#315 – From $20 Million To $220 Million In 3 Years: Osaid Abuelnasr Shares His Story
In episode 315 of the AM/PM Podcast, Kevin and Osaid discuss:
- 01:30 – A Wholesale Phone Trading Business That Started 13 Years Ago
- 03:00 – From Phone Trading To Selling Consumer Electronics On Amazon
- 04:30 – Some Hurdles On Wholeselling These Products
- 06:15 – “The US Consumer Consumes Like No Other Consumer In The World”
- 07:30 – Editing Branded Product Listings On Amazon
- 11:30 – Winning The Buy Box Is Extremely Difficult
- 13:00 – What Does A Winning Repricing Strategy And Software Look Like?
- 15:00 – The Shared Buy Box And Is It Based On Geography?
- 19:30 – Talking About Minimum Advertised Price (MAP)
- 22:30 – Growing The Business 10X In 3 Short Years
- 24:30 – How Much Does It Cost To Make A “True Brand”?
- 26:30 – Planning To Launch Private Label Brands
- 29:50 – How To Reach Out To Osaid If You’re Interested In His Incubator Program
- 31:30 – Talking About Brand Protection And Why It’s A Huge Thing
- 34:00 – The Biggest Factor Of Their Business Growth
- 36:15 – The Biggest Challenge For The Wholesale Business Model
- 38:00 – What’s Next For Osaid’s Businesses?
- 39:55 – Selling On Walmart.com, The Walmart Customer Experience, And Selling Wholesale In The Platform
- 41:00 – Talking About The Freedom Ticket Training
- 43:00 – Why Networking At E-commerce Conferences Is Very Valuable
- 43:30 – How To Get In Touch With Osaid
- 45:00 – This Week’s Golden Nuggets Of Advice From Kevin
Transcript
Kevin King:
Welcome to episode 315 of the AM/PM Podcast. In this episode, I’ll be speaking with Osaid. Osaid moved from Canada to the United States about three years ago, and the business that he does with his brother has exploded from 20 million to over 220 million in just three years. We’re gonna be talking about his journey, some of the challenges, and some of the pivots they’re actually making in their business. This is gonna be a great episode, enjoy. What’s up everybody? I’m here this week with someone that’s actually taken their company from 20 million just a few years ago to over 220 million. That’s right. 20 million to over 220 million and just three short years. And one of the guys that’s been responsible for helping this company do that is Osaid. Osaid, welcome to the ampm Podcast.
Osaid:
Thank you for having me. Great to be here.
Kevin King:
So this is a company that you’re working with now that you said your family started like 14-15 years ago. Is that correct?
Osaid:
Yeah, So 13 years ago, my brother Ammar started the business as just a wholesale phone trader. And it’s a really funny story. He started flipping phones from Kijiji, which is a Canadian Craigslist. So buy a phone from a wholesaler, flip out on Kijiji, and make five bucks or whatever. It’s kind of like arbitrage before arbitrage was a thing. And then it grew from there. I started talking to some phone carriers and whatnot and doing wholesale distribution. And it is where it is today. I mean, we were at 20 million in 2019 in Canada, and that’s when we decided to really move the company to the US and it just blew up from there.
Kevin King:
So for the first 10 years or so of the company’s existence, it just grew from him just buying whole cell phones and flip ’em on the Canadian Craigslist to then getting partnerships. Did it turn into any stores or was it always just a mail order direct-to-consumer type of thing? Or what was it in Canada?
Osaid:
Well, so some of the products actually ended up in stores. It kind of grew into a distribution company. So we’re doing a lot of logistics where we distribute product and we’re direct with some brands. We were direct with Google. We’re currently direct with Ring and we’re direct with Amazon on the fire TV sticks and all that product line. So it really started off from phones, but it kind of grew into consumer electronics in general. And actually, our biggest category is consumer electronics today. But we’re not trying to limit ourselves into one category. So that was from 2009 up until, I would say 2017 ish, 2018 ish. It was really just wholesale and distribution. When I joined in 2018, I noticed what they were doing on the wholesale side and I’m like, “Well we really should do this on Amazon cuz we have a lot of great CE product, Consumer Electronics products.” And we started off on Amazon.com and Amazon.ca and started taking the same products that we would ship in bulk to other wholesale companies and B2B companies and really listing it all over Amazon and it just blew up.
Kevin King:
So did you have to go to what people always ask about that, like if you’re selling stuff for all these big brands, Bose, Canon, Dell, Dyson, Sonos, SanDisk, Ring, Xbox, the whole gambit there that you guys have partnerships with? Do you have to have to go to them and get specific permission for each one of those that you sell on Amazon? Or other places or do you have a blanket thing that, “hey, you can distribute this anywhere.” Or what kind of regulations or hurdles do you have to go through to actually be able to do that?
Osaid:
I mean, there are many hurdles. So you don’t have to have permission from every single company that you’re selling to. There are certain big ones that you do. For example Apple, nobody can sell Apple unless they’re approved by Apple on Amazon. Apple’s one of the hardest ones to get for brand new. And I would think it was about three years ago, they completely stopped everybody except a few, a handful of Apple sellers that have been approved by Apple, they’re basically grandfathered accounts. They stopped everybody from selling. And it was crazy because everybody in the reselling space that had all this Apple product now can’t sell it. So a lot of people that I actually know in the business started reaching out to me and being like, Hey, can you sell my Apple stuff? And I’m like, Yeah, well send it up to Canada cuz the regulations in Canada are different.
