Prepare to be enthralled as Ben Leonard, a zoologist turned e-commerce extraordinaire, reveals how he transformed his passion for fitness into a multimillion-dollar brand—all without a textbook business education. His evolutionary tale from academia to the apex of online retail not only shatters preconceived notions but also serves as a beacon for aspiring entrepreneurs seeking to carve their own paths on platforms like Shopify and Amazon.
This installment isn't just about transitions; it's a treasure trove of e-commerce mastery. We unravel the complexities of global market expansion, discussing the nuances of European VAT and the Pan-European FBA program, and impart sage advice on managing cash flow and inventory as your business reaches new frontiers. Brand building takes center stage, as we dissect the art of creating distinct identities and fostering genuine customer connections—a strategy that's proven its weight in gold for both Ben and myself. Our anecdotes underscore the sheer power of resonant content, demonstrating how brands can transform casual browsers into dedicated audiences.
Capping off our comprehensive journey, we tackle the trials of product expansion and the strategies to keep your brand afloat amidst growth. I share insights on maintaining brand coherence, the impetus behind expanding product lines, and the tactics for ensuring these new ventures flourish financially. Listen closely as we break down the nuts and bolts of validating product demand, the intricacies of unit economics, and pragmatic solutions for cash-strapped businesses. Join us for this revelatory session where passion meets practicality, and dreams meet the digital marketplace.
🚀 Transform your brand on Amazon by building a powerful customer list with the After Purchase Funnel Blueprint course. Click here to get the full course for free.
➡️ Ready to go deeper into your Amazon FBA journey to accelerate your success? Get your hands on ALL of the Brand Fortress HQ resources, mentorship, and knowledge base by visiting us at BrandFortressHQ.com
⭐️ Want to help our show grow so we can continue bringing you the very best of guests and actionable content for your Amazon FBA business? We'd greatly appreciate if you took two minutes to give us a five star rating and review. Thank you!
Prepare to be enthralled as Ben Leonard, a zoologist turned e-commerce extraordinaire, reveals how he transformed his passion for fitness into a multimillion-dollar brand—all without a textbook business education. His evolutionary tale from academia to the apex of online retail not only shatters preconceived notions but also serves as a beacon for aspiring entrepreneurs seeking to carve their own paths on platforms like Shopify and Amazon.
This installment isn't just about transitions; it's a treasure trove of e-commerce mastery. We unravel the complexities of global market expansion, discussing the nuances of European VAT and the Pan-European FBA program, and impart sage advice on managing cash flow and inventory as your business reaches new frontiers. Brand building takes center stage, as we dissect the art of creating distinct identities and fostering genuine customer connections—a strategy that's proven its weight in gold for both Ben and myself. Our anecdotes underscore the sheer power of resonant content, demonstrating how brands can transform casual browsers into dedicated audiences.
Capping off our comprehensive journey, we tackle the trials of product expansion and the strategies to keep your brand afloat amidst growth. I share insights on maintaining brand coherence, the impetus behind expanding product lines, and the tactics for ensuring these new ventures flourish financially. Listen closely as we break down the nuts and bolts of validating product demand, the intricacies of unit economics, and pragmatic solutions for cash-strapped businesses. Join us for this revelatory session where passion meets practicality, and dreams meet the digital marketplace.
🚀 Transform your brand on Amazon by building a powerful customer list with the After Purchase Funnel Blueprint course. Click here to get the full course for free.
➡️ Ready to go deeper into your Amazon FBA journey to accelerate your success? Get your hands on ALL of the Brand Fortress HQ resources, mentorship, and knowledge base by visiting us at BrandFortressHQ.com
⭐️ Want to help our show grow so we can continue bringing you the very best of guests and actionable content for your Amazon FBA business? We'd greatly appreciate if you took two minutes to give us a five star rating and review. Thank you!
Welcome everybody to the brand fortress HQ podcast. I'm your host, john Stojan, and today I'm really excited to have Ben Leonard on. Ben, if you could just, you know, take a minute or so and introduce yourself to the audience.
Speaker 2:Sure, thanks for having me on, john. It's great to be here. Well, I like to think of myself as a little bit of an anti guru. There's a lot of gurus going around in the commerce world right now, and many of them haven't kind of been there and done it, and so that's the kind of perspective that I try to put on my experience in e-commerce kind of being there and done it. So I'm from the UK as people can probably guess from my accent specifically northeast Scotland, and where I'm from is an oil town, and so, inevitably, I got into oil.
Speaker 2:But in 2016, I had a huge change in my life. I got quite unwell. I'm fine now, but I had to stop work for a while and stop my fitness hobbies for a while, and so I finally took action on this idea I'd had for probably four or five years, which was to start a fitness brand, and I did, and it was a disaster. None of the gyms wanted to buy my stuff. I wanted to sell my products directly to Jim, right, but the consequence of that was that I decided I had to find another way to make it work.
Speaker 2:I realized I could sell online, and I discovered that I could, despite having no coding skills, I could build a website on Shopify and I discovered that it wasn't just Jeff who sold on Amazon, but everyone else could sell on Amazon too, and that brand went really well. I scaled it from my laptop in a cupboard and we were doing about $6 million top line late 2019 when I decided to sell it. And so now I'm still building brands. I co-owned several brands. I help people plan their exits. I've just written a book. I speak, I consult and I love the e-commerce world. So I'm very grateful that I got sick, because if I hadn't, I wouldn't have discovered my love for all things brand building and e-commerce.
