Ryan Garrett: The Right Way to Handle FBA

Nathan: Hey what’s up, welcome to e-Commerce on Tap today, we have another epic guest Ryan Garrett, Ryan thanks so much for joining us on e-Commerce on Tap, how’s your day going?

Ryan: Hey! Thanks for having me, it’s going great!

Nathan: Amazing! Well you know before we dive into FBA Forward and how you got started on Amazon, I really want to understand your background, where’d you grow up, what was your family dynamic like, tell me more about yourself.

Ryan: Yeah, so I grew up in Fresno, Central California. I’m the oldest of seven kids so I grew up in a pretty crazy household, always looking for something to do and you know, something to get into trouble with, with all my brothers.

But that’s basically it, I kind of grew up here in California, went to school in Idaho, did a service mission out in South Africa for a couple years and ended up here and in San Diego ultimately, for law school and an MBA program.

Nathan: Amazing! That’s incredible! I can only imagine a household with seven siblings, I mean that’s a lot of fun [Yeah definitely] So, you know, moving on–like what was your first experience with Amazon? I mean, was that before you went to Law School or was that after, you know…what was your first experience?

Ryan: Yeah so it actually started way back in 2005, I had a friend in high school then that was making, you know, 6 figures a year selling stuff. He was telling me about this site called AliBaba, you know way back 15 years ago almost, and was importing stuff and selling it using a dropshipper, telling me how great it was.

So I looked into selling on eBay and Amazon then I remembered I actually had a few books that my dad said he didn’t want anymore and kind of got into it…then started selling stuff around the house. My mom had, you know, pull things away from me to make sure we didn’t sell everything we owned but yeah, basically you know I think I was a junior in high school back then when I really started getting into e-Commerce

Nathan: That’s epic I mean I can only imagine how much the interface has changed since 2005, I mean you look at some of the old photos or even that, you know, photo that surfaced pretty recently of Jeff Bezos in his Amazon office where he’s got Amazon spray painted on the wall and now look at where they’re at today. I mean it’s really incredible.

So talk to me more; you went to Law School and got your MBA, what was the decision behind that? Did you go straight from undergrad to Law School or did you work in between?

Ryan: I worked a little bit, I did some tax accounting, that was all right. My undergrad degree was in accounting. Tax really wasn’t for me–at least on the kind of tax preparation. I thought tax law or corporate law might be a better fit and so I went you know to USD to get a joint JD MBA which is a great degree but super, super expensive.

So you know kind of during the first year, I was talking with my wife, I was like, “Hey I’ve got to get something going on the side that can produce us you know, some sort of income to offset these tuitions and cost of living in San Diego” and so that’s when I really got back into selling online on Amazon.

Nathan: That’s incredible. So would you mind talking about some of the first products that you were selling and how did you, you know, decide to sell those?

Ryan: Yes you know, I looked and read around online and I found out about retail arbitrage and so we ended up going–me and my wife–and we’d hit up all the WalMart’s and Target’s and just clear out all their clearance sections and it lasted for a couple of months but I realized there is no way to scale it and you know I really needed to start making my own products or importing or at very minimum do some wholesale type stuff, so I found a few wholesale products did that and then I was like you know I can make a copy of this, no problem.

So, the very first product I ever bought from China in bulk was a fabric shaver and I had no idea what they were you know, I thought they were selling well on Amazon. I’d never heard of them and I bought 2000 of them and you know, kind of felt a little crazy. My wife told me I was crazy [buying 2000, I feel like, is more than what most people start with] but yeah we blew through those first 2000 units in about a month and a half and I was like, you know…this is going somewhere.

Nathan: That’s incredible and so you know now you’re on FBA Forward and it’s one of the, you know, go-to freight forwarding companies that helps people handle their Amazon logistics. Talk to me about that process in terms of starting FBA Forward and kind of really realizing that gap that you’re filling on the market right now.

