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Firing The Man
THANK YOU TO OUR 25,000+ LISTENERS! We are so thankful to be one of the TOP E-Commerce Podcasts delivering high-quality authentic content to you! Serial Entrepreneur’s David Schomer and Ken Wilson share tips, advice, and insider knowledge about all things Amazon FBA, Walmart WFS, and E-Commerce. Discover how you can create multiple income streams by selling physical products online so that you can have the time and freedom to do what you love - whether that is spending more time with family or traveling the world. Ken and David have successfully created several six and seven figure online business ventures. During the journey, they have had major wins, losses, and lessons learned. This podcast will teach you about selling physical products online through platforms such as Fulfillment by Amazon, building a team, outsourcing, listing optimization, pay per click (PPC) advertising, driving traffic to your listings, and productivity tips / life hacks that will provide a path to be successful in building your online business. It’s a mix of interviews, special co-hosts and solo shows from Ken and David you’re not going to want to miss. Hit subscribe, and get ready to change your life.
Firing The Man
From Cul-de-Sac Dreamer to Business Powerhouse: Neil Twa's Entrepreneurial Journey
Ever wondered how a kid from a cul-de-sac in Oregon could grow up to become a powerhouse in the business world? Meet Neil Twa, our guest on today's episode, who proves that resilience and adaptability are crucial to entrepreneurial success. From dreaming of being a fighter pilot to holding a senior position at IBM, Neil's journey is a rollercoaster of career pivots and learning curves. He shares his transition from a stable corporate life to the unpredictable world of entrepreneurship, offering wisdom from his experiences in lead generation, Amazon FBA, and overcoming financial adversity.
We take a deep dive into the strategic mindset that propelled Neil from consultancy to thriving business leadership. Neil opens up about the mantra "sales fixes everything" and how it became his guiding principle, especially during challenging times, including financial setbacks and bankruptcy. His story of reinventing himself through Amazon's logistics showcases the importance of adapting and evolving as an entrepreneur. Neil discusses his approach to building sustainable businesses, leveraging data-driven decisions, and the strategic steps he took to carve out a niche in competitive markets.
In our conversation, the focus shifts to the power of mindset in achieving business success. Neil shares insights on the importance of execution over formal education and the value of tenacity and grit. We explore the evolution of Amazon's advertising strategies, Neil's vision for future PPC models, and how understanding market dynamics can lead to enduring brand growth. He also offers a sneak peek into the resources available through Voltage Digital Marketing, aiming to guide aspiring entrepreneurs toward creating profitable lifestyle businesses. This episode is packed with actionable advice and inspiring stories for anyone looking to thrive in the business world.
Connect with Neil Twa:
https://www.voltagedm.com/
https://www.facebook.com/neiltwa/
https://www.youtube.com/c/NeilTwavoltage
https://www.instagram.com/neiltwa/
https://www.linkedin.com/in/neiltwa/
https://www.tiktok.com/@fbabusinessbuilders
Welcome everyone to the Firing the man podcast, a show for anyone who wants to be their own boss. If you sit in a cubicle every day and know you are capable of more, then join us. This show will help you build a business and grow your passive income streams in just a few short hours per day. And now your hosts, serial entrepreneurs David Shomer and Ken Wilson.
Speaker 2:Welcome everyone to the Firing the man podcast. On today's episode, we have the pleasure of speaking with Neil Twop. For over 17 years, neil has been constructing businesses, both online and offline, after departing his senior IBM role Since 2012, he's launched five personal brands, generated tens of millions in revenue as eight-figure sellers and has assisted in the growth of a thousand plus other businesses through consulting, coaching and mentoring, alongside his partner Reed and their Voltage team. We're really excited to get into the podcast today. Welcome to the show, neil hey great to have you.
Speaker 3:It's good to be here with a bunch of other bros from Moe, because I don't ever get to have that kind of time, so it's exciting to be around you guys. I appreciate you inviting me in.
Speaker 2:Absolutely. So to get things started, can you share with us a little bit about your background and your path to founding the Voltage team?
Speaker 3:Well, first up the noises you hear, either with kids or chickens. Those are all legit. That's not phones or noises going off. I'm trying to shut it off but the chickens don't stop. We live on 50 acres in the country. I have four daughters and we have kids and Kubotas and trackers and everything out here that play around with and they just do what they want to do. But that's been a journey to get to this point.
Speaker 3:It didn't start there with a cul-de-sac kid and grew up in a concrete jungle, but I did it in the hills of Oregon, the mountains of Oregon actually, and as I grew up there and fell in love with that place, I've always loved getting in the mountains and being outdoor. It was one badge off, the Eagle Scout. I kind of had developed a very deep fear of deep water and I just couldn't overcome that last badge to become an Eagle Scout, which sucks because I was. So that is OK. Long story short, you know grew into the business through just fun and time playing Doom with machines where we would go to my friend's dad's government office, where they actually had a network, and then we would dip switch our way so we could play a Doom LAN party and I really hooked on that crowd back in the day. You remember doing right, like I'm going to age myself. I need like the way back machine on my, on my shirt here, but you know, for an interest in that and you know, thought about doing things.
Speaker 3:But ultimately I wanted to become a fighter pilot. Like I was going to go into the air force my dad's Navy, uh and I just wanted to fly. I wanted to go fast, so I really didn't plan anything outside of high school, um, I was just going to go straight in. So when I went into apply, uh, in my senior year cause that's the path I was headed on the way out they literally took a couple of looks at me and gave me the evaluation test and said, nope, you can't fit in the fighter pilot cockpit, this isn't going to be for you. You can go fly C-130s, you can do all that other stuff, but you can't do this. I'm like, ah crap.
