How Dan Got to $400,000 Per Month With One Private Label Brand on Amazon FBA
In this video, we speak with our “legendary” Ryan & Daniel student Dan, who started his journey selling private label products on Amazon about four years ago. Dan and his wife Monica have since worked diligently to bring their brand to life and now make about $400,000 a month in sales.
Dan went from running his own brick & mortar business in Sydney (which sucked the life out of him) to co-running this online business that saw explosive growth after just 6 months.
And the best part is, it’s the type of business that can be “done from a hammock”, which is Dan and Monica’s key life requirement.
So how exactly did these two entrepreneurs do it, and in such a short amount of time?
One major piece of advice Dan gives us for those starting off:
“Take your time, focus on the product selection part first. Learn it, do a good job with that. Focus on your packaging. Start with building a brand from the get go.”
Here’s What We Cover:
1. Why did Dan decide to get started in this business?
2. How did Dan and Monica learn to choose the right products?
3. What hurdles did Dan and Monica face at the beginning, and how did they overcome them?
4. What was Dan and Monica’s trick to handling unexpected, explosive growth?
5. When did Dan and Monica decide to build out a reliable team to help them?
6. What does Dan believe are the most important things to focus on in this business?
7. How big of a role does advertising play in Dan and Monica’s business?
8. What has this business done for Dan and Monica personally?
Want to Learn How You Can Get Results Selling on Amazon?
Dan’s journey to reaching $400,000 a month with one private label brand on Amazon FBA was made possible by working hard and joining Ryan & Daniel’s training Amazon FBA training program.
The Infinity Code training program is our flagship Amazon FBA training program designed to show you step-by-step everything you need to know so you can start your own Amazon private label business.
Interested in learning more about the Infinity Code?
To learn more about the program click here.
Daniel: Hey everyone. I’m super excited today because I have Dan with me here, who is an absolute legend. He’s been doing Amazon now for, I think, three or four years and has been through an incredible journey. I’m really excited to have him on here and to have him share some of his journey and advice with all of you. I think you’ll get a tremendous amount out of it. I think we’ll just get right into it then. First off, thanks so much for taking the time out. I want to start by asking you, let’s say before this all began, was that four years ago? What were you doing? Why did you get into this?
Dan: Okay. First of all, thanks for having me on, Daniel, and hello everybody. I started about four years ago. It was 2014. I’m 39 now, I started a company when I was 30 back in Sydney, Australia, and that was much more your bricks and mortar type business. It was actually holistic medical centers, and I ran that business for several years. It just absolutely burnt me out. I was absolutely cooked from working crazy hours, and it actually really affected my health. 2014, I decided I gotta do something different. What else do I want to do?
Dan: I sat down with my girlfriend at the time, Monica, who’s now my actual wife and business partner, which we’ll talk about in a minute. We basically sat down and said, “What do we want from life? Where do we want to be? What does it mean to us to have a really great life?” For us, we wanted to have that freedom financially, we wanted to have the freedom to travel, to be wherever we wanted to be remotely and work from anywhere. The thing that we said was, if we can’t do it from a hammock, we’re gonna say no.
Dan: It’s quite funny. A course that you did with a couple of other guys popped into my inbox, which is a webinar, How To Make Lots of Money on Amazon. I said oh yeah, I’ll check it out. I was curious about different opportunities. Watched this webinar and by the end of it, I had the credit card out. I’m like right, I’m in, and I was just psyched for it. I just really wanted to do the opportunity. I convinced Monica to do it, and we started while I was full-time working. Monica was full-time working as well. It took us about six months to get our first product up, and we launched the first one in November 2014.
Daniel: Nice, awesome. It’s been almost four years.
Dan: Yeah, nearly four years. We launched that product in 2014. We launched a few products around that time. Things took off, we chose the right products, and they did very well very quickly. We actually moved to Bali, Indonesia, where we live now in March 2015, so right at the start of our business. For us, it was actually a good decision because this is a great place, as a lifestyle business, we actually got to upgrade our lifestyle for less money. We had more money to put into the business and we had a much nicer environment to actually do our business.
Daniel: Yeah, exactly. This was the first internet business you started, right? Just right away.
Dan: Yeah, it’s quite funny. Monica always jokes. She actually helped me install my first app on my phone not long before we started the Amazon business. I’m not technical in any way at all, but I don’t do anything by halves. When I started to do this I was all in, 500%. I put a lot of time in. Anyone that says this sort of … You see people out there saying Amazon businesses are easy and you can do it with a few hours a week. I’d say no chance. It’s a serious business, you gotta put the work in, and I did. Still now, we’re four years in and keeping up with the growth is one of the tough things, but we’re still working really hard. That’s okay. That’s business.
Daniel: Yeah, and you get what you put into it. If you put 500% into it, then you’re probably gonna see some incredible things. If you don’t mind, I want to ask you right away. How far have you guys gone in a month? What’s the biggest month you’ve had so far?
Dan: Biggest month was actually April just gone. We hit $440k US for global sales. That’s pretty nice. Most importantly, Daniel, something we’ve talked about a lot, is we’ve managed to keep our profitability just under 20% net profit [inaudible 00:04:22] We’ve really focused on trying to get our profitability there because it’s very easy to just keep building that top line revenue but you never feel like you have any money, especially in this business where the demand on inventory is so huge all the time, especially if you want to launch more products.
