Latest / Wealth On Main Street / 295: How to Build a Sale-Ready Brand | Neil Twa

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295: How to Build a Sale-Ready Brand | Neil Twa · Wealth On Main Street

• 0:00
  Speaker A: Foreign.
• 0:11
  Speaker B: Welcome to wealth on Main street where conversations about growing your wealth are fun and entertaining. Wealth isn't just about money. It's the skills and the knowledge that we develop to pass on to future generations. Tune in each week to grow your mindset and your net worth at the same time. Today we're going to get into building your business to powerfully exit with maybe incorporating even a credit line that you can use for your whole life. We're excited to be joined with Neil to today. He is a co founder of Voltage Holdings. He's a CEO. They specialize in launching, consulting, selling and acquiring brands. They have a lot of focus on ecarmus with Amazon, FBA, et cetera. And for over 17 years they've been constructing businesses online and offline. He's got an incredible background. I'm excited to chat with him today because building a business is hard, but a lot of people don't realize that selling one can be pretty hard too. And if you're putting all the energy in to build this amazing asset that's funding your life, your family, your legacy, you want to make sure you know how you can leave it behind and leave it in the way on it's on your terms. So Neil, I'm excited to have you join us today.
• 1:28
  Speaker A: Well, thank you for having me on. It's an honor to be here.
• 1:31
  Speaker B: Now how exactly did it begin that you got into the environment? It's one thing a lot of people talk about, business, business consulting and growing business. Most of the marketing is around that element. At what point did the idea that you need to really help people on how to construct and prepare for a proper exit, where did that really start to materialize for you?
• 1:52
  Speaker A: Yeah, so we actually ended up hitting our first seven figure brand around 2015. And once you kind of break through that first million in a business, you really start to understand systems and processes and you know what it takes to create replication of a product or service, you know, to continue to grow that brand and grow it and even replicating it into secondary brands and new brands and being able to repeat that process multiple times, which we have in the process of doing that. And we actually got really good at it and we are really good at it and manage about 12 brands that we control right now and another 12 that we operate and control that are doing more than 20 million a year in sales. So with the growth of that opportunity came the realization that as a skilled operator's base that there was an opportunity to acquire company. So in 2019, I went out and started Drumming the road and if you will, for capital raising, which is something I've had experience with in the past, ended up about two years through the process. A couple home offices, 50 million a piece. We raised about 100 million in capital to acquire these brands. But what ended up happening was the shift in that market of acquisition for these brands. It was really running off of the kind of the COVID fever, if I can borrow that, was that businesses are growing. It was growing exponentially through 20 and 21. And what happened is a lot of these funds got relatively large, very fast in the acquisition space, and tended to end up buying companies at 30, 40% above their asking price just to grab those assets. So the market became very overinflated. And by November 2021, we had to put a pause on that because we weren't gonna buy companies at 30, 40% above valuation, knowing that even if we did the most masterful job of growing them in the next two years, if anything shifted that 35, 40% back in the market for changes or just variables of things we couldn't control, we'd be blamed for it. And even if we ran it perfectly and we're like, that's a very dangerous situation. So we put the kibosh on that. And, you know, only one person was really kind of mad at us. Everybody else was like, thanks a lot. What ended up happening was it did occur. And in 22 and 23, that market went down 40% from the companies that were previously purchased. And a couple of them got in trouble for sec and investigations went on and it was a message, but we were outside of that. But what it did, long story short, was built up a huge network of connections. I spent a lot of time in fundraising. I had a lot of high level connections. And people who wanted to do business with us in that way were then asking, well, if we're, if you're not doing this, how do we build one over here? You know, we got the money, we got the interest, you know, maybe we want to spend some time doing it. And there we built out our business Builders group, which was basically to work at a high level with those individuals on a one on one basis and help them build up their own companies. And so that's how we got into the process of the Business builders we work with now. We've had about 300 or so come with us since 2019. So we kept it really small. We're very focused on our business and operations. We had enough bandwidth to bring some of those folks in. And since I Raised up a number of people who've become very successful. I asked them to come coach with me to kind of help manage that time. And I have four operators now who are very successful in their business who also coach and mentor the folks that work with us for 12 months on that side who get coached by, well, CEO operators.
• 5:08
  Speaker B: That's great. And so, you know, in the business building group, you know, these multiple companies, they're not there just to plan their exit. They're there to just focus on maximizing growth and potential with probably some good discussion and an ear towards, okay, what if, if we are going to think about an exit, you know, so in the process of that, the strategies that you're coaching towards are really to try to maximize setting up people for the success at the end.
• 5:36
  Speaker A: Within five to seven years, there's a really great exit in that business. It creates a generational wealth of time freedom opportunities as they build that asset, you know, up into a saleable position. So we, we have something called the Platinum principle, which is in essence building that business with the end in mind, knowing it's worth more in the end than at any time during the business building phase. So from the very beginning, it is the fundamentals of business growth, discovery and optimization of that company to an exit from the very beginning. So we do everything by the book. Trademark registrations, brand indemnification, structuring LLCs for maximizing tax effectiveness and deploying capital correctly through capital strategies to build them into an understanding that in three to five years they have a potentially generational wealth exit in front of them if they do a great job.
• 6:23
  Speaker B: Yeah, I love that. And so as people are entering in, you know, this, this selective group of business builders, a coaching program, what would you say are some of the most common if you were to kind of, and it may not be as easy as that, but what would you say are the top three things that a business owner or entrepreneur is dealing with that they don't realize they need to correct or fix in order to start to position their business for that type of an exit?
