Mike Cooch: All right, everybody. It’s Mike Cooch and I am here with Jeff Chisholm, and Jeff has had some success here recently in getting started in the Amazon business model and is one of our Simple Amazon Income System student and was nice enough to agree to be interviewed here so we can do a little case study.
I want to find out what he did to get started on the business, how he brings his product, all that type of stuff that people are always very curious about.
Thank you very much, Jeff. Thanks for joining us. We appreciate it.
Jeff Chisholm: Thank you.
Mike Cooch: Due to our technical difficulties, Jeff had to call in on his phone. We can’t get the microphones working on the computers, so that’s why he’s sitting there, with this phone to his ear, but we’re going to make it work.
Jeff, where are you calling in from tonight?
Jeff Chisholm: New Orleans, Louisiana.
Mike Cooch: New Orleans, Louisiana. All right, awesome. Very good. Well, we’ll make this pretty brief here. Don’t want to take up too much of your time.
Real quick, why don’t you just give us a little bit of background on who you are, what you’re doing when you’re not tinkering around with Amazon, and how you decided to get into this whole thing.
Jeff Chisholm: Like I said, I live in New Orleans now. Originally from northeast. Moved down here when I got married. I work for a company that’s based out of the northeast, technology company, but I work in a remote office here in Louisiana.
It’s basically a sales office, so I’m pretty much the only person in the office. I do have a lot of flexibility to kind of do little side projects on my own when I want, as long as I’m getting my regular job done.
As to why specifically this, it’s something that I’ve always wanted to start a business. I’ve always wanted to do something. My brother is very entrepreneurial. I went to entrepreneurial schools and everything, but I just never really had an idea or the guts or capital to actually start a business, or didn’t want to risk anything.
Then I found out about this thing through you, about all the opportunity that people could have, and, really, how quickly and easily, if you get things set up without really … I mean, there’s always risk but without a ton of risk, so it was very attractive to me.
It was something I wanted to at least try. I wanted to at least give it a real go and see what I could make of it.
Mike Cooch: Yeah, cool. That’s awesome. It’s an entrepreneurial opportunity. You’ve been interested in doing something entrepreneurial but it is pretty low risk.
I mean, there are not that many businesses out there that you can start for whatever it is. A thousand bucks, a couple of thousand bucks, five thousand dollars, depending on how much you want to jump in to this. It is relatively low-risk.
As you said, there is risk in any business, but, certainly, if you’re able to do it while you’re still holding down your full-time job and collecting a paycheck, then that’s all the better because there’s a lot of businesses that you can’t do that with.
What I’m very happy about with you is that I’m very happy, any time I see it, because it is unfortunately a smaller percentage of people who want to start a business like this that actually take action, but you jumped into it.
We were just discussing before this call that you just started using your free time whenever you could grab it. Just immerse yourself into learning about this opportunity and going through the course or researching products and all that good stuff so that’s awesome.
One of the first things that people get stuck on when they’re considering this model is what product are they going to sell. The first reaction when I say to people,
“Hey, you could be selling. You could set up a business selling on Amazon,” almost universally, the response is,
“Well, I don’t have a product. I don’t have my own product to sell.”
So when you explain to people,
“Well, look. You don’t have to have your own product. In fact, reverse that; let’s go out and find something that already has demand and then you can get your product and fulfill that demand.”
Then the next thing that people get stumped on is that there are like a bazillion options that are out there.
Can you talk about how you narrow down and decide on your product there? Are you showing right now, you’re currently selling one product, or you have a couple going?
Jeff Chisholm: I’m only selling one right now. I have one in transit that is hopefully in the air at this point, but for right now, it’s just the one product.
There were really three things, three different ways that I look at narrowing down products.
The first was, for lack of a better idea, just going into Amazon bestsellers, going into Amazon new sellers, most wished for, and just drilling down into the sub-categories and finding out what’s intriguing, and that was very inefficient. That was before I heard about Jungle Scout.
That might be a little more efficient now with Jungle Scout but the second way that I did it, which was a lot more effective, was just trying to do a ‘touch test’. Basically, evaluating stuff I used in my every day life.