Daniel: Absolutely. I can say from working with you a bit, you have a really intense approach. You go all in, but this is what you get when you really put your heart into something. I think it’s amazing to see what you’ve been able to do in three and a half years. I want to start from the beginning. For people that maybe haven’t really gone far yet, I want them to see that you can go and build something incredible if you put in enough effort and time and energy. When you started, what did you start out like. Was it one product? Did it go slow? Did it go fast? Did you have ups and downs? What was it like at the beginning?
Dan: Maybe if I can tell you a little bit about how our business works, first of all. Essentially, Monica and I run the business together. We’re a very lucky couple in that way, that it actually works. We have extremely different work styles. Monica essentially does all of the front end. She does the product research, product development, deals with the suppliers. She does all of that groundwork to actually get a product up and running. She’s very good at being creative. She can find essentially white label products, then just change them and customize them to make them look absolutely amazing. Then they just knock it out of the park.
Dan: Once the product’s ready to go into production, that’s when I jump in. I help with all the logistics, the finance side of it, all of the things, I’m trying to think. That’s all the stuff I did back then, the marketing, basically everything once the product’s ready to go, that’s what I look after. I guess Monica’s kind of head of product and I’m in that CEO role, but also [inaudible 00:06:23] now we’ve got a team that does a lot of it.
Dan: Back then, we started with two different products. There was a couple different models of one of the products, but essentially, it might have been four to six SKUs. We launched those all at the same time in November 2014. I think we really focused on product selection and both of the products took off really quickly. We grew very fast. We got to $50k a month in six months, which we were just ecstatic about because we had no idea that was gonna happen. What we know now, I’m getting almost goosebumps telling you about it because it’s just so exciting, that trajectory that happens. Man, you gotta be ready for it because once it happens, you’ve really got to just be dialed in and ready to go. There’s so many challenges that come up along the way.
Daniel: Yeah, exactly. That’s what I also tell people about. You have to be ready to sustain that growth because it explodes. Once you’ve got something, it just explodes.
Dan: Yeah, it does. One of the really big challenges we had, we got to that six months in, $50k a month, we were ecstatic with how everything was going, so Monica and I got all excited and said, “This is a piece of cake. Let’s just launch another 10 products in 10 different categories.” I kind of ignored the initial training which said, find complimentary products to one niche and stick with that. We didn’t do that. We went and chose a whole bunch of products and thought, if we can get a start in five or six different categories and then expand all of those, we just kept multiplying the numbers of what would happen. It didn’t work that way.
Dan: We launched a bunch of products that tanked and at the same time a bunch of products tanked, our hero product, which is our bestseller that was responsible for about 80% of that $50k a month, had massive production issues. About 1,000 units left our [inaudible 00:08:30] and it arrived at Amazon. Within about two weeks, our account just got shut down. We were like, what’s happening? All of a sudden, super bad reviews, complaints, returns. It turns out our supplier or someone in their factory when they were packing our goods, they put the wrong part in. It was a key part of the product.
Dan: It really crushed us because at the time, we were actually traveling in Europe. All of a sudden, our sales went from whatever $50k a month is daily down to like 10% of that. We just had all of these orders on the way that we had to pay for, the shipping that goes with that. We had no money to launch the next ones, and the business was pretty much over. It was gone.
Dan: Some huge lessons. Obviously, quality control was the number one. We implemented a lot of processes around that now. We’re really tough on that. I think the further Amazon goes along, the better you have to get at those kind of things. Essentially, Monica and I had to fund. We had to … What did I do? I think I actually re-mortgaged the property or I did something basically to get some cash out. We basically had to inject more money into the business to save it. Luckily, we had some cash to be able to do that. It’s been pretty good since then. We have our ups and downs, but that was the big learning … I think it was actually good that we had that one early on. If we didn’t have it, I’m someone who just takes lots of risk. Like you said, I got super hard at stuff. This was a good wake up call. I’m glad we had it then and not now.
Daniel: Yeah. It was like the business grew too fast and then it imploded. That has happened too. I remember one brand, we had the supplier mess up the voltage on the electricity. People are saying, “This thing could turn my house on fire,” and it’s so bad when something like that happens. It really is critical to dial in your supply chain and your manufacturing and to make sure that stuff doesn’t get messed up. Then you can really have a big issue. That’s something you’ve learned. How did you recover?
Dan: We essentially said okay, let’s reassess how we’re doing this. The products that weren’t working, the new ones, we said, let’s just sell through the inventory, let those go, and let’s immediately focus on building out the niche that’s working for us. That’s really where we focused. We did then launch several complimentary products that … We found that as we launched complimentary products with similar search terms, we found that because we already had a couple products that were doing well and ranking extremely well, Amazon gives you an automatic boost. We were finding it was much easier to rank products we found because we were going after the same search terms. On page one, there might be four or five of our products. We were kind of dominating a few pages of particular search terms. That was really probably the smartest move we did.
