Side Hustle City

Mastering Amazon: Dan Brownsher's Journey to E-Commerce Success

April 18, 2024 Adam Koehler & Kyle Stevie with Dan Brownsher Season 5 Episode 27
Mastering Amazon: Dan Brownsher's Journey to E-Commerce Success
Side Hustle City
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Side Hustle City
Mastering Amazon: Dan Brownsher's Journey to E-Commerce Success
Apr 18, 2024 Season 5 Episode 27
Adam Koehler & Kyle Stevie with Dan Brownsher

Unlock the secrets to conquering the Amazon marketplace as we sit down with Dan Brownsher, the insightful founder of Channel Key. From his humble beginnings at Ohio State to becoming a powerhouse in e-commerce, Dan's entrepreneurial spirit is a beacon for anyone looking to create a thriving online business. We traverse his story, exploring the pivotal moments and strategic decisions that led to his success. His tales from the Las Vegas conference circuit aren't just about the glitz and glam—they're networking gold mines that have helped shape his business acumen.

Dive deep into the world of Amazon with a guide who has navigated its treacherous waters and emerged victorious. Dan's masterclass in managing an Amazon business provides a roadmap for anyone feeling overwhelmed by the thought of rising fees and fierce competition. He doesn't just talk theory; we get an inside look at the practical tactics and strategies that Channel Key employs to propel brands to the forefront of the marketplace. By dissecting the significance of data analysis and gap analysis, Dan arms you with the tools to carve out your own space in the e-commerce jungle.

In our candid talk, Dan doesn't shy away from the harsh realities of online sales. He lays out the landscape, from the allure of dropshipping to the grind of FBA, giving a clear-eyed view of what it truly takes to succeed. It's not just about the hustle; it's about building something sustainable. Dan's experience offers a reality check for side hustlers and dreamers alike, serving as both a warning and an inspiration. Join us and step into the ring of Amazon commerce with strategies from one of the best in the biz.

As you're inspired to embark on your side hustle journey after listening to this episode, you might wonder where to start or how to make your vision a reality.  With a team of experienced marketing professionals and a track record of helping clients achieve their dreams, we are ready to assist you in reaching your goals. To find out more, visit www.reversedout.com.

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Show Notes Transcript

Unlock the secrets to conquering the Amazon marketplace as we sit down with Dan Brownsher, the insightful founder of Channel Key. From his humble beginnings at Ohio State to becoming a powerhouse in e-commerce, Dan's entrepreneurial spirit is a beacon for anyone looking to create a thriving online business. We traverse his story, exploring the pivotal moments and strategic decisions that led to his success. His tales from the Las Vegas conference circuit aren't just about the glitz and glam—they're networking gold mines that have helped shape his business acumen.

Dive deep into the world of Amazon with a guide who has navigated its treacherous waters and emerged victorious. Dan's masterclass in managing an Amazon business provides a roadmap for anyone feeling overwhelmed by the thought of rising fees and fierce competition. He doesn't just talk theory; we get an inside look at the practical tactics and strategies that Channel Key employs to propel brands to the forefront of the marketplace. By dissecting the significance of data analysis and gap analysis, Dan arms you with the tools to carve out your own space in the e-commerce jungle.

In our candid talk, Dan doesn't shy away from the harsh realities of online sales. He lays out the landscape, from the allure of dropshipping to the grind of FBA, giving a clear-eyed view of what it truly takes to succeed. It's not just about the hustle; it's about building something sustainable. Dan's experience offers a reality check for side hustlers and dreamers alike, serving as both a warning and an inspiration. Join us and step into the ring of Amazon commerce with strategies from one of the best in the biz.

As you're inspired to embark on your side hustle journey after listening to this episode, you might wonder where to start or how to make your vision a reality.  With a team of experienced marketing professionals and a track record of helping clients achieve their dreams, we are ready to assist you in reaching your goals. To find out more, visit www.reversedout.com.

Buzzsprout - Let's get your podcast launched!
Start for FREE

Disclaimer: This post contains affiliate links. If you make a purchase, I may receive a commission at no extra cost to you.

Support the Show.

Subscribe to Side Hustle City and join our Community on Facebook

Speaker 1:

Welcome to Side Hustle City and thanks for joining us. Our goal is to help you connect to real people who found success turning their side hustle into a main hustle, and we hope you can too. I'm Adam Kaler. I'm joined by Kyle Stevie, my co-host. Let's get started, all right. Welcome back everybody to the Side Hustle City podcast. Kyle Stevie is joining via phone and Dan Brownsher is with us. Amazon expert work with Channel Key, channelkeycom and guys, we're going to talk a little Amazon today so everything you want to know about Amazon.

Speaker 1:

Dan is a wealth of knowledge and also spent some time in Ohio. You used to live in Columbus for a little while, it sounds like.

Speaker 3:

Yeah, I'm a Buckeye. Yeah, I grew up in St Louis and then moved to Columbus to go to school I'm a Buckeye, proud alum Fisher College of Business. Lived there for about 13 years and then drove out to Vegas and I've been here for a while now. So, midwest guy at heart, nice, heart, nice. So you haven't had to love some good ohio people there you go, there you go.

Speaker 1:

Do you like skyline chili? That's the big question. I don't uh, actually thank you, thank you, thank you yeah I'm anti skyline yeah, yeah, kyle's the one guy who's grown up in this area who hates Skyline.

Speaker 3:

I think it's trash, garbage, it should not be eaten, and I'm not a fan and I don't recommend it to anybody.

Speaker 1:

What about La Rosa's Pizza? Have you had La Rosa's?

