Neil Twa – Replace your day job with Amazon FBA.
What if you could replace and exceed your day job income by working just 15 hours per week? My next guest shares how his background in management consulting and data analytics has been applied to selling products on Amazon. In this episode we talk about the first steps you should make, how Amazon works, what kind of revenue you can generate, how much you can sell your Amazon business for, and what products to avoid. Please welcome Neil Twa.
Payback Time is a podcast for investors. The goal of this podcast is to help make investing approachable and easy to understand. We will interview beginner and experienced investors and ask them to share stories on how they got started, what challenges they faced, what mistakes they made, and what strategy works for them today. The overall objective is to provide you with a roadmap that helps you become a better investor.
(00:59) – Neil’s background story
(12:10) – His business model in depth
(24:43) – Capital needed to start
(30:51) – What is the expected revenue per year?
(34:41) – What is the revenue when a business sells?
(35:14) – The importance of building a network to be successful.
(36:51) – Aptitude and attitude: both keywords in that business
(39:09) – What kind of products perform better on that model
(43:45) – The worst business or investment advice he ever received
(44:04) – The best business investment advice he ever received
(44:59) – Guest contacts
[00:00:03.430] – Intro
Payback Time is a podcast about building businesses’ wealth and financial freedom. We try to uncover the challenges our guests faced, the mistakes they made, and the steps they took to achieve their goals. The overall objective is to provide you with a roadmap that leads to your own success. Sean Tepper is your host. Are you ready? It’s payback time.
[00:00:32.670] – Sean
What if you could replace and exceed your day job income by working just 15 hours a week? My next guest shares how his background in management, consulting, and data analytics has been applied to selling products on Amazon. In this episode, we talk about the first steps you should make, how Amazon works, what kind of revenue you can generate, how much you can sell your Amazon business for, and what products to avoid. Please welcome Neil Twa. Neil, welcome to the show.
[00:01:01.520] – Neil
Thanks for having me on. I appreciate it. Sean, it’s great to be here.
[00:01:03.960] – Sean
Thank you for joining me. Well, why don’t you go ahead, take it away and tell us about your background.
[00:01:08.200] – Neil
Yeah, so, like I mentioned in our little green room experience, I will kind of keep that down to things that might be interesting and not something my mom might like. In simple terms, I got a technology when I was younger, 1415, based on my age. The Internet hadn’t come in, but the online AOL forums and other stuff. And through by proxy, through my friend whose family had enough money to buy a computer, which we didn’t, I got to learn about the Commodore 64 and other machines and kind of got into that and realized I thought it was fun. But in actuality, I had really a vision to be a fighter pilot. And so as I went through school, and high school for me was relatively easy. But by the time I got out, I had scholarship opportunities, music scholarship opportunities, classical and jazz and that kind of stuff. But I really wanted to be a fire pilot, so I went to the Air Force and I thought I would try to get in. And they said, hey, guess what? You can’t fit in the cockpit. You are a big guy with a little name, and you will not fit in the cockpit.
[00:01:58.170] – Neil
Well, that was so destructive, right? So I went to college, which I didn’t want to do, and after failing out three times and kind of arguing with the professors and having some skirmishes there, I eventually bailed out my third year because I really wanted to do ecommerce. International and Pentiums were coming into the universities, and technology was gearing up. And I’m suddenly dating myself even though I’m 46. We’ve gone a long way since these times. A long way. And so the end result was I knew I needed to stay in academia if I wanted to try to go where the money was and try to learn what was going on there. Which is more like computer networking. That kind of stuff. Really wasn’t super excited about that or get into the business field and see how ecommerce or international business or the technology of the Internet was going to evolve. So I chose to go into the corporate world. So I started to consult first, literally taught myself how to program HTML and then ASP pages, and then got a contracting job with Sprint. And that turned into an opportunity to take an internal posting and get on the PCs team.
[00:02:51.470] – Neil
With the first mobile device launch. I was heading up a small team of people by the time I was 21. Five people who are overseeing the infrastructure, the knowledge base, it was handling the calls and inbound calls and information for those of the new phones. So that was a fascinating time because I got hired as like the 5000th person by the time I left Sprint. By the time we had actually implemented a full knowledge management system, database driven everything with a latent semantic search engine, which I’ll get to later, it turned into this really big project, and we went from 50 to 800 people. So I got to watch that internal mobile division explode and 2500 reps became 25,000. And I was traveling around the country and into Canada and other places supporting that. IBM came in one day on a project and said, hey, we got this transformational thing we’re going to do. Got involved with that team and got to be good friends and learn something very quickly in the relationship driven aspect of who you know, gets you there and what you know, keeps you there. So I did not know exactly how to be a business management consultant, but I learned.
[00:03:51.810] – Neil
And in that relationship driven aspect, one of the partners from IBM who oversaw that project offered me a job on a handshake to go out to Armunk and become part of IBM. And I did. I flew out there, shook hands, took longer to get out there than it did for the meeting, and walked out of our monk with a job at IBM, still no paper, no degree. And so I worked on the knowledge management and systems with translating data and learning about human machine language learning and search engines and all these amazing things that I had access to at that facility and network and was traveling the world sometimes up to 200 days a year, which was crazy. So I knew that that wasn’t the end result. I knew I just got into that because I was riding the tech wave. And I knew eventually that my little side hustle of game servers that I was doing on the side and running this little business was going to do something or be something or turn entrepreneurial at some point. So I left in 2007. I had an opportunity to take an early retirement. They said, hey, we’re going to Argentina, you want to come?
