#457 – Retail Arbitrage Isn’t Dead & How Charles Chakkalo Built a Private Label Powerhouse
Can you imagine turning a schoolyard hustle into an 8-figure Amazon empire? Charles Chakkalo did just that, and his journey from selling Coke cans to becoming a private label giant offers invaluable lessons for aspiring entrepreneurs. Join us as we explore the highs and lows of his entrepreneurial path, including a hilarious tale of juggling business opportunities with personal commitments. Charles also shares insights into building a brand in today’s competitive e-commerce landscape, all while emphasizing the power of networking at industry hotspots.
For those with a knack for nostalgia, you’ll love the stories of entrepreneurial beginnings, featuring school days filled with selling Billboard Top 40 albums and the many trials of early retail arbitrage. These experiences didn’t just pad their pockets; they laid the groundwork for understanding the challenges and potential of retail arbitrage today. From dealing with counterfeit goods to early suspensions, the lessons learned have been instrumental in shaping mature business practices that stand the test of time.
Running a family business presents its own set of challenges and rewards, especially in the e-commerce and warehousing sectors. We explore the dynamic of managing operations with family, highlighting the benefits of maintaining control without third-party logistics. Gain insights into strategies for differentiating commodities in a flood of knockoffs, and the significance of first mover advantage. With expert advice, discover the potential of integrating branding and community building into business models. Plus, navigate the complexities of information overload and learn how to strategically consume information to stay ahead in the ever-evolving e-commerce space.
In episode 457 of the AM/PM Podcast, Kevin and Charles discuss:
- 00:00 – Entrepreneur Journey and Amazon Brand Building
- 09:51 – From Coke Cans to Amazon Retail Arbitrage
- 04:44 – Life’s Ups and Downs
- 22:07 – Brothers Build Amazon Business Together
- 30:30 – Competing in the Commodity Market
- 33:47 – Brand Building Outside of Amazon
- 36:08 – Navigating Information Overload in E-Commerce
- 42:26 – Everyone Has an Angle in News
- 49:44 – Charles’ Newsletter Strategy
- 50:40 – Entrepreneurial Success and Wisdom
Transcript
Kevin King:
Welcome to episode 457 of the AM/PM podcast. My guest this week is Mr. Charles Chakkalo. Charles has been selling since he was about knee-high to a grasshopper. We talk about his entrepreneur journey, about how he says arbitrage is not dead and it could still be a great opportunity if you do it right, and how he’s used that to pivot into building an eight-figure brand on Amazon as a private label seller, and then also a little bit of talk about should you actually become a brand? Does it matter actually? And some interesting chat on that, as well as a lot of other really cool stuff. I think you’re going to like this episode with Mr. Charles, so enjoy it.
Kevin King:
Charles. You’re on the AM/PM podcast. I don’t know why I did this. I’m just a glutton for punishment. Like you said, you wanted more of me. I said, yes, this guy is sharp, he needs to be on the podcast, he’s fun to talk to, he’s got loads of information and loads of stories. But you’re like, you didn’t get enough of me at the last event? Or at Prosper? Or at the one before that?
Charles:
Listen, when I got that DM hey, do you want to come on the podcast? I had two emotions going through me, the first being well, I’m honored. I mean, it’s a great stage to be on. Second is wow, I just spent the whole last freaking week with Kevin. He wants more of me, so-
Kevin King:
We met at, we’re trying to think that earlier. We’re like where do we meet? I think it was at ASG. You saw me speak, probably at ASG.
Charles:
That’s for sure.
Kevin King:
And you might have won. And after you know, those events are crazy, great, great crowd. But it’s a very, very specific crowd. You know it’s the Jewish audience from Brooklyn and after you come off stage, you’re like swarmed at that event.
Charles:
You are.
Kevin King:
You’re like you can’t move for, like I hope you don’t got to pee because you’re ain’t going to the bathroom, because there’s people around I mean Jeff Cohen one time had to come up and like rescue me. I was like I need to take.
Charles:
Kevin Jeff Cohen was there one year?
Kevin King:
Yeah, he was actually there. Yeah.
Charles:
Totally didn’t know. It’s funny, actually, right after Prosper, somebody I’m forgetting the name of the agency, it’s probably a good thing, was running a 24-hour crash course on DSP and stuff like that at Amazon headquarters. And I’m like, oh my God, this is Jeff Cohen. I recognize him from his LinkedIn posts and I went up said hello. The whole thing it was like long lost brothers. Meanwhile, we never actually met in person, it’s just a digital thing.
Kevin King:
Yeah, he’s in the. He’s in my Dream 100. He’s one of the Dream 100 guys and he’s been around the space for all. Really really good guy, really sharp guy. Now he’s uh heading up by like he’s like an evangelist I don’t know his exact title for advertising at uh at Amazon. But then you, then then you I came with Norm uh and we did an event in a warehouse and uh in Jersey for the E-com Collective. Uh back in 20-
Charles:
Cooperative.
Kevin King:
Cooperative, cooperative.
Charles
That’s the one.
Kevin King:
Back in 2024 and I remember you were there and we had a little hat con. They want us to run a little hat contest. We ran a little hat contest and I was like Charles, you got to enter this. She’s like no, I can’t. My wife, it’s my anniversary. I got to me and my wife are going to dinner at this, our favorite restaurant down the street here. That’s a kind of a tradition and I was like no, just come in. You’re like all right, I’ll do it, but I think it might. What happened with your wife? What did she say? She said-
Charles:
That year you’re running BDSS Hawaii and somehow I mean it was both a good and bad thing. Made it to the final round. Final round required me to stay a little longer than we slightly anticipated, and she goes. Well, you can participate in the final round, but the only way you’ll get out of this one, the only redemption, is if you’re taking me to Hawaii with you. I lost the competition, but hey, let’s still happily married with two kids, so I’ll take it.
