#415 - How a Lufthansa Pilot Turned His Passion into a Million-Dollar Amazon Business

#415 - How a Lufthansa Pilot Turned His Passion into a Million-Dollar Amazon Business Speaker 1: Welcome to episode 415 of the AM PM podcast. My guest this week is David Lang. David is a commercial airline pilot for Lufthansa. He started an Amazon business on the side when he wasn't flying and within a couple years sold it for millions of dollars and now He's helping other sellers scale their businesses, put in the right systems, really know their numbers. It's really fascinating talk. We talk about airlines, about flying, about some cool stuff that you might not know when it comes to airlines and commercial airline pilots. Tie that into how that is similar to running an Amazon business and talk about his exit as well as a cool strategy on how he did $1 million with his business in just five days with just seven SKUs. 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. Lukey here. Speaker 1: We're flying high today on the AM PM podcast with, I feel like a co-pilot here with David Ling. David, how are you doing, man? Speaker 2: I'm doing good. Kevin, how are you doing? Speaker 1: I'm doing good. We met, where did we meet? I think it was in Australia, right? Speaker 2: Yeah, it was Australia at the Sellers event there. Speaker 1: Are you going back to that this year? They're doing it in Singapore next month. Speaker 2: They're going to do it in Singapore. I'm actually on, I don't have vacation time, but I'm going to request the flight to do actually fly to Singapore. So my layover should coincide and I'm going to swing by and surprise the boys. Speaker 1: Yeah, I remember last year they had that intro slide, did these cool intro slides for each of the speakers and they had one for you. It was like, what was it? Top Gun theme or something? Speaker 2: It was really cool. Yeah, so it was like my first event where I was speaking at and it just so happened that the introduction for all the speakers was based on the Top Gun theme and the music and then they gave us all a call sign. They ended up giving me Dreamliner because in the Amazon world, we made our dreams come true by exiting and stuff. It was just funny because he came up and apologized after because as an airline pilot, I fly the Airbus, Dreamliner is a Boeing. So it's kind of like the competition aircraft. But I was just so happy about the whole theme that obviously I didn't mind being called Dreamliner. Speaker 1: It's like what's the Airbus 340 is similar to the Dreamliner or 350? The Airbus 350 is similar. 350, yeah. 340 is similar to a 777, right? Speaker 2: Exactly, yeah. Speaker 1: Yeah. Speaker 2: Especially also from the age and the range and stuff. And it's funny because I'm actually on the 350. So I literally fly the Airbus Dreamliner, so to say. Speaker 1: Let's talk about that for a second. Not only are you involved in the Amazon and e-commerce space, you've had a really cool exit. You also are a commercial airline pilot for a major German airline, right? Speaker 2: Yeah, exactly. Flying was always a dream of mine and it's one of those cliché stories for little kids, but I was born in Germany and when I was eight years old, my family, we moved to Canada because my mom's Canadian. So she essentially, she wanted to go back home and she packed, she had five kids. So she packed up the five kids, the bags and said, okay, we're going to move to Canada to her home country. And on that flight, when we were coming over back in the day, you were still allowed to visit the cockpit, right? Now it's all forbidden. The doors are locked, but back then you could visit the cockpit. And when I spoke to the pilot about it, he gave me this postcard that he signed and, you know, wish me all the best. And he said, listen, I believe one day you could be my co-pilot. I think you can become a pilot. So I went with the postcard to my mom and I told her, listen, mom, I want to be a pilot. And you know, her being a supportive mom, she's like, oh, you can do anything you want. And ever since that day, I've told every single person I'm going to be a pilot. And it never stopped. That's all I wanted to do. That's all I ever dreamed about. And then when I was 12, I joined an air cadet program. So the Canadian... The Americans have it too. It's called the Civil Air Patrol. But in Canada, it's absolutely free. It's like a children air force. But you yourself are considered a civilian, but your instructors come from the air force. So I joined when I was 12. When I was 16, I got my glider license. When I was 17, I got my private license to fly like small Cessnas and stuff. And then I just continued all my training. I even became an aircraft mechanic because I figured I would work as a mechanic to pay for my flight hours. But in 2006, I went to Germany for the World Cup. I figured, hey, I got to go back to Germany and celebrate the soccer summer festival. And that's when I met an airline pilot from Germany who told me how it works in Europe to become an airline pilot. Because in Canada and USA, it's extremely expensive to get all your hours to become an airline pilot. Speaker 1: So you have to do like 10,000 hours or something like that, right? Speaker 2: So 1,500 hours. 1,500 hours. Speaker 1: 1,500 hours. It used to be 10,000. Now it's 50. Speaker 2: So for airline license, it's always been $1,500. To get a commercial license, it's about 300 hours. And what they were trying to do for regional airlines is to reduce it from the $1,500 down to the $300 so you could fly with a commercial license. Because if you think about 1,500 hours, if you had to pay for all of those, I mean, each hour back in the good days, like now it's like $200 an hour because of the fuel prices, insurance and stuff. So 1,500 hours is quite a lot if you're paying for all those hours yourselves. Speaker 1: That's why you see like, you know, if you go to Alaska, let's say on a cruise and you take a helicopter to go sightseeing over a glacier, the guy on there is sometimes like some 19-year-old kid just getting his hours in. Speaker 2: Yeah, he's building his hours. So he wouldn't have a commercial license. So a lot of people think a commercial pilot's license is the same as an airline's pilot's license, but they're not. Commercial just means you can get paid to fly. Okay, that's like one of the first important license you can get and now you can start charging for flying and that's how you can build your hours. So whether it's doing sightseeing, flying banners, doing towing, agricultural flying, like spraying fields, doing fire spotting, right? So people fly over forests looking for fires and sending it down, the information. The way it worked in Europe though is they used to have this ab initio program, meaning it's kind of like the military selection in the States. They're going to select their candidates, they'll pay for their training and within two years you're flying an Airbus. And it's all paid for upfront by the airline. It's sponsored and you pay it off your salary over the next five to 10 years. But that's great because that means there's no upfront cost. There was no real risk because you knew you had the job before you even paid for the training. And it was streamlined training to really tailor all of your flight training to the airline operations. So you're flying the small plane like we flew in Phoenix, Arizona. So Lufthansa, the German airline, actually sent us to the States to do flight training in the States because they have perfect weather in Phoenix. It's always nice and sunny. And we did our flight training there on a Bonanza aircraft, which is a small Beechcraft Bonanza. And we would pretend it's an Airbus already. So the same wording, terminology, the same structure in the operating manuals. But that made the transition to the Airbus so much