Dan: That’s also the time when we said, we really want to focus on one brand. We said this is our brand, that’s our focus, and we started really putting the effort into building a list externally, social media, our own site. We started really doing all those other things to build a real brand. It’s a great thing, I’m glad we’ve done it, but it’s also a little bit risky. You feel a bit exposed with just this one vertical of product.
Daniel: Yeah. I think there’s so much value in building the brand right because you have everything starts to compound now and everything you’re doing, yeah it pays dividends over time because you’re building something substantial. You could sell it. Like you say, it’s easier to rank new products, things like that. I guess that was one of the big lessons, right? Let’s focus in on one thing and make that big.
Dan: Yeah, that was definitely one of the huge ones. The other one is really being a couple of things. The first one being cash flow. It’s really challenging in this business. I think if you’re starting in Amazon now, I think you need to try to pull a bit more money together. If that means pulling it off a credit card, borrowing it from friends and family, whatever you got to do, I think you need a little bit more money than what we probably needed back when we started.
Dan: Obviously, it depends on the product and all of those things, but I think you need a little bit more money now. In particularly, as it starts to grow, your existing products grow, so you’re having to order more and more of your existing product. You’re also launching new products, doing things like giveaways and all those kinds of things where you’re giving away a lot of inventory and things like that. Those types of strategies are expensive.
Dan: As your current products are going up, you’re launching these new ones. The supply chain again, you have to start … As supplies start needing more and more time to produce the order, we want to get smarter with shipping. You don’t want to put things on planes. You want to go by sea, as slow as possible. Then you run into hitting limits at Amazon with your inventory, and you can have storage fees and all this kind of stuff. We’ve had to really focus on managing our cash flow.
Dan: What we’ve done in this last year really … Daniel, you and I started doing the one-to-one coaching, and I really learned a lot from you about how you build your team out. One of the first people I went and got was I got his amazing guy from the Philippines who’s an accountant and CPA, but he’s also done an MBA. He’s got this amazing financial experience, but he’s also got a really good operational experience because of the MBA.
Dan: I’ve had him come in, and he’s really owning … We’ve got budgets now, we’ve got cash flow that we do weekly to show where we’re at. Every time we want to launch products, we know [inaudible 00:14:41] for the next year. He tells us what we can afford to launch when, all these kinds of things. That’s been probably the best thing I’ve ever done. He manages our inventory because we were constantly having the running out of inventory, too much inventory, all of those issues. That was really smart, getting that person in the team. Then there’s been a couples others that are just key now.
Daniel: That’s fantastic. I think as entrepreneurs, we are visionaries. We want to keep going, we want to keep growing. We need that person to balance us out that puts the brakes on a bit and has that background in finance and can do the math, the calculations. I know that’s not something I look at. I want someone to tell me because I would forget. It’s not something that’s in my DNA to be thinking about. I just think about the future, how can we grow, what can we do next? I know you’re the same way. That’s really awesome to hear. That’s fantastic.
Dan: Yeah, I’m actually pretty comfortable reading all the numbers and things because my previous business, I had invested in early and I had to answer to a board, and I had reporting, and all of that kind of stuff. I’m pretty comfortable with the numbers, but the detail that he can get into … We’ve got a bit of an issue right now on Amazon where our US sales have just dropped about a month ago and have just stayed there. They dropped by about 30-40%. You know about this because I’ve been emailing you about it.
Dan: It’s a really tricky situation because usually when there’s a drop in sales on Amazon, I can figure out what it is pretty quick. I either know there’s a problem with the product, or there was a holiday in the US, or there was some sort of weather messing up the east coast, or whatever. There’s usually something I can pinpoint with, but this time around, we just had this big drop and we’re still trying to figure it out.
Dan: What’s great is, again, this team. The guy that I was mentioning before, he actually really dug into the data and reporting to really assess what’s going on. He’s giving me some great insights, and then the other side of it is our marketing agency. That’s another part where, I love the digital marketing side of it. I spent first couple of years mastering sports products on Amazon, really focusing on that, got really good at it, but it just got too big. It just got too onerous and too much detail for me to manage as well as the rest of the business.
Dan: We ended up outsourcing that to a marketing agency in the US. That’s an expensive decision rather than, for example, outsource somewhere here in Indonesia or Asia, but I think it was a really wise choice because that’s helped scale our business. They’ve also provided amazing insights into what’s just happened. We’ve got a game plan of how we’re going to try to dig ourselves out of this.
Daniel: Awesome. You’ve been able to invest into a team and delegation and processes and stuff as you’ve grown.
Dan: Yeah. That’s a hard thing too. When to do it is really tough. We had someone come in very early on, pretty much from the get go, in the US to help out in customer service because our products are a little bit technical. The Amazon seller support guys, they just can’t possibly know enough about our products to help the customer. We had to get someone in the US in the time zone that could actually have someone call them and all that kind of stuff. That person’s now grown into essentially being what we call our platform manager. She looks after everything Amazon related now.
Dan: Getting that team, it really is important, but I think you have to be ready for it and doing the processes first. Like you said, you need to jot down, note down all the things that you either want to outsource, or how to do them, and start doing the SOP kind of step by step so when you bring those people in, they’re kind of ready to go. You’ve really got to be ready to give them the time too because there’s a learning curve. I’ve found every time we’ve brought one of the bigger hires in, it ends up being even more work for me for the first few months until they’re up to speed. Then once they’re there you’re like, that was so worth it.