Ryan: Yeah so what happened was, you know, I launched the Fabric Shavers, got into a few more products, and I was paying a ton in shipping, you know. All the, kind of experts and coaches out there at the time, they were telling people to use Air Express and you know, just DHL it straight to Amazon.

Well one of my suppliers said, “Hey you should really look into this sea shipping” and she kind of walked me through it and helped me out a ton and then my shipping cost ended up being about 90% cheaper than when I was using–you know, FedEx or UPS whatever it was before–but it was a huge headache and you know, the logistics industry of finding a customs broker was…it was a huge pain and I was like it’s worth the 90% savings over the air freight or the Air Express.

But there’s got to be a better way, there’s got to be someone that can just handle this whole thing, you know. I want to just wash my hands of the entire shipping process. [Right] At that time, there wasn’t anyone–this was back in you know 2013, 2012 maybe even–there wasn’t anyone doing that that was really you know Amazon-focused or willing to kind of walk beginners through the whole process and explain what was going on. There’s a ton of you know, kind of shady business and hidden fees in the logistics industry and so that’s when I realized, hey, there’s an opportunity here.

And so, I started Forward you know. I was doing it for myself,  did it for a few friends…just bringing stuff into my garage and it started to kind of snowball and that’s when we were like let’s get a warehouse and let’s bring an in-house Customs Department.

Nathan: So that was really epic, you started literally you know as a service in your garage for other people, that’s incredible.

Ryan: Yeah it was, we definitely got some looks from the neighbors. You know, we’re pulling pallets into the garage–jam packed– but it worked out.

Nathan: And then, I mean, that just goes to show, you know, the entrepreneurial journey doesn’t have to start with, you know, a big investment. You can utilize what you have and grow from there, I mean that’s incredible!

Ryan: Yeah exactly I think we started with a thousand dollars… is what we kinda put into to get everything started.

Nathan: That’s amazing. So talk me through, you know, the process that you guys go through for most of your users to set their products up to be ready to be fulfilled by Amazon?

Ryan: Yeah so like I was saying I was really frustrated with the whole industry when I was first starting out and so we wanted to take that and really, you know, flip it around. And so at FBA Forward we try and be a one-stop shop for completely outsourced logistics. Basically, you know, a seller will come to us, they’ll say “Hey I’m having a product manufactured in China, here’s my supplier’s email address, get it all the way to Amazon. FBA warehouse for me.”

And that’s where we’ll take over. We’ll reach out, we’ll contact the supplier, we will set up the shipment, you know, we’ll kind of shop around, make sure that we’ve got some great shipping rates, send out a quote for approval, get the goods, you know, trucks to the port in China, put on a boat right through to Southern California here where our customs team will clear it through customs and then we can bring the goods down into our warehouse, go through every single box, make sure that everything is compliant with Amazon’s FBA standards so that your account doesn’t get banned or anything and then we’ve got some great storage rates. And so we typically will bring in large shipments, store them in our warehouse and slowly feed them into Amazon as inventory levels run.

Nathan: And do you guys have any, you know, MOQ levels in terms of what someone has to ship through FBA Forward or what’s that kind of dynamic level like because I’m sure there’s, you know, got to be some fixed cost around what you guys do.

Ryan: Yeah you know, we don’t have any MOQ. We have a minimum order charge of $300. Smaller shipments really don’t make sense to be using an outside service. [even $300 that’s super low entry point for anyone to get started I mean that’s great] Yeah definitely and we like to tell people, “Look if this is your first shipment and it’s a couple hundred units, Air Express it to your house and you know, get your hands on the product and see what we’re doing and then when your shipments are bigger, you’ll really appreciate the service we provide later [Right] once you’ve done it yourself once and then once is usually enough.”