easier and so much quicker. Speaker 1: So $300,000 it could cost to actually get the If it's $1,500 and $200 an hour, that's expensive. Speaker 2: That's like very expensive. Yeah. So like I said, you could, what most people do though is they don't pay that all themselves. So what they'll do is they'll just get the commercial license, which is let's say the 300 hours. So now you're looking at $60,000. So you're paying, let's say $60,000. And then once you have that invested, now you start working as a flight instructor or as a tow pilot or some other small job to build up to the ATPL, which is your airline transport pilot's license. But as you can see, once I had the option of going back to Germany, I just had to relearn German because I didn't speak German. I grew up speaking English and French. And then I went back to university in Montreal to study German so that I could apply to the German airline. Speaker 1: But everything in the airline industry is English, right? Universally? I mean, worldwide, English is the first language of no matter what the country is, right? Or is domestic stuff within Germany, do they speak German? Speaker 2: They actually speak English in Germany. There are a few countries that allow you to speak the local language within that country. So for example, Spanish. So in Spain, you can speak Spanish on the radio or French. You can speak French on the radio. Those are considered also ICAO languages. ICAO is the International Civil Aviation Organization. So they're kind of in charge of the rules and regulation on an international basis. And they accepted French and Spanish as an ICAO language. But it's actually not safe. We personally hate that people speak a different language because the other pilots would also like to know what the air traffic controller is telling the other plane. And unless you speak that language, you're kind of out of the loop of what's going on for situational awareness. Speaker 1: So it used to be a lot of people came up through the Air Force or through the military and I guess there's not enough of them now. And so there's a lot of more people you see there, I guess, civilian background instead of a military background. And I'm starting to see even more women actually, you know, it's in the cockpit, sometimes even the captain, which used to be a very male dominated and probably still is to A large degree, but I'm starting to see more and more women actually in the cockpits, especially on some of the commuter airlines. Speaker 2: Oh, for sure. And it's the reason why the number is still relatively low. So like the new entries of female pilots is high. I think it's honestly north of 25%. So we're getting a lot of female pilots. But because historically it's been so male dominant, the overall female number is actually much lower because it takes time for the old guys to retire and have more of those females come in. And the regional airlines have more of the females because that's normally where you kind of start, right? That might be your entry level job when you come in as a pilot, especially in the States, you work for the regionals. And then after that, you transition to one of the major airlines. Speaker 1: A major airline pilot with some seniority can make several hundred thousand dollars a year or more, right? Speaker 2: Yeah, especially on some older contracts. So it's definitely a nice contract, nice job to have. You're also protected by working hours and limits because it is physically exhausting. So it always seems like it's a dream job. You just sit there, push buttons, travel all over the world, but you're putting your body through some stresses as well. Jet lag, it's tough on a body, especially if you do it several years. Speaker 1: Airline pilots get paid a straight salary. It's not based on the amount of time you fly. A lot of people don't realize flight attendants, for most airlines, the vast majority of airlines, they're only paid when that door is shut and when the door is open. So if they're sitting on the runway for an hour or sitting at the gate with an hour delay, they're not being paid. Speaker 2: So it depends on airline to airline. Speaker 1: There's a couple like Southwest pays, but that extra time, I think it's a stipend. It's almost like a waitress salary. It's like a basic little low rate and they don't get their 30 bucks an hour or whatever they're making. A lot of people don't realize that flight attendants, it's actually a low paying job and you have a lot of wasted hours. Speaker 2: It's true, yeah. And the crazy thing is not just flight attendants. So even my contract, I only get paid when the aircraft is moving. And a lot of people don't realize that, but I get a base salary. So I have a base salary and I get paid for 72 and a half flight hours. If I do less than that, they'll still pay me my 72 and a half flight hours. And if I do more than that, then I'll get overtime. But those 72.5 flight hours are only block time, meaning the aircraft has to push back from the gate. And once it's docked on with the parking brake, that's your block hour. So it's not even airtime it's pushing. But let's say we're sitting at an airport. Chicago is a good example because it's super busy and there's a snowstorm, right? So there's massive delay, two, three hour delay. Well, those two, three hours, I might be on the aircraft in uniform working, but I don't get paid for it. It doesn't count as my 72 hours. Speaker 1: Oh wow. Speaker 2: So it's crazy. So like customers get upset with delays. So do we. And most of the times we try to avoid them at all costs, obviously, but there's so many external forces that we can't control. Speaker 1: What's something that's a big misconception about pilots flying up there? Like you said earlier, Some people think you're just sitting around doing nothing all the time, but sometimes you are kind of kicked back and just it's on autopilot. But what is a big misconception that a lot of people have when it comes to big commercial podcasts? Because I'm a frequent flyer. I'm in a group for American Airlines. We're American Airlines guys. But what's something from the other side? Because I've always found it fascinating. When I was a little kid, I would go out to the airport and watch the Concorde band, the DFW. I've always been fascinated by air travel and I'm not afraid of it. Some people, it scares them. I've been on a plane before where it was raining and the woman next to me turns to me and says, are we going to be okay? The runway is going to be wet. We're going to be fine. Or you hit turbulence. You hit some severe turbulence and some people freak out. Maybe rightfully so in some cases, but most cases, I'm like, this is just like driving on a bumpy road. Have you ever been on a gravel, dirt road? It's basically the same thing, so it's nothing to worry about. Now, if the plane starts taking a 45-degree dive, then you start worrying. But yeah, what's something that's just like total misconception when it comes to pilots? Speaker 2: Yeah, so you definitely touched on like the turbulence for the passengers. Turbulence, you don't have to worry about. It is not dangerous. There's been no cases where an aircraft has crashed due to turbulence. It just doesn't exist. Turbulence doesn't rip your wings off. You can go on YouTube. It's really interesting to see when they're getting the wing certified for Boeing or Airbus, how much they have to bend. It's insane. They can bend a lot. Turbulence is normally short-lived. What is dangerous is if there's severe turbulence or extreme turbulence. Actually, it's one level above severe. If you're not sitting with your seatbelt on, you could fly and hit the ceiling, right? And then you can obviously break your neck or break your foot when you land. So it is dangerous, but not to the aircraft. You will not. So if you're a worried