Like being in the matrix; every day, every item I looked at had a BSR and a weight on it, and I just try to think of,
“Okay, wow, that’s something I could sell. That’s small, that’s this, that’s that. I wonder how much it’s selling? I wonder how much it costs? I wonder how much I could make it for?”
Everything, and still, to this day, everything I look at, it’s a new perspective on life.
That’s how I found my second product.
The way that I actually found my first product, which was a niche product, is from a piece of software called AmaSuite, which is similar to Jungle Scout. It’s something that I never would have found otherwise.
There’s some YouTube videos that will explain it but it’s not inexpensive. It’s like $300 but it’s a way that you can, you basically pick the categories you want to look at, it pulls down all the information, you run some filters on it, of weight, price, BSR, and you can look through 10,000 products in an hour.
Mike Cooch: Yeah, that’s cool. I like how you’re talking about, how your perspective has changed about products. I think everybody that gets in this business goes through that.
It’s hilarious now; every time I go to a store, any time I see anybody with anything, my brain just immediately starts, “Huh. I wonder how much that costs, what the margin is, where I can get it,” all that stuff so it is fun.
Jeff Chisholm: It’s something that every entrepreneur tells me. It’s a mindset, not just about this Amazon thing, but every entrepreneur is thinking about anything.
“Hey, how can I make money on this? How can I do this and turn this into a business?”
It’s something that everyone does; how do I make money on it? It’s an affliction.
It’s a characteristic that I never really had, and I could understand it but it was just not instinctual to me, and with this stuff, it really is. It’s really something that, every item that I look at, I think of,
“Okay, how much does it weigh? How much are these buying? How can I differentiate this?”
Yeah, it’s good.
Mike Cooch: Yeah. That’s very cool. Awesome. You decided on your product, you got it launched, and started generating sales. How long of a time frame are we talking about between…
Actually, let’s do time frame from when you got your hands on our course to got your product launched. What kind of timeframe are we talking about there?
Jeff Chisholm: That was probably four months, if I’m doing the math right. That and I know one of the questions you’re going to ask about is about how much I invested. Both of those things are going to be probably bigger and longer than I think most people need to.
I made some mistakes but I also tried to invest a little early, so that’s why it took a little longer.
I heard about it in February, I sent money to a freight forwarder in March, I spent all March getting samples from a bunch of different suppliers and got my samples in mid-April, and then my product launched June 4th.
Mike Cooch: That’s great, yeah.
Jeff Chisholm: If my math’s right, that’s four months.
Mike Cooch: Yeah. Four months is not bad. I mean, we tell people 90 days is pretty realistic. I mean, four months is not bad at all so that’s great.
Essentially, you got the course, you kind of dived into it and got started, right?
Jeff Chisholm: Yeah. I mean, within a month of having the course, I was spending money on samples and having an idea of what I wanted to look at.
It didn’t take me four months to do stuff; it’s just the process isn’t immediate. You have to wait for stuff to come from China and there’s a day delay between emails, as you reach out to people.
It got to the point where, now I’m trying to go to bed; I ended up having to shut my phone off, basically it goes on mute at 11:00 at night because, otherwise, any time it would buzz, I’d wake up. Try and save a day on a communication.
Mike Cooch: Yeah. That is very common. Okay, cool.
How long was it from the time that you got that product to Amazon and got it listed until the first sale?
Jeff Chisholm: Minutes.
Mike Cooch: Minutes?
Jeff Chisholm: It was minutes.
Mike Cooch: That’s awesome.
Jeff Chisholm: Honestly, it is baffling to me. Amazon sends you an email when the thing arrives, they send you an email when it starts to be checked in, and so I was doing work, I noticed on my … because I have a business email, as well as my personal email, so I noticed on Gmail that I got an email on my business and I saw that it actually checked in.
I went on to the seller page for the first time and I had a sale already, and I was like, “Awesome!”
Then I went to call, took a picture for my wife and I called her, and then I went back and I had two more sales, and I very quickly went from “Awesome,” to, “Oh, I’m going to run out of inventory.”
Mike Cooch: Panic. Yeah, yeah. It’s kind of like that commercial, where they launched the dot com and now are all excited and they’re standing around the computer and all that.
Jeff Chisholm: I was going to make that exact reference, yeah.
Mike Cooch: Yeah. That’s classic. Man, that’s exciting, though.