Speaker 3:So in the last year of my senior year I then backpedaled into applications for college, even though I didn't want to go there. As it turns out, I've been playing music since the fourth grade. So I got a relatively full music scholarship in trumpet and classical jazz and went to college, failed out three times and got saved by the internet because I didn't want to be in music. Business was different in that way because it was transitioning as computers and the internet were starting to come online Windows 3.1, all this stuff was just moving so fast and they were moving it into the universities and giving it to the professors. It was just this huge transformational time and as the internet grew I'm like well, I want to do some of that. Like, I realized that there's a whole huge opportunity. But academia was way behind. There was nothing they could teach me there.
Speaker 3:So I had to jump in the corporate world, which I did, and started teaching myself programming on the fly. It's the fly, it's the phrase you know who you know that gets you there and what you know that keeps you there. It's a common theme in my life to just push through and get in and be like, yep, I can figure that out, and then stay up till two o'clock in the morning and figure it out. So that's how I got in to a programming gig I actually figured out. I was pretty good at it, but then didn't really want to stay behind the computer for very long.
Speaker 3:Had an opportunity for Sprint PCS when it went to market and we got to see that thing grow from 5,000 combined employees within their infrastructure to 80,000 employees in five years. So in the mobile growth system watching that inside, it was super hyper growth. We used to joke that there was somewhere in that enterprise we could pull a plug in the wall and the whole thing would shut down. It was just duct tape bailing wire and throwing money and people and phones into just every crook and hole they could do. So we got organized and you know troubles with business and opportunities came up as IBM came in to help spread, fix some of those hyper growth problems.
Speaker 3:Got to be really good friends with the IBM team Again, who you know that gets you in and what you know that keeps you there. So as I made friends with those people, they said hey, by the way, you know we've been with you for a year, you're doing really well, you've led this team, you're the first knowledge management, implementation and enterprise ever you got. You know should come to IBM and do that for us. And they flew me out in 15 no degree, no experience with that, no Yale or Harvard degree, and suddenly I'm knobbing, and with PhDs and double docs and these guys and I'm like, oh, I feel really out of place. Um, but I, I managed to figure it out for four, almost five years and then I fired the man.
Speaker 3:What happened was in 2017, it kind of came to a normalized crossroads. I got into that track because that's where money was being spent, that's where everything was growing. As I mentioned, academia was not there, because they're typically two to four years behind everything. Now that I think they're like two to four minutes behind the entire world, they're just like it's almost irrelevant in my mind. We can talk about that later, but as you continue forward, you know the business was building the growth and opportunity we're going, and IBM was also looking at how to change and consolidate major changes into 2007. So much was changing and they kind of saw some forecasted economic problems coming in 2008, 9 and 10, as you might know, and so they were like what do we do?
Speaker 3:And so let's outsource the entire division to Argentina. Like, well, I don't want to go to Argentina. Well, if you don't, then you get this little cool thing called an early retirement package. I'm like, oh great, so I took it. Then you get this little cool thing called an early retirement package. I'm like, oh great, so I took it and there's a such a thing as burning bridges and there's burning the boats Very different right? I don't know if you've ever heard of this before. So I didn't burn the bridges when I left. I left as good as I could. With the walkout.
Speaker 3:I got the news in February. We got married in March. So a new marriage. And then I'm out of a job in June. So it's like, hey, you know, we're off to life now. This'll be fun. Um, let's try to balance. New job, new business, new wife. See how that works out. We're still in my short story. We're still married, by the way, like many years. Um, so long story short.
Speaker 3:You know, I got through that process and, uh, decided it was time to burn the boats. So there was no going back. Like there was no. Maybe I want to do this, maybe I don't. Maybe this business will work, maybe it won't. There was just that is the time, make or break it back against the wall, never going to stop until I figure it out. So I burned all the boats.
Speaker 3:Turns out, the bridges that were still there helped me in my first and second year as I made IBM a client of my business.
Speaker 3:At that time I went back to fix the projects that the other people had screwed up when they brought it back on shore because the offshore teams had actually foobarred everything up. So they hired me back at what was about a $82 an hour salary at IBM with all the benefits and nonsense. And I got hired back at $250 an hour as a consultant. So I said you'll let me back, here's my fee. And they were like come on in, when can you get here? So I was like great. So the problem was I was still trading time for money, just in a better construct. So I didn't realize until years. As I went through a process in years and became more business oriented and got out of the, you know the Kiyosaki quadrant, I got out of the idea of an entrepreneur and business builder and got into the idea where I'm self-employed and now I have to start thinking as a self-employed business person and that started to really change the way I wanted to grow the business.
Speaker 3:Is this boring? Should I stop? Are we like-?
Speaker 4:No, no keep going.
Speaker 3:This is great. I realize I'm rambling. I better stop for a second and make sure this isn't what you were looking for. But long story short, I keep saying that, but we'll get to it Got through the process and realized that I was going to fail in about year four and five.
Speaker 3:And what I was going to fail in about year four and five and what I was failing at was not the business of consulting, because I was charging good. I'd actually got a couple of other consultants and so I was billing, understaffing and consulting hours with them, and so I was splitting my time. But I was also not taking enough time to do that and I was actually jeopardizing other things by trying too many things and not staying focused, which is kind of a crux of new entrepreneurial mindsets. Right, I just want to try all these things and hope one of them works instead of just trying one thing until it works right. And so I learned that the hard way. And before I went out of business, I hired a mentor, and it turns out, you know, he was very good at sales. Sales fixes everything, was the mantra he burned into my mind. Sales fixes everything. You just have to be able to deliver what you sell. So do it with ethics and integrity or the whole ship is going to burn. So don't just sell to sell, but sales fixes everything.
