Dan Meadors started selling on Amazon with $600 and has now passed 20 Million in totals sales, using his Wholesale Formula
What is wholesale on Amazon FBA?
Wholesaling on Amazon, means you are buying directly from manufacturers or distributors at a wholesale price, then selling on Amazon at full price.
How can you sell on Amazon FBA doing the wholesale method?
Quin asked Dan Meadors to come on the show and explain, not only how it is done, but how it is done profitably.
Today we have another special guest, this one is a multi-million dollar Amazon seller.
He’s been selling on Amazon since 2011. He started with only $600 and he grew that to over one million dollars in sales within the first two years.
And he should be reaching now about 20 million if I’m not mistaken but we’ll hear it from him in a second.
He’s not even doing private label or retail arbitrage.
Let’s hear it from DAN MEADORS himself.
DAN MEADORS: Hey buddy. It’s great to be on here.
QUIN: So listen, have you made it to 20 million yet?
DAN MEADORS: Our lifetime total after last year was like 22 million.
QUIN: Cool and that is all from $600 start?
DAN MEADORS: Yeah.
QUIN: Oh man. So I know you are used to it by now but are you proud of yourself? You had a partner and you still do?
DAN MEADORS: Yeah, yeah.
QUIN: And are you proud of that insane, you know, $600 to twenty something million. That’s something that not everybody can do and not everybody believes that is possible, right?
DAN MEADORS: Yeah, sure. No I mean it’s definitely been a wild ride. Anytime you create a business, anytime you got to go through that kind of like growth trajectory, it doesn’t come without hiccups. So like we’ve had hiccups along the way and it’s never easy as everybody anticipates but it absolutely is possible.
QUIN: Yeah, right now are you still fully into the business like, I don’t know, 12-hour days are you doing the 4-hour work week. What’s your kind of schedule?
DAN MEADORS: For sure. In the Amazon business, we’re definitely
more along that lines in the 4-hour work week now. One of the beautiful things about
the model that we work in, we’re wholesale so it’s very systems-based.
So what we’ve done is we’ve created standard operating procedures for basically every aspect of our business so that we can hand it off to employees and things like that. So our typical role was to come in and we’ll have a meeting with our team, discuss our budget, you know, what’s buying, what’s working, what’s big on the horizons. Day to day operations is pretty minimal on the Amazon business.
QUIN: Cool. And then for The Wholesale Formula, you and Eric are also partners in that as well?
DAN MEADORS: Yeah, absolutely. And that’s you know that tends to be right now where we spend a lot more of our time is focusing on that and kinda helping our students along.
QUIN: And do you have a team of people that are helping you in The Wholesale Formula? How many people are involved in this now?
DAN MEADORS: On the TWF side we have about eight employees, I think. And on the Amazon side we have about four employees currently.
DAN MEADORS: Not including me and Eric.
QUIN: Ok. let’s jump right into this. Most of the people like on my to QA audience are Amazon sellers or actually wannabe Amazon sellers. A lot of people still have 9 to 5 and they want to get into this. So explain to those that have a little bit less knowledge kind of what is wholesale.
DAN MEADORS: For sure. Well with wholesale, what you’re doing is you’re buying directly from a brand or a wholesaler in large quantity, so that you can sell at retail prices and realize a profit.
So now you contact these wholesalers. And is everything a well-known brand? Or do you deal with brands are no so well-known?
DAN MEADORS: You know, one of the things that we really do
is we’re a bit different than most.
We try work directly with the brands as opposed to like distributors or something like that.
And a lot of the brands that we tend to target are small to midsized manufacturers.
So it’s like you know in your traditional day to day shopping if you like shop at big boxes it’s probably not products that you’ll see on the shelves in your typical big boxes but you know, in a very specialized space it might be a product that sells incredibly well.
These small to mid-sized manufacturers, the products that we tend to target sell very, very well in their niche.
But outside of that they’re not you know necessarily potentially even made it mainstream or anything like that yet.
QUIN: Gotcha. So when you get those products to Amazon, those are normally products that have the buy box divided by a bunch of different sellers.
DAN MEADORS: For sure.
QUIN: Do you calculate, kind of you divide, you see who are the ones that have the chance of getting that buy box by the price, you can see that. You divide that and that’s how you see your odds of selling the product?
DAN MEADORS: Exactly. But you know a lot of people get
really confused about the buy box or really scared about competing for the buy
box, especially if they come from a private label side. But it really isn’t
that bad. It’s you know it’s exactly what you said.
What we do is we look at the, you know it doesn’t necessarily matter how many sellers are on a listing, it matters more how many competitive sellers.
So it’s like, you know if a product is $20 and somebody’s
trying to sell it for $30, like, they’re not competitive.
