Serial e-commerce entrepreneur, Adi Gullia, shares his experiences both in and out of Amazon, his strategies and goals.
Time-Stamped Show Notes:
• 03:07 – Adi talks about his experience both in and out of Amazon..
• 05:10 – Why developing a team to do your business for you is the competitive advantage and Adi talks about how to find them..
• 11:28 – Danny asks about iconic guys like Elon Musk and how Adi try to emulate it in his life and business.
• 16:15 – Adi’s talks about compounding, his biggest belief in growing the business..
• 21:37 – Launch, launch, launch. Adi’s strategy when it comes to Amazon.
• 26:06 – Alexa, artificial intelligence, the future of voice search and how it will affect sellers and customers..
• 31:57 – Strategies in the case of Amazon suspension.
• 37:31 – Adi’s real goal and vision towards his businesses.
• 43:00 – Are we living in a simulation?
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Full Transcript of The Episode
Danny: [00:00:24] This is Actualize Freedom. The no-bullshit podcast for selling on Amazon and lifestyle optimization. My name is Danny Carlson, your cohost, and today our guest is serial e-commerce entrepreneur with 40 private label products across five brands doing mid-seven figures in annual sales. In a recent appearance on the TV show, Dragons Den, he turned on multiple half-a-million dollar investments to keep more equity and grows on empire on his own. Despite having dozens of employees and massive profits, he still drives the same car he had in university and reinvests a 100 percent in growth. My pleasure to introduce the man who once ran nearly 55 kilometres in a single day for a Fitbit competition, Adi Gullia.
Adi: [00:01:04] How do you know all that? Did you do some background research? You sent some spies to hunt me down? That’s pretty incredible right there.
Danny: [00:01:12] Yeah man. I have my team of GVAs just like following you around for the past couple months getting all this information.
Adi: [00:01:18] That’s pretty cool. Well, my pleasure being here. I’m excited to have this discussion.
Danny: [00:01:22] Thank you. Yeah man. So you’ve been recently married with, sitting right over here, your recent wife and you’re just honeymooning around Southeast Asia.
Adi: [00:01:34] I was moving a lot these days yeah but that’s my wife right there. She’s a little bit camera shy so so yeah we went. I’ve actually not been in line for more than like 10 days at a time or the last six months. It’s just been crazy. I’ve just been travel travel travel in Southeast Asia, to US a couple of times, India. So just got that stuff out of my system and now I’m back ready to rock.
Danny: [00:02:03] Awesome man. You have like one particular really crazy travel story from Asia that sums up?
Adi: [00:02:08] Yeah. Actually we went to… What Was the city? Ubud, Bali and we went to see a monkey temple and these monkeys they.. One tried actually breastfeed on her like this baby monkey. Some of them were about to get into a brawl with me.
Danny: [00:02:33] And was finally pulled down her shirt and everything like that?
Adi: [00:02:36] Couldn’t take them down. But you know I was like monkey go to hell. But yeah they were getting aggressive especially if you’re carrying like bananas with you. They just come and hop on top of you and you know. But for me like the craziest part was just the wedding in India. That’s just a different experience. So if you guys ever get to check out a wedding in India, do so.
Danny: [00:02:56] Awesome man. So you’ve been pretty experienced in more than just Amazon, right? You used to have a subscription box business and other e-commerce ventures.
Adi: [00:03:07] Yeah I still do. So I actually don’t come from an Amazon background. And you know it’s kind of funny when I talk to people who are selling on Amazon. That’s like dear god. You know Amazon, Amazon, Amazon. It’s a great platform. But I look at it just like any other channel. It’s just a sales channel. And so most of my experience in e-commerce has been actually outside of Amazon. You know so whether that’s subscription, advertising in Facebook, Shopify, wholesale, retail and Amazon just kind of fits right in there.
Danny: [00:03:46] You think they gave a really big competitive advantage with a lot of your brands on Amazon like driving external traffic to Amazon?
Adi: [00:03:53] Yeah we do quite a bit of external traffic on Amazon for all the different brands primarily from Facebook. And in terms of competitive advantage I think it’s really having the right team you know because without the team you’re really just it’s just you. And there’s only so much you can do. This is only so much you can know. So I just have a stellar group of people who are just killers at things like listing optimization, PPC, and you know ranking the product knowing what strategies to use for ranking. So at this point I, you know, in like the last seven or eight months, I probably logged into my seller account four times.
Danny: [00:04:38] Wow.
Adi: [00:04:39] So it’s completely hands off. And so if there is a competitive advantage that everybody should strive for, it’s to really develop a team that can do it for you.
Danny: [00:04:48] Yes. So I Know that you’re super bullish about hiring Super A players.
Adi: [00:04:53] Yeah.
Danny: [00:04:54] Just looking for people that you don’t have to micromanage and people that are “owners” instead of employees, right?
