#410 - When Does Price Really Matter on Amazon with Chad Rubin

#410 - When Does Price Really Matter on Amazon with Chad Rubin Kevin King: Welcome to episode 410 of the AM-PM Podcast. My guest this week is one of the OGs in the space, Mr. Chad Rubin. Chad started off selling vacuum cleaner parts and vacuum cleaners on Amazon when he got laid off from his Wall Street job back during the big Wall Street crash of 2008. He then went on to start one of the first software companies for cross-marketplace inventory and pricing controls, Skubana, helped start the Prosper Show, and his latest adventure is with Profasee and helping sellers maximize their price. We talk about his journey, about why you need to be paying attention to price, and most sellers aren't, and what are some of the The things that you need to be taking a look at is why price really matters on Amazon. It's not always about the lowest price either. Enjoy this episode with Chad. 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. Kevin King: What's up, Mr. Chad Rubin? How you doing? Good to have you here on the AM-PM Podcast. How's it going, man? Speaker 2: I'm very excited to be here, man. Thanks for having me. Kevin King: Yeah, we both go back a ways. I think you've been doing this a little bit longer than even me. I've been selling on Amazon since 2001, but this whole FBA, sending stuff into Amazon and having them ship it out model since 2015, but I think you started before that, right? Speaker 2: I started, let's see, I was 2006 roughly. So maybe you're going to have to start with me actually. 2006. Yeah, 2006. Kevin King: What were you, were you doing arbitrage or did you actually start like a little private label brand or are you doing wholesale? Speaker 2: What were you doing in 2006? 2006 my parents owned a vacuum cleaner store. And I was on Wall Street. I hated my job. And so I was helping them sell on Amazon. I was covering Amazon as a stock and that's how I found out about the marketplace. I was like, mom, dad, you guys should be selling on Amazon. So I was helping them resell their product on Amazon. I was listing the product and then realized that reselling was just a game of musical chairs. And then we started a private label vacuum cleaner business on Amazon that led into coffee filters, vacuum filters, cannabis filters, air filters, you name it. Kevin King: This vacuum shop, was it like one of those Kirby brands or like door-to-door brands or was it like parts and supplies or was it, because what it back then is like Sears and Kirby I think or the two big ones or something, right? Speaker 2: Yeah, so I mean there's a lot of vacuum brands, Miele, but my father owned a vacuum store and so if you want to buy like a cheap garbage vacuum, you go to Walmart. But if you wanted to say something that was built to last, my father would sell vacuums that were made in America. One brand was called Simplicity. They actually just started selling on Amazon, literally. I think I just noticed recently they were selling on Amazon, but they had refused to be on Amazon. So my father would sell these exclusive vacuums. He would really demonstrate the value and show the differences between a garbage vacuum like Eureka or Hoover or Abyssal versus like a Miele or a Simplicity vacuum. Kevin King: So these are more, were these like vacuums for like a housewives or these more like industrial vacuums for like janitorial services and stuff like that? Speaker 2: It was really for just families and it was, we lived in a small town so he would sell like the accessories and sell the vacuums and the truth of the matter is like I had a very difficult childhood because my parents always struggled to make ends meet. So, I grew up, I never wanted to be an entrepreneur. I never wanted to be in the vacuum industry and I just wanted to go work for a corporation. That's why I was like, okay, let me be a first-generation college grad. I went to University of Massachusetts. I studied finance. My dream was to go on to Wall Street and then I ended up where I didn't want to be, which I love it, but I ended up selling vacuum cleaner accessories on Amazon and I was an entrepreneur. I was in control of my own destiny. So, it's interesting how that all happened. Kevin King: So, your whole entrepreneur destiny started by helping your parents just make a little extra cash by putting the stuff on Amazon, but you were doing, your day job was Wall Street and then something happened, the big boom, the big crash happened and you had to make a pivot, right? Speaker 2: Yeah, so 2009, Friday the 13th, I remember it was like it was yesterday. I had Chipotle for lunch, I come back into the office and my boss, so I survived many different head cuts during this time, during the Great Recession. I was assigned a boss. I was assigned a new boss. I always picked my boss, but I was assigned a boss and that boss decided to fire me after working tirelessly for him. We just didn't see eye to eye on stocks, stock picking and the way we communicate the value of those stocks to hedge funds, institutional investors, so he fired me. My father comes to pick me up off the curb in Manhattan. We didn't really talk much. I was devastated and my father just said, hey, you're free. You've been helping us make a lot of money. How much more money to make if you dedicate and devote time into this business? So I started to really increase and ramp up on Amazon. I took a retraining program on Photoshop that was offered through the Obama retraining program for those that were like leaving Wall Street. So I like ramped up on Photoshop and Illustrator and started to just Post products to Amazon. Kevin King: So were you sourcing, were you posting his products still or were you, that's when you started the private label brand or were you sourcing stuff on Alibaba or what was, this was before amazing.com or this whole model that everybody teaches now and knows now. Speaker 2: Yep. Kevin King: This is the early days, this is the wild, wild west. It was the wild, wild west. So what was your process? Speaker 2: And margins were just so beautiful. So, my process was like, first I was relisting stuff for him and then I started finding, okay, I can go to China and I met with, I used one of these, you know how they expose the bill of ladings, Pangeva? Yeah. There's many copycats now. Pangeva, I used to find some manufacturers and I just went to China. This is shortly after I left Wall Street. Kevin King: You actually got on a plane and went to China? Speaker 2: Yes, yes. And found factories, met with them. I saw what was being made and I was like, okay, let me bring my first product. So I brought in my first product to the Upper West Side in New York. The product was an LTL shipment. It was delivered on the street. So I had no pallet jack, nothing to bring that in. And I just took a scissor, cut it open and just started loading up our apartment with all of these vacuum filters. It was significant. Our apartment was a