Osaid:
You can sell it in Canada, you can’t sell on .com. And we started selling on .ca after that Amazon also typically .ca follows .com so like three years or three months, sorry, after .com put in that regulation that you can’t sell on .com. They gated it dot ca be followed through. So for that three months we actually had like an arbitrage opportunity. So there are always opportunities within Amazon, but to answer your question it’s really brand specific. You got Microsoft, you have to have approval, you have to have invoices, but you don’t necessarily need an LOI. You don’t necessarily need a letter of authorization from the brand.
Kevin King:
So you started in Canada and then people, were you selling in the US from Canada or were you just selling just in Canada at the beginning?
Osaid:
Oh yeah, 100%. I mean the US was actually taking most of our product and it still is. The US is really where the consumer is and it’s also kind of the most leveraged consumer too. So there’s a lot of credit in the US and the US consumer consumers like no other consumer in the world. I mean when I was in Canada five years into having a credit card in Canada, my maximum credit limit was $5,000. I came to us I just applied for my social security number, I got a $2,000 credit card. When they checked the social security number, it doesn’t hit ’em back with anything because there was nothing there. And now my credit cards in the US are like 10x of that in Canada. So any US consumer, consumes way more than any other country and they’re highly leveraged. So yeah, we were selling in the US a lot and still are. And typically what you see even on Amazon is Canada’s about 10% the size of .com.
Kevin King:
So you’re seeing that I always tell people it’s about expected, about 5%, but you’re seeing about 10%. So if you do 10 million on amazon.com, you can, you’re expecting to do about a million on Amazon.ca.
Osaid:
Exactly. And I mean, I think a various category to category, but ours is branded products. So for our product, you’re talking about stuff where the marketing is already there and we’re piggybacking off the marketing that these brands already have done. Whereas if you’re creating your own audience, it might be 5%.
Kevin King:
That’s a good point. When you say that the brands have already done the marketing, are they controlling the listing and you’re just jumping on as a seller, are you able to actually contribute to the listing and prove the listings? Or do you actually control the listing in some cases? How does that process work?
Osaid:
So when I’m selling a Google product or a Microsoft product or any other product that’s from a highly recognizable brand, the brand actually controls the listing and you can make edits all you want all day long, and you’ll get the same response from Amazon. This is like, “Hey you know, we put in your request to edit this listing. We sent it to the brand. The brand is under no obligation to approve it.” So you can’t really edit those listings. But when you’re selling tier two and tier three brands then Amazon, based on the size of your account may take it into account your suggestions on the listing.
Kevin King:
What’s an example of one of those tier two or tier three brands?
Osaid:
Tier two or tier three? I mean W Box is one of them. W Box is a company owned by Honeywell. So it’s really not that known by, they sell cables and whatnot. So if you’re looking into getting into the wholesale flipping game, it’s actually a lot easier to start with those brands. Because starting with a big brand like Google, you’re gonna need a whole lot more capital.
Kevin King:
So with like a Google or Microsoft, instead of controlling their listings, are you able, do they listen to you ever, are you able to say, Hey, if you guys, you know, just added these seven keywords, we could double the sales, or if you did this and this, add this a plus content? Or do they just, they just basically have their corporate rules and their corporate blinders and they just do their thing and you just have to pray that it works?
Osaid:
It’s a mix of both. Honestly. It depends on the brand. And it depends if we have a direct relationship with the brand and if we have a direct relationship with the brand and they tell us, “Hey, we don’t even want you selling online.” We will never sell that online. So we protect our relationships with the brands. But at the same time, if it’s a brand that we’re indirect with. We’re not governed by anything. So we will sell that online. And in that case, you can’t really go to them and tell ’em, “Hey, we want you to edit the listing,” because you’re not an authorized seller in the first place. But if we are an authorized seller, then yes, we will have direct contact with the brand and we’ll tell ’em, Hey, you know, we, we notice that there’s a mistake here and a mistake there.
Osaid:
And those brands make a whole lot of mistakes. I mean, Microsoft Surfaces, we’re selling on Amazon forever, and anybody that bought a Microsoft Surface knows that this thing doesn’t come with a keyboard. But the pictures all show a keyboard and the customer messages and the returns all come with the same exact comment. The picture shows the keyboard. I got a laptop without a keyboard, and we contacted Microsoft about it so many times. Now, I think if you go into some listings now actually, they change the picture. There’s a font at the bottom that says, “Hey, the accessory is not included.”
Kevin King:
Wow. So are you doing FBM and FBA or primarily one or the other?
Osaid:
I do 90% FBA. I mean, I think you’re actually losing money for the most part if you do FBM for one Amazon controls the Buy Box algorithm and they influence it heavily into putting your offer in the Buy Box if you have FBA. Unless you’re the seller fulfilled prime. If you have SFP you have nothing to worry about. But I mean, in order for you to go and buy an account that has SFP probably costs a couple hundred thousand if not a million dollars. All those accounts are grandfathered. Nobody’s being approved for SFP anymore. So I always do FBA if I can unless it’s a huge item, I do FBM but then Amazon’s also coming up with stuff around that where you can do both as now and pick up and pick up in store. So pick up at the distribution facility of the merchant rather than pick up in a different store.