Adi: [00:05:02] Yeah.
Danny: [00:05:02] So how do you find some of these people? Are there specific interview questions that you ask or you’re looking in specific places?
Adi: [00:05:10] That’s a tricky part because I’ve made mistakes in hiring. And the biggest thing that I learned in hiring is don’t try to find somebody and change them into something. Try to find somebody who already is the person that you want. And in terms of hiring, I don’t really have any techniques or anything. It’s just a matter of well it starts with the job posting, right? And what I used to do was I would just try to cater to everybody just so I could get a big group of people coming in and interview like you know I remember my first job posting I probably interviewed, on the phone, 70 people.
Danny: [00:05:48] Wow.
Adi: [00:05:49] And narrowed it down to like 12 or 13, ended up with a really good person, luckily. She didn’t know anything about Amazon. But the second and the third and the fourth job postings that I did, it was very clear that this is only Amazon. If you have had no experience with Amazon, don’t even bother applying because I don’t want to waste your time and I don’t want to waste my time. But really just try to qualify as much as you can because that will just save a lot of time and the person who’s the right fit for the job will know OK this is the job that I want and they’ll apply. So it starts with the job posting and then after that you know just having.. You’re going to develop the team that you want. And in our case, we have a certain kind of culture that we want to build in our team and so not everybody’s going to fit in that culture. If somebody doesn’t seem the right fit for whatever reason they may not be good for us, but that doesn’t mean they’re not good. And so really knowing what kind of team you want to build, what are your goals, what this person is going to be focusing on. Yeah it’s like a big lengthy process. I don’t know if you wanted to really touch on anything in particular.
Danny: [00:06:59] Yeah. Just from my experience building the Amazon agency, I ran into a lot of problems hiring people that will take ownership over actually like helping you towards that vision of the company you want to build instead of just showing up and you know done my work done good enough. You know what I mean. So like are there any particular structures or incentives they have in place to incentivize that behavior?
Adi: [00:07:23] Yes well the thing is you want to try to find somebody who is intrinsically motivated rather than an externally motivated. So if you have a person who you’re trying to come up with ways to motivate them, you already have the one person. And you know for example in my case, there’s a couple of people where they like setting their own goals. I was having a conversation with one of my teammates and I said hey let’s go over what we want to do for 2018. And I said I think this might be a good goal for us. And she basically came back to me an hour later and she said well I don’t think that was right what we just discussed and I asked her what do you mean that was not right. She said that goal is not big enough. And you know that kind of like stunned me. I was like here I am, I’m the entrepreneur and I think I’m like setting a high target, but she’s trying to correct me and aim even higher. So you know that just goes to show you what kind of a caliber of a person she is. And when I brought her on board, one of the first thing she told me was she wants to have her own business someday which didn’t you know turn me off in anyway because you want somebody who’s an entrepreneur on your team. I don’t care if she’s not going to be with me in two years or three years. Hopefully she will be. But while she is in there, you want to instill that entrepreneurial spirit, right? And so a lot of people that I know, they shy away from hiring someone who’s too entrepreneurial because they might leave you or they might going to start their own thing. Well let them start doing things. Who cares? But really just identifying people and asking them the kind of questions that might indicate whether they are the kind of person who sets their own goals because you know everybody is going to tell you that. Yes. I like to set my own goals. But actually following through on them you know digging in their past experiences. What was your main goal for 2017. And they’ll tell you and then you asked them, Did you achieve it? What was the big challenge in trying to achieve it. And really you know instead of asking several surface-level questions, picking one or two main questions and just digging as deep as you can because the person who really tried solving a problem or set a goal and actually achieved it will have a different way of answering those questions than somebody who’s just saying hey I had a goal to lose 5 pounds and I did it or what did you do or what did you make on a regular basis for your meals or you know what was your workout schedule like. So the nterviews that I conduct they kind of go deeper into the problem that were going to solve or the g oal that we’re trying to achieve. And just to try to identify, is this the person I will have to set goals for or are they going to be able to set their own goals themselves.
Danny: [00:10:00] I love that framework because, as you know, I’m sure you’ve been through a lot of employees that you know you have to be setting goals for them all the time. It becomes half of a job to actually give them works for you all the time right.
Adi: [00:10:13] Yeah.
Danny: [00:10:13] So I love that framework. I need to try it out for myself for sure.
