Mike O'Connor - Slow Start To £150,000 Per Year

Hey, how's it going? It's Olly here. Very warm welcome to the Ecommerce Freedom Podcast. So, just before we dive in, I've got two special new resources for you. First resource is a PDF with 15 smash hit products on it, ready to go. Examples of products you can sell on Amazon. So you can use this for inspiration or you can just see, you know, what types of products do really, really, really well. I've even included revenue examples, so, so you can see the amount of money that each product is likely to generate on the Amazon marketplace. If you want to grab this free PDF, just go to ecommercefreedom.com and you'll see a link at the top of the page where you can grab the PDF. The second resource I want to give you is a free Amazon Accelerator call. The whole point of this call is for us to have a quick chat, right? And we'll gather up a little bit of information about your situation and together we'll develop a plan for you to build an Amazon business that either works as a side hustle for you or could replace your job. And we'll take into account your situation, your experience, your background and give you a clear set of action steps to go ahead and build the business. If you want to book one of Those, go to ecommercefreedom.com go to the top of the page and click Amazon Accelerator Call. Fill out a quick form and you can book the call. All right, thanks so much for joining me for another episode. This one's going to be good and enjoy it. Hey, how's it going? It's Oli here, so very warm welcome to this interview with Mike o' Connor. So Mike started working with me, I think it was back two years ago now, I believe was when we worked together or started working together. And you may have seen our interview that we did last year, but Mike's made even more progress. So what I wanted to do is, was have a catch up and really dive a bit deeper into Mike's story so you can learn from his journey because it's really, really inspirational. So, Mike, it's a pleasure to have you here with me today. How are you doing today, man?

Cool, thanks. Yes, going really well.

Awesome.

Love it.

So I think a great place to start, Mike, would be with your background and I'd love to dive a little bit deep into what you were doing before we started to work together, before the Amazon business started to take off. And I'd love for you to just paint a picture of how things were before we Met and before we started working together.

Yeah, sure. So it's quite interesting. So where I was at the time, I was working in the West Midlands. I'd just been divorced for about a year. I was in a bedsit, I was working for a public health company and it was really quite dead end and it was like I wanted to pull myself out of where I was. And I came across this Amazon opportunity and I thought I could combine it with my project management skills and try and look at it. So that's what I did. So I did what a lot of people do. I scouted around and I found a course. And this particular course, the way it worked was you got a folder with some DVDs in and you watched the DVDs and that was kind of it. They kind of did a question session, but unless you knew what you were doing or to ask the question, you kind of sort of flounder in the dark of the bit. So it was quite a dry course. But from that I got brave. And I know a lot of people think, oh, that first contact's really hard. And I'm like a number of people. I actually wrote a script. So when I picked that phone up, I was almost reading verbatim from the script saying, I'd like to order 200, is that okay? And I was really good. They kind of knew where I was coming from. And I ordered a product that I put into Amazon and it was great. I worked with a graphics designer off Upworks and it was really nice because you kind of then got the opportunity to put some of your personality into a product. And that particular product, it did okay. But what happened was the pay per click was getting more and more expensive as the market was getting more and more complicated and over. And also I just didn't have that depth of knowledge. I didn't have anyone to ask or bounce back off. So I kind of pulled out of that and got a little bit despondent. But I thought, you know, there's something in this. And then another opportunity came up. And in fact, it's one that Ollie's used as examples when you're trying to start again. And that was retail arbitrage. And that was different because I decided to do that in the UK meant I had more control. I could decide what went in, when it went in. And with a little bit of software, it became possible. And that Christmas, very weird. Sort of running into a shop, buying three or something, going out the shop, coming back in again, buying another three. But, yes, I did really well. I Think I made probably 6,000 over that quarter. So that then gave me a budget. And it was then I was like, I really want to go back to this private label, because that's what I want to do. I want to do my own business. I want to be something I'm proud of and just not another cog in the world. And that's when I came across Ollie. And Ollie's first presentation was about retail arbitrage. Oh, I get this. I know where he's going with this. And they talked about a bit about private label and talked about mentorship. And now that was. When I looked back, that's what was missing. I didn't have that. I had an okay idea, but didn't have a clear idea. So. So you have an okay idea and the manual doesn't tell you if you're going off track from that okay idea. But if you're talking to someone, they go, well, what are you thinking? Why are you doing this? And they go, well, have you thought about this? So that was a really good starting point. So, yeah, that's kind of how I started.