Speaker 3:So when I finally got that, I realized, you know, my role was no longer the consultant role, it was the role of business, and development was the role of leadership. And I had to transition backwards into something that was relatively new, because doing that in the corporate world was very different than doing it on your own. In the corporate world, you're supported by systems and processes and existence and HR and all this stuff and finance and accounting and payroll, and then all of a sudden, you're responsible for all of it and I can feel at times very overwhelming if you don't get help doing that process figuring out who to trust, where your experts are and I expanded that through my mentorship and then ended up with 10 consultants that were working under me, freeing up my time to do other things. My project team was on private and public sector stuff. We'd help deliver the census for the 2020 census project as a major consulting support role and subcontractor for IBM, which is cool and in that process I started to do more online marketing to business development and create lead generation opportunities for the company.
Speaker 3:What I realized was I was actually really good at it. I was good enough at it that I started to apply the same media buying tactics for other businesses. So I became a lead gen agency as a one man operation, but I was doing it through a cost per install, cost per acquisition, mobile phone applications and Legion applications for specifically mobile phone, and we were doing it on spreadsheets because there were no UI, ux interfaces, there was no Facebook mobile, there was no Google, there was none of the stuff everybody enjoys today. There was literally created in a spreadsheet, throw it up, give it a $500 budget and see if it hits, and then wait for two days to find out if anything happened Right. So that's how I figured it out.
Speaker 3:But as I got better and better and I went through 300 failed campaigns, of which the 301st campaign popped off and what I mean popped off is I started making $1,000 a day in profit. I was hooked Right and I was like well, dude, I don't need the rest of the consulting for it anymore. I can just step back here and run mobile applications and lead gen for companies on an affiliate and CPA basis. I don't need to be out in the world consulting or managing people anymore, and so I really turned that up.
Speaker 3:And then I got into it too deep. I got leveraged into a really cool idea for an invention where I put too much time, energy, attention and money to it and then discovered they were cooking the books a little and playing with some things that I knew were SEC issues with investor funds. So I immediately went to a lawyer and got indemnified, and part of the process was to go bankrupt. So I had to bankrupt the business and everything to indemnify myself from the end. I didn't do that. I was a part of a business that was going to hit me too. Even then I didn't do it and through legal methods and mail, disclosure and discovery, it was of course, proven that I hadn't done anything, didn't know anything about it, and of course I was exonerated from that.
Speaker 3:But the long story short was well, I'm back to reinventing myself again. Like now, what? So if everybody thinks like firing the man in their world is just like, well, I started this one thing and 17 years later it's all perfectly good and fine, like no man, I was pivoting like a speedboat through the water. It was like we're over here, we're over here, right, and so I had that expertise. When I went back to it, like I got refocused on what I was doing good before that whole sidetracked nonsense and in the process of realizing that I was still trading time for money through affiliate relations in Legion, I said I should own the offer Like duh. I should own the other end if I can own the front end.
Speaker 3:So then I looked at physical products, I looked at the business of products and flipping and arbitrage and private label and all of that. So I looked at the business of products and flipping and arbitrage and private label and all of that, and in that process I discovered Amazon had just purchased FBA Logistics Company, which is a separate logistics company that they rebranded to FBA, and it's now the sixth largest logistics company in the world. It's a freaking miracle. The thing even works right. So when they got that off the ground, we're starting to say come into our platform. We have FBM fulfilled by Merchant Options. I'm like, well, maybe I could give this a try. So trying to own both sides of the offer.
Speaker 3:Now I started to flip products to see if it would work, and that was in 2011, 2012. And it worked, by my surprise, like holy cow, this actually works. So what I was doing at that point was just scraping and arbitraging different product types that I found on the Internet that were on other e-commerce sites, and going to Amazon and saying, well, was the price lower or different? And then I would just order it from their site or find a coupon to order 100 units or 10 hundred units or a thousand years or whatever I can get, and then send it over to Amazon and ship it to FBM. And it actually worked. And it worked a couple of times so well that I got contacted by the company departments of the main marketing. One VP of this marketing company like stop ordering our stuff off our website, dude. I was like, give me a wholesale deal. And they wouldn't do it. So I stopped selling their product and, of course, their listings went down long term. So I got into the private label side when I realized that this could really work.
Speaker 3:So by 2012, 13 and 14, I got heavily leveraged into the private label side, which was the right thing to do, and because of that we hit our first seven figure business by 2014 on Amazon. And then you know, it was like a dime bag of crack with like we had to have more and so it was just like give us more. And so we were launching products and moving private label and comes to find out the system, the engine, the filing system. Amazon's big thing was actually a component of a large language learning system not a model yet, because that's coming soon that we had developed part of it at IBM when I was at the Watson Labs and our monk working on the super crew to create computer machine and working with all the double docs up there doing machine language learning, human interface and machine language learning which we were doing to predictively determine the calls and why somebody would even call, we had a 40 percent accuracy rate. That was 20 years ago.
Speaker 3:So when I people say I now I'm like you don't even know what we're talking about. Like this AI now is nothing compared to what's coming. This is just to get you like to accept what they're about to show you. But it's not even there yet, right. So it's all under the hood and you know it just was really easy for me to rank products because I understood what the engine wanted. So I may or may not have allegedly had some accounts under my control to prove this process where I could see image graphics, listing copy, keyword, keyword, search terms and everything and how it would react to the engine, when it would react.
Speaker 3:What to expect from the engine, because we programmed these in the past, so it was lurking, learning and adapting to certain responses and we call it priming the engine to go through and get it to respond properly.
