Top Reasons For Amazon Failures + How to Revive a Failing Business feat. Pradeep Kumar Sacitharan

Pradeep’s Pointers For Surviving Amazon Selling

Pradeep reminds us that maintaining a sustainable and profitable Amazon business will all boil down to your COGS (Cost of Goods Sold). As a business owner, you must be on top of every little detail that affects your product’s total cost per unit. And if you can break your COGS down, simplify, and cut the money-draining components in every process then you’ve won half the battle. What does this entail? Remember to take note of the individual cost of the following:

• Raw materials
• Labels
• Logistics – shipping and storage
• Manufacturing process
• Manpower
• Marketing platforms
• PPC Advertising

There may be other things you’d have to factor in when computing for your COGS. Remember that this varies for every business. The bottom line is to know where your business is when it comes to your numbers – this will help you plan your spending and influence your decisions moving forward.

How To Revive a Failing Amazon Business

In Pradeep’s experience, most Amazon businesses can benefit from a simple change or a tweak in their process to get them back on track. Here are a few solutions that could bring a dying Amazon business back to life:

1. Change the inventory logistics – Some sellers buy too much inventory. Proper inventory management will help you avoid losses from overstocking or understocking. Figure out a system or observe the seasonality of your products and adjust your logistics accordingly.
2. Optimize your listing – A specific and single-minded keyword phrase, instructional video, or a more convincing product description can make all the difference. Don’t underestimate what a simple listing revamp can do to turn your sales around.
3. Rethink your packaging – Don’t forget that total packaging cost is determined by material, components, and shipping when weighed and measured. If your brand permits and you can use more lightweight packaging with affordable and more accessible material – then do so.
4. Add extra value – Bundling two items together will kill two birds with one stone – adding extra value while disposing of other products that are incurring losses while they sit in your inventory.
5. Use appropriate tools – Veteran sellers swear by tools such as Helium10, Junglescout, Data Dive, and more. Explore how these tools can help you save on costs.
6. Use influencer marketing – Influencers are a great way of spreading the message about your product. Explore their platforms and see how their voice can benefit your brand.
7. Examine your price point – At least 3 to 5 times your COGS is standard to ensure you’re not losing money on product acquisition costs.

And Pradeep’s most important tip of all – pull the trigger then direct the bullet. In other words, make the decision and make it right. Every step in business is a learning experience. We won’t learn if we’re not taking any steps. Even if they turn out to be a mistake.

Is your business not performing the way you forecasted? Perhaps it’s a good idea to spend some time examining every step in your business process. Check for any unaccounted fees or holes that could be draining your budget. This one step could be the thing that saves your business. And remember that all is not lost – wherever your business is at the moment. Even ‘failed’ Amazon businesses have value for Pradeep who can resurrect brands and turn liabilities into assets.

Transcription

Amy Wees: Hey, everybody, what’s up? I’m Amy Wees, and my co host, Andy Arnott is just taking the day off today, man, you know, he deserves it once in a while. Okay. But I’m so excited for this episode of The Seller Roundtable today I’m here with my friend, Pradeep Kumar. And I didn’t want to mess up his last name. He taught me how to say this. Sacitharan. Alright, good. I got it. I did. Yeah. All right. You guys, and I have to tell you pretty does something pretty cool. You know, he actually works with distressed asset. And what are distressed assets. We’re going to talk about that today. But it’s basically ecommerce businesses, specifically Amazon businesses that are failing, that are just not really going anywhere. And so he buys up these businesses, and he does some pretty cool things with them. And, you know, I’m sure that all of us can get some tips today, from his stories. And also, you know, learn what’s actually going on in the industry and why some businesses are failing and what the trends are. So I can’t wait to get into it. But before we do that, we have to learn a little bit more about this mysterious man. Next to me here in zoom. Brittany, why don’t you tell us a little bit more about you and your background? And how you, you got on this journey to what you do today?

Pradeep Kumar Sacitharan: Sure, sure. Well, thank you very much for inviting me to podcast, I met Amy in London and instantly said this a cool person I need to know. And we got along very well. So hence, I’m here. So it’s really weird, because everyone says I’ll do these different things. But really, if you look at my life, I’ve been a serial dropout. Ever since I was 16. I wasn’t the best at school. So I dropped out of high school, but I went into sales. And I had this thing that if I have a goal, I just obsessively go against with this goal and try to reach it. And I know my lanes very well. But I always I used to tell my students when I had students that, you know, you told you how fast you should drive and where your destination is. So you can have your weaknesses, you can restrict what you should know your lane. So I 21 I decided to go back to education. And I said, Well, this is what I want to do. And as demo said, we’ll jump into high school, how can you go back to college? Well, I’ve done a one year kind of a community college. And I got into Oxford after four years. And I went to Hardwick after five. So he told me very young age that no one tells you what to do. You just have to stick to your lane and know your strengths. And then I found myself after, after wonderful education, I found myself stuck because everyone said you need to do 10 years of career climbing to get where you want to be be to discover drugs. So I dropped out of academia, my second dropout, and I made 232 phone calls around the world. And I got a job in China. And I went to China and I said to, to a university and a biotech guy, I had three ideas. I don’t care about titles, just give me the money and I want to discover these drugs. And in 18 months, I discovered those drugs. And my CEO goes, Okay, you just got the drugs. Now, what do you want to do? I said, I really want to do some business development. So I dropped out of biotech r&d, my third dropout, and I went into business development in biotech. And I said to the CEO, you know what? Pandemic was coming on, it came already. So I said, there’s a lot of distressed assets in Europe, because a lot of people not going to work these derelict buildings and programs existed. So we started buying those assets up, and the company grew very fast. So I learned business there. Then I found myself stuck in the pandemic in China. And then I had to go to hotels to eat, because the only things open. And then I’m a very social person. So I started talking to everyone and all the people in that hotel lobby, and every day I visited with factory owners typing away on their laptop, what do you guys do? And they’re like, we sell on Amazon. For cool, though. What is this? And I’m like, I do business development. Now. Can I see your numbers and I saw the numbers Emile’s like 200% ROI. 300k a week, these manufacturers right factories. So I got to know 49 factories and I said, Can I start selling? They’re like, nope. So I realized, you know, life is a numbers game. You got to break people down. So I started talking to them, helping them with the English on case loads on Amazon had no idea what Amazon was. I started my account Professional Selling account in China using VPN, registering my company in London, and I started selling toys to the UK and will make in profit at the same time. I was working full time. The problem was coming along. Then Then I said, You know what? This is going good. My career is going good. Let me He returned back to London came back to London. And I said to everyone a, I’ve done all this stuff in China around the world. I said, drug discovery lalala, can I have a job? They’re like, Nope, you’re too young now. And you overqualified. I said, Daddy Hill. So my fourth job, I dropped out my career. And then when I get on Amazon, right, and I started doing toys, then I done actually did do face masks for six weeks made a killing, I can tell you more about that. And then we went into pet supplies, then I think that brand got 1.1 million in revenue in 11 months, we weren’t skilled very quickly. And I learned Amazon for two years, I think I’ve been a full time Amazonian seller for like a year and a bit now got to know the space called people like yourself, I’m not a guru. I’m not consultant, I don’t offer any services. But I’m here to help and serve. That’s my motto. So anyone can reach out. So that’s how I, that’s how I got into Amazon, and Amazon selling an online selling.