Speaker 3:

I've had La Rosa's. That's good. Isn't that also like sweet too?

Speaker 1:

It's a little sweet, yep.

Speaker 3:

Sweet. Yeah, it's good.

Speaker 1:

We got sweet.

Speaker 3:

Yeah, it's good. We got graders ice cream, we got all kinds of yummy things. I know graders. Yeah, graders is good.

Speaker 1:

I like that place yeah so, but now you're in the, in the warm air. You don't have to deal with this ohio cold, cold season. You don't have to deal with the raininess that we get. Uh, yeah, you walk outside. Your glasses fog up in vegas every day probably, but you're, uh, you're doing it, man he's gotta suffer through heat stroke every fifth day.

Speaker 2:

Yeah, 38 degrees outside.

Speaker 1:

Yeah, it's, it's rough man. Yeah.

Speaker 3:

Yeah, we get to see the sun through the winter, fortunately, um, and my glass is never fogged up because it is. There's zero humidity here.

Speaker 1:

Oh, I'm thinking Dubai.

Speaker 2:

I must be thinking Dubai.

Speaker 1:

Yeah, if you're in the air conditioning and then you walk outside, it would just fog right up. It would be all bad yeah.

Speaker 3:

Yeah, so good, good living in Vegas. I recommend it.

Speaker 1:

I like it, man. So you know there's a lot of benefits to being out there too the fact that I mean, like every conference is always in Vegas. So whatever you're into, there's going to be a conference there at some point and you can go and you can learn stuff, you can meet people. It's great networking If you're there all the time and, uh yeah, just don't recommend walking on the strip and then having to go over those bridges and then walk back up the street just to go over another bridge. That's crazy.

Speaker 3:

Uh, so I I would agree with that. In vegas, um is generally not recommended and things look closer than they actually are.

Speaker 1:

Yes, oh my god, jump in the car, get the uber.

Speaker 3:

You know, let's see, things are kind of far and you don't want to stray too far. No point, um. But you're right about your first comment. There's access to everything here All the shows, the category shows, the, the Amazon shows, the retail shows. Uh, you can go to the pet show one week and the next week you're at the home and garden show and it's uh, we're very lucky and very fortunate. We get a lot of access to a lot of people that come to us, uh, versus the opposite. So it's good, good for the travel budget.

Speaker 1:

Yeah, true, and then they leave and yeah, send them on their way, and if they're, if they're unruly, but yeah. So so tell me, how'd you go from Fisher you know Ohio state Fisher college business how'd you get into this whole Amazon thing, Like if you always kind of had that entrepreneurial spirit?

Speaker 3:

Yeah, it's a good question, A good story, and the answer is yeah, I've always had an entrepreneurial spirit and, ultimately, I've always tried to create multiple streams of income.

Speaker 1:

Yes.

Speaker 3:

Right, whether that's through businesses or through investments or whatever the case may be, right. So you know, trying to create leverage for myself. Um so um, I graduated, uh, from the Fisher college of business. While in school, over the summer, I met, I responded to an ad, um, with the college of business to to be an intern for this startup business, and the startup company was a mobile or truckside advertising company. So I went and interviewed with this guy that I'd never met before at Starbucks and he was a true serial entrepreneur, had started this business out of college, like directly out of Ohio State, from scratch, had a bunch of job offers to go make some good money, you know, with a larger corporation, but said nope, I'm going to start this company. And so I met him, applied to an ad for a free intern sales position and I think I was a sophomore in college and I accepted. I said I'm going to learn how to do this. It's truckside advertising thing.

Speaker 3:

So first day of work I showed up. It was in his tiny college apartment, my office was his bedroom and I was, you know, making sales calls sitting on his bed. And it was crazy, right, but it was the summertime and I was trying to get some good experience. So he became my friend and I met a bunch of other people through that experience and that business actually did well. I was an intern. I worked for a little bit and made a little bit of money and then graduated from college and then I immediately started working in the medical device space. So I worked for this, started working in the medical device space, so I worked for this like big multinational medical device business selling spine implants to neuro and orthopedic surgeons.

Speaker 3:

Oh, so I did that, um, and then in 2008, ish, um, same guy who started the company that I worked for as an intern. We remained friends and he had started this little side business with his then girlfriend selling these things called purse hooks, right. So for people that have purses, if you don't want to put your purse on the ground, oh, I've seen them.

Speaker 1:

Yeah, yeah, yeah.

Speaker 3:

Like you hang this thing on the table and you can hang a purse from it. And so he started source like sourcing these purse hooks in bulk from uh, from china, like through alibaba, and uh, so I was. He started doing that and and then we were actually on a train in munich, germany, for his bachelor party, and on that train I remember it vividly we had a discussion, said, well, why don't we do that same type of business that you and your future wife are doing, but let's do money clips and cufflinks instead. The only reason we chose that was because, I don't know, it seems cool. Maybe it's trending, maybe it's not, we don't actually know but it seemed like a good idea. We said, all right, we started a company as a total side hustle, and for me I was like, well, this is my friend, he's a serial entrepreneur, I want to figure out how to sell stuff on the Internet. Let's do this. So we did it and immediately I'm communicating with factories in China and sourcing cufflinks of all different variations. Some were violating trademarks or whatever, but lo and behold, we did it. You know trademarks or whatever, but lo and behold, we did it.

