How to Flip Profitable Companies with Ecommerce Business Expert Neil Twa

Hey, it's Mark Podolski, the land geek for the favorite real estate website, thelang.com and on this week's Art of Passive Income podcast. I am so excited for you to talk to Neal twa. And so if you're not familiar with Neil, I'm not even going to give you his bio because Neil is going to give you his background right now. Neil, welcome.

Thanks for having me on, Mark. I appreciate it. And you look like you got some good sun down there in bbi.

Yeah, no, Scribe island was amazing. I'm sorry you were missed.

So this time I'll be there.

Basically tell the audience what do you do and why do you do it?

So we're predominantly e commerce focused, private label brand building, growth scale and exit of the business. So we build and flip companies, we sell and acquire them as well. We're predominantly starting on the Amazon channel and then moving into direct consumer, shopify, retail and other channels. Once we incubate the brand on Amazon and it reaches past seven figures, we're going to move it into multiple channels and increase or double its valuation by moving that brand out into the market. And then if Voltage feels it's a great company, then we'll potentially offer an acquisition for ourselves or our investment groups and Voltage will take over the management of it. So it's kind of a triple win scenario for those who want to get started in E Comm and potentially exit their business in as little as 36 months.

Wow. So 36 months. I can build an E. Com business Correct to seven figures and then sell it either to you or another strategic buyer.

Correct. We can do an off market deal, no agents, no broker fees, in which Amazon, which will make a off market acquisition based on a fair market valuation and then we'll take it to our investment group and we'll buy it. We will manage it so they know what they're getting when they build it or bring the owner along with us. It could even be eight figures. If you've recently seen the podcast and Inner Circle Group with Daniel Espy, he's going to hit eight figures this year in 36 months in his business.

Yeah. That's insane. So let's talk about Daniel Espy because he was just in Scrub island with me in his business. So Daniel basically as a case study, wants to start a business. So why, why is Daniel a good case study? What? What did he want to have? Yeah, is he a skill set coming in?

He's not really a unicorn because he never did E commerce himself at all. So it's not like he came preloaded with the knowledge of how to do this business model. I think that's an important distinction to make here. He had capital, he had intent, he had opportunity. He matched up in a disc profile, an assessment profile, as well as a personal experience profile of people that I've worked with that I know have had success before him working in a very similar systemized process that literally, if you stay within the guardrails, it's just a matter of time until you reach a level of success. Whatever that is for you or where you want to take it is usually based on the person's limiting belief, not the opportunity for the business. So one of the things that Daniel really took a hold of that sometimes others get caught up in, not that they can't get to 6, 7 figures in this business model, Coach can. It's that sometimes they put limiting beliefs on the business that are their own, but not actual market or market share opportunity for the business itself. And if they can break through that mindset like Daniel did and learn the daily, weekly, monthly activities that really drive the revenue and most importantly the profits, because that's all we really care about, then you will allow the business to go where it's going to go. And if it's going to take you there, then you're going to, you're going to know logically and wisely where to deploy the capital that the business is requiring to reach its next level. And there's where you usually get yourself caught up in that limiting belief system. And because we've already been there, we were there to help Coach and mentor him through that. And he was able to then level up his company to where it's capable of going and kind of got out of his own way. Does that make sense?

Totally makes sense. Yeah, absolutely. So how, how does someone even identify a good product? I mean, Amazon just seems like this huge.

It is big marketplace.

Yeah, what do I sell?

Yeah, what the heck do I sell it?

How do I break through?