Adi: [00:10:16] Yeah. And the other reason why you want to do that is because let’s say you know we’re building a team and it’s 10 people. You can manage those 10 people on your own. But if you want to take it to the next level and there’s 20 or 30 people, you’re going to need those people to set the goals for the other people that are coming in. Right. So if they’re not that kind of a person themselves who likes to set the goals themselves, you’re going to be chasing all 30 people around trying to manage everybody’s goals. You don’t want to do that. You want people who are self-driven, who are going to set their own goals, who’ll be proactive rather than reactive. You don’t ask them how is your target. You know have you hit your target or are you about to hit the target. You want them to be coming to you and you know telling you what their challenges are, what their frustrations are. But yeah, in order for the company to really scale, you have to put in the people who are going to self manage and let them make mistakes. Let them know that you know I’m here to support you but I’m not going to be here micromanaging you all the time because again you can micromanage only so many people. Once you have 30 40 50 people that’s eventually your goal, you’re not gonna be able to micromanage everybody.
Danny: [00:11:25] Yeah totally impossible at that point.
Adi: [00:11:28] Yeah.
Danny: [00:11:28] So segues really well into mindset. You mentioned to me that you’re really into just iconic guys like Elon Musk and Hill. What is it about those two guys that are really iconic minds in particular that really speaks to you and how do you how do you try to emulate that in your own in your own life and in business.
Adi: [00:11:47] Yeah. So you know when I was quite young around 15 or 16 years old, I ran into somebody who was pretty wealthy. And I asked him a simple question I was like Hey how do I build wealth. And he said it’s a long discussion but I’m happy to give you my best piece of advice. And what he said really hit home for me and he said in 10 years from now you will be the average of the five people that you spend most of your time with. And he went on to explain if wealth is your goal hang out with five people who already either builds wealth or are on their path to building it. If your goal is to be funnier, hang out with people who are funny because they’ll make jokes and they’ll make fun of you in front of other people. You kind of observe them and soak that knowledge into your head, you become funny naturally. If your goal is to become more confident, find five people who are just fearless and competent and sure enough over time you will develop those skills yourself. So any skill is developable as long as you surround yourself with those kinds of people. And what a lot of people don’t have the ability to do is to go out and find these people. It’s very hard to find high quality people in any field but they’re out there. And for me, reading his books and you know following guys like Jeff Bezos and Elon Musk, it’s kind of a way for me, if I’m not traveling and I’m not out there meeting the kind of people that I want to hang out with at home, it’s just a way for me to mentally stimulate myself. And you know if I’m running into a challenge, I will read up on one of these people’s biographies just to get some mind stimulation and just to help me kind of get over that hump. But even just building the business let’s say the Amazon business right. I got into Amazon really knowing nothing about it. Just two and a half years ago. I couldn’t follow the path which 90 percent of people do which is just sitting on their laptop trying to go on YouTube, Facebook and talk on forums. The next best path is to you know buy some of these courses. And to me the best path to getting good at selling on Amazon for example was going out there and meeting guys who were selling 40 50 100 million dollars a year on Amazon because the way they were thinking about selling on Amazon was very different from the guys who are on Facebook and talking. And so really that’s that that’s the reason I really like following guys like Elon Musk and Jeff Bezos is just run myself with high quality people.
Danny: [00:14:22] That’s awesome. That’s why I like interviewing guys like you man. Brings my level up you know and you bring up a really good point that you don’t have to actually physically surround yourself with those people to actually get the benefits of that law like or the average of the five people you surround yourself with. That could be someone on a podcast just like on videos, Youtube videos, like Tom Bilyeu, he was one of those people for me. I listen to his Podcast every single day, his videos.
Adi: [00:14:49] Yeah.
Danny: [00:14:49] It’s almost like we’re hanging out. You know I know so much of what he has to say that it’s you get a lot of the same effect.
Adi: [00:14:56] Yeah exactly. And these tools that are available to us now they weren’t available that long ago. Right. So if you’re sitting at home and you want to start a business and it is you know 1970 something, you’re pretty much out of luck because it’s you and your core group of friends and you have no idea how to get this information. So the Internet really changed everything and that it allows you to soak in all of this information. So I would really highly recommend everybody to soak in as much as you can. But that’s not to say that only focus on that. Try your best to go out and actually connect with these people because it’s a whole different conversation when you’re sitting next to that person rather than just watching the interview. Interview and you know things like this like content are the next best thing. But we should still invest some time in developing those relationships.
Danny: [00:15:43] Oh totally yeah. Like it’s amazing that we have unlimited access to all this amazing information. But that’s also the downside is we had unlimited access all this amazing information could literally spend three or four lifetimes.
Adi: [00:15:55] Yeah.
Danny: [00:15:56] On just learning about cool stuff which is a gigantic trap a lot of us fall into right.
Adi: [00:16:01] Yeah.
Danny: [00:16:01] Another thing I really love your mindset with is reinvestment. So I remember you saying you know for every dollar that you save every dollar you reinvest back into the business it’s like you’re ten dollars they’re going to come out later down the road right.
