- So the way drop-shipping works,
you choose a product, you sell the product,
you get paid for it, then you purchase it,
and then the supplier ships it direct to your customer.
Is everyone clear on drop-shipping?
Yep.
- [Student] How do you private label drop ship product.
- You don't.
You can't, because drop-shipping is getting it shipped
direct from your supplier.
All right,
so when I talked about about that,
what you do for private labeling is it you buy
one item from one of your suppliers,
that's one of your top selling drop-shipped items,
and then you label that, you photograph it,
and then you list it.
But once you go to private-labeling,
you're no longer drop-shipping.
Unless you got one of your suppliers,
which is very unlikely and very unusual,
to label your stuff.
That's not normally the case.
So you move from drop-shipping to private-labeling.
Sorry, did that answer your question?
- [Student] Will the customer see that it's
coming from overseas?
- No, because you never use overseas suppliers.
With drop-shipping, I'll just quickly go there,
with drop-shipping there's four criteria.
The first criteria is that you only use suppliers
in your own country.
Now I know a lot of people out there teach
you can use AliExpress and whatever.
You can, it's just very high risk.
'Cause when you sell this item on Ebay or Amazon today,
and then it takes three weeks to arrive
because, there's delay in customs,
there's volcanic ash or God knows what happens...
(student interjects)
Exactly, you get hammered.
So there's no way we'll do that.
And you don't have to just do it in Australia,
'cause Ebay, for instance, is in 27 different countries.
Amazon's in 33.
So you can have businesses all over the planet,
but it's obviously just better if you have them
in English-speaking countries.
We've done them in Australia many times,
Canada, USA, Spain, Ireland and the UK.
'Cause they're all English speaking.
Also South Africa, but that wasn't Ebay,
it was, um...
The name escapes me off the top of my head,
but it's not Ebay it's another one.
So you can do it all over the planet.
So that's number one.
Number two is we only use suppliers
that have what we call a dynamic website.
And a dynamic website is a website that shows
if items are in stock.
'Cause you must have a methodology in place
with drop-shipping to make sure your items are in stock.
If they run out, you want to make your inventory
go to zero straight away.
So you can use software to do it all automatically.
And the third one is,
they must be able to dispatch within two business days.
For obvious reasons.
And the third one is they must be able
to dispatch with no invoice.
'Cause if you sold an item for, say, $500
and there's an invoice in the box for 300,
the customer gets upset.
So we only use suppliers that meet that four criteria.
But again, if you want to know more about it,
just go to the link, slash drop, and that's it.
Yep?
- [Student] You know with private-labeling,
will Amazon do any of that for you
if you send the goods straight there?
- No.
Nah.
Yep?
- [Student] Any recommendations on drop-ship websites?
- Yeah, look just follow that link.
'Cause I don't want to go into drop-shipping tonight.
I just want to stay on track with Amazon.
But there's a link there that shows you,
Follow that link and it teaches you how to find suppliers.
There's thousands of them.
All right, so step one for selling on Amazon.
Obviosly, first thing, open an account.
Now, unlike Ebay where you can open a gazillion accounts,
you can only open one on Amazon.
However, you can apply to have more
if you have special circumstances.
So if you've got some brand name, a multiple of brand names,
you want to have separate businesses
and separate accounts for it,
you can definitely do that.
You can just apply with them and they'll often approve it.
But for the average person, unlike Ebay,
you can only have one account.
Product research.
Now, most people fixate on this.
The best seller strategy, we call it the BSS strategy,
so it's the best seller.
And most people just fixate on
what's the hottest selling item on Amazon.
And it's normally the cheapest thing.
So most people end up doing this strategy
and they find iPhone cases, USB cables,
all this cheap stuff where there's so much competition,
there's so little money in it,
and everyone just fights it out for margin.
So I'm going to show you that tonight too,
but I want to show you other ways,
where you can find a lot more profitable items.
'Cause a lot of people just think
that turnover is profit.
But it's not, it's half the equation.
Profit comes from profit-per-sale times velocity
times how many times an item sells in a month.
So if this item sells and it makes 10 bucks a sale,
it's that times how many times it sells per month.