duplex, but it was still small. It was still the smallest place. My kitchen was the size of where I am right now. My wife was like, hey, you need to move. You need to get this out of here. We can't have this here. That's where I got my first storage facility in Harlem, 123rd, I think, on 2nd Avenue. Kevin King: This is a private label vacuum cleaner. Speaker 2: First we started with a vacuum filter because I felt like vacuum bags were already commoditized on Amazon and so vacuum filters is where I started spending money. I would buy a filter for $1.40 and sell it for $24.99. Kevin King: Was that a lot of SKUs then? You had to have filters for different size vacuums or did you specialize in something specific? Speaker 2: So I was just doing prop research. I was looking at the best and there was, I don't even think at the time, I don't think even Helium 10 was, I would just use Amazon. I would sort on Amazon by bestseller vacuums and I would find what accessories fit those vacuums. Starting from the top, stack rank them, prioritize them, go to China, buy them, bring them in. Brandon Munger, our own brand name, and we had a significant advantage. Nobody was doing this. So, I mean, if you fast forward to today, the business is still alive today. It's called Think Crucial. We make anything that you can think of that's crucial in the home. We manufacture anything that's replaceable. And we have about 550 stews, all unique items. And yeah, I mean, that's the genesis of it. When I first started and I was fired. Kevin King: So you still run this company today or did you end up selling it? Speaker 2: No, I still have it today. It's still running. I don't run it. I'm on an L10 EOS meeting once a week for an hour and a half. But that's my involvement currently. Kevin King: So, but since then, there's been a whole bunch of these like parts companies that have popped up, right? I mean, you were kind of one of the first, I guess, that's providing aftermarket parts or something for, but now there's companies that if your refrigerator, the little plastic shelf on shelf three breaks for a Samsung 47-3623, you can like buy a replacement part. Speaker 2: Yeah, that's right. So the business has been under attack. I thought that people were going to catch up to me when I first launched. I only thought I had a six-month lead time. It took years for this to happen and to develop. It took ASM. I think actually that's when we first met. It was at ASM. I think Manny was there. We were all speaking outside the conference hall. I was running the Skubana inventory system at the time. And yeah, that's when we first met. Kevin King: I think it was in 20, maybe 2014, 2013. Probably been 20, if Manny was there, that'd been, because Helium 10 started in 2015 and really started taking off in 20, the genesis of it was 2015. It really started taking off in 2016. And he came to Austin to do a deal with Amazing.com in the summer of 2016. They rebranded it SellerCon later on, but it was called The Amazing Show or whatever it was called, Amazing.com Show. That's probably where it was. That's where Manny, because he hit a million. I remember he hit a million dollars in sales that day at the bar. He was all happy that he hit a million bucks in sales on Amazon selling diffusers. Speaker 2: That's when we first met. I thought that I was going to be copied right away. It did take some time. I always had this rear-view mirror of like, hey, what's going to happen? It probably comes from a deep-rooted childhood trauma, but I always saw people in the Amazon space that were going to be on my heels. And now it's actually increased quite a bit. We're essentially copied all the time. And now actually we're not even leading the charge any longer. There's many others that are far more sophisticated than us that move into products far quicker than we do. And it's partially because I've been focused on a lot of other things in my career in the e-commerce space, but it is a reality. Kevin King: Hey, what's up everybody? Kevin King here. You know, one of the number one questions I get is how can you connect to me? How can I, Kevin, get some advice or speak with you? Or learn more from you, the best way is with Helium 10 Elite. If you go to h10.me forward slash elite, you can get all the information and sign up for Helium 10 Elite. Every month I lead advanced training where I do seven ninja hacks. We also have live masterminds and every single week, one of those weeks I jump on for a couple hours and we talk shop, we talk business, do in-person events. Helium 10 Elite is where you want to be. It's only $99 extra. On your Helium 10 membership it's h10h10.me.me forward slash elite. Go check it out and I hope to see you there. So is that business still servicing like the old-school machines or you constantly have it's like iPhone cases there's constantly new models coming out you're constantly having to add new sizes and new SKUs. Speaker 2: We've been adding over time. We've been investing in tooling over time. Over time, those products get commoditized, whether it's China coming in or someone sharing my tooling in China. There's not a lot of protection there, so that could be something that's happening. But yes, that business, we have to constantly innovate because our margins are eroding. And deteriorating significantly and that is accelerating over time. Kevin King: I think that's probably true for a lot of people. I mean, I think a lot of people get, and correct me if you disagree, but they get into this business and they think once they find a winner, they can just sit back and relax. But you can't. I mean, there's a life cycle for most products and some of them last a while, but you've got to constantly be, what's that saying? One of the guys out there says, you always got to be launching. Always be launching. You always got to be innovating. And I think a lot of sellers, in my experience, don't understand that. They think they get a winner and they just coast. They think they can coast. Speaker 2: If you look at even the first iteration of the iPhone, if iPhone never iterated from the iPhone 1 to the 5 to the 6 to the 8 to the 10, they wouldn't have the market share they have today. You have to constantly be iterating because competitors are employing significant R&D strategy, and that is rip-off and duplicate, and that's happening across the product spectrum. I think it's not just me, it's happening across the board unless you have a patent that you can enforce on Amazon. Unless you have a significant mode that gives you a competitive advantage that protects you, nobody's protected. Kevin King: So are you still using the same manufacturers that you got on that plane 15 years ago to go to China or have you switched? Speaker 2: So interesting, when I first went to China, I met a woman and she was the factory manager at the biggest filter manufacturer in China. We stayed in touch and she was my go-to contact when I wanted to buy filters and invest in