[00:04:43.300] – Neil
I’m like. No, I don’t. What’s my options? They’re like, well, early retirement. Okay. So I learned that in February near my birthday. I got married in March. My job ended in June. And then my wife found out. We found out. My wife found out. She found out first and then told me we’re going to be pregnant by October. I had a hand in this. But by the end of that year, she had gotten some bed rest issues and some new situations physically that had shown up due to the pregnancy that we were not aware of. She had a first trans ischemic attack, which is known as a mini stroke, and it lost her cognitive abilities and couldn’t drive and had to go on bed rest, although she was a BSN and a nurse. They did home health care and traveled all over the Oklahoma Tulsa area when we lived there. But no longer could she do that. She had to go on bed rest. So we went to zero income that first year that I launched out of IBM. So that was not planned, as you can imagine. That’s everybody’s worst fears of going out and launching a business.
[00:05:36.900] – Neil
Is it the right time? Is this the right person? Is this the right business model? Is this the right thing? And yeah, you just jump, man. You just freaking jump and learn how to build that parachute on the way down. So I spent the next two to three years developing a management consultant firm, because that’s kind of what I knew by that point I was doing well. I was in the public and private sector. IBM had become a client and brought me back in for about five times my hourly rate to build a development and management team over some of the knowledge projects that were kind of falling apart. And they told me, he comes back in and please save these projects. So I did, and that led me to helping in the Internet side and the marketing, and so taught me some things about leading generation and business that I wasn’t aware of. So I found out very quickly. I had an aptitude for media buying, like media buying, Internet traffic, this kind of stuff. However, not like maybe people are thinking about it if they know anything about it. Not web interfaces and Google AdWords and Facebook Marketing.
[00:06:23.650] – Neil
It was spreadsheets that were handed up and uploaded with creative information budgets and whatnot with little creatives for mobile application installs into the mobile networks all over the world. Struck gold on my first time over my 301st campaign launch. That finally made money because I tested and tested and tested and just took it off, right? And it took off. And all of a sudden, I’m making $1,000 a day in profit. I’m like, okay, let’s figure out what I’m doing, right? Can I replicate it? And I was able to start learning how to replicate that process. Because of that, a number of affiliate companies, legion companies, were able to raise their bar, go get serious funding. And I learned basically how to raise with capital and how to learn how to raise capital through that process. But someone brought Amazon to me there’s. A friend of mine, Facebook, said, hey, Amazon is here. And I’m like, well, I got leads in here. And I realized that I was running some traffic for companies that had products. And I thought, hey, maybe I got to close this cycle. How do I get to the end of the product?
[00:07:21.790] – Neil
How do I get connected to the back end, to the branding, to the marketing on the product? And he said, well, if you want to learn how to do it quickly, go to Amazon. And this was in 2010 when he brought this to my attention. By 2011, I said, okay, let me start playing around with this a little bit. Maybe it’s just a traffic source. Well, it turned out to be much bigger than I had anticipated. They had just bought, about three years prior to that, a company called FBA Fulfillment Company. And they turned that into an organization within Amazon that allows last customer mile delivery, which we know today is a little mobile phone add to cart click button thing. And they built this big infrastructure that they were leveraging for their marketplace. And it had keywords and traffic. And I was like, okay, I think I can kind of figure this out. Well, 18 months into that process, I discovered something very simple. And that was that the engine, the.com engine, the keyword search engine thing that Amazon uses was very familiar. I couldn’t put my mind on. I couldn’t figure it out.
[00:08:14.800] – Neil
And finally it dawned on me one day. It was very similar to the knowledge based learning and latent semantic engines that we were programming, doing and implementing an IBM. And I said, oh, that’s fascinating. Why didn’t I catch onto that sooner? And so I started to play with that and realize the engine was rating and linking and search engine optimizations. And things were very suddenly all flooding back in. And I literally went back and looked at some of my old documentation and stuff we’ve been writing down. I said, what if I try this, what if I tried that? And started to test it from that angle? And all of a sudden ranking keyword searches and products just went to the top. We were arbitraging by buying low, selling high, just any kind of product, any kind of brand we can get our hands on, and throwing it into this marketplace engine of Amazon and just trying to see what it would do. Stuff was ranking quickly. Stuff was selling out really fast. Things were happening faster than we could capitalize it. So we started to brand some of those products and stuff to ourselves, do more of the intellectual property business building that I’ve been more accustomed to, just the testing and free, willing and Started To Build A Business Around It.
[00:09:13.960] – Neil
Ran into a gentleman who was kind of on a life changing path. He had helped build 100 million dollar company, co founder underwriting mortgage and all kinds of other stuff in the real estate world. He said I’m on a new journey. I said, so am I. Like, why don’t we partner up a little bit and see what happens? So he’s the other half of my coin. After nine years together. He is the analytical detailed CFO. Speaks two languages in Japanese, loves the details, drives me insane, but I love him to death. I get the other half of the coin the fast talking marketing Internet guy over here who runs more of the visionary component of our business model, et cetera. And we just mash up, right? We sometimes fight like cats and dogs, but we still love each other. And it’s been really good. So I just kept launching. Long story short, between ourselves and then the clients, we started to show how to do what we did so they could take advantage of our engine. Then this powering, this system was to learn what products to sell. Like, what do I actually sell to make this work?
[00:10:06.780] – Neil
How to actually turn it into a business that’s not going to overtake my life? So I can run it more like a lifestyle driven business than a business as a lifestyle. Very Different. And how to make it profitable. Number one, like big deal. Profitable growth scale. And then these are assets with intellectual property. How can I sell this? How can I sell the intrinsic value of this business to somebody else? And over the course of that time, we’ve generated over $100 million in sales through that channel. And we’ve learned a lot about growing and scaling and building brands and selling and buying these ecommerce companies. And now the companies that I run, voltage holdings, does all of those things. We train, we launch. We build brands, we exit, we acquire, we do brokering deals with ecommerce companies. And that’s the primary focus of it, right? So we do it ourselves. We show others how to come along for the ride. And then we also acquire or sell businesses as part of our model.