Love it. So you started off in America. You started off with. Was it 200? You said in the first order you placed, and this was following like a video or like a DVD home study course package thing. So you had all the. All the stuff, all the information, but you didn't have someone to speak with if anything went wrong, things like that. And it just started. So it started off well and it started to dwindle down. Is that what happened? You know, you sent in a few, they were selling, but it wasn't profitable.

Yeah. So what happened was it was a time when you could, quote, unquote, pay for reviews. They then got rid of all that. More people came to market, pay per click just got too expensive and so it just wasn't feasible. So learnt loads from it, but it wasn't. It wasn't right for me and it just. I knew, I knew it was there. I just needed some more help.

Got you. So then you went to retail Arbitrage, went around the shops in the uk, selling on Amazon uk, buying cheap products from shelves and flipping them and selling them for more. And then you got motivated to try private labels in the UK and then you found me and so we started working together. Right. And I can't remember Which. Was it 2017 that we started?

Yes, it would have been 2017, because I had a look back at my retail arbitrage and that was sort of. That was 216. So, yeah, it was 217 we started, remember?

So. Wow, that's three years, almost two and a half years. Wow, it's flown by, man. It's unbelievable. So let's fast forward to today then. So you started working with me. I remember we launched a couple test products and you had a few things in the pipeline. And fast forward to today. Obviously things are going well, so yeah, paint us a picture of how things are now, once we started working together and everything that's happened since.

So where I am now is I'm mainly based in the UK, but I'm about to go back to Amazon.com because I know enough now. I know the particular product I have in the uk, I know there's a niche in the USA where it's not going to be over competitive. And yes, it's amazing. It's like if you said to me, or at the beginning, right, Mike, you're going to do a test product with 5000 pound, I'll have coughed very loudly. You know, when you first start, you look at 500 pound or 500 US dollars, but when you get into this part of business, now I'm now six figure seller. When you're trying to expand what you're working on, your budgets and your expectations go higher.

So it's a big transformation. So now you're placing orders £5,000 and you know, it's not like the end of the world, you feel like it's a safe investment, you know that you're going to get money back on that investment and you know, you feel confident enough to do that. So let's get. I really want to get clear on your numbers. All right, so you mentioned there just casually that you're a six figure seller, which is incredible. So what does that mean in terms of revenue then?

So my turnover, my goal was to. Well, my goal was actually it's very close, my goal for this year. So I run April to April. I'm a limited company, I have an accountant that works for me, goes 150,000. I think I'm going to be at about 147,000 so I'm not complaining. So we're pretty close there.

That's incredible. So around £150,000 in annual turnover. And how many products are you selling at the moment then?

I'm going to get back to three core products, but I probably have six products which I want to elaborate a little bit more on. So like people who first start this, my first product was a great product, it sold well and then things changed. My next two Products weren't so good and then my fourth and fifth were better. And it was really about when you're starting early, when you have that first product just doesn't do what you expected to do. You get really down in the mouth and downhearted about it. But all I want to say is without failure, you can't learn from it. So I imported a product. It was good price margins, but what I didn't take into account was it actually turned out to be more fragile than I expected. So I ended up with a high percentage of returns. So my lesson from that was as part of my inspection, I now do drop tests on any new product. So any failure you get, you kind of come up with your new rules. I must check for this, I must check for that. So yeah, so that's kind of what you get when you get to this level. You now, I guess the best way. I now have a baseline of three products which are generating me money. And from that I can then expand my risk. So I can go for either another safe product or I can go one. I think it's worth, I think this market is going to grow. So I can go for this product because I have a baseline product already generating me money.

That's amazing. And it's pretty, it's pretty outstanding that you only have three core products and that's bringing in the majority of your revenue. That's incredible. So what would you say is your average profit per product name for those three core products?