Amy: Oh, my gosh, that is such a crazy story. I can’t even I cannot wait to dig into some of this stuff. I love how you said that, you know, all these factories, were selling on Amazon, because that didn’t used to be the norm like a couple of years ago, there, you know, when you would walk into a factory in China, the chances of them selling an E commerce, they’d be like what you know, now, every single factory has an E commerce department. And it’s growing very quickly. And, you know, I’ll never forget the pictures that were posted. I think Chris Davies posted pictures online about he lives in China. And he was posting pictures online about in the malls, like the malls had shut down certain areas of shopping malls in China. And it was all filled with pallets of goods like goods with like stickers set to go to Amazon. And you know, that just to me was crazy to think about, like the influx of Chinese sellers and everything like that. And it’s, it’s really interesting to me for you to you know, for these, these factory owners, when you offer to help, they’re like, Get out of here, you t’s so cool. It’s so cool to see that, you know, that’s where you started. And I love that you mentioned that you’re a drop off because some of the best entrepreneurs I know are dropouts, so

I love it. You know, and it I always tell people to like, you know, I think of education totally differently than I thought about when I was in my career. Because, you know, I’ve got all these degrees you know, all these certifications and everything. And when I want to invent a product and start a private label brand, I was like, well what’s the point of this MBA I’ll just throw it away you know, it doesn’t really do me a lot of good it doesn’t teach me how to take my prototype and turn it into a product on the market. It doesn’t you know, I can read apples 10k financial analysis I can start a bootstrap a business you know, that takes grit, it takes you being a dropout, it takes you not being afraid to fail, it takes you not worrying about what everybody else is doing. So I love that. That’s how you started. So tell me about your first time selling something. So first you were selling like toys. Tell me about that. Like what was the experience and you finding this product sell? And you know, how did you find the product and like, talk to me about your process?

Pradeep: I had no clue. I had no clue I was on VPN, sometimes no VPN in China. I had no idea what Black Cat white cat baseball cap. I didn’t understand anything or people saying I no access to YouTube. Nothing. No Jungle Scout no Helium 10. It was purely me working out cogs. You know, is very simple. You buy cheap here, sell more there, right. So there was a factory owner and he was sending these push to this puppet toys when they were very popular in the US, the silicon raw material, big factory. And I said Well, can I sell some in the UK and kind of 111 came over and he said I could go for it. So that’s how we that’s how it worked out my cogs, my PPC all through Amazon versus internally working things out on my own at night laptop off my work. And that was my kind of foundation in Amazon just to work out the numbers. And I think work on numbers is more important than any time now. Particularly going into q4 in the next two quarters next year as well. So that’s how I started no fancy keyword volume searches or, you know, product ranking, which we do BSR now and also for us I started simple cogs. It worked very well into Amazon. So we always are you from the It kind of early stages work minimum three to five times the selling point a purchase point, sorry. So if you buy something, three to five times minimum, you should be selling at. If you know, I think we had products eight times more 12 times more is a bonus. But minimum three to five, you don’t want to push to three now more than five. So that includes the sourcing and the flight. Shipping costs. That’s kind of the golden rule I go by. And that’s always worked very well. And that’s the simple number one rule that always worked. So then now obviously, oh, let me tell you something. We went there, we shifted to face masks, right? So I made some money from the toys and I said, Okay, look, I need to double this because I’m going back to London, I don’t know what’s going to happen. So I said face masks, I don’t go face masks. I’m like, let’s try it out. And we say when

Amy: you say face masks, is it the beauty facial masks or masks,

Pradeep: early parts of COVID? Okay, we listed as a nonmedical dos mask, you know, getting around restrictions, but they were quite good quality. And then I found the Chinese suppliers for, as you said, very strict. They didn’t want to get around it. So I learned something when I was in pharma corporate form called equipment financing. If we wanted something, we’ll give a company financing to turn the equipment around. So I said, Hey, this is quite cool. I never knew that I made that deal up. So I said, Can I do this? So I went around the world and I realized Sri Lanka was shut down. And they had clothes factory, right. Sri Lanka is known for clothes, clothing and clothes factory. So I gave some of the money I made from the toys to Sri Lankan company. I said, Turn this your shirt, fax machines into most machines. They’re quite creative guys. They turn around and I said, if I do that, I’m going to get very cheap cogs right. almost next to nothing to actually produce this masks. Then we got those masks and I said set a time limit. Six weeks, my team said we can go for 12 And I said six weeks and we sold and we made a killing for six weeks on very cheap cogs. Again, it was cogs, creative financing and making that deal. And then when I set into came back to London set things up, then I learned about Helium 10 Jungle Scout BSR keyword research volume, but the foundation was built on just any other business in any other field to keep sourcing logistics, take care of your marketing PPC spend and you got leftover. So now we look at five competitors search volume, keywords, where can we rank if it’s good BSR? How the competitors is listing reviews from competitors can we use those reviews to our advantage bundling as we discussed before you and I bonus items, review generation all those tricks are not tricks, more sophisticated or more niche specific business tip for Amazon is what we do now when we sourcing and setting up a launching but I always say one on one. Like the basics count now.