filters. And one day on Skype, she says, Hey Chad, I'm really not happy in my job. And I was like, Oh, I'm sorry to hear that. And then I kind of put two and two together and seemed like she wanted to come work for me. So I ended up hiring her directly and she became my sourcing agent for the business and we expanded. Suddenly then her cousin opened up a factory. How coincidental is that? And we started... We then started buying from her cousin's factory and that's probably where a majority of our spend comes out of today. Kevin King: Are you doing anything, like you said, to try to protect the IP or you said there's tool sharing going on or you just throw up your hands, it's just not worth the fight? Speaker 2: You know, it's just hard to trace these things. I think in China, even when you talk to other sellers, every seller is going to these factories, visiting those factories, they're seeing what's being made. Like all your stuff is exposed, your UPCs, there is no trade, there's no secrets. And so even if it's a handshake, and I know I was on a podcast or webinar recently and someone said, oh, you got to constantly be giving gifts. I still find that there's just a lack of honoring agreements in China specifically, and there's just no trade secrets that are kept secret. And it's a problem, right? So really, I mean, we have tooling agreements, but are those shared? Yeah, probably. Are they shared immediately? Probably not. But once they see that there's significant volume or other people discover it, it's just a matter of time. Kevin King: So as a result of you having to manage these 550 SKUs or whatever you said it was, I'm assuming you must have hit a wall or I can't keep doing this in Excel spreadsheets or whatever and you're like, I need something that can manage this and we need to expand off of Amazon and sell this stuff in other places. Is that what led to Skubana? Is that what led to starting one of the very first multi-marketplace, multi-platform management systems? Speaker 2: Yep. We were on Amazon, but by the way, Amazon at the time was only 50% of our revenue. So the other 50% of our revenue is driven on, we were on a platform called Volusion. I'm dating myself. So we went from Volusion to Magento then to Shopify somewhere in 2017 or 2016. But we started with Volusion. So essentially 50% of our revenue was off Amazon and none of these, even in eBay. So it was eBay, Volusion, Overstock, Wayfair, Amazon. And so we have a platform that can handle my order volume. We're doing significant order volumes. Again, there is no competition at the time. So we started an inventory order management platform to manage cross-channel inventory levels. And when we sell on Amazon, we would update Volusion. When we sell on Volusion, we would update Overstock. There is nothing that was purpose-built because everyone just knew commerce, but there was an additional E that was added to commerce, which was e-commerce, that it was sort of new in the Wild West, like you mentioned, and there was no solution that could actually satisfy my requirements. And NetSuite was just way too bulky and too expensive of a deployment, so we started to build it. Kevin King: Did you have a background in software or you just figured it out as you went? Speaker 2: No, actually, so I, a good friend from college, met his good friend on a tennis court in Washington, D.C., who happened to be a developer for a pharmaceutical company called McKesson. And when he told the individual DJ, who became my partner in the business, that this wasn't around or available, he was shocked. He was like, wait a minute, are you kidding? This isn't around, this isn't available. So he came to my warehouse and he thought, oh, this is an Amazon seller. I'm probably a top 100 seller at the time. He thought there was going to be cranes and robots moving around and it was just stacks and stacks of boxes. It was a jungle. Nothing was organized. Everything was on like an iPad with spreadsheets and that was the start of building Skubana. So we started with kind of a shipping offer, very similar to ShipStation. And then we started adding inventory and then we added analytics to it with purchase order automation and we built an app store so we didn't have to build everything ourselves. And then we eventually sold in April of 2021. It sold to private equity, to a strategic buyer, or what did it sell to? Well, so they're a strategic buyer that was backed by a private equity company. So, and it was, if you think about what happened in April 21, like the business just shot up, rocket ship, because what happened was in 2020 was the pandemic, people moved towards shopping online and retail stores, Amazon shut down their FBA warehouses, and so people needed to overnight create, to sell, ship by merchant, FBM. Or connect to a 3PL and our system allows you to do that immediately. So the business just skyrocketed and took off and we got an offer that was a beautiful outcome for our shareholders, the stakeholders, my family and so we were like, we moved on that offer very quickly. Kevin King: How long did you have to stay on in an advisory role after you exited? Speaker 2: So interesting, I always think that The terms of the deal really will dictate what your role is going to be. And so I became, I was an at-will employee April of 2021, meaning they gave us an offer that didn't have a earn out or cash. I didn't have to stay on. I was just an at-will employee. So I stayed on. I helped with the transition. I helped with employees making the transition. And then I resigned in October of 2021. Kevin King: As a company, is it still running under the Skubana brand now or has it rolled into something else? Speaker 2: So their company is called 3PL Central. They essentially were an operating system for 3PLs and they wanted our order management system to help with lighting up those various fragmented 3PLs and connecting those 3PLs and tethering them together so you can share inventory levels at these different 3PLs. So they were running a company called 3PL Central. We're an operating system for brands. They took us over and then they rebranded to a different company name called Extensive. Kevin King: Along these times, so you're running a vacuum cleaner company, you're starting a software company and then you said, hey, that's not, I got a wife but who, you know, I'll spend some time with her but I got a little bit of spare time on the side. Let me start up a trade show too. So you start up, how did the, what was the genesis and how did the Prosper Show come to be with you and James and the gang there? Speaker 2: Yeah, so James was my account manager at Amazon. So, imagine being a seller on Amazon, having an account manager that's in Seattle and he was there for a long time and we developed a relationship. He would actually help me solve a lot of the problems. As you can imagine, even now, brands have problems on Amazon. Well, back then, those challenges were compounding. So, I had