Speaker 3:And then it became a launch strategy that literally we could rank any product inside the system in seven days. So we had a continual hyper growth problem, which was when the products would launch. You know we need lots of capital to get these products to move to the next level because we can easily outrank anybody, and so we went extremely fast through the business We've generated in our businesses directly multiple eight figures. Tens of millions client businesses combined with ours have been well over a hundred million in sales since 2012. And we're not stopping Now we're in acquisitions, so just keep moving that forward moved into business, have consulting and relationships with people from growth, startup to exit and are now in acquisition mode. It's got five businesses on the line that we're looking to purchase now and about 25 million in capital to deploy and the purchasing of those businesses within Voltage. So we've moved through all the quadrants and now I'm moving very close into the investment stage which is going to change a lot of things in the coming years.
Speaker 4:That's awesome. That's probably the most in-depth intro that we've had, and so I really appreciate it. No, no, no. I think it explains your wealth of experience and, like you mentioned, you're pivoting like a speedboat, you know, and so it was. It was awesome. So can you share now with the audience? You had mentioned that you went, you went to college, but, but you know it was in and out, in and out. Can you explain to the audience or share a little bit about your insight on on how you've created successful businesses without a college degree, because there's this fallacy of thinking that, hey, I've got to. You know there's a certain path that everybody has to follow. So can you share your experience on how you created a successful business without any formal training or college education or college degree?
Speaker 3:So the thing I've come to learn and thank you for that very good question and those of you who are still listening the thing I've come to learn is that in education, execution is the key to all education. If you're just going to sit and learn and consume but never execute, you will never gain the knowledge necessary to do anything. Everybody wants to jump straight to the wisdom, just like the 19 year old blue check life coaches that tell everybody what to do with their life because they're driving Lambos. But the real truth is execution begets knowledge and I had discovered that earlier. My dad spent 30 years of the same business. He was a very good executor. He didn't even have a high school degree, but he taught us the value of integrity of work and putting in a hard effort and just continuing to persevere and try, and so just by sheer being in his presence through my life. While he couldn't teach me about business and finances and the things of the world business, what he taught me about was hard work, effort and tenacity and perseverance and to not build walls of you know in my mind of bricks, of all the challenges I have until I build walls and things I can't do. So he was a very good encourager with that. The other way I learned is that literally if I saw someone doing it and I saw who they were and how they were doing it, I could do it myself. I just never said I couldn't, so I would just look, gain, glean, ask questions. You know, sometimes I might, in small amounts, if I could buy my way into their time or just try to give them something in return, to get information from them, not to pick their brain, as the saying is today Pick your brain, pick your credit card, pick your payment is to go through and learn.
Speaker 3:So I had an uncle who was actually really good in business, as it turns out. So I kind of had my rich dad to a degree, because he had come from a different mind of entrepreneurs. His family was entrepreneurial oriented, he was building boats in San Diego. He had a very different way of speaking and thinking and talking about business and the relationships, and so I heard a whole different kind of conversation from him and it was very intriguing. So I just listened to him, I asked him questions, he gave me some of his time and imparted some knowledge and difference and expedited my thinking beyond just the idea that a W-2 or working you know where my dad was in life was something that I could do.
Speaker 3:By the time I was 21, I was making as much as my 57-year-old father. So when I saw that possibilities of that, it was kind of like every person I saw that was above me at a different station was something I could achieve in time, Right, If I would just put in the perseverance, if I put in the tenacity, if I put the time. It didn't have to be the smartest person, I just had to be the one that executed Okay. And that was really what it got down to. And I have no fear of failure in that execution, because I failed at so many things in life. Until I die there's not a lot of other things I can fail at. I mean, I crashed and burned a marriage from my arrogant pride. I burned a business to the ground for being an arrogant prick too, who was only focused on profit not purpose. And I've done many other things in my past that built me to a different mindset of purpose over profit, and with that I was willing to then help others and by proxy they were willing to help me when I put myself in a position of putting out more and helping more people. I've gained so much more back. So, as I refocused and reframed that there's enough education in the world, it's the execution and implementation that is lacking and that's really what I got down to.
Speaker 3:So not having a college degree was really not a consideration, Even though I tried to go back.
Speaker 3:I didn't mention that I went back in the IBM days because they were going to pay for it and I was 30 hours shy of a business management degree with a sub focus in computer science. I'm like why not? And I spent the first semester arguing with the professor because I was running a project with 400 people on it and tens of millions of dollars, and he wanted me to write the textbook answers to the paper. And I said that is not how it's working for me. So I basically lied just to get the grade. And he told me in so many words if you don't write the paper the way I told you, I'm going to fail you. And I said, well, you can't fail me, I quit. So that's just going to how it's been for my life. And so I never finished the degree because no longer did the mechanism of the higher education system match the experience and level of growth I was having around the people and that were around me, and just gleaning that information from everybody who would give it to me.
Speaker 2:I really like that answer and I think that's a really important thing for our listeners. You know there's oftentimes not a major in college to go into e-commerce. There's people from all different types of backgrounds and the emphasis on execution is huge and I really like that perspective.
Speaker 3:So, if I wanted to go be in a business marketing and development track through education right now by the time you get into 2025, I will have out-advanced you just by executing imperfectly actions of current process marketing and testing that you are going to wait to implement a year from now, after you've been trained on it, and I will already have been implementing it all along through the next year.
Speaker 2:Yeah, absolutely, yeah, absolutely. I think that's that's really good perspective. So let's turn the corner and talk a little bit about Amazon and specifically how do you know what products to sell profitably Emphasis added when there's over 1 billion products sold on Amazon?