Kevin King:
That’s right. Yeah, the prize was, I think, a ticket to BDSS Hawaii.
Charles:
It was. Yeah, it was.
Kevin King:
Yeah, that’s, that’s a. That’s a good ticket. That’s a.
Charles:
Yeah, that’s right.
Kevin King:
But then, but you made up for it now, you just recently. Was it a Prosper, I think, or was it an MDS?
Charles:
It was no, it was Prosper.
Kevin King:
You spun the wheel or you went, and you did tell them what you did, so you actually ended up winning something else.
Charles:
You probably don’t even know the full version of this, the full version.
Kevin King:
No.
Charles:
You were making a promo at your booth. Uh, subscribe to the newsletter and subscribe to the YouTube channel, something like that, and you get a spin. I spun the first time and I got a bankrupt or whatever, like I got a nothing, all right. So then, and then you get you were running this passport kind of program where if you go around to anybody who paid into the sponsorship or something like that, you get a stamp. So yeah-
Kevin King:
You had to go booths. We gave you a little passport board and had like 30 some odd different vendors and their logos and you had to go to their booths and they all paid to be in this. And the idea is to get you to go to their booth and so they can talk to you. And then you go there and you get a stamp and if you get 25 or more stamps you bring it back to us and then go ahead.
Charles:
And then I got to give it to you. I mean, listen, I even said it publicly on my LinkedIn to and throw it was a great marketing tactic. I have to give it to you there. I went booth to booth and I got every single stamp, every single one. I came back to your booth to redeem it and I believe it was maybe it was you or somebody at the booth was like you only had to go to like 20. And there were how many in the booklet? Like 40 or something like that.
Kevin King:
It was like 35 or something like that. Yeah.
Charles:
And I did have a scare that I lost the passport during the conference. And then I’m like, listen, I look like such an idiot now that I got every single one stamped. I deserve another spin. And on that second spin and that part I posted on my LinkedIn, it was like one of those you know like wheel of fortune moments where you’re like either between the bankrupt or the audience ticket to BDSS. So, I was worthy enough to get an audience ticket-
Kevin King:
To Market Masters.
Charles:
To Market Masters, that’s the one.
Kevin King:
Yeah, Market Masters.
Charles:
You just announced.
Kevin King:
Yeah, and it’s November 13th to the 17th in Austin Texas.
Charles:
Is that typical? You’re doing it over a weekend?
Kevin King:
No, it’s over. Yeah, we do it over the weekend. Yeah, it’s over.
Charles:
Gotcha.
Kevin King:
Yeah, it’s always over the weekend. So I know that some of the faithful in certain religions that might be Uh-huh, uh-huh, but we’ve dealt with that. Where someone, they came in on the Thursday, they were able to participate on Friday, and we got them in on Friday, Friday at sundown to Saturday at sundown. They just went back to the room and did observed the faith and then came back out for the party that night, and so we can accommodate. We can accommodate. Food-wise. We do it at all of our events. We have kosher food, we have everything. So, you know we accommodate. The only thing we don’t do is if you ask for something illegal, you know we’re not going to bring them.
Charles:
Right.
Kevin King:
We’re not going to not going to do that. Uh, uh, but no, yeah, so yeah, that’s November 13th to the 17th in Austin’s Market Masters and um. At the time of this I don’t even know if any tickets are available for the hot seats. The hot seats are are. Uh, just went on sale in um in June and so I had to double check and see if there’s even any available. But audience tickets, there’s probably a few, but you’re there in the audience, for sure.
Charles:
That’s if I don’t upgrade. You know that.
Kevin King:
That’s right. That’s if you don’t upgrade. That’s an awesome event. It’s probably my premier event, even over the regular BDSS which is in Nashville next year. Maybe you’ll finally get to come to a regular BDSS.
Charles:
Right and yeah.
Kevin King:
And which is on a Friday and a Saturday, by the way.
Charles:
Listen, it doesn’t matter. Listen. Yeah, it’s not a religious podcast, right? My observance is not exactly a hundred percent but.
Kevin King:
We’ve had guys, one of our sponsors, you know they, they, he’s very observant and when it was sundown on Friday until sundown on Saturday he would go to his room and they were a sponsor and he’d bring another person from the company with him and that guy had to take him the food, had to open the door, had to push the elevator buttons. He couldn’t do anything, which is, you know, that’s, that’s, that’s diehard, but there’s a lot of people that do that. And then I know a lot of people that say, yeah, I’m Jewish and you know, whatever it doesn’t, I go to the synagogue when you know when I can, but it’s all good, so. So, speaking of these, I mean of these how long have you been selling? What’s your story, what’s your background on this e-commerce?
Charles:
And I’m going to give you the short version. I started selling online on Amazon. Amazon, Ebay, 2010. 2010, I was 14, 15 freshmen in high school, so I guess that puts me at 15 years. I’m 29 now. That’s how long I’ve been selling on Amazon, selling being entrepreneurial. Well, it goes back to I think it was like fifth grade selling Coke cans. It used to be on special in Walgreens every three weeks. Used to stock up when it was on sale and sell them in school.
Kevin King:
So, you used to take a backpack full of Coke cans to school.
Charles:
You got it. You got it and then, when I had competition, when I had competition, because some people caught up on that, I started raiding my parents’ closet for the coolers we used to bring to the beach, so that now I can upsell a cold can of Coke.
Kevin King:
So you actually took a cooler to school with ice in it and Coke and they allowed you to put-
Charles:
No ice, but I just made sure no, I just made sure to put them in the fridge the night before.