direct access to James and when I first started Skubana, I was like, okay, who are the top 10 people that I think would be great investors in this company? Not just money, but smart money, someone who can actually Think critically about this business and help us scale. So one of those people was James Thompson. Now, the other person, by the way, that invested is a guy named Brian Lee. He started a company called LegalZoom, shoe-dazzled with Kim Kardashian, an honest company with Jessica Alba. I think that's her name. Kevin King: Yeah, that's right. Speaker 2: And so he actually became an investor too. He actually became on our board. Did you know him? I emailed him a really curated email being like, look, you're the face of LegalZoom. You disrupted an industry and people needed Robert Kardashian's face to be part of LegalZoom to make it work or needed some trust. I was like, what better person to have you believe in this business and have your face as part of this company to give it trust because people weren't understanding this idea of like multi-channel inventory management at the time. They looked at me like I was crazy. I have a PDF of like, I would say about 150 no's when I was trying to raise money. I saved every single one of those no's, all those emails saying, hey, you're not going to be able to do it. It's not possible. Why are you building this? The market is too small." And it wasn't. None of those were true. I was non-consensus when I was building it and I was right, but only of course it took seven years to realize that I was right on creating that business. So backing up to your question around Prosper Show, When I started Skubana, I called up James like, hey, James, you're a very early employee. You had a lot of options at Amazon. I would love for you to invest in this business. And he was like, okay, let's do it. I believe in you, Chad. Let's do it. Then, about, I don't know, I want to say maybe a year later, he calls me up. He's like, hey, I had this idea around building a community. There is no community for Amazon sellers. What are your thoughts around building this together? And I was like, okay, let's do it. So, became a co-founder. I put in some investment capital into the business to start scaling it and it worked. Kevin King: That was 2015, right? Was the first Prosper Show in Utah, I believe it was? Speaker 2: Yep, Salt Lake City, Utah was the first one. It was pretty wild. It was like wrangling all different, like nobody, there was nothing tethering the community together. And there was nobody that was like sharing information at the time. There wasn't a whole lot of sharing happening. Kevin King: You had Amazing.com that was kind of starting to take off around that time. 2013, 2014, 2015 was their heyday. They were doing shows with 2,500-3,000 people. If you bought their $5,000 how to sell on Amazon, you got to come to Vegas or something to a show and they would put 2,500-3,000 people in a room. That was probably the closest thing to any kind of little community at the time. Speaker 2: Yeah, you know, and ASM wasn't even on my radar at the time. I think I was just like so deep and so focused and working so diligently that I wasn't spending time like on Facebook or like taking any course. I didn't take any courses, right? My course was, hey, fail, learn, fail, learn, iterate. Kevin King: Course of hard knocks. Speaker 2: Yeah, exactly. Kevin King: So how did you get the first people to come to the Prosper Show? If you weren't doing social media, did James just have access to a group of people that he emailed and said, hey, we're doing a show in Salt Lake City? Or how did that first word get out on that first show to get a few hundred people or however many you had there? Speaker 2: So a lot of sponsors actually were driving signups. So that was part of it. James, of course, We built a nice outbound engine around it, but Skubana drove a good amount of people. Eitan Wiener was part of it. He drove a big amount of the Jewish community in New York. And there was another person, an individual that was part of the company, Joe Hanson, who started running BuyBox Experts at the time. He helped. So we all pitched in in our own way and all added our own flavor to building this conference. Kevin King: And so was the original idea just to have a conference once a year? Was it the plan was to do it more than once a year in different countries and build this whole community? Or what was the original game plan and how did that evolve? Speaker 2: Game plan was once a year to build, to help other sellers flourish as much as we possibly can. Of course, to make a good amount of money at the same time. And we knew that this was an opportunity that this business would be sellable. Because there was no one else that was doing it at the time. Like now, everyone and their mother has a conference. Like conferences are everywhere. Of course, I mean, you know this space now even better than many, which is it's all about how you curate the conference and how you build an experience and how you activate potentiality. But when Prosper first started, there was nothing, really nothing like it out there. It was like the Mecca for Amazon sellers. Kevin King: I remember hearing about in 2015, I was going to go, because that's right when I was getting heavy in FBA. I think it was like summer, early fall of 2015, and I was going to go. I didn't, for whatever reason. I think it probably, I didn't have the $379 or something at the time to buy a ticket. Everything was tied up in inventory, but I've been to every single one, I think, since then. And, you know, after you guys built it up and it became the place to be. I mean, it's like, if you're in the industry, it's the, it was the place to go. It had the most, the biggest trade show, 100 plus boosts or whatever it was. You go to some of these others, there's like six sponsors or something, you know, you had, I think you got up to 1,500, 2,000 people attendees at one point, and then you guys sold it, what, in 2019? We sold it to Emerald just at the end of 2018. So I think we closed in December. So you sold it to a big company that does lots of conferences, and it lost, in my opinion, this is my opinion, it lost some of its touch. It lost some of its authenticity, it lost some of its touch, and it became what I call corporate BS. Just speakers that were If you sponsored, you got to speak on stage and the speakers would be people that have never even, they don't even know how to open a seller central account. They don't even know what a cost is. They're corporate people and that were in executive roles and smart people, nothing but they, it was useless and it started going downhill and then I posted something in my newsletter and on social media in March of this year saying, has it jumped the shark? And that caused a huge controversy around it and in fairness, they had actually taken a couple steps and they've taken a few more since then to actually correct