Speaker 1:Okay, and just to rewind a little bit. You know, one of the things I was looking at in your background is that you know you don't have a business background or kind of that traditional background. If I remember right, was it zoology. Is that what your original degree at university?
Speaker 2:was? Yeah, it was so. Growing up in Scotland, I grew up in a small town surrounded by countryside and close to the sea, so it was inevitable that I'd get interested in nature, and so I studied zoology and then ecology for my master's degree, and so I worked in oil and gas. My job was to help oil companies get greener and to help the, the regulator, make tighter and tighter environmental regulations. And I specialized when I, when I was studying, I specialized in dolphins. So I was a professional dolphin nerd and now I'm just an amateur dolphin nerd. But you know, a lot of people start a business because they hate their job. I didn't hate my job. I quit the. Actually, the business I worked for was a great business and my boss was a great person, but I always felt like there was something more and so, okay, yeah and so how did you take that yeah, how did you take that leap then from, I mean, I think?
Speaker 1:well, two things I take away from that. First of all, I think it's fantastic just to point out to people that in order to be, you know, successful on Amazon and even ecommerce in general, you don't necessarily have to have an MBA or you know a data science degree or you know something like that. That there are people with all types of different backgrounds, and you talked about a little bit. But I'm just curious, how did you go from you know, thinking about your job and you talked about trying to sell the gyms, but what kind of spurred that, that initial inspiration to say, hey, I want to sell, you know, a physical product?
Speaker 2:Yeah, I scratched my own itch, like so many people. So I came into ecommerce as a as a side effect of coming into, I came into brand building first, right. So what happened was this I was training with my buddies across fit. It must have been about 2012. So a long time ago now, and at the end of a training session one of the guys was like we've beasted it. Today I thought beasted it, beast beast gear that would be a cool name for fitness brand and I did nothing about it. But I let it simmer away in the back of my mind for four years. And then when I got sick, about four and a half years later, that's when I took action. So I knew I wanted to start a brand of fitness training equipment.
Speaker 2:But you know, we grow up thinking that entrepreneurs are other people.
Speaker 2:They're people with business degrees, they're people who understand design, they're inventors, they're people who inherit a business or people who have a lot of money to go start a business.
Speaker 2:You know, we kind of grew up in this world where you go to school, you might go to college or university, then you go work for the man in whatever you studied, and then you retire and then you die, and I never really considered entrepreneurship and I discovered that I do have those entrepreneurial genes, but only because I was forced to take action, because I needed something to do while I was recovering and I couldn't work. And so my message to people who perhaps haven't either haven't started, which is it's unlikely that people who haven't started or listening to this podcast, frankly, people who perhaps have started but maybe feel a bit stuck is to give yourself permission to just go for it, because, like you said, you don't need that experience, you don't need a business degree, you don't even need a decent amount of capital, but not eye-watering amounts of it. And so, yeah, I scratched my own age. I wanted to create better fitness equipment than what I already had.
Speaker 1:So, talking about those early days, you know, because there's a big leap from hey, I want to create a piece of equipment to actually doing it like. What did it look like? Yeah, actually, you know design and source and all those things that you know. People that have launched a product before have gone through the pain of what did that look like for you?
Speaker 2:Yeah, so my first product and this is something a story that I like to tell, because the idea of launching a product can be very intimidating, especially if you have it in your head. You have to design something completely new. So my first product was a jump rope, or, as we say over here in the UK, skipping rope, and really what happened was I was I would start. You know, I was moping around my apartment, I couldn't work, I was tidying out my gym bag and looking at all the training gear that I wasn't using. I picked up my jump rope, which I'd been using CrossFit and boxing training, and it was not that good and I thought, well, if I could make it spin around a bit faster and whip around with a bit more and, frankly, the brand wasn't very cool either Well, I thought, well then, that would be pretty badass, and I basically googled and found contract manufacturers, and then I went through what I now call my Franken product product development process, which is for people who have a limited budget, to create something relatively unique using off the shelf products.
Speaker 2:So after I'd found a manufacturer that I was happy with, I said, right, send me all your off the shelf jump ropes. And they did, and I tested them and my friends tested them, and some athletes that I knew tested them, and then I said, right, I like that bit, I like that bit. Can we take that one from there and that one from there? Can we make that bit a bit shorter? And eventually, after a whole bunch of testing and several rounds of this, we landed on the first product, which was called the beast rope, which went quite nicely with the brand beast gear, and so, although it was all made up of different off the shelf components, it was a completely unique combination that nobody else had. And then I signed an exclusivity deal with the manufacturer that they wouldn't make that exact version for anybody else. So I landed on this relatively unique Franken product, but without having to pay for custom molding or tooling.
Speaker 1:Okay, I like how that's a unique approach.
Speaker 1:I think that that definitely short cut some of the process where I think a lot of people get stuck in that I need to pay, you know, 20, 30, $50,000 for a mold to make something unique, whether they it be their first product or their 10th product, and they're looking to expand.