They’re never getting a sale and they are basically irrelevant to the process. But everyone around that $20 market is probably getting some of the action.
So whenever we’re thinking about getting a product, let’s say the products is selling 200 times a month and there’s four people already selling it.
That means each of those sellers are getting about 50 sales per months, right?
Whenever we’re coming on we’re expecting that dynamical change because we’re a new coming seller, so we’ll have about 40 sales a month in equity.
QUIN: Gotcha. So in that situation, if let’s say you have 70,000 five-star feedback and this brand new seller that had just started, he only has one or none. Is that any relevant to if he meets the same price, let’s say he’s selling for the $19.99 just like you, does he have a 50% chance of getting that?
DAN MEADORS: Not quite. You know, whenever it’s the smaller
sellers, like there are other criteria that Amazon uses, product location, product
quantity, seller feedback like there’s a whole bunch of things that go into
Now, if in the instance that you’re talking about, like where a smaller seller versus a bigger seller, like there are many bigger sellers than us. Like if we’re on a listing with Etailz. Etailz have millions of feedback. They’re top ten or top fifteen seller on Amazon at this point.
You know, whenever we’re heads up with Etailz on a listing, they may get 55% of sales and we make it 45%. The spread is usually fairly small but you know it can [unintelligible] to the larger settlers for sure.
QUIN: Okay gotcha. So another thing is if you have let’s say, I guess Amazon distributes your product around the whole country just like they do with private label products. Isn’t that right?
DAN MEADORS: Yeah, for sure.
QUIN: Okay, perfect. And who prepped you orders? Do you or your team does it? Do the wholesaler do it for you. How does that work?
DAN MEADORS: It’s actually interesting because before this year we had our own warehouse. Well, it was actually last year. We closed our warehouse in July of last year and moved to fully to prep centers. So there’s two ways that our products get prepped now. It either gets prepped by the brand themselves and sent to Amazon or they’ll send it to the prep centers, they prep it and then send it on to the Amazon fulfillment centers.
QUIN: Gotcha. Yes. So like I said, I’m about 80% private label seller and I did that and I still have let’s say some part of those 20% are wholesale. But I do wholesale in Canada only. My concern at the beginning and now I really don’t care about anymore, was the fact that if I’m getting wholesaler X to label the products for me, because some of them would, I used to think like why wouldn’t they just sell it themselves on the Amazon platform, right? Do you do worry about that?
DAN MEADORS: No I mean, for us what we look at it like it’s a very symbiotic relationship. Like the vast majority of brands that we deal with don’t want to be a retailer. That wasn’t their goal. They’re not trying to like learn the different channels for retail. I can say they’re trying to get their products into more channels. They’re trying to concentrate on global advertising and things like that. So the service that we provide is, you know you even said you’re a private label seller, there’s something that you inherently understand about Amazon. You understand how to drive traffic, right? How to make a products sale, how to optimize a listing and things like that. For the brands that we work with, that’s what they need.
Like Amazon is like a giant billboard for these brands, right? More people are going to see it on Amazon.com than in any store that they could possibly be in. And it’s not close. Like there’s just so much more visibility there. So the brands that we work with want to have optimized listings. They want to have their products looking like the best possible advertisement that it could be, right? Because it’s ultimately competing with every single product in this niche. So effectively, that’s what we do for them is we’re a retailer that specializes in the Amazon channel that can help optimize the product for sales within that channel.
QUIN: Very good. So you optimize certain listings. Let’s say, I don’t know for Head And Shoulders, if you had Head And Shoulders account and they only have one image and they’re only using two bullet points, you would go and you would optimize that listing even though it would also optimize it for your competitors. You would do that?
DAN MEADORS: For sure, absolutely. That’s one of the things that in wholesale, whenever we’re working on a listing, our obligations is to the brand we’re working with. Like if it helps other sellers, fantastic. Hopefully they can do other things to contribute as well. But even if they don’t, like the brands we communicate what we’re doing with that brand, right? Like, hey we’re gonna be adding these pictures, we’re going to be updating to make sure you guys have all five them right there. So we’re gonna be going over all that stuff. So when they see all these things getting done, they’re like, “Wow, our listing’s been on there for 3 years and it’s always been, relative trash. Now it’s looking good. We’re starting to see more sales.” Like, what happens there? They want to start working with me more and ultimately, what we’re able to do is over the course of time, we either get typically better pricing or we start gaining exclusive like, we’ll have an exclusive on certain products or sometimes exclusives with their entire line or we’re just the only sellers selling their products.