Amy: Got it. Okay. Yeah, I absolutely love that you started with just the numbers. I started on Amazon, there wasn’t any tools or anything like that. I did the same thing. I said, What can I buy it for? And what can I sell it for? And you know, back then there wasn’t even like a really great revenue calculator or anything like that. It was like you had the the Amazon app. And we had a seller app back then. But it was very good, rudimentary, it wasn’t you know, anything in there wasn’t even FBA, when I started it was just merchant fulfilled. So you’d get like an email said, you saw. Yeah. And so it was like, it was really fascinating, though. Because back then, because there wasn’t a lot of sellers, you could just throw a product on the market. And it would sell, you know, and that happened all the way through to like 2015 2016 2017, you couldn’t really find a product and there wasn’t a lot of competition. And nowadays that has completely changed. So I love that you started with the numbers. And I’m sure that a lot of the failing businesses that you see and that you’re buying now and sprucing up. Would you say that most of their reason for failure? Let’s talk about their reasons for failure is most of the reasons that they just invested way too much didn’t have the margin to make it happen or didn’t have the right product. Can we talk about the reasons businesses are failing?

Pradeep: Sure. So let’s talk about how I got into this first. So I looked at kind of a whole field. I said, What can I do a business model does differently. Actually, I have to give credit to Steve Simonson as well. We had a great chat and we get along very well. So Steve If I’m not following you, so we had a chat, and, you know, distressed assets is something I’ve done. And something he’s also, you know, he’s been around, we’ll talk about ice ages, he’s been around a long time. He’s senior father. So it was a logical move to make. But the move itself took a long time, because we, it’s about forecast and you can see things turning down, right. So we went, I went through a lot of my networks. So most of these distractions is there’s no website you can go to is networks, people coming to you saying, Hey, I trust you, you know, don’t link this or sign NDAs for aggregators, or, you know, manufacturers through pills, or even people in China, who are now contacting us saying people have left stock, and imagery runoff. So that’s how going to distressed assets, we look through 70, so forth, and we bought our first one two weeks ago, and I told you beforehand, I will break this news on your podcast, we bought our first distressed asset for 99 P, which is that P is that sense? In the UK, so it’s like $1 or something $1.10. Now, so we bought our first brand. So I will get to the buying for millions. And here I am a pool aggregator buying for

Amy: $1.10. And what does that include? What did you get for that dollar and 10 cents.

Pradeep: So we got inventory, we got images, EBC. Mind you not the best listing, we’ve got inventory that for one of the major products we think we can grow, we got trademark, or we got a brand mark as well. Everything we didn’t take our selections with. We switched it up into our account. So. So that’s why I included it’s like going through trash and seeing something reuse or selling or kind of a car boot sale, or a garage sale as you guys would say, or yard sale, I think. So. That’s what, that’s what we do. And that’s how we got into it. Coming back to your question on what we’re seeing. We’re seeing all kinds of things. And it’s kind of out there. I think as you said in 2017, this is so and then the brand emphasis was so important you to build a brand, right? We see people building brands, but I think the getting carried away. And they’re not coming back to basics of numbers. And timing time of the week, keep seeing the numbers going wrong. The first thing I do is look at the cogs, obviously we look at saying okay, this is gone wrong. What can we take as a company and go into a niche and actually make it profitable? We’ve said no to many brands who are actually doing very well. Some of the aces, we can’t turn around, right? So exact example. We haven’t we look at these guys. But you know, pharma packs went down, right? Massive one, probably one of the biggest, if not the biggest seller in Amazon once compared to who was it the patch that the cosmetic patch here or cosmetics? I think that was brought up right by church and Dwight. So you can see two different ways the two massive companies one got brought out for massive number multiple one, which was the biggest form of tax collapse. And I think it’s gone to numbers and debt, right? And what we’re seeing individual sellers, we’re seeing bigger brands, and even at times, some of the aggregators that we look from far and in is that they’re missing their numbers. So and also I think, so I’ll give you specifics. Number one, we’re seeing people not looking at cogs on the asin level. And as a huge mistake, they look at cogs or numbers on a brand level or on an inventory level, or a company level button on asin level. Yeah,

Amy: we call this in when I worked through this with my clients, we call this unit economics. So we are by each unit, because you can’t make decisions to move a needle if you don’t know if this one product is costing you. If this one product, your organic percentages that are down or you’re actually you know, you’re actually losing money with every sale because you’re just kind of selling across and you’re looking at your maybe your Helium 10 dashboard. And it’s telling you Oh, I’m I’m profitable. Yeah, you don’t realize that you actually have products that are sinking the ship. And so we track them on a unit level, right that unit level tab by tab in a spreadsheet and see you know what’s going on and it just becomes very, very clear of like, oh, wow, this product is sinking the ship and you know, there’s no recovery from it.