Speaker 1:So it's nice to have a little bit different perspective on the process where maybe you know you don't have to build that mold right away and you can wait until you see that product take off and negotiate with the manufacturer a little bit. So you mentioned one of the other thing I love about this, and just coming back to kind of first principles, is you are testing it with your target market and I think that's one of the things that's, you know, so important is you weren't testing it with, you know, your family or other people that you know weren't in that fitness space. You were testing it with people that you know were exactly like the target market that you were trying to sell to, which I think is so valuable, and you had mentioned in the opening how you know you would. So you have this product and then you took it to gyms and all of them said you know that's nice, but no, thank you. How did you go from that response to transitioning into e-commerce and eventually Amazon?
Speaker 2:Yeah, good question. I was noodling around online I was actually deep into various Reddit threads on product development and using Alibaba, importing from China, all this kind of stuff and I hit upon a thread where somebody was discussing how they were selling on Amazon and I thought, well, that's interesting because, you know, until that point I naively thought that when I bought something from Amazon, I was buying it from Jeff. And it turned out there is this thing called Amazon FBA, fulfilled by Amazon, where I could send my products directly into Amazon. They'd send them all around their fulfillment centers and store them and then pick, pack and fulfill them to customers on my behalf and I thought, well, that's pretty cool.
Speaker 2:And then I went on Amazon and actually looked a bit closer than you normally would. If you're a layperson just buying on Amazon, you don't have to pay attention to all the small print. I realized, hold on a second, yeah, I am buying this from some other company, that's not Amazon, that's somebody else. I could do that, and pretty quickly I did, and so I think you know gyms were rejecting me in the sort of February, March, April of 2016. And by June I think I sold my first skipping rope on the internet, on Amazon and that was wild. That was an incredible feeling. It was very empowering to know that, Holy smokes, you know this works.
Speaker 1:Okay, and was that in the UK marketplace where you're at?
Speaker 2:It was, yeah, and my biggest regret. I don't regret starting in the UK because it made sense. I had to dip into my toe, into the water, somehow. I was new. It made sense to me. I'm in the UK, why would I not sell in the UK? But I regret not going to the US. I was going to say sooner, but at all, so I didn't go to the US. So I started in the UK, then I went to mainland Europe and then I went into Australia and the Middle East and they were tiny for me. I went into those markets shortly before I exited the business and I think if I'd gone to the US I think with basically almost no additional effort to business instead of doing 6 million would probably have been doing, you know, three or four times that. Wow, that's a regret that I have, but hey, you live and learn.
Speaker 1:Right, right. So, while that brings up a great question as far as for people that are listening, that maybe are thinking about you know, whether they be just in one marketplace maybe they're in Canada, maybe they're in the UK, or maybe they're even in the US marketplace and they're thinking about expanding to another marketplace what advice would you have for them as they think about the pros and cons to expanding into different marketplaces?
Speaker 2:Yeah, there's quite a lot of things to think about, and, I think, more things to think about than there used to be, certainly not least because of the competition that there is now. It is harder now. There is more competition. Not just that. There's so many more things to think about. There's always Amazon's always got new ways to make it pay more. There's always new fees coming in, but suppose you're already selling in the US.
Speaker 2:If things are ticking over nicely for you, I think it makes a heck of a lot of sense to immediately get into Canada and add borderline guaranteed 5 to 10% of what you're already doing. Sometimes, you know, up to 15 or 20, depending on what you're selling. You know I've got clients right now who have been selling in the US. Turn on Canada, put inventory into Canada and, reliably, almost overnight, add like 10% revenue. What I would also say, though, is, when you're thinking about adding more market markets, or indeed other channels, is just you wary of cash flow, because if things really take off there, you could end up being in a position where you don't really have the cash to support restocking across all markets, and then you're going to go out of stock potentially, and you don't want to go out of stock in your bread and butter market. That's the US, for instance.
Speaker 2:If you're in the UK, obviously Brexit happened, which made Pani U more difficult, but if you can get back into Pani U, for the rest of Europe, that's a complete no brainer. You send your inventory into like one fulfillment center let's for argument's sake say it's in Amsterdam and Amazon will distribute it right across Europe for you so that people from you know, from Madrid to Düsseldorf, can get your stuff on prime. And when I got onto Pani U back in 2017, this was after the UK had voted to leave the EU, but before we had actually left, so Pani U still worked for the UK. I almost doubled my sales overnight Just by registering for Amazon, and that was a really interesting story actually, because it was a lot of work. I had to register for VAT in France, germany, italy, spain, poland and the Czech Republic, and it was not easy.
Speaker 2:Amazon didn't make it easy and there were no organizations to make it easy. You had to jump through all these hoops and do all this paperwork. It was very complicated. Some of the countries required you to have your documents translated, but only by a translator who was specifically qualified for their stipulations. For Spain you had to have documents notarized and there's like one notary in every city, and this was a hilarious process. I went to get my documents notarized and the guy pulls out a lump of wax and starts melting it with a match and then stamps it with a seal. It's like a medieval wax seal.
Speaker 1:Like a myth.
Speaker 2:Yeah.
Speaker 1:Yeah, like from the pub or something like that. Yeah.
Speaker 2:Yeah, totally, and so what was wonderful about this was it was such a pain in the ass to do all of this. Most of my competitors simply didn't bother doing it, and so then, when I did this, I got pan of you. I emerged on the other side of the hoops that I had to jump through into this, like this valley, this lush valley of opportunity that no one, no one else was in, and that's how I doubled my sales overnight. So you know, a business lesson I learned from that was jump through the hoops, because the reward on the other side is significant and your competitors can't be bothered doing it. They're just they're just not doing these things because it's too difficult.