[00:10:54.550] – Sean
Awesome. Neil, I absolutely love your background story. I have to do a quick shout out to a previous guest, jason shepherd. He was a pilot. He was trying to get into the Navy. He’s six foot did not get accepted. You? How tall are you?
[00:11:08.520] – Neil
Six, four and a half. Almost six. Five. So Disappointing. Man.
[00:11:13.680] – Sean
[00:11:15.570] – Neil
I’ve lived now, Vicariously, through a couple of my friends. One of my clients is a 20 year military fighter pilot gun, and I’ve just been able to live through them. They were like a C 130. You could be an aircraft mechanic. You could go fly one. And I’m like, no, new, that is not my dream. Man I Went Drag and try to get my pilot’s license. Trying to do that, I started in, they wanted to do the Ses and the 302 and the initial trainer and stuff. And I’m like putting over at this point, I was in Kansas putting over the flat fields of Kansas. We had 100 miles an hour. But up there in the air, it’s like, this is really boring.
[00:11:50.730] – Sean
[00:11:51.420] – Neil
I don’t know that I can put up for this long enough to get to something that’s more fun, double engineer rated or something. And I’m like, they always wait on that for a while. Good to go through. But you asked a question a minute ago about the process and how to identify and why maybe do something a little differently in the way we do it in that lifestyle driven business. You want me to talk a little bit about some of them?
[00:12:11.540] – Sean
Yeah, and I’ll have you start there in a second. I wanted to pee it up. Our audience, they’re big on stock investing or how do they create ways to create residual revenue so they can create more freedom in their life? And you really jumped out at me as a great guy to have on the show because your backstory really shows the truth here. You want from a service business model, management, consulting. You’re giving a lot of time away. And how you flip that equation so you have money really working for you. Specialist in Amazon FBA. So let’s dive in. If somebody wants to get involved, how.
[00:12:44.320] – Neil
Do they get started? Yeah. So just to understand amazon fulfilled by Amazon FBA It’s just a model that I liked because it gave me the time and freedom of not having big infrastructure or employees to deliver my product and brand to someone else. So I’m leveraging an asset, and it costs like any other asset costs as part of my operational, but I get the freedom and ability to move while Amazon delivers my products. Or I have a third party logistics company, a threePL, who also helps move those products. Thus, I’m not in a warehouse shipping products, nor do I have any employees. I used to have employees. I had twelve of them and 20,000 square foot a warehouse base. I won’t go that route. Talk about getting locked in. We realized how bad that was. I mean, it was doing okay. The profit margins were a lot lower than our private label brands were. But it started to implode when the manager got caught sexually harassing some of the other female. And that was when I realized that I do it out of the employee business. So I may drop a little bit of bomb for people who are listening here.
[00:13:41.800] – Neil
And that is I don’t actually own any stocks. Some of your heads might just implode when you hear that he’s so irresponsible. What’s he doing? This is no.
[00:13:48.560] – Sean
You’ve got a system, though, right?
[00:13:50.180] – Neil
But I am able to take more out of my products and brands and business on a consistent year by year basis than I would ever get performance out of the market. So because of that, plus tangible, physical, asset driven business model meets virtual online marketplace, I actually have assets. I have physical inventory. I’m not in just a stock or a single piece of paper. Now, I understand the difference in wealth building between controlling an asset and owning the paper. I very much get that, which is why I’m in the M and A business. So at the end of the day, I appreciate brand building and physical inventory assets due to tax write offs and other things you can do with that physical inventory that you can’t do in other ways. Plus, physical inventory is an appreciation and a hedge against inflation. So I can take that inventory and appreciate its value along with inflation and raise my prices and still be able to maintain that brand and still be able to maintain my profitability even though inflation is going up. So I have that control because of the business, right? So these are differences in the way that I’ve structured my wealth building that maybe others don’t like, or maybe they think it’s interesting, or they may want to learn more about it.
[00:14:53.920] – Neil
So I’ll unpack it from my perspective and just one guy. But I know there’s a lot of physical ecommerce business models out there. And if you’re clicking on Amazon, you should know that 70% of the products you’re buying from Amazon are coming from third party retailers. Amazon is actually the majority minority seller on their platform. And third party corporations aren’t really the biggest majority either. It’s actually small businesses, small business owners, single mom and pop, or three or four man operations that run those brands like you from Amazon, guys like us, and ladies and others who do this business model. But it gives me the lifestyle driven business. It’s very important to understand. We live on 40 acres. I’ll give you the preface. I have lived, as you said, in the world of time. In time management is money. And I’ve sold my life away and created time for money. And I don’t do that anymore. I have a family that homeschooled. We live on 40 acres in the country. I can choose to leave for a month if I want and do my business anywhere that freedom allows. And the companies, when done and structured correctly from the very beginning, only take ten to 15 hours a week to manage, even if they’re reaching seven or multi seven figures.
[00:15:55.550] – Neil
So that gives me that time frame in what I call almost automated income. Right? Because everybody wants passive. What’s passive? Passive is that really big, like, home run mentality idea that I do absolutely no work and money just flows into my bank account, which I think is kind of strange. It’s the same way as me just opening a bank account and chase and just waiting to see if money flows into it. There has to be some overarching activity. There has to be some guidance, some structure, some thing allowing for that to occur. All right. Now, Amazon, being its big mechanical marketplace, allows me to incubate products and brands to the tune of 200 million users a month and 4000 units sold a minute, and incubate that brand in there and determine its sales, its price, its viability, which customer, what other products they’re buying. I’m getting data while making money and profit from there. I can take that asset out to the other half of the world, right? Amazon’s 38% of the market share. I can take it out to the radar market and do direct marketing, infomercials, radio traffic, all kinds of other traditional marketing, even direct mailing for those physical products and brands once it grows up.
