Discover how to scale your Amazon business with expert insights from Eric Castellano of AmazonLit. Learn about brand partnerships, wholesale strategies, and much more in this must-listen episode for Amazon sellers.
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Episode Highlights
Building Confidence for Successful Brand Partnerships
Eric Castellano shares the secret sauce to securing brand partnerships on Amazon. Confidence and expertise are key, along with building trust through proven results.
Scaling with Wholesale and Brand Exclusives
Eric dives into his journey from retail arbitrage to managing a massive wholesale operation. Learn how brand exclusives can significantly boost your margins and business growth.
Optimizing Listings and Managing Ads
Discover strategies for optimizing product listings, managing PPC campaigns, and leveraging tools like SmartScout to find and secure profitable brand partnerships.
The Power of Bundles
Eric discusses the benefits of creating product bundles to increase margins and enhance the customer experience. Learn how to find bundle opportunities and navigate common challenges.
Resources From This Episode
- AmazonLit: AmazonLit Official Website
- Eric Castellano on Instagram: amazon_lit
- SellerSnap Repricer: SellerSnap
- SmartScout: SmartScout
- Melissa & Doug: Melissa & Doug Official Website
- SellerCloud: SellerCloud
- SellerBoard: SellerBoard
- SellerLegend: SellerLegend
- ASD Trade Show: ASD Market Week
- Amazon Brand Registry: Amazon Brand Registry
In Conclusion
Don’t miss this episode filled with actionable insights and strategies to grow your Amazon business. From building brand partnerships to optimizing listings and creating profitable bundles, Eric Castellano provides a wealth of knowledge that can help you elevate your Amazon game. Connect with Eric on Instagram at amazon_lit and visit AmazonLit for more resources and support.
Transcript
[00:00:00] Eric Castellano | CEO of AmazonLit: A potential relationship, super confident about your expertise in whatever niche. This one specifically Amazon and brand partnerships and managing brands on Amazon. When you could go into that with the confidence that you know what you’re doing and you can basically guarantee that this brand will grow.
I mean, that just takes the opportunity to a whole new level.
[00:00:22] Todd Welch | CEO & Founder of Welch Products LLC: All right. What’s up everybody.
Welcome to another episode of Amazon seller school today. I’ve got. Eric Castellano with me, and he’s known on the socials as Amazon lit. So some of you have probably seen his, uh, information and such out there, but he’s been selling on Amazon for over 10 years, sold over 500 million with his business partner, Sebastian.
Uh, they do a lot of wholesale, but also some private labels, some bundles, and they’ve been moving into a lot of brand exclusive. Partnerships, which we’re really going to dive into on this episode. So Eric, I really appreciate you coming on the show. Yeah,
[00:01:07] Eric Castellano | CEO of AmazonLit: Todd, excited to be here and kind of dive into it, man.
Really looking forward to it.
[00:01:11] Todd Welch | CEO & Founder of Welch Products LLC: Yeah. Why don’t you just give us the high level overview real quick of your background and how you got started selling on
[00:01:18] Eric Castellano | CEO of AmazonLit: Amazon? Yes. So, you know, you, you brought up Sebastian. That’s my business partner. I’ve known Sebastian for 20 plus years. Um, and back in 2013 ish, you know, he started buying products, retail arbitrage from Costco, BJ Sam’s club and reselling them on Amazon.
And when he first told me about it, I literally laughed in his face. I was like, dude, no way. Are you Um, but he met someone who ended up buying a house from selling on Amazon. So that was his motivation. And we started a small little basement, like most people do out of their home or garage. Um, and we just kind of kept scaling it from there and got our first warehouse.
And now here we are 10 years later and warehouse number six. I mean, we have a 50 employee team and we ship close to 300, 000 orders a month. I mean, and like you said, we’re branching into other avenues to generate additional revenue and profit for
[00:02:14] Todd Welch | CEO & Founder of Welch Products LLC: our company. Yeah, for sure. I’m curious. Uh, how big of a warehouse do you guys have?
[00:02:19] Eric Castellano | CEO of AmazonLit: Uh, it’s about 50, 000 square feet of warehouse.
[00:02:22] Todd Welch | CEO & Founder of Welch Products LLC: Very nice. Very nice. About 10 times bigger than mine. Then mine’s about 5, 000 square feet.
[00:02:27] Eric Castellano | CEO of AmazonLit: So what state are you in?
[00:02:30] Todd Welch | CEO & Founder of Welch Products LLC: We’re down here in
[00:02:31] Eric Castellano | CEO of AmazonLit: Florida. Florida. Oh, okay. So rent is, is still pretty reasonable down
[00:02:35] Todd Welch | CEO & Founder of Welch Products LLC: there. Not too bad. It’s getting a little high near Tampa and Miami area.
Where are you guys at
[00:02:42] Eric Castellano | CEO of AmazonLit: again? We’re, we’re in New Jersey and rent’s ridiculous up here. Oh, I can imagine.
[00:02:46] Todd Welch | CEO & Founder of Welch Products LLC: Yeah. That’s gotta be. Crazy, but very good. So you’ve grown it very large, which is awesome. And kind of a similar path as I had retail arbitrage and, you know, flipping out of my basement and growing from there.