Speaker 3:

We spun up a website and and then started selling these cufflinks and money clips on ebay right, purely as a side hustle and for me, purely just to learn how to sell stuff on the internet. So I was, I had my day job and I was doing well and spend my time in the operating room and then, uh, I would pack orders, people would get these orders on ebay and I would pack these orders up in my basement and then you know when I could, I would go to the post office and ship these orders out. Um, total side hustle. Uh, then I got really busy, couldn't do it. Uh, it kind of was just there as uh on the side, my then partner moved to Las Vegas and uh started going to all these trade shows in Vegas and buying merchandise to sell on the internet eBay websites and then, ultimately, we found Amazon, like in 2010, 2009,. Um started buying brand new merchandise, selling it on amazon as a reseller and the business like absolutely exploded. Um, so there was like a consolidation of companies. We formed this bigger entity and the company like started really doing well, doubling every single year for multiple years in a row, like ink 5000, number one fastest growing company in nevada, like all these really cool things.

Speaker 3:

So what started as a side hustle for everybody became the main focus for my one partner, and then, in 2012, 2013, I said you know what? I'm going to go join the business, I'm going to become active again in the business, and so I did that. I learned Amazon from the ground up, as, on the product side of things right, like selling products and quickly realized that being a reseller on Amazon is was a good business. Ok, but there were very minimal barriers to entry to become a reseller on Amazon which is one of the cool things about Amazon because it's spun up all these entrepreneurs and so the strategy of being a reseller started to not work, and so we pivoted Right.

Speaker 3:

So we started as a private label seller, sourcing our own products and selling them under our brand. Then we became a reseller of other people's products, and then we said you know what? This won't last forever, because we ultimately ended up just trading commodities on Amazon, which is not a viable long-term business, at least in our opinion, because we were buying the merchandise and if you buy it, you've got your cash tied into it. You need to make margin, and if, all of a sudden, you can't sell it or you can't sell it profitably, you've just wasted your time and energy and resources. So we said, okay, how do we create a moat around this business and protect it long-term? We know Amazon is hot. We know people are buying stuff on the internet. How do we craft a business model that can be supportive long-term? So we said we're going to pursue private label again, right? So we own the brand, we own the trademark, we control the distribution of the product, we control the pricing. We get better costing because we're getting it directly from the manufacturer.

Speaker 3:

And then any brands that we work with, we want to enter into an exclusive distribution arrangement with them where we become the exclusive seller of their products on Amazon. And these are big brands Tommy Hilfiger, kenneth Cole, like brands that are well-distributed. Let us be your exclusive and in exchange for that exclusivity, we're going to manage your catalog on Amazon. We're going to manage your advertising on Amazon. We're going to do your storefront on Amazon, right, we're going to do all these value add services or functions that are useful for you as a brand and useful for us because we want to sell more product, right?

Speaker 3:

And so everybody went to the equation and ultimately, what we found was, in concept, that made sense, but it was really hard for these brands to maintain exclusivity and or clean distribution. So what? What ended up happening in a lot of cases is we do this deal, we would buy the inventory, agree to hold price and all these, and then we have we'd be still competing against a bunch of resellers because the brands had leaks in their distribution and they couldn't control it. So and this is a very long-winded story, adam and I'm promising you, no, no, this is interesting, I'm following along here.

Speaker 3:

Yeah, so ultimately, you said you know what there's value in providing services to brands, but we don't necessarily want to have to buy their inventory. Okay, that model isn't working. Um, and what? What? Most what really works is for the brand to own their, their storefront and we become the administrator to operate their business and develop their strategy and provide all these cool services and tactics. Um, but do so in a service-based model.

Speaker 3:

Okay, so the product business where we bought inventory pivoted all the way back to private label, right, and then we said we're gonna create an agency to help other brands create best-in-class Amazon businesses. And we did that under beta for a year, year and a half. Beta was successful, and then we spun ChannelKey out as a completely separate company in January of 2017. So, um, so I ran. I've been running channel key since day one, and my two other partners are running the other company. Um, we ended up selling that company in the summer of 2021.

Speaker 3:

Um, and so I've been with Channel Key since day one, first employee since January of 2017, officially. And today we're a full service channel management agency, a fully remote shop. I've got about 85 people on staff all over the world and we'll power, I don't know. 500 million in GMV through Amazon this year, 40 to 50 million in media retail media spend, and we're some, really, you know, large companies and brands and really nice businesses and we've got just an amazing team of smart individuals that are all working together to drive businesses on Amazon. So that's my, that's my journey.

Speaker 1:

Amazon. So that's my, that's my journey. So yeah, you've I mean, essentially created like an Amazon. An expert Amazon marketing agency is what this has kind of become, where any company can come to you say, hey look, I know I need to be on Amazon. I have no idea what I'm doing, dan, dan, help me.

Speaker 3:

Yeah, that's kind of how it works now, typically so we've we've evolved over the years, right. So in the early days, we would work with smaller sellers that were launching right, but of Amazon in most cases, right. So these are typically brands doing anywhere from two to a hundred million a year on Amazon. Like that's our sweet spot right now.

Speaker 1:

Yeah, yeah, and you're managing all their advertising and everything else. I just had a. I just had a credit card, a points guy, credit card guy on my uh, on my show. Are you, uh, are you using a card? It's getting you some points, travel points or anything with that uh ad spend Uh no, we're not.

Speaker 3:

Uh, that's all handled by our clients and run through Amazon. So we don't, fortunately, get to manage or run 50 million in media through our company credit card.

Speaker 1:

You'd have all the points. You would have all the points all the lounge accesses. Oh man, you'd be living the dream we would own the plane.

Speaker 3:

We'd just buy the plane on points, you know.

Speaker 1:

You might be better off. You just go wherever you want, whenever you want. So, dan, somebody's starting on Amazon now. I watch all these YouTube videos, people, and they're always chasing trends. They're chasing trends, right. It's like, oh, what's the next trend, what's the next thing, right? Uh, you know, now they claim all Amazon's not the thing right now.