Who do I sell it to? Well, you know, so much fascination with AI. You probably heard this right now, AI is this. And it's revolutionary. Can do all these amazing things and there's like something new in AI, like every week now, like 20 different companies have popped up and AI. Amazon is just a giant AI system. It was an AI system before people realized. It's a data driven algorithmic system. It is based on numbers. When people get their emotions involved in what they're going to sell and what can possibly sell or who I might Sell it to. They're missing the data opportunity that's right in front of them. So if I can show them and condition and train their brain on the data, then the products will appear. The products will appear, the profitability will be dialed in. You'll know your metrics and your number, and if you get the emotions out of it, then the products can show up. In the process of going through your analysis of what do I sell and defining just a list of everyday products that are around you, products you probably bought in the last 90 days on Amazon already because 60% of those are sold by third party sellers like us. So there's a good chance that out of that you're going to find a product that someone else is selling, so you can sell it too. Because we innovate, we don't invent. So if you're looking at it from that perspective for a second, if you understand that grandma's crock pot, right, Then you understand that Insta pot was not your grandma's crock pot. I think that she ran on that slogan for a bit, which was just an innovation. And now where are we at? You probably have one in your house, an air fryer. It's another innovation of small, short term cooking for families that are busy and on the go, who want something healthy and good. So innovations create opportunity and conditioning creates the ability to see those products literally in front of you and then you have to go by the numbers and that's the real factor that works. Making it profitable and knowing with 80% confidence that when it goes to the market it will be profitable with upside potential and competition, no saturation, because we don't want to race to the bottom on prices. We want to increase our prices, raise them, of course, and create value and good products. But it's literally all done at the data level, mark, until we actually sell a unit of the product. So people get this whole thought process reversed. The products will start to identify themselves in the process and as long as they're profitable, we test market them. We don't marry them. We test them and if they start to look great, then we might date them. If they're starting to look good after a couple beers, we're like, hey, you know, maybe we should get engaged. And if they look really good, then we'll say, look, let's get married to our products. But everybody wants to go get married to their products and then has that whole divorce period that usually where a lot of sellers are up.

Yeah, what should my expectation be when I marry my product? As far from a net profit stand.

When I can sell a profitable thousand units of that product on the third level of my test. So small test, medium test, large test, I'll marry that product at that point if my profitability growth is on its upward trend. So I'm seeing, you know, 18% or higher net profit. If I'm seeing 20 or 30, even better. And if I'm seeing my cost of goods, which would be the more I order, the smaller the unit cost quantity is going to be because volume lowers cost of goods. And I can then see that go up profitably this way and cost of goods are going that way and then I see my margin and split in the middle becoming more and more profitable. I'll marry that product. Means all the data is shifting. Right. All the market conditions are shifting. Right. My demand inside of that giant filing AI system called Amazon.com is now starting to show itself more into more keywords and more propagation, maybe even email blasts from prime and of course my advertising and Amazon and all those metrics are looking great. I know I'm oversimplifying this, but if all those metrics are looking great, I, I follow the data. Literally. Yep. And it's data driven. So there's a me too concept of products which is where people sell $30 or less. We don't go there, we sell 50 to $150 in profit. So we're selling it a solution oriented product, not just a me too everyday kind of have it maybe if it's the right price and I like the reviews product. This is a solution oriented product that's solving a problem, meeting a need, filling a gap. And if I like that product and it meets that need, fills that gap, finds that solution, then I will order more from that company and I'll become emotionally attached and that's when things get really fun, fun, fun.

Okay, so what is the worst advice you see or hear given in fba, Amazon E Commerce? People saying I'm going to get into this space and this is what I'm doing.

And what's the worst advice would be to get involved in any of the Done for you automation stores.

Done for you automation stores. Why do you say that?

Well, because what they're doing is they're flipping products for profit. They're taking them from wholesale clearances and Home Depot and other locations and flipping them for profit on Amazon. And Amazon absolutely hates, takes advantage of their system, ends up sending the wrong products and so they'll eventually shut you down. And those people usually want 35 forty, fifty, a hundred thousand dollars to start that up and you'll split profits with them. You have no control over the business when that happens. And I have a dozen case stories in the last year of people who got completely taken advantage of that. If you don't own the business, if you're not 100% in control, if you don't have enough knowledge to be dangerous about how to run it, in control of it, then you technically don't have a business. You have an opportunity. And typically, if you can't manage the opportunity, the risk goes through the roof. It sounds really great because you may have more money than time, and this seems really great to you. But if you don't have any knowledge on how to fly that plane, if something goes wrong and the engine shuts off and you can't do anything about it, you're going to crash. Because getting the plane off the ground is pretty easy to do. Landing it is pretty darn hard.

Okay, so what exactly will Voltage help me with? I want to get E Commerce. And why do I want to get an E. Commerce? Sell me on this space.