flyer, just stay seated with your seatbelt on and you'll be fine. Nothing will happen. But a misconception for the pilot. I think there's always funny. So in a cockpit, you obviously have two or three pilots depending on the distance of the flight. And a lot of people think only the captain is the one that flies, right? So they'll ask you, are you the co-pilot or the captain? Well, the thing is, everyone is each other's co-pilot. You're all co's to one another. And you always alternate who does the flying leg. So if there's two flights, one pilot will fly there and the other pilot will fly back. So you essentially switch roles. And then within the crew, you'll have a ranking system. So you'll have a captain, maybe a senior first officer, and then a first officer. And that's your authority rank, essentially, like in the military. That's your chain of command. But the actual flying part is done by both pilots. And a lot of people have the misconception that only the captain will fly and the co-pilot will never fly. He just watches. So that's a huge misconception, especially in an emergency, which is interesting. When there's a major emergency or something going on, Most of the time, the captain will say, okay, to his co-pilot, the first officer, you have control, you fly. I got to take care of everything else right now. I got to manage things. So they're going through the checklist. They're dealing with maybe the flight attendants and the passengers of what's going on. They're busy doing the announcements. They'll communicate with ATC. Towards the end of the flight or the landing, if it's a critical landing, they'll probably take over control again and they'll land. But the co-pilot will be doing most of the flying because the captain will be busy. So that's just a misconception, I think, that a lot of people have of who actually does the flying. But with all that said, it's still one of the coolest jobs and I wouldn't trade it for anything. I absolutely love it. Even after I've been flying airline now for 14 years, I still wouldn't trade it. Speaker 1: How did you end up doing Amazon? I mean, you started an Amazon brand with a buddy of yours. You exited this brand for seven figures and you're still doing what you love to do, fly, and you're still messing around in the Amazon space. So how did this whole Amazon thing begin as an airline pilot that's making pretty good money and having a good time? Speaker 2: Yeah, exactly. It's funny because I think I always felt guilty that I was getting paid to do something I loved and I never felt like I was working. So, you know, when you just have a couple of flights a month, I'm like, oh, all my friends are working. All my siblings are working. I'm not really working. I'm just flying to places and getting paid for it. So I always kind of try to keep myself busy on the side as well. And then while I was flying during the European flights, I was on the Airbus 320. I decided, hey, you know what? Let me get my master's on the side. And I actually went to London to do my master's in air transport management. So I got into the management role and from that I actually landed a job as a project manager for Lufthansa in the innovation department. So I would be the liaison from the airline to different startups to see is there any connection? Can we do anything cool with the new startups and the airline? We're you still flying or you just I'm still flying but so my contract shifted so I would get 10 office days a month and for every office day I would get let's say four and a half hours for my flight time counted towards it. So I would have to do maybe you know a one five day pairing and then the rest would be in the office. So I would keep current. I would still fly and it was a nice balance for me. But the truth is when you do project management, it's a lot of work. It's kind of like having your own startup, right? You're doing a lot of work. You're managing a lot and then mixing it with flying. And I wasn't getting paid a lot more because they said, well, you just get your pilot salary, but you cannot work. But as a pilot, you never have homework. When the plane's off, I go home. Like that's it. I don't, if I, if I call in sick, someone else flies in and the next time I go to work, I just start where I left off. But in the office, if you call in sick, well, when you go back and you missed a week, you have a week of emails to catch up on. You're a bit behind on the project. So you've got to work twice as hard. So like calling it sick in the office is always difficult. I find. But in the operational side, it was relatively call and stake, you get better and you just go back to operations. So when my wife was pregnant with her kid, I said, listen, you know what? I'm going to stop the project management and go back to straight flying so that I'm home more and I'm mentally home more as well. So then she had the first kid and then we had a second kid. And then I got a bit bored of just flying and being at home. And I said, you know what? I always wanted to kind of get back into it, but I promised myself before I work for someone else this much, I'm going to work for myself. I'm going to start my own business. And then I found, I looked at different business models that would work well with the airline flying. So something had, it had to be online. It had to be e-commerce because I'm away from home too much. Half the month I'm in a hotel. So I didn't want to start a business in our town or something. So I started looking at different e-commerce business models and that's when I fell upon the FBA business model. So before you said I started with my buddy, it's slightly different. I actually started the company by myself with my wife. Speaker 1: Okay. Speaker 2: And about a year in, COVID hit. Right. So I had just the first year was setting up the business, doing an Amazon course. So I did like an FBA course online. It was finding a supplier, getting a whole bunch of samples and then finalizing the final product and getting it onto the market. And I'll never forget it actually hit Amazon. It checked in on February 7th in 2020. And like in March, the world shut down for COVID, right? So it was like it just it finally made it and it shut down. And then my flight schedule gets cut in half. So luckily, I didn't get laid off. I didn't get furloughed. Essentially, what happened is they said, everyone take half day and half schedule so that we can keep all of you. So it was pretty social for the airline to do that. But that means all of a sudden, from today to tomorrow, you get like half pay. We took quite a hit personally. All my savings were just invested in this product in the first year of setting up the company. And we had two small kids plus the mortgage and all that stuff. So I said, okay, at least I have the product. At least it's live. Maybe I can get some money out of it. But the first product was such a dud. I was just losing money. So my buddy, Ryan, he was a scientist. He had just finished his PhD in like RNA research. Everyone knows about RNA now because of the vaccine, but he was doing research on RNA and he was working for a biotech startup as well. In their lab, but the lab was associated to the university. So when COVID hit the universities shut down and no one was allowed to go into the lab. So you also had home office, but the thing is he couldn't go into the office and do like you can't do an experiment at home. That doesn't really work. So I'm at home cause I can't fly an airplane from home. He's at home cause he's a scientist and he can't go in and he would want to hang out. He's like, Hey, we both have time off. Why don't we hang out? We're in our social bubble so we can meet up. Um, And I'm like, sorry, I'm busy. I got to work. He's like, what are you working on? So I kind of told him what I was doing. I was