I mean, to get it moving that fast has to feel very reassuring and builds your confidence that you made a good decision and probably.
Jeff Chisholm: Yeah, it was definitely a good feeling. It made me think that my pricing was too low so I started raising my pricing, especially if I knew I was going to be running out of inventory.
I’m selling now for $3 or $4 more on a $20 item. I started selling at $16, $17, with the discount where, if you bought more than one, you got 15% off the order, so the first couple of days, my average price was probably $15.50. Now, last weekend, I was selling one for $20, $21. You’re still trying to figure out where the actual price is.
Mike Cooch: Speed to get those sales just fed the addiction to jump in small and go for it. That’s awesome. Let’s see here.
How much did you invest?
Jeff Chisholm: I have spent right now about $13,500. That sounds like a lot but I’m looking at the numbers now, actually. I haven’t actually done the math before you asked me.
I have about $8,500 in inventory that is either just arrived or in transit, so we’ll take that off the table and it’s really…
Mike Cooch: That’s your wholesale? That’s your cost of the inventory?
Jeff Chisholm: My cost of the inventory.
Mike Cooch: Wholesale value, okay.
Jeff Chisholm: My cost of the inventory is about $8,500, which would probably mean probably double that is what I get back, so $8,500 and profit.
So take that off the table and my cost is basically about $5,000, but only $2,000 of that was actual product.
I made some mistakes on samples, I spent about $1,500 on samples. I spent probably another $500 on various research things I mentioned: AmaSuite, I got Jungle Scout, I got Merchant Words. That was a few hundred bucks.
Probably $750 to actually set up the company, get a bunch of websites for the different brands that I either have or will launch, email addresses, LLC, all that type of stuff.
Some of those things are things that people don’t necessarily need to do immediately and I just did because I wanted to really treat it like an actual business, so I probably, if I were to start again, knowing what I know now, if I wanted to do on the cheap, I probably could have done it for $3,000, including initial product, samples, and basic research tools.
I spent a little more I think than most but I’m not worried about losing it.
Mike Cooch: Yeah. No, I mean, you spent it all on good stuff. I mean, you’re set up for success and got the foundation. You’ve got a good company, employees, all that type of stuff, and that money that you got invested in inventory, like you said, that’s just future profits coming back at you.
What are you doing now, in terms of daily sales volume, or monthly sales volume, what do those numbers look like now?
Jeff Chisholm: I kind of got screwed. I have mentioned running out of inventory. I have actually run out of inventory twice.
What I did is I went through a sample run. I got my samples back and then I wanted to make some changes to the product, and, rather than going back to everyone and having them send me another sample, I just placed a couple of orders of kind of the two best.
I got 125 from one, I got 250 from the other, and when the 125 showed up, I just sent it right to Amazon. I didn’t wait for the other 250 to show up, which I should have.
I sent the 125, I sold it all in the first week, and then I was out of stock for like, two or three days before the next 250 came.
My first week, I had gotten to a BSR of like, 4,000, and I was selling 10 to 15 a day. Then I had nothing and my BSR dropped about 20,000.
When I got the new units, I was initially selling about three to five a day. It just took a while to get back up. I had to do a giveaway to spike the BSR again.
Then I got another batch coming in, which was 500 units, and I thought I was going to avoid another stock out and then my listing went viral.
My views went from like 300 to 400 a day to 10,000 a day.
I raised my price a bunch, so that I wasn’t going to lose stock but I did. I was selling 20 to 30 a day at a high margin, but even before then, I sold basically averaging 20 a day last week, and then I went out of stock on Sunday. I’ve sold 44 now in the last five days since my stock returned, including, the last time I looked, five today.
Once you run out of stock, it takes a while to get things back. You see all the money that you’re losing, and I’m selling it now for $3 less than I was selling it for last week but, for whatever reason, it just doesn’t have the views because the BSR went from, I was up a thousand last week and now I’m at 5,000 or 6,000. It’ll come back but it slows down.
My steady state, when things were smooth, was probably 15 to 20 a day. I was making, right now, it’s about 50% margin. I’m still at $20 and I’m making just a shade under $10 a sale.
Mike Cooch: Got it. Great. On those days when you’re doing 20 sales, you’re clearing a couple hundred bucks a day and that starts to add up and get meaningful here pretty darn quickly.
