The Lazy Entrepreneur Podcast
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“Whenever there is a hard job to be done I assign it to a lazy man; he is sure to find an easy way of doing it.” – Walter Chrysler
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All of the following episodes can be listened to in any order. So find a subject you’re interested in and start there!
“But really there is something about having your own place, about having a community that you’re really entrenched into and you actually contribute to. It’s a very hedonistic lifestyle which you start to feel a bit dirty about and something found quite difficult is that you’re not actually contributing you’re kind of just a tourist.”
– Sam, on the tradeoffs of digital nomading
Sam & Emma talk about their experiences as location independent digital nomads. Why they decided to stop and settle down and why after two years they are now thinking of becoming digital nomads again.
Resources Mentioned In This Episode Of The Lazy Entrepreneur Podcast:
01:00 – What is a digital nomad?
02:35 – What was it like to be a digital nomad?
05:44 – The perks of a coworking community
08:15 – Gran Canaria as a digital nomad hub
09:59 – How to build community when living transiently
11:29 – Loneliness as a digital nomad
17:29 – Discussing digital nomad expenses
22:44 – The importance of scalability in your business
25:27 – Finding structure on the road
27:27 – What will Sam and Emma miss if they go travelling again
34:05 – Perks of living in a small town and being known there
37:05 – Sam and Emma debate the scarcity of eggs benedict when travelling
38:12 – In summary
Sam: Hello and welcome back to another episode of the lazy entrepreneur I’m your host Sam Priestley and we’re here as always with my lovely wife Emma say hello
S: Today we’re going to be having another discussion style episode and we’re going to be talking about the pros and cons of the digital nomad lifestyle it’s something that we’ve lived at one point we spent from March 2015 to July 2017 so about a year and a half and it’s something we’re thinking about actually doing again maybe in July and it’s also one of the lifestyles that I think people see as the end goal of starting your own business becoming like a lifestyle entrepreneur the kind of entrepreneurship I’d like to talk about in these podcasts. A digital nomad is someone who doesn’t have a base kind of lives out of a suitcase and travels the world working online or experience life online basically it’s not just limited to people who are working it’s also for retirees but the main thing is not having a base, the traveling aspect of it and and being able to live a normal life through online means
S: travelling the world full time as a sustainable lifestyle sounds great it’s not quite as good as it sounds and there are some pros and cons to it which will hopefully cover today. Why are we talking about this? well most of these podcasts so far have been about starting a business when really I want to talk about lifestyle entrepreneurship as a whole and the digital nomad lifestyle is a kind of a big example of that and a bigger thing people might strive towards. so let’s dive in. so we went off we went off in March 2015 we first of all went to South America or spent three months traveling around there in Argentina, Chile and Brazil and then for the remaining year we went around Europe pretty much and we did that because of a few reasons and the main one was that it was easier to get back to England for kind of emergencies or just to visit people. my dad has Parkinson’s which was getting worse at the time so it was quite good to be able to come back and then a bit later on we got engaged and say for organizing a wedding required us to kind of pop into the country every now and again
S: so what did what do we like about it so what was it like so we went off without really a plan we just took a suitcase each
E: and a one-way ticket
S: And a one-way ticket to Buenos Aires, Argentina we actually had a return but we never used to return
E: yeah because it was cheaper to get well
S: well it was also because to get into the country they have rules you need to have an outgoing
E: yeah yeah
S: and we kind of thought we might use it but then we didn’t. what we did is we started off by staying in a hostel for a few days with all the other travelers then we would see if we like the area if we like the city we might try and find sort of accommodation for a bit longer for a week or two weeks or a month if we really liked it and if not we move on and generally so we stayed a couple of weeks in Buenos Aires and then we hopped a lot for for quite a while and then in Brazil we spent a few weeks in each place there
S: then when in Europe we slowed down quite a bit because that got quite tiring kind of moving all the time. We also downsized we went from a big suitcase each
E: Yeah like a normal size you take for two weeks
S: yeah and then around Europe we downsized to just hand luggage each
S: and there we generally spent probably about a month in each place maybe a little bit some of them were a lot less some were a couple of days but generally about a month and as we came to Europe we started hunting out places had a bit more of a digital nomad community already built so one problem we found with traveling around South America was finding other people who would be doing a similar thing to us they’re really the kind of communities we’d bump into on the traveler circuits, wordy moving every couple of days
E: yeah did we go to any workspaces in South America? we did maybe in Brazil we discovered the workspaces properly in Europe
S: then after that we then went to Las Palmas in Gran Canaria for that exact reason yeah
E: I just wonder why didn’t we seek out more workspaces or were there not in South America
S: no no I felt like a lot of places didn’t have them but Buenos Aires probably did. We did go to a few kinds of places like that in Buenos Aires
E: maybe there where the workspaces but they didn’t really have the community so we would go for one day do a bit of work not really talk to anyone and then not really return
S: yeah so what we’re talking about is a lot of cities now have co-working spaces where you kind of rent a desk by the day or by the week or a month and they often have ready built communities of people doing similar things and we find that quite a good way to to meet people and also be a bit more productive we’re kind of like we’re kind of starting over fear of the negatives here because probably the biggest negative of traveling is the community side of it where as I said you’ll never a local you don’t know the local customs and you don’t know the local language and that does start grating after a while and become quite difficult I remember the first time we came back after three months in South America I just felt like a weight come off me from this kind of like underlying level of stress that was always there and I hadn’t really noticed because everything you do just has a slight bit more hassle if you’re going shopping you know you’ve got a try and communicate when you can’t speak the language or if you’ve got to get a bus ticket you’ve got to go work out how to do that and you’re always you know your accommodations only last for a few days so you’re always kind of on the lookout for where next and that does have kind of an underlying stress and it kind of grates on you a little bit and yeah and also the communities because either you’ve got the very transient communities of travelers who are gone every couple of days and they’re great fun but you don’t make any lasting friendships there well you do actually we got some friends who we still meet up with again or talk to quite a bit we’ve only met for a few days but that’s not what you want when you’re there we wanted people here we can meet and then go out for dinner regularly with a bit more bit more like community like you’d have at home
E: yeah but also people that you could talk about work to so many people that we meet in the co-working spaces wouldn’t necessarily be doing the same business as us but we would have a lot in common with them
S: yeah yeah the by the time we got to South America and then went to Gran Canaria Las Palmas which is kind of known as being one of the biggest digital nomad hubs in the world it’s a little Americanized a little island it’s officially part of Spain but it’s kind of further south off the coast of Africa and it’s the weather’s kind of very stable all year round it’s often sunny there’s lots of beaches and surf spots and it’s quite cheap and affordable and a lot of digital nomads and it’s got very good tax system so a lot of digital nomads are kind of based out there and will hop from there to different places E: yeah we’d really recommend going it was a good place
S: and there’s loads of workspaces every night you could go along to a different event a different networking or social then we made a lot of good friends I think we went like wine tasting on our first night there and then we kind of regularly meet up with people and you pop into the co-working space the next day and see them which was which was really good but it also had a few problems as well because you make these good friends and then they leave or you leave. rarely are people around for more than a few weeks when we were there there was a digital nomad cruised that was about to head off from Gran Canaria to somewhere in the Caribbean so there were loads of people there for that
E: we really wanted to go on it
S: yeah it’s just before Christmas and it tugged on my heart I thought could we just bug off Christmas hop on this cruise on the Caribbean with all these friends we’ve made interestingly enough that cruise didn’t have any Wi-Fi on it so these digital nomads who kind of the whole point in our lifestyle was being connected and they were disconnecting on purpose which is kind of bizarre but community was a big thing we did find ways around it so you know digital Nomad communities were one of them I’m quite into Brazilian jiu-jitsu so everywhere we go I’d find a club which I quite a good community we’d also hunt out the the english-speaking churches in the place and join there which kind of plugged us into another community which was quite good that kind of expat but living there a long time community
E: It was more the families
S: families and people who’d moved there for work so places like Rio we’d built a really good group of friends there who we around our age and they were just kind of living there yeah yeah a lot of international people I think that’s probably best in big cities really we found that a bit less is more kind of families wasn’t it in some of the smaller communities we went to
E: but that was still nice because when we’re away from home it was nice on a Sunday to have that group of people that you went to meet that did feel like a temporary family yeah
S: yeah yeah definitely but you don’t have you don’t have your family don’t have those long-term friends that we both really missed and was something that was really nice about coming back but when we were going around Europe I kind of felt like I’ve seen some of my friends more regularly than I did when I lived in London and we were only an hour away from each other because by coming back to London every month for every well probably along that maybe a couple of months I felt like I needed to make the most of it and would book up meeting up with all these different people
E: which is the kind of stuff I love doing not so much yeah
S: yeah yeah I’m perfectly happy just to play things by the day and then weeks drive into months and months into years and then I don’t meet up with people who I really enjoy spending time with we see about community I mean you can imagine what that’s like we were traveling as a pair which I do think makes things a lot easier you have each other I know a lot of digital nomads struggle with loneliness yeah if you’re traveling on your own which most of them are to be honest most people who are digital nomads are on their own and I’m on there’s a few communities on Facebook and stuff which I’m still a member of and have people asking questions and I think loneliness is the biggest one that people bring up how do you how do you get around that I don’t think that there’s a good answer to that people do find ways there’s there are groups that kind of group you together and take you around sort of stuff like Nomad year where you kind of pay a set fee and they’ll take you to a different month a different place every month but there’s a group there’s like 50 of you all together and so you’ve got that kind of community you’re with long term as well as also doing the travelling there’s pros and cons to that as well you lose a lot of the freedom someone’s choosing everything for you
E: well it was really funny because then we actually bumped into like a remote year group in our first destination in Buenos Aires and it was one of our first weeks and then we were able to actually meet up with them when we’re in Europe kind of six months later or was it near the end of their year I can’t remember but it was really interesting for us because we could kind of get an update of what it’s been like for them because actually we were interested in booking on one of those well you pay a set fee for your accommodation and your work space each month you have to get to the first destination but then they cover the travel and you’re locked in for a year with the same people it was quite interesting
S: I think the way it works is you paid half up front and then you could leave any time but you’d kind of forfeit that deposit a big deposit and by the time we met up quite a few people, not quite half but a lot of people had dropped out
E: yeah and it seemed it had split the thing that surprised us was thought that most people becoming digital nomads would already have a business some way of supporting themselves but that didn’t that wasn’t actually the case is I’d say to most people we met had like quit their job saved a bit money left and then tried to build a business on the road which is so hard and we’ll talk about that a little bit more in a second but what that ended up meaning for the nomad year or so you ended up six months in with this divided of people who made it and were making good money and the people who hadn’t had just turned it into a holiday and I think now was it was a bit of bitterness there it reminded me of being in university but in university everyone has the same money everyone gets the same student loans and have all the same spending power whereas on this you got people who are making potentially millions yeah living with people who’s living on their savings and they’re going out and getting bought service in the club because they just completed a big contract or whatever with their their business and the other people are trying to live up to the level and that created quite a strange dynamic which they love to bitch about
E: And we love to hear about
S: but I do feel like they are the people who are left by that point were loving it and will remember it forever basically
E: yeah I think the route that they went on in terms of the cities and the countries was a really good mix and I think it was a really good opportunity to travel with people that you wouldn’t normally meet day to day say you’ve got the kind of travel element and the culture element but also pushing you out of your comfort zone and they’re getting to know meet people you wouldn’t normally meet
S: which brings me on to one of the things that are good about being a digital nomad which the digital nomad year didn’t have which was how cheap it is
S: so you actually paid a premium I can’t remember how much it was but it was something like 20 grand for the year for the digital nomad where they would do your flights and accommodation there’s quite a lot more than what you would pay if you’re just doing it yourself and for yourself planning and so these people on this were paying what they probably would to live in London or somewhere like that maybe a bit more for this year experience whereas a lot of people go digital nomading for the cheapness one of the biggest communities of digital nomads is in our Chiang Mai in Thailand and the reason it’s there is because you can live pretty well on about a thousand dollars a month we actually spent pretty much the same amount being a digital nomad as we did living in London in flat shares in central London partly because we were moving quite a lot and we weren’t particularly staying in the cheapest places so even in South America we stayed in the three most expensive countries pretty much in South America E: and we like to eat out and drink and we did lots of touristy things we didn’t hold back yeah we did a lot more
S: yeah we didn’t hold back at all I think we spent I worked it out to about 2,500 a month each pounds is what we were spending while we were away and that was a mix of sometimes we’d be somewhere quite cheap the other time you know where we were rented accommodation short-term accommodation London which is very expensive and then we’d be off somewhere where it was really cheap again and it was but it did even out similar to what we were spending just living in flat shares but one bit that was better was that we would always be in the best place of wherever we were so if we were in Lisbon we wouldn’t be living in a place where anyone who lives in Lisbon lives we wouldn’t be commuting in we were living in walking distance from the central square and everywhere we went on in Rio we were in an email at the best place possible right by the beach like everywhere we went we were living yeah
E: somewhere we’d never be able to afford in London
S: somewhere we’d never be able to afford in London exactly we mean the equivalent of just next to Trafalgar Square
E: yeah it was amazing
S: and although the prices end up being comparable it was the quality we had was a lot better most of the time that’s one of the other things about being digital Nomad is that there’s a lot of variance yes you book somewhere and you don’t really know what it’s gonna be like it might be amazing or it might be rubbish and we had our fair share of rubbish and we had more than our fair share of amazing
E: yeah I mean that’s kind of the fun of it and the fact that is temporary I mean if we moved somewhere and it was really that bad, we could have moved out again pretty quickly
E: with the exception of Lisbon there was a lot of choice most places had a lot of choice and the economy of short-term accommodation was a bit strange so some places actually in London we got very nice accommodation in London quite cheaply compared to what you’d spend renting whereas in Lisbon the opposite was true short term accommodations was very expensive whereas long term accommodations were very cheap yeah same was true in Malta short term accommodations were pretty cheap
S: yeah we had a lovely flat
E: yeah other places were so it really varied and you kind of didn’t really appreciate that until you went because you look up the cost of living somewhere and I’ll tell you it’s this amount but actually short term living there might not be anywhere near that cheap yeah we’re kind of like flicking around all over the place but let’s go back slightly still on the cost to places like Asia and Chaing Mai were a lot digital nomads go yeah something we bumped into quite a lot was both people who went because of the cheapness without a business already set up with the plan of living cheaply and building a business
E: what do you think about that think
S: What do I think that that is a good question
E: Would you recommend people do that
S: I mean I think I mean one problem we had with the traveling was the productivity wasn’t very good yeah so I think like working on the beach isn’t practical yeah you don’t have any Wi-Fi your battery runs out all that kind of stuff and a lot of places you know if you have a workspace that’s great but also whenever you’re in a new place you want to do all the touristy stuff there’s always more fun things to do when you meet new people you want to go out drinking with them and having fun
E: but isn’t someone like Chaing Mai or Bali they have lots of cafes that have got good internet and they’ve got lots of workspaces that you can pick into so you’re not kind of on the beach working
S: yeah so what I think is that if that’s what you want to do you need to make that like the explicit plan so you’re not going to be a traveler you’re going to like if you bet it’d be better to move to one of these places like we saw people doing in Las Palmas where they’re not planning on travelling. They’re moving there to start a business because of the cost of living and taxes and I think if you’re moving somewhere like Chiang Mai to do that can work out yes but what we found was people were trying to have the best everything and were getting trapped basically where they would get a one-way ticket to Chiang Mai they would spend their time there working on the business maybe working quite hard maybe working a bit half-assedly, having a great time and then slowly new reality starts to set in
E: They’re earning enough to live
S: And then they always say one more month and then they run out of money and then they can’t afford to move home maybe they can afford the flight but they can’t afford the rent when they get there they got used to living in this cheap cost of living place and they can’t save up and acclimatize and it’s not just people who have failed its people who have kind of made it so there’s a whole bunch of people who are working very hard for around whatever 12 thousand dollars a month an amount they can’t live on in somewhere like the US or the UK but they can live on in in Thailand yeah and they’re a bit trapped. I’d been trying to write a blog post about this yesterday about scalability and the importance of scalability of the business because a lot of people are doing kind of gig economy stole jobs on things like fiver or upwork where they’re earning a very small hourly wage and it’s very competitive to get the work and you’re competing with all all the third world economies charging half what you are even in your cheap place of living yeah and they they it’s not like they can take on more work and make more money yeah because it’s not scalable and that’s something you need to be very careful about when you plan out to begin with and yeah that’s something I’m able do podcasts on that next kind of planning that out bit as a blog post and it is important and it’s something people kind of assume they’ll be able to sort out later but they don’t they end up trapping themselves and you know getting to the mindset where they can’t afford to give up the income they’re earning in order to take risk and try and like take that scale
E: Because they’re using all their time
S: if they could really put their price they’d lose all their current clients because all their current clients using them for the value anyway we’ll talk about that another time so let me let me try and like kind of summarize some of the good and bad stuff so good you know you’re traveling the world that’s pretty self-explanatory you’re staying in amazing places you can Instagram everything show off for your friends you’re living in the best places in each place by being a short-term resident each place you’re kind of forced to make the most of it which you do you do a lot more stuff than you would
E: When you live in a place
S: When you live in a place and you take it for granted it can be cheap depending on where you are maybe not as cheap as everyone pretends it is and all the sales brochures will tell you but it’s cheap it’s cheaper than living in London it might not be cheaper if you live in an even the country or in a smaller city in the UK most definitely cheaper than London and it is very durable there’s good Wi-Fi pretty much everywhere there’s good short-term accommodation options with hostel world and Airbnb and all that kind of stuff and there are digital Nomad communities set up in a lot of places and probably since we did it which was
E: a few years ago now
S: back in we left in a yeah by a year and a half ago now so it’s probably a lot more these places and you might think the last thing you want to do is go to an office when travelling but actually it does is good because there’s a community there and it does give you that kind of place to work
E: gives you structure is your bit structure and they are open quite often 24 hours so if your structure is working in the middle of the night it works quite
S: well yeah the bad is the main bad is community you know you don’t really have those long-term friends you can make friends as you’re doing it but you’re always having to make new friends. I know it’s quite tiring
E: always saying goodbye
S: which gets a bit draining yeah there’s a comfort being at home there’s there’s a there’s an ease with having your own house having your own apartment long-term that I think we take for granted and when you’re transient and always moving you do feel it and also about not being in with the local customs and language problems there’s a reason why a lot of people end up in places like Australia which is different but kind of similar in some ways
E: And doesn’t appeal because
S: it’s just as expensive as here but in other ways you know we don’t speak the language everyone you go to now something that’s quite nice about someone like motor where everyone spoke the language because English is a main language there or somewhere like Budapest where their language is so complicated that pretty much everybody speaks English and often it’s not very productive because you’re making the most of living this amazing traveling life and working on a beach isn’t particularly practical or you might be in an accommodation with bad Wi-Fi there’s loads of little things where we might spend a day traveling those little things are why it’s not as productive as just having your head down working at home and that’s my little list the good and the bad, let’s talk a little bit about what we’re gonna miss if we’re gonna go I’ve dropped down a couple of things while Emma was getting her coffee I’m thinking what am I gonna find it really difficult to leave if we go off
E: In Tunbridge Wells
S: yeah so our current living situation as we live in Tunbridge Wells which is a very nice town we’re right in the center we can walk everywhere we have a car a local business in Pipe house Gin which means we know a lot of the business owners and we know a lot of people around town we’re pretty embedded in a few kind of local communities where we we go along to church with a regular and a lot of friends at I do Brazilian Jiu Jitsu which I do four or five times a week and I do that quite and meet the same people every time we also have kind of business community we’re kind of involved with and Emma does her supper clubs where kind of every couple of weeks a bit longer at the moment we we host strangers in our house where they pay and Emma cooks kind of a four course three courses with canapes and sweets and things afterwards meal so we got a lot to leave you know we’ve got a nice house we’ve got a super king beds with a very expensive mattress I’ve got my little podcasting and office studio here
E: we have a lovely sofa
S: I have a games room we have you got your dining room and all your
E: kitchen appliances
S: your expensive kitchen appliances we have a lot of possessions we have a convertible we can whiz around in with our hair whizzing
E: We have a very comfortable life
S: We have a very nice comfortable life which we’d have to give up to get rid of most of our possessions get rid of most of our clothes drop down but what would we miss I think I’d miss the comfort for one I’d missed being able to come home flop on our sofa put on netflix whatever and just kind of chill yeah I’ll miss that quite a lot I don’t think we ever stayed anywhere with a nice sofa you know whole year and a half that’s definitely not a priority with short term accommodation
E: yeah some of the worst sofas
S: yeah I’ll miss our bed that’s for sure in the house that’s probably what you know I’m gonna miss I’m gonna miss video games I miss my desktop computer where I can play all my high-performance team games
E: you always used to say that when we were traveling I miss my computer to play computer games which I never understood because you always playing games on your phone
S: yeah it’s not the same cuz I have my laptop there’s not that much you can do on there got my little games room and my playstation which was like the first thing I bought when moving in
E: Give you an idea of Sam’s priorities
S: I’ll miss jujitsu yes traveling I could move to new jiu jitsu place every time but it’s not the same especially as jujitsu is often about lineage and loyalty so moving up the ranks on the one instructor is quite a big part of it and something I’d like to do and if we leave gotta start again or just end up being this transient person never belonging to any club which is a bit sad and something I will miss and miss a lot
E: but I think it is good for your development I don’t think it’s bad to be constantly moving
S: there is good stuff about it there is good about being in different places trying out so many people E: Going with people that have completely different skills and different way of thinking
S: yeah yeah it is good it’s also a bit hard I’d be training a lot less probably because places we go might not have as Brazilian jiu-jitsu or the time tables might be a lot more limited
E: but going to Asia it’s quite likely that’s we’re gonna go in really good gyms yeah if we go team yeah
S: especially in Thailand yes they got a big MMA community there should be a lot gyms there
E: Maybe you’ll turn into a professional MMA fighter
S: maybe unlikely but maybe those are the things I probably miss the most friends yeah miss them but I’m also quite happy being doing my own thing and which is probably gonna be a bigger bigger hurt for you
E: yeah I think you’ll probably miss family more than friends
S: yeah maybe I don’t know I miss my friends but I’m also a lot more in the moment and then when I come back home me up and it we like I never left and have kind of what we were almost more fun and more to catch up on because of it
E: Yeah you’ll have all these stories to tell them
S: yeah whereas you you like to see your friends may regularly yeah here you can pop into London quite a lot and see all your friends from there you can pop home to you today you’re going home to see celebrate our friends 30th yeah taking her out for lunch last weekend we saw family your family and went back to my homes for my cousin’s 31st yeah there’s loads of little things like that that you’d miss out on it’s kind of something we talk about is you miss out on a lot of stuff like weddings special birthday special events just cuz you’re not in the country which is a bit painful and it’s a bit sad I think you’ll really miss so on Saturday we went we just went for a wander around Tunbridge Wells we went to a local market where we got some cakes and things and chat to all the business owners present and we went up to a cheese pop-up so you can order some of your favorite cheese’s for Christmas then we went to somewhere else where we had some beer and then went somewhere else with some coffee this little tour and and you loved it because you got some free cakes because you know the business owner you got a discount on that on a present for someone yeah that’s something you’re really gonna miss being able to like wander around and just know everyone
E: yeah and I’ve never really had that before I didn’t have that in my hometown we didn’t really have a small business community like that didn’t have at uni definitely didn’t have it in London even if I did go to the same person for coffee every day at work they would have no idea who I was whereas yeah living in a small town it’s a lovely feeling people greeting you by name and asking you how you make this holiday was or how’s the gin going whatever it is it was up for a chat
S: I definitely think that I’ll be quite different I think we over we underestimate how nice is here yeah how good we got it basically yeah even the stuff like having a butcher with good quality meat who you know quite well yeah and you want to experiment yeah whatever cooked goat in hay and you can go and put an order in and they’ll source it for you all that kind of stuff which you just don’t know like the quality of eating for instance like home cooking we have here it’s really good we can get all the good ingredients stuff you have it is a bit more tough
E: but travelling one of the big things travelling for me is experiencing different cuisines going on different cooking lessons and going to the local markets and having lots of different experiences whereas the food culture in Tunbridge Wells is quite one thing it’s quite good quality meat
S: English pub yeah
E: yeah and they do it well but there’s a point where I get a bit bored and hence why I go to London so much for the food scene because it’s so good is
S: like one thing we miss about travelling which is really simple is like good quality coffee yeah because most places just don’t have it a thing with like good-quality international food London food is one of the best in the world
E: It is the best in the world
S: and if you’re going to a place like Lisbon obviously have really good food but somewhere like Las Palmas doesn’t if you’re eating out you don’t have any good choices
E: there’s only so much tapas you can eat in six weeks yeah
S: and that’s okay I see somewhere like Bangkok we’ll have a really good international food so lovely amazing yeah the street foods but we don’t wanna live in Bangkok we’ll go to Chiang Mai probably have a quite good but not amazing and then if we go further if we go into Bali or somewhere like it’s gonna be a step down again
E: I don’t agree gonna be amazing
S: they’ll be amazing in what they do the Thai food will be amazing but you’re not gonna get any eggs benedict
E: well we have heard you can go to cafes and get eggs benedict but you spend like four times the amount that you would for a local breakfast just for the privilege
S: and it won’t be very good yeah
E: but I can make you eggs benedict
S: Well you can’t because you can’t get smoked salmon you may be able to get the same type of eggs well you have to make the hollandaise
E: I’d be able to make the poached eggs but yeah in terms of bread and their salmon yeah it’ll be different I won’t be asking to have good sausages no
S: yeah sorry this has been a bit of a waffley episode just to summarize let me quickly go through the pros and cons again you know Instagramable, living the best places is cheap maybe not as cheap as you want it to be but it is cheap you get to see the world you get to travel different communities all that kind of stuff bad is it’s not comfortable it’s not the same as been at home me there’s an underlying level of stress you don’t speak local language you don’t know the local customs you’re always kind of having to work a bit it’s not as productive and you just don’t have those long-term friendships and family that you do at home that’s kind of it like there’s they’re just different lifestyles I don’t think either one of them either one type of life is good if we’re talking about becoming digital nomads again but it’s not gonna be forever you can’t have a family while traveling there are digital Nomad schools that can travel the world and I think as time goes on they’re gonna get more and more set up for that kind of thing but really there is something about having your own place about having a community that you’re really entrenched into and you and you actually contribute to you know actually something we didn’t talk about is it’s a very hedonistic lifestyle which you start to feel a bit dirty about and I found quite difficult is that you’re not actually contributing you’re kind of just yeah you’re a tourist in your countries economy maybe or not you know actually building anything for that where you are you just live in a very holiday lifestyle all the time which feels a little bit a bit wrong maybe that’s maybe it’s wrong to feel wrong about it but that’s something that we were really keen on moving back here and having spare rooms in our house and being able to host people who can’t for whatever reason just like need the space whether that’s family or sort of members of the community and that was like something that we really looked forward to about moving back here
S: just randomly well anyway on that night I feel it has been longer than I had planned hopefully found it interesting it’s giving you a bit of insight into what it’s like kind of traveling and stuff like goodbye
Sam Priestley goes into detail on how to start an Amazon FBA business and how to succeed through 2019 and beyond.