Speaker 1:Yeah, they're not willing to do the hard things and especially I mean I hear that I feel like more and more as Amazon gets more complicated is that a lot of sellers get very frustrated because they have a listing issue or trying to expand into another market and they just kind of throw up their hands. And yeah, I mean, sometimes, I'm sorry, go ahead. Oh, I was just going to say sometimes this is a matter of, you know, really digging in to solve that problem, Like you said it, and it could be something. The results can be doubling your sales overnight.
Speaker 2:Yeah, yeah, you're totally right, and I came across one such thing yesterday. I mean, I'd already come across it, but I was experiencing it again yesterday. One of my brands. We were trying to ship some inventory from our manufacturer in the Middle East into the US, and it was really. We were creating these shipments in Amazon and it was not allowing us to send them to one single location, which was extremely frustrating. We had to go use a third party software tool to let us do it and at first I was like man, this is so annoying. Not only is this frustrating, but it's potentially going to cost us money in the future. And then I thought wonderful, this is great. Higher barrier to entry, more difficult for more people. More people are going to say, oh, this is too difficult, I'm not going to bother doing it, but I'm going to bother doing it. So every time one of these things comes up, my first reaction is oh, another thing. And then my reaction is great, another thing that I get to overcome and other people don't bother.
Speaker 1:Yeah, I think very similarly about. You know all the changes that Amazon rolls out. I know it can be really hard to stay up with all those changes, but at the end of the day, I mean, that's one of those things that gives you an advantage of. You know, just taking, for example, if somebody was like, hey, I'm only going to run sponsored product ads, and so you know, they never took the time to learn anything about the other ad types that Amazon has. And thinking about, you know just the sales and all the other opportunities that they missed out on. And there's I feel like there's a ton of different examples that, as the platform continues to evolve and mature, that there's going to be more and more opportunities there that your competitors aren't willing to take advantage of.
Speaker 1:Yep totally agree. So let's fast forward a little bit. So, looking just on the information that you provided, so you grew that brand to six figures and then you exited that brand and so talk to me a little bit about you've got a few different things, that kind of what you're working on today.
Speaker 2:Yeah. So I grew that brand to seven figures. We were doing six million bucks top line when I sold it and that led directly to several of the experiences of what I'm doing now. So the organization I used to sell that business frankly left a lot to be desired, and my accountant tonight ended up tidying up that mess in order to get the deal done and decided that we could do a better job. So we set up E-com brokers. So we're mergers and acquisitions advisory firm for E-commerce business owners. So some people will work with them over 18, 24 months to get them ready to sell. Some people are ready to go more or less now.
Speaker 2:So that's great fun, and what I love about that is I get to share in the success of other people as they then navigate that exit process, and that's just a really interesting space to be in, because so much has happened over the last few years. We saw multiples go crazy. We saw a ton of money come into this space. We saw the bottom fall out of the market. We're seeing a recovery now, so it's certainly not boring, put it that way.
Speaker 2:I mean while I knew I wanted to stay in E-commerce and keep building brands. I love building brands. So I'm developing a parent and baby brand now which is probably three years in the making. We still haven't launched our first product. I'm six figures in on product development on that brand, which I'm quite happy about. You know I'm putting up barriers around it a unique design. It's a difficult space to navigate in terms of compliance et cetera, and all of that just means high barrier to entry and you can't outmarket a terrible product, which is why I'm taking so long to get it right. But I'm hopeful that we'll launch it summer 2024.
Speaker 2:So that's fun. I co-own a couple other brands and advise a few other brands, which is great. I get to be involved in brands, but I don't do the day-to-day nitty-gritty. I always partner on things and then I love to help people. So I consult and coach and speak and in the end I decided that I would. I put everything I know into a book and I just finished up a book which came out a couple months ago called Quick Stalling and Build your Brand, and so far the feedback has been great and I'm really proud of it. And yeah, that's out and that's on Amazon.
Speaker 1:Okay, wow, I mean, that's a lot of different things. So if we dig in a little bit and looking at what in the brands that you're involved in, how are you seeing or thinking about those brands now versus maybe the first brand that you started, and what do you see going forward for brands to be successful on Amazon and beyond?
Speaker 2:Yeah, I mean, I'm so grateful that I had that first experience and I'm able to apply learnings from it to everything I'm doing now. And one of the key things I think that set my first brand apart was distinctiveness. So the brand distinctiveness right, it's about identifying what's unique about your brand and the sort of so what factor really and what sets you apart from the competition. That's really really important. That all comes down to your unique selling proposition, both at a product level and a brand level. So I think it's really important that people sit down and think about that.
Speaker 2:There'll be people listening who'll be like yeah, but Ben, I'm kind of just selling a mishmash of stuff and it works and I'm making money To them. I would say the chances are, if that's working for you, that's probably because you got in when it was possible to make that work and you're just kind of still riding that way. That's great. It's difficult to sell that in the future, frankly, and also it's only going to get more and more difficult as your competitors get better at building a legit brand identity with engaged fans who follow them and want to buy all their stuff. You're eventually going to get pushed out of the market there.
Speaker 1:Yeah, that's a great point. So I mean, what advice would you have for the brands out there that maybe do have some traction and maybe it's a complete scattering of what their products are in? Or, more likely, what I see is where you'll have an Amazon company or owner where they'll have two or three brands that maybe are in completely different categories, that they're trying to kind of make everything work together. What advice do you have for them on moving towards having that brand distinctiveness?