Pradeep: Yeah, so So today, I know. Apologies to this and I’m not going to tell you any sexy hacks or anything but maybe the information is kind of repeated but it’s just basics in terms of What we see and I’m gonna give you an example a couple of examples, which will astonish you. So what obviously NDA, we can’t disclose brands or people products, but one of the products, we saw my God say, Oh, we’re not taking this company over. But my gut was saying there’s something wrong with this cog, right? One, one. acent. And one of the hero ASINs, something wrong with the manufacturing costs or something from so I told the guys hey, look, I’ve signed an NDA. I don’t want your product. I’m not gonna steal your factory, who’s the factory? Let me reach out, I will good pretty China links. I can’t speak Chinese. But I got WeChat. And I got other people in China. So I found the factory when, you know, it’s the way you answer the question. And by the way, this brand was actually was very close to buying being bought by aggregate and they didn’t and aggregate the, we’re going to set the price. So they I think the aggregate even didn’t look through this. So it’s questions like if you’re buying a distressed as you’re going to buy an event, or this your cogs and you found that the manufacturer and or even the brand owner, you say, what is this metal costume? What is it about this seat? What about this plastic? How do you come about this price? Can you give me a breakdown? What about this wood piece? And it sounds stupid, everybody? Why would use the whole product? No, you break it down, right? Then you add your numbers up? So we found out, right, that the product had a label, and the label cost $17. And I asked why, by the way, look tacky with this label, right? But it’s fine. So the factory didn’t have internal laboring machines. So they made the metal pole, shipped it to another place which labeled it and they shipped it back. And this brand owner was you know, he forgot about this? And they would he or she $17 They paid right. And then probably the aggregator saw one unit cost, right $17. But the module is good, maybe $70. And then I asked my out of curiosity asked my forte is that what does this cost like in terms of, so you can use this $17 to air ship this product express to the USA or UK and still save money? If you change the label and put a tag on the product? It’s crazy. So that kind of breakdown of the minutiae information and how things are kind of generating some costs is what takes to win. Right? And that kind of adds on over time. And that’s why people lose. So that’s

Amy: one. Yeah, and pretty. I think, you know, on that note, I don’t think I know, because I help people with advanced sourcing strategies. Most sellers are not even breaking down their products with their suppliers, they have no idea how that product is manufactured, whether that manufacturer is even who they say they are, whether that manufacturer is outsourcing some of the work to somebody else, right. They’re not thinking about this from the beginning. And you know, when we are sourcing from the very beginning, in our program, we talk about, you know, no, we’re going to figure out what what is our target price, in order to have the cogs that we need to scale this product, I want you to have enough net leftover to buy two or three more units minimum, right, because that’s a scalable business. And if you if you have less net after advertising leftover, then you can even buy another unit or even pay for your advertising, you’re gonna lose money with every single sale. So that’s the that’s, you know, the what we focus on. But in order to get that target price, we need to know our manufacturing process, we need to be able to have a discussion with that factory boss understand what are the components, what goes into it and work together to get the best prices because when we grow both of us grow, not just us, but the factory also makes more money that way. Right, then if we screw up the cogs, and you know, and it doesn’t make any sense. So I love that you’re focusing on that. But I know what you’re experiencing, because so many even I have seven figures, eight figure sellers that come and they have no idea. I’ve never talked to their factory personally. They’re overpaying for things and you know, just these are simple things that you could totally just make one change, and your whole business could look differently.

Pradeep: Absolutely. And to add to that, I feel, I don’t feel I know that many people don’t have more than two factories for a product, we try to contact five and have a list of the five just as a backup or just sourcing or even one quote can act as a negotiation to lower price for another. Something happens. Regional COVID lock downs you have multiple right that helped us win one of our brands as well. And then you have the network builds network. So talk to many factories and actually have them on the table get comfortable with one or two, maybe right and they don’t understand that. A follow up will be good because then you just use two normal metrics by the matrix always be like this, right? So we see that as well. And another thing we see a lot in the numbers, and what particularly with the culture is that, I mean, I’m not saying anyone out there, but you have a lot of gurus, consultants, agencies flooded in the market, which is good because the seller is learning a lot. But is particularly with impressionable 20 and 30 year old sellers, right, what you’re getting is they’re saying, Whoa, let’s just go into this Tiktok marketing of this Facebook marketing, but they’re still not looking at the numbers. And when we talk to sellers, distress wise, oh, we spent 50k 100k on this, it didn’t work out, well, then you when you didn’t have the numbers to spend on that. But we heard that it worked out at this conference, and we threw this person, I’m sure everyone is very well versed and mean good. But you’re in a space that you can get carried away very quickly. And you got to pull it back, particularly the next quarter and three quarters because you need to tighten those numbers and cut waste. So we’re seeing that I think influence of doing too many fancy things. And coming back to numbers is very important. I’m not saying not to do all these other things, but I think you should do it in a measured way. And pick one or two, you can’t do everything. And you can get easily carried away. You know, in this industry, I’ve seen in other industries where in science when there’s a Nobel Prize, everyone’s like, let’s go through that place. Because everyone’s doing CRISPR, when when our vaccines, let’s just change our program, but you you are like a microbiologist that you have no idea what this is about, right? So like, if you if you if you don’t do the numbers here, you can’t do tick tock on Facebook, or just scale or you can even manage the scaling, right. So that’s something else we see people spending too much on, while I called top tier thought leadership kind of exercises, but not spending enough on actually doing the numbers, and also relying too much on the team to think too much of top tier thinking. So we see that as well. The third thing I would like to say is that human resources, people forget this when their company skills, they think, Oh, we can hire better people, or we can go back home. And a lot of people use vas. But we’ve seen ridiculous examples of too much expenditure in people that are unnecessary. So you got to learn to cut people I’m sorry to say cut ASINs in hard time, I’m more than happy to say I caught a Brian a pet supplies brand. Because I saw Chinese manufacturers coming in. I said we’re not completely we’re cutting right. And I’ve caught so much before in my corporate world as well. So you got to cut as well. And I’ll give you another example we saw with one of our very distressed assets. I know you worked in the US Army, right? So this company actually hired ex army logistics supply chain person who was in charge of sending bullets or tanks into Afghanistan, Iraq. And I’m sure this individual was super bright more than I and logistics and stuff. But do you don’t need him to send 10 nascence into the US marketplace? Right? I’m sure you he needs employability but he can serve someone else very well. And they were paying him high six figures. And I mean for that you can’t justify those human resources. And I think you got to look at the people around you and ASINs around is what is again, tightening numbers. How can you tighten it with you know, better cogs, better human resources management, and actually better strategies of not spending too much on certain things. And also three PL costs, people are not looking at them very well. So you’re using three cheap three pills across America, UK, but they’re using three pills, which are more corporate kind of in dense in cities and so forth. Because convenient. You know, can you actually steal some in your house and get very kind of nitty gritty,