Speaker 1:

It's this other thing that's going on, it's Tik TOK shops or whatever, yeah, whatever whatever it may be, right, uh, but you could still do a Tik TOK shop and then have stuff link over to your Amazon store or do Amazon or do TikTok advertising or whatever and have that link over to your Amazon store, whatever the case may be. But I mean, is it still a viable place to start a business or is it just so saturated now that a small brand, somebody doing a white label thing I got a, I got a personal trainer, right, he's we. I just connected him with a company that does supplements Okay, white label supplements. I busted out some labels for him for some pre and post workout, you know, sent it over to my guys who do label printing and, uh, he should be getting his, his supplements, his whole supply of supplements here shortly. Right now, do you recommend somebody like that? Get on an Amazon Small brand? I mean, I know they're out, you know super small compared to what you guys are dealing with.

Speaker 3:

But what would you recommend they do? It's a really good question and it's evolved over the years, right, and I think one of the things I said earlier is totally true. So what's one of the most amazing things about Amazon, in my opinion, is they've like democratized the ability for entrepreneurs to set up businesses of varying types. Right, it could be a product business, like you're referring to. It could be an agency, like mine, could be a software company, like there's a lot of these, like adjacent businesses and in categories and verticals that have been created because of Amazon. Right, super cool. And they've removed bearish entry, which also means that it's cool and it's productive, and there's a ton of traffic and a ton of volume going through Amazon. Like 60, 65 percent of all product searches on the internet are starting on Amazon at this point. So it's very much a product discovery platform, and I think they own like 40% of all e-commerce right now in the US goes through Amazon and 90% of marketplace business goes through Amazon. It's insane, right, but with all that volume and the lack of barriers, there's a ton of competition. There's a ton of competition. There's a ton of competition. There's a ton of tools. There's a ton of data out there that exists for everybody to be successful.

Speaker 3:

Okay, so that's a long-winded answer of saying that you can. You can absolutely start an Amazon product business, but in my opinion, it's harder now than it's ever been, for a multitude of reasons. One is the competition. Two is, excuse me, it's expensive. Right, amazon's fees go up every year. They've created this flywheel where it's super easy to do business, but guess what? It's a pay to play marketplace. You got to advertise. You got to pay Amazon advertising dollars to participate. You've got to use. Sorry, oh no, did I lose video?

Speaker 1:

Yeah, I don't see anymore.

Speaker 3:

What happened with me? Hold on, oh on oh, you're good, we edited everything anyway I have this weird ai thing like that whenever I like do certain gestures, it creates this like oh, I see that on on.

Speaker 1:

Yeah, it does that on um zoom every once in a while, my camera will do that. It'll do some weird shit because I got gestures and stuff that I can do and, um, whenever I do a certain gesture, it'll just like shut stuff down for some reason yeah, but now.

Speaker 3:

So for me when I do that, it like freezes for whatever reason. So hold on, give me a second. I'm sorry, guys, are you good you?

Speaker 1:

Kyle, where are you at right now? What are you doing? You had a kids thing, or what are you up to? He's in a dead zone yeah, he must be in a dead zone. He's driving.

Speaker 2:

He must be traveling can you hear me now? Yeah, I gotcha, I'm going to go jump on my computer while he's fixing his camera. He's driving, he must be traveling. Can you hear me now? Yeah, I got you All right. I'm going to jump on my computer while he's fixing his camera. Okay, go ahead. That way I can actually participate a little bit more then too. But I mean, so far it's been pretty awesome. That was a cool story about basically like the pioneer of e-commerce. That was nice.

Speaker 3:

Yeah, um well, yeah, it's the truth, so hopefully that resonates. Um, I should be back, am I good?

Speaker 2:

Yep, you're back, you're back, I'm going to be. I'm going to be back in like five seconds.

Speaker 1:

Okay, where do you want me to kick back off? Uh, I can start with the question again, and then we'll just start where I was or yeah, yeah, yeah, you can start over. Yeah, I'll ask the question again and then we can just kind of I'll cut out the whole other one.

Speaker 1:

So so, dan, how do you, how would you recommend somebody start today? You know I watch these. You know shows on trend chasing. You know whatever's hot. And you know, oh, you know, amazon, fba was hot in 2021. And, uh, you know, tiktok shops are hot now. You know how do people start in Amazon. What do you? You know small brands. You know my buddy's personal trainer he's got his own brand. You know white labeled. You know should he sell on Amazon?

Speaker 3:

Um, so the?

Speaker 3:

I think the short answer is yes, okay, but it's, it's. It's. It's got to be said and known that Amazon is hyper competitive right now. They've they've created this ecosystem where entrepreneurs can spin up these businesses really quickly and you can have a product company set up really quickly and you have access to traffic really quickly. You've got access to fulfillment. You can do all these things, but it's very competitive and it can be very expensive, okay. So you have to.

Speaker 3:

Amazon's a pay-to-play environment. At this point, you have to use their advertising, you have to use their fulfillment, and the cost to do all those things can be really high and the percentage of revenue or sales to do those things goes up every single year, literally every single year. It goes up because more competition, because you have to use their fulfillment, and they want to make more margin dollars to appease their shareholders or whatever. So I think the answer is yes. There's 60 plus percent of product searches on the internet start on Amazon and it's a very much a brand discovery platform. Amazon as a brand name is extremely trustworthy to the consumer. There's a hundred plus Prime members that pay their annual subscription and your buddy's supplement brand. Well, guess what? I've got to trust that this brand that I've never heard of before is safe, and I'd be willing to put this product in my body, and I've never heard of this trainer and I've never heard of this brand before. But guess what? I trust Amazon, right, and I trust the reviews on Amazon and I trust that if I don't like this product, I can return it with no problem and I trust that I'm going to get it in one to two business days, right.