• 6:48
  Speaker A: Yeah, part of what we call the success mindset, part of what I do to vet those conversations, even having them take a disc assessment to determine if their aptitude and mindset is built around success principles, even if they've never run an e commerce company before. And it's kind of a assessment I do with them because a lot of times people that want to work with me have no experience in E comm but they have a, they have life experience. They could be High income earners. They may be running a dentist practice, or they could be a military pilot who's an income earner or just a high, you know, functioning, high level, you know, engineer who's, who's being paid by aviation company or whatever that they, they have the principles of the foundation built. They don't understand the entrepreneurial side. And so we kind of work them through the playbook of getting to that point by instilling the values of the success mindset. And part of the four things we talk about are the time, energy, attention and money. So if we understand individual entrepreneurialism, that's what a lot of people think ends up becoming a business owner. But a business owner is actually somebody who understands a team effort and the players within that team, the people and of course the time, energy, attention and money deployed into that to create the kind of opportunities they want. Very, very infrequently will I ever see really great successful people because of all of their individual performance. And that mindset gap change comes from people who have been in individual performance positions like I was during my days at IBM while I was a part of a team, I had an individual performance. And so they still think in that manner. And they, and I have to move them through the boxes so that they get to a realization that a business owner does those four things very well because they're not centrically focused on the things they, they can do in the business, they're focused on the things they can do on the business. And so as we look at the right amount of time deployed, we'd start to change the language about time and their language. So they just stop saying I don't have the time. Instead they start saying that's not a priority. So we start changing the, the language to change the mindset of training them out of positions where they have to use time as the, as a gatekeeper to their life, their family or something. And we start to reposition that language. Instead of saying I have to do these things, we say I get to do these things right. And in there we then deploy the right energy and attention into the right revenue generating activities. We call them RGAs, the right revenue generating activities. The things that potentially I see a lot of high income earners doing in their kind of skirting along with their job are not really impacting the revenue generation per se. So they kind of get stuck in the job and a little in the quagmire of just, you know, hitting performance goals and then just kind of working through it like a, like I was with a bit of a zombie ness to it. Right. Like I have to do the grind again. Right. And getting them to start thinking as a business owner who doesn't think that way or speak that way or act that way and realizes you cannot mask productivity with time based things or activities. You actually are the sole person to start this. But you have to understand the energy and attention that leads to a teamwork. That way while you put in a certain amount of effort, you don't have to continue to do that as you structure automations and people and processes in behind you that now can do those activities for you while reducing your time and restructuring your role out of just an individual operator or performance person, but into an actual business owner. And there's a training in that mindset and I look for the qualifications of that success by language and conversation. If I have somebody that's coming on the call and talking about well, I have all these time problems and I can't do all this stuff and I won't do all this stuff. Really when they say I can't, they're just not asking for help. Like in my girls we don't say I can't do something. What we say is I'm having trouble figuring this out. Right. You just have to reprogram mindset and success towards those. And of course one of those things in that criteria is also the money. So if I have the attention focused correctly and I know that I'm starting to purpose and repurposely change the way I think and act and speak towards a business, not me, the individual. And I'm willing to dedicate the right amount of time, okay. To that activity. Then I have to dedicate the willingness for money in that position. It's kind of the one people want to invert, but it's actually the last one in the acronym for a reason. Because when I dedicate the time and capital, it goes to work for me while I'm sleeping 24 7. So I have to really change the way I think about time from how I earn it on an hourly basis to how I earn it on a result or an output basis which can have an unlimited abundance opportunity. That is not based on my time or effort. It is based on my experience and execution.
• 11:13
  Speaker B: You can get a multiplication on time because it's no longer no longer your time.
• 11:18
  Speaker A: That's force multiplication. Right. And there's risk and reward in as you move through those quadrants of understanding how to get to that point. So yeah, as I look for those individuals, I typically are not looking for those who are high functioning, dis dominant influencers. They're typically salespeople. They have more influential roles. They're typically not in the details of operations and controls and where they are currently are in the business. And so they have soft impacts. And I know that's not fun for some people to hear that, but it's still true. Okay. Their impacts can be greatly affected in a business if they are the lead dog and their business is a sales operated oriented product or service that requires them to be the lead dog. If that's the case, they're going to do really well in that business. If they have a really strong operations behind them to support anything they sell and anything they kill and anything they develop in that business, typically you will not find that that person is also capable of running the business. They don't make the list, they don't understand the exercises. They don't know the daily, weekly, monthly routine aspects for them that like kills their mojo, it kills their spirit. They, they can't operate in that environment, it's too constricting. But you get other personality types like an ISC or an sc stable conscientious or intensive individual who's maybe more geared towards. I've had success through productivity, I've had success through following actionable steps. I've had 20 years of doing this experience and I am the lead practitioner in this role. That's why I make 2:50 a year or more. And they're like hey, I get lists, I get process, I get opportunities. Sometimes they're engineers and sometimes they're lawyers and sometimes they're stay at home moms because they make lists and they understand action items and they know how to deal with herding cats and they have an aptitude and perseverance and a tenacity to that process and they actually thrive in that kind of environment. They love the ability to have some of that control over it and they love the ability to see a results based output from their actions in a shorter timeframe than say guys who are trying to kill big deals or out there kind of playing the dominant dog. Those individuals typically will have a greater success at an E commerce style company which once you understand the strategy and you understand how that applies to you making money in your P and L, then you're down to literally operations. And operations in our world is blinky lights, dashboards and just in time inventory.