Speaker 2:Yeah I would say don't force things to work together that don't make sense and keep these things separate when possible. I even advise people to have them in different accounts if we're talking about Amazon, because ultimately, you want your brand to look and feel and behave like a legit consumer goods brand, like your own favorite brand. So I say to people think about your own favorite brands that could be related to your hobbies or your profession, or even the food products in your cover, and ask yourself how do they make you feel? Because to me, that's what branding is. Branding is how you make people feel and ask yourself how do those brands do that? What is it they're doing to make me feel that way?
Speaker 2:And the answer tends to be it's all to do with how they're marketing themselves, which these days is to do with the content that they're producing.
Speaker 2:Well, treat your brand like a big boy, grown up brand and do that too. So create helpful, compelling, useful, engaging information that makes your target audience know, like and trust you, and give it to them where they are, whatever channels they're on, whether that's Instagram or Pinterest or whatever it might be and show up. And I would also say, if you're acquiring customers on Amazon, and you don't necessarily have to have a great brand identity to do that. Give those customers an experience that makes them remember who you are and build a relationship with you, so that if you're in the I don't know, you're in the gardening niche and somebody's bought widget A from you and a couple of months later they'd have a different problem and they needed to a different solution for that problem. They're going to go by widget B. Make sure that they're buying it from you and not somebody else, and that they're buying it from you because they've built that relationship with you.
Speaker 1:And you give an example of maybe either within your brands that you either own or co-own, or maybe a brand that you've worked with where you've kind of made that transition from you know kind of being a meh, you know brand or product, where you kind of blend in with everybody else, to creating that you know kind of distinctiveness and that stickiness.
Speaker 2:Yeah, ton of examples. Let's start with one from my first brand. My first brand, b-skier, had a range of. We had a range of boxing products, and one of our products was a pair of boxing hand wraps. And for people that don't know, these are basically bandages that you wrap around your hands before you put your hands in your gloves. They help to protect your hands, and inside of the packaging there was an insert that said scan this code or go to this URL for a video where we teach you how to wrap your hands. So you scan the code and you land in a Facebook Messenger bot.
Speaker 2:So where the first thing we do is say, as promised, here's your video. So thing number one there is now to subscribe to our Facebook Messenger box so we can market to them and send them great deals and great content. So regularly they just receive, you know, useful articles or useful videos or whatever, and then when we have a deal on, we send it to them and they're going to go buy it. So that's thing number one. Thing number two is we give them the video that we promised. So they click the link, they land in YouTube where there's a video and this video is still up there of me wrapping my hands sitting at my kitchen table. I filmed it on my phone, but it's had over 6 million views. Now here's where it gets interesting. That video was not promoted anywhere except in that chat box. Okay, so I was only sending it as educational content to my existing customers to give them a great experience, and indeed they got a great experience and they knew how to use their product and they would go and leave me a great review.
Speaker 2:So here's what happened. Youtube picked up on all these people watching this video and liking it and also subscribing to the channel. So, first of all, my existing customers subscribed to my channel, where I can give them more content to learn about my other products and buy them. But also YouTube then ranks this video for search terms like how to wrap your hands for boxing. So then people who didn't know my brand but did have a problem ie, how do I wrap my hands for boxing found my video and within the video and within the video description, where links to our boxing hand wraps and our boxing gloves on Amazon.
Speaker 2:And guess what? Amazon likes external traffic. So now we have two flywheel spinning off of each other. We have existing customers ranking me on YouTube, youtube ranking me on Amazon both of those creating positive feedback, right. Meanwhile, my competitors were stuck in the Amazon Goldfish Bowl not doing any of this stuff you know I talk about. Actually, I was chatting on a different podcast the other week and, off the cuff, I came up with this, this I invented an animal called the Thamster, which is a goldfish stuck on a hamster wheel, right. So this is the thing, right, there are people who have they're stuck on this hamster wheel, whereby, you know, it looks like this good listing, good PPC, get sale, repeat, right, right.
Speaker 1:But they're also stuck in a goldfish Right. It's the basic blocking and tackling of Amazon that pretty much you know everybody should be able to do. Yeah, that's table stakes.
Speaker 2:That's basics right, but they're also stuck in a goldfish bowl because they're only thinking about Amazon. They're not thinking about creating a legit experience and treating their customers like customers who want a real experience with a real brand and treating their brand with their respect it deserves and treating it like their own favorite brand. So they're stuck in this goldfish bowl. Instead, they should be in, like you know, a pond connected to a lake by a stream, connected to a river, connected to the sea, an entire ecosystem where they're all you know email, instagram, podcasts, chatbots you know, you name it right. However, you can contact your customers, you should be doing it. However, you can interact with them. So you know. That was one example there with the hand wraps.
Speaker 1:Well, just a couple of things that I don't want people to miss out on. That example that I think are really important is first of all you know, if you had to quantify it, how much do you think that that six million views was worth to your brand?
Speaker 2:Oh well, bananas amounts, because of course not only was it worth all the sales and the profit, but then that added significant amounts to the value of the business when I sold it.
Speaker 1:Because you've not only had, obviously, the sales and everything you had on Amazon, but now you have a YouTube channel where at least one of your videos and you probably have more videos, but at least one of them had six million views.