Speaker 3:

So that ecosystem is hard to replicate. If your buddy was trying to build his own Shopify website and create his own brand, that's hard. It's really expensive, okay. So the cool thing about Amazon is the traffic is already there, but it's hard and it's competitive. So my opinion, you can absolutely do that. But today, to launch a brand, if I were to do it from scratch, I would very much have to incorporate social media into the environment, and whether that's through TikTok and TikTok shop is actually good for supplements, right? There's a few good categories on TikTok beauty, health, right, Wellness and fashion so that might be a good place. I would always supplement Amazon with social media and or TikTok shop. At this point to leverage, don't put your eggs and all your eggs in one basket on Amazon? You can't, and you got to be able to drive traffic in various ways and it cannot just lean on Amazon to find all your customers for you.

Speaker 1:

When this is one of the things you do, I mean with your businesses. You help with SEO. You help you know, say, say somebody's got a Shopify site and I we do websites for you know a living here, right? We have an agency for 13 years and most people are going to go on Shopify and they're going to create a crap website. They're going to build it. It's going to be ugly as sin. Their photography is going to be absolute garbage and they don't know what they're doing.

Speaker 1:

And you know their SEO is going to be nasty too, because none of their images are going to be optimized. Obviously, they're all going to be named image zero, two, three, four, five dot JPEG and they're not going to have any metadata on them. So they're not going to have titles, descriptions, nothing, because nobody knows how to do that. Right, they? Unless you build websites and you understand how this stuff works, you really don't know how to optimize your own website, let alone get paid advertising and manage that paid advertising. So explain a little bit about how you guys help people like my buddy who's a trainer, and I know you work with much bigger brands, but is there, is there an opportunity to work with some of these smaller brands with your agency and how would you help them?

Speaker 3:

Yeah, so what we do, um, based upon what I heard that you guys do, I think it's very similar, right, but the difference is is we just do it within the Amazon environment, right? So if you think about a brand that sells on Amazon and you can pick any brand, I don't know Nike. Nike has an Amazon storefront. Nike has a bunch of product listing pages or product detail pages on Amazon that have photos, that have a title, that have bullet points, that have descriptions, that have A plus or HTML content, right? Furthermore, you have to advertise, right, and the options and choices for advertising and leveraging of retail media on Amazon are really they're endless. There's so many options at this point. Okay, so you've got the SEO elements right.

Speaker 3:

So A Amazon's a giant search engine.

Speaker 3:

You want to make sure that people can find your product, okay, and you do that through traffic driving or indexing or placement in their search algorithm, and then, once you get them to your product detail page, they have to convert, right, and you do that with good content and telling a good story and having good reviews and, you know, putting product videos in there and the FAQ and all these, all these things, right. So we do all that work and there's a lot of strategy around that and every category is different and the life cycle of the product is important, and the budget is important, and the profitability of the category is important. And then, guess what? There's all these other things that have to be done, also on Amazon. There's a whole back end, right.

Speaker 3:

There's a lot of account management. There's a lot of technical things that have to happen. If your buddy wants to sell on Amazon, guess what? He's not going to be allowed to sell supplements right away on Amazon. He's going to have to go through a process to get ungated or to get approval to sell that product type. Not easy, right?

Speaker 3:

Exactly Setting up fulfillment your ops there's a process to that. Setting up fulfillment your ops there's a process to that. So there's a lot of behind the scenes work that gets done, and Amazon is hard sometimes to work with. You can't just pick up the phone, call somebody and say hey, Amazon.

Speaker 3:

I've got this issue. Can you help me fix it? They don't do that. It's not how it works. No, so you've got to know how to navigate and a lot of their system is archaic and clunky and still from the old days and they're, you know, marrying it with with some of the newer streamlined tech and interface, and it's hard, right, it's really hard.

Speaker 3:

So that's where we come in. Right, we start in most cases with strategy. Right, let's build you a business plan that helps you get from A to B. And what does that mean? At the product level, it could be different for all the products, right. And how many SKUs do you have? Do you have one ASIN, one SKU, or do you have 10,000 SKUs? Strategy's different, right. So that's what we do.

Speaker 3:

Right, full service channel management agency and like eight or nine different people touch our client accounts in a given month. They can be doing graphic design, they can be writing copy, they can be doing ads, they can be doing DSP We've got our own DSP seat with Amazon. They can be doing forecasting, analytics, account management. So that's where we come in. So, typically, what we've seen is entrepreneurs that are able to create these Amazon brands right, where their primary distribution is through Amazon can do really well, okay, and they can grow and they can develop and at some point they they tap out right and if they have the chops to actually run a product company and maintain positive cashflow which is really hard and a hard lesson to learn for a lot of people At some point they need more sophistication, and that's where we come in.

Speaker 1:

So and now, who are you looking to work with? Like what, what? When do people come to you? Where are they at with their annual revenue? Is that what you're looking at, or are you looking at some different figures? Are you just looking at at annual revenue? Are you looking at net? Are you looking at like what, EBITDA? Like what are you guys looking at?

Speaker 3:

Yeah, good question. So we typically work with SMBs and enterprise level brands that have distribution outside of Amazon. Right, they could be sold in Nordstrom's or Dick's sporting goods or in Whole Foods or whatever. We're generally category agnostic. Okay, we like all categories. We love consumables as a category and they are typically doing already anywhere from two to a hundred million dollars a year and sales through Amazon. That's kind of our, that's kind of our sweet spot. So that's where we target, that's who we go after. That's you know the content we put out and my sales team and biz dev team that's. Those are the folks that we talk to.