QUIN: Very good. I meant to ask you about that because at one point, one of the Canadian brands I dealt with gave me the exclusivity for the .CA alone, right. So I was not allowed to sell on the .COM, somebody else was including the manufacturer himself. The .CA was just me. And that allowed me to do for example lightning deals because I was the only one there so I can do the lightning deals. Do you get those kind of benefits? And for example, if you do you lightning deals for a brand, do they offer you certain let’s say, “Okay, you’re buying 100 units, we’re giving you 20 for free for those lightning deals.”
DAN MEADORS: Oh for sure, yeah anytime we do special services like in advertising or something like that with the brand we typically work out a deal where they have to pay for the advertising. And that can be, you know advertising a former product with a lightning deal or in just typical PPC or Amazon sponsored ads. Like typically they’ll pay for that or it reimburses with product or something like that. So yeah it’s really common .
QUIN: Very good. Because I did see a few of these brands that are not selling their own product. Like they’re not the retailer. And they had Amazon sponsor ads on other listings and I was wondering like some selling out there is paying for this. So basically, you would be one of those. You would pay for the ads and you’d get reimbursed by the brand.
DAN MEADORS: Yeah. I mean that’s the typical relationship. Or sometimes you know, there’s times where we would just run ads without any plan of reimbursing just so we can have case studies and things like that to see what works.
QUIN: Amazing. So how many days of supply would you send to the FBA warehouse?
DAN MEADORS: Typically, we target 30 days. Like our average, throughout the year like typically quarters one through three, our days the term stays around 42 days. 40-42 days is where we’re [unintelligible] typically. Usually that’s a combination of you know, a lot of the times we target 30 days to turn in terms of inventory but sometimes if we get bigger deals or special deals or discounts or something, we may take it a little deeper and that’s why we tend to land in the 40-42 day range.
QUIN: Now, one of the important things, one of the big things and its actually one of my pet peeve when it comes to Amazon sellers on mostly private label, because wholesale it should be a bit easier. Do the math. I’m not sure. But I see a lot of people that think they’re making huge profits and they’re not, DAN MEADORS. Right? The reality is after pack fees and all that, the profit is either not as big as they thought it was or it’s actually
DAN MEADORS: For sure.
QUIN: Does that happen in wholesale? How can you find profitable products?
DAN MEADORS: No, it’s one of those things where you know, we had that trouble a lot early too whenever we were dealing with a lot of vendors who open accounts really easily and things like that. One of the things we do is we love to work with vendors who when we reach out to them and say, “Hey, we’d be interested in carrying your products on Amazon or whatever,” they just tell us no and they’re not interested. That’s great for us. It shows they really care about their brand. And then we’re able to go back to them and then show some of the really positive things that we’ve been able to accomplish with other brands. And show how we’re going to be able to benefit the [unintelligible] sellers and sometimes they’ll go ahead and approve us.
But those brands are the ones that tends to stay good for a really long period of time. They don’t have the same level of price volatility. But realistically, if you’re just getting on products that you know I’m sure it’s true for private label, if you’re not doing anything to add value to your product in private label, you’re just another commodity. It is a race to the bottom. And the same is true for other products like on Amazon. It holds our products. So if you’re just out there sourcing products from distributors and you know, you’re not building real relationships with the brands that you work with, it is really just kind of commodity seller relationships where it’s a race to the bottom.
So the advice I would give to people if you’re wanting to do wholesale particularly, is make sure that you’re building your business around relationships to kind of protect you and insulate you from that volatility. Likewise, I’m sure you know with private label, like, find values. Add ways to add value or find ways to do things like that to make sure you’re not a commodity product.
QUIN: Absolutely. That’s a great point. I really like that. To build relationships with these brands, sometimes a medium-sized brand can be $100 Million a year to $200 Million a year company, it’s not that really accessible for the person that’s just starting and they bought $100 worth of, I don’t know, the Head And Shoulders shampoo. How do you build these relationships?
DAN MEADORS: Well, it’s just about providing the value that you can, right? For us, if I’m coming on to the product and you know I see efficiencies in their listing like if they don’t have the things you mentioned earlier, have enough picture or bullets aren’t optimized or something like that, that’s just actual value I can provide with them. If those things aren’t being done right, the product isn’t selling as well as it possibly could. And it’s also not the advertisement that they want. Brands want to see their products on Amazon and they want to see them featured well because you can see every brand on Amazon. So it’s just more important that that brands are optimized and featured well. So it’s any type of that value or helping them understand the Amazon supply chain. How Amazon actually works as a company, why having too many sellers can be a bad thing. Sometimes we’ll talk to them about the sponsored advertising or additional ways to drive traffic to their product. Now you can be anything that you’re able to do to help their brand succeed that space that they are on within that marketplace.