Resources Mentioned In This Episode Of The Lazy Entrepreneur Podcast:
01:14 – What is an Amazon FBA Business?
02:26 – How did Amazon FBA create an arbitrage opportunity?
06:13 – The opportunity of white labelling in your Amazon FBA
08:33 – How to decide what product you’re going to sell on your Amazon FBA
12:13 – What is brand registry?
15:16 – Things to take into consideration when searching for a factory
17:12 – How to negotiate with a factory
20:11 – Understanding order quantities
20:57 – When do you hire an inspection team?
23:44 – Barcodes vs. commingled inventory
25:12 – Storing extra stock
27:42 – How do you get sales
30:23 – In-depth discussion on the important of reviews
32:35 – Reviews on product vs. reviews on the seller
34:21 – Adverts on Amazon
39:01 – Navigating language barriers
40:39 – Criticisms people have with Amazon
43:34 – What are some good problems to have with Amazon?
Sam: Hello and welcome back to another episode at the lazy entrepreneur I’m your host Sam Priestley and as normal we’re joined by the lovely Emma Priestly
S: And today we’re gonna be talking about how to start an Amazon FBA business which is my most popular blog post of all time it’s something I get asked about a lot and it’s something I’ve made quite a bit of money out myself and my my main business is sort of focused around Amazon that’s the biggest outlet channel for it and it’s also something that has changed quite a lot since I’ve been doing it so I started in 2013 I think so it’s been about five years and the landscape has changed quite a bit some of the stuff we’re talking about might be easy to see written down if that’s the case and you can check out my articles already on it the best one to start is a with is how to start an Amazon FBA business so you can you find that on my website at Sam Priestley dot com or you can google it how to start an Amazon FBA business Sam Priestley alright let’s get going so first off I wanted to talk about what is an Amazon FBA business I mean there’s a lot of misconceptions here because Amazon FBA it’s only really describing the FBA part is the fulfillment network that Amazon uses it’s basically their set of warehouses where you can store your products in you basically pay them a kind of monthly rental fee and they’ll store your products and then if someone buys something you’re selling that’s in those warehouses they’ll deliver it for you and then you can link that up to Amazon itself so you can list your products on Amazon you will appear with a little Prime icon sticker thing and when someone buys your product as far as they’re concerned it might as well have been sold by Amazon because it will be delivered in an Amazon box from an Amazon warehouse with the same next day delivery or same day delivery type thing
E: And for those that don’t know what FBA stands for it stands for
S: fulfillment by Amazon which is a service the thing is Amazon FBA is so easy what we see is that it basically created this big arbitrage opportunity where more people were moving over to Amazon to for their purchasing but the prices on Amazon weren’t really reflecting how he how much he could buy stuff for elsewhere so when Amazon FBA started what you saw was a lot of people going around just buying in wholesale items send off to an Amazon warehouse and listing it on there for slightly more than you’d be able to buy it elsewhere
E: in a shop
S: in a shop or on another online web site because people weren’t really price comparing they just wanted to get everything from Amazon and that was back when it first started this was kind of 2013 about maybe maybe a little bit before that but there was a lot of people doing that when I started using and was an FBA and that model still kind of works people call it like retail arbitrage it’s quite different now you can’t just hope to resell any old thing but people will often you know go around supermarkets and and shops and look for stuff that’s on offer
S: and then reposted that straight off to Amazon and sell it on there but really very few people are doing that at scale on Amazon there are few and what they normally did the way to normally do is they manage to get such good deals with the manufacturers of the item that they can actually price competitive it’s no longer about being the only person Amazon now everybody’s selling on Amazon it’s more about having some other USP that you can add to it which could be your size you could be ordering in such bulk that you’re means you get a lot cheaper it could be even managed to negotiate like an exclusive distribution rights with the manufacturer but when we talk about FBA business I’m not really talking about that style I’m talking about selling your own product something that’s under your own brand unique
E: something unique
S: something that someone can’t just come on and offer a cheaper version of yeah for instance if I was selling whatever coca-cola on Amazon coca cola could come along and post it on Amazon and undercut me and it’s not really anything I could do about that so with Amazon FBA businesses the way people first started doing them was by just finding a product that people wanted finding a manufacturer of it getting quite a generic product and just slapping their brand on top of it so it’d be completely identical to nine or ten other things on Amazon and then they would just compete on a bit of price trying to build a little bit of a brand presence and and focusing on their marketing on Amazon and actually driving people today listing this worked quite well because it meant the competitors couldn’t list under the same product so the way Amazon works is there’s what’s called the buy box so if you’re selling a generic product which is only a generic product which other people could also buy they can also sell on the same listing so let’s say I search for a popular board game like monopoly if you go on there and you click buy now Amazon has an algorithm which chooses who you’re buying that from whereas if you look on the side there’ll be a little section which says available from all these other buyers
E: yeah exactly there will be like 20 other buys
S: 20 some people over which half will also be using Amazon FBA we’ll say sold by Sheila’s toys for Phil Bahamas and sold by Frank’s bits fulfilled by Amazon or whatever and by white labeling by putting your own brand on something you could you could lock down that listing and mean that you always win that buy box but the difficulty there is how do you differentiate your product from everyone else’s so it on the article I wrote by this about how to start an Amazon FBA business I show a few screenshots where I found people who’ve done this it’s a quite a generic product and I’ve got a screenshot of where you buy from the manufacturers page on a factory wholesale website and then pictures on Amazon and you can see it is the same product they just put a little logo on it just to kind of lock it down that still does kind of work but really know what you need to be doing more of is brand building and basically trying to add value to whatever it is you’re creating both by changing it slightly so maybe looking for a product that’s already been sold that has some problems something that you can improve on it and then improving on it or by building a sort of persona around your brand that people associate with quality which is quite clear like if you’re buying certain trainers you you can almost tell like the price and the quality aren’t necessarily that linked they’re more linked to the brands that they’re associated with and that’s kind of what a lot of people trying to do with their brand building
E: yeah the visual identity is key because if you’re buying a pair of trainers online you can’t pick up the product and try it on and feel the quality of the fabric you’ve got to go on what it looks like S: yeah and I know as a customer that if I buy no-name brand that’s quite cheap it might be amazing but it also might be rubbish yeah whereas if I buy a big name brand I know it’s probably not going to be the best thing ever it’s really quite expensive but I get that consistency of knowing it’s going to be at least a certain standard
S: so that’s kind of where we are we’re now if you want to build an as an FBA business it’s more about putting together a strong brand and building in product improvements to what you’re doing ok so that’s the start so let’s talk a little bit about how you choose what product you’re going to sell on there so again people take two routes on this one is to focus on stuff that they know a lot about that they know they already have a marketing angle on for example I know quite a lot about Brazilian Jiu Jitsu which is something that’d be quite obvious for me to do as a business so I could be selling Brazilian Jiu Jitsu equipment because I know a lot of people in the sport and I know that I’d already have a market ready to push and I know a lot about it and how to improve on what’s already out there
E: Yeah what haven’t you done that that’s an interesting idea
S: Been busy with other things, so that would be quite obvious for me but there might not be a gap in the market for brazilian jiu jitsu equipment. In some ways that would be nice to compete in a way that other people might not be able to. The other way people do it is from complete opposite angle if they just look for gaps in the market they use sort of product research tools to find stuff that are selling quite well that don’t have too many reviews where maybe the quality of the images and the listings aren’t that good and they know that they can release something that’s quite similar maybe a little bit better under their brand and they’ll get more sales because their listing and their marketing on Amazon will just be better yeah and there are some quite big companies that do this and sell all sorts of stuff from whatever toys to kitchen appliances to sports equipment everything to them it doesn’t matter what they’re selling it doesn’t matter if they’re interested in it or not all the matters is whether they think that they have an advantage which means they’ll sell a lot of product and make a lot of money. If you want to learn a bit more about how to find gaps in the market then you know take a look at my blog post which you can find easily on by just googling how to start an FBA business followed by my name Sam Priestley we’re going to part that for a moment and assume that you can decide what you’re doing maybe you’ve got an idea of what are these types of businesses you’re gonna do is it something you’re interested in or you’re just going to look for gaps in the market but how do you choose what product you want to you want to sell there are a few different criteria you probably want to have a look at and I think the best thing for me to do now is just refer you to kind of blog post I’ve written on on my site about this because stuff like pricing, size, competition, complexity such as electricity and laws around it all kind of play a factor and it’s hard for me just to really talk about them because it involves a lot of numbers so that’s yeah have a look again on Sam Priestley dot com how to start an FBA business but let’s move on to talking about creating your brand now unlike when I started it’s got a little bit more complex and Amazon have created their own way of tracking who owns what brand because the problem is is the a lot of fake product started appearing on Amazon and especially with smaller brands it was very difficult for them to work out who the brand belong to. How do you know who to believe and I’ve spent ages and days and trying to convince Amazon that ours are sort of real ones and everyone else is just forging and trying to trade off our brand name so to get around this I was introduced to what they call brand registry which is a way for you to to sort of list for them that you’re the brand owner and in order to be registered on brand registry you need both a website and a trademark so when creating your brand it’s very important to check that one nobody owns your trademark already because I had a friend who was selling a huge amount on Amazon only to find maybe three years in that some other company already owned his trademark and had to rebrand which was a bit of disaster so yeah different trademark registration places if you’re here in the UK you might as well use the UK one it’s pretty straightforward got pretty straightforward search function and you can you can try and register your trademark for I think it’s 150 pounds it’s not very expensive so I suggest doing that straightaway
E: Yeah when you’re setting up your business
S: same as setting up a website they’re mine you’re trying to create a brand that has value outside of just Amazon so you wonder even though you’re gonna be selling mainly on Amazon if someone searches and comes across your item you want them to be able to go onto your site and you want to be able to go onto Google and actually find sort collaborating evidence that says it’s a good brand which includes having a good website having social media all the kind of stuff that a decent brand would when starting an FBA business think about it as if you’re starting a huge brand look at something that you’re going to be selling everywhere even if you’re mainly going to be targeting Amazon and that’s where your kind of angling your marketing and stuff like that. so you got your idea you have a product you’ve got your brand sorted and your brand name now it’s time to start actually getting it manufactured so how do you do that well there’s lots of ways you can find a little factory near you to do it you can make yourself in your living room or what most people do is they look for a factory in somewhere like China that already makes a similar type of item and and then gets them to make one for you as well most people use Alibaba for that which is I’m sure you’ve all heard of it it’s the kind of Amazon competitor in in China but it’s also used by a lot of factories and wholesalers if you kind of search what you’re looking for wherever that might be electric drills followed by OEM, OEM stands for original equipment manufacturer which means basically they’re the ones who make it and therefore they can make alterations to it if you want it generally I think we’re not making alterations to the products I’ll look at, you’re talking Amazon so it makes sense you to look at what your competitors are doing, read their reviews and see what people are complaining about and then fix that and then we like push that a little bit with your marketing and also it means that you’re probably not going to get the same bad reviews so you’re gonna get a higher average reviews in the long run so you find the factory you can start messaging them you’re kind of looking for a couple of things really one of them is you know is the factory reputable there’s quite a lot of fakes out there there’s also a lot of agents who don’t who pretend to be factories and kind of just act as middlemen and you don’t really want that so you look for ones on Alibaba you can you kind of see you know what sort of turnover they’re doing on Alibaba you can you can see how long they’ve been on there whether they’ve got all kinds of awards you can also have a look at their websites you can even you know hire someone out and try to go and visit it for you.
E: Have you ever done that
S: we have sent people around yeah yeah generally you can kind of tell especially once you start talking to them another big thing is you want an English speaker and maybe not perfect English but someone you can communicate with
S: that’s quite a lot to it and most of that communication do you do over email do you ever have to phone them?
E: Never phoned any in my life yeah suggested that but generally English isn’t good enough for that preferred methods are normally whatsapp or or Skype or the WeChat and kind of the Chinese equivalents yeah also it’s not, Alibaba is not just China it’s also India and kind of a lot of other places where manufacturing is is big and affordable so generally my sort of approach is talk to factory try and get a sample sometimes they’ll send them out for free but if they don’t send them out for free I’ll ask for them to instead skip the sample phase and go straight to a prototype so they can improve they can actually make some of the alterations I want that will probably cost somewhere around a hundred to two hundred pounds for that prototype I might get that from two or three different places and then once I find them and choose my favorite then we go ahead when it comes to kind of negotiating there’s a few things that are kind of important and especially when you start off probably price and the minimum order quantity and the two most important because a lot of factories won’t even want to sell to you unless you’re buying kind of like a container load we’ve recently we tried to buy some table tennis balls and the best factory who made him would only sell them by a shipping container load which was something like 13 million table tennis balls
E: I was going to say give us an idea of what a container load actually means how many does it mean in terms of bats obviously balls are very small
S: balls a very small it depends like we don’t buy anything really in a container load
E: but a rough idea and it contains a load in the packaging
S: well they won’t tell you by the container load I’ll often say minimum order is 20,000 units or whatever is and it would be in the packaging in yes yeah and then when you when you argue and say at you and you want to buy 200 of them they’ll say oh no we only said that the reason it’s that amount is because of this yeah but generally like if you’re starting off I think it’d be better for you to push hard in negotiating on the minimum order quantity than on the price and then later is you scale up you could you can push on the price
E: right that sounds good
S: because it probably will be stuff wrong with that first order so you’ve done that they now start making them the payment terms are varied sometimes you pay at the end sometimes they want you to pay upfront sometimes you’ll use an escrow service such as Ali pay or PayPal with a bit of buyer protection but then they take a commission most places will want you to it depends a lot of them have do stuff like 30 percent up front, 30 percent when they finish and then the final 40% when they you take collection of the goods but very and it’s kind of what you’re comfortable with my thoughts are if you’re getting a smaller minimum order and it’s coming in kind of 1,000 pound say it’s it’s cheaper to take a risk on getting that made and it might not turn up than having bought the ticket flown all the way out there and then you still have to take the risk and pay for that like with a small enough minimum order it’s in all of your interest for this to work out whereas if you’re buying a really big order they’re kind of a bit more incentivized to screw you over on that transaction
E: well it’s a much bigger risk isn’t it
S: it’s a bigger risk for you and and there’s more incentive for them to run off of your money. I’ve never been screwed over like we never had anything bad happen I don’t really know anyone who’s had it I know of people who’ve had stuff like they’ll get the electronics and they’ll open it and they’ll be to a different specification of what they asked for. actually I had a similar thing where we had something produced and the prototypes we were sent were a bit different to what they sent us with the final one again we were starting off with such small minimum order and we’re big enough long-term purchaser that they were quite keen to sort that out and reimburse us for those problems. so they start making it and then they finish it and they tell you we’ve got it what do you do now? well one thing you can do is you can send an inspection team to go and have a look at it so you can pay a third-party company out in China to go in and have a look at the items you can give them like a checklist of stuff to look for all that you normally do
E: That’s a good idea I hadn’t thought of that
S: I mean it saves you having to go out there and often you’ll you’ll negotiate this before they start manufacturing so you’ll say you’re you’re willing to accept it like a certain percentage default rate it’s kind of up to you there’s no real set rules just the stuff you’ll feel comfortable with go for generally you know it’s worth using an inspection service at the beginning and then once you go to trust there when you’re making regular orders it matters less. the next step is actually the shipping I’ve done a whole episode on this so I’m going to talk about that before you want any other podcast episodes is how to ship internationally so have a read it out the short answer is a freight forwarder will sort out for you. so rise in your country now you’ve got to deliver it to Amazon again we have a few other options that amazon has for how they accept it you can ship it to them through prepaid UPS labels prepaid FedEx labels where basically Amazon gives you a really cheap deal on the shipping from kind of your house or your warehouse to their warehouses that’s what we do with like the gin for instance actually is what I do for everything pretty much once it lands in the country I’ll switch over to the prepaid Amazon labels because they’re often a lot cheaper than sorting out the shipping yourself. Amazon especially when I started were really annoying about their requirements to deliver to their warehouses but with stuff like this that kind of gets all sorted for you because usually you had to book a delivery slot in a certain time and it needs a kind of archaic online booking system and often it would get rejected for not really any good reason but by getting UPS or whatever to deal with it it works well then when you deliver your stuff to Amazon you kind of got a choice you can normally you’ll have a barcode already which is you can get you can buy them online either UPC or EAN codes again I’ll cover this all in the blog post when you have a choice Amica need to use those barcodes for working out how much stock you haven’t a warehouse et cetera or you can stick Amazon’s own labels on top and the advantage of using Amazon’s own labels is that it includes your source seller ID onto them if you’re going the other option is called commingled inventory where everybody selling the same product as you Amazon doesn’t know which ones belong to whom. I really recommend using the Amazon labels even though it costs a little bit more either you’ve gotta stick one yourself or you’ve got a pay Amazon to do it and I think it costs 15 P or something for a label for them stick it on but if you don’t it up then what sometimes happens even though your brand registered someone might come along send in some fake items and sell it under your stock and then you’ve got no way of knowing, Amazon’s got no way of knowing who sent that in whether it’s yours or the other person’s and even though you’re a brand owner that doesn’t save you from that problem and once you know there are some dirty items in your inventory it’s going to be a lot of work kind of muddling through them all
E: yeah checking each one like a needle in a haystack
S: hat’s kind of it really stick your labels on it you hand your box over to UPS and it’s kind of it it’s in Amazon. Amazon have very cheap storage fees provided they’re in the warehouse for less than six months, which can be a bit of a problem if you’re slow to shift stock. Once you get to that six month mark the the costs go up wouldn’t a cool long-term storage fees and once you get to the year mark they go up even higher so what a lot of people do is they’ll store excess stock in their own warehouses or pay a third party for storage and then when they’re ready they’ll send them into Amazon kind of drip feed them in just something to be aware of. another reason to start with a low minimum order because the last thing you want is to have all your stock stock there and it costing or not it’s quite difficult to liquidate stock that nobody wants to buy if you’ve got a thousand kilograms of some product that nobody wants that’s costing you a lot each month just a store like there’s not what can you do about it to get back your initial investment and there are liquidation companies who will take off your hand but often you’re talking like 10 P on a pound for what you pay from if you spent two grand on this they might pay two hundred quid to take off your hands so be careful. okay there you go you got your brand you’ve got your product you’ve created it’s awesome you’ve taken some nice pictures you created your Amazon listing you’ve put it in the Amazon warehouse that’s now ready for people to buy how do you actually get some sales? so this is probably the most complicated part the rest is all kind of just logistics really step by step where’s this you know if everybody if there was one thing that worked then everyone would do it then they would no longer work again
S: but stuff that’s consistent is you need good reviews you need sales and you need momentum that’s what I mean so Amazon has its own review system which you’ve probably seen and is actually getting a lot of them people are coming to distrust it quite a lot because I know that a lot of people are manipulating the reviews by sales I mean that Amazon can see how much you’re selling and they know that people are buying it must be good product so they’ll start ranking it higher so if there’s a good selling product already they’ll start it’ll start appearing when you search for this what kind of keywords behind it momentum I mean if they see if your product hits Amazon with a lot of force and goes from zero to sending a lot very quickly Amazon already rate that and will rank you higher as well. unfortunately none of those things are that easy to come by and they’re all a bit cart pulling horse type of deal so what do you know comes before the cart? how do you get reviews about having sales without having sales?