Speaker 1:

Yeah, and I you know what I like your web. I like your website and I'll tell you why. And I think other people if they go to your website, channelkeycom and you know we're in a consumer products capital of America, probably you are.

Speaker 1:

Yeah yeah, procter Gamble here, you got Kroger here, you got the largest consumer packaged goods company and the largest grocery chain in the same city together, and then you have the largest Amazon hub in the world in northern Kentucky's airport, right down the street. So yeah, and a large DHL hub and a large Wayfair hub and a lot. I mean we've got. We've become this like consumer packaged goods logistics city, what I like. Uh, I mean so it's great. I mean we get discounted crap all the time, like there's websites bid FTA and all that stuff and I mean you could drive right down here to a warehouse and pick up a dryer and still wrapped up in plastic for 200 bucks. You know, I mean it's pretty amazing and there are a ton of things like if you're in that world and Kyle here on the call with this is a freight broker and you realize how much stuff just gets, it's cheaper for them just to sell it on one of these sites and it is.

Speaker 1:

You know, you got returns and all that other crazy stuff going on and I mean you've got so much waste in this world and people return and stuff and it's just it's tough, but what I like I was going to say, what I like about your website is if somebody is building a site, you've got you're building a Shopify site or you're building a site for any, any product. You've got a great top of funnel strategy here where you've got this schedule, your free report. Now your brand audit. Which people look at this? Any of these brands? Procter, gamble if you're listening to this right now, this is really interesting. So find new Amazon customers for free. You get Amazon share, voice, category, market share, growth opportunities. I mean, this sounds like a crazy comprehensive report for somebody and you're getting this for free, which then leads them into that next step with you guys.

Speaker 3:

Adam, can I hire you? That's great. Yeah, we just did our. We redid our website last year and Kristen on my team will be thrilled to hear your positive feedback on it. We spent a lot of time and energy and effort on it and, yeah, I think what we like to do is educate, if we can.

Speaker 3:

It can be really challenging and daunting to operate on the platform for really well-established larger companies and smaller sellers, and so, for us, the way we can educate is through data and consuming data and and, ultimately, communicating what the data means to, uh, to different companies and brands. So we love to do it. It helps us understand, um, where the pain points are and where the opportunities are. It's really a gap analysis, right? Yes, uh say, hey, you know, and sometimes folks we talk to are doing an amazing job and they frankly, don't need our help. And other times we see it and we're like, hey, there's like 12 things you need to do right now to fix what's happening and to and to make this business better. So that's what it's meant to do is we want to talk to people and be helpful and, obviously, find new clients and customers and, uh, one of the ways we do that is through auditing businesses and providing compelling data and information to folks.

Speaker 1:

Yeah, I mean, if I'm an assistant brand manager on Tide or Gillette or you know, dreft, I look at this and I say, oh wow, look at this, they're doing my work for me. I can get this report and then I could take this up the ladder and show them how smart I am. And oh, by the way, uh, I'm working with this company channel key that put this together for me. Oh, how much did you pay for it? Nothing, oh, wow, let's, let's get started, let's figure this out, like they can see. I mean there was a lot of work that goes in. I'm reading this list here. I mean this is a tremendous amount of work you're giving away just for the opportunity to work with some of these guys.

Speaker 3:

Yeah, that's a good point, yes, and we're happy to do it, and we've got some of the best technology partners out there that work in our ecosystem, right, and so part of this is we know what the data, we know the data, we know what to look for. We know not what not to look for, but we also have access to the information, and we do that through a lot of our technology partners and our ability to kind of aggregate, and so we can do it at scale, right, and in general, that's a reason why somebody would hire an agency like us or like you is because we can theoretically do it better, faster and for cheaper, right, and we've got the tech stack already in place, oh yeah. So, yeah, that's our business, we're happy to do it.

Speaker 1:

Well, and I used to do graphics at an agency I used to work for back before I started my own thing, and we used to build Amazon stores for people. But I would, I would be the one they you know, you'd have your copywriter and they would be writing all the content and then they check with the SEO guy and make sure everything was good. Did I get all the keywords in there? And then they hit me up and say, hey, Adam, we need a graphic this big for this. Here are all the sizes. And I'd get a list, an email, of like 50 different graphics I needed for all these different things and for all the products. And there's different sizes for each product depending on what screen they're looking at.

Speaker 1:

And it gets kind of wild. And if you own an Amazon store and if you're a a brand, most of the time they're going to hire an agency like the agency I used to work with, or they're going to hire somebody like you who I feel like can do a lot more. There we were just doing graphics and write copy, but who's who's managing everything, who's making and who knows what they're doing out here? I mean, it sounds like you guys are the the.

Speaker 3:

You guys are the the one we've been doing it for a long time, right, and you know, I think one of the things that that's unique about us is we built our own business, like we built our own product business on Amazon ourselves, right, we sourced all the inventory, we warehouse the inventory, we packaged it, we labeled it for Amazon, and we made a ton of mistakes over the years and we did that.

Speaker 3:

As for our clients today don't have to, right? So we didn't just learn it on YouTube, we didn't take a course and we actually did it, yeah, and so, uh, we know how to do it and we get into the weeds and we do things that most people don't do or don't want to do, because it's sometimes it's unsexy, um, or they just, or it's hard, right, but in our view of the world, like you could have the most amazing ads strategy in the world on Amazon, right, but if you can't keep your products in stock, if you can't do the basics and the fundamentals and operate a company in that ecosystem, it doesn't matter, right? So we, that's why we take that holistic approach to full service approach, because we want to control really all the key elements that are required to to run a store like that, um, and the reason we know how to do it is because we've done it ourselves.