Kevin King:
So you happen to do then, on most lease listings, since you’re doing mostly wholesale authorized selling, are you just one of like a hundred different people selling? Are you a lot of Buy Box rotation or in some cases, do you have the exclusivity or how’s that working?
Osaid:
Actually, it’s crazy cuz this world’s ever-changing, the Buy Box, it used to be so easy to win Buy Box when I first got in space five years ago now, it’s extremely difficult. You gotta come up with strategies, you gotta make sure you’re using the best Repricer out there. And sometimes the best Repricer is not a rule-based Repricer. So you definitely don’t want to be using a rule-based Repricer that prices down a penny every time for one, you won’t win against Amazon. If you only price down a penny, you need to price down two bucks, three bucks sometimes two, sometimes you have better ratings as a merchant, so you don’t even need to price down. You could be a dollar higher than the competition and still win Buy Box
Kevin King:
Because you have a better seller feedback score.
Osaid:
Exactly. Better seller feedback. Your inventory is there. Sometimes both of you are doing fba, but your inventory has been there for longer. So Amazon prioritizes that inventory and says, “Hey, you know, if you buy from this guy, you’re gonna get it tomorrow. But if you buy from this other guy, even though they’re both FBA, you’re gonna get it in three days because that guy’s inventory is still in the receiving process.” So you gotta make sure you have the best Repricer in place. And even within the Repricer, there’s so many strategies. I mean but you gotta make sure, you know, you’ve got your smart Repricer, that’s your AI-based, and then you got your rule-based and you gotta make sure you’re fighting the anti-shared Buy Box methods. So sometimes Amazon will say, Hey, you’re winning Buy Box, and the Repricer stops, but you’re actually not winning Buy Box. You’re only winning Buy Box since three zip codes. So you’re looking at your listing and you’re saying, Hey, why am I only selling three units when the rank on this item is super high? Helium 10 is telling me the last 30-day sales is a hundred. I only sold three units in the last 15 days, that’s all. It’s because you’re only winning Buy Box in three zip codes, which are the closest to your fulfillment center
Kevin King:
To where Amazon has the stock, you mean?
Osaid:
Yeah, So I’m in Dallas, so anytime I ship to FBA, usually, I ship to DFW six or DFW one. So typically sometimes I ship outside of those, but typically just those two fulfillment centers. And so when you’re shopping from Dallas or anywhere from Texas, Amazon will display me as winning the Buy Box. But if you’re shopping from California, it will display another third-party seller that has their stuff at let’s say ONT eight or ONT six which is a California fulfillment
Kevin King:
Center. Oh. So that makes sense. I follow that logic now. Cause me as a private label seller, I’m in Austin and oftentimes Dallas is the primary source for a lot of our stuff. And I ship to Dallas and because I’m only a private label seller, Amazon is then dispersing that based on their algorithm. So that, okay, we’re gonna take a thousand units that ship to Dallas and they’re gonna say, “Okay, we’re gonna keep 50 of ’em here in Dallas and 70 of ’em were sending to Florida and 60 of ’em were sending to New York.” And whatever their algorithm is that they figured out. But in your case, because you’re sharing the Buy Box and you’re based in Dallas, you’re shipping ’em to Dallas and there’s some other guy on the Buy Box that’s based in California, he’s shipping ’em into Ontario and Amazon’s like, “We don’t need to move these things around because your supply will supply the people that need to come outta Dallas and that guy will supply the people that needs to come outta California.” Its something that works? Something like that, Right?
Osaid:
Exactly. And this is called a shared Buy Box. So it’s based on geography and a lot of people don’t recognize this and I hate when it happens to me. And most Repricers out there actually have a flaw in the logic where the Repricer actually doesn’t recognize it. Cuz the Repricer is based on the feed that Amazon gives them. They don’t scrape Amazon, it’s just an API connection. So Amazon says, “Hey, this guy’s winning Buy Box, and that guy’s winning Buy Box.” But how many zip codes you were winning it in The Repricer has no idea. And I hate when this happens and I actually found it out by by total lock I was really off about this, this item I bought I paid a million dollars for and I’m holding the inventory and I I need to turn that inventory around quickly. And I, I’m, I’m just, I’m, I’m getting upset cuz I’m like, hey, you know, Helium 10 says I should be selling thousands of thousands of these and I’m not. So that’s really when I found out that, if I change the zip code, I’m no longer in the Buy Box. So I started playing around with my rules until I made sure I win the, I win the Buy Box in every zip code. And to do that, you usually just have to reduce a bit more on your price
Kevin King:
Or you could potentially actually, instead of shipping everything to Dallas, actually say you wanna pay a little bit extra and ship something to New York or to California or something so that you’re supplying that local warehouse as well, right?
Osaid:
Yeah. But the problem with that is that when you create an FBA shipment, they pick where you’re shipping.
Kevin King:
Yeah. But you can actually override that by actually paying a fee and actually shipping it to a certain place a lot of times. And there’s some software that does, there’s a way to do that. There’s a, there’s a software tool that will let you almost pick your warehouse.