• 13:44
  Speaker B: It makes a lot of sense. I like how you separated the difference between as an example a sales focused style type organizational business structure versus the Very unique and specific realm of an E commerce business which where you've got technology and dashboards and a lot of automation, it can be construction. And so there's a definitive requirement and a need for that. You got to follow the bouncing ball to get make sure that it gets to the end point.
• 14:07
  Speaker A: You do. And there's marketing involved in that where some of those folks will strive. But if you understand the foundation of making the money, operating the business, controlling the movement of product and technology and data that allows that to occur without emotion because at this point it's all data driven. We like to jokingly say we sell information to an AI engine and the AI engine sells products to people because that's the systems we ride on today. So there's no emotions involved in the building of a product or a brand today. It is down to the data. If it's in demand and there's competition and it's high profitability and we see a market segment to brand it and differentiate the unique selling position a little bit, test the market, the data is there, it proves it's already selling. And Amazon's data can tell me that it already exists in demand. How much it's selling, who the competition is. I use what a process called greenlight by which we have over the last 12 years developed key metrics to filter out and filter down those high value, high demand product types and segments. And then in the data literally opens up and shows me what product that currently is a Coke selling well in the market, you know, meeting the demand of individuals 15 million times who are searching it for a year that there's no Pepsi, there's a Pepsi missing for that co competition. And you would be amazed at how many times you find that in the data that there's not a secondary competitor currently giving that first brand a run for its money. Right. And that that elevates the conversation of the brand, the price point and the product type, even the profitability out of where a lot of people think we go in the physical product and they hear Amazon FBA and they think like sub$20 products, they think a lot of revenue and volume based movement. We don't play in that game. We call that the mosh pit. That is the mosh pit of sellers and the sub 20$30 who are fighting with all the cheap Chinese manufacturers. And pretty much every myth from every Hopium guru marketer you've ran across on YouTube is suffering in the mosh pit of conversations from core sellers and people who just, you know, went and launched a $20 product on Amazon. We say friends don't let friends launch $20 products on Amazon because you will fail, crash and burn.
• 16:10
  Speaker B: Neil, I really appreciate you use of the word Hopium because Nelson Nash, who wrote become your own banker, that's the first time I ever heard that analogy from him. He says that, he said that both Washington and Ottawa in Canada run on Hopium and so does Wall Street. So I really love the there. And this is very interesting because I, I know some other individuals involved in certain FSB type activities they probably dabble in, either started in the mosh area or dabbled in or maybe still some still do. My partner who's not with us today, Jason, he also has a business that they do some Amazon stuff and they do a lot of shipping in Canada to and from American Amazon stores and resellers. So I think it's a very interesting, you know what you're, what you're sharing.
• 16:57
  Speaker A: Here on Jason Lowe, is it?
• 16:59
  Speaker B: Yep, it is, Jason. Yeah, Jason Lowe. So, you know, it's really fascinating to consider some of the granularity of what you're talking about here and the specificity that you have it, but yet you're bringing it right back to thinking. And you also talked about capital, the deployment of capital being intentional with that deployment of capital. But I'm curious to talk about where are we getting the capital from? So before we hit the record, you kind of mentioned that, you know, yourself having used whole life insurance as a medium to fund investments and opportunities for yourself, how does that enter into the equation when you're working in this unique structure of E commerce and you're having businesses that have high capital demand because they're always turning inventory. So how are they able to capitalize growth in new endeavors when you see these opportunities and the green light goes off?
• 17:53
  Speaker A: Yeah. So as we look at capitalization, there's a couple of different ways to consider it in the deployment and the return on that that money. As we look at how product turns on an inventory basis with a business like this one, and the cash on cash value of an inventory based business goes a little like this. I look at selling a particular product in a so many units. So I have to deploy capital to do test marketing of those units first to see if I got the, you know, the image, the listing, the graphics, the alignment of that avatar's willingness to buy my product in line with the market demand. So if I hit that market demand on a test product, then I'm going to go get a thousand units and do a full product launch now that I know I can sell it, because sales fixes everything. So we don't guess. We take data and 80% confidence, okay, of information from Amazon and green light and everything to know that there's that market opportunity. And then we take the 20% and put it in the market and find out how close we are to that product. So we have a phrase in our company, don't marry your product, steal somebody else's girlfriend instead. So there's a lot of products out there that we can borrow through innovation, okay, where we don't have to invent them. The demand exists. We simply need to get a product in the market and find out what the market will bear for that product for us should it successfully go. I'm now going to deploy more capital into a thousand units in a product launch. That moves me from test revenue into actual product revenue. That becomes a net profit in those 1,000 units that we sell. The goal, okay, as every unit has a minimum 50% ROI and a minimum $12 in net profit per unit, is that every 90 days I turn over that inventory. The goal is to move it into a position where I can turn over a thousand units or more every 90 days. Follow me so far?
• 19:39
  Speaker B: Yep.
• 19:40
  Speaker A: Okay, so if I have a 50% ROI on that product and I can turn over 1,000 units of it in 90 days, I'm going to have four times the ROI. If I turn it over four times in a year. So what's our goal? Four inventory turns a year. If I can do that, I now have a 200% ROI on the money that I invested in that product that is now selling. Every unit that sells is ordering a new unit. Every net profit that comes off of every one of those units is allowing me to buy more inventory, to turn the inventory cycle faster and faster. Instead of 1000, I'm now at 3000 every 90 and then I'm at 5000 every 90 and hopefully pretty soon I'm at 5 to 10,000amonth in units moved. As I grow years 1, 2, 3 and on. There is particular algorithmic reasons I choose to incubate products on Amazon. First, because Amazon's system is a system of which it starts as a snowflake when the first product goes live on the ASIN and can turn into an avalanche by year three. It is a growth based system of organic traffic backed by internal marketing with 5 billion impressions a month and 200 million prime members whose entire goal is to get there and buy something in 30 seconds or less. And the entire algorithm is Geared to get them to sell something. It's the only place really you go to to buy things with the intent of buying them. That's that whole algorithmic thing. It's not like we're interrupting Facebook on Facebook and we're not, you know, stopping them on tick tock.