Speaker 1:

Well, and I mean you, you know not everybody's going to have side hustlers out here aren't going to have, you know, the Fisher MBA you know they're not going to have done. You know, grown up in Amazon, essentially Like I mean this is what I mean, you've been doing it long enough. I mean you've essentially grown with Amazon and you know you were early, you were able to pivot with Amazon, pivoting and understand what's going on for for the new side hustler out there. What are some of the mistakes that you see people making today? Uh, what are some of the places you would recommend them? Should they do FBA? Should they be doing drop shipping type stuff and explain even what that is? People don't even know what that is on this podcast. Where are the opportunities at right now? You think?

Speaker 3:

Yeah. So my mindset always goes towards how do I build a sustainable business right that can function well over time, versus trying to make a quick buck right, and how do I create leverage for myself? One of the easiest things people can do is create a dropship business right, and basically what that means is you can create a relationship with some sort of supplier of a product right or products supplier of a product right or products and you can list those products for sale on Amazon and have uh, whereas you are the seller right. So if Adam wanted to create his own Amazon business, you could call it Amazon's or Adam's.

Speaker 3:

You know Adam's stuff and he's the seller of record on Amazon and what he's selling is actually through a catalog of products that he doesn't actually own. He's never bought it, okay. So if somebody comes through and buys that particular item, what Adam would do is he would send the order to his supplier and the supplier would ship the item directly to the customer. Right, and that's a drop ship order. So Adam didn't have to buy the inventory. He didn't have to store the inventory. You have to do anything. All he did was broker the deal and he gets a commission paid to him by the supplier and he pays Amazon a commission right. So you don't need a lot of capital for that, you don't need a lot of resources and infrastructure. But that's a really hard model, right and in essence, sounds easy, right, sounds all fly.

Speaker 1:

All I got to do is make a sale.

Speaker 3:

Oh yeah, yeah, easy peasy, right, but the problem is is that a lot of people are trying to do that and you're not actually adding value to anybody in the value chain. In my opinion, right, what we tell our brands is you should be selling direct to consumer. There's no need to distribute to anybody else or to have your products be sold by anybody else on Amazon except for you, okay. So what value is the broker providing in that scenario? Right, in my opinion, it's very minimal. You're just brokering the transaction, right, people are creating the value, are the supplier, the brand and Amazon.

Speaker 3:

So and I don't believe that's sustainable long-term business model and it's not that profitable, okay, so the other option is you can become a reseller, so actually buying other people's products, storing them, stocking them, putting them in FBA and shit and selling them. That way, viable business requires capital, right, you have to buy the inventory, okay, and you have to store it, and you might get stuck with it. And if you are, I don't know, the third or fourth person that's actually buying that inventory from the manufacturer, right? If you're like the fourth removed person from the manufacturer, guess what? Everybody along the way is doubling their money, right? So you're paying a very high price for that item to be a reseller. Amazon's costing model is really high. You're not going to make any money. Like there is very there's a very high likelihood that after all is said and done, after you pay for the ads or pay for the fulfillment, you're not going to make any money.

Speaker 1:

And these are brands that are already popular, you know, like the tides of the world or whatever, and it's. I know that to sell a product like that, with a strong brand, unless you know what you're doing on Amazon, you're not even going to be able to sell that.

Speaker 3:

They might not let you sell it. A and B. Even if you are able to sell it, you're going to pay too much for it, to where you're not going to be able to make any money on the back end. Now some people do that business and it's viable and they're really smart and they squeak out thin margins. But they know how to do it and they've got these amazing relationships built with suppliers. They've got buying power, they have scale where they can buy in bulk and maybe get better pricing, better payment terms, et cetera. But you've got to build to that, and so there's that model.

Speaker 3:

The other model is you can build your own brand, right, private label. Right, that's where you're going to get the best costing. Right, you're going to control the distribution. You don't have to deal with the middleman. Theoretically, you're dealing directly with the manufacturer, maybe a contract manufacturer. But guess what? Nobody knows who you are. Right? They've never heard of your brand, they've never heard of what you sell. Why would they trust it? Right? So the model to build a business like that is completely different. Right? You then have to tap in to the traffic on Amazon and, opposed to having people directly search for your brand on Amazon, they have to search for some generic search term. Okay, you brought up a pre-workout. Cool, I'm going to search pre-workout. Well, how do you get your buddy supplement that nobody's ever heard of before, that has no traction, no reviews, no conversions, to index an Amazon search algorithm for pre-workout? Really hard.

Speaker 2:

Real hard and really expensive.

Speaker 3:

And you're probably going to end up on page 12 of search results, right, and in reality, you need to be on the top half of page one. That's where all the action's happening. So there's a different strategy. Right, you got to pay for the business. You got to be willing to lose money. You're going to have to drive for the business. You got to be willing to lose money. You're gonna have to drive social traffic and you're going to have to get on TikTok shop and hopefully create some good videos.

Speaker 3:

You get some traffic going in and or be able to absorb just the amount of money it's going to take to launch a new brand, right, but it's totally viable, it's doable and people do it, and so the thing I'd have to be I would caution people around being careful of is understanding your cashflow model.