Osaid:
So I know about the software tool. I met ’em actually at Prosper. I met those guys, they told me they do that. I didn’t believe them. But now that you’re telling me about it, I mean it’s worth looking into because you definitely want to be shipping to multiple fulfillment centers.
Kevin King:
Yeah. In in the way in the past, a lot of times, you know, if you’re a private label, Amazon really didn’t, they frown on that because people were were getting where they would split it up and they’d say, I’m in Austin, ship some to Dallas, ship some to New York and ship some to Washington state and it would cost me an arm and a leg, you know, to ship those to New York and Washington. I’d rather ship ’em to Dallas and let Amazon deal with it, just distribute ’em out. So people were overriding that saying, “No, I don’t wanna ship to Washington, New York, I just wanna ship to Dallas.” And they were using these software tools, third-party tools that would allow you to, to do that. And but I’m telling you that on your side, maybe the reverse is actually beneficial where you actually send it into Washington, then you’re competing against the local Washington guys and getting some of that Buy Box there. I don’t know if that works. It’s just the, it just came to my head is that maybe a, a workaround actually grab more Buy Box share and I don’t know, you have to do the math. Like you said, if you lower the price enough you can kind of gain it. So, but I don’t know where that break breaking point is there, but that might be something worth exploring for sure.
Osaid:
Actually sometimes, like if you lower the price enough, what you’ll see Amazon do is they’ll create an FC transfer. So they transfer your inventory internally. Oh, do from warehouse to warehouse. Yeah, but I mean, if your price is not competitive, sometimes they won’t even receive it. I mean, you’re talking about a typical listing that I sell on has 35 to a hundred to 300 sellers. One of them, you know, being a Fitbit watch it has 300 people on there.
Kevin King:
So how do you forecast on that? So how do you actually, when you’re, how do you forecast how much you should send in? So if there’s 300 sellers on a Fitbit watch and your Buy Box rotating Buy Box sharing, how do you go, Well I’m looking at Helium 10, it says, I’m just making up numbers here. A thousand of these are being sold a month and there’s 300 guys on there. Are you saying that there’s 300 of us, each one of us is gonna sell three these thousand? Or you’re like, no, because I know if I do this, this and this, I can sell a hundred of those thousand. How are you forecasting all that?
Osaid:
Yeah, so, so the, the best way to forecast is using the Helium 10 extension. You’ve got the graph at the bottom of the listing, which shows the price trend. So you gotta take in your cost and say, “Hey, you know, based on my cost, I’m not gonna have any issues competing.” And if I’m not gonna have any issues competing, I know I’m gonna make 90% of the sales that Helium 10 says I’m gonna make. Because sometimes people do compete with you and whatnot, but you know, based on our strategies, we know we got the best strategies in the business. I mean, we’ve been in it for five years just trying to come up with the best strategies to kind of just always win the Buy Box. So really we just look at our cost and we say, “Hey, well based on this, based on the price trend, we’re not gonna have any issues. Let’s send in a hundred units or 300 units.” We always do 45 days sales because that, that keeps inventory in stock, keeps your IPI high, you won’t have any issues when, you know, Q4 rolls around and you’re outta stock, you can’t send it, You can’t send in any more inventory.
Kevin King:
What about with the pricing Repricers and stuff on some of these brands, they have a map, they have minimum advertised price. You’re not like Apple for example. Apple doesn’t allow you to discount more than I think it’s like three or 5% or something at the max. And even then they have rules around how and when you can do that. So how do you account for that kind of stuff and how does that affect Buy Box sharing? It’s not just about lowering the lowest price in that case cuz everybody can only go to a certain point on some of these brands.
Osaid:
So, the map is actually the elephant in the room when it comes to Amazon selling. Brands hate other merchants that don’t follow their map because what ends up happening is people go into Best Buy and they pop up their Amazon, they go like, “Hey, well I can buy it for less than Amazon,” and Best Buy, as usual, is response is we don’t compete with third-party sellers on Amazon. But sometimes what will end up happening is even Amazon starts competing with the third-party sellers if they’re not restricted to Map. And that’s when Best Buy has to match the price and Best Buy sends a charge back to the brand saying, “Hey, we had to price match because everybody on Amazon’s selling lower and we couldn’t move any of our inventory. So we need a chargeback. We need a refund for this many units or the difference, a price difference.” So brands actually hate it. And
Kevin King:
So you’re saying that when Best Buy does a price match, if I go in to buy a TV at Best Buy and I’m like, look, I can get this for a hundred dollars less on Amazon and Best Buy says, Okay, we’ll match it. Best Buy is not eating that hundred dollars. They’re charging that back to the brand.
Osaid:
And the brand absolutely hates it because it Best Buy keeps having to match these third-party sellers, or sometimes they match Amazon themselves because Amazon’s not restricted to map in some of their contracts as well. So Amazon actually protects themselves as well from the perspective of third-party sellers where if, when they’re making a contract a 3PL contract with a brand, they tell the brand, “Hey, if you’re not able to control your downstream, that’s not our problem. We’re not gonna respect your map.” Unless you’re Microsoft or whatever. Of course Amazon’s gonna respect your map, but yeah, there’s chargebacks happening all the time. So anytime Best Buy price matches, they don’t eat that up. They send that back to the brand, they tell ’em, Hey, you know, you guys need to refund us that difference. And sometimes it’s even worse where Best Buy is not even able to make any sales because everybody on Amazon is pricing so low. Cuz the consumer is smart, the consumer is looking for the best price out there and you know, they’re really watching out. So if Best Buy is having to hold onto inventory for longer than they need to, that’s also another issue that they’re gonna have a discussion with the brand about.