the ship and actually did a good job. They brought on some actual sellers, some actual people in the industry to their board that actually have a clue of what's going on and I think You know, they're writing it and I know their attendance this year was up, but when someone like me comes out and says something, and this is your old baby, it's not yours anymore, how does that make you, does that... strike a nerve in you or anything, or is it like, well, that's not mine anymore, I agree with that, or what does that do when you hear something like that, that someone's kind of like slamming your... Speaker 2: So first of all, I want to say that I have a tremendous amount of respect for those that are willing to put their neck out there and share how they feel, right, and I think that We're lacking that, I think, in Amazon and in many other places of our life. I think in general, we're taught to not talk about sex, politics, or religion at the dinner table. Essentially, what that means is it's meant to preserve harmony. I think there's a way to create positive, good controversy. You cultivate good heat because that will allow things to progress. It kind of opens up. It creates an opening. And so I really respect that value and admire that and I think I'm also kind of cut in that same cloth where I tend to want to speak the truth and it's really just to help open up people's minds to seeing the world a little bit differently. We don't have to agree. But I think it's really important to share our perspective and to still be friends at the end of the day. So in terms of your share around Prosper, like a thousand percent. I think that when we first started Prosper, it was completely different. Potentiality was awakened. We were creating a memorable and transformative experience, at least from a content perspective. And what you've had happen, like many things in the Amazon community, Is that they essentially erode over time and you have to follow the money. And so when you look at speakers, right, there's a lot of talking at you, right, there's always this Objective or intention where they're kind of coming up on stage to sell you something and sometimes it's actually more blatant than ever before. I completely align with your perspective on it and by the way, this is not just Prosper, right? This is happening across many different conferences where it feels just sort of this like good old network of pay-to-play speakers and so yeah, to answer your question, I'm aligned with you on that. Kevin King: It seems that they may be making some corrections and some changes and I hope that continues and they can bring that back. But I also agree with you that everybody and their dog has a conference these days where it's a virtual conference or every day I'm getting four or five emails about some virtual conference or something and there's too much. And a lot of it is the same people doing the same stuff over and over and over. And I don't know what the answer to that is, but most of these people that are doing especially in-person conferences, they're not making money. The vast majority of them are not making money, so a lot of times they're one and done. Or the ones that are doing it over, they're eking out a small little profit. And I don't know what it is that draws so many people to doing a conference. Maybe it's that they want to build a community, they want to feel That they're the king of the tribe or I don't know, what do you think it is that has all these people wanting to do these conferences? Some of it's lead magnets, you know, if you're doing a virtual webinar or something, you're trying to get leads for your software company or something, but what is it that, why are there so many? What do you think? Speaker 2: I think that there's been a lot of money thrown into the Amazon space and so sponsors fund these conferences and there's actually, I think there's a good margin in creating conferences. For me personally, I just turned 39, so to me, my time is extremely valuable. In fact, the less time that I have on this planet, the more my time is worth, the more value my time is. It's inversely related. I just find that I'm getting more and more focused on where I'm allocating time and aligning that to really my heart. What I do crave and I think what the industry craves in general is quality over quantity. I think it's more so around engagement of attendees versus attendance and certainly with a focus of like learning and experience and like workshops. Like a lot of times there could be someone speaking on stage but the person next to me is doing 10x more than me. The people in the room can share so much more and so the problem I think that I'm finding is that a lot of these conferences actually don't introduce you to those other people. They're not creating that and activating that of learning. People are so focused on this one-way content and I think that there's a better approach that could be created. Kevin King: And in the meantime, be sure you check out BillionDollarSellerSummit.com. My next event is in Iceland. The next BDSS is in Iceland in April of 2025. Love to have you there. And in the meantime, I've got something coming up in September here in just a couple weeks in Austin. Market Masters event. It's a small event so if you're looking for individual help in your business one-on-one with the Dream 100 from BDSS and you want them to actually spend a couple hours really dissecting your particular needs and your particular business, this is the place you want to be. It's a small group in a mansion outside of Austin by the lake. It's going to be awesome. Check out Market Masters at BillionDollarSellerSummit.com. And one of the other things that you do a lot right now is you give back to the community, especially on LinkedIn. You're big on LinkedIn. And you're constantly doing like a little case studies. Like you did one on like, how did this guy crush it on the garlic press? You know, how did Aaron, you know, you kind of went in and dove deep and like, look, he lost money for whatever it was, nine months or 11 months, a long time, lost money. And this is what he did. And you had the numbers and then you do stuff on here. I've played with every AI tool. Here's the 14 best AI tools are you'll go in and someone says something, you'll counter them and say, no, that's kind of, you know, think of it in a different way that may be bull. Don't just take it at face value. Where do you get all this? Is it just from experience? Are you consuming a lot of information? Or are you just trying to give back? What's the goal there on that? Speaker 2: So just firstly, that Zulay post where I really did a deep dive around his garlic press and his strategy, I used Helium 10 for that. And I gave him an opportunity. I said, Hey, by the way, I'm about to go live with this post. I put a lot of time and investment of time into this post. I've analyzed, I've created a spreadsheet. Here's all the assets I want you to take