QUIN: Awesome. When it comes wholesaling, my like I said my experiences are limited to the few Canadian brands I dealt with. But one of the situations that I found was this brand was hugely loved in Canada and the US, they’re North American, the manufacturer. The thing was their single products were too cheap to be sold as a single unit on Amazon due to the pick and pack fees that would take 50% almost of their cost. And what I did was, I mean I love to be the distributor of that brand or the wholesaler of that brand and I decided well maybe I can get 2 or 3 of their products bundled together. And I did that. I created a UPC myself. Now, is this allowed?
DAN MEADORS: Well, as long as you’re able to go through them and meet the GS1 barcode registered with the brand like, absolutely you can do something like that. That’s actually a great solution. You’re right, some of those pick and pack fees make it really difficult. Like to think Amazon’s made it a little easier with small and light in some cases as a program. Sometimes if you’re still on the sub-five dollar range on product or something. Like even with small and light, you’re not going to be able to make it work. So yeah absolutely. I mean that’s a fantastic solution to be able to not only help a product that wasn’t able to be selling on Amazon to start selling on Amazon. But you know help make more money and be efficient with multi packs and bonus, for sure.
QUIN: Yeah, you know what is fantastic about that product is the only one, and I have at this point, I believe 53 of my own private label products within different brands and a ton SKUs of attached to those. But you know how hard it is and maybe wholesale is a bit different but we, private labelers, we live out of reviews. We want reviews more and more, right? And that brand, it’s not mine, this is my wholesale sell brand, and they come in organically. And people go out of their way to review it. And it’s at 4.8 stars. And you know, it’s a higher percentage of people that review that product than the ones that I actually go out of my way and ask for it, “Can you please give me a review?” So that’s I guess the power of a bigger, bigger brand, right? When you’re wholeselling, that people actually know.
DAN MEADORS: Right. That’s the thing you know that that brand has an existing customer base. It has an existing customer base of people who are actively, you know, want that specific product. So that’s one of the powers of wholesale in that you know whenever we go to market with a product, like we don’t have to invest into launches, we don’t have to invest in PPC and stuff like that. Not as much as in the private label space because in the private label space, you have to build that demand and that awareness for your product. And initial burst of traffic and stuff, it has cost associated to it typically, within private label. And that’s one of the things you don’t see as often with wholesale.
QUIN: How do you target what brands to go after or what products to go after?
DAN MEADORS: We utilize some simple criteria. Like, the first thing that we want is we don’t want to carry products that Amazon specifically carries. And the reason behind that is Amazon, it’s not that you can’t compete with Amazon, they just make it harder to compete, right? They don’t share the buy boxes the same way, they’re very aggressive with price and things like that. There’s just so much other opportunity out there that it just pointless for us to try to compete with them. So we want products that aren’t private label products. So we’ll look for products that have three resellers more. The reason that we do that is typically, private label products were created with the goal of being sold on Amazon. Like the person building them, that was what they were always going to do, right. And our interest don’t necessarily align there, so it’s easier for us to work with brands that are looking for sellers or are trying to manage their own listings and things like that.
So that’s another one. And then the next criteria that we’re looking for is if the product is selling more than 40 times a month and the reason we like 40 times per month is it shows typically if a product is in that range it shows that it has a good level of sustained demand. We’ll usually pull like Keepa or camelcamelcamel, go back and look make sure that demand has been pretty consistent and not volatile. But that’s the type of product that we’re looking for is not carried by Amazon, not private label and already selling and has an established sales history.
QUIN: That’s a great point you touched there about the Amazon not being a seller. That’s one of the big differences in the private label and the wholesale is as a private labeler, I would go after brands that Amazon is selling because on their own listings they do such a poor job of optimizing it. There’s Amazon listings that Amazon is the seller, that they use 3 bullet points and limited pictures. The pictures are not even good. And as amazing as it may seems, some have the main image that are not according to the terms of service.
DAN MEADORS: Isn’t that funny when you say Amazon selling the listings that are against TOS?
QUIN: I know, right? But it is easy. And when it comes private label, it is easy to compete against them. And I find that when it comes to that, it is actually kind of fair game. So yeah, in the wholesale I can see that they do not give away the buy box.
DAN MEADORS: Yeah, I agree. You know, they’re not a great seller at all. But the with the buy box rotation, they don’t play by the same rules, so it makes it tough to compete on the same listing with them.
DAN MEADORS: As long as you’re private labeling the product and you’re getting light with that listing, I mean, absolutely, then they’re just another bad seller.
QUIN: Yeah. I saw a screenshot once and I’m not sure how real that really is, but it was a wholesaler or a retail seller insert a screenshot that Amazon had run out of stock on an item. But they haven’t given the by box away. So basically, they didn’t have the buy box, but Amazon was out of stock. You ever see that? Is that really possible?
DAN MEADORS: Yeah sometimes they’ll do it if they’re coming back in the stock and they have a confirm ship date. Like they can definitely continue to keep the buy box even not having stock.