Adi: [00:16:15] Yeah. I mean this is probably my biggest belief in growing the business is let’s say you’re going out and you’re buying a meal right. People go out and just spend 30 dollars on a meal or even if you’re going I’m getting a Subway sandwich, the way I look at getting a Subway sandwich is this sandwich is not costing me 10 dollars. It’s actually costing me more like 100 or 200 dollars because if I was to save that ten dollars put it in my business, let’s say on PPC, you know it cost me ten dollars to acquire a customer, that customer is going to place six orders in their lifetime that’s like six dollars might equate to a hundred dollars in profit. So that’s how I’m looking at that. And a hundred dollars multiplied itself again. And you know everybody’s kind of familiar with the idea of compounding money you know. But you know you can compound time you can compound everything basically. Money just happens to be one of those things that you can actually see and measure but everything that I try to do in my business is kind of with that way of thinking is what is the actual cost of this one thing. Because there’s always an opportunity cost for everything. If you’re going out and buying drinks for yourself or with your friends, if you’re going out for an expensive dinner or if you’re going out on a vacation somewhere, you are always, well you don’t have to, but I do, I was looking at it as an ROI. It’s not necessarily the healthiest way of looking at it. But even if I’m going on vacation. Right. If that’s not going to ultimately give me that energy boost and rejuvenation that I’ll need to go back and just focus on my business, I’m not going to do that vacation because business is top priority for me and I want to do whenever I can to to take it to the next level. So it’s been a helpful concept.
Danny: [00:18:09] I love that concept too and probably stops you from going and buying that McDonald’s or the cookies or whatever when you really want to go get that it’s up to you. But what about investing in information like surround yourself with people like Mastermind groups or conferences and events and stuff like that.
Adi: [00:18:25] Yeah. I mean anytime somebody is saying this course is too expensive or you know I don’t know if it’s worth 300 dollars or five thousand dollars or whatever the case might be. I just again look at how many subway sandwiches have you eaten in the last two years. Are all those Subway sandwiches combined worth more than investing this course might be. And the answer is always you know this course is much more valuable. And at the end of the day you know, if you live an 80 year old life out of that you might have 60 years of productive work in you, you can drag your ass and try to figure everything out on your own or you can try to learn from other people. Right. To me every year is you know what you make of it and if you’re trying to figure out everything on your own you’re going to be left for the year. But if you get help from other people, use their time, their money, their knowledge and you do things like invest in courses, you could potentially turn that year into five years of productive time because those people who have gone out and spent 10 years trying to figure something out that if you just paid a thousand dollars and learned it, you just bought yourself 10 years. And so you have to look at it as an ROI. Sure it’s costing a thousand dollars. There’s books that are out there that are worth five thousand dollars. But people might say OK this is crazy. It’s a book. Books should cost 20 dollars. But hey what if the book lets you make six thousand dollars. Right. Again you know we’re living in Vancouver right. And there’s a bunch of people that I know who say things like I don’t want to move to Vancouver. It’s an expensive city to live in. Et cetera, et cetera. And I say OK how much additional will you rent if you move to Vancouver, it’s a thousand dollars. And I said are you more likely to find a better job here that pays at least a thousand dollars more. They say yes but they just don’t think that way. You know it’s always an ROI.
Danny: [00:20:16] Yeah. Scarcity mindset, right? They’re trying to protect. They don’t want to raise their costs when they don’t immediately see is like OK I’m immediately going to make this much more money right away. When often that in that case is probably the case. They are going to come here and they’re going to get a job that’s worth more money.
Adi: [00:20:32] And that’s also you know a negative mindset because you’re so focused on the cost and what is what you’re going to lose rather than what you’re going to gain. It’s either a cost or an investment and I try to turn everything into an investment rather than a cost because sure of course might cost a thousand dollars but if you’re just going to go through the course and you sit, that was the cost. But if you actually go out and implement it and take action, that turns into an investment. So it’s really how you frame everything and how you basically do what you know.
Danny: [00:21:07] That’s a great great advice. All right I want to move more into actual tactical stuff here. So like actual tactical stuff from your Amazon experience across your five brands. So you mentioned this a little bit something you do that’s more is different than a lot of people is instead of really optimizing your Amazon product listings and trying to squeeze out a 100 percent, you like to go for more 80 percent optimized enough and just focus on launching more products as fast as possible. Why is that your main strategy?
