Episode of My First Million with Sam Parr and Shaan Puri.
Transcript
Note: This transcript was auto-generated from YouTube captions. It may contain errors and lacks speaker identification. A full Gemini audio transcript will replace this.
Kind: captions Language: en me and Sam are here Sam you wrote something at the top of this I want to hear what you have to say which is people’s reply about what we talked about last time Gracia let’s jump in with that all right you want to I’m gonna read just word for word I have it pulled up on my Twitter okay you ready I’m not gonna read the guy’s name he goes I’m a modest-sized mid seven-figure Amazon seller and a network of guys that range from 1 or 2 million to probably 50 million plus we have a few guys in our network that actually sold their company to throw out how do you call it gracias yeah de Rossi oh happy to chat about Amazon ecommerce sometime ok so I’m gonna read his replies now for those of you listening the background is is that on Tuesday Sean and I had talked about the ratio it’s a company that raised money they raised 100 200 million at a 750 valuation I don’t remember yeah close to a hundred million at Amelia dog nation a big company you can they’re only tears old there and what they’re doing is buying Amazon Fulfillment and filled by Amazon company fulfilled by Amazon companies and they are making the brands better and just owning them they’re doing a bunch of stuff and so I had a guy reach out to me and he’s I go that’s great tell me what’s the I asked him what’s the cash flow situation like for most guys sub ten million dollars they’re probably working with zero to a handful of US employees still actively involved in the day-to-day large team in the Philippines and in cheap locations and are probably netting between 10 to 20 percent a year and and so the typical size for 3 to 5 million the typical size is 3 to 5 million in revenue and they’re probably pulling in 500 to a million dollars a year for themselves but the problem is is that it’s getting harder and harder in 2013 you could sell almost anything and scale seven figure business now there are a lot more dominant more sophisticated players and it’s incredibly hard to enter in the business the Amazon algorithm is much smarter and it makes making incredibly expensive and difficult also Amazon treats their sellers like trash so it’s kind of a mixed bag I could take a month and do nothing and let my team run it and it can go perfect or I can get an email tomorrow saying my account has been suspended or killed and I need a lawyer to reinstate everything or I’m just crushed so anyway Sean I wanted to fill you in on this because I thought it was cool inside I didn’t know about yeah that’s that’s a good insight so a couple of thoughts on that so the first is I think he’s right you know back 2013-2014 it was a lot easier to do it than it is today that seems consistent with what I’ve heard in fact it seems like the formula is build a successful Amazon business in 2013 14 15 then start teaching other people how to do it because it’s too hard to do anymore and so now you start giving away the sort of secrets and you become a TV for the next three years so I think that’s the the career path right now the other thing that comes to mind we were talking I was talking to Andrew Wilkinson about this and he was saying he used the I think it’s a it’s a Charlie Munger quote which I oh no it’s a Nassim Taleb quote which is it’s like picking up pennies in front of a steamroller so the you know there’s a high probability you can make a little bit of money um you know consistently every single time you reach down and you pick it up and then there’s you know a low probability of complete death and that’s what he’s talking about when he says you can get a letter tomorrow that says your account is suspended goodbye and and that’s it or Amazon cuts the rates of your category like I have a friend who was doing millions of dollars of book sales as a third party book seller on Amazon and the name was almost like you know what now our take rate on books has you know not 10% we’re gonna do 25% things and that like killed that happened to me this that happened to me the other day so in our we have in the trends group someone was like just so you know Amazon changed the feet so basically I have various blogs like my personal blog or something like that and it makes just like small amounts of money like three to five thousand dollars a month off Amazon affiliates and I don’t even check it it just runs because because I write just written a lot of content over the years they changed their rate and someone told me in the I think I forget what I was earning I don’t even check it I think I was earning 6% to 9% for affiliate revenue and then they changed it to they like halved it so that money just haft and it’s no big deal because it wasn’t a bit it wasn’t like a big income stream for me but if you’re a wire cutter or if you’re BuzzFeed and you made a hundred million dollars from this it’s a huge deal right yeah that that 20% cut makes it makes a really big difference no no no it wasn’t at all it wasn’t a 20% cut it was way bigger than that it was like half they have out and what category are your links mostly and is it electronics is it some cat is one category was just across the board they rate they lowered it across categories but across the board it’s close to half my categories were probably personal care and electronics I mean just anyone who ya I’m booked a lot of books right okay I want to know another topic so we’re good on terasi oh you want to add anything else no you do not want to know I think it’s it’s consistent with what we thought you know I like when people fill in the gaps with information that we don’t have I’m not an FBA seller I don’t know the ins and outs of that market I just think it’s interesting we talked a little bit about it and then people fill in the gaps in the next episode we come back a little smarter that’s a nice little formula we have going so I appreciate that or you ever talk about stuff you know tell us that was more about what what you know that we don’t [Music]