QUIN: Wow. So, DAN MEADORS would you share with us your winning product analysis formula?
DAN MEADORS: For sure! I mean it was that thing that we discussed earlier, right? We look for products that meet those criteria. The not sold my Amazon, not private label, selling numerous times per month. Then what we wanna look for is once we figure out or find products that fit those criteria, the next thing we wanna know is we want to know what our percentage to sales is, right? Because that’s what really matters. Particularly in wholesale where you’re going to be sharing that buy box. So the next thing that we’re going to do is we’re going to look at how many times that product is selling. And you can use a free tool like JungleScout.com/estimator and that will tell you if you look at a sales, right say 4,000 in health and personal care. Like you can go over to JungleScout and their estimator software or whatever and you can check it out there. And they’ll tell you that 4,000 may mean that that product selling 300 times per month. Once we understand the product is selling 300 times per month, we can look and see how many sellers are selling the product, right?
For us, we wanna be able to sell a product with our own account. Ideally, we want to be able to sell it more than 40 times per month. So if that product selling 300 times per month, it’s being sold by six sellers. That means that each one of those sellers are getting about 50 sales per month. If we came on to that listing, we’ll probably be around that same number, so in the 40 range or I guess it would be like 38 range. Which would get us right about where we want to be. So I mean that’s what we’re looking for is looking we’re looking for products that qualify, that meet our criteria. Then we’re looking for what our equity of sales is going to be so we can understand, I mean, that’s the beauty of it, right? Once we have that account established, we’ll place an order with the manufacturer, they ship the product into Amazon and then we’re already getting those sales. Like it’s immediately we’re not having to run ads, we’re not having to do anything to just get that level of sales.
And then from there, every single thing we do like you know, make bullet points better, if we improve or we add pictures or any of those types of things, that just make those products sell more. So from that 40 times that we were going to sell it originally, once we do some of those optimizations, we may be selling those products 50-60 times then we’re going to try to work with the manufacturer and either get a better price or start to establish some level of exclusivity with the products.
QUIN: You know, DAN MEADORS, hearing you speaking that, I’m here thinking, why the heck do I deal with getting sea cans coming from China and I ran out of stock. And then oh, it’s Chinese New Year so that you’re going to be out of stock for another month. Meanwhile, all my cash flow is literally floating in the ocean for 2 months. The time since I placed the order and pay up front. You know how that works. And then another basically from the port in China to the warehouse is gonna take another month at least. So I’m thinking, why am I not jumping more into wholesale. Because you have virtually an unlimited supply and you do not have to invest two months ahead of time, right? You’re doing it basically the 30-day thing.
DAN MEADORS: Well, it’s a different type of 30 days too because it’s like our 30 days is you know that’s with lead times of 5 to 7 days. You know our money’s not floating for long periods of time. Wholesale is a great partner to the private label businesses. Because a lot of the research is the same but more importantly, it’s a very cash flow oriented business which gives you kind of an extra boost with private label where you need cash flow throughout that order process, right? It’s like what you said earlier you’re sinking all your money into one shot as opposed to building cash flow throughout the process. You know, I think wholesale is probably one of the better types of business model that goes along with private label.
QUIN: Yeah, it got me thinking. I would defend, you know, a lot of people there’s the debate, okay is RA or the retail arbitrage better? Is private label better? And I will defend private label always because I always think, you know, if I’m building the brand and I have more control over it, but I can see all the positives now of wholesale. And it’s actually very tempting. So it seems very easy to get into and manage. Is there any hidden things that are not so easy that I don’t see right now?
DAN MEADORS: I mean for sure, the hardest part in wholesale is the frontend investment. And that’s really just setting up relationships with accounts. Because like I mentioned earlier, the best ones, the ones that are going to make you the most money and be consistent for long periods of time, they’re going to tell you no. Like you have to be really good at being told no and then being able to go back to them and start talking about how you can provide value and things like that. If you can do that, like wholesale’s a great model and I think it does play well with other models because it is so cash flow oriented and process oriented.
QUIN: So you want to get a few no’s that’s basically a good thing?
DAN MEADORS: Yeah like getting a no is great. Like particularly on a product where you’re really lacking and you think it has a lot of upside, them telling you “no” is good because that means, you know, they’re not just telling you no, they’re telling everybody no. Then that creates the opportunity, right? Whenever everybody’s being told no, there’s the opportunity. And for us, we’re able to convert those accounts about 5 to 7 percent of the time, where they tell us no and then we start working with them trying to provide value. But whenever we do convert an account, that 5 to 7 percent heydays on those accounts are so big. And they stay good for so long that it’s just worth it. That’s the downside in wholesale is it does take more work on the front end. You do have to hear no quite a bit. But whenever you do get there and you do establish those relationships, it really does pay dividends for a long time.