Speaker 3:Testing a lot of products has been a great way for us to define a methodology we call our green light process Trademark methodology that focuses on the profit net profit of the product first and goes through and calculates all available and known expenses that are tied to a single unit of that product being sold and then determining through manufacturing and processes, where we can change what we call the green, red and yellow, the green light process. If it is yellow, can I change retail and competition price point, or if it's the manufacturer, and I know that beyond 100, 1000,000 units, can I change the cost of goods for that product and grow with the brand and increase the profitability as I bring retail up or cost of goods down. And so really it's just running it by the numbers as they pencil in in the green light process and become green and I can validate the manufacturing. And I finally looked at competition analysis. Of course everybody talks about saturation, but that's just a known so we don't even care, it's shouldn't be saturated in the front. But we know all products become saturated in time but brands do not become saturated and it's very important you understand that. Then products have a life cycle. They serve a purpose. Okay, they're not going to run indefinitely, but brands do. That's why there's 15 coffee brands and 20 burger joints. Brands can run indifferently. So if you think about products from an analytical perspective and from a data-driven perspective, this one's not going to be received probably very well on here in what I'm about to say.
Speaker 3:But I actually don't care about the product. Yeah, I care about the data. Why? Because I'm selling information in a direct response way to customers on Amazon who are buying products from Amazon. Who's delivering it to them? So my role is not the product or the delivery, it is the sales fixes, everything. It is the defining data points Okay, and I'll give you a couple of those in just a second of what the product can do and what competition it should have to know that in time, there is plenty of market share in those five to ten very focused brand competitors on Amazon that I'm going to compete directly head-to-head against, and then, in time, the data shows that I can beat them. Okay, I'm not going to beat them right away. I may not even beat them this year, but in years two and three. That's when I'm going to really be able to take over their market share. Okay. So if, looking at it at a two and three year process is very different than looking at it as a two to three month process, which is what I hear so many Amazon sellers and the opium gurus and YouTube people all talking about. That is not realistic anymore. Right, that can happen in a short time, but in a longevity of the business model it doesn't get you to an exitable state. It may cause the business to crash long before you get there.
Speaker 3:We look at products to have a minimum of $12 in net profit per unit minimum and that's net profit, okay, not gross Gross margin doesn't necessarily matter as long as the pencil's into net profit. Typically, I'm looking for $24 to $48, which means I'm looking at price point retails at $50 to $200 plus. Don't sell anything less than $50 on Amazon. Why I elevate brands. I get enough profit to pay ourselves, our operators and to regrow the business from capital profits, which means we're going to deploy for for us all, capital back to the business in year one. If you're not able or willing to do that, we're not competing at the same level, okay. So I'm going to deploy that because I'm going to acquire that market. Here's why In my time in market, launching so many products and watching some of them rip up to eight figures and other ones not go very far, we have learned a very simple truth Amazon does not reward you with large market share in the first year because there's entrenched competition and historical data.
Speaker 3:Okay, looking at a 12-month year-to-date in reverse, they're going to judge your products on that behavior of yours versus the others. They're going to look at social commerce and other factors and they're going to see where you are and they're not going to necessarily bury you, but they're not going to let you take that market share. Yet You're not proven and you don't have their data and you don't have their inventory level stocked in at Amazon or AWD or anywhere else. So you're not checked in with the inventory so they know you can't sell at the same capacity of those other sellers. So what Amazon does in the first year, basically what ends up happening, is 5% of all of Amazon's revenues for products launched in 2024 is all that that's going to make up.
Speaker 3:Now what happens is the next 12 months as those products mature, and I'm making an assumption for those paying attention that you'll get positive reviews. The product is profitably moving forward and it's worth keeping for the next 12 months. Those are my assumptions. When that occurs, those products launched this year will now take up 20% of all of Amazon revenue next year. Okay, by year three that jumps to 40%. Okay.
Speaker 3:So when I'm looking at a product at 12, 24 and 36 months, I'm going to evaluate the first 100 units to the first 1,000 units I'm going to look and saying can I move that 1 units faster and how fast can I turn it over in the next 12 months? And that projects forward what 24 and 36 months are going to look like for that product. So if I go out and take as much market share as I can, acquire as many customers as I can and bolster that product in my portfolio, it is going to naturally reward itself in this algorithmic engine in years two and three. That make sense. Yeah. So I'm playing a two or three year game, which means you have to play the same game as me or we're simply not going to compete the same way. If you have a thousand units and I have 10,000, we're not going to compete the same right. You can't build a seven figure business on a thousand units in Amazon. I don't know who's telling people that, but it seems to be a big deal to sell the $7,000 courses. So the end result is we're not competing at the same level.
Speaker 3:Those products typically will have 50 to 100,000 in BSR because we target them right into an area where we can take early market share but know that the next competitors are going to be in the 10 to 20 and down below 10,000 in BSR. We're going to move into those positions. And, by the way, it's okay to be number two on Amazon because you don't take all the arrows. So I don't really care about bestseller badges and this kind of nonsense. Those are all like revenue and vanity metrics of how many units you move every day. What I care is how many are moving profitably.
Speaker 3:And when I discover one of those products that moves forward, I'm going to go eat 10 more of them, okay, and when I have 10 more of them, I spread out the amount of reach that the system will actually give me. I will expand the number of SKUs which, by the way I mentioned earlier, most sellers do not have more than five to seven SKUs in the marketplace. In their private labels selling they may have 15, but only five to seven of them are selling Pro tip. Get rid of the other ones. Even if your green account seller health is green, it is driving down your seller health account.
Speaker 3:Okay, the ones that are in there performing the best, if the ones below them are not selling and you remove them, watch what happens in 30 to 45 days. All the existing performing links and ASINs that are doing well are all going to get a boost because your entire seller health count is going to get optimized. Okay, so people are dragging low performing listings along, hoping they're going to get optimized. Okay, so people are dragging low-performing listings along, hoping they're going to make something really good, marrying those products instead of letting them be ditched, letting them sell out and ditching them. I'm letting a lot on you guys, sorry, it's great Keep them coming.