Kevin King:
Wow, that’s, that’s. I mean. That sounds like something I did when I was about that age. Uh, this is in the days before, uh, streaming or anything, that you had to actually go to the record store and buy albums. CD’s didn’t even exist, it was albums or cassette tapes, I think. And I would listen to Casey Kasem Billboard Top 40, every Saturday would air on the local pop radio station. He would list off the top 40 hits of the week based on airplay and sales, and I would have my notepad and listen for three hours and make a list and then I would type that up and make a little brochure and on Monday mornings take that to school and say here’s the top 20 albums or top 40 or whatever I did. If you want one of these, they’re $17.99 a piece or something like that and people would order them. They would bring me money and give me cash and then on Thursdays I would go to have my mom, would drive me the nearest record stores, like 20 miles away at the time. So you drive me there and I would buy what everybody, everybody ordered for like $13.99 a piece and then take them back on Friday and deliver them all and make a $4 profit on each one.
Kevin King:
So it was a similar, similar kind of story and I’ve done multiple things like that. But, um, that that’s cool. So how did? So Amazon in 2010 I was selling on Amazon in 2010. What were you, what were you selling used stuff? Uh, like I would say, what, if uh have one to sell, click this button. And it was like or what are you doing?
Charles:
Yes, yes yes, oh my god, you just hit it like you hit a nerve. That’s 15 years old. Yes, have one to sell quick here. And it was. It was resale, I think, new, like other or something like that. That was the first time. That was the first time. So there were two, two elements of it. Number one regular resale or retail arbitrage. The second element when I started to get a little more advanced and I actually got suspended something that got lifted pretty recently because I went on, I don’t know what the Alibaba was of that time or something like that and I ordered PlayStation controllers and I sold them as like Sony PlayStation controllers and obviously they weren’t Sony and I obviously got suspended because of it. I want to get back into the Amazon game when I’m an adult or something like that, and I had to appeal my decade old suspension so that I get out of Amazon jail, so I could do it for real and it happened. It happened I think it was officially. It was definitely over 10 years ago and I had to dig up those emails and the scam invoices that it was. It was like, yes, I did bad, I did bad, I did bad, I did bad. I promised a decade ago I’m, I’m. I’m no longer a kid and a seller performance, and they’re good graces. Let me out of Amazon jail.
Kevin King:
Yeah DHgate is famous for that. DHgate is a you know some people were talking about that when the terrorists came back in uh earlier this year. Uh, oh, just get stuff off DHgate instead of Alibaba. DHgate’s a plethora of counterfeit.
Charles:
Right right, I just that was. Yeah, that was on one of your prior episodes. Uh, DHgate was uh a serious thing. That the person who met you at Prosper as well.
Kevin King:
Yeah, so, yeah, so that. So that’s interesting that they still had you in there from way back then.
Charles:
Well, I don’t know if they did, I don’t know if they did.
Kevin King:
Did you just say I was just a kid?
Charles:
I did. I did say that. I said I was just a kid in high school and listen, I’m uh, I’m an adult now. I know what I did wrong and so on and so on and uh, yeah. But going back the decade plus, yeah, it was uh. If you have one of these, you could sell it on Amazon. I clicked that little button and I just kept on finding different SKUs and finding different SKUs until I was shut down because of that. And now I’m a real guy. Now I’m a real guy.
Kevin King:
So you weren’t arbitraging Coke cans on Amazon.
Charles:
I was not arbitraging Coke cans.
Kevin King:
Alright, alright.
Charles:
A good segue into I’m an honest believer in arbitrage. It’s far from dead and it’s something I still do till today.
Kevin King:
So how are you doing it today? I mean, that’s a quick win for a lot of people, a lot of people listening maybe like they haven’t started their journey on Amazon yet, and I think that’s how I start. I mean, I’ve been selling on Amazon since 1999 or 2000. Something like that. Basically, I was doing the same thing. I would put up, you know, if I had a printer in my business or an old PlayStation or something. I would list it on eBay and I would list it on Amazon. With a, you got one to sell, sell here, and whichever one sold, first I took it and then that that evolved into selling calendars and some other stuff. But when I, in 2015, when I decided to actually start doing what people call the selling on Amazon now, which is basically a private label FBA game, I wanted to get my feet wet and I was like, well, how does this process work? And so I actually went locally to a dollar store and bought some toothpaste, Sensodyne toothpaste or something, sent it in just to see the process. I had to send them a receipt that showed I bought 10 of them or whatever to get approval. And I went to a local barbecue place. That’s the Salt Lick, that’s got their own barbecue sauce that’s hard to find on Amazon and bought a couple of cases of that and shipped that in just to see how’s it worked to do FBA labels, how’s it work to ship everything, and so it’s basically not quite arbitrage, but in a way it’s. But I think arbitrage is a great way for someone who doesn’t have money to get started, to actually get the ball rolling and actually get some money-
Charles:
And that’s how it happens.
Kevin King:
Figure out how the system works and what you can do, and then then you can go from there. So how are you doing? There’s online arbitrage and there’s actually foot on the ground going into the store or even people. I remember I did a garage sale and I was selling a bunch of old CDs and there’s some guy there. I had like seven people. They’re like right there seven o’clock in the morning for my little garage sale. Uh, this is like seven or eight years ago and there was scanners on their phone, just like just going through the CDs figuring out which ones they can. You know which ones are I’m selling for a dollar that they can get 25 bucks for on on wherever they’re selling them. So how does that work today? How are you doing it today?
Charles:
Well, today it’s you have to get the most kosher invoices you can out there, not only kosher invoices but contacts at the company who can vouch for you. That’s the only way you’ll get away with it without having tons of inventory stranded by FBA on a whim, which you’ll still get anyway. And the only way you’ll get out of it is with authorization and the contact. That’s the first thing. Second thing when you talk about–
Kevin King:
So going to the store and buying all the toys that are on discounted at Big Lots or a Dollar General or whatever and putting them on. It doesn’t really work anymore?