Daniel: Yeah, exactly, because brick by brick you’re building that team and that system that keeps you growing. You need that to be able to grow. Like you mentioned, it’s easy to burnout because there’s so many other things you have to do. With every product, there’s more things, more things, more things. How are you able to scale it? Once you came back from that dip, did you start with just one product then, or a few? How did you grow from there?
Dan: The product that actually had the problems, we did get a bunch of bad reviews, but luckily we sunk a lot of money into marketing. We almost relaunched the product. We knew it was a great product. It was literally one batch. So we removed all of the units that were part of this batch, we were out of stock for a couple months while we did a new production run, got it back in. As soon as we got that one back in, we had a couple of others on the way.
Dan: I don’t think we got above $50k again for the rest of 2015, but to give you a rough idea on the numbers, Daniel, we did, what was it? 2016, we hit about $750,000 US in sales. That was where we recovered out of that. Then in 2017, sorry. Yeah 2016 $750 and then 2017 we nearly hit three million in sales, which keeping up with that was just insane.
Dan: We launched a lot of products and one of the mistakes that we often make is Monica works on several products at once. What we try to do is launch them as they’re ready, and we try to spread them out. What typically happens is because we do a fair bit of customization on our products, they’re not just typical white label. We do a fair bit to parts of our product, it involves getting molds made and things like that, design work.
Dan: What often happens is we end up with a whole bunch of products ready to go all at one time. Me being me and wanting to see that growth, kind of go, screw it. Let’s just launch them all. We’ll throw heaps of money, get the first products up, do all of the promotion and launch, and then it’s just cash flow crunch for about six months just trying to catch up with those launches.
Dan: We’ve made that mistake a few times. We’re actually about to do it again now. We’re really confident with our numbers and cash flow, but because we’ve just seen this dip we’re having at the moment on our US sales, which is the biggest part, we’ve got a whole bunch of new products going into production that we’re gonna struggle to pay for. I’m having to work with the suppliers now to give us a bit of a break and slow down the production or store the goods for a little bit, all that kind of thing. Plus, working out better terms with our long-standing suppliers.
Daniel: Yeah. You guys don’t hesitate to launch new products. I know that. Just so people know, how many products do you have, roughly, by now?
Dan: Actually, it’s not as many as you may think. I think we’re still well under 30 SKUs. That’s four years in. What we have is the good thing about our business is our products have a part that needs to be replaced. That part that needs to be replaced keeps customers coming back and back. I think that’s one of the secrets that’s helped us grow as fast as we do because every one of these products has a replacement part and all the customers keep coming back. Now we have people doing the subscribe and save on our own website. We have similar subscribe and save type thing. The more we sell and the more customers we build over these years, the more and more of the replacement parts we sell as well. That’s why I think we’ve managed to only have 20-30 SKUs.
Daniel: Yeah, it’s cool. I hadn’t told you before, but just the other day I actually bought one of your products and I’m using it now. It’s really awesome. I needed one of those things. I was like, hey I’ll buy it from Dan. It’s cool. I just love that part of it too. Now you have something that’s real. There’s so many people that are using your products. How does that … Is that something that you get pleasure out of? Your customers, serving them again, things like that?
Dan: Yeah, 100%. Monica, in particular, is extremely passionate about the actual products. I know in the Amazon game, some people are just straight up looking to make money. One of the things that I’ve always really focused on in business is I want to do business and make a lot of money, totally a capitalist, that’s for sure, but I want to do business that’s good for people. I’ve generally stuck around the health and wellbeing space, even in my previous businesses and all the way through to now. It’s always a huge growth area, but it’s just so important to people.
Dan: The feedback we get from customers, you get people telling us that our products help them with all sorts of ailments and injuries and diseases and things like that. It’s amazing for us. Monica is extremely … She’s become a bit of a subject matter expert in our area that she had no idea about when we launched the first product. Yeah, we are very passionate about making sure the products are super high quality. I think if you don’t do that now, Amazon being so competitive, you’re just not gonna survive. It’s pretty brutal out there if your products aren’t good enough.
Daniel: Absolutely. They have it built in [inaudible 00:24:05] review and stuff, the product will stop selling if it’s crap. I saw that in your review on that particular product, people saying it changed some serious things for them. That’s amazing. For a lot of people, that’s what it’s about, creating impact while building an awesome business. That’s cool that you chose something, got that element going as well. It’s really motivating.
Dan: Yep. Now we’re just looking really to where to from here? It’s been four years, obviously, on Amazon US, Canada was probably about three years, the UK two years now, and Europe’s probably been the last year and a half that we’re focused on. It’s nice to have that spread now because when you see that dip that I was talking about we’re having in the US right now, because the UK’s also doing really great, it’s kind of softening the blow a little bit. If we were just in the US, it would be really hurting us right now. It’s helped out.