S: so this is where you’ve gotta be a bit creative. Amazon have a new product launch feature that you can pay for where they’ll try and get you your first five reviews basically by incentivizing people to leave a review by giving them like an Amazon voucher if after they bought your product if they buy it
E: what do you think about that
S: so this is what a lot of people used to do is they used to give out products at like a 99 percent discount on the forums in exchange reviews and people would get the product from a pound or whatever and leave the review. amazon has banned that practice and no longer works and so they’ve launched their own kind of version so you can’t make sense as it doesn’t really work that well and you only get five reviews out of it. really I’d say you need around 15 to 20 reviews you need to be four and a half or five stars for you to get any kind of benefit out of it
E: and is there a time frame around that in terms of once you’ve launched your product when should you aim to have that kind of 20 reviews four and a half to five star
S: as soon as possible really yeah so the thing about reviews is it does help with your rankings but it’s more about conversions once people are already looking at your product so if you don’t have any reviews or if they’re bad reviews then a lot of people are going to look at it and then not buy it yeah but if you’ve got 15 to 20, the more views you have the better but there are diminishing returns difference between having 150 and 200 is almost insignificant yeah I was different between having one and 20 is huge yeah so try and get them as quickly as possible generally you want people who are leaving reviews to have bought them at full price. you want them to have an Amazon account that reviewed things before there’s a lot more just like a brand new Amazon account you want it to be not too easily linked to you so a lot of people will get friends or family and if say three people leave a review from the same ip address or in the same family surname Amazon are quite quick on noticing that and deleting those reviews and they might punish you
E: So family is not good but maybe friends is because they’re not all reviewing from the same address
S: And also be creative yeah but also lot the best thing to do is to get sales from outside of Amazon so doing Instagram campaigns again my friends and family with the gin we’ve done a big focus on like local marketing again in local newspapers and stuff like that hoping that that will then translate to online orders which will then build momentum and then get us past its early phase. once you saw again some sales you can also start emailing your customers with asking for reviews. they used again like there’s lots of tricks people use to try and get reviews selling my say stuff like if you liked it click here to leave reviews. if you don’t like it click here and click here will send you to like an email us form instead so if you like it leave a review, if you don’t like it don’t review and email me instead we’ll sort it out
E: Resolve your issue
S: again like Amazon close out on that as well that’s against the terms conditions a lot of people still do it one thing I do is I’ll send an initial email which is just a bit like a welcome like a how-to guide some tips and stuff about it and then I’ll say like alright if it’s any issues please get in touch and I’ll sort it out my hope is if someone has an issue they’ll reply to that one then four or five days later if I’ve had I know two people who haven’t responded to that email I’ll then send like asking for reviews email. this used to work much better than it does now because a lot of people are opting out of receiving emails at all and I think people got a bit used to being like spam email by sellers on Amazon anyway and they don’t really bother reading them.
E: Oh yeah the amount I’ve had in the last week leading up to Christmas because I’ve bought things on Amazon, every single product drives me mad it’s multiple emails as well it’s not just one from each seller
S: so I try not to do that and I recommend not doing that, people leave you a bad review just because of it yeah one thing to say about reviews is there’s two types of reviews you can get they can be reviewing your product and then can be reviewed or new as a seller and generally a review or new as a seller isn’t as bad as the one in your product because most people would probably never see it especially if you’re fulfilled by Amazon it doesn’t really matter that much so what some people will try and do is I’ll try and direct bad reviews towards their seller feedback instead of their product feedback. something else you can do is try and work out who’s left to you like bad or mediocre reviews and get in touch with them and try and sort it out that can work quite well it’s on it can sometimes be hard to work out who left a review because it’s not there’s no way of linking the two. Generally you just gotta do a lot I mean there’s lots of dodgy things a lot Chinese more dodgy sellers do who aren’t really worried about any comeback is that they will have groups on Facebook where they’ll ask people to buy it and they’ll refund them on PayPal so Amazon can’t see what you’re doing basically so people are buying loads of stuff and the quantity there you know in exchange for a five-star review you get it for free
E: which again you wouldn’t recommend
S: Right because it’s against Amazon’s terms and conditions and they might ban you as a seller yeah where some of these Chinese companies don’t care about that because they’ll just create a new company create a new seller account. we care a little bit more we want to safeguard that
E: Yeah you invest in the brand when you build it
S: Yeah the other thing you can do is there’s adverts on Amazon itself. there’s a few different types there’s um what we call lightning deals where basically is discounted a set amount for an hour or two. there is general adverts which kind of pay-per-click sponsored ads and there are ads around your brand so you can have a kind of paid for brand presence with your own basic website on Amazon itself that people can click on. generally pretty much everyone should be doing the product adverts stuff because as long my fear on that is as long as it’s not losing money it’s worth doing just for the momentum and just getting the extra views and the extra sales velocity basically what you do is very easy it’s kind of automate I’ve just used the automated setting you can make a bit more complicated but start when you automated one and Amazon will look at your product and find keywords that are linked to it every week or so I’ll download a report which will tell me what keywords people are clicking on and then I’ll just tell it to ignore certain keywords which are not useful so for instance with table tennis bats one problem we find is the Amazon thinks, Amazon was bidding on the keyword for tennis bat or tennis racket obviously that’s a different sports so I’ll have to go through and manually tell it not to do that it’s all quite straightforward and again I’ve got blog posts on all this sort of stuff which you can look up. the way it kind of works is you get you pay per click and you’ll get an A cost which is your kind of cost of sale or per one and it’ll be done as a percentage so if you know you make 30% on a product you can have an A course of about 30% and then of course the real best way to do it is to try and get sales from off of Amazon and listen and that’s what I’m going to keep sort of pushing what you should do. don’t rely on the internet and people buying it you should kind of work backwards and think about your marketing strategy it’s kind of why the beginning I spoke about going into industry to hobbies that you actually know a lot about so something like brazilian jiu-jitsu I mean I knew quite a lot of the coaches and people around and I know who to talk to I know the forums people hang out on I don’t have to just rely on people searching for what I’m selling on Amazon
E: yeah you know the events you know the gyms or the brands that run the gyms, the physical side as well as the online side
S: I know who to sponsor all that kind of stuff. the real beauty of amazon FBA is the scale of it you can as a one-person business send all your stock into it doesn’t matter how many so you don’t need to run around delivering stuff to the post office and wrapping it all if you sold a hundred products that’s fine, if you scale up and you’ve got a product line of 76 items and you’re selling thousands of them it’s all kind of handled by Amazon and their logistics network to the point where you can actually scale internationally and become a real like an international business still just based here in the UK or wherever it is that you’re based so Amazon FBA is in quite a few different countries you got it in USA Canada Mexico Australia Germany Italy France Spain here in UK India and Japan and especially if it’s selling in one place there’s almost no reason why you can’t go and expand to those different regions and there are some sort of legals have to be aware about in each place but you know bit of goggling can solve that most of time and and your freight forwarder will be able to help you with how you actually get the products into the country and then it’s gonna be exact same thing your your stuff will leave the factory your freight forwarder will then deliver it to the country they’ll hand it over to the UPS the prepaid delivery people they send it to Amazon and then from there it’s all handled especially we’re doing something where we’re going into USA and Canada and UK all speak the same language the cultures aren’t that different so it’s a bit of a no-brainer really
E: Yeah I was going to ask about those different languages for example with Spain and Germany do you have to invest in translation
S: so Amazon have a translation service that you pay for and they’ll translate over your listing I think it’s worth paying someone different yourself because they don’t really care and they do make mistakes
E: yeah there aren’t that many words in the listing and you want the quality to be really good yeah
S: customer service is a bit more difficult so Amazon handles 90% of your customer service for you any kind of returns and stuff like that but it is still possible for people to message you. I reckon for every a hundred sales I’ll get two messages maybe
E: from all over the world or just from customers that don’t speak English?
S: just in general yeah all over the world about every hundred 100 sales I’ll get about two maybe it may be more like one and a half one so it’s not very many but still that means you’re gonna get quite a lot of different language and there are people do hire customer service reps for the Amazon services there are agencies you can go to they see that we’ll share so they’ll have one full-time native German speaker who manages the customer service for 50 different Amazon businesses because each one is only getting three emails a month or something in German
E: it’s really low volume
S: so it’s low volume it’s not worth them hiring someone themselves but it is worth having like a native speaker to deal with it and also to the quick responses cause Amazon basically requires you to respond to all customer queries within 24 hours if you don’t it kind of damages your metrics a little bit and if you abuse it too much you could get your account suspended. which kind of brings me on a little bit to the criticisms that people have with with Amazon. their seller support is pretty bad a few early problems it’s going to take you a long time to sort it out. they do have a tendency of suspending people’s accounts or suspending listings often because of kind of there’s a lot of malicious backstabbery by competitors on Amazon particularly the same Chinese people who are doing the paying for advert paying for reviews basically are also the ones who feel it’s fair game to submit a fake fraudulent claim on your on your item or leave a bad review on your stuff and that cut stuff is very difficult to deal with what. One of the trends in a moment are people filing fake patents in places like Switzerland and Germany and then submitting a patent infringement notice on say Amazon USA Amazon aren’t very good at working out whether these are legit or not yeah and they’ll go on the website being a different language and they’re not sure you know like is it has it been approved has it not has it just been filed is it a pending one cuz they use different terminology and I wasn’t going to deal with patent stuff from all over the world and their reaction is they will just suspend your listing while looking into it so people will lock down a trending market for maybe like three weeks or something or a month so there’s no there’s quite a lot of these issues with Amazon
E: and it’s constantly evolving right
S: and the people gaming the system are getting more clever um but what I’d say about all of this is this these are problems that come with success it’s only an issue if you’re if you’re on it, if you’re in the game and if you’re selling. I do get I do get angry of Amazon because stuff will go wrong but at the same time like I’m gonna get angry because I’m losing out on the thousands of the sales I would have been otherwise and but I’ve only getting sales because I’m on Amazon in the first place
E: they provide a platform
S: if I had if I had set it up all on my own website as well and that’s something you might want to consider it’s trying to diversify a little better protect you a bit from the variance but I sell a fraction of the amount on eBay than I do on Amazon. Amazon just makes it really easy and and yeah there are problems it’s not perfect but you know if you’re not in the game then these problems don’t matter they’re all good problems to have is what I’m trying to say.
E: and one of the downsides I found using Amazon which I was really surprised about when we set up the gin listing was how difficult the technology was to use. I was really shocked how it was like loads of different back-end systems that were kind of glued together and it didn’t really work very well and I thought going into working with Amazon it was gonna be a really good user experience
S: yeah I know who you mean
E: and I think it is from a customer point of view but from a seller point of view they’ve got a lot of work to do
S: it doesn’t feel like Amazon does it go on they’re on their website and this will web 2.0 blocky and doesn’t really work properly
E: yeah like I remember there was a couple of buttons we needed to press work and they just didn’t work. The amount of screenshots and videos we actually did of us clicking the button sending it to Amazon it sounds so silly but it was it was really frustrating
S: yeah yeah there’s a bunch of issues I’m not like we talk about Amazon all day because there’s loads of stuff you know the stuff VAT and sales tax and all this kind of thing, but generally I’m trying to aim this podcast slightly at UK customers. If you’re in the UK and you’ll sign up to begin with on UK seller central, on UK Amazon FBA then you don’t really need to worry about that in the UK you don’t need to come VAT registered until I think it’s about 80,000 pounds of turnover in a moment which again once you hit that that’s a good problem to have yeah include it in your calculations and I do talk about that in in the blog posts but you don’t need to worry too much same with sales tax in the USA you don’t need to worry about that once you hit the USA and as a UK seller you’re going to start off by doing the UK and I think that’s it for the moment so let me summarize quickly cuz I realized this is quite hard to take in when listening in some ways is easier listening your audio in other ways it’s harder because you can’t go back and reference what has just been said so do go and look at that blog post house on I was an FBA business as a reference point where I talk about you know what is an Amazon FBA business. the differences between reselling and building your own brand I talked about how to choose your products the pricing size complexity competition how to do market research and the tools you can use to to easily kind of like search and filter through what your competitors are doing how to create your own brand how the names work how does the trademark work how to get onto brand registry, building your own website, the pros and cons of using selling on your own website versus selling just on Amazon, and I mean your traffic there, talk about manufacturing how to find factory how to use stuff like Alibaba how to message them the prototyping you know what you should be thinking about with negotiation and how much negotiating room there is there I talk about International shipping freight forwarding and how to transport your goods around the world and make sure you’re complying with all the laws. the final delivery to Amazon, talking about your your labels and and how you actually get it into the warehouses and your marketing, your reviews, your momentum how to get sales, how to use advertising and how to expand him to different countries and and the differences between them and why you should do it. But well I want to leave it by saying that Amazon FBA business is fabulous and it has enabled people I asked to start one person or very small team businesses that are able to scale to be huge take on table tennis business from the moment it’s now it’s grown from launched in 2013 on Amazon a small brand that no one’s ever really heard of it’s now one of the most well known brands in the UK it’s the best-selling table tennis products in the UK and we sell in 20 different countries around the world and it’s really good and it’s still just two of us basically working on it it’s a very small business in terms of the people behind it but in terms of revenue and profits making it’s very big and it’s something that wouldn’t have been possible really without the infrastructure that Amazon has put into place and that hasn’t changed. yes some of these easy strategies to make money on Amazon, arbitrage, the the white labeling of weird products, that has changed that isn’t isn’t really there anymore but still the building of a brand creating better products than your competition and targeting on industries that are underserved does really work well and it’s just going to get better and easier to use into the future. and you and if you’ve got any questions you can email me at hello at sam priestley dot com or kind of resources you can also find on my website or you can google it you can google Sam Priestley Amazon FBA. In a week or two I think I’m gonna do a question-and-answer podcast so if you want to ask me anything doesn’t need to be about other than it could be about anything then email me with your questions and I’ll be happy to answer them and that’s it.
“The plan was to have no plan. That was definitely outside my comfort zone, even just going down to a bus stop and trying to communicate with someone in a language you can’t speak try and get a bus ticket is actually really good for you even though it’s uncomfortable.”
– Sam, on pushing comfort zones through unstructured travel
Sam and Emma talk about how their comfort zones have been shrinking and what they can do to help them grow.
Resources Mentioned In This Episode Of The Lazy Entrepreneur Podcast:
03:29 What question does Sam ask himself to push himself out of his comfort zone?
05:05 How Sam uses commitment to push his comfort zone
06:38 Why did Sam become a part time police officer?
09:12 How does comfort “close in on you” if you don’t push yourself?
11:47 How do Sam and Emma’s comfort zones differ?
13:00 Discussing Emma’s comfort zone regarding her supper club
17:29 What job does Emma want to work while travelling?
20:37 How does Sam plan to push his comfort zone within Pipehouse Gin?
24:16 Local businesses Emma and Sam are considering starting together
27:03 Hear about Sam and Emma’s upcoming plans to travel again
S: Hello and welcome back to another episode of the lazy entrepreneur I’m your host Sam Priestley and as always I’m joined by my lovely wife Emma say hello Emma
S: Today I want to talk about your comfort zone and more importantly like what you can do to get out of it, what I in particular can do to to push the boundaries and get out of it comfort zone. It is something I very much strongly believe in and think is important for all of us to really push the boundaries but it’s also something that I used to do a lot better and maybe in the last year or so my opinion on it has changed a little bit. Well I used to think that your comfort zone was a bit like like learning the skill the once I’d learnt it and pushed the boundaries a little bit that was it and you got over that. I think for me a big thing was kind of social stuff, being extroverted, going out talking to different people, things like that. Going up to strangers in the street stuff like I spent quite a lot of time pushing my comfort zone. I thought that once you know I’d learn to be an extrovert that was kind of it but then in the last year or so I’ve been living in a very very very comfortable life and haven’t been pushing the boundaries as much and I found kind of those walls have come in a little bit. And that actually I’m probably maybe a bit more anxious, a bit less comfortable with things than I was a few years ago.
E: Well I would agree largely apart from the gin. I would say doing the market stalls and talking to people about your kind of a PR of the brand so talking about yourself, doing interviews, trying to show off in a way is really out of your comfort zone and you’ve had to do that with Pipehouse Gin.
S: Yeah that’s true that’s true and I’m just saying over the last year or so where I’ve been out of my comfort zone, it’s it’s it’s not something I’ve been working up.
E: yeah consciously
S: yeah whereas before I feel I could see myself improving every few months. I’d be a bit more confident and a bit better at certain things a bit better and more comfortable with uncertainty. I mean that start slightly reverse
E: yeah and I think you were very goal orientated as well so you’re aware of your things that were out of your comfort zone and you had ideas and little projects to try and work on those things
S: yeah exactly exactly yeah I think that I would think to myself well I’m not so good I find say cold-calling really really uncomfortable and really far out of my comfort zone so I’d set myself a target to do that or I remember the first time we ever had to fire someone from our business I volunteered to be the person who did that even though it was horrendous it was the last thing I wanted to do
S: And I was probably one of the least suited to doing it. I think part of it was I used to have a bit more of the philosophy of embracing stuff I wasn’t comfortable with and just one kind of like an everyday life it’d be I think to myself is this uncomfortable in like would it improve me to do this to do this unpleasant task and often the answer is yes and I’d go and do that. So yeah something like that where firing someone from a company, even back in my single days going into a nightclub and walking up to strangers and talking to them, that would be something I purposely try and do even though I felt horrendous doing it
E: to be fair, that’s how we met, you came up and talked to me
S: Yeah to be fair I still benefit from it now like when we’re traveling and stuff I’m still I still know he like the mental stuff I go through it to be like okay our goal tonight is to go chat a bunch people okay just go over and I can remember like the little games I play in my mind you know like the strategies till I start chatting to strangers try and get me over that kind of socially awkward uncomfortable bump it’s after you’re actually naturally very good up tell us one thing I’d have liked a little philosophy and probably overthink things a little bit and then the other thing I’d do is try and find sort of bigger long-term stuff I could commit to because you’re the thing so in one sense I’m quite I’m quite lazy and if I can find an easy way out of something I’ll take it but on the other hand I really don’t like letting people down and if I commit something if I wasn’t gonna be somewhere I feel really bad if I’m not so my way of kind of getting over a bit of laziness sometimes and a bit getting over comfort has been to commit to things and that could be stuff like the expert in year challenge I committed to getting up every morning and playing table tennis every day
E: yeah and you told everyone about it it wasn’t something you were doing in secret people were asking you how is it going what are you doing today so you felt obligated to carry on doing it
S: yeah yeah because since we married how many little challenges have I set myself on and given up after like two days because I haven’t really committed to them
E: quite a few
S: yeah okay I’m gonna do this this and this and to be fair like I wrote a blog post about three months ago about like daily habits I wanted to do to try and push myself in certain ways
E: Yeah what was in there?