Charles:
It can. It can work. You have to be okay with losing not necessarily losing the inventory, but shipping in, let’s say, a $10,000 shipment to FBA, and then you get dinged for an inauthentic product, even though it’s authentic, and no Amazon rep will ever reactivate that ASIN just because either they’re not exactly looking to reactivate it or they just don’t want to give you the time of day to be helpful. I mean, any Amazon seller knows what that sentiment’s like.
Charles:
It’s not dead. It’s not dead. It’s a lot harder and riskier if you go about it that way.
Kevin King:
So how are you approaching it now? How do you find something arbitrage? Do you find someone that’s just not on Amazon? You’re like, hey, I can throw these up there and uh, basically it’s almost like you’re buying them wholesale in a way, and with their permission, or are you actually doing arbitrage or looking for those gaps or price difference?
Charles:
A little bit of both. A little bit of both. You know, if I tell you I have to kill you, but it’s a little bit of both. It’s a little bit of both. Okay, but that’s on the arbitrage front, which is not the only thing. It’s a train that should be ridden. Whoa, what’s the word? Ridden out by everybody, but it’s going to go.
Kevin King:
So you do a little bit of arbitrage, but you’re also doing. What else are you doing?
Charles:
The private label end. The private label end. The private label end. Listen, the way the business started was our field of specialty was in the home and kitchen niche, so whatever we were trying to invest our efforts into was home and kitchen. So we said let’s start this business, whatever it happens to be, with Amazon, and it was retail arbitrage in 2016. Foot on the ground, we went into dollar stores from New York up to New England finding light bulbs on sale I think the statute of limitations passed. There was like a state rebate or something like that and we bought them, sold them on Amazon FBA, Ebay as well used that money over years and years and started investing into gadgets in the home and kitchen space. We got into the field of making molds, getting into touch with factories in China and so on and so on. That’s something. So the general structure of the business is using retail arbitrage to funnel into a private label business, because one day that retail arbitrage will not be, in my opinion, there for the taking. Everybody will have to face some online presence at some point.
Kevin King:
So the retail arbitrage allows you to generate a little bit of cash that you can hopefully then reinvest. Start small and grow, because you can flip. You can grow as you flip. And then it gives you an idea of like what works, what doesn’t work, how the process of shipping in works, and then you can take that and like, see what you like selling, what doesn’t sell, actually leverage that into private label, and that’s basically what you’ve done.
Charles:
That’s it. That’s it, and you know like as recently as recently as last week, we’re, we’re uh, we were considering a new product doing the keyword research and everything you’re supposed to be doing.
Kevin King:
Just go buy 50 of them somewhere and put them up and get the data.
Charles:
That you could do. That you could do. And I was asking questions that had to deal with oversized shipments. Right now, in my current state, I know exactly the fulfillment costs and what it physically requires to store something over 18 inches and the difference it would be to the warehouse logistics to make a shipment to an oversized facility instead of a regular facility like the ones that we all know AVP1, JFK8, and so on. So when I was evaluating that new product, I thought to myself this is an oversized product. What has to go into this calculus is that I’m not going to be able to throw this on any shipment with any other product. This is going to have to have specific shipments going to a specific warehouse. That experience would not have come if I wasn’t involved in the volume of retail arbitrage that I was still today.
Kevin King:
So the products, your private label brand is a home gadgets, is that? Do I understand that correctly?
Charles:
Yep. Home kitchen gadgets. Yep. Think your dish racks, your pails, your toothbrush holders, soap dispensers, stuff like that.
Kevin King:
And so you’re. You said you’re creating molds for these, or are you doing, finding something and just modifying it, or is it all custom, like you’re designing it from scratch?
Charles:
Both, both, it’s, both, it’s. It’s. It’s taking your Vogue AI stuff. It’s taking your negative customer feedback. It’s taking your best sellers finding a niche that the best sellers aren’t satisfying, going for those. It’s a combination of all of that, and there was even one that we were producing domestically in the United States. The manufacturer cut us off, so we just said we’ll make our own mold. At that point.
Kevin King:
Okay, yep, awesome. And this is you by yourself or you have partners in this?
Charles:
No, I’m partners with my two brothers. Dad promised us he’ll be able to help us in business, but he won’t give us a penny, so it’s something that we have to bootstrap. Listen. Kevin, if you’re born to immigrant parents, this is it. This is the epitome of parenting like the old country, and I was also blessed with two brothers with completely complimentary skill sets. I love administrative work and I used to be in the litigation field. I was a litigation paralegal but never got off of e-com, so I love paperwork, handling different administrative tasks. That doesn’t mean which is true I ran warehouse operations for two or three years at some point, took a break and now I’m back in it, so I still have that going. As far as my involvement in the business. Brother number two is really sourcing and merchandising. Brother number three is managing the third location.
Kevin King:
So you have your own warehouses?
Charles:
Yeah, yeah. I don’t believe in 3PLs. I don’t believe in 3PLs. Any Amazon seller can tell you when you outsource your warehousing and you cannot physically touch your product; it’s like you’re being held ransom. Steve Chu, who we both know, has a story where one of his friends or other sellers he knows had to actually rent a U-Haul, go to a 3PL and store his goods and take his goods back because he wasn’t getting responses from his 3PL. So, it’s stories like that that. It just makes me believe that you have to be able to touch merchandise, you can’t just simply farm it out. Uh, bad 3PL stories are a dime a dozen.