Speaker 3:Long story short 50 to 100,000 BSR, 5 to 10 products or more. Ours is a five by five game plan. In 12 months, launch five products, each product that goes to market. We're going to market test first. If the market test and data prove well, we'll put a thousand units in it, still not marrying the product. 1,000 units of the same product, same packaging, will then determine whether or not I should innovate and move that product on how fast what we call unit ROI turnover percentage is going to occur, or a velocity of sales is another way of saying that for the amount of 1000 units I can turnover in a 12 month period.
Speaker 3:Okay, why am I wanting to do that? There's a metric that means more to the whole system of Amazon than any other metric and nobody ever talks about it. Amazon's prime members okay, you and me and my wife with our four homeschool children, who gets four boxes a freaking day on Amazon, is spending more than $1,000 on Prime every year. So what is my CLTV and target for an FBA Prime member? When I'm selling a brand, $1,000 or more from that customer buying one product, multiple products and additional products from me in a 12-month period, they need to spend $1,000 with me. That's my target. So they got to buy one $1,000 product. Let's do the math right. They got to buy 10 $100 products or they got to buy some other combination or get on a subscribe and save and purchase that amount from that product. Now I can say that if I get 10,000 customers in a year across 10 products 20 products that equal up to 1,000, do we see the numbers? That's how it grows exponentially. Amazon loves it when you have more products selling in the marketplace. So how can you fix that if you are not there and want to grow, put more products in the marketplace. To grow, put more products in the marketplace. Only make sure that they're selling faster and faster.
Speaker 3:And growth and organic growth and PPC growth. And really the second favorite metric we follow, which is TA costs or tacos. Don't care about a cost, okay, that's customer acquisition. I mentioned that a minute ago. What I care about is the total advertising cost of sales, okay, and that matters towards my CLTV, which is my 12 month 1000. So when somebody said like, well, I have 89% ACOS, I don't care, is your tacos between 8 to 15% Great, throttle it up. Well, but I heard this guy say I can only have 30% ACOS, then you're going to lose, right? Because others are going to be willing to acquire those customers away from you and you do not have a business unless you acquire customers organically or through PPC. So my strategy for PPC is much more aggressive than most Amazon sellers want to consider or don't realize the impact of it positively for that organic growth in year two and year three, right. So that's why my businesses end up with 70% organic growth and 30% PPC.
Speaker 3:When I meet a lot of Amazon sellers who have that complete inverse, 70% of their business is PPC and only 30% is organic. And they know if the PPC shuts down or the cost goes up and their ACoS changes their host, that happens all the time, doesn't it? I see it all the time, I hear it all the time. People got questions. They're completely inverted. One of the ways to fix that is the third metric. Okay, we talked about the first metric and et cetera. The third metric we pay most attention to is organic PPC sales over, excuse me, organic over PPC. So that means when I launch a new product, I will not touch it for the first 21 days.
Speaker 3:I am looking for maximum optimization and priming the engine to determine where I'm getting impressions, clicks and sales from inside the engine organically. I'm even willing to wait longer to see that be proved, because Amazon has been doing something for a long time. They never published it. They don't talk about it. Just watching it over a long enough period of time has shown they will penalize your listings if you put PPC on it too soon. They will lower your score in the system and they will force you to pay for more traffic. Okay, we've seen this with Facebook. We've seen it with other algorithms, we've seen it more publicly in other marketplaces, but Amazon, very quietly, doesn't tell you this.
Speaker 3:Okay, I broke their engine a long time ago, in 2014, and hopped on a call with their VP of marketing and sales and they're like how the hell did you break this? Like, you broke our PPC engine and I was like what do you mean? He's like well, you're doing numbers that don't make any sense. Your account was drawn to our attention and I've got like three other people on this call who want to know what are you doing, not to brag, just to realize that I was pushing the system harder and I was doing things that others weren't doing and I was risking different levels of capital that others simply weren't doing at that point, so it was causing this problem to try to figure out.
Speaker 3:Now, very shortly I'm not saying that it had anything to do with me, but very shortly two and three years after that, they started hiring away a bunch of AdWords managers and by 2017, it turned PPC on Amazon into a very similar AdWords interface of keyword bidding and systems. It wasn't like that prior to the change. Right? That's what you all know now is in the system, and it's very dramatically changed in the last couple of years as well, because they're moving everything towards Cosmo. Right, and that's the fourth thing to be really paying attention to, this change is going to fundamentally change the way we see the A9 engine, which will now become Cosmo, supported by Rufus, in the coming year. They already implemented it at 10% of it in February of this year. The change was dramatic. If you haven't heard or seen anything, go check out my Substack. They had a 0.7% CTR increase on 10% and drove $4.9 billion in additional revenue. It's huge. Okay, they're already rolling it out.
Speaker 3:Yeah, so what I mean by that fourth metric is to just ensure that you are really learning and understanding how keywords are going to become irrelevant in the system and all that old training about keywords and relevant keywords is about to die. If you don't understand anything about large language models, if you don't understand anything about AI and latent semantic searches and search relevancy and the, you know what I'm going to call more conscientious to aware search engines. Think minority report okay that it's tracking you across all your watching, your lessons, learning your online stuff, the Prime and Freebie and Twitch videos you're watching, so that if you're a pregnant lady and you're watching a you know Brightzilla on Freebie you're going to get no longer an ad for some dude. You know who's trying to buy a pickup. What you're going to see is the next best pregnancy products that amazon is delivering directly to you because they know you're pregnant. So it's going to dramatically change the way people and in this engine works follow-up question, um kind of kind of back to your ppc.