Dan: Now, we’re at that point where a year ago when we started talking, you suggested we double down on Amazon, and that’s exactly what we did. We’re about to start looking at other sales channels, in particular, our own website. It was definitely the best decision at that time, but now we are at the point where we’re thinking of actually bringing someone else into the team to help expand into other areas. We’d like to get into retail, we’d like to get into some other e-retailers. We’ve got a wholesale affiliate kind of things get set up at the moment, we have agreements and contracts. We get approaches all the time, people that are … The business gets noticed, especially once you have a decent number of SKUs and they’re all doing quite well. You get noticed out there. We get approaches all the time now for people that want to be a distributor, or an exclusive partner in this country or that country. Most of the time, we’ve just always said no just because it’s been too had to explore, but I think that might be the next step for us. That’s probably where we’re gonna head next. I still feel like there’s a lot on the line with this one brand all just on Amazon. I feel like we have to start branching out a little bit.
Daniel: Yeah, you can achieve some of that diversification through the other international storefronts, which you’ve done. I think when you have a product that’s starting to be something really good, you’ve evolved it into basically more than just private label. It’s starting to be your own thing. That’s when you have an opportunity to those sort of things that you’re talking about. It’s something real. It takes time. Starting out with something customized is not something that I think anyone should really consider, especially
[inaudible 00:26:48] and stuff. Then you can evolve it into that. It’s really your own thoughts.
Dan: Yeah. That’s what we did, Daniel. I’m very lucky in that, if I was doing the business on my own and I was just working with sourcing agents and things like that, we probably wouldn’t have picked the products that we’ve picked because they are a bit technical, they do take a lot of work, and there’s a lot of learning. If you’re starting out, yeah, you definitely want to just stay super focused on keeping it simple to start with, learn the platform, learn the process of finding the products, and all of that stuff. Take your time because the product selection is so important. Don’t be in a hurry and just focus on doing one thing right.
Dan: Once you’ve got that, move onto the next because it’s very easy out there, especially with all of these so-called gurus out there suggesting that you do this and you do that. There’s about a million different marketing channels you should be doing, and you should be on every social media network, and all this stuff. We just cut out that noise. For me, I learned that from my previous businesses. You’ve really just got to put the blinders on and say, I’m just sticking with one thing. That’s why with your program, and I’ve done several Amazon courses by different people, your last one, Infinity Code, right?
Dan: It’s just such a good step-by-step, it’s measurable. Just stick with that. Don’t get distracted by anything else. That would probably be the best tip that I could give anyone who’s starting out. As for the customization, yeah, I’m really lucky that I’ve got Monica. She basically spends her days, 10 hours a day, on product development and building and sourcing. She’s got a full-time sourcing assistant now. She’s full-time just doing that. If I had to do that as well as running the business, then no. Customization is probably not the best thing unless you’re starting with a partner from scratch, I’d say.
Daniel: Yeah. It’s something that I think takes 50% of your time, like you’re saying, just the sourcing and product development. It’s something you have to get either delegated, outsourced, or just don’t really go there into detail like you guys are doing.
Dan: Yeah. It’s a different skillset too. It’s a really different skillset, that whole … I don’t really enjoy searching for products. Monica has this ability to just go down the rabbit hole online and find supplies and stuff whereas I just don’t have the patience. I’m much more like you, high level, want to just go and kick ass on stuff. Yeah, again, I’m really lucky to have her.
Daniel: Yeah, that’s awesome. You have a fantastic partner. I can relate because my wife, she would be doing the exact same thing if we had a brand too because that’s more of her personality, the detail, the design, that kind of stuff. I have no patience for that and I think most sellers actually love the marketing, that kind of stuff. That’s exciting. You’re getting results, that sort of stuff.
Daniel: Yeah, I want to bring up the point you made that’s so good, staying focused. I make that the whole theme of Infinity Code for that reason because I think that’s the number one problem people have in general business, not just Amazon. Being too all over the place, and getting distracted, and looking at all these different options you can try and all these different marketing tactics and stuff. On that note, what would you say are the most important things to focus on in this business? Just few things that really everyone should be focusing on?
Dan: I made some notes before I called, Daniel. I’m trying to think if some of these things that … The things that I’m really focused on … Obviously when you’re starting out, the product selection part is just key. If you choose the right product, you launch it well, and it gets off to a great start, it’s just such a good foundation. I’d really say take your time, focus on the product selection part first. Learn it, really do a good job of that. Focus on your packaging. In my view, you should start with building a brand from the get go.
Dan: You don’t want to just launch something that’s … Maybe you could do that a few years ago when we started, but I think now you really want to launch a brand. It doesn’t have to take forever to create. It’s pretty quick to get design work done and those things, but at least get started on what you want to do with the brand. To start with, I would say forget social media and things like that. I’d say forget external traffic, all of those kind of things. Just focus on the Amazon platform.
Dan: You really need to learn how to launch, you really need to learn how to do the advertising because that’s really gonna help you get that volume and get you seen and ranked and all that kind of thing. Then really learn the numbers side of things as early as you can. If you’re someone that hasn’t run other businesses and things like that, I would go and up-skill yourself. I would go and find a coach or a mentor or do a basic course, something simple online. Learn how to read a P&L and balance sheet, use some accounting software. There’s so many great tools out there now. They don’t need to be technical. There’s so many third party things that plug into Amazon and your own software and stuff. Those would probably be the main ones that I’d really focus on.
Daniel: You used the KPI system numbers to look at your progress over time?