Adi: [00:21:37] Well again if you’ve got it. Most people are just so focused on trying to squeeze that extra rapid juice out of the orange rather than picking up the next one. You have to take a long term view. You could spend the next six months trying to take the one or two products that you already have and make them absolutely perfect which is one strategy or you could take that time to launch as many products as you can. What it comes down to is you know that concept of the more you fail the more you learn the more you learn the more you earn. The more products that you put out there, the chances of you actually hitting a homerun with any one of them is higher and you’re just basically taking chances and selling on Amazon can be a numbers game you know. You can basically take any product and make it successful. There’s no doubt about that. But the more products that you launch, the more the chances that you’re going to succeed because you know out of the friends that you and I even have, they may have five products and one of them is really good. And if you knew that the fifth product was going to be a success, would you want to get to the fifth product that much faster? And so I don’t really focus so much on trying to perfect any one thing. It’s not like you know there’s companies like Apple. They have to make the product perfect. That’s just what the brand is dependent on. But if you’re just trying to build an Amazon brand, it’s all a matter of how big your catalogue is you know. Unless you’re trying to build a brand itself that’s outside of Amazon which I highly recommend, in that case you really want to think through other things like the user experience, what’s the brand, what’s the mission and the vision behind the brand, what’s the brand identity. But if you’re just simply trying to build an Amazon business, the most successful people that I know they just have a huge catalog and they are super aggressive with the way they churn out products. I know some guys who have 300 private label products.
Danny: [00:23:33] Wow.
Adi: [00:23:34] Yeah. 300 private label products and they’re huge. And the one thing they would tell you is just launch, launch, launch. That’s the only thing they care about. You know I’ve got some duds that I know that might be duds but I just don’t go to the time to go and look at those guys and see OK is it worth discontinuing these products or not because that same energy can be spent on launching new products. It’s going to be obviously if a product is absolutely doesn’t make sense to do. But there are some products that are going break even. But that’s not my focus. My focus is we had 10 more products, 15 more products to see.
Danny: [00:24:12] Totally. So you’ve Identified the that’s like the real 80-20. That’s 20 percent or the 80 percent of your revenue is going to come from just blasting new products all the time because yeah it doesn’t really make sense to spend a lot of time just trying to polish up a turd right. If it’s not working.
Adi: [00:24:27] Yeah.
Danny: [00:24:27] It doesn’t warrant a lot of time to try to make something it’s not working actually work when you can just launch new products and one of those is going to work right.
Adi: [00:24:35] Exactly. I mean if I told you launch 20 products, five of them will be just killers. You going to want to get to those 20 products ASAP. Rather than trying to like you know play on just one product at a time.
Danny: [00:24:48] So you have like 30, 40 private label products, right?
Adi: [00:24:51] Probably 50 at this point.
Danny: [00:24:55] OK. Just like raw percentage-wise, what would you say is like the duds, the ones that lose money or break even and then the ones that are you know they trickle on they’re doing OK versus like the home runs?
Adi: [00:25:08] I’d say probably two out of those roughly 50 might be duds with three or four maybe max four, five or just stellar, they produce let’s say 40-50 percent of the revenues and the remainder of the 40 or so they make up the remainder of the revenues. So it’s a pretty decent split.
Danny: [00:25:32] Wow. That’s like 80-20 pretty much spot on right there. Five killers out of 50 products?
Adi: [00:25:37] Yeah yeah.
Danny: [00:25:38] Impressive.
Adi: [00:25:39] Yeah. I Mean that’s why I’m telling you if you just l aunch 200 products, there would be 20 or somewhere around there that would just be crushing it. And so just launch, launch, launch.
Danny: [00:25:51] Awesome man. And then next up I would like to talk about something a new trend is coming out on Amazon, Amazon Alexa. It’s a voice search. Are you currently… Do you have any views on where voice search is going and do you have any plans on how to maximize on that?
Adi: [00:26:06] Yeah I’ve actually been quite interested in artificial intelligence just reading about it. I went to a couple of conferences lately and it was somebody from Amazon actually there, they were like high up an Amazon team and they said, yeah one of the things you know he was aware of a lot of these black hat tactics that sellers are using. Elon knows all of this and they actually have dedicated teams studying the same courses that are teaching this you know like the Illuminatis and the other ones. But what this guy said was this is all going to change as soon as voice come to us because of what these tactics are based on is search results. Right. How to rank better, how to get more reviews, and those are primarily the two things that most sellers focus on reviews and ranking. What search is going to do is it’s going to completely change the way people are buying things. So if I wanted to buy what is this microphone?
Danny: [00:27:05] Microphone? Yeah like getting microphone.
Adi: [00:27:07] If I search microphone on Amazon.com let’s say, the guy has the best skill set in terms of getting most reviews and the best ranking is likely going to show up and I’ll buy. Right. And that’s just how it is. It doesn’t matter if the best microphone for my needs is actually on page number 3 and that seller just doesn’t know how to show up on PAGE ONE. Well what us would do is give you the ability to interact with the machine a lot better and it will actually render useless a lot of these things that the sellers are focused on such as reviews because what Alexa told me is sure I found a bunch of microphones for you. Are you looking for five star, looking four stars, three stars and I’ll say four stars or up and it will not really care if the product has 10 reviews or a thousand. It will just give me the latest reviews that somebody has left. I may ask what things like what’s the most relevant review somebody who fits my user profile is left there and Alexa will understand you good enough to know that you’re an entrepreneur, you’re a male in your 20s, you live in a certain state, things like that. So all those reviews are not really targeted to me. Some of those reviews are because some of those users fit a certain demographic that I’m also part of. So voice will completely change everything you know in terms of search and it’s going to bring about new opportunities for some people, it’s going to kill some people’s businesses and just keeping up pace with how Alexa and things and tools like this will change your business it’s really important.
