He Hit 6-Figures With 2 Products & A Facebook Group

So a couple of years ago, a young kid came up to me at one of my events and he was like, hey, Ryan, just want you to know, you're my hero now. It was a really, really cool moment, but I didn't know who this guy was and I didn't see him until several years later. And several years later he had launched a business. And I didn't know this, but he actually took his first sale while he was at one of our events, which he talks a little bit about in this podcast. Well, he messages me a few months ago and he says that he was going through an exit and he was selling his business. So I invited Andre onto the show to share the whole story. I didn't know. A little less than a year into the business, he lost everything. And he talks about the fact that he basically had to start over and he still had a meaningful exit shortly after that. And the second thing that I want you to listen to is the perfect process that Andre used to actually build and then recover the business. Because he followed what we talk about in my book, 12 months to 1 million to a T. He built a very small audience. He launched to that audience, he listened to that audience, and he didn't care about things like Amazon algorithms. And that allowed him to have a loyal enough following to carry him to the point where he had a meaningful business that he can sell. This is a beautiful case study for those of you who are early in your journey or thinking about starting this journey. So please join me in welcoming Andrey Sedla.

Andre, welcome to capitalism.com to kick things off, I think congratulations are in order. You just had an exit, my friend.

Thank you. Thank you so much. Thanks for having me.

Of course. So you just closed like you just had your exit within the last couple of months? I believe so. So to kick things off, tell me what you can tell me about the exit. You can just tell me whatever you feel comfortable sharing about size, timeline, why you did it. Just give me an overall summary about selling the business.

Yeah, absolutely. I think I can share all of most of the stuff, if not all of the stuff, because I did confirm with a buyer, he had no issues at all. So I sold my business, which is like 3 year old business, for half a million dollars. So 500k. Why did I sell it? Basically just following my gut. I wasn't hundred percent sure whether I should, but my intuition said that I'm ready for something new. So that was the main decision maker there. Yeah, that's about it. That was the biggest thing that Happened to me last year and I'm still living through this now.

A few weeks ago, you sent me a message that said, ryan, you were right. I can sell this for a lot more than I thought. So tell me what you meant when you said that and remind me and everyone listening about that conversation. We had me telling you that.

Yeah, that was a fun conversation because that conversation was. The original conversation about exiting was, I think in March 2020. So right around the time when Pandemic came in and it was new to everybody. And I got scared just like most of us did. And since my products were in the travel related niche, that was even more scary because, because I love traveling. I couldn't, and most people couldn't travel anymore. I was like, oh, it's going down. And I already thought of selling the business at that point. And I'm like, I better get out as soon as possible.

And when I talked to the broker, initially the valuation was super low. And that's when I started doubting myself because I put so much work into it. And I felt like the brand was pretty strong. And numbers before the Pandemic hit were pretty decent too. But what's funny is as soon as we got used to it. So starting from April, every month, my new month was better than the previous one every month, my revenues and profits were going up months by month by month by month. And by the end of the year, the business was making more than it has ever been making. And I sold it actually in Q4. So the last two months, November, December, the new owner was making much more than I have. Have I been making that business? So that's a little bit of irony there, but still no regrets. It's been quite a journey.

That's great. Good for you. And I mean, the last time we saw each other in person, you were still kind of deciding what route you wanted to go with this business and with your career. So now you've kind of gone through, you've gone through the exits. You said you were following kind of your intuition about what to do. I'm curious if you would change anything about how you got to this point based on that kind of uncertainty that was floating around a couple of years ago.

That's a big question. There's definitely a lot of lessons learned. So with a new business, I'm thinking of, I'm going to implement the stuff I learned. But if I summarize it, I'd say there are good things and not so good things. So good things. I always focus on long term and I'M building a brand and not only depend on Amazon. So I was already in the process of diversifying my sales channels with that business. So that was a very big positive which I would like to take to the next business as well. Not so good. Things were probably focusing too much on Amazon algorithms while I could focus on building stronger relationships with my clients and my strategic partners in order to grow the business.

Expand on that. Because I preach this and it's good to hear somebody else say it.