[00:17:00.360] – Neil
Right? So I’ve chosen to incubate, and that has been my experience because I can rapidly deploy a product to test market in front of a buyer, which is very important to understand. Because if I don’t know how to get a buyer, if I don’t have to have a conversation with them and I don’t really know what I should be selling them, then I’m kind of guessing. So in Amazon, it’s data driven. In Amazon, we have database that we’ve gone through our products, we have data points we use and profitability and scientific analysis of them to determine that we can reach seven and eight figures with these products before we even launch them. So we start testing them and working the market to determine upside potential. But the product itself is where so much of this is viable. Now, after going through all of Amazon data, using what we have been successful and our clients have been successfully selling, we have about 4% of Amazon 600 million products that can reach eight figures setting in my database. And so from there, I can launch those products, test market them, and know their upside, potential, profitability, and staying within my operational independence and operator space can reach seven and eight figures in just time.
[00:18:01.440] – Neil
Now, part of that is competition. Part of that is knowing not to be saturated. Part of that is the profitability of the product and understanding how the system actually runs. And a lot of it has to do with dialing in the customer, like, what the hell do I sell? Who wants this product and why would they buy it? So in a solution oriented framework, I want to choose products that are more solution driven and that the emotional charge for the buying of that product is more dependent on the person’s solution and less on the reviews or price point at which they’re purchasing it. Let me give you an example of what I mean. If I’m going and I wake up this morning and I have a horrible toothache, like it’s been grown or whatever. And this morning I woke up and I’m like, dang, this has to be taken care of. So I call the dentist. That’s my solution. And he says, hey, I can fix that for $200. It’ll take an hour? When can we schedule your appointment? Now you having let this go a little too far, waking up, needing a real solution and not wanting to wait for the rest of the day or spend another hour go.
[00:18:54.080] – Neil
Hey, what’s my other option? To which they say, great. We have a ten minute procedure. Cost $500. Would you like to do that? Yes, please put me on that. I’ll be down there to take care of that. Right. So we are now looking at a difference in approach to the avatar of the person buying and the reason the solution has to occur. So those are the people, products and types. We identify and then launch those into the market. Why? There’s More profit In Those products at that solution oriented 50 to $100 to $300 price point range than there are products selling less Than $50, especially on Amazon. That’s where a lot of sellers miss the market. And a lot of business people who don’t understand e commerce never ran. One of these companies don’t understand how the profit metrics and cost structure works. And so they’ll get going and then realize, well, it’s not terribly profitable or it’s not really profitable at all. And then what happens? Right? Just recently, literally, at the time of this podcast. And I know you said in two to three weeks, we’ll be out. So this won’t be too old news, but one of the largest sellers on Amazon just went out of business.
[00:19:51.350] – Neil
Now. Why do they go out of business? They’re a wholesale distribution model, not a private label. Branded, trademarked. Intrinsic property. Their margins kept getting thinner. And they kept compromising their margins until they literally ran out of business. They even formed a SPAC, a special purpose acquisitions company to try to raise capital, to raise their profits, raise their brand line. The stack failed completely. So they weren’t able to do it. So they went out of business. But understand the distribution arbitrage wholesale model is not something we play in. It’s private label. Intrinsic brand building profit. 1st 24 month growth. And then we exit those businesses in the market. So by determining that product and knowing those numbers, all right, we want to make sure that our scientific process of eliminating products and interpreting profitability has all the right numbers in it. And that’s how we are able to do this repeatedly. So I show people how to understand. One of the basic concepts is don’t sell the product that has less than $12 in net profit per unit. Why? Because I cannot go back in the market and properly compete, pay myself and keep the business growing without the right level of profitability.
[00:20:53.430] – Neil
So a lot of sellers make that first mistake. What they Don’t Understand Is something I’m willing to do when I have a or 50 or $60 profit margin, when there are sellers in the market who just got there first but aren’t really good at what they do, I can come in in 90 days. And based on my now example of the engine, which is Amazon’s ranking and services running and over 90 days, take over their market share, take over the seven people in there, I can take over the lowest two. And as I take over the lowest two, I’m proving to the engine and I’m the better product. And as my stats go up, as I’m continuing to buy more of their customers because I can afford to buy their customers inside of Amazon away from them because they may have $10 in profit and I have 20, what am I willing to do to take over that market share? Spend fifteen dollars to eighteen dollars buying all of their customers away from them over the next 90 days because I’m willing to attack the market from the business perspective, the longevity of a 612 24 month, and they’re looking at it on maybe a 30 day, by 30 day they’ve already lost.
[00:21:52.060] – Neil
They just don’t know it yet. So as I go in and take that market and take their customers, and the algorithm starts to reward me and the review cycle comes in because I’m always building better than products like an iPhone experience. We’re not just launching cheap Chinese crap. We’re building a brand with great products, innovative products. Not inventing, but innovative. I’ll just say. But the end result is those numbers have to work. And when they work and you’re in the market and I’m coming to compete with you, it’s just a matter of time until I’m going to make the algorithm believe that I’m the better product for Amazon’s customers. Because Amazon is over. Here to the customers. They don’t want the returns. They want a happy customer. They want to spend more than $1,000 a year with them on Amazon Prime. And I want all that too. But I got to make sure that Amazon’s engine and technology knows that I’m the better product. It’s all data driven, you see. So at that point, I don’t care if it’s fuzzy bunny slippers to Grandma. If grandma loves them, she’s super happy and leaves me a five star review and she’s paying $49 for something, someone else is spending $24.