Danny: [00:28:41] Yeah. That’s really inspiring to think about especially like Alexa has all your information and profile. It knows what you’ve bought all recently and knows exactly where you have a Macbook Pro or whatever so it’s not going to bother showing you anything that won’t be compatible with a MacBook Pro or something like that.
Adi: [00:28:58] Yeah and if you think about it, the way these reviews are done I’m very skeptical of the way I buy products on Amazon just because I know what kind of techniques are out there to get reviews and get rankings. Generally it’s not the best buy and that’s showing up number one two or three in search results. You have to do a digging and be a discerning customer and actually read through the reviews and see if they’re verified or not. Look at the latest ones rather than the older ones. But it’s actually not that good for customers. The way the platform is built right now. Amazon’s only focus is pleasing the customer right. So something around that is going to have to change. For example, things like number of reviews. If a product has 500 reviews versus 5000 reviews, does it really make a difference in terms of which is better. So they may implement things like you know LinkedIn has that 500-plus connections. So Amazon may just very well render useless how many reviews you have past 500 by putting something like 500+ reviews or bringing in Alexa that might actually be able to study you a lot better than online results are because when I search microphone on Amazon right now, Amazon you know I’m not able to interact as good as I will be able to do with Alexa. So it is very interesting and I’m excited about it because it’s going to open up a lot more opportunities. And anybody who’s just getting into Amazon for example will have a new way to rank or show up. So I would say keep learning about it.
Danny: [00:30:26] Oh yeah that’s fascinating to think about. I totally agree that there is probably going to be a review reset sometime in the near future just because it’s you know if a product category has all like 5000 plus reviews on the first page. It’s really really difficult to actually launch and compete in that market. That’s not actually good for the customer right. Like the new better products are coming up are not going to be showing up for the customers and that that’s bad for Amazon so they’re going to have to do something about it eventually.
Adi: [00:30:52] Exactly. If You think about it take for example one of the really most competitive products in beauty which is a very saturated market. Vitamin C. Right. When I was looking at the beauty category two years ago, the vitamin C serum that was like the top one might have had 2000 reviews. Today it has 15000 reviews.
Danny: [00:31:11] 15000? Wow.
Adi: [00:31:12] Right. And in another three years, the product might have 40000 reviews. And how are you supposed to compete with that as a new seller. Who’s looking at 20 reviews? Something will have to change because otherwise it’s just a big and the bulky kind of businesses that might not have as much of a customer focus. We’ll just be left with all these reviews. So you’re totally right. Something will probably have to change and probably will change.
Danny: [00:31:39] Yeah absolutely I think so. And let’s talk for a second about how to protect yourself on Amazon so you have five brands. What are some of the strategy you are using to you know protect yourself in the case of an Amazon suspension or in case something catastrophic happens you know?
Adi: [00:31:57] Yeah there is that those ways to do it and then there’s the way to kind of get around the system. I can talk a bit about both. The first thing is if you just want to really play it safe by the rules which I recommend most people do, just don’t do anything stupid you know. Read Through the terms of the TOS terms of service. And it’s not like you know very lengthy. It’s Just a couple of pages and you just know the basics of what not to do because if you get suspended it can cost quite a bit of money. I’ve known people who like I know this one really big seller who have five or six brands as well. And their main brand they were doing 35 million a year and they had a dedicated account manager with Amazon who worked with seller performance. So they had an insider performance. They could have picked up the phone, call seller performance any time they want it. They were getting violation after violation every week you know primarily to do with reviews but they just thought they were so big that they couldn’t be touched. And boom, Amazon came in, shut them down. And they were literally losing you know three million dollars a month in sales. And you know they since come back. They put safeguards in place. You know they’re selling their whole catalog through three different accounts now. So that if anyone gets shut down they still have PPC and everything running on the other ones. But I would just say if you’re just getting in, don’t do anything stupid like don’t go out and buy reviews just from somebody who tells you it’s safe to do so which I’ve done. Second is see if you can get two accounts and try to get Amazon’s permission. I have extra accounts for which I’ve got an Amazon permission and you know let me have those. They’re just kind of sitting. I don’t really sell on those accounts but they’re just in the event of something happens. Second is find another seller. Let’s say I sell products in the pet category and Danny sells products in the home kitchen category. If you’re afraid of suspension which everybody.. You shouldn’t be afraid of it but you should have insurance in place right. You should have things in place like have Danny ready to sell my products if my account is suspended. And he can buy my product at wholesale price. There’s nothing wrong with that. I’m just selling Danny my product and I’m taking a cut in my margin but in case somehow I”m losing all the sales. So that’s one way. The good thing about having a community of Amazon s ellers and being connected with them is most people would be willing to do that especially you know if Danny came to me and said Hey man I’ll just let you have all this traffic that I built up. You can take half of the profits. I just don’t want to lose all those rankings while I’m trying to get my account unsuspended. So that’s another way. Third way which is like you know the blackhat way is actually having a backup account and running the account through what’s called the VPS virtual private server and just operating it from there. But those would be I think my thoughts are on suspension and how to deal with them is just have backup because if you’re selling anywhere you know 100 thousand dollars or more a month, you’re a pretty sizable business that’s a million dollars a year or more business and you better have protection for that.