So you can have other items that run higher margins,
than fighting it out just for the scraps at the bottom.
So BSS, most common strategy.
Most people fixate on this BSS strategy,
it's got the most competition,
It's got the highest MOQ, in other words,
you've got to buy the most items
to try and squeeze a profit margin in it.
It's got the lowest margins off the lowest price items,
like USB cables, iPhone accessories et cetera.
And it doesn't mean it's got the most profit.
As I said, you can have things that sell less,
but the other side of the equation,
the velocity is higher, the margins are higher,
so at the end of the day you can make more money
and do less work.
Now the wholesale strategy,
which I'm going to talk about now,
this is basically the oldest strategy in the world.
It's basically buying in bulk at a discounted price.
And it's the oldest strategy you can even think about.
The pros of it.
You can choose existing products
which already have good sales ranks, good reviews.
And you just get those at a good price.
Which I'll talk about how to do that.
Products with a good sales rank already show high
in Amazon search results compared to a brand new product.
So you can basically just jump on the bandwagon
of something that's already selling,
buy it wholesale and away you go.
Now, this is a big one, MOD.
This is one big, huge takeaway
for anyone who's new in the room.
You've really got to write this down
and just continually hit this.
MOD is minimum order dollar.
Many, or most suppliers
will not even tell you that they offer it.
What it means by that,
you might have to buy a minimum of 50 of these,
or a hundred of them or whatever,
but if you to the supplier and say
hey, instead of doing that could I have
a minimum dollar amount.
Could I buy $1000 worth of stuff.
$5000, $10,000 worth of stuff, whatever.
And if I have that, can I now get multiple items,
instead of one item.
And if you do this,
you've suddenly got a much wider product range.
So if you get 10 products instead of one,
you can effectively have 10 times more products.
Which means you can 10 x your revenue
for the same amount of money.
It's very very important, always, every single supplier,
whether it's a local supplier, or an overseas supplier,
we always talk about MOD.
Because everything in life is negotiable.
Everything.
Just 'cause they tell you something, doesn't mean squat.
They might say, no, you have to buy 100, well, negotiate.
You create unique bundled listings.
I'm going to talk about bundling tonight.
There's a really cool tool we can use for free,
which in Amazon shows you what to bundle.
And I'll show you tonight.
You can use that same information for Ebay.
So MOD allows you to create a wide number
of listings, instead of deep.
So you get more bang for your buck.
Now wholesaling, of course,
is a good way to learn the FBA process.
Because you shouldn't, if you're a beginner,
be very careful about jumping on
and finding products yourself
if you don't have the experience.
I've heard too many people do this,
where they go, they find a product,
they basically mortgage the house,
import a whole container of them,
and they hope like hell it's going to sell.
It's not a good business model.
You're better to start with proven products
until you learn the industry.
You can sometimes purchase locally enabling ungated.
Now, Ebay calls, it's got restricted products,
Amazon calls them gated.
Same thing, different word.
So if you purchase locally,
you can often get around this gating issue.
So, for instance, you try and sell beauty products,
they're gated, you can't do it,
'cause they're classified as food.
So if you purchase locally,
it's a way of getting around the gated a lot easier
than bringing in something from China,
and then getting into the food administration et cetera,
and getting approval.
So, wholesale, buying bulk at discounted price.
The cons of it are,
some wholesalers will not supply Amazon and Ebay sellers.
In fact, a huge majority will not.
So, don't tell them.
Now, it's amazing how many people come to me and say,
I contacted this supplier and they say they won't supply
'cause I either sell on Ebay or Amazon
or I drop-ship or whatever.
And I always say, why did you tell them?
Well, I don't know.
We don't.
Our purchasing office is in the Philippines,
we run a separate business, separate company name,
and that's who our purchasing is.
Now every time somebody asks us
what we're going to do with the products,
we always say the same thing.
Our staff's being saying this now for over 10 years.
"We have a database."
And we do.
And you guys should as well.
So when we sell items,
we put them through the database as well.
Every product goes through our database.
Now, the way our database works,
and you guys should do one too,
if you sell anything on Ebay or your website or wherever,
you get an email address.