Dan: Yeah. We use a bit of a hybrid. Because we were quite a way along in our business when we did Infinity Code and I started working with you, we’d already created some other systems. I was trying to mesh these systems together. What we’ve got, it’s a bit of a hybrid, but our KPIs are probably slightly different to what you teach just because of the types of products and where we’re at and things like that, but 100%, we follow KPIs and metrics.
Dan: What we have now typically is a yearly budget where we forecast out what numbers we want to do every month. It’s not just the revenue, it’s the expenses, the profitability, all of those things. Then every month, we update those to actual numbers so that we can see how we’re tracking all of those kinds of things and we’re watching, where can we reduce costs? It’s very easy as you start making lots of revenue to think, I’ve got all this money, and start taking on all these extra costs. Yeah, you’ve got to be careful on that too. Metrics for sure, we definitely focus on that.
Dan: Everyone that is in my team now has checklists of things that they need to do daily, weekly, fortnightly. I have weekly catch-ups with all the key people in the team. The finance guy, he has a huge amount of stuff to give me at basically this time, just the start of a new month. He gives me all the reportings of the previous month. I even have people in the team doing things like checking listings and checking pricing. We’ve just got a lot of checks and ticks and crosses everywhere to make sure the thing just keeps running properly.
Daniel: Awesome. Basically to sum it up, it would be carefully select your product, your niche. Don’t rush into that because it’s really important, and then focus on the quality of the product. Make sure they’re really good. Then obviously you have the numbers, the tracking. In the middle there, or I guess the third thing, the marketing. Can you go into some more specifics on what you really get the most out of? It’s advertising, right? Like sponsored ads?
Dan: Yeah. To talk about our advertising now, like I said, it was about six months ago now. I had to make the decision. I was spending about half of my week just on sponsored products, just really constantly tweaking bids and budgets and all that kind of stuff. The more products that you launch and the more campaigns you launch, it just gets really onerous. The more time you do keyword harvest and add more keywords and negative keywords and all this stuff that goes in there, it’s just half my week. The other half of the week was all the stuff around inventory management, shipping, all the logistics around staying in stock all the time. That was where I decided I needed to outsource those two things.
Dan: The marketing agency that we took on in the US about six months ago, they’ve basically taken what I was already doing and then have scaled it big time. Because there’s a dedicated account manager who’s working on that, their ability to get much more efficient with the ads and all that kind of things, that’s really worked. Sponsored products are still a huge part. We do AMS so we do the headline search and the product display ads. Now we’ve actually just started to invest in Google shopping, Google text ads that we’re driving both to our site and to our storefront on Amazon because it’s trackable, which is something that’s pretty new. Yeah, we’ve started to expand out, but if you’re starting out, sponsored products is where it’s at still. Just get good at that. Now inside sponsored products you’ve got headline search, so you’ve got half of what AMS is right in there now. It’s easy for anyone to learn.
Daniel: Did you guys focus on ranking for specific terms? Did you track that and things like that as well?
Dan: Yeah. We’ve pretty much followed your methodology on that kind of thing. We focused on about 20 keywords, about a few more than what you suggest, but they’re all pretty closely related. We did that always, even four years ago when we started, we started by working out the search volume for a bunch of keywords and saying, that’s a good space to play in, assessing the competitors and all the other things before we jumped in and started looking for the products. I think that was another thing that we did well, we followed those steps of actually figuring out the search terms.
Dan: Now it’s still like that. We’re in a good position now where because we’re in this same vertical, usually the keywords are pretty much the same. Each time now, there’s only slight tweaks to the keywords that we focus on, things like that. We seem to really hold our ranks pretty well. One thing I’ve noticed recently actually, it’s part of this dip were having at the moment, is I was trying to focus on the A cost inside seller central, the return on your AdSpend. I wanted to have it at about 30% or less all the time because that’s profitable for us. That means we’re making money on our ads all day long, and I can keep spending more and more and more.
Dan: What I found was at 30% now, a couple years ago it was possible, but I found now to get under 30% we don’t get as much ad exposure, which then means not as much volume, and that means not as much organic sales as well as our ranks start to drop. For us, we’ve learned this just recently, but the sweet spot for us is the high 30s in the A cost. While for some products, that’s not profitable for us, because there’s the volume there and then the organic sales and rank, it still ends up working out on the numbers. Again, the numbers are important.
Daniel: Yeah, that’s great. I just love how you guys have been able to just really say, these are things that matter. Instead of getting distracted by all kinds of different strategies, you stuck to the basics and you focused instead on scaling, adding more products, growing, instead of, let’s try this, let’s try that. Obviously, most of those things aren’t gonna work that well. In terms of conversions, what sort of stuff have you done to really get your products to convert and sell? That’s really important as well.
Dan: Yeah, okay. We’ve really focused on high quality products from the get go. In our space, we’re normally the most expensive, which people have different strategies on pricing and things like that. We’re always pitching ourselves a little bit above the middle point for pricing, but we’ve been able to do that because quality’s there. We’ve really started to invest now, as the consumers have become more educated, they challenge us. Explain how your product actually does what you claim, kind of stuff. You get challenged, and this isn’t to us directly. They’ll do that publicly on Amazon. We’re like, whoa, we’ve got to be able to answer this.
