appreciate you taking some time today. I know you're a busy man. I got a lot of things going on over there. Thanks for taking the time out and joining us and talk a little shop here on the AM PM podcast. Speaker 2: Thank you for having me. It's a pleasure to be here. Speaker 1: And again, what was that if someone wants to reach out or learn more or connect with you? What was that way they could do that again? Speaker 2: Yeah, so a couple ways. Basatne.com. That's our website. B-A-S-A-T-N-E dot com. Or directly through my email. Osaid at Basatne.com. That's O-S-A-I-D at Basatne.com. Speaker 1: Awesome. Thanks, man. Appreciate it. I hope you really enjoyed this episode of the AM PM podcast with Osaid. We spoke about a lot of things that you don't hear too much about the wholesale side, some of the challenges in that side of the business and some of what they're doing to actually get their margins up. It was very interesting. Hopefully you got some good value from this and were entertained. I look forward to seeing you again next week in the next episode. And before we head out today, I've always got a little nugget of information for you. And today is no different. Just remember that nearly everything in life is unfavorable once it grows to a certain size. It's entirely possible to have too many clients, too much work, too much fame, too much free time and so on. Always pay attention to when the thing you're chasing exceeds its usefulness. I think a lot of us lose track of that and lose focus of that. Again, nearly everything in life is unfavorable once it grows to a certain size. It's entirely possible to have too many clients, too much work, too much fame, too much free time and so on. Always pay attention to when the thing that you're chasing exceeds its usefulness. Have a great week and we'll see you next week on the next AM PM Podcast. Speaker 2: you.