showing him this Amazon thing. And he really liked the game. He liked it. He's great at Photoshop. So he would edit my images a bit, make sure the listing's good. And then we started diving into why is my product failing? Like, what did we do wrong? Where did we go wrong? And then me and him developed different systems together. We would run experiments on the Amazon field, especially with his experiment mind and then me with my procedures, like we wrote SOPs for everything. And then working out together, we figured out why it failed. And then I said, listen, let's make this official, buy in. So I sold them a third of the company. With the promise that the money that we get for his purchase, we would use to buy new inventory for new products that we're pretty sure are going to work because of the systems that we just like analyzed. We reverse engineered it. And then what ended up happening is those products that we did launch ended up being hits. And we finished our first year with $73,000 in revenue. Our second year, we hit $3.1 million. And our third year, we're on route to do $5 million, but we ended up exiting it for mid-seven figures. So it was really rapid growth. Speaker 1: So that was all in the US, right? Speaker 2: That was all in the US. So we did do the North American remote fulfillment. So we did sell that. But we ended up, we weren't even selling in Europe or in Asia. So it was just North America. Speaker 1: So to go from 73,000 to I think you said 3.1 million and you're on track on pace to do five, how many products was that? How many SKUs was that? Speaker 2: So total SKUs at the end were about 40, but those were color variations. So we had about seven different parent listings. So seven different products and each of those had then a couple of variations. And our total number in the end was 40 SKUs. Speaker 1: And what category was this in? Speaker 2: Giftable items. Speaker 1: Giftable items, okay. Speaker 2: It was giftable, yeah. So we made the conscious decision to go giftable because we saw the search volume was big. And because we saw that a lot of the competition at the time, they had pretty weak Amazon skills, right? So their listings weren't optimized for the giftable listings. They were very creative perhaps of products, but not very data-driven. And we said, okay, we're data-driven guys. This might be easy competition for us. So we kind of went in there. We also figured Amazon returns, like we ran the numbers to see how expensive would returns be. And we figured that giftable items, if you make a good quality products, might have less returns because people are too embarrassed to give it back and be like, hey, can you return this? I don't like it. Right. But if you sell something like a Halloween costume, I mean, they're going to return it on November 1st after wearing it. So you're dealing with all of that stuff. So we figured, okay, less returns, chances are better reviews because people aren't just reviewing the product, they're also reviewing the emotion they felt when they received the gift. Or if you gift something to your mom and your mom's crying of joy and she's happy, your review is most likely going to be better. So we figured, okay, if we can just focus on a good quality product, getting better reviews is going to be easy because it's a gift, less returns, and then really nice seasonal sales. So sales that will take us through the roof at Christmas and stuff like that. Speaker 1: So you said you kind of just glossed over this that we're data driven guys. I think that's something that a lot of people are missing when it comes to selling on Amazon. They get caught up in the glamour of the marketing or the packaging and the listing and the images and all that's definitely important. But at the end of the day, if you're not good at data, If you succeed on Amazon, it's pure luck. Speaker 2: It's pure luck. You can't repeat it. You know what I mean? What we did, remember, we reverse engineered why it failed and said, why did it fail and let's just do the opposite. The first one, we differentiated too much, meaning the people, it was such a unique product, they weren't looking for it. And we said, well, OK, let's just do something they're already looking for and just make that better or make it slightly different. Can we combine two things people are looking for into one product so we can target both those keywords into one and now we get both customers? And that's what we ended up doing. And then because we have that system in place, we were able to scale it. We've been doing this for seven times with seven different parents and they all worked. Speaker 1: So the first, your only failure was that first one, what you and your wife are doing. And then when your buddy came in, he kind of helped analyze everything from a science background and you'll develop the systems to actually be able to. You got one working like, okay, let's see if we can repeat this. That worked. Then you did it again. You repeated that basically seven times for seven SKUs. Speaker 2: Yeah, exactly. And that, like when we launched the other products, I mean, what helped with when Ryan came in is that we both said, okay, this isn't working. Let's take a step one step back. And the first year it was really about like the course I did online was really about like, how do you find a supplier? How do you manufacture a product? But it didn't go into the details. Once you launch, what do you do next? I realize, hey, I don't know what I'm doing. I didn't know about keyword research. Then we ended up just learning from Brandon Young. We found his system of doing things. We absolutely loved it. We said, okay, let's add a creative aspect to this because that's just data. Let's add a bit of creativity to it. Then that was the combination. That's how we ended up winning. Speaker 1: I think you said by doing this, you actually, by reverse engineering the system, you figured How do I actually rank for some things you, Amazon doesn't normally let you rank for on and you did like a million dollar weekend or something like that, right? Speaker 2: Yeah. So we did a million dollars in five days. Yeah. So our, so cause we, we would set each other like goals. Right. Um, and the course I did was an Australian based course called reliable education. They're not around anymore, but they had different awards that you can reach kind of like click funnels. You know, you have different trophies and one of them was like very prestigious. You're a Rhino. Uh, if you hit a hundred thousand dollars in a month, And then we said, that's going to be our goal. We hit it. And then they have like a very unique trophy that if you can keep it consistently and you didn't just do it over in Q4, because if you don't screw up too many things, almost anyone can hit 100,000 in Q4 on Amazon. It's that powerful. But if you can keep it consistently throughout the year and hit a million dollars, so you're a seven figure seller, you would be considered a white rhino. So after we hit the rhino status, we said, let's go for white rhino, which is a million in a year. And we hit that by August in our second year. And then we said, OK, well, there's no awards left to win from Reliable. We've won the biggest one. What do we want to challenge ourselves with? So we said, instead of doing a million in a year, do you think it's possible to do a million in a month? So we run the numbers backwards and we say, OK, we're well stocked for Q4. If we really push it, you know, the month leading up to Christmas, we might be able to hit a million. We actually hit that target and Ryan and I were celebrating, having a couple of drinks and he's like, so Dave, what's next? Unknown Speaker: We're going to do a million in a week. Speaker 2: And I just kind of blurted it out, half joking, saying we did it in a month, can we do it