Oh, so they do vary. So I've got a product I sell for 15 pound and I make 5 pound profit and I am VAT registered, so that's a good product. Next one sells for about 14 pound and I make about 3 pound 50 profit. But that's because I want to overstock that product and I want to reduce my stock levels because then it frees up capital for another product. My third one sells for about 20 pound and I make about five pound profit.

Wow. So aside from the VAT, you're looking at maybe 20, 30% profits somewhere around that. It's pretty in line with what we aim for. So it seems like you're doing things really well and really by the book, which is, which is so cool. So it's really interesting a few of the things that you mentioned which are just so key, like I love your attitude. You know, you launch one product and most people just want to launch one product. They want it to go perfectly and they expect everything to go perfectly. And if it doesn't, then sometimes they just give up. But I mean you didn't, you stayed in the game and you've lost, learnt the lessons from that first product and almost built up a bank of knowledge and experience that you've brought with you to your next products as you've continued to launch them. And now, you know, because you've got all that, you've got a much higher chance of products succeeding, which is what we're aiming for. That's all you want. You want to become like a product launching machine where the chance of your products doing well is really high. So the money you put into stock you get a return on. So that's incredible. So you've done 150k, three core products and a couple of other products. And how many dead products have you launched? Because this is something I'm talking about quite a lot recently with people. It's like, you know, sellers think that every single product they launch has to work, but the fact is some products might not work. So how many dead products have you launched? And then they just haven't really done what you want.

One, two, three, four, five, five, six. I'd say seven or eight.

Wow. Seven or eight. And are they. That's over two and a half years. It's not all in like one day, right? Yeah. So have they been big imports? Have they been small test batches?

So this is what's great. So one lot was off ebay because it was. I wanted to test the market. Yeah. So that was cheap, but so what? Because I knew K base it was, I did my own prepping for it. The private label there didn't work out because the other players in the market, until you try it, were dominating it. And yeah, another one which is one I touched on earlier was a, was a pizza stone which is heavy but using sea freight you get reasonable rates. It was enwrapped in polystyrene and cardboard outer. It came across by sea very well. But unfortunately Amazon delivery guys are not so careful. So unfortunately I had a high return rate on it, but the profit margin was there. So what I learned from that was personally now have an inspection service in China and as part of that inspection service is I get them to drop it from six book.

That's brilliant. Yeah, inspecting products. Once you get things moving, once you're testing lots of new products, inspection service can be. It can pay for itself, basically. That's a great idea, man. So this is the point is you've come from maybe a slower start than you wanted with a product in the US not working too well to now things really being moving forward quite fast and I just want to explore a little bit about how your life is different now that the business is moving, that you've got 150k coming in every year and you know you're now a successful seller. So how is your life now? How have things changed fundamentally since you were living in a bedsit and since you felt like you were at a dead end, massively.

I mean it's massive difference. So I'm not quite to the stage that Amazon is my full time job. So I still have another part time job but the emphasis is Amazon's my primary job and the other job is in project management. But I know at some stage in the next one to two years I will be full time Amazon. So it's given me confidence, it's given me freedom to say to someone, I'm working part time is a real great step forward and it's a tangibleness. My other job is very report based. Check out this report and analyze this. Whereas Amazon is. I found a product, I've put that product. You know, the bullet lines come from me. I put my little spin on it. Talk about our customer services and you know, you go and talk to your colleagues or your friends and go, oh, you do what? As well? And a conversation.

Yeah, that's the thing, it's fun. I think that's the best thing about the Amazon business. It's actually fun, like finding products, deciding how to just make yours a little bit better than the others. It feels like a fun competition, you know, squeezing out as much profit margin as you can, getting the best price from suppliers, getting things to sell. I don't know if you find the same thing as me, Mike, but I'm addicted to refreshing my sales to see when new sales have come through. I mean, are you the same?

Oh yes.

It'S still a rush, right? When you see the sales come through, that's it.

If you open my phone, it'll be on Internet Explorer page and it will be on the Amazon app that can. Where we are today. Yeah. I come from an analytical background, so I love looking at ppc, looking at my keywords, what's doing well, what's not doing well, how. Just to tweak that a little bit. And I look at my own processes now you're asking where I am now and where I'm looking at. So I'm starting to look at standard operating procedures. They may be for myself, but I need to make myself more rigid in how I work. So I'm looking at okay, at what point should I be restocking into my Amazon process? What are my key KPIs I should be looking at? So it's a repeatable process and you're not. And then you can, as you just said, you can become the purchasing machine. So the other tasks that you do just become routine.