Okay, well, I don't. I'll give you the information you sell yourself. Because at the end of the day, we know that if we want to go do something that we cannot currently do and there are curtain, you know, ways to do it. Like, let me give you example. There are ways to do certain things correctly and incorrectly. For example, you don't just go out and call yourself an electrician, roll a truck and go to someone's house and start playing with their wires. You have to become an apprentice journeyman. You have to go out and get certified. And then you can go roll a truck in the plumbing. It's the same way you've got to go out. You just can't go mess with somebody's plumbing and not be bonded insured otherwise and just say, hey, look, I'm a plumber. You have to go through a trade. You got to go through it. Businesses are really the same way. At the end of the day, the same way you would go out and get a flight instructor to fly the plane. You don't just run out to the plane and start trying to fly it yourself. Why? I don't know why people don't follow that analogy in business. In business, you need to go get a mentor. You need to go find someone who's in the cockpit and find someone who's already apprentice and trained. And then you need to follow them through the steps that they have already done. So you can match their level of success. Because once they show you what they're doing and you can see it, there's no reason why you can't visualize yourself becoming that. Because right now you're just in a weird space where you don't understand it and you can't see it. But here's what's happening. The market has shifted dramatically. E Commerce is taking an adoption curve that has taken 20 plus years since the Internet came online to get to this point and this juncture in time in 2022, because the numbers in 2022 have all beaten expectations. We were about $800 billion in market sales for E Comm. We actually went over $1 trillion in sales, which wasn't supposed to happen to the end of this year. 20 million new people bought something online for the first time ever in the last quarter. That was a new record. Mobile devices have now surpassed desktop in terms of buying power. That was a new record set in fourth quarter. So since the dawn of the Internet, we've never seen this kind of transitional change. So it's all leading to E Comm. It's all leading to online translation, physical products, opportunities for digital and physical. The experience and the things that are going to occur in the next 10, 20 years all show. And there's a Bank of America Forester research study you can go check out that says we're about to flip from the 35% online and 70% retail and invert that in the next 10, 20 years and it's going to be the opposite. So this is your chance to really get involved, understand and take advantage of what is the future digital commerce and really understand where you fit into that place. Now you can be trained like anything. Like go out and learn. You can get your hundred hours in the cockpit and become a flight. Anyone can do that if they have the desire and tenacity to do it right. The grit to overcome the challenges and solve the problems. Literally anyone can be trained on how to do any one of those activities, including building E Commerce.

Phenomenal. Phenomenal. So I'm thinking about my own one E Commerce item on Amazon, my book Dirt Rich. And what I love about Amazon is the awareness of the book, the ease of use to get the book. What I don't like is that I don't get the customer.

Amazon, you're not grabbing the customer. So there is a way to do it within Amazon's terms of service that does not violate their terms of service and we'll get up to 30 to 40% of our orders in customer data from Amazon. Technically we get it from the customer, but within the terms of service. So if you know how to get that data, you can get the data all right, and start building your customer list. But make no mistake, Amazon is not a single point of a business. Like, it's a, it's just, it's a fail point if your business only relies on Amazon. So once you incubate your brand to seven figures on Amazon with physical products, usually we won't sell books unless it's a lead magnet or a part of a physical product that adds additional perceived value, higher value. So you could take your book and bundle it with something that's maybe real estate focused, product wise, and add an additional bundle value that creates a whole different perceived value in the mind of the buyer. And at that point, then we can grow and scale past seven figures. We now dial in the audience, the demographics, who's buying our product, you know, the message that's of real clarity and the growth. And then we can move it into another sales channel. Right. Once you take even just 5% of revenue on a Shopify store will add an additional point to your valuation and in essence, double your business. If you have a hundred thousand profit and you open 5% on Shopify for new sales, you now have a $200,000 business. So there's no reason why you don't want to do that. And then you want to do retail or another marketplace or some additional channels later on to lower the risk and stabilize the foundation of the business across multiple channels. So just to be clear, nothing that voltage ever does is just one channel only. We start and incubate on Amazon to prove, because there's 150 million buyers clicking their mobile devices insanely like to $700 million a day. So we go where the money, the traffic and the buyers are and we prove the product and the brand, which is really easy for new people to do who have no experience in marketing whatsoever. That's why we take them there first and we show them the three simple steps to do that so that they can leverage that opportunity and then take it into the knowledge and the product and understanding of how to deploy the capital correctly for growth.

Yeah, absolutely. So I know Daniel personally and of course he's at Scrub island with his, his lovely wife.

Yep.

And they're hanging out and he's, he's doing business while he's hanging out on the island. So how much time should somebody think about.

Yeah.

Committing to on a weekly or daily basis?