S: that’s the funny thing I can’t really remember there was um I was doing my daily journal thing yeah well I was recording that yeah I was a phone call every day
E: that was amazing yeah well
S: that’s something that’s an exact example of something which I know is really good for me I know it’s really good for me to actually get on the phone and call someone
E: And everyone loved it
S: Exactly like I remember calling my sister for the first time and she thought that something terribly wrong so I’m not sure I’ve ever called our before if what let’s get but again I kind of just stopped doing it, just let it slip. The other thing I did at one point I became a police officer, a part-time police officer working one day a week trying to deal with conflict and all other sorts of stuff which I found intimidating in civilian life is so much worse as a police officer. If you’re in a boardroom you’re not gonna no one’s going to attack you or anything
E: well they are in a very different
S: very different way yeah I want everyone’s kind of being quite polite where people are straight-up abusive and having to deal with that particular you know yeah in a non-confrontational way and how do you deal with kind of adrenaline and and situations where everything’s going wrong and trying to keep a cool head and still think logically through things and that was really good i went through with that for a few years and It definitely helped a lot of things. Another thing we did was travelling travelling to and that was something that you found particularly difficult really outside your comfort zone where we had no real plans everything was uncertainty we didn’t know what city we were going to be in the next couple of days
E: yeah and everything was a one-way ticket i was used to planning two week holidays and what we were gonna do where we were gonna eat and all that stuff but I couldn’t do any of it because we just had no idea day-to-day we were doing
S: the plan was to have no plan yeah yeah oh that was definitely outside my comfort zone a lot like even just kind of going down to like a bus stop and trying to communicate with someone in a language you can’t speak try and get a bus ticket it’s actually like really good for you even though it’s uncomfortable. I suffer even when I started doing Brazilian Jiu Jitsu that was very much out of my comfort zone type of thing and I forced myself to compete which I don’t really enjoy find it quite uncomfortable but now it’s something that’s very comfortable cuz I’ve got you know fairly good at it and I just kind of go along when I want to and I don’t really compete and it’s always the same people who are there every time when I was travelling and going to new jujitsu place where I don’t speak the language every couple of weeks – that was outside my comfort zone even thought I was fairly okay at jujitsu, being someone new was quite uncomfortable but going to the same gym four times a week at the moment training with the same people is very comfortable. There’s quite a few things like I think kind of the problem is is that we think that the best life is like a comfortable one and we look at like what you want to be doing what people think of when they think of like retirement or holidays it’s like relaxing on a beach no stress no no worries
E: no commitments
S: yeah or whatever is just really do whatever you want chilled out no nothing you don’t want to do whereas in reality if you live that sort of life your comfort zone closes in on you and becomes it has its downside as you need to be pushing yourself I like to think of it as the difference between chronic chronic stress and like an acute like short-term stress actually short term stress is quite good for you like working out in a gym you’re putting stress on your muscles or doing sort of mental problems or meditation stuff like that or put short term stress on your mind if you want to make it stronger, but long term is very unhealthy is kind of chronic stress where you’ve got kind of this underlying something you can’t we do much about this always playing on your mind and I think maybe in the last year and a half I’ve suffered quite a bit from too much chronic stress and not really any of that like short term yeah stress about a bunch of like business deals and stuff which have been sat in kind of no-man’s land a couple of years and I’ve been on my mind quite a lot
E: yeah extremely stressful
S: I mean stressful but not in a good way whereas the other kind of stressful stuff like going out for a shift in Tower Hamlets as a police officer where you have no idea what’s going to happen. A call comes over that you know someone’s got a knife and your hearts racing then one’s over it’s over and that’s just gotten I don’t really have any of that kind of short-term confidence pushing self-improvement and it’s with because that’s all kind of by design we designed ourselves a very comfortable life
S: nice house we got a nice group of friends we live in a very safe civilized area we know a lot of people we don’t need to get out of bed in the morning if you don’t want to we don’t need to do any work during the day if we don’t want. It’s all too comfortable I’ve spoken quite a lot am i I also want to talk to you about your comfort zone because I think that we you probably have a similar problem as me which is exhibiting itself in a very different way in the stuff I find uncomfortable such as whatever cold calling or going around to restaurants to chat someone I never met actually you quite enjoy and that’s very much within your comfort zone
S: whereas other stuff which I’m perhaps a bit more comfortable with such as like the uncertainty like the travelling and not having a plan you find very uncomfortable and I think even though you’ve been doing a lot of stuff over the last year which I would describe as very uncomfortable they’re actually very much within your comfort zone
E: yeah I’ve really enjoyed them enjoyed them
S: I like to talk about your your supper clubs because when you start doing them they were very much outside your comfort zone when I do remember I’ll notice you were for the first like I’d actually I remember how nervous I was for the first
E: Yeah I think you were more nervous than I was because I felt very in control of the situation in that I guess when I was picking the menu people were signing up and paying for it I guess the element of no control was that people might not show up but I didn’t really see that as a reflection on me and I was I was quite confident about my food and I mean yes there’s always an element of being worried that I was going to get bad feedback and people didn’t like my food but that hasn’t happened so I’ve been quite lucky.
S: you do you do worry about negative feedback
E: yeah for your food and I think that’s one of the reasons why so one thing that Emma has had the opportunity to do but hasn’t done would be to turn her supper clubs into a bigger like renter space and take over a restaurant for an evening and turn in with like 30 plus people and there’s many reasons why you haven’t done it which some of them is probably that lack of control like lack of it being in your comfort zone
E: yeah I suppose it’s it’s quite daunting going from cooking for ten to kind of 25 or 30. I don’t have a professional catering background so I’m very much a home cook that’s used to cooking for family and friends
S: yeah yeah you are I knew I think you’re a bit self-conscious of that
E: yeah because there are certain tricks and tips and ways of even things like plating up for more than ten people that I just wouldn’t even though I’ve never seen before, let alone know how to do so that really puts me off
S: yeah I’m not sure yeah so one of the things you like about the supper clubs is that it is in your home and it’s home cooking
S: and you kind of you push a little bit on purposely on not professional aspect of it definitely
E: and also I am in control of it so because of the size of it I can control what we eat I do all the shopping all the prep all the cooking all the serving and all the clearing away whereas when you scale it up I’m gonna have to have staff to help me do some of those things yeah which again is something that is quite out of my comfort zone to manage as a casual worker or friends and family
S: yeah because you said before you don’t want to work in a restaurant you don’t want to you would like to work or have your career to be as a chef in a restaurant
S: you have said before that you wouldn’t mind being like a landlady of a pub or something like that so what is it about what’s the difference between those two things that means one of them when really like food is your thing surely being the chef would be more up your street than the landlady
E: yeah I think it’s just that jump between a home cook and being professional cook on the scale so yeah it’s the I don’t feel like I have the skills to be able to be a professional chef and I see professional chefs catering for more than just a dinner party
S: yeah yeah yeah well maybe that’s something that is worth you pushing the boundaries of slightly maybe not necessary jumping straight into doing a full-on pop-up for loads of people but you know we’ve spoken and actually you’re looking into doing a little joint venture with someone else who you can rely on for those skills
E: yeah working with a professional chef yeah yeah I’m really looking forward to doing something like that
S: yeah I’m hoping that you’re gonna find it’s not as daunting as you think it is well
E: I think the next stage for me is apart from doing this pop-up with the chef where I could obviously learn quite a few of these things so for example how to plate up for 25 but I think the next step is when we go traveling to work in some professional kitchens yeah so like a local cafe in Thailand or yeah I don’t know like amazing pastry chef that works in Bali that was on chef’s table work in his kitchen for a week like that kind of thing
S: but we’re not we’re not we’re talking about going traveling until summer till like July so what’s to stop you talking to someone like the small Holdings who like because of the gin you now actually know quite a lot about the restaurant owners and stuff around here and I’m sure loads of them would be up for you helping out maybe doing one day a week for a month or something or doing a couple of weeks straight as like a bit of work experience
E: yeah haven’t really thought about it yeah because we were talking about you getting some more professional cooking experience either by way of a schooling or sort of volunteering or working in kitchens yeah all doing something like the cordon bleu back when we first went traveling yeah four years ago and we haven’t really got any further than that
E: well we could see the cheapest way to do it was to do it in Mexico yeah so I’m still up to that plan it just needs more Spanish yeah yeah
S: I don’t want to embarrass you any further on this podcast. well I mean what what areas do I have but I really need to push the boundaries on and what can I do about it
E: I mean I have no idea you just wake up one day and you’re like oh I’m gonna do this challenge for the next month yeah well I don’t know where any of this stuff comes from
S: well, this is where I come from, I’m having a chat with you oh I’m just having it with myself yeah I think um I think doing some of the stuff that you’re doing at the moment where you go along to bars and restaurants and stuff and chat to them is something it might be worth me coming along with I want to do myself even though it’s it’s probably not the best use of my time in terms of stuff I could be doing well I want to be writing blog posts whatever I think actually in terms of my comfort zone stuff it would be good
E: I do like half a day well I’ll pick an area and map out I don’t know 10 pubs and restaurants and I’ll do a little driving routes and then I go in and drop off a bottle of our gin like a small sample bottle and try and chat to the manager introduce our gin and then I follow up with a phone call a few days later so you thought to buy it
S: Think that would be good we get a lot of opportunities people often have to do like tastings and stuff yeah and no bars so maybe I should sort of commit to doing a few of them actually talking about our gin to strangers and in public
E: yeah I really want to do that with you
S: yeah I think that could be quite good, I think it’s really good good experience for us and it’s something that we can really utilize having the gin brand yeah yeah we might it was very good at it but that doesn’t really matter for the first few
E: yeah I mean you know talking about gin there’s quite a lot of stuff to do with that I think also something I could do is start marketing my blog again yeah cuz that’s something I stopped doing because I found it really uncomfortable so I’m posting about it on the forums and putting it out there the problem with marketing your stuff like that it’s there’s always gonna be a few people that are quite negative about it which I really didn’t like and so because of that it’s basically been a year well I haven’t done any promotion at all for the blog and just hoped that people will find it naturally the whole if you build it they’ll come and because of that sort of revenue and traffic has dropped over the last year that’s probably something I should do maybe focus on half a day a week or something of really promoting it
E: so that posted on like reddit and quora
S: yeah yeah yeah all the kind of stuff where I used to get traffic but you still have to deal with members of the public it’s quite time-consuming and it can be in the middle of the night as well, you’ve got a once it’s live you’ve got a kind of constantly that’s part of because I get a little bit a little bit neurotic over it like we need every common yeah which isn’t particularly good for me and something I’ve got to learn as opposed to just question it all together it’d be better for me to learn how to deal with
E: yeah yes I think about it a half a day a week rather than a few days of blitzing it and they’re not doing it again for six month
S: I think I’ve another thing I spoke about before is trying to find conferences and stuff to sign up to and maybe talk out maybe I should push that but make it a bit more local so find business events that are happening around or school assemblies or whatever and try and just do some public speaking type stuff with that because that would take that’d be quite easy to get the gig so I could like queue them up and have loads and I wouldn’t have to travel too much
S: um that’s a bit of a problem these days being a bit ill and don’t like the travel yeah because I often get asked to do stuff like school assemblies or um like little talk and networking event things like that so maybe I should start pushing up again especially locally we’ve got lots of contacts around here yeah I could do stuff with maybe also I should be thinking about some sort of local business I can do that’s that’s a short term maybe try and maybe something we could do together we can look to do some sort of event.
E: I know you’ve previously you’ve talked about doing some sort of social event a church
S: yeah I don’t know I don’t know maybe some sort paid event try and actually make a bit of money out of it just something I don’t really have much experience with but that isn’t long-term and push my comfort zone for saying something where it involve going around talking to a few business owners whatever I maybe try and get in a bit of sponsorship for it. there’s a little bit of a coworking community around here but it’s not got any depth to it yeah so there’s a bunch of people who are co-working and it’s not really any depth to it I could do something for them to do yeah there’s loads of I’m sure if I spend a bit time brainstorming like I think of 100 good events that would be worth doing and that people would want to do and have like a plan to do it and maybe then try and make you and actually make a bit of money out of it as opposed to just doing it for fun yeah maybe that’s something I should we should think about doing
E: Yeah I quite like that idea
S: Because you like events anyway that’s from your background it’s very much in your comfort zone is very much outside of my comfort zone yeah and it’s not like starting a whole new business where if we go travelling and stuff we have to leave it behind or whatever it’s something that we can do once and maybe leave it or maybe do something different in the future especially now we’ve got kind of contacts with the press and local business groups and stuff like that I think we could do a bit with that
E: and the cafes where everyone works in
S: cafes wave on works and we know a lot of a bunch of business owners who’ve let us use their space or do a sort of team-up thing with us yeah
E: I quite like that off the cuff that’s quite good idea
S:yeah I think that would be good to help push my comfort zone do something a bit interesting I think something else I should do is start competing at Brazilian jiu-jitsu maybe sign up a few competitions. The problem is they’re all on weekends and my weekends are booked up for months and months in advance there are timetables of competition so I need to be I mean they’re not good excuses I should do that then give me an excuse to lose some weight as well we’ve just come back from an all-inclusive holiday in the Caribbean well I’ve eaten my body weight multiple times a day I’m no longer a feather weight and then of course if we go traveling again this is something we’ve been considering and are probably gonna do is come July we’re probably gonna move out of our house get rid of or sell most of our belongings and go back to being sort of digital nomads and traveling a bit yeah that will definitely definitely help with a bunch of things help push the boundaries a bit of our comfort
E: Remove all of our comfort scary times
S: scary times alright well let’s leave that discussion here for a moment got a bit of food for thought here you go, this is what I think about when you fall asleep I’m a night person and Emma’s a morning person and so when she’s asleep I lay awake thinking about what I can do to get out of my comfort zone or other equally weird wonderful concepts we talked about
E: that’s right
S: I can talk to myself I’m happy I don’t know all right well thanks for listening and if you have any questions that you want me to answer these podcasts please email me at hello at Sam Priestley dot com I’m thinking about maybe adding in a question-and-answer episode once a month or once every two months for I’ll just take all the questions I’ve been asked and just run from they could be on any subject and I’ll do my best and yeah please please leave a good review 5 stars or nothing please on whatever whatever you’re listening to this on thank you and goodbye
“It’s part of the whole podcast, the blog, and the idea of doing stuff for the lifestyle. Doing work so that it creates a lifestyle you’d like to live rather than living a life that enables your work.”
– Sam, on why he quite a successful business
Sam Priestley talks about his first business and how it led to his six years as a professional gambler. Everything from simple matched betting to running around London in disguises placing bets.
Resources Mentioned In This Episode Of The Lazy Entrepreneur Podcast:
What type of marketing did Donald Trump use well in the presidential election? [03:30]
What sort of marketing did Pipehouse Gin use? [04:51]
What sort of PR does Brewdog use? [06:48]
How can outrage be leveraged for success in marketing? [07:20]
What is content marketing? [09:37]
How does Sam feel about content marketing? [12:45]
Sam and Emma discuss viral content [13:36]
What is community building? [16:47]
What role do events play in marketing? [20:27]
Emma describes her specialty within marketing [23:09]
What are direct sales? [24:15]
What marketing might work best for smaller business? [25:50]
What are the benefits of talking to other businesses within your market? [31:27]
What is SEO? [32:30]
Discussion on paid advertising [34:46]
What is the other type of paid advertising? [37:49]
S: Hello and welcome back to another episode of the lazy entrepreneur I’m your host Sam Priestley and as always I’m joined by my lovely wife Emma say
S: today we’re gonna be telling the story of how I kind of got started in working for myself it’s a story that Emma takes almost zero interest in so she won’t have heard most of this before I remember I want to try to recruit you at one point in this and you just laughed in my face I never brought up again
E: I vaguely remembering it yes
S: you’re one of the only people I’ve met who weren’t at all interested in this but therefore it’ll be new to you and hopefully if I flop over stuff too quickly you’ll bring back and answer questions
E: well what I do remember from that initial conversation was I wasn’t interested but I did say a few my friends were
S: yeah that that makes sense what we are is talking about well we’re talking about professional gambling which is actually the first thing I did that really made any money I started in my second year university in a 2008 and then I did it kind of full-time ish up until about 2014 I did do some other businesses during a time generally especially once we got serious about it I was doing it with with friends we sort of formed the partnership and we always had this idea here that we wanted to be able to build other other businesses as well you know invest the money we were making and so sometimes I would go off and focus on something else so friends as most of 2012 was taken up with our price comparison website ET advisor but generally you know for our most that time there was at least two hours free I was working full time on this so what do I mean my professional gambling well I’m talking about anything where we had kind of mathematical advantages over the bookmakers or casinos and were making money it all started with cash back sites so theres websites such as top cashback quidco cashback Kings places like that where they basically works similar to affiliate sites on blogs where businesses will give them a bit of money if they refer customers and these cash back sites would then pass on most of that commission to to the user that might not make sense and I’ll give you an example so for instance let’s say something like coral which is a bookmaker was on there they would say to top cashback any customer you refer to us will give you 50 pounds and then top cashback would say report on their website anyone who signs up for our link will give you 45 pounds so often what you could do you can sign up someone like or on their requirement be have to deposit 50 pounds and you’d get a 50 pound cash back from cash back site which meant effectively that money he put in there was free you know you could bet it a few times and then if you want withdraw it
E: yes it’s corrals way of marketing and trying to get a new customers
S: exactly that’s exactly it they also go a step further they often give you a bonus as well when you sign up you’ve probably seen them around, sign up to coral or get a 50 pound free bet things like that which then took us on to next step which is very well known now it’s called match betting and it’s basically where you take these free bets they different bookmakers give you and you you fulfill their requirements which often to bet it maybe once or twice you do that by kind of hedging your bet at a different bookmaker or a bet in exchange
E: and that step from going from getting this free money just to start gambling and then match betting is that quite a normal step for kind of an online gambler to do?