Kevin King:
So when you’re doing wholesale, you’re working on some pretty tight margins. I mean, as a private label seller, you know, I’m looking at 20-30% margins end of the day, you know, after all things said in most cases. But as a wholesale, what’s a target you’re shooting for and what sometimes is the reality?
Osaid:
Oh, I mean, five to 10% in my business. I mean, I did tell you in 2019 we were at 20 million gross revenue. In 2021 we hit 208 million. So we actually 10x the business in three years. But what we’re looking at in terms of margins, so usually when I throw that number out there in conferences and whatnot, that’s actually what I told you in Helium 10 Sell and Scale. Some everyone thinks, you know, this guy’s making bank. The reality is, I’m making five to 10%. If you’re doing 228 million in private label, you’re keeping 30 million or so, maybe even 50 million. But we get to keep, I mean, 10 million, 20 million at best. And we have a lot of overhead. We have a 25,000-square-foot warehouse. We have to worry about a lot of investment into the space.
Kevin King:
Yeah, that’s what a lot of people, and you look at one of the biggest to sellers, you know, just went out of New Jersey, I’m sorry, out Brooklyn just went under, you know, that because they were doing crazy numbers and it’s a tough business, but you get to ride the backs. I mean, you don’t have to build brands, you know, if you’re private labeled, you gotta build brands, build recognition and do things. But you can just, you know, everybody knows who Apple is or Microsoft or Dyson or Fitbit or whatever. And so you can just ride that. But sometimes you wish, “Man, I see that these Dyson vacuums, these Dyson hair brushes or whatever are selling really crazy or these vacuums are selling really crazy. If we just came out with our own private label brands like that was similar to this, we could come in here and take a piece of the market.” Do you ever look at things like that?
Osaid:
Yeah, so I was actually just at IFA Berlin, and I was also at the Dubai GITEX show. And there’s always that one hall that has all the, I’m gonna use your example, the vacuum cleaners that have all the vacuum cleaners, and I always pass by that hall. I always skip everybody there. If you wanna compete with Dyson and iRobot and all these sharks, for example, you better be sure you have a whole lot of money to throw out just in terms of branding and marketing, I often need a lot of people on Amazon that say, “Hey my goal is to create a brand.” Yes, you can create a branded audience, but in order to create a true brand that’s millions and millions of dollars in marketing you’re not gonna reap the rewards for until you exit that business.
Osaid:
That’s what iRobot did. So I often tell, you know, the sellers that I meet, they’re just finding something on Alibaba or, you know, sourcing from China. They have a sourcing agent. They always tell me, “Hey, I wanna create a brand.” And I’m like, “You don’t need to create a brand to sell on Amazon.” It’s the biggest, you know, marketplace, where there’s the most search volume in the whole internet, is on Amazon, and they’re like, Yeah, I wanna create a brand. I’m like, No, you’re not creating a brand, you’re creating a product later on, it can become a brand. So I always pass by those vacuums and I’m like, “Yeah, I’m not interested. I don’t wanna do the distribution for them.” I don’t wanna do logistics for them because they just won’t have a chance against, you know, so few that will have a chance against iRobot and, and Dysons and whatnot.
Kevin King:
But there are certain categories on Amazon where the brands aren’t dominant. I mean, you got, you know, I don’t know, in Dyson’s case it may be, but in some cases, you can see that this Dyson vacuum cleaner is just crushing it for us on a wholesale basis. What if we just came out with the cheap private label version of this and yeah, we’re not gonna beat Dyson and we never expect to beat Dyson? They may be ranked number one and two and three, but there’s enough depth here that if we’re ranked number seven and eight we can still make bank and have increase our margins and have something that we know we have the data because we sell this. Or is that not something that you’ve ever considered?
Osaid:
Oh yeah, I mean 100% the, if you’re talking about categories where there isn’t that one big dominant player, that’s often where I actually recommend people in private label to look into. But I just use that vacuum example. But yes, 100%. I mean, we’ve been looking into that. We’ve actually been hiring people, I actually just had an interview with somebody I met at Sell and Scale where I told him, “Hey, you know, we’re very well capitalized. What we’re trying to do at Basatne right now is hire people that are private label owners themselves and operators, and we’re hiring them. We’re giving them a full-time salary. We’re giving them our entire suite of products, whether it’s logistics, WMS, everything, and all they have to do is launch their brand using capital that we provide them.” So it’s kind of like an aggregator, but instead, we’ve actually been operators since 2018, 2017. So yeah, that’s something we’re looking into. I actually have six employees currently that we put through the Freedom Ticket Program, and these are very creative people. We actually vetted them and they said, “Hey, you know, my dream is to build up this product and whatnot.” And we’re like, “Go for it. You know you’ll have our full backing.” They have a full-time job finding anything they need, and all their job is to create products.