in a week? And we said, you know what, before we sell the company, let's see if we can hit it. Kind of like for ourselves, it's a challenge. So once again, we ran the numbers. We did take a risk because you have to hold a lot of inventory to hit a million in a week. If you miss the wave, man, you're stuck with that inventory because selling on peaks, like for Mother's Day, if anything goes wrong, just for like seven days, You're not selling a million in a week. You know what I mean? So it was a bit of a risk, but we calculated it. We thought, okay, with our earnings, because we had a 29% profit margin. So when we just did a million in a month, you know, we just did profit 290,000 in a month. We said, even if we screw stuff up, we'll have enough money cash to pay for the inventory and we'll sell it next Christmas. So we, we decided to go for it. We went all in and we, we, instead of hitting a million in a week, we did it in five days. We had 1.2 million in a week. Speaker 1: This was actually in my newsletter. You shared this with me when we met in person in Australia last year. And then you gave me permission to put it into the newsletter. But a lot of people didn't see it because I made it like a VIP feature. So you only got to see it if you had referred two people to the newsletter and it only shows up in the newsletter. And I do that from time to time. I'll have special things. And it's a little section that says VIP. I'll tease it. It'll say, this is what's in here. Whatever, get these keywords to rank that normally can't rank. You want to see it. If below there's a yellow box, if you don't have a yellow box, you haven't referred to people yet. And so then what always happens when I do that is a lot of people go and refer to people because they want to know what's in there. So I used your tip that you allowed me to share in that. Can you talk a little bit about it? Speaker 2: Yeah, for sure. So I mean, it was quite a unique hack. So what we're trying to do is for Mother's Day, We did the research on what is the biggest keyword. So we used Helium 10 to find even historically. So last year, what was the biggest keyword on Mother's Day? And we saw that Mother's Day gifts was the biggest keyword and we wanted to lead our title with Mother's Day gifts because we figured it has the most ranking juice. We'll put it right in the front of the title and then we'll describe our product after. The problem is Mother's Day gifts is actually a forbidden keyword to put in your title. And when you go to publish your title, when you publish your listing, Amazon removes Mother's Day gifts from it. So it would just completely remove it and then you would be left over with the remainder of the title. So then we said, okay, that sucks. Mother's Day isn't forbidden. Gifts isn't forbidden. Speaker 1: You actually did this and then the title got changed by Amazon. Speaker 2: Yeah, so Amazon will publish it and we noticed by going on the back end, you would see our title that we put in. It'll say Mother's Day Gifts. Speaker 1: It'll say the whole thing. Speaker 2: It'll say the whole thing, but on the actual listing, it's removed. And they literally just cut it out. It's like, all right, that sucks. But then we realized there's other things, like if you write fuck, you told me I could swear, that's why I'm doing it. If you write fuck in your title, Amazon won't publish that. They will remove it. So we said, okay, we don't even want to risk that because we don't want to fully suspend it. But there's other things that they'll remove from a title. And the shortest words that we found that they remove is free gift. So if you say like, oh, I sell a nice, I don't know, Fruit basket with a free gift. They'll remove the word free gift. So we said, okay, if they're going to remove free gift, and that's the shortest one we found, then what if we put that in between Mother's Day and gifts? So we would write Mother's Day, free gift, gifts, and then the rest of the title. Speaker 1: The word gift would be up here twice back to back. Back to back. What you knew they're going to take away. Speaker 2: That's right. Because gifts in itself is allowed and Mother's Day is allowed. You just can't put Mother's Day gifts. And if they're going to remove free gift and they're going to cut out the word free gift, the rest just gets stitched back together. And now our listing was one of the only ones that actually appeared on Amazon with Mother's Day gifts. Speaker 1: So they only make one pass through when they're doing this check. They don't pass through a second. Well, maybe they've changed this now. Unknown Speaker: Maybe they changed it. Speaker 2: The newsletter has some weight there. Speaker 1: That does happen. Things quit working. Speaker 2: Yeah, exactly. Like hacks change, right? But we noticed that and we said, as long as they don't do the second pass, it'll stick. We tried it. They didn't do a second pass. It's stock. Speaker 1: So you don't touch the listing after that. We're not touching this listing. I don't care if there's a typo. It's staying because this is working. Speaker 2: It's really funny because after we exited the business, we actually like in Australia at the sellers event, A girl came up to me. She's like, hey, you know me. I'm like, sorry, I don't think we've ever met. She's like, but I know you. I'm like, that's great. She's like, I've been following you. I know what your brand is and I'm one of your big competitors. And then she told me her brand name. And of course, I knew the brand name. I just never dug behind because we never focus too much attention on our competitors. We would just focus on our own game. But clearly in this space, you know who your big competitors are. So I'm standing face to face with my competitor. And she's like, listen, you have to tell me one thing. How did you guys change your title on Mother's Day to Mother's Day Gifts? Because she had tried everything and couldn't get it. So it was really fun to get that feedback from her as well. And then during my presentation, I shared that hack and then she finally got to learn how we did it. So that's cool. Speaker 1: So do you think that's what contributed primarily to the Million Dollar Five Days? Speaker 2: I think it definitely helped. But I think, and this is something that's funny and it's interesting in the Amazon space, people are so excited and they love hacks. And maybe it's a thing in life, like people now are maybe a bit lazy and they all love a hack. How do I get rich quick? Speaker 1: How do I get an upgrade on Lufthansa? Unknown Speaker: How do I hack my way? Speaker 2: If you just actually flew more, you would get all those upgrades. Just do the work, you know? So I think people love hacks and they focus maybe too much on it. And hacks don't work if you don't have the basics right. No hack is good enough. You can change your title to the best hack if you have a shitty product with bad reviews, if you don't have enough inventory to actually fulfill it. So what we've been working on since exiting the business is helping other brands. We've been looking at a lot of different brands, but an almost even more exciting product is that we've been working with 8Fig. So 8Fig is a company that will fund sellers, right? They give funding. The reason why we got started with 8Fig was they actually helped fund our business. So you can't get from $73,000 one year, bootstrap it with your own cash flow, and then do $3.1 million the next year. It doesn't work, right? So as soon as we saw our system works, and this is where Ryan and I, we complement each other well, because I'm very long-term focused. I like to have alternate plans for everything. That's a pilot, right? You need the thing. And he's very short-term focused in the moment looking at what's in front of him. I'll try to solve that in front of