Speaker 3:

Okay, just because you sell $100,000 worth of product on Amazon doesn't mean you get $100,000. At all, and it doesn't mean you're ever going to get it, and if you get it, it's not going to happen right away. So, to continue on with a business like that, you've got to continually leverage your cashflow to buy more inventory, and some people don't know that, especially young entrepreneurs, right, they're like man, I just sold $100,000 worth of stuff. Why is my bank account in the negative Right? And that's the reality is you need to understand your operational and cashflow model to be able to continually sustain a business like that. And that's the reality is you need to understand your operational and cash flow model to be able to continually sustain a business like that. And it's hard and it's risky.

Speaker 2:

Yeah.

Speaker 3:

So, but it's doable and there's a ton of data out there and you can do product research and you can find all these really cool opportunities. And if you're one of the lucky ones that finds that white space, you have to pounce on it fast and build the momentum fast, build the reviews fast, get the traffic going fast, because chances are, if you found an area of white space that it uh, it will be um, you will be bombarded with competition very quickly.

Speaker 1:

Oh yeah, yeah. I mean there's millions and millions of people selling on Amazon, so and and a lot of those people in other countries and they have all kinds of time to do it and they have cheap labor that's doing it for them and all kinds of stuff like that. So I mean, what do you think about affiliates? I mean, do you guys use an affiliate strategy for some of your stuff? Do you have a list of influencers that you reach out to when you're trying to push something like that?

Speaker 3:

Yeah yeah. Affiliates are good, influencers are good. No-transcript, the right affiliate, and you've got to make sure that your product type lines up with their audience and that you can strike a good deal. That makes sense. It's absolutely one of the many traffic driving options that brands can consider.

Speaker 1:

So you just mentioned a lot of different strategies advertising strategies, right, yeah, yeah. But you also have to understand and this is one of the values of going with someone like you versus trying to figure this stuff out on your own things that you've learned how to do over the years, right, and you've again, you've matured, as amazon has matured. But also, you said something earlier about categories being popular on certain platforms. Now we all know at least we should that there are a handful of categories in general that sell well on social media, right, right, health and wellness is probably the most popular supplements, things like that People love that. Beauty, weight loss, you know all that kind of stuff. Another thing you have to consider is not only these advertising channels, but what works on those advertisers. So what are you selling? Where can I put my dollars? That they're most effective, right. And what's the old saying? 50% of my advertising is wasted. Advertising dollars are wasted. I just don't know which 50%.

Speaker 3:

Yeah, yeah, you can exactly. So, um, it's hard, right, and you've got to piece together that strategy, um and um, and it changes quickly. Yeah Right, the dynamic can change quickly and it's different for every category, product type and, uh, and life cycle of a brand and or a product.

Speaker 1:

Yeah, can you, dan, can you just have like a YouTube channel or something where you you teach young, uh, aspiring e-commerce sellers to, to, to the tricks of the trade early on? I mean, you guys are doing great Cause. You know you're, you've got these like larger companies that you're working with and you're kind of you know you could coast now. I mean, obviously everybody's always looking for more business, but you know, the smaller guys, the people that, uh, that don't know what's going on, some of the tips you've shared here, some of the stuff you've put out here that they may not be familiar with. You know, I'm in a brand city so I obviously I get everything you're saying, but most people aren't right. Most people are just like Joe Schmo that lives out and you know wherever in the middle of nowhere and hasn't ever worked in advertising in their entire life. Where do they go for tips? Where do they go? Is there a company or something that you guys work with for the lower level guys until they can build up to where you're at?

Speaker 3:

So it turns out, we do have a YouTube channel and you'll find us on YouTube, and also we're super active on LinkedIn. Whether that's me or the company, you can find me on LinkedIn. And yeah, we, we've got a bunch of partners that we work with that if, if, if, we're not the right fit for a business, for whatever reason, we always like to refer people out to trusted partners. So, yeah, we'll evaluate and help anybody we can, but if it doesn't make sense, we've got a list of folks that we can refer out to. It just depends on the situation. So we're happy to chat with anybody. Look at anything, and if it requires us to push it out elsewhere, we'd happy to chat with anybody. Look at anything, and if it, uh, requires us to, you know, push it out elsewhere, we'd love to do that I love it.

Speaker 1:

Man, dan, tell, tell people how they find all this stuff and I will put some links in the, in the, in the description at the end of here. But uh, you know, for the people listening, uh, tell them how they can find you.

Speaker 3:

Yeah, so you can go to our website, uh, wwwchannelkeycom. Check out our cool website, as Adam mentioned. Uh, you can find me on LinkedIn to search my name, dan, on LinkedIn, or search channel key on LinkedIn. Uh, or you can find us on YouTube also by searching channel key. So we're everywhere. I love it man.

Speaker 1:

Well, I appreciate you spending the time here. I know you're a busy guy. You've got, you know, these big brands you guys got to manage and that takes up a lot of time. And enjoy Vegas, man, I'm glad you're there. You're in the warm air. You don't have to deal with this misty rain all the time and you never know if it's going to be 90 degrees outside or 45 degrees outside here. It's uh, I don't know what it's going to be when I walk outside right now.

Speaker 3:

So we'll see Good Godspeed, Adam, Good luck to you. I love, I love Ohio, Good people, Um, but you're right, I think the vague, I choose the Vegas weather. So uh, appreciate you having me on. It's great to great to meet you and uh, uh love spending the time together.

Speaker 1:

Awesome man. I appreciate it. Thank you, Thanks, Thanks for joining us on this week's episode of Side Hustle City. Well, you've heard from our guests. Now let's hear from you. Join our community on Facebook, Side Hustle City. It's a group where people share ideas, share their inspirational stories and motivate each other to be successful and turn their side hustle into their main hustle. We'll see you there and we'll see you next week on the show. Thank you.

Speaker 2:

Bye.