I know. Well, one of the things I started doing pretty late in my opinion is working with influencers and I only tasted how good it can be around the time I sold a business. So I already started having some sales generated by people who talk about the products on Instagram, YouTube and elsewhere, wherever they talk about it, only around the time I was selling. So I was like, oh, if I were to do this for the last three years, not just last time year, I'd probably get much better results and I'd be able to diversify off Amazon sooner, you know.

And tell me about those relationships. Towards the end of your experiences being the owner, what type of results did those relationships create for the business?

In all honesty, the results were not impressive yet, but I could see huge potential and I really enjoyed working with people versus Amazon's AI, you know, so what was nice is content that was created by those people was genuine content. They really enjoyed the quality of the products I created and I could reshare it everywhere. So if you measure only the sales they generated, it would not be comparable whatsoever to what Amazon generated for me. But the effects of being able to share those images and videos with my Facebook community that I built for the brand with my Instagram with even Amazon post.

Exactly right.

Human element to the business and I.

Think so much and so, so often entrepreneurs who are running brands are looking at an influencer sponsorship like a one time transaction and so they're looking at spent a thousand. I should make a thousand. But when you are running a Facebook ad, you don't think about it that way. You think about the, the, the long term customer value. You think you don't expect to break even on day one. You expect to lose at first and then make it back over time. But we forget that mindset when it comes to influencer sponsorships. It's so funny how sellers just completely forget that piece. So Andre, you've got some lessons that you're going to take into the next business. You just made half a million bucks which isn't going to allow you to Never work again. But it is more money than most people have before they're 30, before they're 50, and you've got it sucked away. Tell me how it feels. Do you feel surprised? Do you feel stressed about it? Do you feel excited, relieved? Tell me about it.

I felt differently at different times. So when I was getting closer to the sale, I felt excited because I felt that someone, and actually a lot of people expressed interest in the asset I've built, so that felt flattering.

And also for me, as an immigrant, my parents probably have never made that much money in their entire lives, so it does feel great. But as soon as I got the money in my bank account, I looked at the number, didn't mean anything to me, and I was like, oh, it doesn't really matter that much. The only question is, what are you going to do with this now? What's the next step? And knowing what you know now, obviously you can build something greater. What is it? Focus on that and keep creating, you know, because that's. That's what I do best.

So let's go back to the early stages when you started this business. Like, how did you get into this business? Why did you go into this niche market? And what were the first six months like for you as you were grinding it out?

First six months were fun because I.

Actually, I set a goal for myself to have very first sales, to be an entrepreneur by the time I joined the Capitalism Conference, 2017. So when I flew in and I saw you for the first time in person, December 6th was my first day of sales.

Amazing.

Ironically, yeah, because that was the goal. And I, like, my inventory got stuck somewhere, so it got delayed. I was pretty disappointed that I'm flying in. I don't have any sales. I'm just a one entrepreneur still, you know. But first day of the conference, I checked my app and I'm like, oh, it checked in. Oh, I have first sales. It works.

That's amazing. I know that part of the story. That's terrific.

Obviously, I met a lot of great people there who kind of steered me in the right direction going forward. That's the reason I'm jumping on interviews like this one. I want to share and pay back or maybe even pay forward. But the journey was pretty fun. First year or so, maybe a little less than a year I spent researching and improving the product, which I would not recommend to anyone else because I feel like speed is more important. But I was such a perfectionist, and I went into a home decor niche where design really matters. So I Can fully disclose the product because I always been doing that. It's a sketch scratch off map. World Map was the first product, so scratch off map of the world. And I did see a lot of.

Imperfections. I should call in the maps of my competition. So I did improve design, like quite a bit. So many small things that I shouldn't even talk about because it's going to take an hour explaining how great it is. But I also found manufacturing in my home country in Ukraine, which enabled me to make this map United nations compliant design. Because all of the maps that are made in China how to comply with Chinese government, mine didn't have to. So that was already a great differentiation for my customers. But by the time I had it in stock, it was the best design map, the highest quality, probably the most expensive cost of goods too. I was paying about six bucks for the product versus like two and a half in China. But because of all of that, I was able to communicate that value through really high quality images and grasp enough attention and keep that momentum moving forward. So I think it was important for me to look at the business from the standpoint of, hey, how do I make this better? And I enjoy that. I love designing stuff. My background is in architecture, so I feel like I've done a really good job with the actual design.