Well, you know, time is a Limiting factor to some folks, but I see it very differently. You know, I used to say, well, I don't have time to do that. I used to tell people I don't have time to do that when in actuality I've change that language in my mind and now my execution to say, you know what, that's not a priority now. Right. I'm not prioritizing that. And it, sometimes it hits people's ears wrong. But when they realize what I'm actually saying, I'm taking control of the time aspect and I'm not being a victim of time or other circumstances in which I simply don't have control. And the truth is we all have control of our time. We just take and prioritize it in different ways. If you truly want to launch a business, truly want to grow something, truly want to learn, you have to invest in what you know or you have to invest in knowing. So with this model, he invested in knowing and the understanding expectation was it would take what time it was going to take for him to accumulate that knowledge and execute that process. There's not a requirement of time that anybody has to stay within. But I will usually see that people like him and the most successful sellers we have that are way beyond Daniel two, by the way, go 15 to 20 hours a week. Because when they build this, grow this and scale this, because Daniel has no employees, he's working from his laptop and he's spending about 15 to 20 hours a week managing his dashboard of information. Now that moves his products and logistics all over the world and through Amazon, handling his customers, data, marketing and everything on his laptop in the middle of the islands there and the Caribbean for 15 to 20 hours a week. So he can do it a few hours in the morning and then if necessary check in later. And it's now a lifestyle driven business, not a business that's trying to gain a lifestyle. People get that wrong too. I want to invert that realization. You should be looking at the business that allows the lifestyle you want, get to the lifestyle goals that you think you want and start to execute on those goals and then find the business that fits those goals and then you can keep it at 15 to 20 hours a week even if your business is on its way to eight figures.

Yeah. So let's say we build it to eight figures and we've got a seven figure EBITDA on the business or free cash flow. What is the logic of selling and exiting 36 months?

Why wouldn't you hang on to that? Sounds stupid. It's Cash flow. Cash flow is king, baby. Why don't you understand? Because inflation, economics 101, inflation is transitory. It is always dollar is devaluing and inflation is always increasing. Every day this afternoon, the dollar unfortunately will be less than it is now because inflation takes something every day. So if I can go and basically time jump forward two to three years by taking profits now, okay, I will do that. Why? Because once I get to that point, I have a confidence that I can sell anything to all people. It's just a matter of what else am I going to sell, which is now an opportunity to take cash and time and deploy into a second brand. And he is developing a second brand right now. So as business 1x that's he now is going to deploy his new knowledge and structured knowledge along with the capital required to really scale it again into a secondary brand. Because you can do that over and over and over again and you have more products you can do in an entire lifetime once it unlocks. See, the limiting belief is that if I sell that, I'll have nothing else to do. I'll have nothing else to sell. When actuality you're gonna have a whole pipeline of things you can't always do or do them all for fast enough or with enough capital. So as you raise up one, you sell and you do it again and again and again. There's just no end to it.

I love it. All right, so what are the most successful Amazon sellers doing right now?

They are incorporating AI, but only to the level of efficiency and time management within their current operations and processes. For example, we have incorporated about a year ago systems of AI within to our our algorithms and product research algorithms we use inside of our greenlight process that was in there. And about two months ago we released testing from a software a partner of mine had developed into the to the system of copywriting and valuation of keywords using AI and chat GTP 4 it was 3 at that point. They're on to 4 now. And so we've used that as an optimization for standards and processes we already had. But we've incorporated AI in for time efficiency. So things that used to take two to three days and copywriting of a listing, we can, can do that in like two to three hours now. So we've incorporated AI into the efficiencies. We haven't taken AI and tried to deploy it as some sort of new business model, some sort of new thing because economies of scale and growth in any business is to find new revenue streams. All right, within what you're already doing. If you can find 3, 4, 5, 6, 7 revenue streams and something you're already niched into, that's when you become a millionaire. It's really how it works. Right, Right. And most people want to go use AI and try something completely brand new and that's not really how it works. So for those who, sellers who are really capital at this point on the growth side, they're using things like user generated content and AI platforms to develop that content and the people around it to disseminate it out to the world. And they're focusing it on products and efficiencies in their product research, development and launch processes. Management of the PPC campaigns is done by an AI system within our and so we oversee the dashboard and the AI system does the management changes and you know, lifts the keywords or removes the keywords or finds new ones and it does it all within the system and templates itself. So that's an efficiency as well. And including some upcoming time logistic management stuff on the AI side for the logistics and freight movement and inventory movement, we're looking at next. So it's just creating opportunities for efficiencies and keeping us in a position where we don't have any employees, which is very nice.

Yeah. I mean, you're geekier than me, dude.