him. And I'll just keep introducing new problems and new steps in the future. As soon as we knew we had a product, I said, we're going to need funding because I don't want to wait and bootstrap. If we're onto something, competition is watching us. They're going to infiltrate the money with their millions of dollars and they're going to destroy us. Let's get funding from someone else. The problem is we're a German holding company with a US LLC. We don't have social insurance numbers or social security numbers. Speaker 1: Social security. Speaker 2: Social security numbers. The banks didn't want to give us funding. The US bank said, you don't have a social security number. We're not going to give you the money. The German bank said, yeah, but you don't operate in Germany. All your inventory, all your operations are in the U.S. We're not going to give you money. What are we going to do with the inventory if you don't pay us back? So we couldn't get funding. And then I started looking online and one of the Facebook groups I actually saw someone posting about a startup called 8Fig that would help fund Amazon sellers if you have good products and they would connect to your store and see what you're selling. So I said, hey, this might be our way to do it. So we ended up having this relationship with 8Fig and they funded us. They're a startup. So things were a bit tricky at the beginning. But, you know, we worked through it. We got the funding and we ended up succeeding, exiting our business. And then they reached out to us and said, hey, the systems you guys built, we like it because we also have everything in Excel form. Like we build these pretty cool Excel sheets that anyone can go and check it out. It's on our website. They can help their business. But they said, can we turn all this knowledge from these Excel sheets into a software? So it's been now about a year. We've been building a forecasting software with 8fig and their team, as well as an inventory management forecast that ties into that sales forecast. So we have this inventory tool and the interesting thing about that is you can see the data on a lot of products, right? So we do big data now and we have over 200,000 products that we can look at and we never look at an individual product, but we're looking at the big data. So we're able to analyze it from a much bigger scale and we see how important the basics are. We ran the numbers. I don't have them all in front of me right now, but it's not a huge number. If you just don't run out of stock on average, you will increase your revenue next year by 7% guaranteed. Just don't run out of stock. If you look at year-to-year growth for people that are trying to exit, 7% is huge. Just don't run out of stock. It's that simple. There's no hack for that. It's just proper planning. That's it. You know, so hacks, yeah, they're important, but looking at some of your basics is also more important and knowing if you're profitable or not. And we've been, you know, helping this one brand. And today, this morning, actually, we had the call and we said, listen, we we really, really don't recommend you continuing with this. You have to pull the plug. He was losing over a thousand dollars every month with his business. And he would just keep he kept feeding it of his own money, an extra thousand every month of his own money. I'm like, you're losing twelve thousand dollars every year of your own money. Why? It's never going to turn around. This is a dead product. So I think it's important to just understand the basics sometimes. Speaker 1: People get too emotionally tied. I know my product is better than others. I know I can make this work and it's a numbers game. You can't get emotionally tied to it no matter whether or not your product is better or not. If the numbers don't work, this is not going to work. And that's where a lot of people, they hang on too long. Or they go into it not knowing their numbers up front, not realizing what it actually takes. Like you said, to go from 73 to 3.1, you need more money or to have that cash flow or to do those projections. Most people, this is not taught in most courses. We teach that in the Freedom Ticket. I show people like, you know, my standard rule of thumb has always been that you need two and a half. People always say, how much money do I need to start an Amazon business or to launch a new product? If I already got an Amazon business going, I say at least two and a half times your landing cost. And that number actually probably need, with all the increased fees, I probably need to take a look at that and probably raise that to three or three and a half now. That means if you've got $5,000, if you're listening to this and you've got $5,000 in your life savings that you're willing to invest to start your Amazon business, one, that's probably not enough to actually create a real business. I mean, you can create a side hustle. You can create some money. Or if it's successful, at some point, you're going to need a lot more money, just like David just said. But that means you need to have a landing cost of about two grand. And the landing cost, not the cost from the factory, but actually after you paid all the tariffs and the duties and the shipping to get it here. Because otherwise, if you're successful, this is not going to work and you're going to have exactly what David just said. You're going to run out of stock with a successful product and you're going to be scrambling. In the meantime, you've just lost all that work that you did to rank it, the vast majority of it, for when you come back and stock in. Also, other competitors have seen what you did and they're monitoring Helium 10. They're monitoring all these tools and they've stepped in and taken your place. Speaker 2: I think that's the thing I was more worried about, to be honest. People, don't forget, it's all public. You prove to the system, to everyone watching, that this is a good product. They're there in six months, whether you like it or not. They're there. They're on you, right? You can fly below the radar. It's hard. And if you do fly below the radar. It's not that good of a product. It's not like the numbers aren't going to be that good. Your ranking is going to be on page two. I remember Danny McMillan said at the festival too, he's like, listen, I think the new sweet spot is actually being a tier two product because you have way less stress. So if you're doing it as a side hustle, try to stay a bit smaller. You'll have less stress, less competition, and the product might actually live a bit longer because every product will eventually die, right? Speaker 1: Yeah. The life cycle. Yeah. I mean, I like, I don't like being the best seller. I mean, if it's a very small niche, you know, you're selling 10 a day and I'm the number one seller at 10 a day, I'm okay with that. If I'm going after a big keyword that's got hundreds of sales or thousands of sales a day, I don't want to be in the top because it's a cutthroat game up there on price, on shady tactics, on just all kinds of stuff going on. I'd rather see a product that has depth that the first guy might be doing 1,000 units a day, but the 20th guy is doing 200 units a day. I'm like, okay, I'm going to go down there and compete with the guy doing 200 units a day because I'm going to be keeping my head out of the fishbowl. Speaker 2: Yeah, definitely. Stay below the radar, right? Even in flying, in military flying, it's a good spot to be, right? It wins you some time. Speaker 1: A lot of people, if they take an exit, it's a seven-figure exit that you had, they would say, okay, I'm done. I'm going to go chill and relax, but you're like, nope, I'm going to keep flying. I'm going to keep working with 8fig and doing some consulting and helping some other people. We're going to flush out these spreadsheets, the system that you have. What is it like actually to take an exit? I mean, it's got to be exciting, but then what happened? How do you feel next? Is it almost like a sense of like, you need another challenge or is it a sense of like, accomplishment or is it a sense of relief? Because you did it quickly. I mean, from 2020, but 2019, really 2020 is when it kind of started working to what you actually in 2022? 