• 21:01
  Speaker B: They're not, they're not just browsing randomly.
• 21:03
  Speaker A: Because they are there to buy. Your wife, my wife, us. You know, five times a week. That's click, right? Yeah. Amazon actually calls my wife after 45 minutes, like Mrs. Twa, are you okay? We haven't got an order from you because it's like, are you okay?
• 21:17
  Speaker B: This is Amazon yesterday. Don't worry, we've already put it in your fridge.
• 21:20
  Speaker A: Oh, it's already. It's on its way. Okay, good. We're good. So, yeah, this machine turns like a juggernaut and there are so many people buying so much, it's literally an average of 6,000 units a minute. 6,000 units a minute on that system. 9,000 to 10,000 during prime days and peak holidays. So it's a, it's a miracle the thing even works. But so as we look forward in that juggernaut goes in year one. Amazon's by its own admission has told us in meetings that we can achieve up to 5% of market share in year one. And the algorithm's growth of a positive product that has positive reviews and is turning a positive cycle inside of the system can see up to 20% in year two and up to 40% in year three. Part of that minimum three year endeavor.
• 22:02
  Speaker B: Would also cycle back to like returns and volume of returns and stuff.
• 22:05
  Speaker A: Would that returns, inventory and warehouse, amount of velocity of sales, profitability of the product are all going to factor into your ability to attain market share?
• 22:15
  Speaker B: Yeah, it's, it's lots of columns on the spreadsheet that determines the.
• 22:19
  Speaker A: About 49. Yeah.
• 22:21
  Speaker B: Okay.
• 22:21
  Speaker A: We now track it in an entire system we created called Cayman Data, powered by that green light process that gives us really intellectually competitive and accurate data from Amazon tied through an algorithmic engine called Greenlight that basically produces the highest customer need and customer intent products that are currently running in the system today. So I don't guess we choose really big difference. And so as I look at money in year one, two and three, if I redeploy that capital back to increase the velocity and churn of a profitable product at a, at a high roi, I'm going to let the engine do what it's naturally going to do already for a good product that is now overtaking market share because that's what it's intending to do. Sell more products to more people. And then I'm going to capitalize inventory to equate to what we call feeding the beast. So it isn't really getting started. For capitalization you have, you know, 25,000 or so to get started. You may use another 25 or another 25 to move faster because you're going to build up revenue in a war chest. For every product sold, you'll have money in the bank to buy another one. And then as capital turns, you'll have to capital allocation up to the next level for the next thousand units, next 2000 units, next 3000 units. So you have a base of war chest in here built up say 20 grand and then the new PI is 40 grand. So you'll have the 20, you'll have to capitalize another 20 to level up to the next level of inventory. That's your opportunity to turn that cash flow four times a year. And if it does really well, you may be looking at 100, 250, $500,000 in growth. Because that algorithmic engine, once dialed in, is going to require you, the business owner, to level up to a new risk reward ratio. One that you may not feel comfortable with at the moment. But that does not mean the opportunity is not setting right in front of you. Not something I'm telling you, it's literally something the business is now green lighting. And it is your risk or opportunity cost to get it figured out through your whole life, through credit lines, through capitalization of investment group or whatever is necessary to take that new business, which is a going concern, registered ein its own business. You can register it done in Bradstreet, you can have it go get its own credit lines and service itself needs to get the capitalization required to feed that beast. You do it well and you could be like Daniel. Daniel literally got within the first three years a million dollar credit line in his business, which accelerated his business to over 17 million a year. And he just got a $29 million offer on his company after five years. So when we feed that beast and the engine wants to go, the more inventory we check in, the faster it's going to sell to more people. And therein lies the real opportunity and the real risk. With an e commerce company, it isn't even finding the products. We have a methodology for that. It's called the five by five product launch. We're going to find five products. We're going to invest in small quantities to Test that market in our brand. And then the market's going to tell me it's this one or two product that we love the most. And then we're going to take all of the time, energy and attention and double down on those products by creating more products in different packaging, borrowing from retail like Nike and Apple. We're just going to put more of the product in different packaging until the whole business is a giant funnel. Okay. Somebody who wants that product, who comes through my seller account, who went to my brand, who only wants these products because 15 million times a year people are searching for those products. And now I have a fully optimized brand that is just serving those 15 million searches a year for that product.
• 25:46
  Speaker B: Yeah, I love it. It's fascinating. And so your, the capital demand isn't, isn't a little, it's a lot. And it's like you identified a going.
• 25:54
  Speaker A: Concern by some measures, you know, franchises can be up to a million dollars or more. So it really just depends upon what people consider to be a lot of money.
• 26:01
  Speaker B: So liquidity is really the key is like, where are you getting that capital? And, you know, you mentioned different sources. You have a credit line, you have a business and a brand that's grown to a point that you can now apply for those in a shorter time frame. You know, I think a lot of people who listen to our program and our show, they're coming from a traditional business model world where banks are not your friends. Oh, you've been business for 24 months.