Kevin King:
Yeah, that’s that I still, to this day, don’t use 3PLs. Um, I, I, when I was the heaviest in Amazon, um, which was 2015 to 20, I mean I still sell on Amazon now, but I, my products, most of my products, are seasonal. So what I do is I get a store, I get four storage units side by side by side of this place, out kind of on the edge of town where it’s cheaper, and that’s where they offload the pallets in there. Each one of these units can hold 14 pallets and everything is off on there and I’m the one me physically is going and shipping the stuff. I mean people would be like crazy, Kevin, get somebody for five bucks, 10 bucks an hour and do that like no it’s a good workout, uh, and it gets me.
Charles:
So hold on, hold on. You’re there when and you’re there receiving trucks and loading it on the on the.
Kevin King:
Yeah well, the shipment comes in from on one particular product, the biggest one it comes in. It’s not like daily shipments. It’s not like weekly shipment yeah, I got you the one big shipment that comes in from South Korea for the entire season because it’s seasonal stuff, so we’re not ordering. And then, yeah, I’m there and then two guys they know me, they’ve known me for 20 years, the guys that come from the local bonded warehouse they come out like, hey, Kevin, we got another load for you, and you know I let them do it all and I give them $150 each tip, some water bottles, because it’s usually in the middle of the summer, in July or August in Austin and it’s hot, and then I go out there and I stick the labels on for the stuff, going into Amazon and bring some back. I have a condo in downtown Austin. On the top floor and on floor number four, I have two garages that are meant for cars, for you to park your car, but they’re not set up for that. There’s a computer there’s it looks like a Costco in there with racks and everything, and there’s a computer, uh, connected, because there’s power in the garage but there’s no internet. So I have to use my cell phone as the hot spot and to connect to the ship station and to connect to everything, and then stuff, stuff goes out of there and stuff gets moved back and forth. So, yeah, no, I now you can’t do that.
Charles:
That’s the way it was when I started the business. You tell me you still run it that way?
Kevin King:
That way, but this is a seasonal small thing. It’s a million bucks.
Charles:
Alright.
Kevin King:
I couldn’t do that. If it’s 10 million, 15 million, 20.
Charles:
No, I hear you.
Kevin King:
No, that would not be possible. But I like it because people like keep telling Kevin quit doing that, just job it out. It’s like no, yeah, um, I’ve got a system. I’m like. I’m like Southwest Airlines. You know, Southwest Airlines only fly 737s, that’s all they fly and that’s their whole business model is like the pilots are trained on every plane. You know slight nuances between the, the 800s and the 900s–
Charles:
Airbus and so. Yeah.
Kevin King:
No, there’s no airbus on in Southwest all seven—
Charles:
I’m saying there’s—
Kevin King:
Yeah, but yeah but so parts are easy, um supply, and that’s what they’ve done, so that’s what I’ve done. So the way I have the calendars business particularly set up is it’s systemized, so it’s mindless work. So I go down there and I actually still stuff the envelopes during that season, during November and December, and I listen to podcasts, because it’s mindless work, and so I feel like I’m productive, instead of me sitting on the couch or driving around listening to podcasts in 2X and learning something. I’m actually down there learning something and making money at the same time, and doing these for about a fraction of the cost, saving thousands, if not tens of thousands of dollars in fulfillment fees and having control. So I know I get that. So back on your warehouse. So you have three warehouses?
Charles:
Two. It’s two warehouses and we just closed an external office to combine into one, so it’s really two active locations at this point.
Kevin King:
And so were you seven-figure, eight-figure in sales.
Charles:
Actually because we opened the second location this year. No, we just, we just crossed from. Uh, we’re projected to hit eight this year.
Kevin King:
That’s awesome. That’s awesome. Yeah, um all Amazon. Are you doing still eBay and Walmart?
Charles:
Yeah, no, all Amazon all Amazon. It’s something you know. Last year last year, I walked into Seller Summit saying that I was a recovering addict, being so dependent on Amazon. It makes me uneasy. I’m thankful for the opportunity, but it makes me a little uneasy just because of how much dependence we have on it. Yeah, that’s what I have to say about that. It’s something that I wish weren’t the case.
Kevin King:
So are you and your brothers looking to fix that, or you’re just comfortable and way down. It’s a habit and it’s a way of life right now.
Charles:
That’s my mission this year. My mission this year is so I’m really stuck between two let’s call it obstacles. The first one is, I think of somebody, let’s say, like my mom. My mom goes and buys something on Amazon. If I ask her where’d you get it from? She’s going to say from Amazon, not a certain brand on Amazon and I think my mom is emblematic of most customers out there. They would answer the same thing. So I have to justify to myself why am I going to invest in particular brand packaging and brand A-plus content and brand imagery on the carousel if it’s just going to go by the wayside and someone’s going to say I ordered it on Amazon. Nobody’s going to go and Google my site or join my email list or join a community or something like that. The second thing is the way the business has run so far is we found a niche and we built a product to fulfill the niche. We didn’t build the product to build a community around it. I mean, can you imagine building a product around, let’s say, our six-in-one cake stand where, if it’s a cake stand that also turns into a salad bowl, that it also turns into a chip and dip thing. I mean, you could, you could turn that into a community, but that’s not what our energy was focused around all this time. So it’s both a mind shift and also it’s me accepting that some people may have to or I may simply have to buy into the idea that one day people will wake up and say, ah, brands do sell on Amazon. I didn’t just buy this from Amazon, I bought it from a brand on Amazon. Ideally, I’d like to shift away from it, but for the time being it looks like Amazon is going to be a big chunk of our sales for the near future, for sure.
