Selling on Amazon: A Case Study
Learn the power of an Amazon mentor from Rich Dad's VP, Greg Arthur
If there’s one thing that’s always constant, it’s change. My business and financial education occurred in a time when, to build a big company, you had to have a lot of overhead. Today, thanks to the internet, you no longer need an office, a staff, and in some cases, even capital. Today, there is a whole generation of young people who have grown up with the internet, are fluent in it, and are building cash-flowing businesses through it.
One of those people is Rich Dad’s VP, Greg Arthur, who has built a thriving business selling through Amazon.com. But Greg didn’t do this all alone. He knew he needed a good mentor. He searched high and low for the right person—someone who would not only understand his values and philosophy but also challenge him. That person is Brad Degraw.
As I’ve said before, business is a team sport. No one does it alone, even when they’re a solopreneur building an online business. And a mentor is key to success. Below is a transcript of Greg talking with his mentor, Brad, about running a business on Amazon. As you read it (it’s been edited for readability), I encourage you to ask, “Who is the best mentor for me?”
Greg Arthur: Hey, this is Greg Arthur, the VP at the Rich Dad Company. As you know, we signed up for a webinar about entrepreneurship. Unfortunately for you, you've got me instead of Robert because while Robert is one of the greatest entrepreneurs in America, he is not so great with the home school, the home-based entrepreneurship. You got me because I actually do that as a personal thing. One of the things I wanted to do today is introduce you to my coach that I used for my Amazon products.
Before we get into that I want to give you little bit about Rich Dad and a little bit about the philosophy of entrepreneurship. As most of you know, Rich Dad really, really focuses on entrepreneurship because we believe it's the best way to control your own future. If you become an entrepreneur, your boss doesn't control your future, and you are not relying on the government for social security or Medicare. You control your own future, your own destiny, and your family’s. To us that is probably the most important thing, maybe the best gift, we can give you.
However, if you look at the media you hear things like, nine out of ten entrepreneurs fail, and it causes so much fear. It really just makes people want to stay as an employee. It makes them want to just be so grateful they got their good grades. The truth is that fear is not based in reality. When they give you those numbers that nine out of ten failed, what they are doing is they are looking at the IRS records of anyone who listed a business for the tax benefits—they did that just for tax benefits—they wanted to get a tax write off. Maybe they would have turned it to a business at some point in their life, but they really didn't. You can only carry those businesses on for I believe five years, at that point you have to close your business. When it says that most businesses closed, it's because most businesses were never businesses.
I want to get rid of some of that fear for you. The other fear is, a lot of people believe in order to become an entrepreneur you have to quit your job, and you have to jump in with both feet. I will tell you that didn't work for me. I have a family. I have four children. That would not work for me. I needed the security of a job for the short term while I built up an entrepreneur business. What I've done is I still work here at Rich Dad because I love it, and I still wanted to control my own destiny. What I did is I started my businesses in my off hours, on the weekends, 15 minutes a day and night.
The first thing I had to do though was I had to get educated. The person I want to introduce you to today is a person who helped me along this path. I started my own Amazon product, and it was going pretty well. I did some courses, and it was going well. But there were some pieces that I was missing, and I went out and I found the best coach I could find. His name is Brad Degraw. I will introduce him in a second. He took my little business, and he made it into a great business. Now, the money coming in monthly is actually more than my paycheck. I'm now free enough, that I could quit if I needed to.
Let's say Robert Kiyosaki doesn't like my face anymore and decides to fire me. I'm still okay, and my family is still safe. In the future when I get old and it’s Social Security time or Medicare time, that probably won't be around. It won't matter because I have already taken care of all those things because I started a home-based business. I did it with the right coach and the right education. I decided to introduce my coach to you guys because I feel he has so much knowledge about the Amazon stores and how to make money with Amazon that to not introduce him would be wrong. Here is Brad Degraw. Hey, Brad.
Brad Degraw: Thank you.
Greg Arthur: My pleasure, thanks for pulling me out of the rat race. Now I'm here because I chose to. I wasn't able to do that on my own. I would love if you could give the Rich Dad community kind of the same lessons you gave me.
Brad Degraw: The first thing you have to realize is you can do this. This is something that anyone can do. To give you just a little bit of background, I had a job once upon a time, and I kept getting fired. Like a lot of folks, I realized that there was a lie. This stability, this idea that you can work for someone and eventually that can turn out to your benefit long term, it didn't work out for me. I started with $100, and a WiFi connection.
Back then there were no coaches, there was no software, and there were very few resources. I started with Amazon. Back then there was a business model where you could buy other people's products at a very low clearance price, then sell them for retail sometimes higher. The thing is, that's not even really a business, that's just cash flow, that's a glorified job. For me, we moved on to what traditional people call “white labeling” or “private label work.” You take a copy cut product and just slap your label on it.