• 26:24
  Speaker A: Sure.
• 26:25
  Speaker B: Here's a great line of credit. I mean, people are listening and they're driving and their heads are exploding. Like now, how did this business able to get a credit line in two years? And so I think there's a little bit of a uniqueness to the structure, but also not just the structure, the intentionality by which you're designing this and with your coaching group. So, so there, there's, there's a lot of, maybe greater opportunity because you have a predictive almost model to some degree. And the reality is for people just getting started, if they're in this process and they want to, you know, just hit the ground running and they're maybe just brand new. They're going to need a beginning set. And it's got to come from somewhere. It's coming from their cash resources, reserves or selling some other investment, borrowing against the HELOC or they're, you know, they're borrowing against, let's say, a collateral aspect, such as, you know, cash value. And, you know, so I'M curious from yourself, you know, Neil, you've, you've invested in multiple business structures plus this heavy focus of yours. Now presently, where have you seen the utilization for yourself on where access to capital on demand through an example, like a whole life policy was the difference between being able to make the decision fast and being able to hit the ground running versus having to jump through somebody else's hoops?
• 27:39
  Speaker A: Yeah, there's where, you know, when I qualify, folks in my process, those are the four things we talk about. If they come in and say, you know what, I won't be able to put 25 grand to the business, I will usually tell them that it's not the right time yet. Build up initial cash reserve. That's your first risk money in the phrase we have is keep it all and keep it small. Some people want to go sell it or get partners or this kind of stuff, and I usually hedge against that. Right. When you're in the learning and building and aspiring entrepreneur stage, you need to focus down on only the things that create the revenue and the activities you should be doing. And one of them isn't trying to find money per se, or trying to get a business partner who might have money involved. That creates a lot of complexity, new relationships, and it levels up the risk. Right. So I would encourage people to have the initial capital required to jumpstart the business so that if they are moving and going, then they could pull down from their policy. Knowing if they pull from the policy, the business can now service it because I am making some sales. And if I pull down 100,000, and let's say I want to pay that back at $1,000 a month to myself, then I know the business can support a thousand dollars a month repaying the 100,000 I brought down because I'm putting good money after good product and good business. I'm not taking that initial risk out of my policy, but I'm using my policy to put gas on fire at that point. Business is now servicing the debt and the debt is a repayment to myself, knowing that I could draw down on it if necessary to grow. Or I can leverage that cash allocation into another relationship. We have, you know, vendors. We have like a broker relationship with a financing company that has 44 lenders that look at your Amazon account, your sales history and your growth, even cash assets you can bring and says, sure, we're willing to lend you the next $100,000 against your Amazon account sales, and then you're going to pay us under a certain amount of Terms and then they can literally wire you the money the next day, which it goes straight into capital inventory allocation. Okay. Because at that point the bigger opportunity is to inventory capitalize while the secondary opportunity is to increase marketing. Now if you have a cash back credit card with lots of points as you're getting paid from Amazon every two weeks, you're going to pay that card off, you're going to accrue the points and if you points the cash out, if you pull the cash out as points, it's free income. So some of the accounts will make two to $5,000 a month in free money just off credit cards from advertising that we use points on. Right. So those come back to the business as an opportunity for seller discretionary earnings. But the jump start should be out of cash. It should, it's your risk first risk money in to get the business, get the first products going in the market and then fund in capitalization from other credit lines, whole life policies or etc is a smarter move with a lower risk because now you're putting capital into a going concern where you know it's going to be deployed and you know that that deployment from sales and revenues can service the debt.
• 30:37
  Speaker B: Makes total sense. I love that. And so what, what would you say is something that is one of the least understood aspects of the E commerce style business? And you know, in this case we can, we can zone it in on the Amazon model because that's our, that's our testing ground as you identify incubation. Yeah. What would you say is when people are looking at this Even today in 2025 and we're approaching 2026, what are some of the missing links that you know, the general public or the typical business owner just doesn't understand.