[00:22:49.240] – Neil
I’m happy and she’s happy and we’re all happy. And therefore I can level up my traffic and create exponential growth inside the system, which has allowed us to take some of our clients out to a million a month in four months. Because the system can reward you when you approach it the right way. So when we have the statistical data, when we understand our profitability, when we understand what it is we’re going to sell to compete, we also want to look at a bit of innovation. We’re not. Inventing. We’re not going as far as getting utility patents. We’re not doing those kinds of things. Amazon’s Marketplace kind of exposes itself to opportunity, right? Because I can see the products, I can see the competition. I have this opportunity because of that. I can see where they are, their estimated sales. I can look at some of the things they’re having challenges with. And I can create a more innovative product that comes to the market and basically sells on the premise that my product is better than you for the three reasons why everyone else hates yours. Sure makes sense. So I can literally go right back into that data and attack them at the point in which their weaknesses lie, because I can see it point blank.
[00:23:46.390] – Neil
[00:23:47.110] – Sean
You definitely have Amazon FBA down to a science. I can tell you really leverage the data to really drive. Let’s take a quick commercial break. Have you ever lost money in the stock market? Maybe you heard or saw comments on YouTube, TikTok Reddit, or another social platform. Or maybe you just received bad advice from a friend. Yeah, I think we’ve all been there. Most people lose money in the stock market because they make decisions based on emotions. What if you could remove emotions from investing? What if you could make consistent returns in the stock market based solely on logic? And what if there’s a software that handled that logic for you? Introducing Tykr, a platform that helps you manage your own investments with confidence. Get started today with a free trial.
[00:24:34.900] – Neil
[00:24:35.210] – Sean
Tykr.com. That’s tykr.com again. Tykr.com. So I’m thinking my audience is going to want to know, okay, how much money do I need to get started? Are they starting with you? Like, do you have a course? Do you have a coaching plan to do this right? Where are they starting?
[00:24:57.690] – Neil
So I don’t do courses or programs. Right. The end result is I do mentoring and coaching within a framework that’s goal oriented. The goal overarching is to take a brand out to 24 months and exit it. That’s number one. To get to that place, we know that we need to reach certain metrics within twelve months. And one of those metrics is to basically go backwards and understand the brand, the competition, and profitability, and how we’re going to take over that competition every 30, 60, 90 days for the next year. If we do this correctly, then between six and twelve months after products launch and brand launches and iterations occur, certain exponential growth metrics should occur between month six and twelve, setting us up to open up direct to consumer channels, DTC channels, other channels outside Amazon, other marketplaces, other paid traffic, other media, other things to expand that brand that has proven itself out. So we want to reach 100K in net profits. Year one, we do it under both a consulting, mentoring, and performance bonus. It’s done with you. But components of what we do are done for you that are literally things like graphics, illustrations, and some of the more minutiae that operators can do that you can pay them to do as part of this.
[00:26:07.300] – Neil
So it’s done with you, with been Done For You sort of a hybrid model. We don’t do all done for you because I’m launching plenty of my own brands, I don’t need to launch others. But I will take five to seven people a month under wing and we will mentor them through our steps. We will help them pick up their base camp and ensure they understand all the oxygen tanks and the right materials and everything they’re going to need to get to their Everest. And then we’re going to sherpa them up the hill and ensure they stay in the guardrails so they don’t go off site seeing and fall in a hole. It’s how to deploy capital correctly. So in this way we charge 35 kwh over a year to work with us and it’s twelve months and we’re going to break this up into both consulting, mentoring, and performance. So we’re going to take ten k of that and say this is pays you profit skin in the game, holding that back. We’re going to reach that 100K in net profit or I guarantee you don’t pay that. Okay. On the front end, it’s twenty five k to get going.
[00:26:56.270] – Neil
So that 25K if we’re qualified. If you and I agree that this is a good fit, that we actually can help you and you understand the model and how we’re going to go approach more of a CEO, operator, executor, that can turn into ten to 15 hours a week, or you can literally hire an operator at some point to manage those more technical minutiae. Then we’re going to do that over installments. So literally it’s five kwh a month for five months. Pretty simple, right? We’re going to get to work. We’re going to get to work building the business, building the brand, building the assets, launching and test launching the product. Now there are investors on here and they understand market and business strategy. I know I won’t put 5 million in one company, but I’ll put a million in five companies. Why is that? Right? Because I haven’t learned divesting. And obviously divesting funds means opportunities for risk coming reward. One of those companies may fail completely. The other two might be like, yeah, they’re doing okay. One might do a lot better and one will make more than the other four or five combined.
[00:27:49.130] – Neil
It will literally take over the rest. So we take a similar strategy to our products. So people need at least 25 kwh to deploy to the business, to the assets, and to the inventory. Right from the very beginning, within the first 90 days, we go to run really hard because we can run hard because we have the data that we’re giving them. We’re giving them the products we’re giving them the sourcing, the graphics, every person they need in our team to step them through the start up and launch and growth process. It’s just step by step sort of a play by numbers and I want them to get through those correctly and deploy their capital. Very smart in that testing and growth strategy because we’re shooting for profitability number one. We’re shooting for scaling growth and then we’re moving to an exit. So none of this is meant to set them up for failure. It’s meant to set them up for that opportunity. If they don’t reach 100K in net profits in twelve months and maybe they do it in 14, then you don’t pay me the ten k. It’s basically pretty simple but we’re going to follow a strategy that many others have done before.
[00:28:44.560] – Neil
I got plenty of case studies and people who have had zero experience becoming heroes in this marketplace. An insurance salesman guy who never sold an Ecom is doing like 40,000 a month. I got the military guy and the fighter jet background who’s about to retire in two months because he just broke 50,000 a month and he’s on his way up. And I got the golf course management degree guy who’s got a theology secondary who’s never sold an income in his life doing over 300,000 a month in sales in 16 months. So. I’m looking for Aptitude. I’m looking for interest, aptitude and intent. Go getters action. Takers people who might not say, okay, 5200K in the next year isn’t going to break my bank. And instead of investing it in Wall Street or maybe owning another property or maybe buying another crop property and waiting for three years or so for that to return, it’s 2000 a month. I’m going to go take a run at this and see if I can start turning 50 to 100,000 a month in profit. That’s how I diversify things. That’s how I look at this model when I take capital and put that 30, 50,000 or more upfront.