2022. Yeah. Speaker 2: August 22. Speaker 1: A little over two years, two to three years, that's a quick exit. That's almost everybody's dream. Speaker 2: It's a dream. Yeah, that's why they call me the dreamliner. So it definitely is a dream. It does feel a bit surreal at times, like when you reflect back and you're like, whoa, what just happened? It's like in old school when Will Ferrell just does the debate and nails it and you're like, whoa, where am I? What happened? That's what it feels like, especially the last part of the business when you're doing the due diligence. It's a stressful period. It's a lot of work and you have a lot riding on it because you know what they're going to pay you if everything goes through. You're still running your business. So imagine, I always would explain it to people. It's like going to Las Vegas and you have this massive pile of chips in front of you and you're like, all right, I want to go cash out. And like, oh, you can, but you have to play like 10 more hands and you have to go all in every single time. That stress of knowing I could lose it all because if the deal falls through, you lose it all or you're going to be a multi-millionaire. The problem is you see the chips, you know it's there, you know the number, you know where you're going to get. So it's that kind of emotional stress that you kind of deal with as well, to be honest. And you're keeping your business afloat, you're running it, you're managing it, plus you're working with the due diligence. So a lot of work. And then after the sell goes through, I definitely think a feeling is definitely relief. Relief that the process is done and that you're able to take the chips off the table. After the relief kind of kicks in, there is obviously excitement and joy. To be honest, the money doesn't change you. It is life-changing, definitely, in the sense that I was able to do things I never dreamed of. So I was able to buy my mom a house. We were able to get, you know, in which we visit. So now I have homes in Canada and Germany. That's life-changing. I'm not going to lie. We used to stay at my brother's house in his basement when we visit. Now we're staying in our own house. That's amazing. So, it is life-changing, but your day-to-day doesn't change. It just really takes that financial stress off you, but your kids still have to go to school. They're still going to get sick. You're still going to have days where you wake up with a nightmare or whatever it is. Your day-to-day doesn't really change, but you have the less financial stress on you. You know there's a buffer and it's a nice buffer. And why did I keep working? Well, flying, I'll always fly. I'll be one of those guys. I love it. It's traveling. It's a hobby. The nice thing is I know I have the option to scale it back if I ever want to. And why am I saying in the e-commerce game is because I love it. It's fun. It's a challenge. It's hard. You know, people think flying airplanes is hard and it is hard, but flying airplanes for airlines is very regimented. We're not allowed to be creative. We shouldn't really be. There are SOPs and we have to follow them and we have to play by the book and that's how we're supposed to do it. E-commerce, as you know, Kevin, there is no rule book. You can do whatever you want with your newsletter. You can tell them, hey, I'm not going to share info unless you share it with two other people. You came up with that. It's genius. I love it. Right. But that's creative and it's fun. So part of me likes being creative, being sneaky, figuring out new ways to do things, you know, and my airline job doesn't allow me to do that. Speaker 1: So this lets you play with your creative side. Speaker 2: Exactly. Yeah. And it's a perfect balance. It allows me to do it on the side. And I like problem solving, to be honest. I think all pilots do, right? So that's how they select us. If we get a problem, we have to solve it. And in business, there's a lot of problems for everyone. And some are small, some are big, but that's where the consulting is really, really fun for me because Ryan and I pride ourselves that people, they'll come to us and be like, okay, here's the problem. What further information do you need to know and how do we solve it? And then we will try to crack it and solve it for you. And the crazy thing is sometimes just getting that external perspective from someone else is like half the battle because you're so in your business and you're so focused on the problem that the solution might be so simple. It might be so simple. And just getting that, you know, other set of eyes on it is normally the best way to solve it. Speaker 1: Do you have any desire to start another brand or start another product? Speaker 2: I do, but I, well, the thing is, I was, there's a really good book called Buy No, yeah, buy then build, right? It's an acquisition book. So it's a different business model where they say instead of starting up from zero, just buy it and build it. Speaker 1: It's one of the guys from quiet light that wrote that. Yeah. Speaker 2: Yeah, exactly. So really, really good. And I was looking into saying, okay, it's actually a more, the chances of success is better to actually buy something that already exists. Plus you save a lot of time, maybe a year and then just try to scale it. And We are very close to acquiring a company, a part of a company. The original owner was going to stay on. He was going to sell me a third. He was going to sell Ryan a third and he was going to keep a third and we're going to turn the duo into a trio and we're going to scale it together. And we love the brand. He has subscribe and save. So we have like recurring revenue coming in, which is great for exiting as well. You know, it's future thinking. So it's like good for the environment, eco-friendly, all that stuff. And we loved it. And we said, OK, this could be a brand. And then my wife asked me, she's like, Dave, why are you doing this? You just spent three years of your life literally working every day. And we had the exit and we got the money. Why are you doing this? Is it for the money? And I said, no, it's not for the money. And she's like, you're mentally gone. All your time is invested. Our kids are only young ones and they just sacrificed three years of their dad's time. And I said, you know what? You're right. This is silly. Business will always be around. It's always been around. I can go back into it when the kids are in high school and don't want anything to do with me either because I'm the boring old dad with the dad jokes. But right now, my kids are eight and six. So I said, OK, what I'll do is I'll just consult and I'll stay in the game. But I'm not going to do my own brand until they're a bit older so I can spend more time with the kids. So luckily, my wife called me out on it. And luckily, I was smart enough to listen to her because I don't regret it. So I backed out of that deal. I didn't buy a new brand. But I do think the desire is there to have another go at it. Speaker 1: If you're listening and you missed last week's podcast with Janine, you might want to go back and actually listen to that podcast because they talk about exactly what David just said where they found a distressed Amazon seller who had done a lot of things right. He had done all of his branding right, his images right, a lot of things right. He had expanded from the U.S. to Europe, but he was in over his head. He