a look at before I go live. And he didn't have time to respond or whatever. And so I went live with it and he got a lot of followers from it afterwards, which is pretty cool. The reason why, in general, I would say is like, How did I come up with that first? I would say I was like on his post. I'm constantly going on Amazon, seeing what is new, what's happening. I want to learn from the best. And this specifically, I was like, okay, like let's look at his price to BSR chart. Let's see what he's doing. And I started analyzing his price changes and how he's using price to increase his ranking position on Amazon and how he did over time and how he initially lost like Six figures, high six figures of dollars and then now is actually making roughly about a million dollars a month on his product. So why do I do it? I think it goes back to what we were talking about earlier, right? I want to, first of all, I want to leave this e-commerce industry better than how I found it. That's like a mission for me. I want to leave it better and I think I'm doing a great job at it. It's my mission in life in general is to help others flourish And two is to really like open up our eyes to new things and like one of those things is pricing and nobody's talking about pricing specifically in the Amazon space and so I'm trying to open people's eyes up to like, hey, by the way, this is a massive lever. It all drops to the bottom line and like here's somebody who's probably one of the most successful sellers that I know who's using price instead of using ad spend as a lever to make a whole lot more money. Kevin King: There is a lot of misconceptions around price that you bring that up and a lot of people they just think on Amazon it's all about the lowest price or in most cases that's the general consensus is I gotta be priced less than my competition and if you're gonna do that then you gotta make your money somewhere else. You gotta make it in the sourcing, you gotta make it somewhere else in a lot of cases but when you sold Skubana you got the itch to like well I gotta do something else in the software space. I can't just sit around and And just sell filters anymore. I got to do something. So you started Profasee. And Profasee is a true AI tool, not one of these that's sticking AI on the end like everybody and their dog is doing for marketing purposes. It's all it is, is an algorithm. It's not actually AI. It's just a script, a bunch of if-then-else statements. And to actually determine the best price, and there's been tools that have done this in the past. I've used some of them for some of my stuff, but You know, they watch the buy box and they adjust it up and down and they do some general price testing and AB splits and things like that, but you've taken it way beyond that to the next level and where you can actually In some cases, spend more in ad spend and adjust the price in concert or spend less in ad spend and you can get some pretty amazing results. I know you've posted a few charts and stuff online about some of these, but can you talk about this misconception that a lot of sellers have on price and what they need to be paying attention to when it comes to price on their products, on Amazon specifically, but really across all marketplaces? Speaker 2: Yeah, so there's a lot there. So by the way, when I sold Skubana, I did a lot of personal development and personal growth in my own life. I started really just becoming a CEO of me and I started working on my e-com business again because it was being attacked, right? Like PPC inflation, salary inflation, didn't have the right bus and the right seats and just the business was really undergoing some duress. So I started asking myself very simple questions like, wait a minute, so I'm constantly updating my ad spend, who benefits from that? Amazon, right, they're taking a nice cut of that. It's a $31 billion line item on it. Why don't we change price? And why don't sellers change price? I'm chronically leaving my price the way it's always been. First of all, I didn't spend a lot of time thinking about price, but then I started spending a lot of time thinking about price and started thinking about there's a lot of misinformation on Amazon around it. Amazon doesn't want you to go there. There's a flywheel around PPC, but they really just want you to have the lowest price and not think about price. And that fear and that misinformation is contagious. So on top of that, it's very complex. Like how do you know you're making the right change to your price? Because it's not always to increase price. Sometimes you want to lower your price, which increases your discoverability. You get a better BSR on price. So there's, I mean, we can spend a whole hour kind of digging into And so what I've realized in a way is that the same way Wall Street is not efficient and there's a lot of people that are making money on that inefficiency, Amazon is a marketplace and shoppers are not making rational purchasing decisions. Nobody is processing information perfectly and that creates a massive opportunity to exploit. That inefficiency allows you to actually exploit it for financial gain. So, that being said, I started adjusting price in small increments based on a strategy. Like, okay, for this view, I want to make as much money as possible, but I don't want to hurt my ranking position. On this view, I want to hit a specific velocity, which means I'm going to start lowering price to hit that velocity. And then I was like, wait a minute, deep learning models and AI has become so much more significant. We can actually process billions of lines of data in a model and have a far better accurate output. And it won't be nearly as time consuming, right? Because a model will do it much better than a human can do it and faster and learn from those mistakes if it's making mistakes and get better over time. And so I raised 2.3 million in December of 21. To solve this problem. Kevin King: That's what led to Profasee, right? Speaker 2: Yeah, so that led to Profasee. So like learning that, that we were leaving a lot of money on the table with price changes led me to starting Profasee. And then with that, I've learned a whole lot more about pricing on Amazon, right? Like it's opened up a whole can of worms. And I think you alluded to it earlier around the idea around harmonizing and aligning and synchronizing price and advertising together to even unlock more dollars on Amazon. Kevin King: What have you discovered? What are some of the little things that you discovered? Because a lot of people, they think that you go to Amazon and if I'm selling garlic press and my competition is all selling for $12.99, I've got to sell for $12.99 too. Or I've got to have like 10,000 reviews and I can sell for $13.99 if the guy at $12.99 only has 1,000 reviews. That's kind of general like back of the napkin logic that a lot of people take and they try to stay in that range. But based on some of your data, that's not the