Jeff Chisholm: Yeah. It starts to be especially meaningful when, now that it’s out, there really isn’t a lot of work that I need to do, aside from just making sure I have enough inventory, responding to the very few messages that come in from customers.
Then you start thinking,
“Okay, if I can do 20 units, 15, 20, $10 a sale on this one, I can launch another one. Do another 15, 20, do another, 15, 20.”
Then you start doing 70, 100, 150 a day, start thinking about $1,000, $2,000 a day, then it starts getting real money and then it starts getting potentially life-changing.
Mike Cooch: Yeah. Yeah, absolutely. That’s awesome.
What is this all about to you?
If you are able to get that point and get those numbers, which I have no doubt that you will; I mean, the amazing thing is, even though this is so exciting and at times can seem overwhelming when you’re just getting started, doing 15 or 20 sales a day on Amazon, that’s a real low volume.
I mean, you’ll be able to get I’m sure way beyond that very quickly, especially if you add additional products and just kind of get refined on how you market those products and stuff like that.
What excites you about this? What kind of opportunities does this create for you? What is your vision for this, when you get to that point where you’ve got more sales going on for you and your family?
Jeff Chisholm: Honestly, right now, even if I just, for whatever reason, did nothing but this one product; if I can sell 15 or 20 a day at $10, it’s already life-changing because my kid is just two years old now, is going to start going to school soon.
My wife is looking at probably starting to work again. She doesn’t need to now if she doesn’t want to.
This basically replaces her income on this one product, if I can just continue to do this.
Now, in terms of when I really starting to think of long-term, yeah. I mean, my head is swimming. I have never taken sleeping pills in my life.
I take sleeping pills every night now because I cannot get to bed because all I do is think about, not just product ideas or how much money I’m going to make but about the next brand extension.
I could sell this, I could sell that. I could market it this way, I can do a promotion here with this group. That’s also life-changing because I do well.
I have a MBA and I have a good job, but I’ve never really had passion for a job in a long time, and the only times I’ve stayed awake at night thinking about my job is when something bad’s happening or being nervous about a presentation or,
“Oh, crap! I forgot this email and my boss is mad at me.”
Now I’m staying up at night because I am so excited.
I’m like a kid before Christmas. Just thinking about a million things and my mind is racing a mile a minute.
I mean, it really has already been life-changing, to some extent. Yes, I have already a second product coming in, which is a completely different brand, and I have the ideas of my first product developed right now, two or three different brand extensions.
Same thing about my second product, so while I really think, certainly before Black Friday, I want to have three or four products out and up with a solid base, so that I can really do it well for Christmas.
I would think, by the end of the year, I’m expecting 50 to 100 units a day. I think I should be able to hit those numbers.
Then it starts getting potentially a full career and quitting my regular job and doing this, and then you start branching out into really focusing on moving off just Amazon and finding out other avenues to sell it and real retailers.
Potentially looking at an exit strategy of selling the business or selling different brands. There’s a bunch of things that I have in my head.
For right now, I want to try and master getting things on Amazon, getting as many samples in the door as possible, getting as many products out the door as possible that I can reasonably manage.
Mike Cooch: That’s awesome. That’s killer. I mean, you got your hands on it since February for the first time; here we are, just kicking off July, and like you said, it’s already life-changing, in terms of your wife having the option to not go back to work, staying with the kid. That, in and of itself, is phenomenal.
Super excited to hear about this a year from now.
Any kind of major challenges that you ran into that maybe you didn’t expect other than running out of inventory, which is clearly a for everybody here?
I guess, along with that, any parting words of wisdom that you would give the people listening to this, maybe considering this opportunity?
Jeff Chisholm: Yeah. The big challenge I had was inventory, and to that kind of parting words of wisdom, I would say is it’s understandable, and I was the same way;
“I don’t want to lose a bunch of money, I don’t want to risk a bunch of money.”
But if you follow the program and you’re looking at the right types of products that fits the demand criteria and don’t weigh too much, it’s highly unlikely you would lose money.
In a very negative scenario, you dump and run and you basically break even. It isn’t worth it, in my mind, to save that extra $500 to $1,000; buy the extra inventory.