Kevin King:
So it’s like an incubator in a way. You say they get a salary, but do they also get a piece of the action if they, if they’re successful?
Osaid:
Yeah, so, so we negotiate with each and every one of ’em to give them obviously a piece of the overall profit of the product. That’s
Kevin King:
Cool. That’s an interesting concept there. That’s actually is cool for a lot of people. That might be a great opportunity for someone that can come in and learn from someone that’s already doing it and have the support and the financial backing. And you got as you said, you got the logistics and everything in place already, and they may not make as much money as if they did it on their own and were successful, but they probably have a much better chance of succeeding by doing it that way, and actually perhaps even growing bigger than what they could on their own.
Osaid:
Yeah, I mean, I met somebody at Sell and Scale Summit who has their own business. I think they’re roughly taking home 90k from their Amazon sales, so that’s profit. And you know, they, they just told me, Hey, you know, it’s hard to keep turning around this cash and you know, we need the cash flow and whatnot. There’s a potential for a merger or where you guys can acquire our company and provide us your funding or another opportunity they wanted to explore just to come on board full-time and just launch brands that they’ve been thinking about. And they presented a case study with the brands that they wanted to launch, and we took ’em on board.
Kevin King:
What do you think that’s gonna go? Do you think that could become five, or 10% of your business or grow bigger? Or what are you hoping to see this kind of program go?
Osaid:
Yeah, so I mean, my goal behind going to all these conferences and networking is to find people like that. And my goal is to kind of, well, we wanna keep the legacy business, which is wholesale trading. But my goal is to actually find a lot more people like that because we don’t wanna be in the five to 10% game anymore. We’re trying to go for the 30, 40%. So I think we’re gonna have a lot more people on staff that are launching brands left dry in the center, and each one of those business leads becomes, the lead of their own brand, and they have full control over their brand, and we only support them and give them the full suite of our products that we have in the house being from logistics, WMS, and our international distribution capabilities.
Kevin King:
So if someone’s interested and someone listening to this is interested in actually talking to you about that, how would they reach out? Or what would they do?
Osaid:
Yeah, I mean they can reach out. I mean, on my email, that’s osaidbasatne.com or my Instagram @osaidabu. So that’s really where we see the vision. I mean the thing about aggregate is you might join them, but they’re really financial institutions and I think we’re doing a whole lot more organically.
Kevin King:
Yeah. And I always say, like back on what you were saying about a lot of people thinking they’re a brand, you’re not really to me, this is just my rule. This is like no hard, fast rule, but if you don’t have at least 3000 searches a month for your brand name on Amazon, you’re not a brand. That’s just kind of where I draw the line is that people think I created this brand, I got this logo, this cool name, but unless people are surgeons for that specific thing, and outside of you doing promotions or search find buys or something like that, but true organic searches, if you don’t have at least 3000 then you’re not a brand. And we look at that too, like when one of my companies, we do license, and so we license like body glove and we license a few others, and we actually look at that before we do a license to see how strong this brand is, because there’s actually some brands out there that people know, but people aren’t searching for ’em by that name. And the more they’re searching for it, like Fitbit or Bose or Apple, the more valuable that is. And that’s what a lot of people, I think just don’t understand is there’s a lot more to branding just, just a name and a logo and, and sticking in on your stuff and having a few hundred people that are in your Facebook group that always buy your stuff.
Osaid:
That’s true. And, you know, there’s a lot of actually brand protection around it that has to go around. So, I mean, on Amazon you need a lot of copyrights and trademarks and you know that’s something the aggregators look for as well. Like, they wanna make sure, you might have a patent, a trademark something to show who you are. But you know, it really goes beyond that. Brand protection is a huge thing. That’s something that we’re investing in. We’re actually launching a service called Nformed without the I and Nformed really deals with the problem that we were talking about a bit earlier in the podcast, which is a map problem. A lot of brands are seeing their listings hijacked. They’re, they’re seeing people completely tarnish their brand reputation, and that’s what Nformed is about.
Kevin King:
So this is like a software tool that people will be able to subscribe to or something?
Osaid:
Yeah, so it’s a software tool. In the beginning, we are not gonna open it as a subscription-based. We’re thinking of it more as a consultant consultancy-based application where it’s really gonna be tailored to bigger brands first until we figure out the exact formula that we need to attack all the smaller brands. But, you know, it’s something that our, our direct brand partners are having issues with because they keep coming up to us and saying, “Hey, who’s so and so selling this product? Because they’re not authorized. We can’t, we can’t service warranties. And they keep selling blow map, they’re tarnishing the brand reputation.” And we’re able to capture all that data and provide it back to the brand. And that’s something we’re working on. We’ve already invested half a million dollars in the software and yeah, you know, it’s not based on API, so it’s based on full real-time data.
Kevin King:
Wow. That’s a big database. That’s a lot of horsepower to do that.
Osaid:
It’s huge. I mean and the applications are endless. I mean the same engine that we built to capture all this data. We’re, we’re going to use it for other applications as well. I mean, a Repricer is possibly one of them. But you know, it could go much beyond that. I mean, one thing that we do is we actually go into every person’s offer on Amazon, every offer on Amazon in, in the Buy Box or not. And we do the 999 trick. I think a lot of people know that trick where you add it to the cart and change 999. Yeah. And you see how much they have in inventory. And from the Delta, then we do it every 15 minutes. And from the Delta, we can tell how many they sold. And when we tell how many sold we sold, we can aggregate that across all the sellers and get the exact number of sales that happened during that time period.