QUIN: And how do you start the process, DAN MEADORS? For example, I know the easiest way to get a yes would be to walk in the business and have a meeting with somebody, the decision maker. Then probably phone will be the second. And the easiest way would be cold outreach with an email. Is that what you do?
DAN MEADORS: Yeah, we actually start with an email first. Because here’s the thing, the email tells me multiple things. If they say yes, that’s a warning sign. That’s a warning sign that this product may not be good for very long or it’s something we need to at least talk to them about is like, “Hey, we’re just letting everybody sell our product.” And that’s not a good thing. So it’s like, it gives us a lot of information. And then it’s just more convenient, right? Like, it’s faster. So whenever they say no, one of the things that we love to do is we ask why. And that’s kind of where we’re able to start initiating that conversation. And then if we can, we’ll get them on the phone. And you’re right, you know, on the phone the more direct contact you get, like if it’s on the phone, converts significantly better than email, right? Same thing in person. So that’s what we do is we try to start with email and escalate up as far as we can.
QUIN: Nice. And your email signature, do you have a link to a website?
DAN MEADORS: Yeah, absolutely. That’s one of the things that I think all companies should do. And it’s not just… we don’t sell anything on our website. All we do is talk about our brand, who we are, some of the value that we can add on Amazon. And just basically what we’re good at and what makes us do or why we do the things we do, right? And I just feel like it’s such an easy and cheap thing to do is everybody should have a website that talks about their company and things like that. But you know, we absolutely do. We try to drop our website so they can learn more about us.
QUIN: Awesome. So how about somebody that is not in the US? We know Amazon.com is the biggest market. And how about somebody, let’s say in Canada, somebody in Spain. I guess maybe in Spain they have Amazon Europe. But do you sell internationally as well?
DAN MEADORS: We don’t. It was actually funny we’re selling in the UK and it is literally the day we were going to send our first shipment, BREXIT happened. Then we’re like, we just didn’t do it. And just kind of never got started back. Amazon.com is so big that it just provides a massive opportunity for us. And eventually, whenever we’re not seeing the returns we want or we’re wanting or continue to grow more, we may push outside again and think about it. But right now it just provides so much opportunity for us. But as far as for other marketplaces, there may be less traffic on the other market places but there’s also less competition which is great. So there’s huge opportunity there. But more importantly, it’s really easy for the international folks to sell in the US too. It is easy to set up a US-based business and things like that to be able to buy and sell products there. So it’s like I kinda envy the position for a lot of the international folks because they have, its particularly people with the market place like yourself, like international where you have, you are able to operate in a Canadian market place pretty easily as well. You understand those tax regulations and all that stuff. That’s just a lot of value you can provide the manufacturers. Like you can work with a manufacturer, optimize them within the US, and optimize them within Canada. It’s just very, very easy for people. So the international folks definitely work very similarly and it can work for them. It’s just slightly different.
QUIN: Yeah, I just find that for example if it was a locally sourced or bought product, to sell them in the .com market, the shipping fees which is from here to the US because Amazon wouldn’t do that with their own shipping, it will just take so much of the profit margins from those shipping.
DAN MEADORS: You really got to have a good plan for the logistic side. That’s one of the things that we did a couple years ago. And you know, not internationally but even internally within the US is we really focused a couple years ago on working with FedEx to get our rates really low. And what it is is it gives us the flexibility to move pallets of products really cheap within the US now. So that gives us somewhat of a competitive edge versus a lot of people, I think. So it is the same thing. I mean if you were wanting to grow that international side of your business, I mean it’s impossible. You just have to hammer down on the logistics and kind of find the best options you can to ship.
QUIN: Yeah. And for international seller, to be able to wholesale in the US, there are certain laws that you would have to comply with. Would you need to have a wholesale certificate or something like that?
DAN MEADORS: It’s one of those things where realistically, you could operate without some of those things. Like you could have a business based on your own country. But one of the things that we’ve started to realize is it’s really is just so much easier for international folks to set up a US-based business and then operate the business remotely. That process is just easy enough that that’s probably generally the best route.
QUIN: Yeah. It’s pretty good. How about The Wholesale Formula? Do you know how many people you’ve trained so far?
DAN MEADORS: Well, it’s kind of funny. I don’t know exactly. I know that it’s around thirty five hundred active students in our course.
QUIN: Wow. And cases have like a huge success that you follow?