Speaker 2:Exactly, exactly, and that is in itself, that is an asset which adds value to your business and your future, proofing your business as well. Because you own that YouTube video, you can go in there and change where the links point, whatever it might be. If you need to suddenly change the links to go to your own website instead of Amazon, you can. Yeah.
Speaker 1:Well, and the other thing that I found interesting about that is that you know you didn't hire a studio, you didn't hire a professional boxer, you know, and spend thousands of dollars in order to make the world's most amazing video, you know, or most kind of a Hollywood level production on wrapping your hands. It was just something that you filmed on your phone. That wasn't necessarily about having the world's highest quality video. It was just about having, you know, really useful information that was directly connected to your brand and what your customers needed to get the maximum amount of value as quickly as possible out of your product 100%.
Speaker 2:The crappy video can be the best video. I have a whole bit in the book where I talk about that. Having said that, you can't only produce like really rough and ready, organic looking videos, because otherwise people are going to think that your brand is somehow less legit. What people value is a certain amount of content that legitimizes and makes your brand seem extremely professional which, of course, should be and a certain amount of content that makes the people behind the brand seem authentic and real and relatable, and I'm a huge fan of making yourself the face of the brand.
Speaker 2:So, in fact, for Beast here, I'm an avaragely fit, asthmatic guy, right, but I made myself the face of a fitness brand. Now, on the face of it, you might think that's a dumb ass thing to do, because fitness, the fitness industry, is all about being the fittest, the strongest, the mustliest, the fastest or the thinnest or whatever. But actually I thought to myself well, hold on, who are my customers? They're not the heavyweight champion of the world, they're like normal people and people buy from people they relate to. You know, caldini talks about these principles in his books. One of his principles is unity, this idea of people wanting to be connected to each other and to the people that they buy from. And it worked a treat. I basically said if you are the heavyweight champion of the world, you're welcome in our tribe. If you're a really unfit person training for your first 5k run, you're welcome in our tribe. And that worked a treat and that kind of set us apart from the competition.
Speaker 1:Okay and so, and I appreciate that point, so it sounds like there is definitely a balance to be made there, whether we're talking about a video or just your brand overall of you know, you may not have the huge budget to turn it into Nike, but at the same time, you do want to put you know some resources, thought and money behind making sure that your brand, you know, looks professional, looks like there was some effort put into it. Yeah, to extend beyond just what you have on Amazon.
Speaker 2:Yeah, you know, john, absolutely. I mean people. I had a conversation once with a client who said oh yeah, you know I sell this stuff, but you know I don't really have a brand. You know brands for Nike. And I was like no, no, no, no, no, no. The only difference between you and Nike is scale and think about it One day. Once upon a time, nike was just an idea, and even when that idea had been turned into a business, they still hadn't sold any secrets yet. Right, but they were still a brand. It's about giving yourself permission to treat your business like a legit big boy, grown-up brand, because otherwise how's it ever going? If you're just treating it like I just sell stuff on the internet, almost like a side hustle, they're immediately putting a ceiling on what it can achieve purely in that mindset, let alone the fact that people don't connect with stuff. They connect with brands.
Speaker 1:Yeah, I think and I think that's, you know, one of the things that a lot of Amazon sellers have been around for a while now are kind of struggling to make that transition of they just, you know, think about themselves selling a product as opposed to having a cohesive brand. That's there really to speak to an audience.
Speaker 2:Yeah, I think a lot of people do so. It depends how you define brand. So here's how to find brand. I define brand as our brand, as being a group of products that solves problems for particular group of people. So if you are selling only gardening products, then you have a brand. It may not be a particularly good brand, it may not be a particularly cohesive brand, but you've got a brand. What you now need to work on is your branding, which is how you make people feel, and you do that through the way you connected them through, for instance, your marketing. But if you're selling a gardening product and a security product and a car product and a cycling product, then you don't have a brand. You have a mishmash of stuff, and that's a really difficult spot to be, in my opinion.
Speaker 1:Yeah, because you have so many audiences to try to speak to that it's very challenging to resonate.
Speaker 2:Plus, yeah, I mean also, I don't know, If you're just selling a mishmash of stuff that you're not even particularly passionate about, how do you have to get up and go in the morning to go and crush it in your business? I would argue that it's difficult to muster that up. But if you're selling a collection of products around a niche that you're really passionate about, I would say it's way easier to get fired up and it's also easier to stick it out through the tough times and the last 24 months have been a pretty tough time for a lot of entrepreneurs. So I really encourage people to build brands around things that they're passionate about.
Speaker 1:Okay Well and this might seem a little bit of a side tangent and I could bring us back if it gets us a little off track, but it's just been kind of interest me. So you talked a little bit about one of the brands that you're working on as a baby brand and you said you've been working on this brand for a couple of years, wanting to make sure that the product is really right and have some significant investment in that product. I think one of the things that any brand, in order to be healthy, has to be continually launching new products and really continuing to cultivate that audience. So I think if I was in your shoes, I'd be kind of concerned about okay, this is a lot of effort to put into it and a lot of money. How do you think about kind of validating those products and maybe even an entire brand, when you're looking at what's next, either for your brand or just your company as a whole, of maybe it's time to start a new brand?
Speaker 2:Yeah, wow, okay, a few things to unpack.