Kevin King:
But that’s it. I’m looking around. When you say that here in my studio and I’m looking at I have a fan here and stuff and I’m like I don’t even know the name of this brand. I just bought a desk fan that I’m looking. Now it’s called the Cooney. I have no idea. I didn’t buy it, but then I’m looking at you know I’ve got an Apple mouse and I’ve got other things. I’ve got a microphone and I bought it because of the brand. So that’s an interesting point that you bring up there. So you’re basically selling a commodity, but how do you so? But isn’t that everybody always says, oh, that you gotta be branded, because that’s just a race to the bottom. You’re just constantly fighting other people selling commodities. So what? What’s your reaction to when someone says that, cause, what you said is a valid? I think it’s an interesting take. I want to go a little bit deeper on it. So when someone says you’re just selling a commodity, anybody can knock you off. It’s just a. So what? I don’t care about the email address, I don’t care about all the stuff that people hype, uh, I’m just, I’m making money, uh, and I’m good. So what?
Charles:
That’s it.
Kevin King:
So how do you differentiate, or do you? Or is it a constant fight against knockoffs? Even if you have IP, it’s still going to be a fight.
Charles:
Well, we do no, no, we do differentiate. And IP, I mean, it’s a toothless tiger, unless you have really really deep pockets and the person against you is pretty egregious. You know it almost never pays to actually pursue it. Anyways, that point aside, the way you go about it is you just simply keep going. I mean, we find the niche, we launch, we already have an established page and as long as we are first in the field, we have the benefit of longevity of reviews—
Kevin King:
You’re building moat?
Charles:
Yeah and you’re building a lot of rank authority with Amazon in that particular niche, so that person will basically never catch up to you unless they decide to deploy black hat tactics. That has been done and as long as you have a solid ad game and your solid SEO game, you’ll outrank the people who are trying to knock you off. That’s it as far as commodities. As long as you’re in there first, as far as we’ve seen, you’re making money.
Kevin King:
So it’s first mover advantage basically. First mover advantage.
Charles:
You really have to identify that niche though.
Kevin King:
So first mover advantage is how you can win on doing that versus some people would say, well, this is great, Charles, but you have this cake thing that converts into a taco chip holder and all this other shit. Shouldn’t you just look at Simple Human? You know they create a brand. They start with trash cans or whatever they start with, and now they have a brand of soap dispensers and all kinds of stuff, and now someone that buys that they’re like no, I want a Simple Human because it’s cool, it’s sleek, it’s silver. You know it looks modern in my modern house. And so some people say, well, maybe you should expand that into that. But you’re saying, why bother?
Charles:
I’m saying they may have a point, but the way we’ve operated until now was well, we’re just going to sell something else. I’m not interested in upselling them or capturing their email or anything later on. Whether that was good or bad is for future to tell me, but I mean I would say two years ago I experimented with inserts. Our opt-in rate was one to 3% depending on the insert, and it’s something that is an iterative process. I keep on trying to see is it worth it, is it not? Let’s say, with that cake stand, I’ve included a cake recipe book or something like that. That if they scan here, they get a cake recipe book. It’s something that I’m experimenting with, but that’s just not how my business has operated so far. It’s just been focused on making the next sale. Now this is the conversation we’re having. What is the better path forward as a business? Probably establishing community and branding. But again there’s the second obstacle of who actually remembers the brand they brought from on Amazon. That’s the second mental block that at least I have.
Kevin King:
That’s valid. So if you’re creating a brand off of Amazon, you don’t create the brand really on Amazon, even though Amazon wants you to create branding. Amazon is the shopping cart of choice. You create the brand outside of Amazon. Amazon helps supplement that brand, helps grow that brand, maybe even helps launch the brand initially. But the brand has to stand on its own and social commerce has to stand on its own on your own Shopify site and so on. Where people are then going to Amazon looking for that brand to buy it, they want to buy the cake thing from a XYZ company because they saw it on TikTok and it looks like this is a quality product so they’re actually looking for it. It’s a different–
Charles:
Yeah, that’s the holy grail.
Kevin King:
It’s a totally different marketing approach but that one does build a bigger moat. But if you’re capable of actually doing what you’re doing, where you’re finding first mover advantage and building that moat, and the only time someone comes in that’s going to hurt you is if they’re doing some black hat or crazy stuff, and then maybe that takes down a couple of your products. But you got enough products in the in the portfolio like well, if a couple of them go, we’re good. Uh, it sucks, but yeah.
Charles:
Chances are they won’t even last that long either. I mean, uh, one thing I’m sure of is that we can outwork anybody who comes after us. So I mean, if you want to, I mean I’m positive.
Kevin King:
So, are you thinking about testing this shift, or are you like ah no, we don’t need to?
Charles:
I am this year, this year this year is actually as far back as like about a month ago. I, uh, I just I just hired Isabella Ritz and, uh, I’m looking to see what she could come up with as far as her product validation. Um, I’m looking at that very approach. My, my approach was figuring out a niche, figuring out a product to satisfy that niche, so, so far, pretty familiar. The next part of the validation phase is something that we are going through together, her and I. The way I plan on launching this product is actually through a pre-launch sequence where I will be able to have that branding aspect that’s standalone, that will run through my Shopify site, that will run through my Klaviyo and that I will be able to drive traffic to Amazon from using an attribution link. I’m going to try that approach this year. This, if this launch goes correctly and if it’s on track for a successful Q4 launch at this point, just talking as far as timing, I may want to replicate it. I may want to divert more resources of our business to that process. I may have a name, finally, where I can say, hey, I’m launching another product, come back for a repeat purchase, be it on my site or on Amazon, whichever they prefer.
Kevin King:
Is this complementary to what you’re selling now on Amazon?
Charles:
It is, it is I made sure of it. I didn’t want to go too far out. I wanted it to be complimentary, at least to some degree. Once I have more familiarity with the process and I see the success rate, I’ll be able to replicate and sort of drive that ship wherever I need it to go.
