Using Amazon Fulfillment to Grow Your eCommerce Business with Michael Begg

Joe:Real quick before we get started, I want to tell you about theBuild Something Weeklynewsletter. It is weekly, it is free, and you will get tips, tricks, and tools delivered directly to your mailbox. I will recap the current week’s episode and all of the takeaways, I’ll give you a top story, content I wrote, and then some recommendations that I’ve been using that I think you should check out. So it is free, it is a weekly, it’s over at streamlined.fm/subscribe. Go ahead and sign up over atstreamlined.fm/subscribe.

Intro:Hey, everybody, and welcome to another episode of How I Built It, the podcast that asks, How did you build that? I am workshopping a new tagline, though, and that is “actionable tech tips for small business owners.” So let me know what you think of that. This is Episode 209. It is brought to you by our fantastic sponsors:Mindsize,Restrict Content ProandTextExpander. You’ll hear about them later in the show.

But for now, I am excited to bring in our guest. His name is Mike Begg. He’s a co-founder atAMZ Advisers. We are going to be talking about several things that I know a lot of people listening are interested in, opening up another income stream, discussing what it’s like to transition to a fully remote team. Mike is currently in Guadalajara, Mexico, and has a remote team of 30 people. So we’re going to talk about managing that. Mike, how you doing?

Mike Begg:Joe, I’m doing very well. Thank you for that great introduction. I’m excited to be here, and hopefully provide some good insights to your audience.

Joe:Oh, absolutely. My pleasure. I appreciate you being here. And I am excited. So before we get into the crux of the matter, why don’t we set the stage? I have here in your information that you went from employee to freelance to business owner to running your remote team. I feel like that is a path a lot of us take. Why don’t you tell us a little bit about your journey up to what you do now.

Mike Begg:Sure. As I mentioned before, I went to school in Philadelphia. Anyway, I graduated from there. I had to throw that in there. Graduated from there, started working in consulting. I went to Deloitte out of school. And then after that, I moved into real estate development. I had a really great job. I really enjoyed what I was doing. But I just kind of always wanted to work for myself. So I started trying to find ways to use my knowledge, my expertise to build other revenue streams, but at the same time I started getting into eCommerce. Between the two, I was doing some freelance work for real estate valuations, real estate consulting on Upwork, and then I was also building the eCommerce side. I started publishing some eBooks on Kindle, started making a little money that way, then moved into retail arbitrage, private labeling, building my own brands by importing products from China, and then eventually building the agency that I have now. We’ve been building this now for about six and a half years now. It’s been going great

Joe:That’s fantastic. I mean, you have quite a wealth of experience. First of all, you went to school in Philly. Did you grow up in or near Philly?

Mike Begg:Yeah. Somewhat close. I’m from Connecticut originally. So I think it was about two and a half-hour drive.

Joe:North or South Connecticut?

Mike Begg:It was like Southwestern. I’m close to New York.

Joe:So you’re a New York sports fan, I assume. Because Connecticut’s divided New York and Boston, right?

Mike Begg:Honestly, it is. And honestly, I’m kind of a mix of everything. I told you I went to school in Philly. My uncle also went to St. Joe’s. And when I was little, he was just buying me all Eagles stuff. So I’m actually an Eagles fan for football. But for hockey and basketball, I’m a New York fan

Joe:Got you. Got you. Cool. Go Rangers! I’m originally from New York and so I’m a New York sports fan.

Mike Begg:Awesome.

Joe:How do you feel about Doug Peterson being fired real quick?

Mike Begg:You know, I’m not surprised. It was a pretty bad season but it is what it is. He won the championship for us so can’t complain about that.

Joe:That’s true. That was the only time I’ve ever really rooted for the… as a Giant fan. I rooted for the Eagles that year because I still don’t like Tom Brady. Anyway, maybe we’ll do more sports talk in the members part of the episode. So real estate development, you said a whole lot of eCommerce things there that I couldn’t keep up with. But you mentioned something that it sounded like you said retail arbitrage. That sounded very similar to drop shipping. Is that kind of the same thing or are they different? How are they different?

Mike Begg:They’re similar for sure, but it’s a little bit different in that you’re not buying a bulk load of inventory from Asia or Mexico or wherever you’re manufacturing. Essentially what we were doing was going to every target and Walmart in the tri-state area, and just buying up everything on clearance, then turning around and selling it on Amazon. We actually ended up making about $10,000 to $12,000 doing that. And then we invested into inventory that we did buy from China and started selling that online.