Speaker 1:Maybe we'll just yeah, why don't we do this? Well, maybe slim it down a little bit. It's just a product. So let's say we've got a brand we want to expand. What does your process look like for how you think about what product to expand into and then how you validate that before you invest a ton of time and money into that product?
Speaker 2:So if I've bought a brand and I want to, I'm thinking of launching a product. First of all, I just have to know that it makes sense that my existing customers also want that product. So let's I mentioned boxing hand wraps before. If you're selling boxing hand wraps, the other obvious product to launch there is boxing gloves, right. And then another obvious product to launch there would be focus pads and then punch bags and mouth guards, and you get the idea. So, first of all, it has to make sense. Second of all, I would simply ask my customers what else they want. If I'm building my brand correctly and I have their email address, or I have them on social media or in a Facebook group or whatever it might be, I can ask them either fairly informally ping them all on email or set up a survey, for instance, to just validate that my assumption is correct and they do really want this thing.
Speaker 1:Just out of curiosity, because what does that look like for you? Because I think you know some people may have tried this before and gotten stuck with. So I asked them if they wanted a punching bag and everybody, everybody said yes. So then I launched a punchy bag and we sold like one of them. So what does your process look like to make sure that the data that you're getting out of that kind of well does a good job to inform what you're hoping for as the outcome of the problem, yeah.
Speaker 2:So you want to then make sure that you are going to stand out in the marketplace with a unique value proposition or unique selling proposition. So that's all about making sure that your design is distinctive, as good as, if not better than, the competition, that your product performs as good as, if not better than, the competition, and that you're going to be able to compete on price. You're potentially going to want to have something quite unique as well about your product that your competitors don't have, or at least, if not your product, then your brand has to be positioned in that unique way. Then it's all about understanding whether or not you can compete on that product. So if we're talking about Amazon for a moment here, you know I encourage people to think of Amazon as our sales channel, and you ought to be selling on other sales channels too. But if we're talking about Amazon for a minute here, then you want to do the work to understand how much money it's going to take to launch into that niche. So use the tools like Helium 10 and there are others available as well to understand what is the monthly revenue associated with that product and therefore more or less roughly how much money you're going to need to launch into it, and a decent rule of thumb, I think, is that you're going to need to 100 to 125% at least of the median monthly revenue of the top 10 to 15 products on that main keyword to launch into that niche. So make sure you've got the capital there.
Speaker 2:And then it's about validating the unit economics. So one of the big things I see people struggling with is cash flow, and they scratch their heads and they say why are we struggling with cash flow? Because this is profitable. And I say you're right, it is profitable, but it's not profitable enough. Because you're return on investment is too low Because in e-commerce we have such a slow cash conversion cycle.
Speaker 2:By the time we paid, our manufacturer shipped our products from wherever we're making them to the market we're selling them in, stored them in fulfillment centers, they've trickled up the shelves, and then Amazon have, like, held back a bunch of our money. We now need to place a deposit for another order, but we've got a bunch of money tied up in venturi sitting on the shelves and we can't afford it because our return on investment is less than 100%. So when people are validating their products, I always, always encourage them to look at what is the contribution margin relative to your landed cogs and that's going to give you your net return on investment, and you want that to be at least 100%. You could take it as low as 70%, provided you're prepared to keep pumping some money in every hour and again, but really you want that to be a good chunk over 100%. So you've got free cash coming out so you can afford to keep ordering.
Speaker 1:So I love that kind of formula. For those of us that might be a little bit mathematically challenged, can you walk me through kind of an example of what that could look like?
Speaker 2:Yeah, sure. So take your. We'll keep this super simple. You're selling your product for $100 and all of your costs, you know landed costs, shipping, storage, affiliate to the customer everything is 50 bucks. So then 100 minus 50, your profit's 50. Take your profit, divide that by your landed cogs. That gives you your ROI. You want your ROI and the reason we divide it by your landed cogs is because we want to divide it by your initial investment. We want to understand how much. We want to understand the ratio of profit to your initial investment, to understand if you're going to have enough money as you're making this profit. Are you going to have enough money to keep funding more of that initial investment? And we want that to be more than 100%. If it's bang on 100%, that basically means we can more or less afford to keep repeating what we're doing over and over again, but we want it to be more than 100% so that we have extra money to grow, either to place larger orders in the same product or to order new products.
Speaker 1:Okay, and so for brands that find themselves where you know that ratio is, you know, under kind of that one to one, what recommendations you have, or maybe just in kind of a cash crunch, what recommendations or advice would you have for them?
Speaker 2:There's this relatively several options, and it always surprises me when I find people in this situation and I say so, what's your payment terms? And they say, well, I pay my supplier 30% deposit and 70% what is ready, I say, and how long you've been working with them Like four years. I'm like, oh my God, you want to be after just a few orders, working to come up with some payment terms that work with your manufacturer and explain to them. Listen, you help me grow and I can help you grow. So I encourage people to pay like 25% deposit, 75% on when the goods are ready for like the first couple orders, and then move towards the situation where you're paying less in the deposit, a proportion when it's ready and a proportion 30 or 60 days later, so that you're actually then selling inventory before you've even finished paying, for that is immediately going to improve your cash flow position. Not to mention, you should be negotiating down the actual per unit price as you're paying larger and larger orders. By the way, you can also get payment terms with your freight forwarders. I do this as well. I actually have payment terms for freight forwarders. A lot of people don't realize that they're just paying their freight forwarders when the stuff arrives, no, negotiate a term.