I live and breathe this stuff, man. It is fascinating to me. I get up every day and be like this is what I get to do for a living. You got to be kidding me. It's just I live on 45 acres in the country. Right. I have time to go play. We have the big boy toys out here all the time to play with the girls, go horse riding and next step is probably to get a horse at some point. Don't tell anybody. All these girls. I have four daughters in my house. We homeschool them all here. We live and breathe lifestyle as a business and we're able to travel as a family. And hopefully I'll be able to bring them all in August out to the Inner Circle event. We may not quite make it all together, but I'm going to try for that. And we just travel and do things as a family group and we learn and at some point my kids are going to get involved in the business As I get older. My 15 year old actually turns 15 next week. Is really interested in getting involved as well.

That's awesome. So Neil, is there anything I should have asked you? I didn't ask you how much does it cost?

Because there's always a question like there's time, energy and attention. We went through that. But money, you didn't ask me about money. So we better get it out on the table, right? Because everybody's like, what the heck does it cost to do this? Let's look at what it costs Daniel as just a case study of what it took for him to get out there in 36 months. Okay? So it took him roughly a quarter of a million dollars in three years to get where he's at. So we have to look at again, what is our limiting belief for opportunity and what's available in cash, which is literally abundant everywhere, and how to deploy it correctly and wisely to what's working so that it will increase the valuation and growth of the company. Profitability and of course, net profit, most important. So what I usually want is people in the first year to have at least 50 to 100k in liquidity available to deploy to this model. They won't deploy it all at once. But to have it available is to put themselves in a situation where when the business starts to demand it because it's growing, they can feed that beast, right, and feed that engine and not be held up by, well, I got to go find extra capital to do this. Now, it may not all come out of personal pocket and cash flow and that does incorporate the way that we do our fee structure on a consulting plus performance basis, which I can mention in a minute if you want to know. But the end result is the growth of it and the test market of the product. When they start to hit, you need to go, it's like a wave. And when that wave comes and the AI engine is pushing you out and propagating you in the system, you need the inventory and the marketing to follow it. And so you've got to be ready to deploy that capital. So the business is at least three months into its own environment as a business and it's got registered Dun and Bradstreet. It's now taking on its own life as an entity. And then there's all kinds of cross crazy funding sources where people will throw stupid cash at you, including Amazon itself to go fund the business so you don't have to fund it out of personal cash. If you're an IBC holder, if you're in the infinite banking concept, that's how Daniel did it, that's how Bry did it, that's how Joel did it and how others have done it, like David LeBlanc and stuff, they went in and took the IBC funds, they built their company, they Paid themselves back. They grew the cash flow, they borrowed more to grow it at the next level and they basically used their banking concept to grow their e commerce companies.

Amazing. Amazing. Well, your mentorship has been invaluable. But now, Neil, we're at that point in the podcast where I'm going to ask you one more question.

Okay.

Your tip of the week. A website, a resource, a book, something else actionable for the auto passive income listeners to go improve their businesses, improve their lives. What have you got?

Well, if you go to voltagedm.com, there's a free workshop. If you are very serious about looking at understanding the five topics that all sellers need to make to 10x and build a business like, like Daniel did, there's a free three part workshop. I give everybody to go in the details, bring your knowledge, bring information, bring your pen and paper because it's actually a workshop. There'll be resources there and information you can tackle that will show you how to get started. Answering the question what the heck do I sell and who do I sell it to? So that's a free workshop you can go check out. It's about $2,000 worth of training that I give out and that's free for you.

All right, Neil. Well, so check out Voltage dm. I want to just remind the listeners that today's podcast is sponsored by flight school. Learn how the next 16 weeks can literally transform your life. Go up that mountain of land, investing quickly, safely, efficiently with Scott Todd. As your Sherpa said it thousands of times, start building that passive income without any headaches. And I know you're thinking, what about the tuition? It ain't going to cost you nothing, guaranteed. You're going to make back that money 180 days or less. Just show us she did the work. Learn more. Go to thelandgeek.com forward/training thelandgeek.com forward slash training Neil, are we good?

Yeah. This is wonderful. Thank you for the time. I'm honored.

Thank you. I want to thank the listeners. Just remind you the only way, the only way I'm gonna get quality of guests like Neil Twa from Voltage DM.com is you do three little favors. Follow rate, review the podcast, send us a screenshot of that. Review support@thelandgeek.com I'm going to send you a signed copy of Dirt Rich. So please do it. Just do it for yourself, selfishly. That way Neil TWA will come back. So please do that. All right, thanks everybody. Let freedom ring.

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