Joe:That’s so interesting. So I guess at this point we should kind of make it clear thatAMZ Advisers, AMZ is Amazon, right? For all intents and purposes.

Mike Begg:That’s more or less.

Joe:If you’re a lawyer, so you can’t say that but that’s fine. But you focus on kind of doing eCommerce through marketplaces like Amazon. Is that accurate?

Mike Begg:Exactly. I mean, right now, the eCommerce space is blowing up, and there’s no bigger player than Amazon. So we saw this six, seven years ago and we just kind of went all in into the space, learned as much as we could, became experts, and pretty much everything to do with eCommerce on the platform. It’s definitely paid off.

Joe:Yeah, for sure. You saw this six or seven years ago. That’s really interesting. Because there are retailers that I really like or makers that I really like that I will go to their website, and if I have to pay for shipping, I will see if they are selling on Amazon, right?

Mike Begg:Oh, yeah.

Joe:That’s a little anecdote. But do you find that a lot of consumers do that? Because there’s got to be some benefit for smaller shops to be selling on Amazon even though Amazon takes a cut. I assume Amazon takes a cut.

Mike Begg:Yeah, they do. They take a pretty good-sized cut, actually. I mean, the way I always phrase this to our clients and the people I’m talking to about the Amazon platform is that Amazon’s the biggest brand discovery tool that there is. If you want to be found, then you need to be on the Amazon platform. I mean, you’re a perfect example of it. You go to Amazon to search to see which one has faster shipping or cheaper shipping. People just go to Amazon now instead of Google to find what the best price is on a product. As a small brand, you have to be on the platform.

Joe:And that makes perfect sense. Plus, there’s this trust factor. Maybe not trust in like Amazon big as a corporation. Though, I mean it, whatever. But like amazon.com, I trust to give my credit card information to versus…I don’t know. My parents sent me a website the other day and it was like, “Would your daughter…” They didn’t say “your daughter?” “Would Teresa like this.” It’s like a scooter thing. But the website was like shoponline.sale. I’m like, “I don’t order from this website. This is crazy.”

Mike Begg:Yeah, I mean, consumer trust is a big thing that Amazon helps a lot of brands get over because the reality is most people don’t have good websites to sell through right now. I mean, that’s just one hurdle the Amazon platform helps. I mean, convenience shipping is another huge selling point in the eyes of consumers. I mean, all that’s really important.

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And now let’s get back to it.

Joe:To bring this back to freelancers and other small business owners, a lot of people who listen to the show are small business owners. Many are web savvy perhaps, maybe even web developers. So they can probably build their own eCommerce I’m guessing using WooCommerce. That’s a generally popular platform. I mean, it’s like a quarter of eCommerce sites use WooCommerce. So if we have a small business owner who wants to get into kind of selling stuff online, maybe their own products, maybe not, because you just demonstrated that it doesn’t necessarily have to be your own products, what are some of the things that they should think about as far as research goes?

Mike Begg:As far as researching what products they want to sell or just kind of understanding how the Amazon platform works?

Joe:Let’s go with kind of how the Amazon platform works.

Mike Begg:Sure.

Joe:We had a previousepisode about drop shippingthat talked about kind of researching products. But if you have tips. You know, that was two years ago now and there was a whole pandemic here and there.

Mike Begg:I know. A lot of things have changed. The Amazon platform isn’t pretty straightforward. Obviously, the consumer customer side is a lot better built out than the actual seller side. There’s a lot of pain points on the seller’s side. There’s a lot of people that get frustrated with Amazon. Just part of the process, Amazon is built to serve their customers, not their sellers, which is its own thing. But anyway, you sign up with a professional account, it costs about $40 a month. From there, you upload your listings, you need to have UPC barcodes for your products. So you need to purchase those from GS1. Those are about I think a 10 packs like $300. So it’s not that crazy.