Amy: I would say service providers to like I’ve seen people spend, you know, and I’m all about spending money on images and copywriting I mean, heck offer those services, right. So, you know, I’m all about that. But the problem is you’re going to spend $10,000 on an image on a 3d rendered image or something, you know, and that, that you don’t even have proof of concept for that product or anything. You know, it’s if you don’t have the margin or the money in your account to justify that other thing I see is people hiring out PPC services when they have like one asin What what are you doing right? Like I’m all about, you know, yes, we need to outsource we need to we’re not going to grow if we can’t outsource but at the same time, we also need to stay lean until that asin is covering our overhead and you need to know what are we need to study our p&l and our balance sheet and know what our monthly burn rate is. And these are all things that I have learned over time like I didn’t know this stuff in the beginning I had to figure reached out because I was like, Where’s all this money going? Like, what’s going on? Yeah, I had to learn these things. And and that’s really key, you know, you don’t really you don’t know what you don’t know. And it’s very normal for business owners to over hire or overspend or like you said, spend on a strategy or something like that, and then learn the lesson. We’ve all probably run Facebook ads that haven’t led us anywhere, or you know, we didn’t know our market, I get it, we’re gonna make mistakes. But if we don’t learn from those mistakes, then it’s what the definition of insanity, right. So I think that’s the hard thing is people don’t have these fundamentals down, they kind of get the idea of the business model. They see people making money, and they go, Okay, I’m just gonna throw money at it, or I’m gonna throw a strategy at it. But I don’t really have the numbers to make those decisions and in a better way.

Pradeep: Yeah, when I was 14 years old, my English teacher was a love hate relationship. But he’s very witty woman, and I used to give witty remarks. She said pretty fast in what? She said, Are you a realist, or optimists and without hesitation, I said, I’m optimist living in reality. And, you know, everyone that knows me knows I’m a gambler. I’m optimist, but I’m very realistic and cynical of our surroundings. So really, like, I’m not telling you to gamble on certain things. But you got to be optimistic, but you got to be gripped in reality, and what your numbers can afford you to do, right? And people are taking long shots. And particularly like, everyone’s like, Oh, my God, you brought a brand for 99 P. But we went through 70, we looked at the competition, we looked at keyword searches, we looked at inventory, we also looked at saying, Okay, this is the product, but what about products that fit with that product? And that niche? So can can we kind of make that brand bigger? And how are those products around it? And their colleagues and their search, keyword volume? And how can we launch subsequently, other products, so you’re lining up your kind of launches as well. So that’s also something we look at. And particularly with this brand we bought for 99 P is that the husband and wife, fantastic team, their first business, Phil, but they had a launch on this business ready? So why would he do that? If this business was failing? So it was that kind of clear, logical thinking and being optimistic. In reality, it’s what’s all about, I think, as well.

Amy : Yeah, for sure. Um, so we talked about the numbers we talked about, you know, the the key reasons that that people are failing, and it’s mostly because of those numbers, right, because we’re overspending somewhere, we’ve got, you know, we’re not scaling in a way that makes sense. How many of these, you know, assets, these distressed assets that you’re seeing, would you say, made the wrong product choice? Um, you know, how many of these do you think failure is tied to trying to sell too much of a saturated product that they’re never going to ever even if they have decent cogs are not going to be able to rank for it?

Pradeep: So that’s a very good question that no one’s asked me, I think it’s come down to 20% 80% are actually winners, right? Maybe even 10%? I mean, those may we had couple of people come in here, we’ve been here for three, four months is not working for us. What if he’s not going to work for you? It’s not gonna work for us. Right? We’re not I’m not a magician, I’m not some kind of genius, the numbers are not adding up, right. So maybe even 10%, because they’re kind of first time buyers and so forth, or, you know, the launch bad products, but majority have products that are working, but they messed up in terms of management, right, or they didn’t get out quick enough. Or they didn’t change their products or their bundles or had subsequent launches, because they concentrated on one hero product or one kind of angle. And also, let’s face it, that is being hard. Obviously, we have war, we have the pandemic polemical, super good, but we’re at the back end when inflation is rising, right. And you have all these social economic factors coming in. So it’s more than ever, it’s important to look at the numbers and management now, particularly going forward as well. And, you know, I always say if you can’t manage the numbers, start cutting something, start cutting ASINs products, people start cutting services, do something back to basics, and also caught marketplaces, sometimes expansion means to actually be not vertical, horizontal, but be steady. And you know, I’m a bit worried. Also, when people keep saying go to scale, you got to scale you’ve got a skill, sometimes scaling this way, or sometimes this way as well. I think you need to actually maintain a steady course if your business is not doing that well in q4, this q4 And the next two quarters, because then you’ll be a genius then people will look at say, oh, what your Amy made a fantastic decision. She didn’t go crazy, she stable, the Bible love it because you have cash flow coming in, you can use debt when everyone else is faltering, you can use that because you’re a success. And they’re going to back in because they need that because because they need to learn money. And buyers, maybe when the aggregate mark is better, although this is successful person because our product or they didn’t tank the kind of maintained. So those are two advantages as well. So now I think it’s about maintaining, or if you can scale scale, but strategically as well. So, you know, scale sometimes is not the answer. I know I sound like a pessimist. But I think it’s very important.