Kevin King:
So you said you have a Shopify, you have a Shopify.
Charles:
Now I do.
Kevin King:
You don’t really push anything to it, it’s just people that have it.
Charles:
That’s correct. That’s correct. I mean, I played around with some ads. Yeah, I played around with some ads, you know, from November until about April and I mean that’s about it. Just I used it as a testing ground, learning, learning a little bit. Uh, tested out some email marketing campaigns. I mean I have email capture there, just in case you know. No, no, no amount of emails is too much, and, uh, that’s that’s also how I keep myself a little more educated on the DTC space. I it’s not like my, my information consumption is limited to just the Amazon field. I make sure to branch out at least a little bit into general marketing or D2C. That’s how I know what the hell the difference is between DKIM and SPF when it comes to setting up your own email domain. That’s why I know what a repeat purchase campaign or an abandoned cart sequence looks like outside of Amazon, so that when Amazon enabled those features, I actually had some experience in that it even extends to my network. My network is not just the network of Amazon sellers, it’s also those in the D2C space. All of that are just things that I’m not afraid of and I just needed to make sure that I had something external to Amazon, even though it’s not necessarily the beating heart of my operation.
Kevin King:
Are you doing any social commerce, TikTok or Instagram?
Charles:
I have the integration set up but I’m not pushing. I had the integration set up. I’m not pushing. Even somebody last week was willing to be my TikTok shop operator. They saw my whole catalog was already imported there. But I said I’m not ready to push it. I’m doing this different thing which is analyzing niche research and validation of products, and I said only one project at a time. I’m not going to overextend myself and I know the number one cardinal rule on TikTok shop is never run out of stock and I’m not ready to tackle the stay in stock 100% of the time game with TikTok while I’m running this other operation where I’m waiting to see the validity of.
Kevin King:
What are you doing with AI right now in your current operation?
Charles:
So using different tools to export keyword research and different niche findings to ChatGPT, have it analyze the potential niches and products that I can develop, even have them recommend different aspects I can add to a product. That’s one way I’m using it. The second way finding a way to integrate the special features into a certain product, into the product packaging and the product main image. So having the image creation of ChatGPT put in, let’s say, an extra slot on a dish rack. So saying if dish racks typically have six slots to put six dishes and everybody’s searching seven, I can say chat, put the fact that I have seven slots on my dish rack on the product packaging so I could put it as part of my in-image on Amazon. Probably run that through a PickFu simulation which chat can run and save me some pay crew credits. And that’s just one way I’m using AI, just one.
Kevin King:
Any other ways.
Charles:
Yeah, second way when it comes to staying up to date on what’s going on in the market, I have two ways that I actually speak about in my newsletter. The first is my primary inbox, where I read every single newsletter that comes my way and it’s a lot, it’s a lot. The second way is a sort of alias inbox that I set up and that’s like for the subgrade newsletters, the newsletters that aren’t as interested as in delivering value but they’re more interested in just capturing your email address for, I guess, future upsells. I have AI truncate all that and put it into a podcast using Notebook LM and between reading the newsletters in my primary inbox as well as listening to that podcast on, let’s say, my commutes to and from the office, I stay up to date on what’s going on in AI e-commerce marketing world. So that’s the second way, and I honestly believe that that way of information significantly contributes to your bottom line, because you just know which levers there are out there to pull.
Kevin King:
Yeah, that’s an interesting point. A lot of people in our space don’t pay attention to what’s going in out there, whether it’s what’s happening in AI or what the latest PPC strategies are. It’s information overload and there’s so many emails and so many webinars and so many online seller sessions and summits and this and they’re like I just can’t. I can’t, how do you? This didn’t exist. 10 years ago. When the AM/PM podcast came out, originally with Manny, there was like four podcasts in the space. Now there’s like 60 just for Amazon. And then you tack on all the other stuff on top of it and you got everybody. You know, every day you get hundreds sometimes of newsletters or what they call newsletters or email market for this and that and the other. How do you? How do you figure out what to pay attention to and what to ignore? How do you figure out what to pay attention to and what to ignore? How do you prioritize the time to actually spend? Whatever you spend 30 minutes or an hour, hour and a half a day, whatever. It is going through this that you’re on the cutting edge and you know what’s going on.
Charles:
It comes down to something. It’s actually. I told my friend Kevin Sanderson last week, everybody has an angle, everybody. If they have your email address, they have an angle whether that angle is to get you to buy their course, to onboard to their agency, to give back to the community with no strings attached, get affiliate commission. None of the above. Everybody has an angle. And you know, outside of Amazon, I personally love the world of news and politics, love it. I even comment on it publicly. But the news outlets have an angle. So I view it as something that’s fun to look at. All the different angles out there contest different viewpoints, compare and contrast it versus others. I guess in the field you have your ultra right and ultra left kind of figures. You have people who believe in, for example, retail arbitrage is completely dead, don’t touch it with a 10 foot pole. And you have other people who are actively promoting a course saying buy my retail arbitrage course on how to sell on Amazon, you can make millions. I don’t think either of those are really wrong, but I think both of those have valid points. I look through both extremes and I look through the different keeper charts, I look through the different history of product ranking and I also look through the amount of sellers on that listing to see is this really a viable product? Bigger picture is this really a viable path forward, even with you, Kevin, I think I think a couple months ago I asked you where your source was for being able to list for a more expensive price on yeah, it was on Amazon prime.
Kevin King:
It was a buy, yes, buy. how do? How do uh? How do you have a more expensive price and not get penalized for listing it more expensively on your own website on Amazon?
Charles:
Yeah.
Kevin King:
I said, well, if you have the Buy With Prime badge, then they won’t penalize you if you’re in the Buy With Prime program. And then you asked me like yeah, that sounds too good to be true, or something to that effect.