From there, you can list your products on the platform. Amazon will pretty much handle the entire fulfillment side of the sales if you want to. I mean, if you don’t have your own warehouse or your own fulfillment team, or you don’t want to be packaging, you know, 100 orders a day to go ship out yourself, Amazon is great for that. Using Amazon FBA, you can send all your inventory right in, they’ll distribute it across the country closest to the consumers that are going to probably purchase your product. And then as the orders come in, they’ll handle the shipping, they’ll handle the customer service and any issues on that end. So super helpful if you are a smaller business, and you don’t have the capabilities to really deal with the fulfillment and customer service aspects yourself.

If you do, I mean, that’s great. You don’t need to use FBA, you can also fulfill orders directly from your warehouse. But FBA definitely gets you a little more visibility on the platform. It definitely helps you stand out more because you get the prime badge, which is another very big selling point when consumers are shopping on the platform. That’s more or less the basics to it. I mean, there’s a lot of other specific niche things that we could talk about that I can help you sell more. But just getting set up on the platform is pretty straightforward. Following those processes, you can pretty much do it on your own.

Joe:Yeah, for sure. The kind of use cases I’m thinking through right now is maybe we have like a maker who’s creating their own stuff or we have somebody who’s maybe looking into drop shipping, or retail arbitrage, right?

Mike Begg:Yeah.

Joe:Okay, somebody who’s selling other people’s products. And it seems like if I’m making something, I can basically send it to Amazon for them to fulfill. Or I assume if I’m buying someone else’s product in bulk, I can have them send it directly to Amazon. Is that how it goes? Do I have them send it to me and then send it to Amazon?

Mike Begg:Most of the time you’re going to have it sent to yourself, or you’re going to be purchasing it yourself in person, and then you’re going to be sending it to Amazon. That’s probably about 90%. There are some people that will send it directly to Amazon for you, but it’s a little bit more difficult to find.

Joe:I see.

Mike Begg:It really doesn’t matter what size business you are, how many employees. There’s so much potential there on the platform. We have a client that was literally a one person operation to start with. She started working with us a couple of years ago. She was doing about I think $15,000 to $20,000 a month in sales. Two years later, she’s doing $350,000 a month in sales.

Joe:Wow.

Mike Begg:Now she’s actually been able to build out a team. I mean, she’s making significant revenue. She has a significant team to help her now. That’s just one example of how quickly you can grow on the platform and how much you can scale a business just through the Amazon sales channel.

Joe:Yeah, that’s great. The reason we’re talking about this is because as a freelancer, as a small business owner, you worry about when your one big client says, “We don’t need you anymore.” Or “we want to diversify our income.” So selling through Amazon is a good way. Now I suspect the listeners like me do more kind of digital products. You mentioned that you started selling books on Kindle. I want to ask you about that in the members-only show.

Mike Begg:It’s okay. Sure.

Joe:But in general, we’re talking mostly about physical products here, right?

Mike Begg:Yeah, for the most part. The Kindle side is just one piece of Amazon. It’s a royalty-based business. So you create a piece of digital content, and you’re making money forever. I mean, books I published eight years ago are still bringing me royalties every month. That’s just one way to do it. But physical product businesses are also pretty easy to build through the platform. Not that challenging to do on… It’s not a full-time job to do it on your own if you have a few products that you’re selling.

Joe:That’s fantastic. Because the fulfillment kind of is the hardest part. I don’t have room in my house to keep inventory. I’ve got two kids now. So, their toys are where my inventory would be. Now, the other part of this is that your personal path has led you to creatingAMZ Advisers, and you say you’re running a remote team of 30, right?

Mike Begg:Yes.

Joe:So let’s talk about how you built that team and then how you moved to remote. Because right now, the listeners can’t see this, of course, but I’m looking at you in an office with multiple desks but you’re by yourself. I assume because we’re recording this in the midst of a pandemic?

Mike Begg:Yes, that would be a good assumption. It’s actually kind of a funny process that we went through. I mean, it started with definitely working remote and then coming into this office. And now we’re remote again because of the pandemic. But as a business, we started growing. It was myself and two other partners in the agency to start with. We were handling a lot of things ourselves. We were able to get to about $40,000 a month in revenue with us just handling it, which was nice, because I mean, that was like 90% margin. So that was a nice little payday.

And then we realized if we wanted to actually take it beyond this and build something that has some equity value or something that could provide us an exit in the future, we really need to build a business and not just be doing this freelance work. I mean, again, if you’re relying on a lot of clients, or a couple of big clients that are really bringing in the revenue like we kind of were, there’s a lot of risk in your business model that way. Let’s just put it that way. So we realized that we had to start scaling.