case. I've given an example in the past. I've talked about a bunch on bully sticks where I sold these high-end bully sticks at $55 a box for three versus everybody else selling 30 sticks in a plastic bag for $30. And I was able to do well. Now, is it on price? Does it have to do with like what you're targeting as well? Like if you're on a garlic press, if I'm targeting the keyword garlic press, which is a very generic top-level keyword, if I'm trying to compete on that, is it more based on price because those are commodity people? Or if I'm selling a garlic press for left-handed people, It's specially designed with a special thumb thing or something for left-handed people. Is that a whole different thing where price is not as important and you need to factor that in? Are you seeing differences like in actually down to the keyword granular level or is it just more of a category product level? Speaker 2: By the way, we are category agnostic, so we work with garlic presses. We work with brands, bidets. We work with bed bug items. I mean, it's just across the board it works. One is most sellers statically price their product. What does that mean? They go to the marketplace. They see what the other seller is selling. They copy the price of a brand that copied their price, and then they maybe go slightly lower to remain competitive, but the interesting thing is that those Competitors that they're copying are broke. So then why are all these sellers copying them? And there has to be a better way. So most sellers never change price. And if they do change price, they don't even know what the right price is. And so that requires you to spend a lot of time on it and people just don't spend time on it. People spend time on doing product research, and they should be, and doing keyword research using Helium 10, and they spend time on sourcing and logistics, but pricing is just something that they just don't spend time on, and they don't realize it's such a massive lever. So, the idea is that you want to match, the same way like Uber, have you ever taken Uber or Lyft? Uber's pricing is constantly changing and it's doing this based on a lot of signals in the market. How many cars are available? What kind of car is available? How many people are raising their hand that want to get a car? What time of the day it's happening? There's all these signals that are happening that they're chewing on to give, to spit out a price that they believe is optimal to make them a lot more money. It just so happens that it hasn't been happening on Amazon until Profasee arrived on the scene and now people get Uber-style pricing. And the ability to capture the value of their product with the customer's ability or their willingness to pay for that product. And we're creating a better match based on seasonality, based on impressions or sessions, conversion rate, based on the amount of velocity of your competitors. So we're pulling in your competitor's velocity, your competitor's price, your competitor's revenue, for example. All of that are signals that come into the model and so it actually spit out an optimal price point automatically for you. Kevin King: So like, I think an example you gave me one time when we were talking about it was where you can zero in with Profasee to a local level since Amazon's doing all this regional fulfillment now based on what's in stock nearby, you know, this distributed hub of eight different, I think it's eight different distribution, main distribution points on this wheel, almost like airlines do in some cases. And your software can actually hone in on that. So if Taylor Swift is doing a concert in Cleveland, Ohio, And you know that there's going to be 100,000 people going to the concert. Some of them in the stadium, 20,000 of them outside the stadium, just listening to the overflow music. And they're all going to be buying whatever those little bracelets are that she sells and going to Amazon to buy these. You can see that there's a rise in demand in the general area of Cleveland for these. And so your tool will take that into factor, as well as the inventory levels of the other people or the sales volume of the other people. And like, OK, we can probably adjust this. Up a dollar, up two dollars, or maybe lower it five dollars and sell 100% more or something like that. Is that kind of the thought process of the way it's dynamically working? Speaker 2: Yes, so we're understanding the demand that's coming into the listing and as that demand is increasing, we're working on increasing price because there's more demand to capitalize on that, which essentially is exploiting the money that you're leaving on the table. So for example, we have a company, we have probably the best selling umbrella company on Amazon. There's storms that happen and people want four-hour shipping with Prime. So we essentially will check their listing a few times a day and start seeing if there's more demand happening and start creeping price up to capitalize on the demand. And of course, when there's no storms happening and no one's shopping for an umbrella, we'll start lowering price and that increases the demand. So you're essentially selling more velocity units. We're now increasing their BSR and the idea is that they can actually own page one for a keyword versus renting with PPC ad spend. Kevin King: What would you say to the people that say that's price gouging? If it's raining and you're like, oh, well, it's raining, tough. We're going to charge an extra two bucks an umbrella because we know you need to have it. How would you counter those people? Speaker 2: I would say that there's a difference between ... So there's something called surge pricing and there's something called dynamic pricing. Again, surge pricing means we're only going up in price, but we're dynamically pricing, so really matching the willingness of the person to pay with a price. And people do this all the time. You look at, if you go to New York City or you go to Austin and there's a rainstorm, you have no umbrella, your willingness to pay for that umbrella and how much you're willing to spend for that umbrella goes up significantly. If you're at the airport and you have no water, what do airports do? You're at the airport. You can't bring your water through TSA. The cost for a 16-ounce bottle of water, which probably is supposed to cost a dollar, now costs $5.69. So you can say that's price gouging too, but really that's just matching people's demand with how much they're willing to spend for a product, and that's what we do, and this really helps and benefits the brand. Kevin King: So, what are some results that you've seen by people that are using this methodology to actually do this? Are you seeing huge rises in their sales? Are you seeing huge reductions in their tacos or a combination of those? What are you seeing? Speaker 2: So, I have a case study with Mina coming up today. He's a customer and his results are pretty staggering. You'll see those