Danny: [00:35:22] Totally. I love the one about wholesaling to another Amazon seller as well just because it keeps your actual sales rank for that product and you’re still you’re getting less money like you said but you still have an income instead of it’s infinitely better than suspension having zero your product ranking is going way down. You have zero income coming in. Amazon’s holding onto your money. So I really like that.
Adi: [00:35:44] And it gives you that peace of mind right. And also if you want to do that. Make sure you already have everything set up beforehand because for example in my case, some of my brands are brand gated which means that you can’t actually even try to sell that product. That, combined with the fact that some of the products are in beauty, requires you to have two levels of approvals from Amazon. One is I have to send you a letter. You have to send to Amazon to get approved to sell my products. That’s one layer that you have to go through. Second is most people need to approve the selling. You may not have that approval. And in order for you to sell my product you’ll actually have to apply for food and beauty and get approved. And that process can take a month at least. So if you are finding a Danny for yourself to sell in the event of a suspension, send them a small order of 20 units that he can send to his FBA and actually get the whole thing set up should you need to sell them in the event of suspension. That’s just because I ran into that same issue. I had a friend who was acting as my wholesaler and they’re just selling my product. And he couldn’t because he had those two years to go through.
Danny: [00:37:01] Yeah that’s super super valuable to have because like you said you’re losing so much money every single day that you got a stock there. And Adi, you’re recently on Dragons Den, that Canadian TV show basically that the Canadian Sharks tank. I believe you end up creating a deal with one of the dragons there. So I mean you’re building some pretty serious businesses here. What is your real goal here. What is the vision that you’re driving towards with these businesses.
Adi: [00:37:31] Yeah I’m just having fun building the brands that I’m building. So that’s number one is you know I do have you know eventual exit in mind but I don’t think about it day to day. Because if that’s what you’re starting out with, you’re not really in it to build it you know. If somebody is thinking about an exit, you’re running away from your business rather than wanting to build a business so that’s just you know the one thing. But my eventual goal you know obviously build all those brands and ideally have some sort of synergy between the brands. So if your main demographic happens to be men who have beard you know has something in common with in between the brand so eventually you may be able to merge them together. But you know the reason I have multiple brands is twofold. One came from the idea of hey what happens if there is a suspension. You just want to have a separate brand that you’re selling. Second, this is interesting to me. Having a brand that’s a beauty and another one is sports, you just kind of team dynamics into. It allows you to learn things that you otherwise wouldn’t. So if you happen to be in the same category you know you get stuck in a certain way of thinking you know if you’re selling pet products you’re only human. You might only be in pet forums and discussions with pet bloggers and it just doesn’t allow you to kind of stretch your thinking. And I’ve purposely got into categories where I’m going to need to get into wholesale. Otherwise the business just wouldn’t work. For example, if you wanted to get into office products, that’s not a BBC business generally. And you will you know you’re better served knowing how to deal with wholesale and retail. It just makes you a better business person by making you think in different dimensions. So that was one more reason why I started multiple brands. I actually bought a brand recently a couple of months ago. And part of it is just you know it allows me to learn more, challenges me and my eventual vision I guess is to kind of exit from them at some point. I’m pretty sure I’m going to get bored of e-commerce at some point. And that’s what I’ve been going to different kind of conferences, related tech and things like this. So I’ll eventually probably pull them together perhaps sell them. You know the other thing you want to know is when you go to exit your brand or your business which I assume most people would, the higher your EBITDA the higher the multiple. Because if you have a business that’s for example doing 200000 a year in EBITDA. EBITDA is basically profit. You’re going to be looking at buyers who are mom and pop kind of you know smaller buyers and they won’t have you know the database will be 60 year old or 50 year olds who are betting against each other and they’ll be very price sensitive because your business might be selling for half a million dollars. If you get into the million dollar plus EBITDA, that’s where the big cats come into play. And really the good action starts to happen when you have five or six million a year in EBITDA because that’s when private equity guys come in and they have so much capital that they’re not afraid to put in an extra million dollars. They just don’t you know I say to them it’s like Warren Buffett going out and trying to buy business. He, at this point, has so much cash. He will just pay the premium. And so that’s the other motivation behind having multiple brands is because when you go to pull them together and sell them EBITDA is hopefully higher which allows you in turn attract a different level of buyer. So that’s the eventual leave.