We started with using virtual assistants in the Philippines. So that was one aspect of our remote work team. Obviously, there’s definitely challenges with that. Time zone being one of the big ones. As an agency, we need to respond to clients quickly, we need to provide good customer service. And dealing with time zone differences created a lot of issues around that sometimes. So we continued to grow. I actually came to Guadalajara, which is where I met my girlfriend, and why I’m still here.

As we continue to grow, we needed more people. So we started hiring client-facing people remotely in the US and content team people here in Mexico. So doing graphic design, content writing, some administrative stuff, things like that. And now we’ve actually started hiring client-facing people here in Mexico as well. So it’s just been a process of just scaling like that.

Obviously, March 2020 hits and that kind of all changes. The pandemic comes and now everyone’s working remotely. In Mexico, now we have 18 people completely remote. It’s obviously a big change. I know it affects some people differently. But we had a great office community prior to the pandemics so it was great having the people we worked with. Really enjoyed it. Now I know a lot of people are kind of missing having that interaction with everyone in person. It’s not the same talking through Slack for example, but it’s one of the challenges that most companies are facing right now.

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Joe:So you build your team and you realize that you need… Well, I should say you realized you needed to build a team. So you started with VA. Now last week’sEpisode 208, I spoke to Matthew Yahes all about hiring a virtual assistant. You realize that you needed, first of all, people closer to your time zone and perhaps people who you can work more closely with that were more familiar with your business. Which is again, another transition. Check outEpisode 208. So you have client-facing people remotely in the US and then you mentioned content people in Mexico and client-facing people in Mexico. I want to word this the right way because obviously the people in the US most likely speak English. Are you hiring English speakers in Mexico too or are the people in Mexico handling kind of a different client base for you?

Mike Begg:No, they all work with English-speaking clients. Our clients are in the US, Canada, the UK, Australia, India. So I mean, everyone is English speaking. And it’s not a problem. I mean, the reality is so many people here in Mexico grow up learning English, so many even are born in the US and grow up there and come back to work or go to high school there or go to college there. So it’s actually pretty easy. Our entire team is phenomenal with their English. So our clients don’t even notice really when you’re talking to them that they’re not even from us.

Joe:Got you. Got you. I was just kind of generally curious about that. Cool. As you mentioned, the pandemic hit March 2020, you moved remote. And you mentioned that there are some difficulties there, right? There are people who enjoy the water cooler talk and things like that, seeing their co-workers. What kind of tools and processes did you put in place to help mitigate moving an entire team remotely?

Mike Begg:It’s definitely a challenge. I mean, communication is the backbone of everything. Really, the first step was making sure that we were implementing Slack. Most of our team communications are through Slack. However, we also have weekly phone calls just so everyone’s on board, we’re up to date with everything. We do monthly newsletters to our team, where we update them on what’s going on in the business, what we’re focusing on, how we’re growing. So we try to keep the communication piece because that’s the most important to us, top of the line.

I mean, if you can’t support your team in that way if they don’t have any idea what’s going on. It’s definitely a little bit scary for an employee not really understanding what’s going on in your business. And beyond that, we’ve tried some other virtual events. We did a virtual cooking class, which is actually kind of fun. And then we had a virtual mixology class as well. So it’s kind of like a work happy hour.

Joe:Awesome.

Mike Begg:I mean, those are some of the things we’ve done. Zoom has become incredibly valuable for video conferencing and actually seeing people face to face not just for work, but for personal life as well. That’s more or less the way that we’ve helped manage our team here in Mexico. It’s different. Like I said, they were in the office environment so they knew each other personally, they were hanging out, they’re having lunch. You know, we were going out to lunch together. It’s a little bit different than our team that was in the US that was fully remote from the start. So they didn’t have that face-to-face, person-to-person interaction. The relationships are a little different. So trying to do something here in Mexico is extremely important to help build something a little bit more solid for our team there.

Joe:Yeah, for sure. We talked a little bit about your client work. It seems like most of your client-facing team was originally in the US anyway. Have you had to change your process at all for pitching or client acquisition?