And how old, how old were you when you started the business?

27, I think.

Okay, great. So you're 27 and this was your first business and your background's in design. And so of course you would spend the first six months over designing the product because that's your background. Like of course you would. And now in retrospect, you've got that group of behaviors out of the way now you're like, you know what? Speed is more important. I think I should have just been focused on selling more, getting sales out the door as fast as possible and iterating as I go. That's what I'm hearing you say.

Still, even though I did wait a little bit and made it a better product.

It was not too late in like for that niche. Like some niches are fairly short term. This one fortunately was not. So the higher quality was appreciated. But what was interesting that happened in the first half a year is a huge loss at a time for me because I was very confident. Sales were going great. I launched in Q4, so it was very positive in the beginning. I was like, oh, I don't know anything about this and it works, you know, so that felt amazing. But as I went and I was learning More and more about it. And the product was ranking better and better. My community was growing. I was like, okay, this is going to be my big thing. I need to focus. I borrow some money. I bought enough inventory to stay in stock for quite a while because I quickly learned that you should not go out of stock. Never, Never. You know, so I did order a lot at that time. It was 5,000 units. And in summer 2018, it arrives at to Amazon warehouses. And I started receiving 1, 2 star reviews, like lots of them and many, many emails every day. And people were basically saying, hey, I'm using this scratch of map, but I can't scratch it. So there was a clear quality issue that I could not foresee. And at that time, I did not have proper quality inspection process. I just trusted that European quality is just the best. So what I had to do is recall all of the inventory. So in total, about 5,000 units have it inspected just to estimate how big the issue is. And the Results were like 10, 15% does not scratch well, but you only determine that if you scratch. So obviously 5,000 units are just not sellable because I wouldn't risk selling 80% of them potentially scratch. Right. And yeah, then I calculated my losses was like 35 grand in total. No, not including being out of stock for the next five months. Right. And around the same time, I'm actually losing my day job. So that was quite a punch in the mouth.

Okay, so this is what, six months in? So this is what, 2016, 2017?

No, this was already. So my first sales were at the end of 2017. So this was already 2018. Beginning of summer.

Okay, so beginning of summer 2018, you are now about to lose your job. You got negative reviews coming in on your listing, and you're just out $35,000 in inventory plus shipping. Yeah, well, in money saved. Right. That's not just sales. That's money. It's retained earnings and you're out of stock for five months. This is. I mean, this is a. This is a country song gone bad. Like you've lost everything at this point. So that's two years later you were prepping for exit. So how the heck did you turn that ship around?

Focused on what I can do. Right. I obviously wanted to get back into the business. I love the audience I built, the customer I served. So I couldn't let them live with the worst quality competition out there. So I looked for ways to improve the quality inspection process. I built it myself pretty much because in Ukraine, the infrastructure is not there. You can Just go and call a few people and hire an inspector. So I had to train someone to become my inspector, develop a proper process with the manufacturer there to ensure nothing like that can ever happen in the future. In the meantime, I would deliver food just to make ends meet, and rent out Airbnb. So I had a private room that we didn't use, so that was rented all the time. And also every weekend, we live in Kelowna, so it's a beautiful part of Canada. We'd go and explore some mountains. In the meantime, we'd rent the entire town home just to help pay for the mortgage.

So you were delivering food, renting out your place, doing whatever you could to get by while you were training. Most people would have given up at this point, right?

Yeah. I thought about finding another job, but I was like, ah, I'll give it a shot.

This is. I love Andre. I love this story because that is like the quintessential losing everything story.

And I still have more, but.

Yeah, but, but you. But you still kept going and then two years later got a half a million dollar check, which means that, like, we at least know you won't be delivering food and having to rent out your place if you don't want to ever again.

Right.