S: well so what they’re hoping is donate what they hope is that you’ll end up and that start using it now if you’re recreational betting yeah so they know they gonna lose money from your first few bets and then eventually but it is now very well known these cash back sites don’t really exist much anymore but a kind of a match betting side of it does right and that’s very very well known like it’s at the time we kind of had to work out what to do ourselves whereas now there’s hundreds of guide, there’s a guide on my blog there’s loads of services you could sign up to and pay a monthly fee and they’ll give you all the offers every every day then as they come out and
E: you say at the time that was about ten years ago you started
S: yeah 2008 yeah 2008 we were doing this why hedging out a tennis match there can only be one winner yeah so if you bet on both sides at the correct odds you can you know even out or potentially make a bit money just from that if you find the correct odds of different places after that we don’t moved on to casinos which was a bit more complicated but they had the same kind of offers of a free bet you can’t really hedge out in them so instead you’re taking a bit of a risk but it’s kind of a mathematical risk so you started for instance you put 100 pounds in I give you a hundred pound bonus so now you got 200 pounds and you say you need to bet once in order to make any money so you could for instance put that 200 pounds on red on roulette if it loses you’ve lost a hundred pounds if it wins you’ve made three hundred pounds so it’s almost 50/50 chance slightly less than that but in general if you do that 100 times you’re gonna make those money like anyone ever offers you lose 100 or make 300 on a coin flip you know you should probably take that that’s a good good bet but it’s not very free whereas the matched betting stuff we started with was so it’s kind of a slow progression as we got more confident with the mass we got more confident with you know investing money on these kind of things got better and better and at the end of my end of that year of university the year before in a thumbhole days I’ve worked as a caretaker and I’ve done 250 pounds a week and I thought if I can do this on a full-time through the holidays and make 250 pounds a week then I’ll do that instead and I did and I managed it and it’s kind of all uphill from there then in my my third year of of university we started to take it to a slightly bigger level I so I get into what’s called arbitrage which is situations where two bookies disagree on who the favorite is in a certain event so that’s a tennis match example if their odds are different enough you can bet on both places and regardless of the outcome you can make a bit money so I was a computer science student so my dissertation for my undergrad was on arbitrage and I’ve AC developed software which would kind of scan lots of different bookmakers and find opportunities where there was there were these places where you go bet on both things and and make a bit of money
E: was that really complicated
S: so I didn’t do that well in my dissertation not because the stuff didn’t work that software is still in use by people today in much more advanced forms but it’s not very groundbreaking in terms of computer science and I wasn’t invented any new algorithms
E: but it was quite commercial
S: yeah it’s very commercial which is not what they wanted they wanted like a research project for pushing the boundaries of algorithm design or something yeah efficient storage you saw something like that but it wasn’t that I think I got sixty eight percent or something on it which is like t high
E: There’s a high t1
S: yeah but considering it was making me quite a bit of money at a time I was a bit cheeky actually dumped like a youthful project on that practical side yeah and to be fair I went back I did a master’s afterwards and for my Master’s we did another practical thing but this time we chose our supervisor a bit better
S: and we found someone who really appreciated practical stuff
E: yes and would mark you accordingly
S: and I think on that one we got 80 percent or something ridiculous and that was a like a GPS system that would um for cars which would take the date from all different cars and map you know the best route based on traffic and all that kind of stuff stuff which is now quite common on at the time wasn’t yeah so that was now, whereas nowadays you can pay computer programs so nowadays you can pay and rent software like this it’s quite common and you know I mentioned before the kind of match betting services where you pay like a monthly fee often those ones now have they now have these odds finders as they’re called built-in so that you can you know find good matches for your match bets but other time this is we were they were for you around but we would kind of targeting markets that nobody else was so we’d be the only people arbitraging them then you know we got we got more complicated you know big part of what we’re doing was looking for places where bookies would would mess up slightly so we were looking for stuff where there might be a little difference between one bookie and another and where that rule difference wouldn’t leave like an opportunity we were looking for mistakes that companies would make you know if they miss price their odds you know for instance we word for like smaller bookies we would often work out the formula they were using to create the odds so when there’s a new market especially something a bit weird like whatever the the number of red cards in a football match where it’s not a very well understood market they’d often have quite a simple formula to create those odds and then once we knew that we can reverse-engineer it and find the opportunities where that formula was wrong I mean we can make some money we yeah so a lot of it was looking for these weird opportunities another example was a new betting exchange opened and a betting exchange is where instead of betting against the bookie you some market place so you can buy and sell bets against a lot of people we discovered that they were kind of propping up their own they were they were playing their own markets using quite simplistic like Robo betters we found that we can manipulate those Robo betters in order to like do stupid things where we could take advantage on it they worked it out pretty quickly and sent us a polite email asking us to stop. And it kind of just went from there we did a lot of data mining where we would look at how the change in odds word would ripple out so stuff like if a team scores in a football match how does that affect the number of the odds of like the number of red cards happening in that match and so we so once you get kind of a few levels down to that you’ll find that people are very quick to change the odds on them saying who’s gonna win the game but they might not have mapped that interaction far enough back and so those odds the altered red cars happening would change quite slowly so we did that for a while eventually we got we started running two interproblems with the bookies working out that we were smart betters and kind of limiting our accounts. nowadays they’re very quick to do that if you’re doing arbitrage as soon as they workout that you’re not a regular punter they will close your account down which is actually legal in some places that’s illegal in Australia but it’s not illegal here yeah and they have the right here to say we don’t want you as a customer anymore so what we started doing we started leasing out our software and our knowledge to other people in exchange for like a portion of the profits they were making and I think that’s why I try to recruit you to do I’m no gonna go into too much detail with how that works because I’ve still got friends who do that you kind of get the idea we’d have sort of tens of hundreds of people who would be using our software who we would be you know communicating with on basically a daily basis on you know what in such situations and basically focusing on the software side of it
E: how would it work would you send out like an email to these people saying these are the opportunities for today
S: no it was all software that they would have running on their computers and then it would give them kind of opportunities and they’d always be on whatsapp or a phone call type things okay again I don’t want to go into too much detail on it because people are still doing it and I don’t really want to tread on any of my friends toes –he’s who are oh no no it was it was kind of like a much more intense version of what a lot of these so now there’s a lot of software you can sign up to you pay like a 10 pound 15 pound 20 pound a month and you’ll get along with ten thousand other people daily offers a lot of these opportunities so we would have that but it was much more intense and only with a hundred people as opposed to ten but they would be giving us a lot more money than twenty quid a month
S: thinking about maybe we should have gone the other route because those companies are doing very well and they’re a bit more in the open with it where us recruiting was quite a big challenge because we actually find people who are interested and then kind of convince them that it worked we weren’t charlatans yeah yeah exactly we did that, things got harder that still kind of worked. we tried a different a different method at one point we we wanted to place the bets manually going into bookies because there you don’t need accounts they don’t know who you are but if they recognize you too much they’ll get to know it so we so built up a network of people who we would you know give them money they would go to different bookmakers place the bets based on an app we developed for their phone and then they were going take photo for the betting slip and it would go to our computer program and it would work out you know the odds of it winning and all this kind of stuff and then it will determine if the bet won and they would go back and pick up the money at the end of the day give it to our agent he was like I mean uh agent in these groups of people going round and made you know get recognized and have to dress up in disguises
E: that’s my favorite bit
S: yeah wigs running around that kind of worked you know there’s a lot of leakage when you have so much cash lying around just people making mistakes and maybe people stealing from you I don’t know so it didn’t work quite as well as all online and also people thought getting recognized quite quickly because they were placing kind of like 500 pound bet on a quite obscure marketplace no one else would bet on yeah the pattern was quite easy for people to track by this time you know we got to about 2014 things were still going well our software was real cutting edge and then I quit I retired really basically I really I’d got a bit fed up with the business I made quite good money out of it and and I wanted to do something where I was actually like contributing towards the world we have this betting you know it was intellectually stimulating because it’s always like competing with the bookies and trying to find my opportunities and all this kind of stuff but really you know the money we’re making it was just coming out of the profits the bookies were making we weren’t actually improving the work we weren’t creating a product it’s always a bit adverse and the sartorial for the word is you know you’re always trying to deal with people who don’t want to deal with you you know how all this is 100% legal and you know we weren’t doing anything wrong but if we were out in the open we would very quickly have been you know we were making money as long as the bookies didn’t know what we were doing as soon as they got clever enough to close one opportunity we would have to like find another one I should say it still works and as I said I’ve still got friends who are doing nowadays and still doing really well but I just got a bit fed up with it I moved on obviously now there is a bunch of stuff that I do go back to every now and again I’m really interested in automatic algorithmic trading on betting exchanges which is where you may see like create some like AI style bots that just goes around placing bets for you on exchange money I’m a bit looking and maybe like once every couple of months I’ll go back and do some work on that and I think I will spend a lot more time on that coming in because I just find it really interesting and I’m I kind of have this I did like this idea to eventually it’ll be a just like a money machine you turn it on it goes off and prints you money I know I think it’s very possible and if anyone could do it I should be able to do it because you know at some point we were like top five in the world a professional gambling and you know things have moved on a bit but not that much you know, stuff like you know we collected more data than I think even the bookies have I still have all that data so I couldn’t like at some point go and delve into that and find opportunities but each time I start doing I realize I’m not good enough programmer to work it all out a lot of things I’m more interested in yeah but I do get back to it every now and again
E: and you made the conscious decision to stop doing this
S: yes yes yes and if I did I’d be more of a hobby than a business you know I’m much more interested in the other stuff we’re doing in a moment
E: yeah and I think one of the key things the successes of this type of business was that you did make quite a lot of money that meant that you can invest it into other businesses
S: yeah yeah and you know it’s part of this whole you know podcast the blog and the idea of doing stuff for the lifestyle you know doing work so that it creates a lifestyle you’d have rather than living a life that enables your work so once I kind of made you know I made a decent amount and my table tennis business was quite taken off which was a bit more hands-off and I thought you know I could retire and travel the world or laze on my arse and watch TV 24/7 for the next ten years or so and be fine play computer games yea got quite interested in like early retirement and you know having been financially independent sort of having enough invested that you didn’t really need to work
E: and this business really helped you to do that
S: yeah definitely I mean you know other things happened since with some of the investments are made I haven’t worked out so well but still you know it’s it I’ve got a lot to be thankful for for that and effectively a very young age I was able to make a decision just to focus on stuff I want to rather than the jobs that made the most money
S: so where we’re gonna leave this you know this isn’t an advert for you to start gambling in fact you probably if you have any sort of addictive personality or you have any history of you know you’re losing money betting and this is really not for you I think one of the reasons we all did quite well is that none of us had really ever gambled before and the gambling part never really interested us it was all like the maths behind there making the money the opportunities if that does sound like you maybe have a look into matched betting it’s now very easy to get into the it will be very difficult for you ever to get to the level we were at because everything’s a lot more out in the open now which means there’s a lot more people doing it but also means the amount you can make is a bit more capped the bookies know these opportunities exists and they’re happy with them but anyone that they limit them so you know you can make a few thousand pounds maybe two or three thousand pounds fairly easily have a look at my own blog post on matched betting just goggle sam priestley matched betting to find it or if you look at arbitrage I got some on that as well or you know you can post a comment if you’ve got any questions yeah I hope that wasn’t too boring for you emma yeah is there anything there that you found you didn’t know or that we have more questions about
E: I think I did know most of that
S: yeah you probably pick up a bit more when you hear me talking to other people
E: exactly because something particularly when we’re traveling something that a lot of the other travelers are quite interested in
S: yeah when we were traveling the world and saying hostels and stuff we didn’t meet a few people who were doing it who were matched betting kind of full-time well not full-time but to fund their travels yeah
E: not necessary doing it very well were they weren’t they weren’t at a big level but making a thousand pounds a month which if you’re staying in hostels and living in South America is more than enough yeah a lot of people use it for, yeah don’t approach this sort stuff as a business like it’s very difficult to become to make any like real big amounts money out of it and there’s very only very there’s only room for a very small number of people doing that and they’re all taking initiative if you just follow the matched betting recipe and finding opportunities there that no one else knows exists but you can make it a bit of money
E: topping up your income
E: good to go travelling or you want to buy a kitchen or something well I feel that’s just me
S: or just want to invest maybe it’s good or if you’re lazy and you don’t wanna get a job after university my use this as a way to delay that a little bit while working on your other businesses it’s kind of how I started kind of all started
S: it gave me not so much the money because we often didn’t really invest much money into things we were starting it was more the time and you know and also the way to think well well yeah when I say invest into businesses I mean it pays your lifestyle costs while you set up these new businesses
S: I don’t know that you have hundreds of thousands of pounds for investing in this brand new business the idea is that you’ve got a bit of money to pay your rent and you eat that month while you have lots of time to think about setting up these new businesses
E: yeah definitely
S: all right let’s leave it up then thanks for listening as always you can email me at hello @ sam priestley dot com please subscribe and if you leave us a five star review whatever podcast service you’re using I would really appreciate it thank you very much and goodbye
This is an interview I did for the podcast Life, Love & Entrepreneurship back in 2015. It is fairly short but I think gives you quite a good insight into the way I think, enjoy!
It is very hard to compete in an already established industry but it is also very difficult to create a whole new industry yourself. So in this episode, Sam Priestley talks about a fundamental concept behind how he positions his businesses: find a new angle to compete in already saturated marketplaces. An angle where you are the market leader.
02:34 – How Wii competed at a different angle in 2006
04:11 – Starting up the coffee shop
07:24 – Questions Sam asked himself before starting the gin brand
13:34 – The many ways the gin business competes at a different angle
14:52 – The problem with targeting niches and why to play in big markets
16:08 – Blogging at a different angle
19:03 – How Sam benefits from writing about a diverse range of niche topics and documenting personal processes
20:33 – Don’t be afraid to enter a saturated market place
Sam: Hello and welcome back to another episode of the lazy entrepreneur, I’m your host and I’m here my co-host Emma Priestly
S: We’ve both got back from holiday quite recently and we’re both a bit cold so if it sounds a bit sniffily then I apologize.
E: speak for yourself Sam I feel fine at the moment.
S: Good I don’t. Today will probably be a slightly shorter episode and Emma doesn’t actually know what we’re talking about today. It’s something I don’t think I’ve really spoken to with her about before so hopefully she’ll find it just as interesting as you do.
E: Dropping me in the deep end here are you?
S: What I’m talking about today is competing that’s a different angle trying to think of a better name for this what I can’t really because it’s kind of a concept I’ve made up and developed for a bit of trial and error. I think it’s quite important to the way I think about business now and the way I think about competing especially in markets that everyone says are too saturated. The problem is it’s very difficult to compete in any industry. If the industry’s already established then you’ve got people who’ve made it work they’ve got a lot of money and they’ve got a lot of experience but if it’s an industry that you’re creating for yourself then you’re gonna really struggle to get any customers because you’ve got to educate the customers as to why they want your product or whatever it is you’re selling. It is true for pretty much everything I think about saying our artisan coffee. The person who first started a artisan coffee shop had to convince people that they wanted to pay extra for coffee versus just going to your Italian Roasters or to your Starbucks or whatever but now if you start an outside coffee shop there’s already an audience who wants your product but you’ve got to compete with all those other coffee shops. You’ve done really well, you’ve got the expertise. There’s coffee shops everywhere now that got a lot of big money behind them. So my solution is to go to an already established field where there’s already a large market already built and then compete at a slightly different angle to everyone else at an angle that I’m the best at or where there’s very little other competition, basically being the best in your field which isn’t easy when you’re entering a field that you kind of know not that much about I think my favorite example of this is the release of the Wii in 2006. The Wii is a game console released by Nintendo and at the time there was no real sort of arms race in the technology behind games console releases. The period before we saw the release of the Gamecube, he Xbox and the PlayStation 2 in which the Gamecube was quite significantly worse in terms of technology and graphics and performance than the other two and as a result it didn’t sell as well as the other two. That was in 2001 and by 2006 that technology gap had really widened and and the new consoles were going to be released the Xbox 360 and PlayStation 3 by Sony and Microsoft were there was no way really Nintendo could could compete and produce something that had good performance and has high graphics so Nintendo decided to compete at a slightly different angle. They instead of targeting the hardcore gamers they targeted a more casual market where the graphics and performance wasn’t perhaps so important and they added more motion picture stuff, made it a bit more family-friendly as opposed to it’s what gamers sitting with their mates were alone in their bedroom and as a result they ended up outselling the other 2 by a long way and became one of these sort of best-selling consoles of all time. Even though on paper the Wii was a lot worse than the others. I first came across this concept by making a few mistakes and I was when I started my coffee shop. The idea was to start an artisan coffee shop in the City of London and originally we just wanted to do just another arts and coffee shop but we quickly after launching worked out that we’re gonna really struggle to compete with the other shops out there there’s places like Taylor Street Brewsters who were just gonna blast us out the water every on every sort traditional point. They had a lot more money to invest they had already a developed reputation and they were just more skilled at us they’re having the experience. They have a six-month training program that they put every barista through before they’re allowed to serve any coffee to a customer.
E: That’s amazing
S: It’s amazing and it is the reason why you want to go to there and when there’s a walking distance between the Ren and Taylor Street which one are you going to choose if you’re just going for the coffee? And there’s a new coffee shop we couldn’t afford to be spending six month to train our new staff didn’t we have anyone qualified enough to train him up but what we did have all we did realize was that we had this huge space we were in an old church a thousand year old building that had been redesigned by Christopher Wrens or Britain’s greatest architect there was kind of a tourist attraction in its own respect all had this huge seating area with really high ceilings and a lot of space something that the city doesn’t have much of so we worked out is there by competing on some way you can go and sit for your coffee and ice and ice basically a little outdoor seating area as long as our coffee was good enough it was in the art design category wasn’t quite on Bristol level but it was much better than Starbucks or prayer or anything else it ticked all the arts and coffee check boxes then we could still attract customers by focusing on the other stuff the stuff that we were the best at and the stuff that other people would really struggle to compete with that was a little bit of an eye opener and something I’ve tried to kind of implement with everything which brings me on to one more recent businesses that I’ve been doing with Emma here. The Gin and I’m not sure this would be interesting to talk to Emma about because I’m not sure she here entirely understood my reasonings behind doing the gin to begin with
E: Yeah I want to wait and see
S: And why I thought it was a good idea in terms of from a business point of view as well as just something that be fun to do. I think you always understood that making Gin would be great fun
E: Yeah we love drinking it.
S: I mean like exactly it’s a good idea stuff for what to do and but I don’t think many people thought that it had legs to be a legitimately good business I think we were told by a lot of people and you thought it yourself that there’s a lot a lot of Gins in the market, how are we gonna compete with them, are we too late is the gin craze kind of at its peak already. What do we know about gin what can we do differently like I hope you talk about our unique selling point and we did a have a unique selling point, we had our flavored component flavored about the sweetness but that is not the angle that I thought we compete at, flavored without the sweetness is something I thought was a unique selling point and was good and we had another one we had a local aspect so when we were sell markets and to local places we could say that we were local to them we were the most local gin there was she kind of got through the door well.
E: Before I thought the reasoning behind the business in terms of coming out from a different angle was that we were gonna create a Gin brand that really stood out online. I thought that was the USP and a flavor the flavor concept came second to that
S: Yeah that’s correct good memory yeah basically what it is is that I have a lot of experience with online sales and so does my business partner Ben and we have owned together we had some successful Amazon businesses but Amazon is quite a saturated market and so one thing I was doing is it’s quite difficult to compete on Amazon and the whole thing I think with these different angle is you’re looking for something that other people can’t compete with you at
E: Yes and this is something where I thought Gin could come in really well because the hard thing about Gin it’s all the legal requirements around selling alcohol online and in general yeah I mean general I getting the duty or even just working out how all how all the legislation works together yeah makes it a million times more difficult than selling like a soft toy or something like a table tennis bat, even a table tennis bar we had a bit of trouble because it needs to be approved by the International Table Tennis Federation which then makes it a bit harder for some random person who doesn’t know anything about table tennis kit come in and do it and so the problem that a lot of people have with Amazon is that as soon as kind of a niche appears to be slightly profitable you’ll get lots of these big boys with lots of money and go and create a product in that and they’ll have products ranging from fans to beauty products to bamboo sticks to toys just encompassing like the whole range
E: Yeah the have a lot of money to throw at it don’t they the have the marketing the designing the branding
S: Yeah yeah yeah thats where it’s hard for them to compete in alcohol it will be quite difficult because there’s a whole bunch of other like stuff they need to do and know about you know and likewise for us to compete we’re having this formal appointment getting into distributors yeah so we’re also with the ginn trying traditional routes and we’re finding them quite difficult for those reasons there’s a lot of other gins out there you know we don’t have a background in industry it’s quite like a meaty meaty industry where everyone knows everyone yeah and that’s kind of how stuff works and as Outsiders we’re finding quite difficult to compete when up but all those people it’s an old-school business it’s one of the works on relationships you’re on the works on going round meeting people getting drunk with people
E: Yeah pretty much
S: All that doesn’t translate very well to online so a lot of these established gin businesses are very bad at online marketing and at the online market, so there is a gap in the market on Amazon considering any sort of scale of sales that are going on on Amazon which you know compared to the rest of the industry isn’t very big but for people like us is huge
E: Yeah I mean you had a look at some of the user tool to have a look at some of the gin brands that are already on Amazon and there were a few big plays that were doing well but actually looking at the craft gin there were a huge amount of craft gins on there
S: but the ones that were on there were doing quite well I mean quite well by not doing very much
S; yeah so we could before we could compete with them quite easily yeah and I don’t say there was no competition in theory there was but we’ve eliminated the competition in this business we’re approaching two different very competitive industries and taking a slight angle at both that means they combine and we’re not being one of the only people in that in that sort of combined area so we got gin which is competitive we’ve got Amazon FBA which is competitive but combine the two end up in this kind of niche –
E: isn’t that it
S: yeah and yes we are doing bunch of other things we are selling locally we’re using slight angle of that we’re the only local gin we’re also competing with our flavouring you know flavored gin without the sweetness but even stuff like that is kind of because we’re pushing towards this online market and we’re thinking to ourselves what is it that someone buying gin online what would make him buy something without trying it
E: yes and a lot of other gins they rely on you tasting it to know when you like it and because they’ll be cooled by that brand name there’s not anything really descriptive about the flavor in the name and often their London Dry which a lot people think of as just juniper led with hints of other things going on there’s quite like subtle differences so we went a slight different angle we designed it to the bottle to really stand out when looking at it and a thumbnail on line and we put the name of the flavorings in the title and they’re quite interesting unusual things our first one is earl gray and cucumber which you know instantly we all kind of know what that tastes like and it’s sort of thing where you can see online and you can you can buy you can look at somebody’s review see what people are saying about it and then buy it off that whereas other gin you don’t really know it’s also good for people who don’t really like gin and want to buy gin as a gift for other people
S: because they can be like oh there’s something unusual that my gin loving friend would like as opposed to trying something they don’t like anyway or just buying around a model
E: yeah that’s the good thing about having a gin business that even if you get customers who don’t like the taste of gin actually they probably have someone in their life they could buy it as a gift for so it’s got quite broad appeal
S: indeed yeah which is one of the reasons it try and tell people don’t be too afraid about entering really busy market places because the advice people often give is to really niche down and find something really small from something they know because often the market is so small you can’t create a sustainable business, yeah in the table tennis business we are like the biggest table tennis people you know we have the best selling bats in the UK we’re quite big in the USA and all around Europe and Canada and places like that and yeah the business yeah it makes us good money but it’s not gonna be, it doesn’t have the potential for this gin business to be like number 50 in gin would make us more money than being number one in table tennis and the other problem with targeting a niche or trying to create a new market doesn’t exist is that you got to convince your customers do you want it whereas for us it’s quite an easy sell once we tell something we’ve got gin for them to end up buying it interestingly I’ve been speaking to someone else he started a volka brand recently who’s got kind of the opposite problems that we have so our problem is differentiating from other gins but once we talk to a customer it’s a very easy self and buyer this person sort of hook a brand where he is um he’s creating a vodka that you can just mix with tap water or any type of water and drink it’s like a healthy alternative but there’s a market that doesn’t really exist so he’s finding quite difficult to sell to bars or to get customers to buy online whenever he’s gotta educate his customer base that that’s what they want but he is finding quite easy to get into distributors like that because it’s new it’s unusual it’s unique. enough of gin let me move quickly on to another area where I’ve tried to use his thinking and that is blogging so blogging in general is quite a saturated market place there’s a lot people blogging and the other thing to think about with blogging is that not everyone can blog successfully you need – each blogger needs thousands of readers in order to make it a profitable business so the size in a market isn’t that big
E: And also not many bloggers know how to make their blog profitable
S: there’s that too and you know there’s loads of things in it, one thing is it’s very easy to start which means it’s very easy to quit, people don’t know that much about it, but one of the other things that I want the other problems but I think some of the advice that’s given out there it’s only the expert advice is to find a niche that you’re an expert at and write about that which is kind of the opposite approach to what I took the niches are already interested in at a time with stuff like passive income and early retirement and there’s both for them have got really big players already in the marketplace yes people like Pat Flynn smart passive income and Mr. Tim Ferriss, got mister money mustache on the early retirement stuff all of which I can’t really compete with now they’re better than me at it and now they’re much more established but an angle that I did have that no one else could do was writing about me writing about the business spend time documenting my processes instead of saying I’m an expert at this trying to talk about it I spoke about whatever business or project I’m currently working on which gave me a unique selling point a lot of people didn’t have and then also let me write about loads of different niches that perhaps weren’t that linked that I wouldn’t even able to write about if I just focus on one thing to begin with and then led to me stumbling into a few niches where I was the only one competing now if he wanted to read about so I became pretty much the first person in the UK to write about Amazon FBA I’ve got a lot of traffic out of that kind of randomly not something I really targeted it’s just something I was working on for myself and so I was writing about r
E: Right place right time
S: right place right time but it’s always if you listen to one of my previous episodes on serendipity this is kind of serendipity I was positioning myself so that I could end up getting lucky about these round of things, I’ve written about hundreds of things most of it don’t really go anywhere but few of them ended up becoming little bit popular
E: this wouldn’t works if you’d just created a blog around one niche
S: exactly exactly another one was much betting I became one of the first people to write about that openly it used to be a very secretive community and now I’m starting to get a lot of traffic about alcohol brands I had a guest post about a vodka brand and I’ve written all my post about my gin brands and it isn’t really that much out there all that and people are searching for it so yeah I’ve ended up blogging but in niches where I don’t really have much competition which is good because I’m not particularly good writer the design of my website isn’t particularly good and I’m quite bad at the follow up I don’t send many emails out I don’t write many posts I don’t do too much editing and I don’t do much marketing to try and get out I kind of rely on people stumbling across it so there we go
E: well I think there’s one other thing with your blog that people really like is that it’s your personality it’s coming across I think they’re excited to get to know you and you do that by talking about things that have gone well in your businesses but also the things that haven’t gone so well and I think that’s a bit of an unusual style and people really like that
S: yeah I agree and I think that is kind of the unique that the unique thing that anyone can do when writing their own blog
S: they write about themselves no one else could write about them so that does create that that unique angle so we’re going, this is something I think about quite a lot don’t be afraid to enter a saturated market place always look for something you could add to it yourself that adds uniqueness something your competitors can’t really compete with or something you know it doesn’t need to be something they can never compete with but something that will probably take him a little time to catch up with you often hear people saying oh I want to start the uber of something you know the uber of pizza delivery well that’s kind of what they’re doing there and there saying I’m gonna take this saturated marketplace – pizza delivery – and approach it from a slightly different angle it’s kind of uber crowd sourcing gig economy type stuff
E: yeah because you know you’re gonna have a massive audience that want pizza delivered
S: you’ve really got the audience you’re just approaching it from a slightly different angle that the other pizza people won’t be able to compete with don’t think don’t go away from this thinking all what is the uber of whatever I can start that’s not the way cuz everyone’s doing that, don’t limit your thinking to that but take this kind of idea of different angles looking for unique approaches to things and not being afraid of those saturated markets to help inspire your thinking and help you compete
E: And don’t be scared to appeal to a mass market
S: yeah definitely all right well that was a slightly shorter episode just something that I think about quite a bit and hopefully you found interesting as always if there’s any feedback you want to give to the podcast I think we’ve we basically got the studio set up now and I probably some more sound dampening stuff added later hopefully make the quality of the audio a bit better but in terms of the volume and a set up with me and ever having a little discussion for these things this is probably it so please let me know what you think about it you can find me at Sampriestley.com or email me at hello @ Sampristley.com thank you very much good bye
“It really wouldn’t surprise me if in five years I’m doing something because someone who I met at some random point has contacted me with a great idea.” – Sam
Sam Priestley talks about one of the ideas central to the way he does business. Serendipity. And how he prepares himself and remains ready for unforeseen opportunities.