on YouTube probably very soon. So when we first launched Profasee, it was just, hey, how do we make as much money as possible, as much profit, without hurting your ranking position? So that's one model that we built. The model's objective is to just make you more money without hurting your BSR. And so it doesn't mean just increasing price, sometimes it means lowering price, but we do within the bounds that you give us. So you give us a floor price, you give us a match price, we do the rest. Then other people start coming to us and saying, hey, I don't just want to make more money, I want to target a velocity. So our model, we have a model that targets velocity. So now you can put in a velocity you want to target and our model will keep working till you hit a velocity and then you can actually set up something called auto switching where it goes from a velocity model to a profit optimization model. So we optimize for profit, we optimize for revenue, we optimize for velocity, we optimize for lifetime value with subscribe and save. Those are probably the top four models that we built. You can of course create your own rules in our system. They're really guardrails that create, that are around the model. So the model is making the decisions, but there's rules that you can put in place to make sure that it matches the kind of behavior they're looking to mimic. Kevin King: So is this something that any seller that's listening to this should look at or is this something that you need to be a 7, 8, 9 figure seller to really see the impact of it? Speaker 2: So, right now, people use Profasee, they're doing half a million in revenue all the way up to 40, 50 million in revenue. So, we kind of work across the board. I mean, I would say, I don't know if you think a half a million a year is the lowest, but certainly if you're doing two to four units a day, Profasee is something to check out. So, not only can we make you more profit and increase your cash flow, but also save you a whole lot of time. Actually optimizing price is something that nobody is actually even doing right now. And it should be done because you're leaving that much money on the table and yeah, it's a cool mousetrap we built. Kevin King: So how do you spell that? For people listening here, driving in their car right now, working out, how do you spell Profasee? Speaker 2: Profasee is P-R-O-F-A-S-E-E. It's kind of a play on words, profit, you could see, prophecy. Kevin King: Is that .com or .ai or .org? Speaker 2: It's .com, yeah, profasee.com. Kevin King: One of the other things that happened a few months ago is you got named into the billion dollar seller Dream 100. Was that a surprise to you or how did that make you feel? What did that do when you found that out? When you got that email and said, hey, did you see this today? Because the way this works, just for those listening, is I have my newsletter, BillionDollarSellers.com. It comes out every Monday and Thursday. And a couple times a month, I announce someone that I say, hey, it's made a difference in this space. Someone that's actually It had an impact on a lot of other sellers. They're giving back to the community. They're the real deal. They're legit. These are people that you should follow on LinkedIn. You should pay attention to when they speak. They're not the Lamborghini guys. And I've chosen the first 90 of those in advance, and we just draw them out of a hat every week. There's no order, so people can't say, why was I number one? Why was I number the 50th? Does that mean I'm the 50th best? No, just random. And there's 10 that I have open that I have for people that I haven't met yet because there's still People that are doing awesome stuff that I just, I haven't crossed their path yet. But you were named into that and so what, how did that go down? Speaker 2: How did it go down? Well, I was definitely surprised. Multiple people sent me the newsletter. Some of the smartest people that I know in the space were like, congratulations, Mazel Tov, awesome to see this. And look, I was, first of all, I spent a lot of time like head down Just trying to help others flourish so it was meaningful to me because like I mentioned earlier my mission is to help elevate this community and to activate potential and I don't stop. I keep going. I keep pushing and It was nice to have like a good win. It made me feel like, hey, all this pushing and all this struggling a lot of times because a lot of times I'll post content that not everyone agrees with, right? And so just seeing that actually made me feel really nice. I wrote you a personal message and I wrote a personal message online about it and it made me feel really just like a good win and just positive all around. Kevin King: Awesome. So if you're not following Chad, you need to be following Chad, especially on LinkedIn. He's very active. He's active on some of the other socials, too, but LinkedIn is probably the most active, I would say. How do they find you on LinkedIn or anybody wants to reach out to you or connect with you after listening to this? What's the best way to do that? Speaker 2: Yeah. So my personal email is chad at profasee.com. You can also find me on LinkedIn, posting thoughts, challenging conventional wisdom. Yeah, so LinkedIn, Twitter, those are my two main sources or just email me, chadprofesee.com. I'm happy to kick it, happy to support the community in any way possible. Kevin King: I appreciate it, Chad. Thanks for coming on the podcast. It's been great and we'll see you at some upcoming stuff. We'll see you hanging in the hallways at Prosper or see you at a Billion Dollar Seller Summit or see you somewhere. Speaker 2: I plan to be in Austin with you in September. Kevin King: Awesome. That's going to be great. Cool. Thanks, Chad. Appreciate it, man. Hope you enjoyed my talk there with Chad. He's made a big impact in the industry, as you can see, from selling the vacuum cleaner stuff to starting Skubana, the first software that allows you to control inventory and everything between different marketplaces, as well as the Prosper Show, and now with pricing and Profasee. Great stuff. You'll be able to meet Chad at the Market Masters event in September here in Austin, so be sure To check that out at BillionDollarSellerSummit.com. You can check out Market Masters. It's a private little mastermind, a small group of people in a villa here on the lake in Austin, Texas, September 12th to the 16th. So coming up here in just a couple weeks. We'll be back again next week with another awesome episode of the AM-PM Podcast. In the meantime, I've got some words of wisdom for you. It's the quality of your relationships that will determine the quality of your life. The quality of your relationships will determine the quality of your life. So invest in your connections, even those that might seem a little bit inconsequential right now. You never know when they're going to come back to help you. Take care. We'll see you again next week.