[00:29:38.060] – Neil
I’m looking for that return every month within twelve to 24 months.
[00:29:42.470] – Sean
I love it. And I’m glad you mentioned the other areas where people can deploy their capital because there’s people out there that they want to invest $100 into something and then be getting $10,000 of reoccurring revenue. It just does not work that way no matter how you slice it.
[00:29:59.330] – Neil
But I also know that I’m not just deploying it into my knowledge and learning, right? I’m also deploying it into a system as well as my business and inventory. So a lot of that inventory capital I discussed is going into actual inventory worth money. It’s not just going into a vaporware or a system or a technology. It’s actually going into a physical asset. And the beauty of that is, as I mentioned, because of where I live and home school into what I do, it doesn’t come to me. It goes into Amazon’s warehouses or it goes into a third party district company. So I’m not the one drop shipping that product. I’m not the one moving that product. I’m not the one delivering it to the customer. I’m in the logistics, the profit, the management, and the operational oversight that can even be managed by artificial intelligence systems that we deploy to help manage things like PPC campaigns, pay per click and stuff. It doesn’t take a rocket science to learn, and maybe most of it, 80% of it, is done by the systems and the templates we put into it self manages.
[00:30:51.370] – Sean
What I was going to say is there’s so many areas where you can deploy your capital, and it takes some capital, like real estate. You have to put an investment with a private business. With this business, with the stock market, you really want to see some big returns, you’ve got to put in a larger sum of money. So in this case, 25K. Not too bad, especially with some of the case studies you’re talking about here. Can you talk to us about what kind of exit multiple? Because you said an exit after 24 months, what kind of multiple are we looking at?
[00:31:20.860] – Neil
Before I answer that, if you don’t mind, I’m going to answer the question about capital deployment. Because if you put out 25K in 90 days and you’re actually in the market selling revenues and profitability, there will obviously be more capital that needs to go in. But anybody who understands business knows, as you registered OPM is ridiculous out there. Amazon offers you money. I’ve got capital partners that will give you 0% interest for next growth schedule until you exit the company with zero involvement or you pay them off early. There’s plenty of ways to capitalize the next level of growth. It’s just important to understand you need to because sometimes these ecommerce companies can take off very fast. And when it says, hey, you’re selling 6000 units in the next month and you got to deploy $157,000 to a 40 foot container, then that’s what it takes to keep selling. You just need to be able to make that work. So when that comes through, and that profitability is there, when we’re looking at a business that has a minimum of net profit at 15% EBITDA or EBITDA, if you’re in Canada and you’re looking to grow, that maybe because Ecommerce can go 18% to 25%.
[00:32:18.800] – Neil
I’ve seen it even a little bit higher. Depending upon how you structure the affinity of the brand and the prices and the things that we do, and our tier two or tier three clientele versus the tier one, which is the sub $50 price point range, the profitability can go up. Let’s say it’s 15% at the end of the year, you’re doing seven figures. So you’re turning over 150,000 in profit. Maybe that’s taking you ten to 15 hours a week to manage. Not a bad turnover in my opinion. Right, so let’s say we go to market, we go to sell that product. We have to have certain aspects of the business in there. I won’t go too far into it, but let’s just say you’ve got to have obviously upside potential. There’s got to be more brand distribution of that product that could occur, or market share you can take over. There needs to be a little bit of operational independence so someone buying it doesn’t feel like they’re buying a job. So just some of those things to consider. Right. So the other aspect of it is that once you reach that metric, you should be able to see anywhere between 2.8 to 3.2 x your profit on just an Amazon only channel.
[00:33:14.200] – Neil
It used to be a little bit higher, but there’s market shifts that have occurred because of the aggregators. You and I talked a little bit about that before the green room. But there’s market shifts, but there’s always opportunity in that. Of course, if you open up additional channels, even if it’s just additional marketplaces, even if it’s a small shopify or traffic store of WooCommerce or some other website, not just Amazon, and it’s starting to accumulate some customers, even if it’s not a lot, that data is worth a lot of money. I mean, that could be a four x six x ten x exit. Okay. I can really change the multiples of exit, not just at the profitability, but the distribution of the potential that someone may come in and say, great, they have barely exploited this channel. They’re doing this thing not as well as I would do, they’re not deploying as much capital that I could deploy. And I could see that turning into double or triple in the next 24 months, and then we’ll go sell it again. So what happens with voltage? What’s in it for us? So we get people qualified to go through this process mainly to make sure I have a pipeline of network.
[00:34:12.790] – Neil
That’s what’s in it for me. And that means I have MMA’s deals, brokerages, other things we can do together with those business owners. The businesses sell, we exit. Voltage sometimes can become the management of record for those companies and operational, and these people put in the 500,000 or million and to grow it to the next level, and then we exit it again. So people always want to know, why are you doing this? What’s in it for you? That’s what’s in it for me. The game plan of exiting these businesses and acquiring them sometimes and growing them up and exiting a man and taking some people along for the ride with me.
[00:34:41.500] – Sean
When a business sells, are you taking any percentage of that profit?
[00:34:45.790] – Neil
Like a traditional real estate brokerage deal in Australia standards around 10%. So as I take them out to my private equity funds, my hedge funds, my accredited investors, or anyone I have in my network would be willing to buy these companies, I am the lead negotiator. I’m coming in with the brand understanding I’m going for maximum profit opportunity for the upside potential of the product and therefore I’m getting the 10% commission that I think should be great for that. It’s fair and it’s market value. Someone gets to sell a great business and then someone gets to buy a great business. It’s a triple win. Yeah.