The more of those processes you have written down standardized as well, the easier everything becomes, you know, and the more organized you can get with that. Yeah, that's. That's incredible. So it's so cool that you're thinking about that. No, so it's amazing to hear your journey, Mike. So cool to hear that, you know, things are moving forward.

And.

Yeah, I mean, there's a few things I want to pull apart because I think people will find it really interesting. For example, what would be, let's say if you. I don't know if you may have already done this, if you were to have like a standard operating procedure for a test batch and you were thinking of trying a new product in the uk, what would be the steps that you recommend someone does? You know, let's say they wanted to try their first test batch on Amazon. What would you recommend they do? It's a big question.

I look at it, I take different ways of looking at the problem. So, for example, I may look at a niche and say this is possible. And then I will look at the sellers on there. So I'll see if there's a high Chinese contingency, whether it's a German or European contingency on the niche I'm looking at. Because if I see more European sellers, then I feel that I'm going to be able to compete on a more.

Even ground because the Chinese have got very cheap margins. Right. So you don't want to be battling for price and things like that.

Yeah.

Okay. So you look at what nationality the sellers are, where they're coming from.

What.

Else do you look for?

So I'm now looking more towards the branding. So if you're brand registered, you've got the headline adverts at the top of a page. So if that's not being utilized, there's an opportunity to help me launch my product.

That's a golden nugget for people, man. Have a look if the headline has been used. So people probably don't know what this is. So when you go and look at a niche on Amazon, sometimes you'll see a big bar across the top with someone's product on it. And if that's not there, that means you can grab that big bar, the top of the niche, and you could have your product on the banner. And if you are the one with the advert, then customers will be likely to click on it and buy your thing. So is this how you're getting some of your core products to sell more often?

Yes. So one of my core products, there are a number of other sellers with something very similar, and it's about my branding. So my packaging is very European. It's no colloquialism, but it's wording that people would recognize. And my headline banner talks about the benefit of that product range. Anyone looking in that niche will see my banner, they'll talk about the benefits. They've already seen my image, which has similar approach to others, but it has packaging on as well, so it's distinct enough. So. So anyone then scrolls further down, says, I just saw it at the top. Well, there they are again. Open up, read about the bullets and go, oh, well, it's British values. Not no quibble guarantee, but worded in such a way, any problems, we will be there to help you. I'm very much about that localized, almost like that shop corner around the corner. You trust and you understand what they're saying. That's what my branding is about.

Mmm. So it's more about just giving that personal touch so people don't feel like they're just buying from a warehouse or buying from someone in China who just doesn't care about the customer, but they're buying from. Yeah. Like you say, someone down the road who you might even know their name. And they give you good customer service and they care about the products. They care if you've had an issue and that's how you separate yourself. That's incredible. That's really cool. And the more you can think about that stuff, the easier it is to make your product stand out in a niche. Awesome. Okay, so you think about the brand, you have a look in the niche to see if there's a headline banner along the top. And when you're testing products in the uk, what's the smallest test batch you've ever ordered?

Smallest test batch, 10.

10 units.

Oh, really?

Was that the ebay one?

No, it's different. I'm going to expand that out by what I mean by 10. Actually, it was one of your suggestions. So I'm going to take credit for this one product that I'm selling. And there's a number of other Chinese sellers selling the same product, and it started to merge into the background. So I went on ebay and Found an associated product and the easiest thing to do is just to scroll down and let Amazon help you and say, what else would this customer buy? And there it was. So I've added that into that product and then added it as a variation. So I've already got my support, my original reviews and use that way to clear some stock.

Wow. And did it work? Did it sell?

Yes, it's now given me, I'd say a 40% increase on that product. So I'm still selling it as a single item, but I also now have it as a bundle item. So the best way I could describe it is they'll go in and see the first item and they have a look at variation. Actually, you know what, I need that as well. And there's an upsell that is a.