Mike Begg:No. We’ve actually always done our business development remotely. We’ve only met in person I think with two or three clients over the course of six years. Everything we do is online, everything we do is remote. Video conferences have… we were doing that well before the pandemic hit to get that face-to-face relationship. But the good thing for us as well is that the Amazon’s face was… I mean, it’s still evolving, but it was fairly smaller back then. There weren’t as many companies in it. It was harder to find people that were specialized in that knowledge. So, having the remote business development wasn’t that much of a challenge.

I can’t speak for every digital agency, but I think more and more people are open to the remote stuff. I don’t think meeting in person is as important as it used to be. Because we can all work online, and more and more people are realizing that.

Joe:Got you. So you’re mostly remote? That’s an interesting point. It seems like you specialized in such a way that you are probably… You know, web developers, I feel are like a diamond dozen. I am one so I can say.

Mike Begg:Yeah.

Joe: But people who specialize in your services, at least a few years ago, probably a pretty scarce, I think, as you said.

Mike Begg:Yeah, exactly. There are a lot more. Now there’s a lot more competition. There’s a lot of agencies that are newer that don’t have the experiences that we do, they don’t have the prior experience selling themselves either. So there’s a lot of people that are moving into this space, but which is also a challenge because the quality is going to be very different between the agencies that people are working with. Obviously, we always recommend working with an agency that’s been around longer that understands how the Amazon space has evolved. Because that’s extremely important to get a better idea of where it’s going.

Joe:Yeah, for sure. Well, this is great. We’re coming up on kind of the end of our main discussion. Again, in the Creator Crew portion of the episode, we’ll be talking about selling books on Kindle and perhaps other digital products. So if you’re not already a member, you can sign up over atbuildsomething.clubfor $5 a month. Lots of great stuff over there.

But I want to try, as we wrap up, and we have some tips for the listeners, we talked about selling on the Amazon platform, we talked about building your remote team. But overall, we also wanted to cover opening up other income streams, right? And selling on the Amazon platform is one way to do that. But you’ve also built a team that helps other people sell online. I obviously don’t want you to create a bunch of competitors to your product, but I know a lot of people do web development consulting, potentially WooCommerce consulting. Maybe you can offer some tips as to how you can specialize in helping people sell online. Is that too nebulous? Or do you think that’s…?

Mike Begg:No, I think I can talk to that a little bit. I mean, obviously, what we’ve seen this year is that eCommerce is taken off. And within the development space, there’s a lot of things that are still needed. I mean, more and more people are adapting. Just for one example, a website development, Shopify, everyone’s building Shopify stores now. WooCommerce, it’s the same as well. There’s a lot of people that are in the traditional retail space that need to start building those online presences. I’m sure there’s a lot of people probably reaching out to them on the web dev side to kind of get that going.

Another big area, though, is application development for online. There’s so many different businesses that have different tech stacks. There’s different connector tools like Trade.io, Zapier, whatever you’re using, Stitch Data for APIs, API pipelines. So understanding how to connect all that data for a lot of these companies that maybe don’t have that technical experience is another good area where I think there’s a lot of value for people that have web dev, app development experience as well. I mean, there’s so much data going on. There’s so many different ways that people need to be better at manipulating it.

I mean, just data visualization and understanding data analytics and usage is very important. And that’s another area where a lot of I think web development work could be done. But I mean, it’s really just reaching out to a lot of these retail businesses and just seeing what their needs are. I mean, everyone pretty much has some online need right now. Just seeing whether you’re a fit for it, or whether you can find someone that can provide the service for them.

Joe:Yeah, absolutely. I think focusing in, Mike, as you’ve done on a particular platform, kind of niching down specializing or becoming good at it is a way to differentiate yourself from other people.

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Joe:The last kind of tip I do want to ask, we alluded to it before, but if I want to if I want to start selling somebody else’s stuff, if I don’t want to develop a product, I just kind of want to sell it, what do I do? Just maybe one to two things or two to three things steps that I could do to find a product that I think is worth selling through Amazon fulfillment.

Mike Begg:So if you want to sell other people’s products, it’s a little bit more difficult. More and more people are waking up to… more and more brands, I should say, are waking up to selling on the Amazon platform. So a lot more people are taking it in-house. Retail arbitrage is one way. Just go into your local stores and seeing what’s there. The Amazon app, you can actually scan barcodes, see if it’s on Amazon, see what the price point is. You can kind of calculate whether you’re going to make money based on what the discount is in store. That’s one easy way to kind of get going.