Kevin King:
So from growing in 2019, from 20 some odd million to now 10x that basically in three years, what was the biggest contributor to that? Is it you got some new licenses you got the Apple license, or I don’t know, the Microsoft license and that just exploded sales? Was it just adding more licenses? Was it doing this, like you said, switching from just whole selling out to stores and other distributors to actually going to Amazon? What was the big driver of that catalyst into 10x in three years?
Osaid:
I mean in, in 2019 we were very Amazon-focused. We were selling a lot on Amazon. In 2020, I, I got hit with my first suspended account, and that’s when I decided, you know, from now on, Amazon’s going to only be 10% of my business, and 90% is going to be everything else. And I think the biggest contributing factor to our growth was really moving to the US. We were initially using Freight Forwarder and logistics partners in the US. But as a wholesale distributor, you know, that really limits your growth. And when we moved to the US, we got a whole lot more access to capital, to funding. We have good relations with many of the major banks and, you know, the US consumer consumes like no other. It’s, it’s crazy what we were able to do here. I mean, we went from 20 million in 2019 in Canada to 228 million three years later. And honestly, I would say most of that is just making the move into the US market.
Kevin King:
So a lot of that’s coming from outside of Amazon then.
Osaid:
Yeah, Amazon’s only 20 million.
Kevin King:
20 million of that. So you have deals with like Ingram and stuff like that, where if I’m some small little Apple authorized reseller that I can, and I need three Fitbits and or not three Fitbits, about three Apple watches or something, they’re getting out, You’re the one fulfilling it outta your warehouse in Dallas?
Osaid:
We’re actually currently in negotiations with Ingram regarding a deal that we’re doing with them. But yeah, we have deals with all the big distributors like LIKEWISE, which formally used to be Brightstar and many other large players in the field.
Kevin King:
What’s the biggest challenge in, in doing it, in doing the wholesale versus the private label side, besides the lower margins, but what do you think is the biggest challenge?
Osaid:
I think the biggest challenge is establishing that brand relationship. I mean you want to show the brand that you really care about their brand, that you’re there to protect their brand and not to harm them. I did mention that you know, if sometimes we’re indirect with a brand, we will sell it online without authorization. But, you know, once you go direct with a brand, you’re really trying to establish that relationship and show them that, “Hey, I’m not just another flipper.” Those brands don’t really need you. I mean, if you’re Microsoft, anybody can sell Microsoft Surface Laptop, what makes you different? And that’s really what we had to build out. That’s one of the reasons why we built out informed because we want to add value to the brands. We want to show them we’re not just flipping their products, but we’re also you know, doing RND and, and partnering with them at every journey of the product life cycle.
Kevin King:
So a lot of this is about personal relationships than with the people at those brands,
Osaid:
Correct. Yeah.
Kevin King:
So are there any side benefits if you’re the biggest seller of Dyson vacuum cleaners, do, do you, do you get invited to their, their Christmas parties or any kind of cool events or their box at the Dallas Cowboy Stadium or, or something like that?
Osaid:
Yeah, I mean, I’ve definitely been invited to a few suites. But I mean, I would say the biggest benefit is the cashback that you would get from some of the credit cards you use. I mean, it’s a whole lot more money that you’re spending over a short amount of time.
Kevin King:
So, cash back, you mean that your companies actually buy a lot of inventory using credit cards to get the airline miles and the cashback and stuff like that?
Osaid:
I mean, sometimes it would be using a credit card. Other times obviously it’s a wire and whatnot, depending on, depending on the specific deal.
Kevin King:
Where do you see the company going? Where do you, where do you see this going? What’s gonna happen next?
Osaid:
So actually Basante is kind of splitting up into many different business units. One business unit I mentioned to you was the incubation where we’re just investing in private label sellers and private label brands that are already existing and acquiring them. So that’s one side, one side of our business. The other side is really the software side, and that’s where we’re really investing Nformed, That’s Informed without an I. It’s not launched yet, but we’re really making significant investments and doing a lot our RND into the software space in order to help brands and eventually help sellers as well. And the third side is really the wholesale. I mean, we’re one of the very few accounts on Amazon that are approved to sell Apple-renewed iPhones and iPads and whatnot. And the wholesale side will keep going. We just opened up our third facility in Dubai, United Arab Brims, so the wholesale side will, will, will keep existing, but that’s really the three pillars that I’m currently most involved in.
Kevin King:
Are you looking to expand to any other marketplaces, other Amazon marketplaces or just gonna concentrate still on just US and Canada? That’s good enough for now.
Osaid:
So I already saw in Walmart I tried selling Amazon UAE. I think they need a few more months or maybe one or two more years to really build that out. Australia’s pretty good. Amazon, Germany’s really good. Mexico’s obviously really good. I sell many of those but in the United Emirates, I didn’t really sell much in I stopped it after like two months, and I sell at Walmart as well.