• 31:11
  Speaker A: They think that a few videos on YouTube have shown them that everybody who tries it fails and that every failure is a failure for the business to launch, not a failure of the operator to overcome the problems that every business has. Right. They also look at it and say, well, there's no good products because I can't think of something and I don't know what it is. There must not be any good products to sell. They would typically say it's not profitable, there's not a good way to make money. You can't make it profitable. I saw a couple YouTube videos and the guys were complaining because their products weren't profitable. You break that down and you'll typically see it is low priced products, low retail or arbitrage, online arbitrage or other models that are not Private label brand building, you know, trademark intellectual property, right? Where you're building brand assets. And that is like the second oldest profession in the world selling products, right? It's been around forever. So E Comm itself is an evergreen situation. It's just a median by which product can now move at the speed of a click on your mobile phone. So we have to get out of this, like, black box kind of idea that this is some sort of foreign thing that occurs that no one can do and no one's ever had success in. The failure point is typically of the model of business to deploy too much inventory in a product that you are not yet proven that the market wants from your brand. So people will think, I've got to allocate 25 grand to one product. I'm going to get 3,000 units of that product and then I'm going to put all my hopes and dreams into that product. And if it doesn't sell fast enough, the whole thing's a failure. So then we get into the sunk cost fallacy, right? Which is the straw man argument against any sort of methodology that says, well, if I test a product, I test another product, I test another product. Law of averages says if I invest in multiple products, I will have one of those investments return more than two or other three combined. I may have two of them return more than the other three combined. And I'm now going to see those investments as my next opportunity to keep going. There's a analogy here. For every kind of business model from sales to marketing to age of act to real estate, it is knowing the audience, knowing the avatar, knowing where to put your cash, and then putting good money after a good opportunity. So I think a lot of people get caught up in those myths. They get caught up in the marketers in the online world who are like, well, if you can't sell on Amazon, come buy my Facebook course and we'll sell on Shopify. Okay? That's just another, you know, marketing thing to get you off of something. That's true. After 12 years of doing this. I have had products that have failed, but I've not had a brand that's failed. It's very important we understand the difference. As I said earlier, as products have a life cycle and serve the business hopefully profitably, if they do not, then they must be removed. That's the sunk cost fallacy. If they're no longer serving the business, we must get rid of them. No blood, no sweat, no tears, no law. Like, hey, I have to hang on to this because it's part of my ego. It's no, that product has to go away. If I can't re engineer or reinvent it back to current market situation, it has to go away. So what do I do? I build more portfolio of products. Right? So we have to think about building an E commerce company as a portfolio of products that roll into a brand and it's the brand that lives on. It's the brand that creates the intrinsic value. It's the brand that becomes a saleable asset. The products just serve the brand. If they don't serve, they get removed. So there's a lot of these processes and I hear these arguments and these myths of no good products, nothing's profitable. Well, they're just not creating the right variables of success. They're not pulling the right metrics, levels of success, they're not going by the right numbers. As I mentioned, we don't sell the product that has less than $12 in net profit. I typically average products 50 to 500. And one of my really great successful launches right now in the last three weeks is a $389 product that we're moving 10 to 20 of them a day now after three weeks. And with this we have $150 net profit per unit. It's about a $10,000 a month profit right now on that test product. So it's green lit. It's like hey, let's get a thousand of those units, let's go. This is a product we can take to market really well and it's generating more than 90,000 in revenue a month on that. Right. So we know even after marketing cost and rollouts, we're still going to profit 10,000 on that first month. And that's a really great indicator that everything is going well with that product. So it's going to tell me, well let's launch every variation, shape, color, size, let's, we're going to double down all that. This product is going to be a winner. And the data proves that it is. Right? Right price point, right profitability, right capitalization, right market share. If people don't understand that opportunity, they're missing it. Here's the last very key point for this whole thing. I've been in this for a long time, been in this pre Covid been in this during the tariff. I was in business, you know, for the last 18 years. I've seen a lot of things occur, change and move. One thing is true, Americans love their products, has never changed. That is only growing more vivaciously. As you know, in 2022, mobile purchasing surpassed desktop for the first time on the Internet. And with that, anybody can buy anywhere, right on a bus, home or whatever in a few seconds. And that's changed the way people have a relationship with consumerism. So as we grow this up and we understand what's happening, then we realize that there is always shifts and pivots in the market where there are certain times that are good to get in and other times where you're a little bit late. Okay, about two to three years ago you were a little bit late dealing with a lot of the COVID and stuff nonsense. What actually happened with tariffs and the post Covid situation is about 30% of Amazon sellers, just as that one market platform, it's happened on other platforms but just on that one have fallen out of the market. So we see holes of opportunity now to go in very quickly. And there are millions of product opportunities that are now available that weren't there when 30% of the sellers were in those marketplaces are now gone. The impressions have gone from 5 to 5.2 billion a month. So the demand is up, but there's nobody filling that gap. And I haven't seen something like that since 2013. So we are doubling down on products and launches and go to market for the next six to 12 months. Because there's this really very amazing window right now for us sellers to jump in at this product price point at this opportunity. And while the opportunity cost has changed and it's a little more complex and I don't recommend everybody try it alone unless you're really like a go go getter and you like to lose some money, take the next six to 12 months. This is a great time to start a brand because there is a huge hole in the market for a lot of product opportunities.
• 37:38
  Speaker B: And it's interesting, even now with AI platforms, they're recommending products on Amazon, you know, like you depending on what you're, what inquiry you're coming up, they're on there. So you're seeing the redirection happen on so many different areas and so you kind of piggybacking on what you just said. So how can someone get started with limited experience? They want to be able to accelerate and do it in a faster timeframe and they don't want to have to burn 500 grand to be able to make it happen. So, so you talked about testing couple of products, pick five, find two winners. You know, somebody's watching this right now and they're like, oh my God, this is what I've been looking for. I tried this a couple of years ago. It didn't work for me. You got me reconnected. I'm ready to go again. What would be the first steps that you'd identify?
• 38:27
  Speaker A: Well, in the, in the product selection process, that is a, that is the critical component to this whole thing. And really as it comes down now, as you mentioned, to AI systems, even the three years now, Amazon has been switching over its own systems into AI driven analytics, AI driven ranking engines, and AI driven training engines to train the models that are ranking. The training model is called Rufus and the ranking engine is called Cosmo. And that's changed a lot of situations with this learning curve that people have now to kind of get in. And so they're going to have to understand how AI is impacting those models, relationship to the data and how they present their product to those engines so that it believes that they're the best product to be sold. So as shopping agents come online and other things change, that engine is now driving the sellability of that product.
• 39:14
  Speaker B: Before you sell your product to a consumer, you got to sell your product to Cosmo, the AI engine, 100%.