Like, you're. You're now ahead. You might. It would have been easy to feel behind at that place. And that's the thing that I want to highlight is so many entrepreneurs are. You're into this just like you were and are looking at this, saying, I feel behind because of X, Y and Z. It would have been easy for you to look at it that way, but two years later, you sold the business and got a big fat check. So it sounds like you kind of had to start from square one. The only thing that you had was a product, a little bit of a community that you had built, and that you started back to the grind, got product back in stock and started going again.

Yeah.

So how long did it take for you until there was consistent sales again for you to kind of have momentum?

Fortunately, it didn't take too long because I relaunched in Q4 and my products are giftable. So there's organic traffic coming in, searching for these products. So that was an easy part there.

Beautiful.

But I had to plan in advance for it and push some triggers, like get a loan from the bank to pay for the inventory, for example. And later on, I had to sell my town home to pay off the loan. And since I sold it, I was like, oh, I always wanted to build this business. So I have freedom of time and location independence. So maybe I should fly to Southeast Asia and taste that digital nomad lifestyle at the same time.

Love it. I love it, love it.

That's what I did. I sold a townhome, I paid off my line of credit, invested enough in inventory. Sales were going strong in December, but I was already on Bali exploring and working just like half time, like part time work, right? Yeah, that was quite a turning point for me to see the sales coming in and like December was already 50k a month in sales after being -35k in losses.

Amazing. Good for you. Now you've mentioned in passing the community side of this. I want you to talk about what the community was, how you built it and how it helped you develop sales.

I'm glad you're asking this because now that I look back at it, I think I probably would consider giving up more seriously if I did not have that community. Because people knew me personally, right? They knew that I'm working on this. They even knew about the issue because I talked about it there and was.

This a Facebook group?

Yeah, it was a Facebook group. Yeah. It's called Traveling Civilization. The brand name is Travelization, so it kind of rhymes and it probably explains what the brand is about. So for global citizens who enjoy traveling, exploring the world and at that time the community was probably like 2,000 people or so. So I started building it before I even launched the product. I knew I wanted to be in the travel niche because that was my big dream of life. That's probably why I moved to Canada from Ukraine. I wanted to be like global citizen, you know, so it was like serving the same kind of person I am. That was the best part about this business. And because I was so open and I was built relationships with these people, I could not let them down and not relaunch the business and not get back on my both feet and create something great for them, you know.

And how big was that audience when you were launching and growing sales?

At the very beginning, I think it was under a thousand people, which to me felt like a lot of people already. I don't think I have that many friends.

But when I was selling the business, it was already more than 6,000 people. And it's definitely a great tool if you want to launch products, whether it's Amazon or elsewhere. For Amazon specifically, because I can speak from experience, I could launch new products that I would design with them together. Like the next product was the United States national park map, Parks map. And I knew that those people Travel to national parks. So I could ask them, hey, what would you put into this map? Do you think this is a good idea or would you design it this way and show them images all along the way and within like three, four months with to design that new product together and then they feel a part of the journey. And then Thursday, it's live on Amazon. I give them that little discount code just for extra push, give them that scarcity is going to expire like two days later and you have all of that organic traffic. You don't need to give away the products. Right. You don't need to ask them for reviews. They already know that I need them. Right. So it was pretty easy at that point to launch something.

So Andre, I mean it sounds like you, you built up a small Facebook group. You compared to a lot of Facebook groups and that was enough to kind of get you the collective sales that you needed in order to get lift off. Right. And then it started to build up some like organic reach and organic, like organic following. That's continued to support that group. Question to you is, you said that you knew a lot of these people personally. What does that mean? Were you documenting the experience of building the company in this group? How did you interact with them to the point where you felt like you.

Knew a lot of these people? Yeah, first I started before I had the product. I just invited everybody I knew all over the world who like traveling and I would share some useful content for people who like traveling. Not necessarily create, but very often just share what I found useful. And then I would always ask these people, hey, if you think somebody else would enjoy being part of this community, I'd appreciate inviting them. So they did. And then later on, since I was also part of other travel communities on Facebook, I would become friends with someone there, join, like add them as a friend on Facebook as well and ask them to join the group. And it was growing and growing and growing. And every product I sold also had that little insert, basically motivating people to join the community because it's an extra value for everyone who buys a travel related product. So they would join, they would.