Kevin King:
How’s Walmart do? Is it similar to Canada, like 10% of your sales? Or how’s Walmart do for you? 10% of Amazon sales. I mean
Osaid:
I mean, we’re doing 20 million on Walmart. We’ve only done a million on sorry, we’re doing 20 million on Amazon. We’ve only done a million on Walmart. The Walmart customer experience is something I’m not a fan of. They’ve been improving it, but usually, they’re, the pace of improvements is nowhere near Amazon’s. So they’re really slow when they notice a problem, they’re really slow to get to it. But if you’re doing wholesale, I highly recommend Walmart because it’s just another channel. I often meet sellers that go like, “Hey, I own my own business. I’m like, So what does your business do? He’s like, I saw on Amazon, like, well, that’s not a business, that’s a, that’s a channel.” You need, if you want a business, you’re gonna have to have multiple channels whether it be direct sales to wholesalers. You’re selling to farmer’s markets and whatnot. If your product allows you to Amazon’s obviously a huge one. You should be on there. I’m not saying you shouldn’t, but you need multiple channels. You can’t put all your eggs in one basket.
Kevin King:
Exactly. So you said earlier that you’ve had like six or something of your employees go through the Freedom Ticket. How was that experience for them?
Osaid:
Oh, I think they loved it. I actually, when I met you at the Helium 10 Sell and Scale Summit, I sent a picture in the group chat and everybody was excited. But yeah, I put everybody through that program. And I think it’s invaluable. There’s a lot of information on there that you need as someone that’s first starting up, but many of the guys that we’re hiring, they’re already veterans in the space. They might have exited a business before and they now they just want a full-time position where they wanna relax. But I still send ’em through the Freedom Ticket. I think I think that course is invaluable. And honestly, I meet a lot of people in the space that want to get into Amazon selling, and they’re all taking these $5,000, $10,000 courses, or they’re in somebody’s inner circle to become an Amazon seller. I’m like, “How much would you pay for that?” And they’re like, “Oh, I paid $25,000.” And I’m like, “Oh man, you gotta get on the Freedom Ticket.”
Kevin King:
Yeah, the Freedom Ticket for those listening, if you’re not aware, it’s free. If you have Helium 10 software any level of their software then you get about 60 plus hours. I think they’ve added some additional stuff to it especially on the PPC side of training from A to Z on how to sell on Amazon. You know, some of it like, as Osaid said, if you’ve been selling for a while, you can skip over the part, maybe about forming a company and you know, some of those, the basics. But there’s, there’s a lot of other good stuff in there that really covers all the nitty-gritty of selling, you know, a lot of courses and a lot of stuff out there just covers the sexy stuff and they leave out the numbers and some of the unsexy, but Freedom Ticket cover covers it all. So check that out if you haven’t checked that out. So you said you get out there and go to some conferences and stuff. I met you at Sell and Scale back in September. What do you get from going to these as a wholesaler? You know, it’s a private label. A lot of these conferences are more geared towards private label sellers, and maybe that’s why you’re going because you’re trying to switch to that, but what’s the biggest benefit you get from going to some of these conferences?
Osaid:
So I, I mostly stick around, like there’s a lot of seminars in these conferences, but what I try to do is, I honestly talk to everybody and anybody at these conferences. There was a seven-figure networking session that happened, at Sell and Scale, and I sat at the table with somebody I’d never met ’em in my life. You’d think being as big as we are in this space, we’d know all the wholesalers cuz there’s only a few. But it turns out he’s literally 20 minutes away from my warehouse. He has a 40,000-square-foot warehouse, and he does the exact same product and knows every single guy that I know in the business. So I, what I try to do is I honestly try to network as much as possible. I think it’s invaluable and, you know, just kind of putting your name out there, saying hi to everybody. There are a lot of bright people in the space and the industry’s small, but it’s also very captivating.
Kevin King:
Awesome. Well, Osaid, I really appreciate you taking some time today. I know you’re a busy man. A lot of things going on over there. Thanks for taking some time out and joining us and talk a little shop here on the AM/PM podcast.
Osaid:
Thank you for having me. It was it’s a pleasure to be here.
Kevin King:
And again, what was that? If someone wants to reach out or learn more or connect with you what was that way they could do that again?
Osaid:
Yeah, so a couple of ways. basatne.com, that’s our website, basatne.com or directly through my email, osaidbasatne.com.
Kevin King:
Awesome. Thanks, man. Appreciate it. I hope you really enjoyed this episode of the AM/PM Podcast with Osaid. We spoke about a lot of things that you don’t hear too much about the wholesale side and some of the challenges in that side of the business and some of what they’re doing to actually get their margins up. It was very interesting. Hopefully, you got some good value from this and we’re entertained. I look forward to seeing you again next week in the next episode. And before we head out today, I’ve always got a little nugget of information for you. And today is no different. Just remember that nearly everything in life is unfavorable. Once it grows to a certain size, it’s entirely possible to have too many clients, too much work, too much fame, too much free time, and so on. Always pay attention to when a thing you’re chasing exceeds its usefulness. I think a lot of us lose track of that and lose focus of that. Again, nearly everything in life is unfavorable. Once it grows to a certain size, it’s entirely possible to have too many clients, too much work, too much fame, too much free time, and so on. Always pay attention to when the thing that you’re chasing exceeds its usefulness. Have a great week and we’ll see you next week on the next AM/PM podcast.
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