• 39:19
  Speaker A: So we say we sell products to AI engines and the AI engines sell the products, deliver them, handle the customer returns and run the automation. And as that engine is looking for that intersect between our product data and a customer who's searching for a product in 30 seconds or less, that engine's entire job is to use petabytes, zettabytes and whatever bytes it goes above that to pull these language models together to find that right product with a customer need and intent that this person may be going on a trip next week. So they put a social media post out that goes I'm going camping next week. And Amazon's large language model now realizes that if you go camping, guess what you need. Well, I've seen them purchase some things like propane before in a fire, but I don't see that they purchased a tent or a camping chair. So this customer intent model is now going to start showing them camping supplies, tents and other things they don't have as an intent to get them to buy that product, knowing what they're purchasing behavior and even viewership on Prime, Twitch and Freebie is doing to present products just in time to them. Think Minority Report so that they can see a product right in front of them and be able to purchase that product and go, oh, that's right, I don't have any camping chairs or oh my gosh, I don't Want to forget the propane? I'll order it from Amazon. It'll be here tomorrow before we leave on our trip. Those customer intent engines, that's what we sell to and it is all data brokering. It is so much that way now it's not even funny. When does it become about the product? Any idea?
• 40:42
  Speaker B: No, I'm curious. I mean, I don't know if it's when, at the point in time that it lands at someone's door, but when.
• 40:47
  Speaker A: You physically have access to the product, that's when it becomes about the product. What is it about before then? The faith. This is a tough one for people. And belief that the product you're purchasing will not only show up, that it's a legitimate business that you've given your money to and that the product that shows up will fulfill the solution or outcome or desire that you ordered it in the first place. To run farther, jump higher, have a propane and be able to use your camp stove in the woods where you forgot, oh crap, I forgot propane. And be able to do the things with the product you need to do so that you have a great experience with it. And that closes this new engine of e Commerce in 2025 and beyond to have the reviews and the successful product and the whole engine completed that cycle. So that engine knows it's a good experience, it's a great product. You have the equation of selling the product and the product success in hand. And these engines love to see that. So if we're selling that product, engine data that says I am the better product, I am the competitor to that Coke, I look, feel, taste and add the same value to people who want Coke. But you need to try Pepsi. We're now basically telling that engine over a period of time, 30, 60, 90 days, we're it. So we are literally selling that engine so that it knows exactly who that avatar is that needs that product and will intersect that with millions of people on its own 247, 365 while I'm sleeping and sell the product for me.
• 42:08
  Speaker B: That's really, really cool. I love it. And you know, the power of all this put together is a number of elements. You talk about system, process, language, mindset and then you know, a little bit of faith. So there's a lot of things kind of all tied together there. But the faith is really just in that you're going to have the power of a well constructed, historically based at this point in time because Amazon's been around for a while. Data machine deliver the end Result to a person with a credit card and they don't even need to put the credit card in because it's literally a one click purchase option.
• 42:48
  Speaker A: Now they take care of it for you 100% in two days, less or two hours. And if we get that information right in that system then we actually understand what E commerce is about. In today's world. The physical product, if it breaks or has a problem, you have to solve that. If you didn't create a good enough product. And some people are going to say, well Neil, you never talked about the product. Are we just supposed to sell crap? No, don't sell cheap Chinese crappy products. We're talking about a product that you know, for me, as I mentioned earlier, it's a 389 product that can't be a crappy product that has to deliver on the value of that perception or above. So we have to create great products, we get good reviews. The thing doesn't break. People love it. They tell their friends the whole engine completes. That's the the balance of this equation. Let's say I sell really well. I did an amazing job. I figured it out. Maybe I had some help, maybe I had a mentor, maybe I got it done. But the product breaks. Solve the problem, right? If sales fixes everything, then I have to fix the product. That's my opportunity to balance that equation. What a lot of people are afraid of is that it won't sell. They've actually got it inverted. They think, you know, if you build it, they will come. I need this most tremendous product. I've spent all this time on the was an inventor who went bankrupt trying to invent a product that I thought was super super cool. Only we never sold enough of it to really fund our house and ended up going bankrupt in that process. So not recommended right from going to that bankruptcy to going into millions of years in sales was to understand a simp simple concept of innovation over invention to understand the demand for these products already exists. This is not the Internet of 1999. We have spent that period of time all the way to 2025 with systems people, process and technology doing a driven consumerism model that you just need to take advantage of that already exists. You just have to know how to take advantage of it because it's sitting there for anybody who wants to go get it. The success mindset will be one of perseverance and tenacity, overcoming problems and objectives or even asking big questions that create problem so they solve big opportunities. And that's a mindset of success that anyone can build into themselves. Okay. Even if they have no experience in the business, they just have to have that desire. As I say, go from their hell island to their heaven island and be willing to want to do whatever possible to row that boat until they reach it, however long it takes them to row that boat to get to the island. Those people are my most successful builders. Those people are my most successful operators. And when you understand that is a time based thing, again, we go back. Time and money, energy and attention. If you have any limitations on any one of those four things, don't start a business.
• 45:20
  Speaker B: Well, you've delivered ton of value today. Neil, I'm curious. I'd like to make sure we do a shout out for your book because you have a recent book that you've launched here and it's about creating almost automated income. So speak to that a little bit and then where would you recommend? I'm assuming Amazon would be one of the great places to purchase that book, but where else might they be able to find it? And how would you recommend that our viewers get a hold of you?