DAN MEADORS: Yeah that’s kind of the thing that drives us these days is the course. That’s where I tend to spend most of my time. And its being able to answer people’s questions, being able to offer advice and things like that about their business. And over the past few years, we’ve just seen honestly just an incredible amount of success stories and people being able to really change their lives by starting a business. It’s kind of like the same opportunity that I’ve had, the same opportunity that you’ve taken advantage of is Amazon just provides such a massive marketplace and opportunity for people to get into and make money. And doesn’t really matter how, right? There are many ways to make money. Like you talked about it earlier like retail arbitrage, online arbitrage, wholesale, private label, merch, you can just do it. I just wish more people would get involved with it. Just seeing those success stories is incredible.
QUIN: Yeah, you must get a ton of them. You know, maybe two years ago, I first heard of The Wholesale Formula through Kevin Rizer. He used to have a podcast.
DAN MEADORS: I think it is Private Label podcast.
QUIN: Private Label Podcast, that’s what it was. And he’s not on it anymore. He must have sold the podcast or something. But that’s when I first heard it. And I know it’s not open all year round right, you close the doors at certain times?
DAN MEADORS: Yeah, we actually did our big launch this. I think we just wrapped it up like a month ago. That’s our only scheduled launch, our public offering this year. But the vast majority of time, I mean that’s one of the things we really do with our course is you know rather than just leave it open all the time, like we don’t like doing that. We like focusing on the success of the students. Once we’ve taken a normal period, have those people coming through the course, we really do kind of double down and try to help them as much as we can, so that they can realize success. And that’s the biggest strategy for us over the past few years is making sure that those launches are you know that was our enrolment period. But yeah this year, that was our one plan this year.
QUIN: So you’re saying that if somebody buys the training, they don’t just get a bunch of videos that they sit in front of the computer and watch some videos? You actually get involved, you and Eric in it?
DAN MEADORS: Yeah, for sure. We do a lot of live webinars. We have the TWF alumni group and that’s you know everybody who’s ever taken The Wholesale Formula is in that group. So that group is incredibly, like crazy active. There’s lots of questions. But more importantly, it’s not just like a lot of questions that it would seem like a more newbie community. There’s a lot of people that just come on with ideas and things like that. And have really honestly kinda helped shape our business and grow our business over the past few years as well. You know, it’s that kind of thing. We’re always in there posting, talking to people and just helping out whenever we can, really.
QUIN: You follow Pat Flynn at all? Pat Flynn has a wall full of thank you notes and stuff that are actually being hand written to him. Do you have anything similar just because I know what great feeling it is when somebody contacts you, doesn’t matter if it’s Instagram, through Hotmail or whatever and they send you a message thanking you for what you did that you didn’t know you did, right? That feeling is so amazing. Do you record those, save them somewhere?
DAN MEADORS: Oh yeah, we have a ton of testimonials. We’ve got a ton of video testimonials, written notes. People would send us posters, all kinds of just super awesome stuff. It really is. I mean that’s the thing that just really just makes you happy, right? It makes you feel like you’ve just helped somebody else.
QUIN: Yeah. I love it. So where can people find The Wholesale Formula online?
DAN MEADORS: Anybody check our website thewholesaleformula.com/qa. That’s a specially made page for you guys. And then we have our Facebook page, Facebook.com/thewholesaleformula. And we post content pretty regularly there as well.
QUIN: And now when dealing with the big wholesale, or it doesn’t matter if they’re big, just any kind of wholesaler, when they give you the price list, is that in any how negotiable? Do you even try to negotiate?
DAN MEADORS: Oh yeah, of the things that we always tell people in our course is you know whenever you’re given a price list, like it literally doesn’t mean anything. You know, that’s just the starting point. From that point we try to negotiate literally every single time that we work with anybody. I think a lot of people kinda get scared with that. They kind of get scared of, “Oh, maybe they wouldn’t want to work with me,” but it’s just part of the business. And the vendors that they’re working with understands it. They get it. So you just have to kind of get over that fear and move forward.
QUIN: Very good. And when it comes to a big distributor of, I don’t know, let’s say you were dealing with hockey equipment. And they would not sell to you, so you would have to go to the distributor. Do these distributors normally have good enough margins for you to sell on Amazon?
DAN MEADORS: I think sometimes. We do work with a few distributors but it’s more hit and miss. But yeah sometimes you can definitely find the pricing and make it work. And other times it’s not necessarily there. But one other thing you don’t tend to get with the, through distribution that you do get by directly working with brands is a lot of times you know, distributors, they carry lots of lines and they’re just trying to move lots of units. Whereas you develop that relationship with a brand and you’re really able to tie your success to them by talking to them about the optimization things you’ve done, listings, running ads, things like that. And the distributor just tends to care a little less about it. It’s the only reason we don’t like to work with them as much. So it’s not that you can’t make money, you definitely can. It’s just you don’t develop the same type of relationships.