Dan: There’s a bit of science behind our products. We’ve really focused on actual lab testing, various elements that go into our product, the different mix and how that works. That’s been one of the big things, to just get quality really dialed in so that we can back up everything that we say. We’ve constantly evolved our packaging so as we’ve had a bit more money and as we’ve developed the brand, we’ve refreshed products that were older products and things like that.
Dan: Then customer service, we’ve really … It’s a big cost in our business, which a lot of people probably wouldn’t like to have, but for us, it means really happy customers, better quality reviews, better feedback. We essentially now have three people on customer service, two in the US, one in the UK and then one in the Philippines. We’re available on chat on our website, you can call us on a 1-800, you can get us through seller central, through seller messaging. We’ve got about four or five different ways people can get us 24/7. We’ve got people on shifts all around the world. I think that’s one of the reasons why we’ve managed to continue to get really great feedback.
Daniel: That’s awesome. In terms of [inaudible 00:40:18] like you’re saying, the feedback, the reviews, the interaction with the customers is huge. Is there anything in terms of images or things that you say or offer with the product that has made a difference for you?
Dan: Yeah, I’m glad you brought that up. We use 3D renders now instead of photography. That’s something that I learned from you. It’s been a bit of an investment, but wow they look good. It really shows. When you get someone good, like we’ve got a guy who’s amazing, it’s not a fast process. You’ve got to be well planned to have those done in time for launching products, but definitely those images have helped. For us, we try not to crowd the images too much. A lot of people you see putting extra words and text and all sorts of stuff in there. It just looks like a mess. We’ve tried to focus on just getting really clean products, sorry, clean images.
Dan: In terms of our bullet points and descriptions, we go pretty long on those. We use the maximum character limits and all that kind of stuff because our products need explanation. We really try to … It’s not so much about stuffing keywords into them. It’s just about trying to really educate the customer. We try to find that nice balance between search terms and actually educating the people that might be buying the product.
Daniel: Yeah. That’s great. Have you done any A grade listings with images and have you done any of that, those updates for your products?
Dan: Say that again? A grade? What do you mean?
Daniel: Where you pay Amazon to have an image description kind of thing, or have you done anything like that?
Dan: No. The only things that we have done is enhanced brand content. That’s actually another lesson that we’ve had not that long ago. We had enhanced brand content, but one thing we didn’t do early enough was go and get all our trademarks sorted out. We’re still going through the trademark processes now. For many of our SKUs, we lost enhanced brand content. That was a bit of a shame because it does work really well to have something very graphical. For the products where we don’t, that’s where we’re trying to create almost infographics just on one or two images, not overdoing it, just so you can really point out some key features in some of the images.
Daniel: You’ve found that to be really useful when you have done that in the past?
Dan: Yeah. We try and test those sorts of things but yeah, it definitely feels like that’s better for us, yeah.
Daniel: Cool, awesome. In terms of you personally, that’s been a lot of great advice. Obviously, I met you and Monica in Bali, and you guys have a really cool life there. What has been the most important thing, in terms of this business, doing for you personally? Is it freedom? Is it just being able to do something that you enjoy? Is it able to live in Bali? What is it?
Dan: Okay. I want to give you a really honest answer, Daniel, because it’s really easy to sit here and say it’s all sipping cocktails and surfing, but it just isn’t like that. We’re still working really hard. In fact, this past January was the first time we actually felt like when we went on a holiday it was an actual holiday where we switched off. In the past, we’ve often … Monica’s from Norway, so we’ve often gone to Europe, my family’s in Australia. We’ve traveled a lot, but we’re always working as we go, so we’re never switching off.
Dan: The most important thing that, not so much that we have now, actually we do. Probably the most important thing is that we control our days. We love that we work from home. There’s no commuting, there’s none of that sort of stuff. Monica and I have very different work styles, even work hours. For me, it’s great. I can get up. I love to either go and do some surfing or yoga or the gym or something really early, like super early, 5:30, 6:00 in the morning. Get that out of the way first, or if there’s no waves, I’m straight into the work, but I usually am done by about 4:00. Monica on the other hand, she works later in the day.
Dan: For us, that freedom to choose how a day runs, that’s probably the most important thing to us. We get to control the day, and part of the speed that we scale and the speed that we build our team is all based on lifestyle. If we had to go and get an office, put a bunch of people in there and go every day, we just wouldn’t do it. We’d slow down. For us, it’s really important to keep that mobility. We have a lot of trust in our team. We really want … Yeah. My mantra in life is definitely build freedom. It’s definitely lifestyle focused. That’s the most important thing for us. Bali is a great place for that.
Daniel: Yeah, it is. You basically want to get to a point where you work yourself out of the business more, right? Where you have to do less?
Dan: Yeah. At the moment, we’re actually considering selling the business, which is something that we’re-
Daniel: Oh wow.
Dan: Yeah. It’s something that we’ve got a few different options of what we might do. It’s either gonna be we’d like to step out more and more or we’d like to sell it. The only reason why we were thinking more around selling is it’s quite difficult. I think I could probably step myself out of the business, but to take Monica out of the business is quite tough because she’s the one with the product knowledge. She knows the niche intricately, she’s got all the relationships. To hand that stuff over and have someone own it like she does and have that same amount of drive, I’m just not sure that person is out there, or they’re not out there that we can afford.