was doing $2 million a year in gross top-line revenue, but he was deeply in debt. Basically, every little thing that he heard someone say you should do, he tried to do. They were able to actually come in and buy this business for $40,000. Wow. $40,000 plus the cost of inventory, which basically got him mostly out of debt. They immediately slashed it to fix all the things that he shouldn't have been doing. Sales went down to about a million dollars, but it was actually a profitable million dollars instead of a non-profitable. And now they've doubled that or tripled that now and gotten it back up in the proper way. So there's tons of opportunities like that out there as well. So how is flying an airplane similar to running an Amazon business? There's some similarities. Speaker 2: Yeah, there's a lot of similarities. Planning is one of them, right? You have to plan and you have to have an alternate plan. And I think that's one of the reasons also why we're successful in Amazon is always calculate worst case scenario and can you survive it. Now, it doesn't mean it's going to happen and you don't have to give it a weight of 100%. So you don't have to say, if I lose 100% of my inventory, can I afford it? But you can say, what if I lose half of my inventory, can I afford it? Or what if sales are half or put in buffers, right? So when we calculate landing distance on a wet runway, we add a bigger buffer than on a dry runway, just because you brought up the wetness before. Those safety buffers are going to save your business, right? And that comes down. Then also, spend time. And this is what the seller you're just talking about should have maybe done. Don't just think of growth, growth, growth, grow. Grow a little bit and then trim the fat. Streamline. Write things down. So people are good at building systems. They're not good at keeping them clean and up to date. We all write down a nice SOP, but it takes equally amount of time to maintain it as to build it. We have departments at the airlines that clean up and revise our SOPs and then all the pilots will get all the updates. Everything's been updated. The links are fixed. Set time aside in your business to clean up your current system. Make sure they're still up to date. Make sure it doesn't get overwhelming. If you hate using your system, it's not a system. You're going to have to love using it. It has to be clean. That's why we built our Excel sheets the way we did it. So Ryan, being the sporadic scientist, man, his stuff were all over the place, right? And me, I like clean. I like streamline. And I said, we're working together. Let's streamline this. And to convince him, I said, what we're going to do is we're going to sell these. We're going to make them so pretty that other people are going to buy them from us. And that's how we started selling them. Otherwise, we weren't doing it. It was kind of for us within the team to be motivated enough to keep our stuff clean. So maybe trick yourself, keep stuff clean. Speaker 1: Well, David, this has been great. We could keep talking for quite some time, I think. More about airplanes, about business, but we'll be doing that because you're actually coming to Iceland. You're going to be speaking at the BDSS. Hopefully, you've already asked for that time off. Speaker 2: I did. It's all locked in. I'm super excited. It's going to be really fun. Speaker 1: That's going to be really good. That's coming up in April next year, BDSS 11. It's happening in Iceland in early April, April 4th to the 9th, followed by Elevate 360 from the 9th to the 12th. And you've also, if people want to know more, you've also spoken on Helium 10 Elite several months ago. Speaker 2: It was several months ago, yeah. Speaker 1: Yeah, you came on. So those of you that are Helium 10 Elite members listening to this, if you like what David had to say, go check out his talk. Just do a search in Helium 10 Elite. Or if you're not a Helium 10 Elite member, You might want to be because David's talk was really good. It was good enough to actually get him a spot at BDSS, which is not easy to do. It was good enough for that. So yeah, go and check that out. David, if people want to reach out to you or someone wants to get in touch or follow you or check out your Excel spreadsheets that you and Ryan did, What's the best way to do that? Speaker 2: So just come to our website. So it's Davan Strategic. Davan coming from Ryan and David, right? We didn't want to go with Rivid. It sounded like a disease. So we decided with David going first. So Davan, D-A-V-A-N, Strategic. We have a website. We also have a Facebook group. It's free. Just join it. It's super fun. It's small. So we are actually able to keep in touch with people. It's just Davan Group. You can find it on Facebook, Davan Group. And that's it. Yeah, just reach out, shoot an email or the website and stay in touch that way. And one last note, this is not a shameless plug, but really think about your business and think about growing it and scaling it and finding funding if you need. Like, yeah, even if you're profitable, then, you know, scale with other people's money if you're profitable and use your money to maybe pay yourself a salary or maybe actually put money aside for rainy days or if things go bad. It's not always bad to have other people fund you if it's a win-win situation. Speaker 1: And the best time to get money is when you don't need it. Speaker 2: Exactly. And yes, that's a perfect quote to sum up. And it's something I've been trying to teach people. People go and they're like, oh, but I don't need it. I'm profitable. I'm like, that's exactly when you could use it. Every company has debt. SpaceX, Tesla. Unknown Speaker: Apple has debt. Speaker 1: They got billions in the bank and they have debt. Speaker 2: And every country has debt. And if you have this old mindset of, oh, I don't want... There is risk involved, obviously, but it's a little bit of risk. And what I always say is, people want to just grow with their own money. It takes too long. Competition is going to kill your business. Think about it. That's what 8Fig was good at for us. Check them out. Like I said, we don't get any profit or anything from that. It's just we're helping them build stuff. It's a great website, great platform. We're constantly releasing new tools with it as well. So you get like free tools. You can check it out. You can even use the tools without getting funding if you don't want. But if you're looking for funding, check out 8Fig. It's a really good company to help you grow. Speaker 1: Awesome, David. Thanks again for coming on today. It's been fun. Speaker 2: Yeah. Thanks, Kevin. Speaker 1: Like David says, it's not about the hacks. Hacks are cool, but you got to have the fundamentals down first to have a chance at success. As he says, he's seen in hundreds of thousands of SKUs that he's taken a look at and the advising that he's doing now after exiting his business. Great episode. A lot of fun talking. We'll have to have David back on. You can catch more of David in the Helium 10 Elite. So check out Helium 10 Elite. I think it's h10.me forward slash elite. If you want to check that out, if you're not a member, if you are a member, You can go in and see his presentation from I think it was earlier this year, earlier in 2024. Just do a search in there in the members area and you should be able to find it. Or he'll also be at the Billion Dollar Seller Summit, the next one happening in April of 2025 in Reykjavik, Iceland. We'll be back again next week with another awesome episode. But before I leave you today, I've got some words of wisdom for you. You know, what you think you become, what you feel you attract, And what you imagine, you create. What you think, you become. What you feel, you attract. And what you imagine, you create. See you again next week.