And then you can send that email out to your database
selling your products.
Gazillions of times we've sold whole containers of products
using our database.
So when we get what's called a DO, a delivery order,
from the docks saying we can pick up a container,
we'll then send out a mailer,
and we've many, many, many times
sold out the whole container
from the time we got the DO,
to the time the truck delivers our container.
We've sold the whole container,
just from the database.
But that's another story.
So, don't volunteer information.
Don't ring up your suppliers
and say, hey, I want to sell on Ebay and Amazon.
It just doesn't work.
If you do want to go that, you can go the route
of telling them what a wonderful seller you are
and how you're going to help their business,
but good luck with that.
Yes?
- [Student] Is it easy to get an account on Amazon?
- Yes, it is.
Probably a year ago I asked the question of the room,
who's got an application in for Amazon
and has not been approved?
And, I think you were there Lincoln,
probably about three quarters of the room or more
put their hand up.
So if I asked the same question here,
who here's got an application to Amazon
and hasn't been approved?
Two.
OK.
So I think that probably answers the question.
It's pretty easy.
Okay.
So wholesaling.
Now, you are competing for the buy box,
and I'll talk about the buy box now, what that thing is.
'Cause whoever owns the buy box, gets the most sales.
If you're not in the buy box, you get slow sales.
So this is the problem with wholesaling,
if you don't get the buy box,
you're sitting on a whole lot of stock,
it's going to be slow to move it.
And that's why multi-channeling is the way.
So when people say to me, should I sell on Ebay,
Amazon or my website, my answer's always the same.
Why don't you sell on all three?
'Cause then when it slows down on one channel,
you've got two more channels left.
Also, if you've got a hot-selling product,
this hasn't happened in Australia yet,
but we'll just see what happens,
but it certainly happens a lot in the US,
when something sells like hotcakes,
Amazon gets excited and goes and buys a stack of them.
And then good luck competing with Amazon.
So here's the buy box.
In Amazon, this is the buy box.
And it works very much like the Ebay best match algorithm.
So if you're the buyer, it looks at where you're located
and then it looks at all the sellers.
So obviously, if you're in Melbourne
and there's other sellers in Melbourne
and there's one in Ayers Rock,
the guy in Ayers Rock, unfortunately,
is not going to get shown very high up,
unless he's an FBA seller,
but if he's shipping himself, from Ayers Rock or Darwin,
he's going to get down the search results.
So it takes into account where everyone's located,
of course price, also their account, all that kind of stuff,
and of course, FBA.
So if it's in an Amazon warehouse,
it's going to get bumped up higher.
So it looks at all of these factors,
and then whatever it does,
this is the seller that it chooses,
then everybody else is below here.
And that's the way the buy box works.
OK, so tips for finding local wholesale companies.
When using Google for wholesalers,
most wholesalers don't have good SEO webpages.
Now, what I mean by that is,
if you do a search for an item, like, let's say,
PowerPoint device wholesale,
if you do that, the first page that will come up in Google,
are generally always going to be retailers.
Even if it says wholesale.
All it means is that they've brought a .com
with wholesale in it.
'Cause wholesalers generally have rubbish websites.
It's the retailers that invest all the money
on the good websites, not the wholesalers.
So generally, if it's the first three pages
when you search for something, it's very often a retailer.
And just because it has the word wholesale in there,
doesn't mean anything.
I used to own a company called Cam One Computer Wholesale.
We were not wholesale.
But we got a lot of business
because everyone thought we were wholesale.
The only thing that we were, is that I just registered
a company name that had the word wholesale in it.
So be very careful about that.
The SEO people, so peaking at the top of the search results,
are the people that have paid SEO people
to appear in the search results,
and they're generally not wholesalers.
So, top one to three pages in Google search results
are often not true wholesalers.
So search the Google product name, plus the word wholesale.
Now something that a lot of people
haven't discovered yet in Australia,
is at etsy.com/market/wholesale,
the offer a minimum 50% off.
So it's another place to get wholesale products
that most people haven't discovered yet in Australia.
And like I mentioned earlier,
everything in business and life is negotiable.
Absolutely everything.