[00:35:14.110] – Sean
I love your business model by the way, because you’ve got like a consulting fee upfront. You are guiding people along the road, as you mentioned. You keep them within the guardrails because I’ve heard a lot of people talk about FBA and most people fail. There’s a lot of steps and they’re probably missing. They probably want to reach out to you. But then your skin is in the game because you want to see them being successful because you take a part of the winnings at the end of it. It’s part of the touchdown.
[00:35:40.830] – Neil
There’s skin in the game for both of us to be successful in this, which is why I don’t take a lot of people and I’m not looking for hundreds and I don’t do a course and blah blah blah blah blah. We’re running a real business. We’re running our own brands. We’re doing this ourselves. We have multiple divisions and a software company and a solar company and other things we’re doing. But it’s fun. It builds a network. Right? And that’s another aspect of net worth, of course, as we all know. The thing that I just want to be very clear because some people misunderstand this is that this is not a done for your situation. I’m looking for CEO operators now. Can you make it more passive, more automated? Absolutely. They said a few times, they’ll just say it again. Even if we get clients to 50 to, they decide, hey, 15 hours a month is still or ten months is still too much. I have an account management team, but not until that business actually takes on 50 to 100K in revenues will we step into the business management and then take over full account management.
[00:36:33.770] – Neil
Right. From logistics to customer support to ordering PPC, the whole nine yards. We will manage that business completely for those customers, completely hands on. So they have about 1 hour a week. They check in with the operators and we have oversight the executive level for that. And then they’re able to continue to grow that up to exit a lot of rigor here.
[00:36:53.340] – Sean
I really like this. And you hit on a keyword aptitude. You got to have aptitude. I remember a mentor years ago said you want to find good people to work with and have good attitude and good aptitude. They’re willing to learn, willing to put in some effort because there’s a lot of people that don’t check those two boxes.
[00:37:14.590] – Neil
No, they have a misunderstanding, maybe some expectation differences. They have maybe a $500 mindset when they need to be realizing businesses start at 50K, those that really have profit upside and can make it past year one. As you mentioned, about 70% of the Amazon FBA sellers fail because they are not systematized. They do not have the business. They choose the wrong products. They marry their products and get locked into them for too long. I say don’t marry your products, steal somebody else’s girlfriend. Keep launching and testing those products. Find those winners that are profitable and start scaling them. Yeah, well, there are plenty of girlfriend. Like, I’m a married spot, okay? But at the end of the day, that’s like stocks.
[00:37:51.170] – Sean
You get ready to get rid of it when the time is right.
[00:37:53.670] – Neil
Take it all the way down, take it on the way up, get out. Like, sometimes that’s your best move. The end result is these are intrinsically growing organic. As the system takes over. There’s a lot of organic growth. Let me give you an example. Daniel, one of our clients, he got to 75,000 a month within the first three months after launching his products. He stayed there for about four, five, six months as the engine basically made great profits for him. He’s making about 50% profit margin, real profit margin. And at the end of that, the engine basically said, oh, by the way, your stats now are better than the other competitors. So it started sending him more traffic and distribution. It’s not like he magically did anything and push some magical buttons. And it wasn’t like he worked 80 hours the next week to make this happen. The engine literally just leveled him up. So he jumped from 75 to 150,000 a month. And that happened over a two month period, just like where and then he stayed there for a month. So between May of 2022 and June of 2022, he made 152 $300,000 month jump just because his algorithmic numbers, brand referral and everything was working optimized.
[00:38:55.590] – Neil
And he just took over more. And the engine said, hey, you’re the better product, you’re getting the better customer reviews, you got the more profit. You’re happy with us, we’re happy with you. By the way, here’s more sales. You just get more sales than your competitors.
[00:39:06.310] – Sean
[00:39:06.970] – Neil
And it leveled up really great.
[00:39:08.930] – Sean
I love it. Listeners out there, if you’re looking to replace your job, transition to something that’s ten to 15 hours a week and you have the willingness to learn. I think Neil is a good contact here. I’ve got one more question. Sorry. We jump to the rapid fire around. Can you give us an idea what kind of products have done really well?
[00:39:27.570] – Neil
It’s actually easier to tell you which ones haven’t because I’ve sold in just about every category along with my clients. Okay, I will tell you. Electronics is very difficult. Got to have at least a quarter of a million to go to market there. And you’re going to have changes in inventory defect. You’re going to have more customers report, you’re going to have to constantly innovate against the market every two to four months. Very difficult. Heavy lifting in that model can be very profitable. I got friends doing like 6000 units a day, but if you talk to them very clearly, they’re like, don’t get into this one. Like, okay, I won’t. I don’t think I want to play in that ball. Okay. The other one is nutraceuticals and supplements. We really don’t like to touch that unless there’s a unique aspect to the nutritional supplements. I won’t go into all the details of why that’s not a great game to play on Amazon. It’s just a corporate oversight. You’re going to have now the alphabetic soup of the government looking at you too. And there’s a lot easier ways to make money without going into those places.
[00:40:13.820] – Neil
Okay? Owned one and had it and sold it just so we’re very quick. And Amazon, I’ve also consulted with some of the largest brands on Amazon. Dr. DEPA was one of our original clients. He brought in now. Doctor Tobias settlement line. He sold it for eight figures to another company a few years back and got out of it. But that’s a great product, great line, but a very difficult market. The other one is closing. Unless you got star studded power behind you of some kind with brand influence and an open channel that has a lot of brand ambassadors, you’re going to suffer on Amazon. You’re going to suffer with returns. You’re going to suffer with a lower profitability and a lower volume. Now some of that may be more, higher profit if you bring the brand, but overarching it’s going to be a little bit more lower, a little bit more saturated, and certainly the volume of sales is going to be a lot lower. Now, anything else is up for sale? Patio, home kitchen, outdoor survival gear, all kinds of things. There’s all kinds of opportunities to sell those products. It gets down to, again, profitability and competition in the marketplace.