Very often introduce themselves as, hey, I'm traveling, I'm from North Carolina, I've been to this many national parks and I'm excited to be part of this community. And then I talk to them and then I message them and like just as imagine yourself being a teenager trying to date a girl, how actively you want that? That's pretty much what I was doing with each and every customer. I had Right. So, yeah, I think it matters a lot. And then also Instagram helped a little bit. Those influencers I mentioned in the beginning, mostly they were on Instagram. Some of them had YouTube channels. So they would generate some buzz for the brand that way as well. And a lot of people from the community I actually met in person. So later on I flew to Southeast Asia. I spent like eight months traveling Southeast Asia, Mexico, United States. And in many of these places I would meet those people because they were there. Yeah, that was pretty cool too. And I am still in touch with them. Like, I enjoy being friends with these people because we share the same values.

Yeah, that's amazing. I was working with one of our members of the Incubator a couple weeks ago. They're talking about how do I interact with this influencer? And I was like, how would you interact with a friend or someone that you were trying to date?

I mean, would you be asking for something from the get go or would you be focusing on building the relationship before you went for the ask? And that completely flipped the relationship with that influencer and you were doing the exact same thing with your customers?

Yeah, yeah, I'd focus on giving first. So let's say if it's an influencer, I'd like to make them a part of the brand somehow. I'd be giving some compliments, sharing their content, talking about something they're working on, and bringing people to their channels, you know, and then they're like, oh, he's so great for me. Like, what? Like, how can I help you?

You know, that's exactly right. That's it. You treat it like it's an actual relationship and watch what happens. And my guess is that that group also helped it be easier to get reviews and to get more organic traffic and more organic sales. Increase conversion rate sometimes allows you to charge higher prices than your competitors because you have an actual loyal following. That to be the case.

Yeah. I was selling the most expensive scratch of maps in the world.

Well done.

I had a competition for like 1012 bucks.999 by the keywords, it's the same product, but it's not. And mine was 30, 32 in December, sometimes 34. No problems at all to this day. I was just checking this two days ago. It's number second most selling scratch off map still on Amazon.com and I'm not even doing anything for the last three months.

Yeah, that's fantastic. So you were three times the price of a lot of your competitors.

Some of them, I'd say, on average 30, 40% more expensive than most, and you're out.

And you were the number two selling. So you were outselling most of them, revenue wise. Yeah, yeah. And so you're doing that because you have a loyal following, that loyal following backs you because they trust you and they're leaving really good reviews. And so the engine starts to fuel itself. And so now you don't have to play the price game because you have a foothold on the marketplace by being a premium brand. Right. That's just. That is just the formula. Well done. Now, Andres, some people would say, okay, scratch off map, what the heck do you make the second product be? So how did you go through that process of diversifying the product line from just being one scratch off map?

Right. Well, I definitely looked at what my competition does, but I think I spent way more time and attention on what my ideal customer wants. And since I talk to them every single day, no weekends, then I know that they're traveling not only internationally, they travel in the States. So that led me to launching that scratch of map with national parks of the United States. But later on, I looked at my emails, and I quickly figured that most of the communication I got from Amazon customers would be, hey, how do you recommend framing these maps? So, like, oh, okay, they need frames. But my parents actually in the framing business back in Ukraine, and I knew how much hustle that is. I didn't want to launch a traditional frame, but I found some alternatives that work perfectly for posters, which is a magnetic poster hanger frame. So basically four pieces of wood with magnets, and that's all you need, two at the top, two at the bottom to hang any poster. So that way I also increased my market because not everybody has a map needs a frame. Also, anyone who has any poster needs that kind of a frame. So I talked about it in my group. I launched it the same way with my following that I already had, but also on Amazon. I feel like it's also important to position yourself as a proper brand on that platform. And compared to everybody else in that framing niche, I think I created the best visuals and videos ever for that product. And also I was like, oh, it sounds like a me too product. I struggle differentiated with Me too products because I'm not that good with Amazon algorithms, all these giveaways and other shady stuff some people do. How do I still make a difference? So by learning what were the pain points, I created the magnetic poster hanger frame with the strongest magnets so even the thickest posters could be held there. And it probably cost a few cents more in my case, but it was something I could talk about. And you want to be the only solution to something. You want to be the first, the only on Amazon, the only overall, the best in some ways. And if you understand that, hey, this, this unique differentiation is something I care about very often that's all you need. Just communicated well in your images, videos, and through your community, if you have one.