Nathan:       Got it. It makes sense, so you know, walk me through that kind of dynamic right now that you see on Amazon. I mean, we work with so many different factories around the world at Sourcify by now that all these factories are starting to asking us you know, “How do we sell directly on these marketplaces, you know, how do we go direct to consumer” because they’ll produce these products for Amazon sellers or Shopify stores and they’ll see the margins that those sellers are running and they’ll want to get in on that margin, and so you know, have you been hit up by any factories that want to sell directly on Amazon?

Ryan: You know every once in a while we do, we’ve got a handful of Chinese clients that are manufacturers and use some decent volume through us but you know the same challenges that plague the Chinese sellers, they can’t seem to get around them. You can definitely tell if a listing is written by a non-native English speaker by their marketing tactics, a few things like that, I think, is where they struggle to compete, so that’s one way that you know, our sellers definitely can differentiate is through you know, writing good listings in obviously great English and marketing to the right crowd. It really helps set themselves apart, which is one of the services we offer.

Nathan:  Oh nice that’s amazing! I’m going to ask about that later in terms of how you think someone should write a good listing but I want to dive into this question because we get it so much around protecting IP and I think one of the kind of scariest things about, you know, you as an e-commerce entrepreneur, if you go out and tell your factory, teach your factory how to ship directly to Amazon-FBA, what stops them from shipping their own products to Amazon-FBA…becoming a competitor of yours?

And so that’s something you’ve got to understand, you know, if you don’t use FBA Forwarding service then you’re going to, you know, potentially face that problem where you create competition for yourself amongst these factories. So, where for FBA forwarding and for us, right, it sounds like you guys are really kind of able to protect someone’s IP in some sense by handling the kind of specifications that Amazon requires in their shipments. Is that how you would see it?

Ryan: Yeah definitely, so there’s actually been, there are two camps here and so we have a lot of customers that say “Hey, like I don’t want my supplier knowing everything about Amazon, how to prepare, how to ship here,” and that’s one side of things. The other side, once you get to a certain level on Amazon, Amazon will actually start, or at least they’ll offer to handle your shipping for you.

And obviously you still have to pay Amazon for that, that’s a whole other game where all of the sudden you’re giving Amazon your factory details, your pricing details, and you see Amazon go straight to the factory and cut you out. And so, there’s both sides to that coin where we really help protect the seller, no matter what level they’re operating at.

Nathan: What’s the typical, you know, the typical minimum, you know, kind of volume that someone has to be doing on Amazon for Amazon to say, “Hey you know we can start handling your shipments for you” because I remember, if I recall, Amazon started creating some of their own freight forwarding services.

Ryan: Yes, so they’ve got a general freight forwarding service that I believe they’re going to be launching, I think, a couple more years they still have before they roll that out but the sellers that we have that Amazon has reached out to–they’re very, very large, you know, top 1000 Amazon sellers. It’s going to be going you know dozens of containers a year before Amazon is willing to offer those services.

Nathan: That makes sense, it’s interesting. So diving back into actually creating the listings on Amazon, what are some keys you look forward to create a very, you know, marketable listing?

I Ryan: I’ll be 100% honest with you Nathan, I’m not the listing expert here, we got a whole team that handles that and when they go about doing that, they’ll do a lot of research on competing products, find out what sets this product apart, and then they’ll do a lot of keyword research to make sure that they’re getting the right keywords in there, but that it doesn’t sound super spammy and, you know, just like a keyword stuffed title or listing.

Nathan: Now I know a lot of our listeners right now, they’re first time e-Commerce entrepreneurs that are just getting started and very interested in selling on Amazon, if you are going to go start selling a new product on Amazon, walk me through your decision process in terms of how you’re going to analyze and see what product you want to start selling?

Ryan: Yeah that’s a great question and it gets, we can go pretty deep with this. I think most people out there use some sort of tool like a Jungle Scout that can help look at sales volume for similar items.