Resources Mentioned In This Episode Of The Lazy Entrepreneur:
Positioning oneself for serendipity [3:32]
Serendipity as an action [05:17]
Finding opportunities in current events like Brexit [06:02]
Sam explains the arbitrage opportunity on the 2012 US presidential election [07:43]
How the table tennis bat business came about serendipitously [09:35]
Having flexibility to pursue rare opportunities [10:52]
On transferable skill sets and being nimble [12:43]
Opportunities with Emma’s supper club [14:18]
The importance of networking everyone [15:21]
Creating useful contacts [16:43]
How to spend your time [18:32]
Why does Sam listen to a lot of podcasts? [19:22]
The limits when you start a business [21:46]
“Thinking time” in a full time job [23:15]
Muses on the medium of podcasts [24:35]
How Sam and Ben became business partners [25:32]
The benefits of brainstorming without any clear things in mind [26:48]
Discussion on risk taking [28:10]
Sam: Hello and welcome back to another episode of the Lazy Entrepreneur. I’m your host, Sam Priestley and as usual I’m joined by my lovely wife, Emma. Before we get started today, I just want to say that each episode I generally change a few things around, like how the sound recording works and how the studio is set up and it should be getting better and better each time, but if you are going from episode to episode and the audio changes volume or something in between I’m sorry for that hopefully as we get better at this it all gets smoother and smoother. So now we’ve both got our own microphones we’ve got some soundproofing some muffling in the little studio and it should be getting better and clearer and also my post-production should be getting a bit better.
Emma: It’s very high-tech in here.
S: I should start taking some pictures.
S: It’s got a little sound mixer thing on my computer as well all this technology I know nothing about but that’s alright! Okay, today I want to talk about a concept that I think about quite a lot and it’s quite important to the way I do business and the way I live my life I suppose. It is one of my favourite words and I’m not even sure I’m using it correctly that’s the funny thing I’ve kind of made up a meaning for it. There might not even be true both say I’ll define it how I think it what I think it means and then if that’s wrong that’s right so the word is serendipity so let’s see what wikipedia says we could be the serendipity is the occurrence and development of event by chance in a happy or beneficial way so what does that mean well the way I interpret it it’s that you are positioning yourself or you are ready to take to make the most of opportunities when they come up you don’t know what that is going to be you don’t know what that happy or beneficial event is gonna be you know what that what what the future holds but you are ready for when something good comes up and you are able to make the most of it. I think the concept is slightly countercultural because it often means doing nothing, it means waiting. Not doing anything particularly productive but just being ready for when stuff happens. I know that’s a bit wishy-washy so I’m gonna try and sort of mail it down a little bit kind of maybe give a few examples from the last few years when I’ve used it and talk about how I’m kind of using it at the moment and then also talk about what it’s not yeah let’s talk about that first so what it is not is doing nothing it’s not annex serendipity waiting for something better to come a long way for an opportunities come along it’s actually a slightly active thing it’s not sitting around playing video games all day. That might happen, you might get a call from Chelsea or something asking you to play in their first team but it’s pretty unlikely that a great opportunity will happen without a lot of work put into it.
E: Well yeah like you’re you’re waiting for an opportunity to happen, it is an active thing
S: Yeah it is all about positioning yourself and making sure you’re ready and prepare kind of actively looking for these opportunitiy. It’s hard because we don’t know what the future holds and I think that a lot of people overestimate their abilities to predict what’s gonna happen unless early the case of that is when I plan out things I want to be like well I think whatever is going to be the next big thing and I want to do this or I think in two years time I’m gonna be doing this but really whenever I look at where I thought I’d be in two years time I’m never that at all I’m not doing to be completely different two years ago. I say three years ago I wondered if I’d be doing a gin business, before that I probably would be getting traveling, or getting married. I was starting a coffee shop, or I’m running the tech startup or having a successful blog or a podcast because I hate the sound of my own voice.
E: Yeah are these things on in your five ten year plan?
S: I do have a five ten year plan but not having the details defined out yeah it’s quite important. Okay so that’s kind of the concept let’s talk a little bit about some examples.
E: Yeah yeah I think that will help I think it will help.
S: It’s hard to kind of describe because it is quite wishy-washy and abstract because you’re basically relying on luck.
S: But it’s like it’s like the same you make your own luck and you make your own luck by being able to have the time or the money or whatever it is to jump on whatever opportunities come up and also having kind of a mindset where you’re looking for those opportunities. Yeah so one thing that I’m doing at this moment in time and I wrote a blog post about it a few weeks ago but recently I sold an investment and so I got quite a large chunk of money land on my bank account and instead of just putting it straight into long-term investments or buying whatever or on a rental property, I purposely put most of it aside in short-term investments really to be used when an opportunity comes up and really what I’m thinking about here is Brexit Britain is leaving the EU we don’t know what that deal is going to look like. We don’t know what’s going to happen to the stock market and house prices. We know what business opportunities are going to occur we don’t know what arbitrage opportunities are going to occur and I just want to be ready for whatever they are. I often get asked you know do I think the house prices are going to crash. I don’t know. If I did know then I be acting on that one I don’t know what will hapen so what I am doing is I’m leaving myself open for that possibility whatever opportunity comes up I’m kind of ready for it. Another example with money is um I’ve kind of plucked out because it’s quite a nice little story. I often investigate kind of random ideas so I have float set aside to invest in these ideas opportunities they’re often very short-term things that will hopefully pay me back quite quickly and these spend quite a bit of time looking around and I’ve come across quite a few in my time and one of them that I want to tell you about is during the 2012 presidential election. The US presidential election here in the UK we all considered it at pretty obvious that Obama would win but in USA, in the u.s. that was not case and all the prediction markets had it kind of a 50/50 probability.
S: Now the thing is you can you can put your money where your mouth is when it comes to these prediction markets both here in the UK and the USA so I had a look and I discovered that the odds, the payout I would get if I kind of bet on Mitt Romney in the US would be a lot higher would create an arbitrage opportunity if I was betting on Obama here in the UK. yeah quite a big difference and so I was able to put my entire kind of opportunity float that I had on this one opportunity which paid me I think it was about a 30 percent return in kind of a couple of weeks.
E: That’s really good!
S: And that’s not the only example of that there’s other similar things. Even a lot of my businesses, if I had a start like that like with the table tennis business which is currently my most profitable business, that was one of these situations. I had a little float set aside for investing in kind of random ideas and and that’s what we did we didn’t put much thought into it and we spent I think it was under, a few thousand pounds might be three thousand pounds or something on an initial stock of a turbulence bats that we didn’t put much thought into and decided to try and sell it and see what happened. Basically, actually let me go through a little bit deeper. The concept was that my friend Ben had a popular table tennis blog where through which he was referring people to certain websites by chance bats and he was earning a slight Commission on it and he was selling maybe something like 20 a month or something like that so he fought well instead of doing that him earning five percent, why don’t we start our own table tennis brand and he can you know that we are at least as good as these other ones and we can get those 20 sales for ourselves so he had a side date with well he’s gotta get 20 sales. There’s not that much risk, it was an opportunity to do it so we tried it out and then it developed into this huge business which is now running today. That’s kind of it so I have a little float I set aside ready for these rare opportunities, stuff that I would never go for. And like people ask me are you really into table tennis? I think I’d never played table tennis before starting this idea and I now got quite a bit into table tennis and I ended up doing a bunch of other stuff in table tennis but at the time it was that it was an opportunity that we saw and wanted to take advantage of. So that’s the money side of it but really the most important thing is is with your time, it’s one of those things where you need to have the flexibility to work on something that just appears like I’ve taken opportunity. That could be anything. Let’s say I’ve got a phone call from a popular TV show that wanted me to appear on it to interview me about one of the products I’ve done and it was in LA and I had to like fly off and do it.
S: If I was working full time on a business and doing all that, then I would have to turn on those and sometimes it is the right thing to do, sometimes you’re in the midst of an opportunity and it is the right time to turn down an opportunity that appears but then other times it’s not. Another times you want to be had the flexibility to go and do that and that could be anything that could be going along to a networking event, it could be being interviewed by someone, I keep going on to conferences. It could be all sorts of things, but generally your opportunity is probably going to take quite a lot of time, especially if it’s a business which is kind of what this podcast is about. If the opportunity that occurs is some sort of new thing maybe the next fidgets spinners come along you can just act on it. Finish spinners is fidget spinners is probably quite a nice example because nobody could have predicted that fidget spinners would become this huge thing.
E: Yeah they random
S: They’re so random but certain people were in better positions to benefit from it than others and it’s not because they thought of fidgets spinners, they just already had the experience with setting up logistical supply chains and finding factories to do that and are able to act on it. Also something I’ve been thinking about recently with our Pipehouse Gin business. Gin is a bit of a craze at the moment and we love it and… but most people talking about what is the next craze and the answer is I don’t know but when we do know, we’ll be in a very nice position to benefit from X we’ve already got all the legal sets out we already know exactly what we’re doing transitioning from gin, one type of alcohol to another type of alcohol is going to be very easy yeah we’ve already got bars, we have relationships with distributors, we already know you got all the legal sorted out. We we know how much bottles and stuff costs and labels
S: Suppliers. We’re in a very good opportunity to benefit from that even though I don’t know what that might be. I’ve also been thinking a bit about your supper clubs so mi you have a small business where you host supper clubs people come round to our house every few weeks. They are paid guests, you have about eight people come and you cook like a three or four-course meal for them. That is never gonna be a huge business on its own. There’s only so many, we can only fit ten people in our house.
E: And I can only host so many.
S: Yeah but it does open you up to other opportunities should they come up. Someone might come to your supper club who might be a publisher in cookery books, and they might love it and then you would be positioned to start that, or you could start developing social media following, start doing YouTube videos, or whatever. Your current approach is quite often by people wanting to do joint venture supper clubs of you.
E: Yeah in bigger places yeah particularly from the hosting point of view because because I do the hosting and the cooking. There are quite a few professional chefs out there that are looking for people to to host and to understand the evening and then kind of be behind the scenes because you tend to be one or the other and not really both in the industry which is quite interesting.
S: And I mean it you have an idea of how to get your clubs in front of customers, how to get people around, you know a little bit about what it takes what is kind of stuff or there could be an opportunity that comes up that neither of us have even thought of.
E: Well yeah yeah someone has a really good idea or yeah they want to meet with me for coffee to offer me an opportunity and the thing is if I wasn’t doing supper clubs I wouldn’t really be putting myself out there.
S: You wouldn’t be in the food industry we’re doing yeah cuz you do spend quite a lot of time going for coffees for people just because you’ve got similar interests. Which you’ve then, people are doing similar things with food, doing innovative things in food who you never would have met if you weren’t running your own albeit it being a small food business.
E: Exactly and it’s all about contacts in whatever industry you’re in. It’s knowing the influential people, it’s knowing the people that have the budget, make the big decisions, running other events etc
S: Definitely which neatly brings on to my next point which was you should try and be serendipitous with your approach to networking and the people I mean it’s quite easy to not want to meet up or network with people who you can’t think of a direct reason that would be beneficial to your business or whatever you’re doing you often see a networking event where people will do the rounds they’ll speak to someone and then as soon as they kind of get their job description, or if they don’t meet the person that is useful to them or not then if not quickly extricate themselves and move on to the next conversation maybe that works for them maybe not um whereas I think of it as a slightly different angle is that people who are doing anything interesting I want to know about I want to get to know him anyone who I think is a sort of inspirational person or doing something unusual or different or it’s got anything to do at all with what I’m doing, he’s really interesting. I remember I was um I was out in Malta and I have a friend and there was someone there who runs a beard oil business it’s one of the favorite people I’ve ever gone and chatted to
S: I’ve got another friend who sells like stuff like dehumidifiers or things like that really interesting so I wanted to speak to him um obviously there’s all different people all our competitors who are making Gin, now competitors but still interesting people to talk to and all these people I take inspiration from the beard oil guy he gave me lots of contacts, so I met him and then a year later we started the Gin business and I contacted him to ask about labeling companies in the UK and he gave me lots of tips and stuff for that which was useful deep dehumidifier I know he’s quite keen to do a joint venture with me. He’d be very up for like a big business is what he’s kind of thinking something where we’d raise kind of seven figures and I know that he’s a bigger person I know that he’s got a real strong work ethic he’s a smart guy and he’s able he’s built this big business himself so even though dehumidifiers are what he’s working on currently it’s not something I’m interested in he is all that person could they’re not doing something with really good but there’s loads of that sort of thing there’s loads of people who at the moment there’s no kind of link with yeah but actually in the future and it really wouldn’t surprise me if in five years I’m doing something because someone who I met at some random point has contacted me with a great idea and I feel like that’s also great idea there that’s good yeah and vice-versa I was going to many people who I contact because I’ve met him at some point I’ve had my day and I’ve been like Joe Blanc’s is perfect for this I think they’re already kind of a diverse network is very important. It’s not about just focusing on your industry it’s about people that have the characteristics that you like and making that something that you take seriously as I said even if there’s not anything that you can do it in right away
E: Yeah with the projects you’re currently working on
S: So we’ve spoken a little bit we’re still kind of talking about time how you spend your time and one of them is it’s so funny what’s up my phone is lit up with someone asking me to do a joint venture to do with a slow Gin anyway [Laughter] What I’m saying is there’s all that time you know networking blah blah so I think and I’ve already mentioned having the free time to grab opportunities isn’t a case of doing nothing and waiting for it happen it’s not playing video games all the time it’s funny it is finding stuff that is productive but isn’t a commitment to your time so one thing I do is I listen to a lot of podcasts all sorts of things from kind of fitness lifestyle development biographical I have ones about cults and crime kind of a real wide range of stuff but all of which they’re not they’re not necessarily just consumption for the sake of consumption they’re all kind of stuff which I know could lead to some sort of inspiration or an idea or something and I do a lot of that and I’ll binge listen if it’s something I hope the people maybe do with this podcast it’s having it on in the background while there so I listen to a podcast while doing my accounts because they’re quite boring and they don’t really take any brainpower and I’ll just have podcast playing back to back in the background. Same with reading books I read a lot of books I listened to a lot of audiobooks as well again stuff like there’s all the kind of self-help books out there there’s business ebooks theres management books and then there’s biographical books about influential people. There’s historical books I get a lot of inspiration from history and how sort of people have done stuff in previous eras and I like to translate how that would work on today but all of those things if an opportunity came on I could just drop them all and move straight onto it so watching documentaries spending quite a bit time doing that, do all stuff which is useful to do so I’m going to networking events as we’re talking about going to conferences meeting up with loads of random people for coffee building your network all this stuff you can just drop for no reason because even though it’s useful something better and come up that is more useful or you might get inspiration for something and go and spend all your time doing that so it’s productive but not not something you have to spend not say well I said it’s a productive easier time but it’s not sure it’s not something you’ve committed yourself to to do regularly whereas what I find with people who maybe start having recently started their business or even people are quite deep into business is that they are a hundred percent in the thick of it and they don’t have any spare time at all for anything else same with people it’s hard for me to be a bit snobby about people of jobs but if you have a job you’re spending all your time working on that job and if a great opportunity comes up you can’t just drop it and move on to that but maybe you can with your free time you’re doing yeah your evenings your weekend’s evenings your weekend maybe the thing is if you have a full-time job is not booking up every weekend or evening with social event
S: Having that time for serendipity time for you to think of fruit for inspiration
E: Yeah I was gonna say about timing things through because that’s a really big thing with you
S: Yeah actually it really is and it’s something I probably should have put into that productive time and then what I spent a lot time doing it’s not just consuming stuff for inspiration but also actively thinking through stuff working on my ideas I’ve spoken a bit before about kind of the ten ideas habit I kind of stole from James Altucher where I’ll think of a topic and then just come up with loads of ideas for it but even just that I’ll spend a lot of time kind of musing over how things are going kind of ideas thinking about what I could do for the future yeah and
E: That really got my attention because I was used to working in a 95 and actually we didn’t have any time to think the thinking time was when we weren’t working so it was evenings and weekends when you didn’t want to be thinking about work you wanted to switch off so I found that concept of I don’t know going to a coffee shop listen to listen to a podcast sitting there with a cup of coffee and thinking actually quite strange because it’s not something I’ve done before
S: yeah I don’t know if Google does it anymore but they used to have, I don’t have the exact details of it but it’s something like every employee would have something like 15% of their time would be for their own projects for whatever they wanted to work on and that’s where a lot of Google’s greatest stuff like Gmail or things all came from yeah these people just their employees we let loose to do whatever they want but had that free time and then when a great when something great appears from one of these employees and Google runs a bit and turns in something even greater yeah is yeah I hope I haven’t been too wishy-washy in this episode because it is a bit of a wishy-washy concept and it’s one that I don’t really have a very good definition for
E: well this is the whole point in the podcast isn’t it it’s to talk about you’re like how you think about a topic in your own head and in your own words you’re not trying to come up with these are the five points to having the perfect life to make the most of opportunities you know it’s your musings yeah yeah and something where um hopefully it’ll be useful hopefully you’ll spend 25 minutes listening to this and go there, that’s a good idea so let’s just leave you on a one final example or serendipity and how we positioned ourself for serendipity and it ended up working out so my long-term business partner Ben Larkin and there’s actually one of the bonus episodes of this podcast is the interview of him you can listen to. Ben Larkin is a longtime business partner of mine but the reason he became a business partner is because I just sold my business ET advisor and I was left with an office that I still had a lease on it was I think we had about four months left in this lease it was a six person office and at that time it was just me in there. At the time Ben was working full-time as a table tennis coach and so I spoke to him and I said why don’t you drop down a couple of days a week you can come in to the office and we’ll spend two days a week working together and just try and come up with something. We had an idea at the beginning I had asked him, I am trying to remember what it was, it was like a Groupon style website for casino bonuses
S: something very random
S: it’s very specific it was an idea I had and I was looking for someone to work on it and I always wanted to work Ben because he really kind of inspires me like the way he thinks and approaches stuff and so I watched him to come in for two days a week pretty quickly it turned out that that business didn’t work out but he kept coming into the office and we kept him kinda doing a bit with his own thing, talking through ideas did a bit brainstorming not with any real clear thing in mind and then and it worked out and eventually the first inspiration kind of struck which was the table tennis bats and we’ve been working together ever since now we do that we have our Gin business together I did the expert in a year project with him all sorts of things and it all started because he made that commitment to quit two days a week of his job in order to he was working he had a good contract something that was really – people in his industry really wanted which was he was coaching at schools five days a week he quit two days a week at various schools in order to see what happens in order to allow serendipity in projects that he didn’t didn’t visualize think about the difference between a table tennis equipment business and a like Groupon style website for casino bonuses they’re completely different and there was no kind of predicting kind of either one but yeah so he made that commitment and it worked out for him
E: yeah I’m really glad you bought that example up because I wanted to as well here’s the point I wanted to make it was about taking risks hmm because it was a risk that Ben dropped down some of his coaching time but also during that time you were trying lots of different businesses and lots of different ideas so you were open but also willing to try different things and and it was a bit risky
S: Yeah I mean I haven’t talked about what I was doing which was I just sold a business so I suddenly had all this free time but I still get into the office five days a week trying to find out what the next thing was didn’t really have an idea what it was
E: But you’ve got to get yourself out there
S: Yeah, just waiting for that serendipity to happen. All right on that note we’re gonna say goodbye I hope you’ve enjoyed the episode and as always if you have any feedback or you just want to speak to speak to us just email me at firstname.lastname@example.org and also I’d really appreciate it if you could leave us a good review five stars please adios
“Anyway, very stupid. And quite naive, but that is how these things work and we probably wouldn’t have done it if we had a better idea.” – Sam on his calculations for how he would repay investors
Sam Priestley talks through the details of how he started one of his businesses. A coffee shop based in central London.