And I say this because, Australians,
we're not brought up to negotiate.
It's just not in our psyche.
And we just don't do it very often.
But you have to.
If you're going to go down the wholesale bandwagon,
you've got to negotiate.
Now, if you talk to any wholesaler,
one of the first things they're going to ask you
is what's your ABN number.
'Cause it's kind of like a hurdle
they want to get you through to see
are you a true business.
Or do you just want to buy this thing and use it yourself.
So they ask you what your ABN number is.
Now, the thing about an ABN number, it's free.
And you can do it online.
It's instant approval.
So there's no reason you can't get an ABN number.
Even if you use some drop-ship suppliers,
like Dropshipzone et cetera, they make you.
They won't talk to you unless you've got an ABN number.
So there's no reason not to get one, it's instant approval.
Just one hurdle they make you go through.
- [Student] I had an ABN years ago,
and I think it's inactive.
Would I have to apply for a new one,
or do I have to try and reinstate that old one?
- Lincoln?
- [Lincoln] You've got to talk to the tax office about it.
- [Second Student] Reinstate the old one.
- [First Student] You do, yeah?
- [Second Student] Yeah.
- Lincoln's an accountant, so...
All right.
OK, so next thing is, besides getting an ABN number,
to make yourself look even more impressive,
get yourself a website.
A lot of people think, oh my God,
that is going to cost me thousands.
No it's not.
You can get a website like a Shopify store from $29.
You can also get a lot of other free ones,
there's Woocommerce,
there's a whole load of things you can get,
there's Wordpress plugins, if you know what Wordpress is,
you can also get a Magento store for free,
but you've got to pay somebody to set it up.
But then to populate all the products,
just use drop-ship items.
So you don't have to buy the products,
just use drop-ship items.
You can get someone overseas, spend maybe 30 or 40 bucks,
and they'll add all the products, say 50 products for you
into your store.
Now you've got an ABN number, and you've got a website.
So now you look like a professional company.
So if you're trying to negotiate with wholesalers
and you want to look impressive, that's how you do it.
And it doesn't cost you much money at all.
So Shopify stores from $29 a month,
Magento store is free,
but you've got to pay someone to set it up,
and just use drop-ship products to populate it.
Any questions on that?
Suddenly you look professional, for hardly any money.
So, how to pay for drop-ship inventory products,
and also wholesale products.
If you get a credit card with points,
if you're just paying to pay,
then you're leaving money on the table.
'Cause you can be racking up the points.
So this particular care here gives you 120,000 bonus points,
and you get all your points for every dollar you spend.
You can collect Qantas frequent flier points,
you've got up to 55 days to pay,
you can use cruises, flights,
you can convert them into JB Hi-Fi vouchers,
David Jones vouchers, et cetera.
You can also drop-ship from those companies,
so if you've got 1000s of points,
if you think about it, just a small drop-ship business,
which is doing, say, 50 k a month, that's 600 k a year,
and if you just got a one to one ratio of points,
and Amex cards can get up to three points per dollar,
but if you've just got one ratio,
that's 600,000 frequent flyer points per year
just for a small business.
And then obviously you can use those 600,000 points
to drop-ship products from JB Hi-Fi et cetera,
and then cash them up.
So, just food for thought.
So, obviously talk to your accountant
about your obligation for fringe benefit tax with points.
But that's another story.
OK, so Amazon sales rank.
Sales rank on Amazon.
So the two things it looks at, sales rank on Amazon,
is velocity, and velocity is of course,
how recently an item sold.
Amazon looks at things that sell per day,
it's obviously got a higher sales rank
versus things that sell once a week with a low sales rank.
Everything is shown here,
so if you look at this particular product,
this one is number 1238 in the beauty category.
So every single item shows you what rank it is.
So if we want to do product research 101,
we just go choose any category,
here, just from the dropdown,
we can then go into here, any of these categories,
we can do this with the minors and some rubbish,
so it shows us how many items are in a category.
So this particular category's got 90,000
in the Beauty and Personal Care category.
So we can see how many items are in there.
And then we can also go to any category
and click Best Sellers.
And it shows you the best sellers in any category.