I had the fortunate opportunity of speaking with Dan Meadors, one of the founders and current owners of The Wholesale Formula, over this past week as the new year was just getting started. Given our shared background of being entrepreneurs in the eCommerce industry, specifically on the Amazon Marketplace, we absolutely hit it off.
The following is a back and forth question and answer that Dan and I had as we spoke about selling on Amazon, his unique wholesale formula, and what 2017 holds for both of our companies. I edited the conversation down to keep it as value packed as possible.
I know that you’ll enjoy the conversation and I highly encourage you to head over to Dan’s website to learn more about The Wholesale Formula. We’ll also be holding a webinar in late January with Dan and his co-founder to continue this conversation in a live setting. To sign up to the webinar, click this link.
1. How did Dan and Eric decide to get into selling on Amazon?
It was actually a funny story. We both knew of Amazon, but didn’t really know that is was a marketplace. I had always thought of Amazon as a bookstore.
One of our friends from work came into the office and turned in his notice. The shocking thing about this, was that he had six-figure salary in rural Kentucky (which equates to a veritable fortune) here. When we asked what his plans were he explained that he was selling products on Amazon and was nearly making his salary part time and working from home.
We had to know more and he explained the retail arbitrage model, that you could literally buy things from Walmart and sell them on Amazon. We were hooked, and every minute that we weren’t looking we were diving deeper into this.
We read Chris Green’s book “Retail Arbitrage” and literally couldn’t believe the opportunity. We moonlighted for around six months before moving full time.
2. Is there a reason Dan and Eric chose the wholesale model over drop shipping? If so, why?
We changed our model from being arbitrage based to wholesale in mid-2014. Despite working more, we weren’t seeing the type of growth that we wanted, and was looking for a more scalable model, and if nothing else, something that would give us more time at home (and would supplement our Retail Arbitrage business). Within six months, the wholesale model had completely supplanted our arbitrage business.
In terms of the direct comparison to drop shipping. We honestly never had considered drop shipping because of the lack of control with suppliers and the risk it inherently has with your Amazon account. With wholesale, we have perfect control over our business and growth. We know that by utilizing the FBA model, that customers will receive the goods that they order.
3. What is the Wholesale Formula? How did Dan and Eric come up with it?
The Wholesale Formula is what we believe to be the premier training course that teaches the wholesale model, and provides students with the best chance of success.
We developed it, because we wished we had a similar resource available to us. We learned pretty much everything we know about this business the hard way. Most other resources simply teach going to trade shows and looking through giant catalogs of stuff, and that just didn’t work for us.
4. How is the Wholesale Formula different from other eCommerce coaching courses?
This course is a true blueprint of the model that we actually use. We have continually added to it, and changed the material as we find more efficient and effective means of conducting business. Most courses are taught by people who aren’t truly involved in their business, and aren’t experiencing the type of growth that we are.
Our business has grown by a large margin year-over-year, utilizing the same strategies that we teach in our course.
5. What are the biggest challenges with selling on the Amazon Marketplace?
This question is very wide, and depends a lot of where you are in your journey. There are truly different challenges faced that depend on where you are in the game.
As a whole, we believe that people don’t realize that making this business a long-term sustainable model requires you to build systems that scale beyond yourself. As competition increases, the efficiency of scale comes into play a lot, and the only way to truly create scale is to create systems that can be replicated or outsourced.
We don’t believe that Amazon will be the same marketplace in five years, as it is the most dynamic and evolving markets we have ever seen. There are so many changes happening, and they happen so quickly, that we believe that sellers should prepare for the future, by playing the long game.
Focus on creating something sustainable and scalable.
6. What advice do Dan and Eric have for individuals thinking about starting to sell on Amazon?
Amazon presents the largest opportunity that ANY of us have ever seen. This is the world’s largest eCommerce platform, and they actually allow third party sellers to not only have access to their customer base, but also their vast and incredible fulfillment network. This reduces the traditional barriers of having to create infrastructure and have capacity to store products.
I am a true believer. A die hard.
Jeff Bezos (CEO of Amazon) said he believed that eCommerce was still in the first inning. I wholeheartedly agree, and believe that this is that one opportunity that people will wish they had tried, when it’s no longer available.
In short… Get in the game!
7. What is Dan and Eric’s favorite memory from selling on Amazon?
This will sound cliche, but we think the best is yet to come.
I don’t want to be that guy, and want to give you a REAL answer to your question. So, I remember the first item we bought so many of that it made us nervous.
I believe we bought something like 15-20 Shu Todoroki (a Cars 2 car). Bear in mind, that this was only like $3 at Walmart. But, we hadn’t fully grasped the magnitude of the Amazon marketplace…
We had our reservations about whether we could honestly sell twenty of ANYTHING in any reasonable amount of time.
We sent them in, and… BAM.
They literally sold in hours. One right after another! Just flew off the proverbial shelf. We sold them for $14.99
It was in that moment, that we REALLY recognized the opportunity, and the power that Amazon had.
8. What are Dan and Eric most looking forward to in 2017?
We are very passionate about our business. I mean, the ride has been phenomenal, and its just getting started.
But, honestly, it’s continuing the work that we do with The Wholesale Formula. We have been a part of so many success stories at this point.
The experience has been humbling.
We have had several opportunities to meet TWF students (at conferences and events), and the stories we have heard about how our course and mentorship has changed their lives for the better was truly some of the most touching interactions we have had.
We have come to realize that the difference we are making goes well beyond just helping people make more money!
This article was written by Connor Gillivan, the Chief Content & Marketing Officer of FreeeUp. Connor is the author and owner of ConnorGillivan.com, has sold over $20 million worth of product selling online, and has been featured in top publications such as WebRetailer.com and the Huffington Post.