Resources Mentioned In This Episode Of The Lazy Entrepreneur:
“The Free Stage” [04:16]
At what point did Sam know this business was going to happen? [07:22]
How did Sam and the church’s interests align? [09:18]
What was Sam’s initial investment? [11:11]
Material requirements for the coffee shop [14:06]
Planning out the initial launch [18:14]
Unforeseen costs of running the coffee shop [20:35]
The process of raising funds for investment [22:57]
Trust as the cornerstone for good business [24:14]
How much Sam ended up raising for his business [26:17]
Launching late [26:54]
Why you shouldn’t make your product free on opening day! [28:09]
What it was like for Sam to have a physical location of a business [29:22]
Sam: Hello and welcome to another episode of the Lazy Entrepreneur. I am your host, Sam Priestley, and I am joined once again by my lovely wife, Emma. Say hello, Emma.
S: So today we are going to try a new series, so we’ll tell you a bit about how I started one of my businesses. So in this case, the subject is how to start a coffee shop.
E: Sounds good.
S: It was back in 2013 it launched and we had the idea in 2012. It is not one of my best businesses, I would say even though I am not involved in it anymore, the coffee shop is called the rand, it is still going today, but yeah, it never really worked out that well or made much money. It was a lot of work and quite stressful. But even though I think the process of what it took to start it was quite interesting, especially when I came up with the idea when I was 23 years old and it launched when I was 24. So how, as a 24 year old, do you convince people to invest in you and convince landowners to use their premises and stuff like that. So hopefully, if this works out, we’ll make this a regular spot on the podcast and we’ll go through the businesses that worked out and the ones that haven’t as well. So first off, what was the idea? The idea was that in London, especially central, we’ve got loads of really beautiful churches that aren’t really used for anything during the week. Well, at least that’s what I thought going into this idea. Real estate in the city was very expensive but there were all these beautiful buildings with large spaces that weren’t being used. So wouldn’t it be a win win if we could open up those spaces during the week, get more people into the buildings, and earn a bit of money to support these churches which are costly to run and upkeep the building. And I also approached it from a quite naive angle, which I think is actually very important when starting a business. You need your brain to trick you into thinking it is going to be easier than it is.
E: Yeah, that is a bit of a theme across your business isn’t it.
S: Yeah, I always think things are going to be easier and quicker than they are. And in this case, I thought that starting a coffee shop would be an easy business. You’re just putting hot water through a machine and out comes coffee. It is not like running a restaurant where you’re managing the logistics of the kitchen and come up with good menus and create good food. It is just a coffee shop. Sell it for 2.50 each, make it, give it to them, they leave. How hard could it be, how costly could it be, how much equipment could you possibly need? We all make coffee at home.
E: Sounds pretty optimistic to me.
S: Yeah pretty optimistic. But that was it. So then we’ll talk you through the process. This was in 2012 so at the time I was working full time on another intense business called etadvisor. It was quite intense, we had quite a few employees, it was pedal to the medal the whole time, so I don’t know where I found the time or energy to do this. But let’s talk through the process. So we came up with the idea in 2012. I can’t remember exactly what happened. I think I was talking to someone in the queue for somewhere and they mentioned that they were thinking about coffee shops and I was also thinking about coffee shops at the same time. I think previously somewhere before I had sort of gone around and talked to a few landlords about coffee shops and then it just happened that I met someone who had a similar idea. We thought, we kind of discussed it, yeah that is a good idea, let’s go ahead and do it. That guy is called andrew hult, and so the first stage was kind of what I call the free stage. The beginning point of every business is when you don’t really know if it will work out but you invest a bit of your time and energy into planning it out and taking it step by step. Something like a coffee shop you kind of assume that you need to spend a lot of money immediately and dive head in but that is not really how we did it. We gathered a few people together who liked the idea and were willing to work on it for free in their spare time and we wrote a business plan and planned out exactly how it would work. This was particularly important for this kind of business because I realized we had to get a lot of buy in from different people, so first we had to find a church and convince them to rent us out their space, and second we needed to find investors and convince people to give us money to support the idea. So that took a few months and we ended up with a really kind of intense business plan and we had another guy who was helping out who was an architect who could do some lovely drawings of what the things would look like and mark up, even though actually all the stuff he used we ended up not using. And then we started picturing it. And the churches disagreed with us that their space was underused throughout the week. Surprise surprise. So the first church we pitched to was called St Helens Bishops Gates and they were very very nice to us. I think because they had seen we had put in so much effort and had come to them with quite intense proposals and mockups about what their church would look like, quite intense numbers and how it would work out for them, so they were kind enough to just go away and think about it before turning us down, which they did. And eventually when we got the let down, it didn’t just come with a let down, it came with them suggesting some other places that might be interested.
E: So they thought it was a good idea then
S: I don’t know, I don’t think they did. I think they were just nice people. They had some contacts that might be able to make it happen so they put us in touch. SO after a bit of time of pitching to another church and a board of trustees, who went away and thought about it, and this time kind of liked the idea with a few tweaks to it. And it was at that point that we knew it was going to happen. What we were doing was a profit share and a small rent, our kind of pitch was we don’t know what we’re doing, none of us have any experience in coffee shops.
E: So you were quite upfront.
S: Yes, but we were also very confident, and I am not really sure why. I think we impressed them.
E: It sounds like you were really excited and that must have come across.
S: And everyone involved attended church as well and we also wanted to do it for their benefit and we were upfront that, Andrew was working full time on another business, I was working on my business full time, and it wouldn’t make either of us that much money and it was just kind of a hobby business. I like the idea of having my own coffee shop and drinking free coffee and people would come in and have a chat with me and
E: Your kind of office / coffee shop
S: I thought that was a really romantic idea. Yeah, originally, we weren’t sure how we’d do it. Eventually, we made it a not-for-profit, but at this point we hadn’t yet decided and we were still in the stage when we thought we would take out a bit of profit. And we weren’t sure how we were going to raise the money and it is easier to raise money if people are getting a share in the business and if we made it a not-for-profit then there wouldn’t be an opportunity. Even so, we pitched it and we quite liked the idea and it was quite fortuitous because this church was already looking for ways to raise a bit of money because they were going through a refurbishment and they were also looking for someone to do coffee. They had a little space outside the front of the church where they wanted to rent out a coffee cart. So we asked if we could just take up the whole church. Which, yeah, I am still not entirely sure why they liked the idea. I think it just sounded like a no-risk for them.
E: How much were they really using the church at that time? How many services were they having per week?
S: We were only using it Monday- Friday so it wouldn’t have been that useful anyway and this place actually had one on the Thursday lunch where we would close the coffee shop. I think part of our pitch is that we would get more people into the building which is what they wanted. There was this thing about the intimidation of walking into these grand building and they were really just trying to get people in, so having people that were familiar with the place as a coffee shop was probably an easier step for them to then come along to a service. This was all in our pitch and our business plan and stuff and something we believed very strongly in. So at this point we finished kind of the free stage and it was time to put our money where our mouths is. So actually both of us were working full time and it is quite a lot of work starting a coffee shop, so we both put in 5,000 as a loan to the business and then were looking to hire some people to work on it, and what we did, we were trying to boot strap the whole thing and not spend much money until 6 months, and if at 6 months we were just burning through a lot of money, so we put in 5,000 pounds each and then we went and found some people who were willing to work on the business. We basically put together a management team, a general manager and assistant manager. Lyvia and Luciana Perry were the two great people who we ended up hiring and the deal we came to them with is we were paying quite a low wage for the beginning process when there was no money coming in and it still might not happen but we had already agreed on the salary and we might go on to the proper business. So they were kind of incentivized as well, the quicker they get it going, the quicker they get onto a proper salary. I think it worked out roughly that we had with our 10,000 pound investment that we would have about a 5 month runway with these people working on it full time between when we launched, or at least raise more money. So that is what we did and they spent most of their time doing research and finding suppliers. When we started we had no idea what goes on behind a coffee bar. What do you need, the equipment, I remember I used to go around different coffee shops in London and look behind the bar just to see what is going on.
E: You must have looked like such a weirdo.
S: A coffee machine, does that need to be plugged in or not? Do you pour water in the top? Or is it, I don’t know. How do you set everything up. ANd once you get into these things you always come across issues. And one of the issues is that all of these churches are grade one buildings os we couldn’t put any permanent fixtures in. And let me tell you, a coffee bar requires plumbing and a dishwasher and a sink and electricity for your grinders and fridges and where you store the milk and we had a little squirter thing for cleaning the milk jugs afterwards and we had a water tap, all this stuff that we figured we needed, we needed somewhere to put it. And we couldn’t in these churches because they are grade one buildings. So our idea came around once we decided to build a counter thing that was on wheels which then needed all the plumbing that has detached valves that can be moved around. It’s hard, they’re not really things you can buy from anywhere, you can buy a coffee cart but we wanted a 6 meter long counter that you can buy at a coffee shop but it would just be on wheels. So a lot of this time was spent working on what this counter, obviously we needed tables and chairs and stuff but a main thing was setting up this counter and serving point and we ended up going to some carpenters, luckily the architect who helped us before was still helping us now. He helped us produce some tender documents which I had never heard of before but apparently when you send stuff out to tender you give your specification to a bunch of different businesses and they’ll give you quotes, so we did that, it was a new experience.
E: Quite exciting! That he was taking an interest in what you’re doing, coming back with appraisals.
S: And we got to go around to all these cool businesses and look at all these types of wood and all this kind of stuff.
E: Your favorite one was in Sherwhich wasn’t it.
S: That’s the one we ended up going with. They did some really cool stuff for us, we ended up having a spoke kind of design done on the front so the coffee shop was called the Rand Coffee shop in a building designed by Christopher Rand, and after the great fire of london he redesigned London and drew a new map of london of what he thought it should look like and that is what we put on the front of this counter which was really cool but very very bespoke and the price ranges we got were huge from 25,000 to 200,000 pounds for this kind of stuff. But while we were doing all this we weren’t really spending any money we were just getting quotes and speaking to coffee providers and we went with a coffee company called workshop and they helped us find suppliers for the machines and then they helped us and there were different grinders and stuff and we were all kind of advised by the different roasteries.
E: That is kind of interesting because it is in the coffee companies best interest that you have the best roaster for their coffee.
S: Definitely, definitely. And I think one of the things that I was worried about is when you go speak to these suppliers, they say, what is your previous experience? Or just think that you are not serious. But that is not what we got at all, we actually got a huge amount of help both from the roastery and from a bunch of others. Quite a lot of people were able to give us quotes, and said that if we signed up for two years here is the coffee machine we recommend, here is the grinder, here is the discount, because they are linked with the different supplier because they could get slight discounts and they could get some commission on any sales they generate, this is everything you need, we can help you design the workflow of your counter. All this stuff, planning and design was all just time. You know, we were paying for time, but we hadn’t actually spent any money on any of the equipment. But we knew exactly how much it cost and we had the relationships ready to pull the trigger once we were ready. And that is how it kept on going. We ended up going with forces joinery and they ended up dealing with the different providers and different equipment to see how it would all fit in. And then we were planning out our launch. March 1 was our target and everything basically needed to happen at the same time, so in I think beginning of January or end of December is when we started to raise money, what we did is we decided we were going to do a not-for-profit so we couldn’t give away shares in the business so instead we tried to raise money via loans, so instead offered people a 10% interest rate on a 2 year loan that was a mistake because we thought that we would have made enough profit to pay back the whole loan and the interest in just two years.
E: And what was that based on?
S: Just optimism. I think one thing we had is that we looked at the rent was of businesses near us and we thought that our rent was this much cheaper because of our profit share deal so we’ll have to make this much less. We were next door to a property manager, the biggest property manager in the city, and their rent was 150,000 pounds per year and ours was 10% of that so we were like, if we just make the same as them, our difference is this amount. It was a very stupid way of doing it. Because I am sure that that doesn’t make any money. It is just a flagship store and branding for them. Anyway, very stupid. And quite naive, but that is how these things work and we probably wouldn’t have done it if we had a better idea. What we should have done, we did a bit of stuff with this many passing, and this is how much we’ll make, but at this point, you don’t really know anything about wastage, you don’t know how many people will come in, you don’t know what the average spender si going to be.
E: Did you have an idea on day one how many customers you’d have through the door
S: And we had no idea how many we could serve, how long it takes to serve coffee, what the process is like with taking payment, there are loads of costs we didn’t really anticipate. So stuff like payment on card machines you know the commission they take, wastage was a big one, we totally forgot about the v80 we kind of thought about it and then well we just didn’t think about that it takes quite a big chunk off your profits. I was just a bunch of things where we weren’t quite sure and our margins and that means smaller than we thought they would be I think also we kind of assumed that the margins and coffee would be about 100 percent. But it’s a bit like how much is coffee? It cost hardly anything it’s actually quite a little coffee especially if you’re training up new baristas and staff they’re going for a lot of coffee that you’re not selling, you can’t just take a bag of coffee divide by the number of cups that could serve and then have that as your margin. It doesn’t really worry about that, there’s a lot of wastage. But that’s beside the point. At this point in our story it was January and we did a pitch so we invited a bunch of individuals along who we thought might be interested in lending us some money. We had caps on it, we said we would take no less than five thousand pounds from a single person and no more than 10,000. We had quite a small, We were raising a hundred thousand pounds in total and we didn’t want to be indebted to too many people which would be very difficult to manage or to too few people
E: Because then they would take control.
S: Yeah or just it’s a lot of burden on just one person. That’s what we did, we raise the money and by the end of January actually raising the money was surprisingly easy I think because we won’t ask you for that much and you don’t need that many people to find people who have 5,000 pounds to spare isn’t actually that difficult. It sounds like quite a lot of money but it’s not really. If we were trying to raise a million pounds that were and we were asking for 50,000 pounds per person that would, no normal people have that money spare ready for investment whereas especially in a city where you’re surrounded by lawyers and bankers and people are that it’s a bit easier to find.
E: So do you do one evening where you invited them all and then you pitched?
S: Yeah exactly we had one evening. And we did a presentation so we went up we put on like canopies and stuff and we made coffees and staff we invited um quite a few people. They knew what it was for, we’d kind of spoken to a lot of people. We prepped a lot of things beforehand and yeah and then we came in. We had someone else who was helping us out who was a lawyer. He for free helped draft us some of these contracts, very simple, just like a one-page agreement which turned out to be a little bit of an issue, not because of anything big but because some people said yes the investment and then I got this one-page thing and they were like that’s not enough. Can I go away for a minute and others you know were like what about us what about that. Well generally when it comes to businesses I feel kind of like a lot of it is on trust anyway you can have a really strong contract but contracts are only as enforceable as you’re willing to enforce so something like are you ever going to go to court over this? Probably not, in which case then maybe the point of contract is just to outline your agreement and if it like see you all on the same page and if you have all done that you don’t need it the hundred certain legalese it can just be so obvious obviously you’ll understand all the points in terms of what happens in certain situations but we that’s what I can’t afford being a bit naive but actually you know we ended up some of the people invested were lawyers themselves and they were like oh it’s not good enough for me, which is fine and what we ended up doing we’ll say no to those people. We’re saying you can’t have different contracts for different people. Yeah it’s not fair. In any event she we raised money I think we were a little bit short I think we raised ninety five thousand.
E: Pretty good guy now isn’t that instead of the 100 we were looking for.
S: Which was enough because the last twenty thousand was float it was we wanted something like eighty thousand of which we’d already spent ten and the other seventy was basic the cost of starting up all equipment and then a 20,000 pound float at the end. And then we did it we clicked go on everything, stuff started arriving, I started work on our counter and we started the process of looking for people to hire for the first day. What was a nice thing about working with these roasteries was that they were able to train our staff
S: Before we’d opened so were able to go to their shops and stuff and actually learn how to be baristas and then we have a couple of days after we had everything in place with equipment before we opened where he then came to us and trained us on our machines for free basically
E: That’s so well thought through, isn’t it?
S: Because we were a contractor and we were buying, you know, you do and even the coffee’s not that expensive you do end up spending quite a lot of money on it so it’s something like 500 pounds a week. So over the course of a few years that really adds up and if they can add a little value added other places where other places can’t, it means quite a lot. So yeah so we weren’t quite ready for launch, we missed our launch day and then we eventually launched in mid-march
E: So we had a few weeks to date.
S: It was a couple of weeks late which at the time I was pretty furious about but since I feel like even now thinking about the timings going from raising the money to starting to raise money in December to launching in March is a ridiculously short timeframe that is like unbelievably short but I was like at the time I think you could bear mind that every day we every month that we only had a two-year timeframe on this loan before we had to pay it back which we didn’t end up doing we had to then renegotiate after two years and anyway that’s not part of this story, we’re talking about the start up here yeah. But and then we launched yes so the launch we had a bunch of people, we just invited all our friends and staff we invited kind of local businesses as a fan up. We had every all coffee’s for a pound for the first day, which was a bad idea because all these people would have spent full price for a coffee sort of no point like yeah it was a stupid idea. It meant we ended up losing money on our opening weekend when that should have been probably almost profitable day at the and yeah and that was it. It didn’t go completely smoothly but it was remarkably good. It was a huge amount of work and then things started running normally and that’s that, that’s how you start coffee shop.
S: You never heard that story before
E: Yeah there were a few things I didn’t know.
S: Yeah I think what I like to take from this story is that we didn’t we know what we’re doing but it’s all kind of logical steps starting off not really spend any money spend your time researching, talking to people who do know what they’re doing then you know once we got a little bit of proof of concept it’s gonna work and go a bit buying for someone then we start spending a little bit of money and then well we got everything completely ready then we start spending loads of money to get it going and that part I think worked out really well considering we weren’t going in with any money really. We have to raise it all.
E: How did it feel to have a physical location because a lot of your other businesses are kind of service or put up to that this is probably because it’s coffee but actually having a location?
S: Yeah that was that was when the reason to do it, so it felt real as opposed to kind of a techie business. So my original reason wanted to do it was that I would um I would have, I said at the beginning now that I would have somewhere I can sit around and do your work in and then people come chat me and it’s a homely environment that would pay me some money and it didn’t really work out because every time I was in there there’s always stuff to do. Yeah and there are always people to talk to so it was quite a stressful environment to be in but it was great it’s something I’m really proud of having done it was really yeah yeah I’m looking back I’m like wow but it also kind of took guts to do it and it kind of impresses me and it’s something yeah especially now I’m a little bit further away from it… when I was a little deep in in all the stress and stuff it’s I’m like, “You idiot” and that’s that. Well thank you for listening I hope you found that useful if you want any further questions or you want any advice on how to start a coffee shop I’ve written a couple of blog post about it on sampriestley.com or you can always email me at email@example.com or if you’ve got any general feedbacks on a podcast maybe you want to hear more this or episode or if you think this is a load of rubbish feel free to get in touch with deals.
Ben is one of my favourite people. Someone who really inspires me and have a huge influence on the way I do business. In particular, he approaches problems in a unique way and is very comfortable going against the advice of his peers.
Resources Mentioned In This Episode Of The Lazy Entrepreneur Podcast:
In this episode, Sam Priestley goes into depths on how you manage international logistics remotely and as a one-person business. In particular, we’re looking at a product-based business. Where the product is manufactured in one country and sold in another. We cover:
- Dealing With Factories
- Inspection Team
- Freight Forwarders
- Customs Brokers
- Final Fulfilment
Resources Mentioned In This Episode Of The Lazy Entrepreneur Podcast:
How logistics can all be managed by one person [01:07]Sam demystifies coordination with factories [03:52]Things to be wary of when seeking out an international factory [05:32]Why getting used to communicating via skype or whatsapp will serve you well as a one-person entrepreneur [06:09]The multiple levels of product samples [07:28]
How do you pay factories? [10:48]The role of inspection in creating a quality product [12:02]What might you do differently with factories when you have a very high quality item? [15:59]Sam discusses freight forwarding at length [19:51]An anecdote of a freight forwarder successfully managing difficult logistics in India [22:46]Discussing the final fulfillment and delivery to the customer [32:19]In summary [35:18]The role of automation in sales [34:03]
Hello and welcome to another episode of the lazy entrepreneur. I am Sam Priestley and this is my wife, Emma. Today we’re going to be talking about how to manage international logistics as a one person business. Hopefully it will be interesting and is something I get asked a lot by people, and I think are intimidated by it and it doesn’t take that wrong to research and pick out most of the steps and this should give you an idea about how the whole thing works. What I am really talking about here is a product based business where it is made in one country and is sold in at least one other country. There are many types of businesses that fall into this category and generally fall into the same thing where someone makes it, someone else transports it to its destination, someone then stores it and then someone fulfills it and delivers it to the final customer. Now each of those duties can be done by the same person.
How logistics can all be managed by one person [01:07]
Let’s say you’re a multinational business and you have your own factory and distribution centers around the world than you can do it all yourself. But in reality what almost every business does including people at Apple will be taken on by different people and different businesses. Specialty business who focus on each of these things. Things will get split a little bit further so I am going to talk about the different roles that we have. So the first role is the factory, the person who makes it. And we have an inspection team who will go in and view the products and make sure they are good enough for the final payment and shipment. And you have a freight forwarder to manage the delivery of the stock from the origin country to the destination.
E: That is the one I can never understand.
S: So hopefully by the end of this you’ll have a bit of a better idea. And if you have any questions, jumpin to ask.
E: Why thank you
S: So there’s another role which is tied up in a freight forwarder and customs broker. They are the one who negotiate your products through customs and duty in both the leaving country and the destination country. Normally your freight forwarder will also do your customs broking, but now they’re in separate role especially if you’re using an intl freight forwarder but dealing with conflicting countries which we’ll talk about in a bit. And once you’re in the destination company, you’ll have a warehouse where it’s kept and it will often require some prep for the products
E: So like packaging, labeling.
S: Yeah, also a bunch of things that take on multiple products and you’re putting it into a gift box, they might be coming from different countries in the factories, they’ll get to a central point and then get packaged together to get sent to the final customer, or it could be well we’ll talk about that a bit more in a bit. And then finally you’ve got the final fulfillment to the customer. Customer could be a person such as you sold on Amazon and then they received it. They could also be a business. Say you sold a pallet full of something to someone or a creative gin to a bar.