I think the most important thing is to, you know, find a product that’s selling well, it’s not overly brand-dependent and then really look at how you can differentiate from all the other listings out there. A great way to do that is through awesome product photography and we’ve got an in-house photographer that does some great work and we’ve seen how having multiple images–a lot of people will just put 2-3 images but you can get tons of images in there–really sets your product apart and show why you’re different than the competition.

So, you know finding products that you can differentiate, seeing, you know, making sure that you can hit the correct price points and things like that and then getting it to Amazon. Our customers that are first time sellers are honestly blown away with almost how easy it is to start selling on Amazon and how fast inventory starts to move if you really put the work in to get it set-up right.

Nathan: That’s amazing so now that you have that product picked, what’s the next step you’re going to take in terms of you know, let’s say you can source your product through Sourcify, you got the products sourced, it’s at the factory floor, and it needs to be shipped, what’s your next step? Walk us through the process of FBA forward.

Ryan: Yeah so we typically like people to reach out a little bit earlier so most products in China have about a thirty day lead time. Once you put that order in and they’ve started production in the factory, that’s when we like to be contacted, so you can reach out to us. There’s a ton of different ways to contact us on our website and start working with our sales team.

They can get you some estimates on customs duties and on shipping and what it’s going to cost ultimately to get your product landed at the Amazon warehouse. So yeah, that would be the next step, would just be to reach out and start getting some quotes.

Nathan: Now that’s awesome and so I want to talk–to touch briefly on the future of e-commerce, I mean it’s grown so much the past 10 years, where do you think it’s heading in terms of, you know, you started yourself doing kind of inventory, arbitrage, and there’s a lot of drop shipping entrepreneurs out there as well. What do you think of that dynamic behind people that are arbitraging products, people that are drop shipping and people that are actually trading their own products?

Ryan: You know it’s…nothing comes easy right? Now instead of those things the retail arbitrage, the drop shipping, sometimes is just too easy and when it’s too easy tons of people come in and just cut margins away until they’re nothing.

That being said, I think we can all agree e-Commerce isn’t going anywhere, it’s just going to keep growing you know just the convenience of being able to shop and buy things online and especially as Amazon gets stuff delivered faster and faster, there’s definitely opportunities. And I know I keep coming back to it but as long as you can differentiate yourself from the competition, [Right] e-commerce isn’t going anywhere and it’s something that you can really use to be a tool to build a business around.

Nathan: Right exactly. What are–do you mind touching on some of your kind of favorite product categories on Amazon or what are some product categories you think someone can get started in?

Ryan: Yeah so like I said earlier, a lot of these courses and coaches and things, they like the home and kitchen categories and because of that, they seem super over crowded. A lot of people still haven’t caught on to just the ginormous cost savings of sea freight and ocean shipping.

So honestly, I tell people the bigger, the better. Find a big product that’s oversized because that limits your competition, [Right] will get you some great shipping rates, and then find something a little bit more expensive, if you can find an oversize product that sells for, you know, $100-150, you only need to make 1-2 sales a day to really be successful.

Nathan: Got it, yeah, that’s incredible. It’s so interesting to me to see just the rise of this industry. And in terms of, like you’re saying, the competition in some product categories, what do you look for that kind of scares you away, where if you’re trying to sell in a product category and you look at it and you’re like, “Oh I don’t think it’s worth my time to go against this competition.” You know, do you have any difficult parameters that you look at?

Ryan: Yeah, one would be if something’s very brand dependent, you know, like if you go into like clothing or shoes or something like that, people want the brand names there, you’re not going to be able to go in and compete with a Nike or Adidas or something like that.

Another thing is if you–just something personally that I look for, if I do a search for a, you know, main keyword and nothing on the front page has less than 500 reviews, it’s probably over crowded. It’s probably, you know, those people have been there for a while or they’re, you know, somehow paying for a ton of reviews. There’s not a lot of room to get in there.

Nathan: I want to touch on–you mentioned paying for reviews, are there still a lot of black hat strategies that happen on Amazon?