Amy: It is it is a scale game, right? Because we have to have enough profit to cover our overhead, right. And often we can’t get that with one product. Depending you know, unless you just have like a super winner and you’re just crushing it, well, then more power to you. But often, then you are going to have to add another variation to the product, you know, that kind of thing. So that you can get some enough volume going for your profits and make up for it. But if your numbers are broken in the first place, your scaling isn’t the answer, because you got to fix what’s broken here. Right? If you’re not making any any profit, like what who’s to say you’re not going to make that same mistake the second time around. The other thing that I’ve done with folks, and when you know just sitting down with them figuring out what they’re doing is a lot of times I see the biggest overspend for people is PPC. So they think that, you know, the answer is PPC, more advertising more advertise more advertising? Well, if you’re not converting, there’s no point in spending so much more on advertising sometimes. And you know, I give people permission to pause their PPC all the time. I’m like, Hey, you’re losing $5 With every sale, it’s time to take a breath. I’m not saying turn your PPC off forever. Like you should plan advertising into your into your your budget and into your cogs and all of that. Right, like you should, you should plan your advertising into your margin. I bet not your cogs, your margin, right. But sometimes if I see people are losing money with every sale, when we’re looking at those unit economics, I’m like, Okay, the first thing that we’re going to do is pause PPC. And see what is it on our foundation that we need to fix? Do we need to bring the cost down with the manufacturer? Do we need to look at our listing and see how it’s converting even organically? Are we ranking for any keywords? Like what are we doing? Right? What is our foundation look at look like before we just throw an insane amount of advertising dollars at it. And you know, our click through rates aren’t good or placement isn’t good. We’re not converting, right. And sometimes it’s really nice because people are just bleeding all this money. And then they’re like, Okay, cool. I actually that gave me some some clarity in pausing PPC, and diagnosing what’s going on fixing my cogs, fixing my margins, fixing my foundation, my listing my conversion rates, my keywords, my all of the fundamentals, the things that you started with when you didn’t have any tools, you know, having those fundamentals down, and then revisiting the PPC going, Oh, now I have clarity. Now I know exactly what keywords are gonna be on page one for and what I want to rank for, I’ve got the margin to be able to spend on that advertising and grow, you know, and rank those keywords. So I think PPC is a huge one.

Pradeep: Yeah, absolutely. I’m on PPC, you know, I don’t say I’m an expert. There’s so many gurus out there. And probably on your podcast as well. One thing I always say to people look for CPA cost per acquisition, because not one click right is going to be many clicks. Right? So you best you know, put that into your margin as well. Also, with marketing as well, I just feel like a lot of people spend time and effort, you know, saying BSR keywords for ranking this and that it’s okay to be ranked three to eight or 10. But do multiple products. It’s okay, right? Because if you’re hitting your sales per day or you work that out, that’s fine as well. No one has to be number one. So I think that’s also a tip because I think too many people try to win and go aggressive, or, you know, try these different things. But you know, levering of now is it’s a good way to go. And CPA cost per acquisition is something that a lot of people forget.

Amy: Yeah, for sure. That’s one of the first things I do is I’ll look at what their cogs are. And then I’ll look at, for example, a 30 day period, how many units did you sell? And what was your advertising spend, divide that by the total units that you sold, not just the ones from advertising, and look at how much it’s actually costing you to make a sale right? And in many cases, Like, I’ve seen numbers up to like 14 to $20 to make one sale. And that’s like, you know, the product costs less than that. So it’s like you can’t even you don’t even have the margin for that. So it’s good to because those dashboards are in different places, sometimes it’s easy to kind of not be able to make those connections. And that’s okay. Like, I want to remind people that this is normal, like, these are normal things that we, as new business owners and ecommerce entrepreneurs have to figure out over time, it’s not something that just like, oh, we all launch a product on Amazon, we just have this figured out from the start, you know, these are things that we have to figure out over time. And, and that’s okay, it’s normal to spend a little more and not really know and learn these lessons. But hopefully listening to the podcast and, and getting some education in this, you can find somebody that can help you understand your numbers a little bit more and just get down to those basics. So let’s talk about revival, right? Because we’ve talked about everything the reason people are failing, we’ve talked about, you know, all the mistakes people are making. But let’s talk about reviving a brand. So you buys distressed assets. What’s your process, talk us through your process of reviving and growing a brand.

Pradeep: So oh, by the way, on PPC, I like to get the data, because we’re seeing prices increase earlier because of the second Prime Day. So that’s one thing we’ve listened to look out for q4 Because normally you’ll see an increase going up to Black Friday, Cyber Monday Christmas, but we’re seeing earlier rises because of the first Prime Day. So this quarter watch out for that. That’s also we seeing some of these distressed assets going by. So the first thing coming back to your original question is we changed the inventory logistics. People buy to way too much inventory. And most of them distressed assets are us actually buying the inventory very cheap, or with for no money, right? So we look at inventory and sell through rate on that account. And we adjust that. And that’s the biggest reader revival we see with keep in China or tell the manufacturer put it down if you want our services, use cheaper three peels, put it into all containers, mix things up, put all the brands into one shipment and bring in a sounds so stupid, but that’s what it is, I think is too much inventory is ordered. Because people want this scale, right. And they think, Oh, we’re gonna get through this. So that’s what we do change our logistics. First, we look at sourcing first logistics, then we look at images. Normally image quality is very poor. We’re looking at Dynamic videos, and then changing the listings and SEO The title is like a revamp. It’s like Google by buying a house refurbishing all making the look so good. Making sure that those work, checking everything through again, and then putting it back on the market. So that’s what we’re doing no magic formula. No, no sexy hacks or anything. But that’s how we reviving again, as I said, Amy, we go. It’s almost like you’re reverse engineering. When we’re not launching from here and doing all the sexy stuff. We’re going back to the source in China and working backwards cogs inventory, logistics revival ban and they go again. So that’s what we’re doing. We’re seeing a forward trajectory, we’re actually going to buy another brand as well, very soon the next two weeks. So for that we’re we’re replacing all the cogs we’ve got new cogs a new manufacturer we sourced as well. So we said no to all supplier, we read on the packaging, which is more better, cheaper, we’re not using boxes anymore. Again, this quarter, you’re gonna save money, see how you packaging? Well see where you can save your money on packaging, we save the time on this next distressed assets, new packaging, better, cheaper, lighter to export, and it sounds stupid, but it works. And also we’re bundling two items together to give a bonus items. And also if people want to survive. I think also that bonding concept is more important ever because consumers are looking for efficiencies. So if you’re telling them selling 30 tablets for a month, can you offer them 90 In a bigger package, right? So that’s what we’re doing little tricks to make it more efficient. So and then we do all the refurb work on imaging videos and so forth. So we’re always looking for Western fields to the storefront and look because most people look use Philippines or for rigs, imaging and so forth. We’re not we’re using Western companies for that field and look as well. Got it expensive, but it’s worth it. Particularly if you’re picking thinks that for 99 P, you can afford to actually spend on the back end to make it better.