Speaker 2:That's thing number one. Thing number two is get loans. So you can, you know, if you're, if you can get a loan with an interest rate that's relatively low compared to the profit you're going to make, then it's an absolute no brainer. If you know that you're going to sell this stuff and it's going well to take a loan.
Speaker 2:People are often very scared of loans, perhaps because of you know so and so got a loan to buy a Rolex and now he's credit ratings, you know, plummeted and he's in a complete pickle. Well, yeah, that's the dumbass reason to take out a loan. But if you're going to take out a loan to fuel something that is a flywheel that is already working and it just needs a little bit more oomph to get it going, Absolutely, that's a great idea. So you know, those are just two examples of ways to help with a cash flow situation. A few other thoughts there Pay your Amazon, pay per click on a credit card that immediately is going to buy you like an extra 30 days, which is going to help significantly potentially Well, not to mention I mean any sort of I mean, depending on what your situation is cash back.
Speaker 1:So you know, there's a lot of cards out there where you can get one or 2% cash back and if you're spending, you know, 10,000 or $50,000 a month in Amazon ads, that adds up really, really fast.
Speaker 2:Or if you're rolling in the dough.
Speaker 1:You know you want to do it using an Amix card and you know, get some, get some points. That's another great way to do it.
Speaker 2:I'm just going to cash in there. Another couple thoughts there. Charge more, raise your price. Raise your price. So many people are scared to raise their price. Try it, see what happens. Be sure that you raise it. The raise that you make on your price is pertinent to your brand identity. Like, don't put yourself up to a premium price band if your brand looks like a budget brand or your quality is budget and it's not like it's not a great product, frankly. So be careful of that. Another one is lower your price. So this can be an interesting one to experiment with. So it could be that actually you lower your price, but at that price point you actually make an absolute higher profit because you hit the sweet spot where you actually sell a whole bunch more per day, that higher price point which, although your profit margin is lower, the actual absolute cash that you're getting is higher and you're selling through the inventory faster, which therefore shortens your cash conversion cycle.
Speaker 1:Yeah, I think that that one's like you said. I think a lot of people have a lot of fear around changing their price and it's always interesting to me because I feel like that's one of the last levers that ends up getting pulled for any product in order to move it in the right direction. But it can be still incredibly powerful and it always blows my mind on, you know things where I think that increasing that price is going to slid on the sales velocity and sometimes I see the exact opposite, where you know, increasing the price by $2 or $3 and all of a sudden they're making 50% more in sales than what they were making before.
Speaker 2:Absolutely. And you know, at the end of the day, if you're in a cash flow, if you're having cash flow difficulties, you're going to have to do something. So, in addition to the things that I've talked about, you know payment terms, negotiating on price, injecting capital, play around with price, because if you don't change something, then you're still going to have cash flow.
Speaker 1:Yeah, yeah, and I think you gave some great tips on and some strategies. As far as you know, negotiating terms, you know you talked about not only with your supplier but also with your freight forwarder and other ways that you can kind of free up cash in addition to price. So, as we kind of you know, wrap up here what is, you know, maybe one action item that you would have for people that are listening that you think that they should look into, if they haven't already, for their brand?
Speaker 2:So I think it's ask yourself if you, if your business, is truly represented by a true brand identity and whether or not it is. Make sure you're doing the work to understand who your customer is and then strengthen your brand to deliver your customer what they want where they want it, escape the Amazon goldfish ball in ways that are going to bring value to your customer's life. So who are they? What do they want? Where do they want it? Go and give it to them, whether that's YouTube episodes, whether that's you know recipe guides, whether that's funny content on social media, whether that's podcast episodes whatever it might be could be combination of all of those. Go and do it. Ask yourself how your own favorite brands make you feel and what is it that they're actively doing. What are they delivering to you to make you feel that way? And ask yourself how you can apply that to your brand.
Speaker 1:Okay, and is that something that you know that you cover in your book? Yeah, give them some more direction on that. Awesome, so, yeah, so the book is.
Speaker 2:The book is a roadmap of business principles apply to e commerce, from ideation all the way to exit. I've tried to make it timeless. So, rather than being very sort of tactical, you know, go build a landing page here or whatever it's timeless. I hope that people will get value out of it in 510 years time, whether they're doing six figures or eight figures. I think there's some work thing in there for everyone, from product development to branding, marketing, growth, hiring teams, planning for exits. So, yeah, it's called quit stalling and build your brand, and it's on Amazon.
Speaker 1:Awesome. I love the title. And then you know people that want to learn you know beyond the book, want to learn more about you or maybe want to connect with you. Where's a good place for them to reach?
Speaker 2:out. I'm all over social. My handle is Ben Leonard pro on on Twitter and Instagram and tick tock I'm on LinkedIn. I'm pretty active there. Drop me a message on there. I'll be happy to help. You can email me, ben at Ben Leonard pro or Ben at ecom brokers dot code at UK If you want to talk about planning your exit, whether that's now or in a couple years. I'm always happy to help people, so just drop me a line.
Speaker 1:Awesome. Well, ben, thank you so much for being on the podcast. I think there's a lot of takeaways for people as they're looking at fortifying their brand, looking for that success and building both on Amazon, and then you have some great examples for how to build off of Amazon. Thanks so much for being on the podcast.
Speaker 2:Thanks for having me.
Speaker 1:John.