Speaker 4:Um, so you don't, you don't monitor acos at all, you just push heavy. Now, um, p, ppc is all keyword based right, and so everything is moving away from that and so forward thinking. Well, how is your PPC strategy going to change?
Speaker 3:So we're still adapting that because it's really early stage, and what I'm going to expect Amazon to do at some point is start changing the way the PPC engine works. Right, we're going to start seeing differences in broad interest and target keywords because they're moving away from it. How exactly they're going to implement that, I don't know just yet. I would speculate, okay, in my little crystal ball here that they're going to move it towards display advertising. It's the same way Google has, the same way Facebook's had to pull out of targeted data. They're going to move it towards more display advertising, right? Okay, yep, which is going to change the way you look at the metrics. Instead of necessarily a cost for your metric previously defined by Amazon, you're going to get to more of a wide standardization of CPMs, right, what are my costs for CPMs, which is just a? You know, cpc is just a metric they make money on. The real one you pay attention to is CPM. Okay, and I always advise pro tip never use bids up and down on Amazon. Okay, they only made a program change ahead of the time for prime and nobody paid attention to it. So I'm sure they see people out of a billion dollars in advertising who weren't paying attention Always bid down on that right now.
Speaker 3:So I see they're going to probably change to display advertising because the analytic and the large language models are so intelligent it doesn't need you anymore to find it. So I really see them evolving into segments, kind of the way they've done with Google Ads over there. I think they're going to have to follow a bit of playbook from that and they're going to be testing some of that out here pretty soon. I can't see how they aren't. Uh, because the relevancy of cosmos is going to change dramatically and even bbc itself will probably change, because they're going to give you a hyper, hyper focused results. Okay, you're not going to see like 20 pages anymore with cosmo coming into play. You're going to see like the top seven results that have the highest intent and click through interest of your behavior pattern, uh, viewership on prime and everything targeted these products that you're most likely to buy based on your previous history, people like you and things you watched on television.
Speaker 4:Okay, A follow-up question on PPC. If you're not optimizing based on ACOS and you mentioned, the tacos range that you like to aim for is 8 to 15. How are you optimizing PPC to keep it in that 8 to 15? Are you using click-through rate? Are you using conversion? What are you using? So we're using conversion right.
Speaker 3:Click-through rate is extremely important. Higher the click-through rate is one. There's two problems with click-through rate that everybody kind of negates and as a media buyer we have to understand what these two things are. The one is too low a CTR should be relatively obvious, right? Too high of CTR? Most people think that that's a good thing. It's actually a bad thing. It's typically where the tire kickers are if you're getting too high a CTR. So typically 0.8 to like 1.1, maybe up to two, depending upon the demand of the product and which type of keywords. If it's a longer tail keyword or a broader keyword is going to be kind of a sweet spot to dial that in for each of the keywords which should back into your 18 to 15 TA costs, which means some of those keywords might be getting 80, 70, 80, 90, a hundred percent a cost. But as a seven day metric window of your total advertising cost of sales with organic it should be between 18 to eight to 15. So if that keyword is converting at 89%, that's what it's converting at. If you're making sales over a seven day period, you're probably going to just leave it alone because your total a cost is doing great. I have some of those keywords and stuff shoot above 200%. You might make a business decision not to do that, even if you're acquiring a customer. That would be your choice. I would say you know it's up to you to determine whether that metric makes sense. So we get it dialed into 18 or 15, we can actually go and then continue to crank up the budgets once we're there, because we're not going to change the CPC. We're only going to crank up the budgets once we get that dialed in and basically give the algo more budget to work with within that framework and just keep monitoring a cost, what happens, the output. The result of your question is we can see the total, a cost, actually go below eight, below eight percent. Right, because we're seeing that growth. We're seeing time and market. We're seeing more reviews coming in. We're seeing that economic engine dialing in.
Speaker 3:Which is your unit session percentage? That's the other most key factor. Which is your unit session percentage? That's the other most key factor. Right, if my unit session percentage for my market share should be within three to 4%, usually for the high end of the node in which you're competing for that, five to 10 people, or between mid two to 3% if you're somewhere in middle market, and so you're going to want to see those numbers dialed in again. Regardless of egg toss, you want to see what your tacos is doing, your TA costs in that measurement. So that will potentially come down as organic goes up when you continue to take over the market share because you have a higher USP.
Speaker 3:But keep in mind, even if you get all those numbers right, there's one thing Amazon is not going to do. It's not going to try to force you to stock out why it wants the customer to have your product as part of their demand. It's part of a capture which is the majority of what Amazon is now. So they don't want you to stock out. They want your product to be available. Even if they show it to less people, they still want it to be available because it shows more available options to their customers, which is what they want.
Speaker 3:But if you have a thousand units and I have 10,000 units and my numbers are dialing better than yours and I'm willing to risk that next level of inventory and you're not Once my inventory is above yours by at least twice. So you've got a thousand, I'm at 2000. And all those other metrics are being dialed in over here because I can have all those really dialed in and not have enough inventory, and it doesn't make any sense. It's not going to improve a whole lot, right? What it's going to do is cause me to stock out forcibly, because I did it.
Speaker 3:The system is going to throttle you back to keep you from stocking out because it wants the demand. So if we understand that we have to feed the beast, when we get that extra thousand units in and it checks in all of a sudden all those very positive metrics we had on the front end are now going to be expanded as more units will now be moving through demand. So that's really critical. So you can get all that stuff right here. But if you aren't willing to capitalize the inventory, you're going to lose. That means you've got to put two, 2,500, 5,000 units whatever the numbers project based on the fast turnover you're getting. Okay, then you're going to have to inventory up or you won't overtake market share.
Speaker 4:What is your target? Days of inventory as you, as you scale up, like, say, for year one, year two and year three, what do you target?