Amy: Right? But first, before you get to images and stuff, you’re fixing that foundation. So you’re starting with your sourcing in terms of, you know, like, what, what is this product actually costing us? And how can we give the customer more value, change the packaging up, break down those components and really get down to brass tacks and and figure out you know, what, what are we paying for? And what gives the customer the most value? And how do we get the most margin there? Then you’re going through logistics going, Okay, well, how much money? Are we? Are they spending on three peels and all this other stuff? And, you know, can we save on shipping? Can we do this or that can we just make sure that we streamline logistics. So now we got really great margin, we look awesome. And then before we start selling, we want to make sure we update that image to really connect with the customer, and ensure that they’re, they’re seeing all the things all the value that you just fixed through fixing sourcing and logistics, you’ve added extra value for them. And now you’re making sure that you’re communicating that value so that they’re making the purchase so that when you’re spending money on PPC and stuff, it’s it’s working all the way through. So if you’ve been

Pradeep: successful, you’ve done something right. It’s up to you to revisit with that period where you’re doing something, right. So when we’re buying this stuff will not buy in corporate form, when we’re buying high tech r&d, to buying distressed baby products or whatever, right? Someone’s done something right somewhere. And that’s why they got to the stage. I’m just going back and saying what have you done? Right? Where can we repeat it? And where can we make it better. So if your business is flatlining, which might be a good thing, and you’re maintaining or if it’s going down a bit, you’ve done something right, you just have to go back and say, What have I done, right? Where? Where can I check my ego? And where can I call it, and it’s not your baby, or your kid is your business. So you can cut things and be a bit mean as well. So that you’ve done something right guys, you just have to you to go back to that mindset and frame.

Amy: All right, and let’s talk about the tools that you use. So now that you’ve fixed all this stuff, you got the images, everything like that. Now it’s time to actually launch or relaunch and rank those products. So talk to us a little bit about that process, kind of what kind of tools you use, what are your go twos, what’s your process to ensuring that you’re staying on top and making those

Pradeep: sales? Yeah, when we don’t do anything magical, we use the same tools as you guys, Helium 10, Jungle Scout data die, making sure the metrics of fine as well. And we just we use those tools and make sure the metrics are fine, we’re launching sequentially, we’re getting reviews, we can reach out we do actually, when we actually buy a product, we look at other products we want to launch that’s very important because you want to scale at a sequential level if the first product launches, and also each product we have a huge list of influences that we can now connect to which we’ll be doing more of now. So micro influences below 100k reaching out to them and just making sure we get the message out

Amy: amazing yeah, influencers are huge as well. And you know, that’s, that’s really awesome to you don’t always have to pay a whole bunch of money for external traffic, sometimes you can just spread the message in a very organic and awesome way. So love that. Oh my gosh, you’ve covered so much here today. I have one more kind of technical question for you. You originally said that you don’t buy the account you just switched the asset into your own account. How do you do that? Because don’t they already isn’t the brand already registered under their name? You know, how how is that working? Where it’s it’s able to be swapped over to your account?

Pradeep: That’s a very good question. So the first asset we brought the as I said the husband or wife didn’t launch it. So the trademark was not very interested. So we actually savvy enough to actually watch the trademark the watch the registered trademark, you get the brand registry right the second asset we’re trying to buy is we don’t take all the accounts but what we do is is cheaper for us to buy the inventory out and change the names and and the packaging compared to paying whatever legal fields to take all that counts trademarks and so forth and patterns. Well pattern you you have to if it’s a pattern, bro, we haven’t got one yet. So if you’re going into this, take your time, and the trick is to buy out the inventory to see if they don’t have trademark if they do we swap out the trademark make a new name and that will Give us brand registry into account.

Amy: So you don’t even try to transfer their trademark, you’re just gonna go ahead and swap out the packaging, change the brand name, you’re almost like white labeling their product under your brand. And then you’re able to grow it from there.

Pradeep: So that’s, that’s been the first well, first one, yes. And the second one was the same, but it’s a totally different story. If the brain is already registered, and doing well, then we have to actually buy the accounts and so forth and do formal procedures.

Amy: Well, thank you for giving us some of your trade secrets. That’s fun. Very, very cool. You know, I think I have enough to focus on in terms of taking care of my own assets, no less to worry about reviving somebody else’s. But I’m glad there’s people like you out there. And that we can learn from all of your awesome tips. So just wrapping up here today, you know, do you have any advice for somebody who is about to get started? So you know, somebody who’s considering? Hey, I think I want to get into the E commerce. I’ve heard about this. It’s pretty cool. You know? Do you have any advice for people just getting started?