Ryan: I’m sure there are. I think as long as Amazon and e- Commerce exist there is going to be black hat stuff and Amazon is…seems like they’re always improving, always trying to catch those things, which is great, you know obviously we want a level playing field. I don’t know, and honestly I don’t even sell anymore. Running FBA Forward is taking all my time, so I’m not super in tune with everything going on there but I guarantee you there’s some stuff going on.

Nathan: Yeah I mean it’s just super interesting to see that dynamic. I mean, it’s just crazy to see people be able to jack up the reviews like that or jack up the listings like that, you know, it definitely makes the playing field a bit unfair…just, you know, not the way it should be in some sense. And I think, like you said, Amazon is cracking down on that but it’s going to be a struggle really for them to optimize the best way to handle that.

Ryan: It is way better than it was, you know, a year and a half ago when they kind of did the first sweep of getting rid of those incentivized reviews and so the harder they make it, the less and less people do it.

Nathan: Got it. So I want to talk also about selling across channels, I mean there are a lot of different marketplaces out there like wish.com and Top Hatter and a few other ones that are rising or even just eBay. What do you think about, you know, e-commerce entrepreneurs that are selling across channels and do you have any recommendations in terms of managing that from a logistics standpoint?

Ryan:  Yeah so obviously there’s a ton of channels out there. None of them are as good as Amazon consistently, but you know certain products do well and sometimes even better on different channels. I think the first channel that we typically recommend is building your own website using like a Shopify or big commerce type store. I think that that really helps with branding yourself, branding your products, and, you know, instill some faith in the brand that you have.

And then obviously like you said, eBay, not as big as it once was but still has, you know, some pretty decent sales and some other up and rising ones. As far as logistics on that, you know, works out the same, get it on a boat, get it as cheap as you can to the US.

We offer fulfillment services so we can ship out. Amazon also offers kind of third party fulfillment. They’ll ship for some of those platforms, but some of them will not allow you to have Amazon doing your fulfilment–some of the Amazon’s bigger direct competitor like Walmart.

Nathan: Right yeah it’s super interesting. I mean that’s why, I guess, they could keep some inventory in FBA Forward and you guys can act as a 3PL service right? [Exactly] Nice, that’s a good setup, that’s cool. Well Ryan thanks so much for coming on the show. One last question here, if you were to start an e-commerce company tomorrow, what would you do and how would you get started? Walk us through that process real quick.

Ryan: Yeah, so if I was going to start a new product or a new brand tomorrow, I’d go through that product research. Like I said, the most successful customers that we’re seeing right now that are just launching or kind of finding the bigger, heavier, more expensive items, so that’s kind of where I’d start, you know. Start doing some research on Amazon, see what’s selling well and then I think what you’ve got to do is build a brand. You know, come up with, or if you’re not good at it, pay someone to come up with a good brand name, a good logo, get that website up with some products and really, really build that out. Have someone or manage yourself your social media accounts, get some followers, you know, network like crazy. And as you do that, it really helps build that audience.

So apart from picking the product, finding a decent niche–really somewhere that you can set yourself apart from the competition. Like I said, probably bigger, heavier, and more expensive are some great barriers to entry you know. Get it on a boat and that’s where your cost savings are going to come in, it’s going to help you be able to compete on price and retain your margins.

And then launch anywhere and everywhere. Amazon is going to be your number one channel most likely, but get that Shopify store up, throw some listings on e-Bay and walmart.com and Jet and all of these other marketplaces that you can get approved. I say go big and it really helps establish that brand, I think is the best advice I can give.

Nathan: Hit that home run, that’s what’s up man, I dig it. Well thanks so much for coming on Ryan. If people want to reach out and get in touch, how can they contact you?

Ryan: Going through our website, we’ve got a contact form there, a few different buttons, we’ve got live chat, and our phone number is on the website as well, it’s the best way to reach us.

Nathan: Amazing! That’s awesome, well Ryan, thanks again and I appreciate you coming on.