• 45:45
  Speaker A: Yeah, so thank you for asking. The book itself really is a culmination of some of the things we talked about today. But going into a little bit more detail, it is the strategy by which our playbook, our greenlight process and our successful brands, including some of the failures that are documented in there, have become what they've become, not just for us, but for our clients. And so in that process, I have a podcast called the High Voltage Business Builders Podcast. We're coming up on our 200th episode and we have recorded a number of relationship based podcasts with other people in finance, business and research and legal and accounting and all of these things. And I took those podcasts and with the permission of those people, we made a chapter out of each of them. And each chapter focuses on a component of our playbook. So as people read through the conversation of the podcast, they're reading through each step of the playbook with resources and materials to support support them. Free resources, materials they can look at, videos they can use to support it as they learn the strategy of building an almost automated income. It's the use of technology and training technology against AI algorithms so that the almost automation is literally entire thing that happens after the click that you don't have to do. It's the warehousing, inventory, last mile logistics of this Amazon's ecosystems of plane trains and automobiles that allows me to make sales while I'm sleeping without having to go out and move 40 foot containers myself. So the whole book documents how we create that process in, in our business and our model and gives people an opportunity to check it out. Yeah, Amazon's a great place. If you want to just go order a, you know, hardback real quick, you can go to voltagedm.com forward/freecopy and I believe we have a code, if I'm not mistaken for you, that they can enter that will be in the show notes to get a copy. For the first 10 people they want to grab a copy. There's 10 free codes to get a download, I mean an instant download of the ebook sent over to your email.
• 47:33
  Speaker B: We'll make sure to put that in the description and a comment below. So get a copy of that book because I mean what an incredible resource. Even if you hadn't considered Amazon FBA previously. But there's no harm in learning about how to create an almost automated income. I don't think anybody listening would, would be upset if they had more of that coming into their bank.
• 47:54
  Speaker A: More revenue, more income, more ability to diversify investments if you're into, you know, alternatives of wealth.
• 48:00
  Speaker B: And then for our clients, of course once you've got that set up, you can certainly reach out to your coach so that you can also get some more automated legacy by increasing the size of your family banking system. And then we're just going to get that flywheel turning as you rotate that capital through from a combination of insurance company money, funding products, products to consumers. Revenue comes back in and we just get that thing humming and turning the way it's supposed to be. Neil, this is, this was a ton of fun. I really appreciate you sharing a ton of value. There's so much going on here that I think people will recognize. And you know, we touched a little bit on the power of AI in a unique vertical. How you're using it for so many different businesses, how you're coaching people to understand and recognize even through some customized tools that you've built, which is great. And it sounds like the book is going to be a wonderful resource. Thanks for sharing a copy with our listeners. My pleasure. You know what I'd love to hear from you? Way we like to close our show is we always want to find out. Well, I know you can order capes, especially for Halloween. Of course, maybe when this airs it's going to be around that time you can order capes, but you may not be showing up as a superhero today. However, when you've got 300 people in your business builder group and you're helping them create massive exits and growing an automated income. And even the people reading this book, they might feel like you're a hero. But our question for you is, who do you most want to be a hero to?
• 49:24
  Speaker A: Yeah, that's a great question. And actually the cape analogy just reminded me of a joke. It's probably inappropriate now, but if your wife ever gets mad at you, just grab a blanket and throw it on her and say, now you're super mad. That's probably going to get you kicked off to the couch.
• 49:37
  Speaker B: But, you know, appreciate that joke a great deal. I made your side this weekend.
• 49:42
  Speaker A: She might laugh. You might, you might be sleeping on the couch. I don't know. Really. It's, you know, the value of what I try to do, not just in my business life, is to walk this in my personal life. So as I raising my daughters, we homeschool them. We're teaching entrepreneurial spirit in their life and their daily walk. We talk about the finances and the policy we have as a home office for them for the future and how to manage and maintain that and build their own income systems. So they're all working at different stages of getting to that point. My 13 year old has an ebay business. You can't see the boxes and stuff over here, but she's been running a little ebay hustle, which has been great for her mind and getting the product and talking about what she's making and which products to sell. And my 17 year old is making sponsored brand videos for our Amazon accounts for our clients using AI technologies and stuff. She's been developing a process by which she's now getting paid to make branded videos for the marketing in our company. And she's absolutely loving it and learning how to, you know, grow that. So for me, the purpose of installing into my family those values, the, the wealth, you know, without my, without Wall street mindset, I guess not just the I invest in somebody else, but I can invest in myself, I can invest in my own company and I can build up these understandings of successful mindsets and how to deploy and create wealth, keep wealth, and most importantly, how to help others in that process come along with you. Either they be family or friends. There's an opportunity for you to teach the next person up behind you how to do those things and really just install that at my family level so I can just be consistent across business, family and everything I do well.
• 51:15
  Speaker B: I absolutely love that. And you know, what you're sharing about your daily walk and how you're expressing this to your daughters and how they're embracing the entrepreneurial mindset is fantastic. And it reminds me, of course, of our book Don't Spread the Wealth, which while you should go get a free copy of Neil's book, if you also want a free copy of this one, you can go to don'tspreadwealth.com that's don'tspreadwealth.com and pick up a copy of that so you can start having those family banking meetings and incorporate great conversations about money. We have an opportunity to start taking this thing called money, which often creates stress in the household and completely change and flip the game so we can have conversations about money that are fun and engaging and entertaining that actually bring people together and make something really powerful over a lifespan. Now you're doing that. Neil, thank you for sharing how you're helping 300 entrepreneurs do it in your powerful group and for allowing all of our amazing listeners to get a free copy of your book. Appreciate you being here. Those of you watching, of course, on YouTube, magically, you're just going to see bam. New video showing up that says, holy, this is amazing content. Please click that and continue the ever present journey of learning. If you're enjoying this episode, you should subscribe. Go ahead and do that now. Whether you're on Apple or Spotify, hit the subscribe button and you can never miss a show again.