Danny: [00:41:21] Well I know you’re a true player man. It’s you’re in it, you’re in it for the hustle instead of for for some shiny carrot at the end of the road right.
Adi: [00:41:28] Yeah man like you know it doesn’t really bother me you know. There are setbacks in business like for example our business in Europe. It just completely tanked. We were doing multiple six figures a month and that went to zero because of one stupid mistake that I made. Our account was fine but our brand was you know vanished and didn’t bother me the least because you know I was just having fun doing what I was doing and I was like it will come back. And speaking of that incident, one of the big lessons that I learned was have a lawyer to deal with your Amazon issues. Just have a lawyer because the lawyer might cost you 500 dollars to a thousand dollars. But I was losing thousands of dollars a day by not having a lawyer and trying to fix all of that myself thinking Hey I know so much about Amazon. I can fix it myself. I Know how to deal with Amazon. Dude, that letter from the lawyer just you know fixed everything within a couple of weeks. And I was going four months without any sales when all I needed was that letter to be sent because he knew the exact person to reach out to within Amazon.
Danny: [00:42:29] And then they take a lawyer’s e-mail a lot more seriously than just like within seller central communication I imagine right.
Adi: [00:42:35] Yeah. And so if you run into any account specific issues or something that’s like jeopardizing your entire business, do not even try to tackle it yourself. Get an attorney. Get him to kind of go in for you.
Danny: [00:42:47] That’s awesome, Adi. Oh it’s been a pleasure having you on this show. I just have one more question for you before we sign off. You brought up artificial intelligence so I have to ask, Are we living in a simulation?
Adi: [00:43:00] I don’t know. Some people say we are because there’s really no way to know right. I mean if we had a game where we were running a simulation with little creatures in it, they wouldn’t know. Were much smarter than them. And so there is like super intelligence out there which there might be. We’re living on this little ball of mud called the Earth. Right. And the farther out there you go, the more insignificant the earth becomes. And you know you and I are sitting in this little office here on this little planet. And so it’s kind of crazy to think that we’re the only people out here. There’s got to be life out there. I know there’s no proof of it. But I don’t know. Maybe we are. Maybe we’re not. And hopefully this simulation keeps going long enough while we’re alive. So what do you think?
Danny: [00:43:55] Oh man yeah I think after hearing guys like Elon Musk and Peter Diamandis talk about it, it makes such a good case that it’s way more probable that we are living in a simulation that we’re not. Sounds insane but I mean you just got to watch those videos. They have a very good explanation for why we are.
Adi: [00:44:13] Yeah.
Danny: [00:44:13] But not go too deep down the rabbit hole there.
Adi: [00:44:16] Yeah.
Danny: [00:44:17] Before we sign off here, is there anywhere that people might want to reach out to you or any resources you want to pointing towards.
Adi: [00:44:25] Yeah. If you want, I try not to use Facebook as much anymore but I want Facebook. You can just look up Adi Gullia and you can look me up in that same name on Instagram. But in terms of like final thoughts, I would say if you guys have the goal of building on Amazon casual business which I presume most people do, you know basics. Just figure out how to make one product successful and then replicate it times 50, times 100, times whatever your goal is and just have fun doing it. There’s no point in doing it to prove something or how to do somebody else or anything like that. Just try to build a brand that you might want to own for the rest of your life. It’s kind of like thinking that Warren Buffett has right like buy something that you think is worthwhile and keep it for the long term. But I just say keep hustling, keep listening to Danny because he knows what he’s talking about and we should do a podcast on fitness someday because this guy’s and your dad is in like biking too right. I remember running into him.
Danny: [00:45:35] Yeah my dad’s a crazy long distance runner. I’m actually going next weekend down to Washington to go run a marathon with him and like I am not that prepared for the marathon. But he he crank marathons for breakfast and he’s like 60 years old. So it’s inspiring to see at his age for sure. But Adi. Thank you man. I really appreciate you coming on the podcast sharing all these gold nuggets with everybody here.
Adi: [00:45:57] Anytime man.
Danny: [00:45:58] And it’s just really inspiring to see what you managed to achieve in e-commerce in such a short span of years.
Adi: [00:46:03] Yeah well I hope to continue kicking ass and I’ll watch your podcast and learn too. So keep putting out this great information. And everybody? Focus.
Danny: Awesome guys any resources mentioned in this podcast with the notes you can find at actualizefreedom.com/15. And as always, go to iTunes. Leave us a review on there. Subscribe. Go to Stitcher if you’re on Android and we’ll see you on the next episode.