QUIN: Yeah. This question now when I ask is something that I personally do, so I want to ask you if you do the same thing just to see if we’re kind of all us Amazon sellers are the same. Now, I don’t do retail arbitrage but I have the Amazon seller app just like any other Amazon seller does. And when I go past a liquidation shelf, I still scan stuff. (laughs) Do you do the same thing?
DAN MEADORS: Every single time. I usually retail arbitrage but I mean I haven’t even done it in years. Probably three years at this point. And every single time I walked by and I see something cool on clearance, I will scan it 100% of the time.
QUIN: Yeah, same with me and then there’s a couple things I check to see if it is brand gated. Basically if I’ll be allowed to sell it or not even if I don’t plan on buying them, I’m gonna check those things and how much profit it is. And then I actually did it a few times like I don’t know, you see some items that okay there’s enough margins to buy it. I end up buying it and then just keep them at home for myself.
DAN MEADORS: (laughs)
QUIN: All right, DAN MEADORS I noticed something about I guess your company or something. The organization, the fact that before the meeting, me and you both got an email and there was a page pre set up like this kind of organization really fascinates me because I love when things are super organized. You guys have pre setup a page TheWholesaleFormula.com/qa, you have somebody that just that’s their whole job? How do you work with these things?
DAN MEADORS: I mean, we do have a pretty awesome team to be honest. Like, we have our audio/visual team and content team and that’s two different people. They do a great job on getting stuff like that up, just making sure that we have a page setup for podcasts that we’re on or whatever. And a lot of that is just we like to be able to provide content, like you know to your audience, for example that is geared more towards them from based on the talk we’ve had.
QUIN: I like that kind of stuff because for many years when I started when I started my online selling career although it wasn’t full time back then in 1997, I did so many un-organized things. Throughout the years, I realize that every time I did something that I was not very organized with, I could lose money or not make as much as I could. So when I see organizations like this, I’m really fascinated how I can improve mine even more now, right?
DAN MEADORS: You know, I think a lot of that is just having good operating procedures in place. Like, I mean that’s the biggest change in our business honestly in the past or years has just been putting processes in our business for everything. And that way, whenever something comes up people know exactly what to be doing and you’re not reacting to tasks quite as often as you are being proactive in getting things done.
QUIN: Nice. So now that you have operating procedures, how comfortable would you be taking off 30 days from work? You and Eric would just go on vacation, it would run completely as if you were there.
DAN MEADORS: I mean, I would be 100% comfortable. Actually, I’m at home today. I’m not at the office. And our team is incredible. And you know, I’ve had a couple chats with them today but past that, they just knock stuff out and they are butt kickers. Honestly they’re better at some of the tasks than we are at this point.
QUIN: Yeah. I can see that because I do have one team member that just surprises me how much she knows. And like, yeah man you’re better than me at that. So there you go. That’s your job. That’s perfect. Alright, DAN MEADORS. Let everybody know where they can find you, where they can find The Wholesale Formula and what else you’re involved with.
DAN MEADORS: Yeah, absolutely! Definitely check us out at thewholesaleformula.com/qa or on Facebook at Facebook.com/thewholesaleformula.
QUIN: Perfect. And thewholesaleformula.com/qa like DAN MEADORS has very graciously offered a Wholesale 101 eBook. Is that what it is, DAN MEADORS?
DAN MEADORS: Yeah, it’s just a guide about the group, kind of how to get started with wholesale and how to do some of the things that we do in our business.
QUIN: Perfect! And you know what, you got me almost sold so I’m gonna download my copy myself and I would check it out. Because it really fascinates me how easy you make it sound, so I want to do more of it.
DAN MEADORS: It’s not easy but it is doable. Once you get it figured out, once you get the wheels in motion, it’s a systems based process so you’re just able replicate it without adding more of your time. And that’s the real beauty of it is I love anything based around systems and processes.
QUIN: You know what, I just thought of something. Do you know how many SKUs you have at this point in Amazon?
DAN MEADORS: Generally, we have between, at any given time, we’ll 250 and 300 active, 350.
QUIN: And do you know how many emails your account is getting per day?
DAN MEADORS: Oh, as far as like how many vendors that we reach out to?
QUIN: No, from the final consumer to you with questions and support.
DAN MEADORS: Oh! I have no idea. I haven’t answered one of those in years. Like we have virtual assistants who answer all of our customer service questions on Amazon.
QUIN: Gotcha. Cool. All right, DAN MEADORS. Thank you so much for spending some time with us. And I hope the audience really maybe listen to this a couple times. And check out DAN MEADORS’s Wholesale 101 at thewholesaleformula.com/qa. Thank you very much, DAN MEADORS.
DAN MEADORS: Absolutely, brother. Thanks for having me on.
Links:Amazon FBA Selling Online Podcast