Daniel: Yeah, that’s right. Yeah man, selling it is always an option. It can be a really cool option as well. You can probably sell this one for quite a big sum of money with what you’ve built up because you’ve built up a brand instead of just a bunch of different products that aren’t related, something like that.
Dan: Yeah. I think we could definitely get a good price and sell it. That would then give us the freedom that we want. Monica and I are quite passionate about we’d love to go and do some other things out there in the world that are less money focused and are more giving back, that kind of stuff. We’ve got that drive in us. We’re both around 40 years old and we’re sort of thinking if we can cash out and then go and do something great, that’s cool.
Dan: At the same time, yeah, if we can … We’d probably have to slow down the growth a little bit and start taking more money out if we’re going to keep the business, but at the moment, we haven’t, just keep putting it back in and kept scaling. We have to really make a conscious decision to pull that hand brake and say, you know what? We’re happy at this level. It’s now gonna be a cash machine. That’s difficult for me to do.
Daniel: Yeah. Maybe you’re more in tune with just building it up, scaling it, and selling it. That’s what a lot of entrepreneurs do. They say you can make a lot of money, more money I should say, doing that than just running the business. Yeah, I’m excited to hear how that goes and what you get as offers and stuff. I’m sure there’s other brands and stuff that would love to buy you out and just acquire you.
Dan: Yeah, I think we’re kind of at that stage. We’ve started some early discussions with brokers and stuff like that, and starting to understand a little bit about who buys these kinds of businesses, and is there much of a market? What sort of multiples do you get for it and how evaluations work. To be honest, we’ve really thought about that over the last year or so, we’ve been thinking about that. It’s something that might be a few years down the track for us. It’s not something that’s right here right now because there’s a lot of things to consider.
Dan: At the moment, we’re still loving it and right now we’re absolutely loving our team in particular. It’s so nice this last year to have a team that just works so nicely together. Everyone does their role. We’re so lucky to have a great bunch of people in the team. Yeah, I’m not ready to let go of that yet. I’m really enjoying that part of the business right now.
Daniel: Yeah. You’re busy but in a way that’s enjoyable. I agree, building a team is one of the best things in terms of that. You really enjoy that aspect where you’re building culture, obviously providing these people with an opportunity as well. They’re feeding their families, they’re having a nice job. That’s enjoyable, the people aspect. Even if it’s online, it becomes more of an interactive business in terms of having people around versus just sitting on the laptop alone all day working on it.
Dan: Yeah, it’s super nice. We give everyone a lot of freedom because we like to have freedom. We pretty much have the rule with everyone, as long as the work gets done, we don’t mind when it happens or how it happens, as long as it gets done. What we’ve found with … I think a lot of people are bit worried about hiring people remotely or outsourcing, whatever terminology you want to use, but we’ve actually had nothing but good experiences.
Dan: We’ve always taken our time to find the right person, but we’ve only had one person leave our team in four years. Now we’ve got a team of seven or eight. They love it, and they get so excited. We have group chats and everyone gets so excited when a product does well. Even someone’s birthday, everyone’s in on it. It’s so cool. It’s so nice to have that culture, like you said.
Daniel: Absolutely. Your people are in the Philippines. Do you have someone in Bali or US?
Dan: Our team?
Dan: We’ve got a call platform manager and customer service in the US, our design team are actually in the UK, and they also help out with a bit of customer service and even some product returns and stuff. Then we have our [inaudible 00:50:06] finance operation guy in the Philippines, plus two other people in the Philippines, one focused on more VA activities, and the other one on sourcing. Then Monica and I. That’s the core team. We have a mix of people from all over the place.
Daniel: Yeah, it’s a global team for sure.
Daniel: That’s cool. Look, I don’t want to take too much of your time. We’ve been on here for, I think, almost an hour. I know you’re busy, you’ve got plenty to do. I really appreciate the time and I know everyone watching this does as well. Is there anything you want to mention that we kind of talked about, any final words that you have?
Dan: I think honestly, Daniel, we’ve covered everything. As you can probably tell, I could talk all day long if you let me. I am passionate about this. It is so exciting. It’s full of challenges, but every business is. They’re just different challenges in different sorts of businesses. The only thing I would really mention is if you’re already in this, hang in there, stay focused, and just work through the problems. 95% of the time, you come out the other side better for it. For anyone who’s thinking about having a go, you’ve got nothing to lose. Just give it a go, but just stay focused and follow the steps. I can’t say enough about the time I’ve spent with you personally and also doing your programs and things. For us, they’ve for sure worked. They’re a huge part of how we’ve scaled up. Whoever’s listening to this wherever, I would strongly say just get into it.
Daniel: Awesome. Thanks, Dan. By the way, anyone watching this, there’s a link below the video if you are new to this with a quick crash course on our methodologies so you can see some of the things we’ve been talking about in terms of how we do it in more of a data driven scientific way. Thanks so much, Dan. I really appreciate the time. I look forward to talking to you again soon, hopefully. Obviously, keep me posted on how everything goes. We’ll chat soon. Thanks.
Dan: Will do. Thanks a lot, mate. Bye.
Daniel: Bye bye.
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