[00:41:12.380] – Neil
And it’s actually product branding. Second, once you know that avatar, I know you can compete against those people in the marketplace because at that point I can build a brand in ten minutes and take it to market that no one’s ever heard of and make it a seven figure business.
[00:41:23.910] – Sean
[00:41:24.640] – Neil
I love it.
[00:41:25.140] – Sean
Right away, when you said survival immediately, what clicked in my head is I’m a total outdoorsman. So anything that’s camping or fishing, like any little widget or knife or little hatchet and all that, there we go.
[00:41:36.440] – Neil
That’s a whole there’s a little bit of medical on that side. There’s outdoor adventure on that side. You can go a little prepper on that side. You can go a little light on that. I mean, you can go all adventurous. You could go sell all the components of the rugged Pike Peaks edition of your bike with the paneers and the super saddle and all that stuff. That’s like a ten grand outfit and all that can be brought from your brand.
[00:41:55.760] – Sean
That is awesome. I love it. All right, well, let’s dive into the rapid fire round. This is the part of it we get to find out who Neil really is.
[00:42:04.940] – Neil
May not be prepared for this.
[00:42:06.220] – Sean
Here we go. If you can, try to answer each question in about 15 seconds.
[00:42:10.690] – Neil
[00:42:11.170] – Sean
Ready? All right. What is your favorite podcast?
[00:42:14.030] – Neil
Okay, I can’t come up with another one since we talked. So I’m going to say most recently, jesse Elder and I did a podcast recording last week, which was amazing. He blew my mind on some things that he understands about how he stopped paying income taxes in 2014.
[00:42:25.090] – Sean
Very interesting. You have my attention.
[00:42:27.200] – Neil
Yeah, I got my attention too. I hit you back as another guest and I listened to it again the other day and I’m like, how did I not hear that? I’m like, not to sound arrogant, prideful, but I listen to the guy again and I’m like, oh, boy.
[00:42:38.320] – Sean
Yeah, I missed it on first pass.
[00:42:40.160] – Neil
I got to get it more of that.
[00:42:42.470] – Sean
What is a recent book you read and would recommend?
[00:42:46.950] – Neil
Read. And this is what I’ve been talking about a lot lately, feel the Fear and Do It Anyways by Susan Jeffries. It literally gets you down to understanding what things we should actually be afraid of and things that we perceive as failure or issues of concern. And it asks a very simple question of what’s the worst that can happen.
[00:43:03.040] – Sean
[00:43:03.710] – Neil
And as you continue asking yourself that and understand the logic and reason behind that, you will usually either talk yourself out or talk yourself into the problems if you’re not careful. Love it.
[00:43:11.350] – Sean
Great suggestion. I’m interested in that, actually. Next one. This is a good one. What is your favorite movie?
[00:43:17.680] – Neil
[00:43:18.750] – Sean
I was thinking you were going for Maverick. You being an idiot.
[00:43:23.280] – Neil
I haven’t even seen it yet. No, I haven’t done it yet. No, wait, we have a building movie theater that’s getting things to get it ready and then we’re going to watch it on the big screen.
[00:43:32.900] – Sean
Matrix is still very good. Classic.
[00:43:34.780] – Neil
Well, it’s so much unpacking into that movie that has to do with so many more things than the Sci-Fi aspect. It has to do with really getting you to critically think about the environment we live in.
[00:43:44.540] – Sean
Right. What is the worst business or investment advice you ever received?
[00:43:51.110] – Neil
Just stay in this company a little longer and we’re going to figure it out. Yeah, I’m not afraid to say that some people are, but that was a really tough life learning lesson. Advice that I should have never listened to.
[00:44:03.840] – Sean
Exactly. Flip the equation. What is the best business or investment advice you ever received?
[00:44:10.090] – Neil
The best business advice or advice I ever see. Good grief. That’s a great one. I would have to say that that recognition with that relationship from Peter, that really leveled up my thinking into the realization that networking is not worth. Not what I knew because I was running all technical to that stage. And until he helped me unlock that understanding, did my business not truly prosper after all that?
[00:44:34.300] – Sean
Wow. Great. And last question. Here’s the time machine question. If you could go back in time to give your younger self advice, what age would you visit and what would you say?
[00:44:44.650] – Neil
I would go back and tell that young guy not to kiss that girl in college that gave you mono, probably not the one you were expecting. And the rest of it? I would say, let it ride, dude, because you’re going to love how it ends up.
[00:44:57.800] – Sean
Awesome advice. Well, why don’t you go ahead, tell the audience where they can reach you.
[00:45:02.500] – Neil
Yeah. Wonderful. So I’m on all the major social platforms, whatever you choose to go take a look at. Or you could just Google my very short name. I can’t hide online, nor am I trying. And you will find my website, etc, for Voltagebtobee.com. Voltagebtobe.com will allow you to go watch a podcast I did with my portfolio’s partner, Kevin Harrington, where we go over about 45 minutes of understanding our model business, both Amazon and direct to consumer. How we approach this, it gives us about 80% of the details, some of the stuff we may have talked about today. We’ll also be involved in that. I encourage you to check it out and then go from there and see what you think.
[00:45:37.700] – Sean
Awesome. Well, thank you so much for your time, Neil.
[00:45:39.820] – Neil
That was great. Thank you, Sean, for having me on. I appreciate you, sir. Bye.
[00:45:48.110] – Sean
Hey, I just want to say thanks for checking out this podcast. I know your time is valuable and there’s a lot of other podcasts out there you could be listening to. So thanks for taking the time to listen to my guest story. If you did enjoy this podcast episode, could you head over to itunes and leave a five star review? That would be much appreciated. Thank you. And last but not least on this podcast, some episodes we do talk about stocks. And please keep in mind, this podcast is for entertainment purposes only. So if you did hear any buy or sell recommendations, please don’t make those decisions based solely on what you hear. All right, thanks a lot. See ya.