You want enough inventory so, if your supplier tells you it takes 35 days to make the product, it’s going to take two weeks from the day they ship it until Amazon gets it probably, so you need seven weeks of inventory at a minimum. Knowing your inventory, if it’s going to sell 20 a day, you need to buy a 1,000, 1,500, 2,000.
That’s the mistake that I made that I couldn’t keep up… I had to start twice.
That’s the parting words of wisdom I would leave on that.
The other one was, a small one is I have this product launch and it does well. I love the name. It’s great. Then I started looking at, “Okay, let me trademark it,” and I looked at the trademark. Someone already has the trademark.
My name is already trademarked, and it’s work that I could have done very easily. There’s free search engines; you can look at the I think it’s USPTO service something but a federal website you can search for your name and now I need to kind of start over with a new brand name and that was just a stupid mistake.
The other thing that I’ve learned so far is keywords. I keep hearing, everyone talks about, when you start to do an auto pay per click advertising campaign on Amazon, and I really don’t think that’s the best way to go.
Once you look at the auto PPC campaign, they have 10 keywords; two or three keywords are completely nonsensical. You can start manual keyword and you can import the words that Amazon suggests. You can also take three or four of your best keywords, put them into Google Keyword Planner, and it’ll give you 800 more keywords for each one.
Do that a handful of times, you have a bunch of mutually exclusive keywords, probably 5,000, 6,000 keywords. You can create a bunch of different keyword groups for each of those, a thousand maximum, you create six or seven different ones in one campaign, and you get so many more views on your listing.
Because, really, your sales number is going to factor on two things: your conversion rate and your page views. The more page views you have, even if your conversion rate stays static, you’re going to sell more, you’re going to make more money.
I also found out, which is weird, I have some keywords in my PPC campaign that are not anywhere in my listing, that I have not had a single PPC sale from, and still, if I search for it, I’m on the second page for that keyword. It appears to me, granted, it’s a small sample, just putting a word in your PPC campaign helps you in organic searches. I have, on this one product, I have 6,000 keywords in my PPC campaign. Next time I think about it, I’ll add another 4,000.
You can have 4th of July; come up with a 4th of July campaign. Mother’s Day, Father’s Day, Christmas. Just add them in every time and there’s very little downside because you don’t pay unless someone clicks on your listing. If it shows up in something that is tangential to your product, and no one clicks on it, you don’t spend a dime.
That, to me, has been the big learning that I’ve gotten, in terms of maximizing the views.
Mike Cooch: Yeah, that’s cool. For some of you who maybe either just getting started or considering getting started, that may be a little bit Greek to you but, essentially, what he’s saying is,
“Hey, I’m figuring out ways to game a little bit,” not in a negative way.
I don’t mean it in a negative way, game, but just to work with Amazon’s internal pay-per-click engine, advertising engine, to help you get more visibility to your product when people are in there, search around, looking for stuff to buy.
That’s one of the strategies that we talk about, it’s just getting that pay-per-click engine working for you, so that you can get the advertising inside of Amazon when people are in there, looking around. That’s awesome.
You’ve thrown yourself into it and I love that you’re having to take sleeping pills to go to sleep at night because you’re so fired up. Doctors may not say that that’s such a great thing, but I think it’s awesome stuff.
Jeff Chisholm: Well, it’s just Unisom. It’s Unisom. Nothing prescription. No Michael Jackson stuff. No horse tranquilizer.
Mike Cooch: All right, man. Well, thank you very much for doing this interview. We appreciate it. I know a lot of people out there that are considering getting started in this will appreciate hearing about your success and in your enthusiasm and your words of wisdom.
Jeff Chisholm: I definitely want to check in with you. I’ll keep in touch in six months, and it’s only been a month.
I’ve done about $8,000 in a month. Sold over 400 units and probably made $2,500, so it’s not a huge amount of money, obviously, and, like I said, but it definitely seems pretty profitable so far so we’ll see where it goes in the next couple of months but I’m very confident and that’s …yeah, very grateful.
Mike Cooch: That’s awesome. Yeah, we’ll look forward to checking in with you and hearing how you’re doing.
Jeff Chisholm: Awesome.
Mike Cooch: All right, thanks again. Take care. Have a good night.
Jeff Chisholm: Thanks. You too.