Something that’s a little bit more challenging is to go the reseller route or kind of like a dropship route as well, where essentially you’re purchasing inventory at wholesale directly from distributors and then you’re selling it to retail. This is a good way that you can use other brands that are not yours. You can just purchase our products and put them on the Amazon platform that way and start selling. There’s going to be other competition there. So finding the right distributors, getting the right agreements with them.

If you can get an exclusive agreement for a distribution brand, I mean, that would be huge. That’s another route you could go and just reaching out to these people and asking them for their product catalog, seeing what they have is just the way to kind of get that process started.

Joe:Got you. Awesome. Well, if anybody is interested in that, definitely heed this advice, check it out. There’s also a link in the show notes over at streamlined.fm/209 to a dropship episode that we did. Again, this is probably 18 months ago, but still generally good advice. So with that, Mike, I do need to ask you my favorite question, which is, do you have any trade secrets for us?

Mike Begg:Uuuh, trade secrets. Yeah, for sure. I think if you’re going to go the route of building your own brand on the platform, one of the biggest trends that’s happening in eCommerce and one of the things you need to take into consideration when you’re building your listings on Amazon is more and more people are purchasing from their phones. So mobile-first is becoming more and more important.

It seems common sense but maybe you probably don’t realize it if you’re not looking at it from the perspective of selling. When you’re going through the app on Amazon, for example, what comes up first is the product title and the images. People don’t actually scroll down to the bullet points of capturing their attention in the product images is one of the most important things you can do. And we utilize lifestyle photos, product photos with text overlays to call out the benefits right there in the photos. So as soon as they come, they’re seeing the visual content, they’re seeing the highlights of the product. And probably within a few seconds, they’re going to decide whether they’re going to purchase the product or not based on how professional it looks, how well done it is, and how much the product will actually benefit their lives.

Joe:That’s fantastic. Call out benefits right in the photos. I think that’s great. It’s definitely worked on me. If I see it in the photo, I don’t need to go scouring through the description. I thought of two points as you were talking there. More people are purchasing through their phones. Probably another benefit of being on the Amazon platform, because most people who are using the Amazon app, it’s extremely easy for them to pay on the phone. I’m sure we all have had the displeasure of putting in our name and address and credit card information on our phone hoping we don’t mess it up. Apple Pay has made that a little easier. Android wallet has made that a little bit easier. But with Amazon, it’s press a button and you’re good to go most of the time. A little too easy, maybe. So I thought about that. And then you mentioned product title and images capture attention. Really important how people make the decision. How important are ratings and reviews?

Mike Begg:Social proof is one of the biggest things in eCommerce in general. If other people think that a product is good, it’s more than likely going to influence more people to buy the product. If you start getting bad reviews, you have a big problem on your hand because it’s very hard to reverse that. I say this in anything, whether you’re selling a physical product or a digital service. Your product quality is the thing that’s going to determine the most of your success. Even if it costs you a little bit more to do something, if you have a good quality product, you’re going to get that good social feedback, those good reviews or ratings or whatever they may be. And that’s only going to help sell more people down the road. So always focus on the product that you’re putting out there to sell.

Joe:Love it. I am going to ask you another question regarding getting Amazon reviews in the members-only show as well. This is something that I’m genuinely curious about, but also something I’m directly involved with, because people ask me to review their stuff all the time. I also just put out a book that has gotten a couple of bad reviews because it’s not like the last version. So we’ll talk about all of that in the members-only show. For now, Mike, thanks so much for your time. I appreciate it. If people want to learn more about you, where can they find you?

Mike Begg:Joe, first of all, thanks for having me here. I really appreciate it. I hope I was able to provide some valuable insights. The best way to get in touch with me or get in contact with me is either through my website,amzadvisers.com, or directly in my email, mike@amzadvisers.com.

Joe:All right. I will include that and everything we talked about in the show notes over atstreamlined.fm/209.If you’re a member, stick around for the next part of the conversation. If you are not, consider it over atbuildsomething.club. But either way I really appreciate you tuning in. So again, thank you so much to Mike. Thank you for listening. Thanks to our sponsors:Restrict Content Pro,TextExpander, andMindsize. For all of the show notes, you can head over tostreamlined.fm/209. And until next time, get out there and build something.