Genius, genius golden nugget. So guys, if you haven't written that down, I'll be very concerned because this is, this is gold, right? So what Mike's done is he's found a product that sells, right, and something and he just picked it from one of my PDFs which I send out all the time, right. If you haven't got one of my PDFs with products on it, send me a message, I can get you one. He picked one of those products and he's used that product and he's bundled it with something that would complement the product and he's selling the original product and the bundled product together on the same listing. So customers think, well, why don't I just buy the complementary product and give Mike more money? So that's a genius way just to bump your profit, bump your revenue and also make your product stand out in the niche as well. Because nobody bundles in the uk, so many sellers just don't do this stuff. So that's why I always encourage everyone to do it. So Mike, it's amazing to hear that you've, it's amazing to hear that you've been using some of the products off the PDFs. I'm glad someone's using them. That's good to hear. So I think we've covered a lot of ground. It's amazing to have a catch up and to really get some more info on your journey. So do you have anything else that you want to tell people at this stage? Maybe they're thinking about starting to build an Amazon business. They're on the fence whether to do it or not. And do you have anything to say to them?

Yes, I think go for it and start as big or as small as you're most comfortable with. There's many opportunities. Opportunities. You could start with an item off ebay, so you're focusing on understanding the process rather than being overworked on the profit. Or you can go larger onto Alibaba and so on. So, yeah, and if everyone could get the first product to be the perfect product, then that's fantastic. If I look at my own products, I'd say my fourth or fifth product I launched is probably my best product because I learned from the first four.

So, yeah, so be in it for the long game. And, you know, it's so funny because some, some of my clients do launch their first product and they're doing 10K A with that one product. Other clients launch their first product and it goes okay, but something goes wrong because they didn't realize or we had a mishap. And the key is just to be in it for the long term. Not to try and make money in 30 days, but be ready to just keep at it for a while. And the longer you stick with it, the more experienced you get as a business owner, as a seller, as an Amazon seller, and the higher chance it is that you get continued results. In fact, before we wrap things up, Mike, I'd love to ask, what impact has this coronavirus had on your business? Have you had delays? Have you seen it's, you know, causing like a massive disruption or. You know what? I just wanted to just. If you could just let us know what stuff you've been seeing from your end.

Okay. So I wind back about two months when China was in shutdown. What happened? I work with a sourcing agent. And so what happened with them was there was a delay and they were back two weeks later. I got an email. They explained their situation, that they were working from home and there was a number of their colleagues working from home. So you'd still be able to. You could still go on Alibaba if you saw a particular product. They were still emailing back. They couldn't go any further than that. And then another two weeks later, they said, well, we're back at the factories and because of the new year, Tony's new year, which is usual shut down plus four weeks, I'd say factories are probably up to two months behind. So don't get overly worried if you're trying to make contact with a supplier and they're a little bit slow getting back or they come back quickly and then they tell you it's 40, 50 days before you can get a sample. It's just they're playing with A catch up sales in the UK maybe a little bit slower. But you know what is positive? Because I want to talk about positive about the situation. Positiveness of the situation is my other job. They've turned around and said you can work from home. And I know a number of places you can work from home. So that means for me, that's two hours a day. Less traveling, that's two hours a day. I can focus on looking at my Amazon growing. So I'm looking at this very weird period as an opportunity to actually grow faster.

I love that attitude, man. I think that's so true. I think now is the perfect time to really get focused in and start building your business because they are encouraging us to stay indoors more. We're not going to be going to so many big events. There's not going to be so many distractions. As long as you don't have the news on 24 7. Right. So now is the perfect time to really get focused and you know, we're in the perfect business because everyone wants to stay at home and just order things to their door. So obviously Amazon is the best way to do that. So I'm really happy to hear you haven't had too much disruption. Yes, there's a couple of delays. Yes, some suppliers are a little bit behind, but you're still making sales. It's not as if the whole things come to a halt. So that's incredible. All right, Mike, well, look, today's been so helpful. I've really thank you for, number one, being such a good example of what people can do selling on Amazon. And number two, sharing so many of your secrets today and helping people with all these golden nuggets. And it's been a. It's been really fun having you. So yeah, thanks a lot, man.

Cool. Okay, awesome.

All right, man, thanks so much. Take care and yeah, we'll catch up soon.

Yeah, take care.