Charles:
Right, right. I said where’s the source?
Kevin King:
What’s the source of that?
Charles:
Right, because I’m looking through all this content with a very skeptical eye. It better be sourced in primary data, and especially when it comes to Amazon and compliance, no question about that. You’re not going to risk your entire business, which, I hate to say. Most sellers are probably in my position as far as the gross revenue stream comes, and you don’t want to take any unnecessary risk that you don’t have to. So that’s how I keep—
Kevin King:
And I told you the angle direct from the horse’s mouth.
Charles:
You did, you did. I’m not specifically leaving it out. But you see, I know your angle is number one. It’s like you and Ritu Java are the best people at. Just your angle is delivering value. You see it from the way you even launched it with all the incentives. You launched your newsletter with. Another, and I think I also told you that same conversation. So we were dealing with Liberation Day and the tariffs in April and people were looking for tariff mitigation tactics. One of the biggest tariff mitigation tactics were using FTZs, free trade zones and bonded warehouses. The amount of misinformation that was going on was horrible. I thought to myself wait, I have access to a great freight forwarder, Pam Kael from RPC she’s amazing and let me get her on and we were conversing back and forth what we can do to alleviate the tariff situation. I did a ton of research because I don’t have a 3PL. I have warehouses of my own, locations of my own that I could have converted into FTZs. I did that research and she did her research on what Customs and Border Patrol were doing at the ports.
Charles:
We had our own webinar and we heavily researched everything with sources and references something that would put any AI bot to shame, but we did it with humans. I promoted the webinar and I promoted other webinars going on in the space as well. The other webinars falsely claimed that if you put your goods into a bonded warehouse or an FTZ you pay the effective duty once the items enter the American economy from the FTZ or bonded warehouse to the American economy. That’s not the effective rate you pay tariffs on. Pam was the one who found out there’s something called PFS privileged foreign status where the tariffs actually got locked in when it entered the country, when it entered the FTZ or the bonded warehouse. I’m not going to get into the. It entered the country when it entered the FTZ or the bonded warehouse. I’m not going to get into the difference between the two.
Charles:
But subsequent webinars were saying that really illegal information where no scratch that. Take that out. They were saying misinformation. I mean that just wasn’t true. And imagine you would have to be stuck paying 145% tariffs when a few weeks after that it went back down to 30. And legally you’re still on the hook for that differential of 110, right, 115. So when I look at things with that kind of skeptical lens it leads me to question. And when it’s not based on fact, I actually look it up and I call it out, and because I consume so much, I have what to compare different data points against and as soon as I find the primary source. That’s how I know what the truth actually is. That’s how I get into the whole content creation space too.
Kevin King:
So, speaking of that, you just recently launched a newsletter.
Charles:
Yeah.
Kevin King:
And what’s the motivation? I mean, you did the webinar. What else are you doing content-wise? I know you post a lot on LinkedIn.
Charles:
Yeah.
Kevin King:
And then you decided to branch that into a newsletter. Walk me through that of what you’re doing there.
Charles:
It’s actually the two go hand in hand. I saw such a burning need, you know, being that I did so much research, being a warehouse operator and owner, and then the miss and disinformation that was going on. As a result, I said, wow, let me just do this webinar. I’m just doing it for myself. I want other sellers to have accurate information. And don’t get me wrong, this is not a selfless thing. There are affiliate links in there, but I’m not sure I’m the only guy who’s on LinkedIn and has their own newsletter that doesn’t have an agency of their own. I’m simply putting information out there that I consume, plenty of it, and we just went over it. I think I go to over about 20 conferences a year and go through tens of newsletters a day and all of that, all of that I prepare. All that is in the welcome sequence of that funnel. It’s completely free and my angle really is based on. I’m a follower of Scott Galloway, NYU Stern business professor. Everybody has a personal brand. Whether you decide to control it, mold it, take shape of it is up to you, and that’s what I’m trying to do.
Kevin King:
So what’s next for Charles and company?
Charles:
Charles is just going to put whatever value he can out there. Subscribe to the newsletter.
Kevin King:
How do I do that?
Charles:
CharlesTheSellercom or JustASellerNewslettercom that’s the title I came up with Just the Seller, no agency, justasellernewslettercom, and you could sign up there. You’ll get every value prop I put out there, and the one thing you’ll know is my angle is I’m not trying to sell you on anything.
Kevin King:
And if they want to follow you on LinkedIn or somewhere else, can they do that too, or just go to the newsletter.
Charles:
Going to be available at LinkedIn, but I mean fair to say that whatever you’ll find on one, you’ll find on the other. Follow me on both. How’s that?
Kevin King:
Awesome, Charles. I really appreciate you coming on. I’ll probably see you at another event coming up somewhere. If not, uh, I’ll see you in November at Market Master.
Charles:
Yeah, it’s not a probable, it’s a will.
Kevin King:
Thanks, man, appreciate it.
Charles:
Alright.
Kevin King:
Do these podcasts? The time flies when I’m speaking to an OG, someone that’s been an entrepreneur since they were in diapers, basically can swap stories, and someone that actually looks at both sides of everything, whether it be business or life, takes a look at the both extremes and finds that that probably that truth somewhere in the middle. That’s that’s really cool that Charles does that. Remember, you can subscribe to this podcast if you’d like, by hitting that subscribe button on Apple or Spotify or here on YouTube. If you’re watching this on YouTube or wherever you may be watching it, if you like this episode, be sure to share it with a friend, and I’ll be back again next Thursday with another edition of the AM/PM podcast. But in the meantime, make sure you subscribe to my newsletter, billiondollarsellers.com. It’s totally free. Brand new edition every Monday and Thursday. See you again next week.
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