Sam demystifies coordination with factories [03:52]
Alright let’s dive a little bit more into these things. And I’ll talk a little bit about common questions people have and your different approaches to them. Let’s talk about a factory. Now the common thought is that you’re dealing with a different country from the one you live in. If it’s in the same country you live in, it might be fairly easy for you to go to visit the factory, or to do a tour for potential factories to try and find the one that is right for you, but generally that is not the case either because they are a long way apart even if they are in the same country, or if they are in a completely different country, it could be prohibitively expensive to get there. And what we often find there with these sort of small starter businesses is it is cheaper to produce your first lot of products with your factory than it is to fly out there and speak to them. So for instance you could produce 500 products something as an initial start of 2 or 3 thousand pounds. That’s kind of what it might cost you to actually start looking around and trying out different factories. And what you’ll find, especially if you’re dealing with in India or China is actually going out and listening to them isn’t particularly useful anyway because if they are dodgy they will put on a show for you and might even take you to a factory that isn’t theirs, so it is quite common that investors will go out to China and India or places like that, they’ll meet their rep that they’ve been talking to and the rep isn’t actually associated with the factory and is more like a salesperson and he will take you to the most beautiful looking factory that he is linked to and then might actually outsource your stuff to another factory.
Things to be wary of when seeking out an international factory [05:32]
And then the other reason is that there’s often bigg language barriers. When you’re going to rural industrial parts of China where there really isn’t any english speakers and you’ll be reliant on whoever your contact is, and often these factories, they’ll have a front person who you can communicate with in English but their English will be very bad and you’ll get further by talking to them via skype messaging or whatsapp or something like that, then you would actually speaking face to face because they can go back and google translate things. And also getting used to communicating with people like that will serve you well as you go forward
Why getting used to communicating via skype or whatsapp will serve you well as a one-person entrepreneur [06:09]
Because translators aren’t going to fly out there every few months to speak to them. You’ll be mainly communicating through technology. Well how do you find a factory? There are lots of ways and I don’t want to talk about it too much but you could use Alibaba or google and contact them. Generally what I like to do is contact a few different places and find ones who talk about pricing, getting onto pricing first because that is often the thing, pricing and minimum order because some places might have 100,000 units minimum order which would raise the price enormously, and that is not a risk I want to take. I do not want 100,000 units, I want 500 units. ANd also talking about price, because sometimes they want you to be committed and spend money on prototype only to tell you the final price. You probably won’t get a final price but you will get a general range which you can then refer back to later at the end negotiations. Generally what I do is ask for samples. There are normally multiple levels of samples.
The multiple levels of product samples [07:28]
The first level will be getting just their kind of stock products. Which often places will send you for free. Or just at the cost of shipping. Be wary, some places will charge you loads for this, saying it is 100 pounds to send you one t-shirt. It is up to you what you think is worth it, but a lot of places will just send you stuff out for free. If places do want to charge me a lot for their base product, what I will do instead is get them to send me a prototype of the product that I want. You want to see that they’re not just taking someone else. You want your customization. You want your branding, your colors, fonts, etc. So if it is prohibitively expensive just to get their stock items, it probably won’t be that much more to get them to create your own personalized version. Whereas places that will send you the stuff out for free, when it is just from their stock, will charge you for the prototype. And eventually you want to do the prototypes before placing the big order. So that is sort of like that, you’ll probably go for a few rounds and it can get a little bit expensive. Because bare in mind you will be shipping, sending by airfreight, whatever the prototypes you’re getting to you. Then you’ll ask for changes and they’ll send you another one and it can take a long time, but it is worth sticking with and is something you should factor into your cost. And every time you spend 50 pounds to get the product over to you, that is a lot cheaper than it would be to sit over there and work through it.
E: WHat is the average amount of time people should expect to go through finding a factory, prototyping, to then agreeing a price and then putting your order in. Where you talking 6 months?
S: Yeah, probably, a little bit less than that. Probably about three months to get your prototyping done and then probably another 3 months to actually make it. If you factor in three months, you might do better than that. People talk about getting it all done in a month but realistically that is not going to happen.
E: Well when you’re starting a brand new business relationship with a factory, it might happen in the next product range for someone that you’re used to working with.
S: Yeah, or if you’re just jumping on a trendy bandwagon, like you want a fidget spinner and all you want is just your logo on it, you could probably do that straight away, you might not even need prototypes. But there you are relying on speed to market rather than customization and rather creating something actually unique and a good product.
Alright so let’s talk a little bit about the other issue that people have with factories which is how do you pay them, dealing with somewhere you’ve never been, doing it with people in China or Pakistan or the Philippines or some country you’ve never been to before, you don’t know much about their culture, and there’s loads of different ways, some of the suppliers I work with I just pay them once it is all ready.
How do you pay factories? [10:48]
But, you know there are people who I have worked with for a long time. Most new relationships you start off with will require some sort of upfront payment. Some places will ask for 100%, which I would probably never agree to, but generally somewhere between 30 and 50% upfront. Followed by sort of 50% to see you take control in the stock.
E: Yep, that sounds good.
S: There are ways you can make it a little bit safer, you can pay through esgo [?] services where you don’t receive the money until you’re both happy. So stuff like alibaba’s Alipay, paypal also has stuff. Just be aware that they take quite high commission, so you’ll have to pay extra in order to have the factory allow you to use these items. And generally I don’t bother because normally my first order is fairly small and then slowly scale up and by the time I am sending 30,000 pounds for an order we’ve been working together for so long and it is in there interest to play fair.
The role of inspection in creating a quality product [12:02]
Next I want to talk about inspection, and it kind of ties in a little bit with the kind of when you pay because, especially if you are starting a new relationship, you probably want to have some sort of quality control done before you accept receipt of the goods from the factory. There are a few different ways or terms for how you accept the goods from the factory. You don’t really need to know what they mean, and you can kind of google them, and generally you either accept them at the factory or onboard a ship so the two most people talk about are freight and board which is when they’ll deliver it to a ship or x-works when you pick it up from the factory. I’ll almost always use exwork, but it doesn’t really matter, just make sure you get quotes for it because what is quite common is you will do freight and board and will have agreed on the price for the item and then they will have charged you a huge shipping cost to get it from the factory to the ship, which is generally why I don’t do it because I know I can get it cheaper through my freight forwarder than what they will charge me. But that is something that you need to think about ahead of time. Almost always, especially when you’re ordering large amounts, you will want to sort out the shipping yourself, because there is a third type of term which is when they deliver it directly to your house or warehouse which is fine for prototypes but generally it will be a lot cheaper if you organize it yourself. So, x-works, the other thing I like about it is before you actually accept the goods you can send an inspector to the factory to check them and do some quality control. What they’ll normally do is they’ll go in and they’ll take ones at random and they’ll run through a checklist of checks for quality. And what you want to do is before the factory starts work on the products, you’ll have negotiated some sort of terms as to what sort of default rate you’re happy with. And what will happen if they fail to meet it. So, they will, inspectors will go in if everything is good, you’ll then pay the rest of the money and they’ll ship the products out. If they fail the inspection, then they’ll have to make good and bring the default rate up to the level you’re happy with before you pay them the final bit of money. What you’ll sometimes fine and generally as you start working with people and they get better in knowing what your needs are is your default rate will drop to a low enough rate that it actually becomes cheaper not doing any inspection at all and just to take the default rate and ship it out. But I think inspection is very important especially when starting with a new supplier. That is the case whether it is a factory in China or a distillery in just around the corner from where you live. So for instance we went and did an inspection on our first batch of gin that we ordered and we found that there was a real problem with the labelling and them putting the labels in the bottle and the way they were packing them into the boxes, which is something we were then able to sort out for the next round, but if we just then sent straight to the warehouse or the customer than we might never have known it or it would have taken us a lot longer before we got the feedback from the customers that osmethings wrong
E: And it affects your brand image.
S: RIght. You can do a much more intense inspection if you are doing a really high quality product, the factory might still be within your defect rate that you’re happy with but you might never want those defect ones to reach your customers at all, so the inspectors can go in, check every single product and throw out the ones you don’t want your customers to have. If you’re doing a high quality brand that is probably something you want to do. If there is a high price, you might spend 10-30 p an item to do a thorough inspection of each one.
What might you do differently with factories when you have a very high quality item? [15:59]
S: Okay let’s move on to a freight forwarder. This is a company that specializes in moving a product around internationally. It is usually big names, and they are good at doing smaller quantities via air freight, and then there will be other bigger companies that you’ve never heard, for whom you’d need a freight forwarder with to work through. Especially if you’re doing anything by ship, let’s say you’re sending a container load, a 20 ft container of products via ship. That would work out very very cheap per item but you need a freight forwarder to negotiate for you. There’s all types of freight forwarders you can get, you can get even get someone in your destination country who will be more expensive but easier to deal with, or someone in the origin country. If you’re producing in China, someone in China will sort all of this out for you. Really there are probably people in both countries, so if you go to someone say you’re shipping to the UK, they’ll have a partner freight forwarder in China who they’ll work with. So that is generally if you’re going from one country to another. What I do is slightly a step more abstract than that, so I go to a freight forwarder broker for all of my kind of international needs. So when the factory produces 4,000 table tennis bats, that might be split between six or seven different countries, so the freight forwarder will go and pick up all the stuff and.. Rephrase: I will organize it all in one city, so I will say we’ll send this amount to this country, and the broker will then go and get freight forwarders or freight companies in each of those countries who can then organize it and get it through, and then they’ll sort it all out from there.
E: lots of logistics.
S: Yeah, and so I just use a company called FlexPort for that. I’ll go to the dashboard and sort it all out and then they’ll organize it all for you. It is a bit more expensive, it is cheaper to work with the smaller freight forwarder in each country, but as you expand and get more international then it becomes quite a bit of work working with all these companies, and then also finding a freight forwarder you’re happy to work with. And they can also get more complicated in terms of their pricing. So what I say is don’t be afraid to look like an idiot and asking loads of questions. What I do is after we’ve talked all about it and they’ve given me a price list, I’ll go through it and calculate exactly how much it’ll be and then I’ll go confirm the price list, which will include 101 different items and you need to add them all together and work out how much it is going to be for whatever and it can get quite easy to miss things. So don’t be afraid to confirm exactly how much it is going to be. But generally, freight forwarders, international freight is very complicated but it is very easy to outsource. So I, especially at the start, didn’t really know anything about it. But you’re just paying someone to do it for you.
Sam discusses freight forwarding at length [19:51]
E: How did you select your freight forwarding company initially, did you do research, are there reviews online?
S: Yes, there are, but it is a very old fashioned sort of business, so it is very much a terrible website, speaking to people in person, talking on the phone, when I first started, what I did is I posted on a forum, I can’t remember what it was, maybe UK small business forum or something like that, and I asked if someone could organize this. At the time I wanted them to send it to an Amazon FBA warehouse, and this was before Amazon was well known. So I needed someone who could support from China and then prep it such a way that it’d be accepted by Amazon because they have very strict delivery requirements, and then we prepped Amazon. Eventually we moved to flexport, they’re kind of just the best known international one, they’re a google backed startup who received a bunch of money and they basically brought the web to freight forwarding. So now it is all just like an online dashboard where you put everything in, and you don’t need to talk to anyone on the phone and negotiate. You just get your price, yes or no. There is, so freight forwarding, the other side of freight forwarding is custom brokerage, which is often, I’m going to kind of put them two together, so someone like flexport or freight forwarder would be able to sort it all out for you. And the really nice thing about this is that each country has a very different requirement for what it takes to get your stuff in there. What licenses you need, how they need to submit the reports or whatever. Having a good freight forwarder will do all of that for you and just tell you what you need to do. Is that what happened. So India is the most bureaucratic place I’ve ever dealt with, and getting your stuff into there was something I am going to talk about in a second. So if anything goes wrong, having a good freight forwarder, they can sort it all out for you.
An anecdote of a freight forwarder successfully managing difficult logistics in India [22:46]
The way I normally do it is I don’t bother doing much research into the countries, I’ll just say send my freight forwarder a request saying can you send this number of stock to this country. And they’ll give me a quote. So normally they just give me a quote and then they tell me what I need to do and it is all very straightforward. In the US, they’ll say oh, you need an import form or you need this thing or that thing, here are your choices here is how much it costs. With the UK I needed to send an email to a government agency to get an importation number. But the freight forwarder tells you all that. With India, they said India is a hugely bureaucratic thing, so before we give you any quotes, let’s sort all this out. We need a, b, c, d, e, f… there are many documents we needed. Even then, we did all of that and even then when it arrived in India, there were issues. So we thought we had everything, it arrived in India and the first problem we had, there were a bunch of problems, the first one was that we needed to have stuff stamped with our company stamped. And we hadn’t we just signed it, but what do we do now? Who has a company stamp? We don’t. ANd our freight forwarder told us about this and we eventually got some friends out in India to make a stamp for us and stamp the documents and eventually sold it. There are a few things like that where there are issues in India or moving across state lines in India that we weren’t able to fix if we were trying to navigate it ourselves which is good, and stuff does happen like your stuff can get stuck in customs and be inspected by customs agencies or whatever, and your freight forwarder is good at dealing with all that. So I’ll say just kind of outsource all this and make sure you build in the cost of all this to your business, and then yeah. I think nowadays it is getting easier to find freight forwarders. But when I started it was very very old school and we actually went around to a few like freight forwarders and houses and stuff. The only other thing to our freight forwarding is generally you have two choices which is sea freight or air freight. Sea freight is very cheap but it takes a long time. So say we ship from China to the UK, or China to USA. We’re talking 6 to 8 weeks and it often gets delayed by a few weeks and there will be a storm somewhere in your ship or you’ll get them lost to the sea. It just takes a long time and you’re paying pennies so if you see the cost breakdown of shipping by sea, let’s say our quote might be $1,500 for a shipping container. Of that, the actual sea freight will be like $400 and the rest will be like the paper work at this point, taking it off the point, the final delivery to this place. The actual on the ship is very cheap. The other way to go is air, which takes only a few days which is how I do pretty much everything nowadays. It is a bit more expensive. But it means that your logistics and cash flow is much easier to manage, and generally I prefer simplicity. But with something like flexport, they will give you a quote for both and then you can weigh out, is it worth spending 30% more to send it by plane but have it there in a week as opposed to be sitting in it for 2 months waiting for it to arrive. Alright, the next step is warehousing, actually keeping it and getting it into something you can do yourself, you can keep it in your garage or whatever.
Understanding warehousing [27:04]
This is something you can use like Amazon FBA, which is Amazon’s network, where you’ll store it in their warehouse and then whenever someone orders something on Amazon, they’ll deliver it. Or you can go to a completely third party company for. For instance, a lot of people doing the FBA nowadays, including me. It is a very popular fulfillment service. What they do have is very high long term storage fees if you keep your stock in there for six months or more. So what people will sometimes do is they’ll store their bulk in another warehouse which is very cheap for storage costs, and when they’re ready to store it to Amazon, they’ll just send smaller amounts. If you’re doing, so with our gin for instance, we’ll do a lot of wholesale, which isn’t very good for Amazon. So we’ll take an order in person, say via email, for any number of bottles of gin, and then I can just go onto our warehouses onto our online thing, and then they’ll go send it out in boxes. Super easy, and if I have something very specific, let’s say we’re delivering to something like Mars’s Mob for instance who require all the number printed on all the boxes, then I can get the warehouse to do that. But Amazon FBA wouldn’t do any customization and they charge you a per item delivery rather than the lot as a whole.
E: Yeah, it is B2C rather than B2B.
S: The other reason to have a third party warehouse that is not linked to fulfillment is for prep. We talked a little bit earlier about if you have stuff coming from different factories and countries, you can have a central location where they are packed together, you get something like subscription boxes, you get them from all different places and have them packed into one box and sent as a whole. A classic example of this is with bottles. With Gin as an example, in order for them to take our bottles in an Amazon warehouse, they need to be packed in individual boxes with airpacks, which are inflatable things around them. But they take up a lot of space, so it works out a lot cheaper to actually produce it near us in the UK, but if we produced it in China, it would be cheaper to store the bottles on a pallet and then send that to the UK warehouse and then have the warehouse prep them in individual boxes and then send them to Amazon.
E: And one of the requirements is you have to be able to drop the box from a certain height without them smashing.
S: From two meters on all four sides.
E: It’s quite specific.
S: It’s quite specific and in order to package it in that way and ship it internationally would be a real pain. Another reason to prep is for stuff like when we first start on Amazon, they require certain labels for different types of stuff. It is kind of important and also they might have different hazmat and requirements depending on your product, or electricity requirements that your customers might need and if you make a mistake and you have waited six weeks for it to arrive by ship in China, what are you going to do about it. The easiest thing is to find a prep service to go in and then change everything for you. Also if you have a really high value item, then having another quality control service at this point is also quite useful. So originally when we started doing table tennis bats and we weren’t too sure about the people we were working with, we would have our prep service go through and do a quality control on the items, so for instance the cases, they would go through each one, they would bend it, look for scuff marks, all that kind of stuff, now that we’ve evened out a lot of our issues, with stuff like that, now the factories good enough at producing stuff that we want to our requirements that we no longer need that, and can save money at that point.
E: So you had inspection at the factory as well as at the warehouse.
S: So we had full quality control at the warehouse in the destination country and that is because a lot of damage happens during the transit. So, because they are chucking it around and all this stuff, so stuff does happen and break and so we wanted our inspection to happen as close as possible to the final customer.
Discussing the final fulfillment and delivery to the customer [32:19]
If you’re storing it in your garage, you can go to the post office, put it in a box and send it off to your customer. What you will find is that it would be very expensive. Because big fulfillment centers have very good deals with delivery companies that means they get it a lot cheaper than you, and in fact places like Amazon FBA, if you are selling on Amazon, subsidize it even further so it ends up being very cheap for you to deliver parcels.
E: And then working at packaging is quite complicated and can be quite complicated in small numbers if you’re starting up.
S: Yeah, because they’ll just put it in an Amazon box and deliver it like that. Whereas you might need to buy delivery boxes if you are doing it yourself, and then you are getting a lot of boxes and could get a cheaper unit.
E: Something we found when we started out with gin and were packaging some of the first batch ourselves, is that not all of the packaging we purchased first time round was good enough quality. It took us a while to get the right box, the right package, etc. etc.
S: Yes indeed. So depending on your type of business, I have talked about Amazon FBA quite a bit because they’re basically the best on the market. For our table tennis bats we actually used Amazon FBA for everything. That is for sales on everything, for ebay, for our own website, for one of our sales in person. We’ll put it through that. And there are ways to automate that.
The role of automation in sales [34:03]
So you can link up say ebay or your website to Amazon and then whenever an order comes in it will automatically put through to the warehouse without any work on your half. I wrote a blog post recently that you can check out about that. And for other types of businesses, as we already said, we have different fulfillment options for different types of customers. So for gin, for one thing on Amazon, we use Amazon FBA, and that is because not only does it work out a little bit cheaper, given that Amazon FBA has subsidized rates for sales on their own website, but also it makes you earn more on Prime, and the Amazon algorithm means that you’ll appear higher up on search results if you’re using them. So AMazon will punish you if you’re not using them for sales on their service. But for sales on our website or wholesale sales, we will use a different fulfillment center, one that particularly suits our needs a lot better. And that is kind of it. So let’s quickly run through the different points.
In summary [35:18]
So someone makes it, you find the factory, you negotiate with them how they’re going to, what they payment terms are, what the minimum orders are, what the price per quantity is. You make sure that you have some way to inspect or quality control. And then you go for it. You don’t worry too much about having to visit them because you probably have it cheaper to order that first lot. And then if it doesn’t work out, it doesn’t work out, it is costing less than a flight. If you fly over there and it doesn’t work out it still costs you the flight. Secondly you need someone else to transport it to the destination country. If you are only dealing with one country you are probably best look for a small freight forwarder who will be very affordable and work with them direlt.y If you are shipping to lots of different countries than a bigger broker like we use Flex Port works well. Then in the final country you need someone to store it, if you’re just reselling on Amazon than Amazon FBA is a no brainer. If you are doing no sale or a lot of other types of orders, than you can find a different way to do that. Or if you are dealing with large quantities and you are worried about the storage fees at Amazon, than a third party warehouse to store stuff for you could work well. And finally you need someone to deliver it to the final customer. Again, if you are using AMazon, Amazon FBA is good or there are a whole host of other fulfillment options. You can read lots of options on the website, but if you’re kind of at a loss or just starting out, I recommend Amazon FBA because it is easier and simple. And slowly as you start building up your business, you can cut costs and one of the ways you can do that is finding a new fulfillment provider and warehouse.
E: How do you deal with losing stock at any point during the process, and stock that isn’t fit for sale, so would you recommend baking in some percentage to allow for that, particularly when you’re starting out, or is that something you just have to wait and see as you go.
S: It depends on what point you lose the item.
E: It could be several points.
S: With Flex Port, they can bake insurance into it if anything is lost during that process, they’ll reimburse you and that’s kind of baked into it. With other freight forwarders you get the choice of getting insurance or not and it is your turn to price it out and see if it is worth it.
E: Have you done that?
S: Yea, and we decided not to get insurance because the cost of losing one shipment, we didn’t think the risk was that high or the premium for insurance was worth it. If it gets lost on the way to an amazon fba warehouse, then amazon will pay you the retail value of whatever you’re sending in. So if they receive say six cases of 10 they should have 60 items but if they only have 54, they will pay you the retail value of those six items. So in that case you make quite a lot of money if they lose your items. I try to aim for between one and two percent defect or return rate, and that should be baked into your margins. If you’re hitting five percent returns or defect rates, yeah, you need to either, some industries that is fine like clothing has high return rates but that really needs to be built into your margins.
Okay, great, I hope you find that useful and as always if you have further questions you can email me at firstname.lastname@example.org or you can go to sampriestley.com where I have quite a detailed blog post on various different parts of this sort of process.