Speaker 3:So in the first 90 days I want to see the 100 unit test to go. All right, I want to see it go because it's in the worst conditions possible at that point, all right. It should only improve as my data improves. So, as I'm seeing it go out 30 and 60 days, if I now I'm projecting that inventory is going to move faster than 90 days, it's going to move within that 60 to 90 day window, I'm going to go ahead and order 1000 units. Okay, if it's not moving fast enough in that first 90 days, I'm going to have to optimize something, whether it's a slight tweak to the title, slight tweak to the images. You know, do some cross comparison on PickFu and this kind of thing to see if I can improve that ctr. Specifically, images first and title second. For those that are paying attention, because it's like a big f, by the way, mobile devices made up 60 of all prime date sales. That's the first ever. Okay, so you've got to optimize for mobile, which means it's title and images. Those are your two major things, okay. Beyond that, they're not really doing much except hitting the add to cart button. Okay, very different, very fast. 60, it's huge. It's amazing to watch, right. So once we look at that, they're not really doing much except hitting the add to cart button. Okay, very different, very fast, 60%, huge. It's amazing to watch, right.
Speaker 3:So once we look at that F and we go down, then I have to look at, okay, past 90 to 180 days as that's being manufactured and coming in. Of course I'm looking through the self, you know self-rerated that 1000. Can I achieve, if at all possible, that 1000 units moved in 90 days? If it takes up to 180 days, that's okay too, because I'm looking at it in terms of what is that product going to do in maybe a competitive, hard to breach kind of space in terms of entrenched competition that's in there. If it takes up to 180 days but it's profitable and meeting my profitability metrics, then I'm going to feel confident getting another 1,000 or 2,500 units in to continue pushing that forward, as it takes more time and market share to penetrate them.
Speaker 3:Now other products and brands may move a lot faster than that. Of course that's wonderful, but it's not necessarily to be expected, especially in very competitive market shares, right? Some of the most competitive ones I won't compete in are electronics supplements, right? Some of the most competitive ones I won't compete in are electronics, supplements and apparel. Those are off the table. Okay, there are a variety of reasons, but those are off the table.
Speaker 3:Everything else, pretty much, is fair game. It just means some competition and breakthrough is going to take longer, more capital and more inventory. Some is going to go a little bit shorter. So I try to balance those. You know 90 and 180 days. But I'm also going to be launching multiple variations and 100-unit tests of those additional products to find out which ones kind of rise to the cream of the crop, if you will, rises to the top. And I want to see which ones are going to get 1,000 units faster, that are turning over inventory quicker. But they're all going to have that same minimum product requirement of profitability. It's just which one hits the velocity of sales faster.
Speaker 2:Very nice, Very nice. I'll tell you what, Neil. I think that we could stay on here for another couple hours and talk nitty gritty Amazon. I'm loving this. I'm loving this conversation, I know, but this has been an outstanding episode. As we wrap things up, there are four questions that we ask every guest on our podcast. We call it the fire round. Are you ready?
Speaker 3:I'm ready, absolutely yes, no, yes.
Speaker 4:All right what is your favorite book.
Speaker 3:First favorite book is a good to great by Jim Collins. Great case study of what to go from good to great. Don't be Walgreens because they're going to go bankrupt. And they were one of the case studies in that book. All right, second one what are your hobbies? So I love to garden, love taking care of my property. Got 50 acres out here playing on the Kubota, shooting my rifle, you know just keeping busy with my kids, walking with my wife every evening, those are some of my hobbies. Tinkering with my tractors and equipment out here, those are some of my hobbies. Very cool.
Speaker 4:What is one thing that you do not miss about working for the man? One thing that I do?
Speaker 3:not miss about one thing oh dang, You're going to get me into a train wreck. Oh, someone else's corporate credit card.
Speaker 4:Okay, fair enough, all right. Last one what do you think sets apart successful e-commerce entrepreneurs from those who give up, fail or never get started?
Speaker 3:So, in simple terms, it's those that are willing to kind of follow this that, literally, your opportunity begins at the end of your excuses. Everybody has trouble. People think they need to be resourceful. Mark Cuban said if you're, you know. If you don't have the resources, be resourceful. So really, what it gets down to is tenacity, perseverance and grit, and it's usually a mindset challenge. It's not a technology, it's not even a product challenge, it's not a process challenge. It is usually always in the mindset of the person. Which is why I profile people under a disc profile and I'm looking for an ISC profile, just so we're clear. Those are operators daily, weekly, monthly. They're tenacious. They don't build walls and bricks of challenges. They realize daily, weekly, monthly problem solving in business is a normal part of any business operation.
Speaker 4:They see it as an opportunity not necessarily a challenge and really that gets down to preparing and coping in your mindset with things you need to do to de-stress, refocus and reframe, go back to work.
Speaker 2:I like it. I really really like it. All right, david, over to you to close out the show. Absolutely, I want to thank you for being a guest on the Firing man podcast.
Speaker 3:If people are interested in getting in touch with you or Voltage Digital Marketing, what would be the best way? So they can go to VoltageDMcom. You can check out a copy of my book. Notice I didn't say I'm not that arrogant anymore, so I've got my book over there. Almost Automated Income with FBA Building a Profitable Lifestyle Business. You Can Run from Anywhere, even in the Country or on a Laptop. So go check that out and you know some free training to unlock, as well as my eight figure mind map, a video presentation of myself and my partner, kevin Harrington, going over our, as seen on TV strategy talking about how we capture demand on Amazon and then grow into multiple channels beyond Amazon and then move to exit and acquisitions. So you're welcome to go check that out. And I'm on social media and yeah, it is twa and it's the three letter last name and no no-transcript.