Greg Arthur: That's where I started, that's where I came into the picture is I had started white labeling. I found some success but not the success I wanted.
Brad Degraw: That's the thing, there are people out there that will convince you that's a business, that that's a long-term play. The reality is not because it's a copy cut business, anyone can go out there, create a new logo, and they are going to be out there slicing that pie and watering down the market. What we did in your business, what anyone can do in their business, is actually make something that's unique, something that doesn't exist in the market place. Just make it two percent better and now you have something that you actually own. Something that people will throw away the copy cut and order yours.
Greg Arthur: In my case I won't tell you exactly what my product is because I don't want to water down the market. The small change that we made was almost laughable, it made such a big difference. That little tip right there is actually huge, listen to that. Tell them, why Amazon?
Brad Degraw: Amazon is fantastic because all the most difficult pieces of e-commerce, being an entrepreneur, Amazon takes care of those headaches for you. You don't have to be a traffic specialist; you don't have to master SEO. As far as shipping and logistics, they handle everything for you. They come with credibility, everyone understands Amazon, all the customers, hundreds of millions of people are right online ready to buy with their credit card. It makes the business very easy. Your biggest role in your business is having that great idea and doing the market research . That's why I love Amazon, because they take care of all of the heavy lifting, all the most difficult parts. They let me do the easy part.
Greg Arthur: One of the things that I discovered just at the early start of this is, why physical products? Why did you choose that over digital products?
Brad Degraw: For a few reasons, if you are going to use Amazon for books you have to be able to write books. That's a lot of work. When I started looking at what it takes to write a book, I wanted to see who the most successful authors were out there. There are only a few people out there, like Robert Kiyosaki, who can make best-selling books consistently. I didn't feel that that was something I can do. To make best-selling products is actually easy because there are best-selling products everywhere. I know how to look at products and pick the winners. I have a really easy system to just implement with that. The nice thing about physical products, you can't share the downloads. What's in the box is what it is. It's a manifestation of time and consciousness. When people open it, it is actually physically here in the universe.
Greg Arthur: That's always so fun when you get that package in the mail.
Brad Degraw: I order stuff all the time, and by the time it gets to me I've forgotten what it was. It’s almost like Christmas everyday. I give from myself.
Greg Arthur: You are giving the great business to millions of people, that's awesome. Why now, for example, in the news lately Amazon is cutting out the small business guys. I don't even understand what they are saying, can you just address that?
Brad Degraw: Every market place has some turbulence, you know there are highs and lows. Right now Amazon is trying to tighten up their business model. For example, the Amazon stores are starting to shut down. You can still use Amazon as a platform to sell, but Amazon's overall objective is to grow more Amazon customers. For example, if I had a Brad Degraw store check out by Amazon, that really doesn't help Amazon because I get the customer; I get the customer's contact information. That customer almost doesn't realize that Amazon was in the loop. Now, if the customer had to go to Amazon to buy Brad Degraw products, now Amazon has an Amazon customer. What they are really trying to do is build the Amazon market place rather than the third-party market places.
Greg Arthur: Which is actually what we do. With our products, we don't list them in the Greg Arthur store. We just list them on Amazon. We are actually helping Amazon achieve what they want, in return they help us achieve what we want.
Brad Degraw: Exactly, it's a win win.
Greg Arthur: When I talk to my friends about this, they are always so amazed that I was able to be successful at this because they see it as so much competition on Amazon. Like it's too late for them to get in. I have tried to explain to them that that's not the case. Why don't you explain because you are going to do a much better job than me.
Brad Degraw: The nice thing is there is no limit to the amount of products or variation or number of brands that we can have. It's not too late, in fact it's only getting started. In the last few years we've seen it go from “this is a pretty great market place” to “this is an exceptional market place.” Amazon is actually taking more time and more consciousness right now to make it easy for sellers who have unique products to launch. There are several new programs, they're actually going out to the trade shows and talking to small guys like you and I who want to do better on Amazon. They are really making it achievable for guys like you and I to get into Amazon and build their nice, healthy, cash-flowing business.
Greg Arthur: When I started out, my product had five other products that were all the exact same. Their (Amazon’s) fear was that it's just going to be one of ten of the exact same thing.
Brad Degraw: Amazon doesn't need to turn into eBay. What they are trying to do is create a place where anyone can buy anything quickly. The time that it takes you to think of a product that you may want, and the time you actually get it—they want to minimize and compress that time. Watering down the market place with more of the same doesn't achieve the goal. If we can have variations so that your product is unique and different than mine, then it works. There is someone who specifically wants your product, and they may specifically want my version of that product. It needs to be unique to really make your mark in Amazon.
Learn more about Brad Degraw and his system for building a thriving, cash-flowing business on Amazon.com.