Pradeep: Yeah, pull the trigger, then direct the bullet, as I say, you know, there’s old saying, you make the decision that you make, right, there’s going the, you know, you can’t learn if you’re not doing it, you know, I you know, i That’s why I always say you know, I’m here for you. But I’d rather be in a ring than being a pundit or consultant or commentator outside, being a ring, if you’re in the ring knew that you couldn’t you can learn and fight and experience it. Be strategic with your searches. You don’t have to be in a big market or small market, but be strategic with your price points, three to five minimum in terms of sourcing and shipping to selling point. So the margins are good. If you get better, that’s good. Go to a market where you might not be as you know, competitively challenge, maybe other markets in Europe or other markets somewhere else as well. That’s also tricky. Things that are very hard to defend. Stability is important. So heavy and bulky goods, things that certain manufacturers can’t report or get into the market quicker than you. If you have money, use it wisely on PPC, make sure the numbers are right, as well. And it’s just a numbers game. And it’s very simple. I mean, people make it very hard now, particularly now, but you know, go to podcast, listen to people like Amy network called I think networking is very important. Every success I had, it’s me just turning up and saying yes, Amazon space, no one knew me. I asked the guy for five minutes talk. And then everyone kind of asked me to talk elsewhere. So I think, obviously, you all those things are listed. But networking is very important because you only learn from the people who are around you. And you’re only as good as the people who are around you, by the way, and you talk to so network is very simple. Even if it’s your local bar networking to Amazon conference, try to get there and get it done. And also, with your manufacturer, I always say is a transaction is not a transaction is interaction, get to know them, if it’s China, get on WeChat, you know, talk to them, you know, build that rapport and build multiple network of factories. And also forwarders is very important and three peels. So then your picture is actually you’re getting to know your logistics famous framework as well. So you need your Amazon network. And you also need your logistics networks as well. And sourcing networks. That’s how they both combined.

Amy: I love that, you know, I completely agree with you. When I made the decision to go to I said, like, two years ago, I was like, I’m gonna go to every conference, whether I’m speaking at it or not, I’m just gonna go and I’m gonna just network with people and whatever I can do. And it absolutely changed. Everything for me, like the amount of growth that I’ve had just in the last two years has been beyond my wildest dreams and, and it’s all been getting out of my comfort zone, talking to people, you know, communicating networking, learning, you know, there’s so much to learn. I certainly know like this much of all of the information that is available to me. So you know, I love that tip. I think it’s wonderful. So,

Pradeep: information is always changing. So you have to be out there to die information has changed and you know, this month you’re in trouble because always changing so you need to be out there. You have to gather information, the change of information. Yeah, just

Amy: that one person that you meet at a conference might change everything for you, you know, and it It’s not necessarily even the content. It’s like, like I said, the one person that you mean, I just went to that q4 party in Miami, the q4 kickoff party. And you know, I wouldn’t really expect to like learn a lot there, you know, or anything like that I did learn some things that was great, I got to network with all the new friends. But I met one person, a sourcing guy in China, and I already have a team in China and I got all that stuff taken care of. But this guy has a new business model, and I met him, and he’s going to be able to help so many of my clients and everything is just so cool. So like that one, that one contacts, changed everything for that one event that paid for the whole trip, everything. So it’s just sometimes it’s just that one thing, the one thing, that’s what we say, people coming to Mexico to source with us, you could find one product or meet one supplier make one connection for logistics that completely changes your business. And so it’s just like, then you don’t even think about, you know, the cost of the trip so much, or the cost of of getting out to that conference or whatever, because it just wow, like, you know, that didn’t even cost me as much as PPC cost me this month, you know,

Pradeep: even if we can’t afford to get get a mentor that’s going to these meetings or is known. So like yourself, or someone so you’re always hearing it from the grapevine. You know, obviously, we all learned something for every conference. But what it gives me comfort is, I know where the winds are blowing, like you get a picture of where the landscape is and how it lies and where the direction is Anyways, moving as a field. And that’s very important, because then you have a global and a local perspective of where ecommerce is going. And so then you can make some strategic kind of changes as you go along. And you’ll be learning stuff, but you get a broad look where it’s going. So you can say, oh, everyone’s going that way. Can I go this way? Or should I go with them and learn from them. So you kind of get the understanding as well. So technical minutiae, and stuff to the big kind of ever changing landscape. That’s what I love about conferences.

Amy: Yeah, me too. I love it. When of course, I got to meet you there so that I didn’t look back in London. That was awesome. Um, last but not least, I guess we should tell people you know, you said you don’t have anything to sell anybody today. But what if they want to reach out to you be part of your network? What’s a great way to do that?

Pradeep: Yep, Facebook is pretty Kumasi, Darren, Instagrams, PK Sasidharan. LinkedIn is pretty cool. My sources are just like my name, you get it from probably the podcast. I’m here to help and serve. I don’t have anything particularly sexy kind of hacks or reviews or mechanics or stuff. But I’m a top level business risk strategy guy. I can talk about distressed assets. I can just talk about anything and everything. If you want to talk to me, yeah, just reach out. And we can have a chat.

Amy: Incredible, you know, I had so much fun talking to you about my business, you gave me some really great tips that I implemented that really helped me so you know, hey, you never know who you might meet and who might spend a few minutes with you. And, and, you know,

Pradeep: I’m glad I’m useful to someone.

Amy: I think you know, you’re pretty useful. So amazing. Pretty. Thank you so much for being here with us today on the cellar roundtable. Thanks, everybody, for listening. Be sure to rate review, subscribe. We really appreciate all of you. Thank you Vlad, for being here again today. It’s great to have you here in the Zoom Room with us. And thanks, everybody on the livestream for hanging out. So yeah, we’re gonna we’re gonna sign off here and we’ll see you guys next week on the cellar roundtable. Bye, everybody.