So, Andre, you did the whole process, right? Like, you built the audience beforehand, you documented the experience. You didn't worry about algorithms as much as you thought about people. You kept going even when things were really rough. Two years after being basically at rock bottom, you have an exit that puts half a million dollars into your bank account. Well done. What do you do from here?

Well, I'll tell you what's happening now, and I'll tell you what I think I'll be doing moving forward.

Great.

Now I'm researching a lot of different things that I've always wanted to be in, like, niches. I'd like to be a part of that. I never thought I could be. Now I feel like I can because of what I know. Not because of the money, necessarily, because money is easy if you have the right idea, but because of what I understand about E commerce. And also I found myself on calls very often because a lot of people seem to be exiting their businesses and they want some of my help. And I'm happily sharing with them because I got a lot of help for free as well. And it may lead to something. I'm not really looking to gain anything out of this, but very often if I give, give, give, give, then it comes back in miraculous ways. But moving forward, I think I'll be still running some E commerce brands. Maybe not just one, but I'll start with one. And I'm personally passionate about health, about anything related to health and optimizing your life. So I feel like it's easier to build a brand around what you care about. And that's. That's kind of the direction I'm looking at right now.

Yeah. Beautiful. Andre, what would you say to the person who is in the situation you were just two years ago, where it feels like nothing's working, want to give up, and I've taken my licks and my losses. After six to 12 months of being in business, what would you say to yourself two years ago or somebody who was going through the same situation?

I'd ask if they would regret trying to recover everything. And if the answer is no, I would probably regret not Trying, then you gotta put all your focus into finding ways to make it work. And the question I like asking not only for myself, but also when I deal with somebody else and it's a difficult situation, I'm trying to figure out how to do this. I'm not asking if something is possible, but I'm asking how. So if I need something done, like, how do we achieve this? How do we make sure this and this happens? And I kept asking myself, like, how do I recover this business? How do I ensure this problem does not happen again? How do I ensure I make ends meet? Then with positive attitude, Obviously, the answers come to you sometimes to people you didn't even talk for a while to, and they're like, oh, I'll connect with someone. Okay, here's the solution. Just because they like the energy you're projecting. So I feel like mindset is very important because that's the energy you're projecting. And if you have the right mindset, if you're working on it every day, and if you ask the right questions, you'll get the right answers.

Beautiful, Andre. You did it right, man. So congratulations. I bet it feels good to have one solid home run under your belt. And I'm. This is. This is usually the time for somebody like you, where you find the thing that really, really does something big because you've proven that you can do it, you know the process, and now you're just doing out of pure what you want to do. So I am excited and scared about how about what you're going to do next. Congratulations.

If you ever need an investor, give me a call.

We'll do all right.

Andre, thanks for sharing with us. I appreciate you.

Thank you. Take care.

It's a true stat that 99% of business owners never clear a million dollars. And that is why I started a mentoring group called the 1%. I have helped hundreds of entrepreneurs cross seven figures. There's a reason why that's the case, and it's because we have a formula that works really well. And this year in 2021, we've introduced mastermind groups at each level in the process. That's the grind, the growth, and the gold. So when you come join us inside the 1%, you'll be partnered with other entrepreneurs who are at your level to help you get through that level and accelerate onto the next step in your journey. You'll be following the same roadmap that I teach in my book, 12 months to 1 million. That's why we have such a high success rate, getting people to where they want to be. So go to capitalism.com1, scroll to the bottom, hit the join button, and for less than you spent on eating out this past month, you'll be in a room of entrepreneurs who are pushing you to go from where you are right now to the next step in the process. It'll be the best investment that you make all year. Come join us. We're ready for you. Go to capitalism.com1.