So that’s awesome. Yeah. You guys are doing a majority right now wholesale, uh, with some private label bundles and brand partnerships. So, uh, tell us a little bit more about that mix and, you know, why you’re moving into more brand partnerships.
[00:03:20] Eric Castellano | CEO of AmazonLit: Yeah, so definitely a majority of our business, you are correct, is still a wholesale and I think there’s still a lot of opportunity with wholesale, you know, there’s tens of thousands of brands out there produced by some rather large manufacturers like Unilever, Procter Gamble, Reckon, and Ben Kisser.
Where they’re not really interested in partnering with one. So there’ll always be wholesale opportunity, but what we’ve noticed and I’m sure others have noticed is the margins are always super tight and all it takes is a few mistakes or misbuys or removal orders or disposal orders to really eat up your profits if you’re not operating your wholesale business correctly.
So about four or five years ago, we started branching out into brand exclusive relationships where. We build relationships with these brands and then represent these brands on Amazon and optimize their listings, run PPC campaigns, images, everything. We do everything.
[00:04:20] Todd Welch | CEO & Founder of Welch Products LLC: Yeah. And you have that, your team that does that in house, then you’ve hired or do you outsource that?
[00:04:26] Eric Castellano | CEO of AmazonLit: No, it’s all, it’s all pretty much in house. I mean, we have some VAs who help with some listing issues, um, on the back end. But other than that, uh, all the listings are created in house. Yeah. I mean, all the, all the analyzation of the data for estimated sales and which listings should be created for new bundles of variety packs is all done in house.
A hundred
[00:04:47] Todd Welch | CEO & Founder of Welch Products LLC: percent. Okay. Very good. And do you hire mostly here in the United States or you got a lot of VAs as well?
[00:04:53] Eric Castellano | CEO of AmazonLit: No, no, we, uh, I would say 90 percent of our staff is, is U. S. based, which is about 50 employees. And then we have, you know, another seven or eight overseas.
[00:05:04] Todd Welch | CEO & Founder of Welch Products LLC: Okay.
[00:05:05] Eric Castellano | CEO of AmazonLit: Very nice. Now, as far as like listing, uh, creation for like infographics, like I, I just pay somebody, uh, a guy overseas to take care of stuff like that.
[00:05:17] Todd Welch | CEO & Founder of Welch Products LLC: So what is your, what is your guys kind of secret sauce when it comes to actually finding and acquiring these brand exclusives and being the only seller of the products?
[00:05:29] Eric Castellano | CEO of AmazonLit: Yeah, I think really the secret sauce is the confidence. Right. The confidence, but here’s the, the secret of the secret sauce is the confidence comes from experience, right?
So I think when you can go into a relationship or a potential relationship, super confident about your expertise in whatever niche, this one specifically Amazon and brand partnerships and managing brands on Amazon, when you could go into that with the confidence that you know what you’re doing and you can basically guarantee.
That this brand will grow. I mean, that just takes the opportunity to a whole new level.
[00:06:09] Todd Welch | CEO & Founder of Welch Products LLC: Yeah, for sure. I mean, there, there’s so many products, especially doing wholesale that you come across that’s like, man, if I could only optimize this list, just be killing it. So is that how you found a lot of your brand partnerships?
Like you were selling their products already, and then you built that relationship over time or other ways than
[00:06:31] Eric Castellano | CEO of AmazonLit: that? Yeah, a hundred percent. I mean, a lot of them come from that products that we’re selling, buying from distributors and wholesalers that we’ve, we’re buying just general wholesale from. And then we’re like, wow, we’ve been buying this product a lot.
Like maybe we can establish a connect, a direct relationship with this brand and really enhance their whole entire brand on Amazon to make them more money and make us more money and really optimize everybody’s shopping experience on Amazon. But another software that we use or another. Skill we use to acquire some of these brands is smart scale, which is an amazing software.
A good friend of mine, Scott Needham created who I’m sure you’re familiar with. And, uh, you know, it really helps sort the data, you know, for, and the recommended sort would be like 20 to a hundred thousand dollars in monthly sales revenue. Right. So you’re not, you’re not targeting like the Huggies, you know, these massive brands, you’re looking for those small, medium sized brands to really.
[00:07:31] Todd Welch | CEO & Founder of Welch Products LLC: Yes, exactly. I like to say that if you went to the mall and mentioned a brand name to someone, like maybe one out of 10 or probably zero out of 10 would know that brand.
[00:07:43] Eric Castellano | CEO of AmazonLit: Yeah, small, small, right? Maybe, but maybe nice presence on, on e commerce, not really in many stores yet, or maybe the opposite in a lot of stores, not a heavy presence.
Presence on e commerce.
[00:07:56] Todd Welch | CEO & Founder of Welch Products LLC: Yep, exactly. Yeah. I think that’s a big mistake. A lot of people make, they’re going after Huggies or Nike and stuff like that. And then they’re like, why can’t I open accounts and stuff like that? It’s like, well, they’re way too big. They’re, they’re not paying attention to Amazon for the most part, a lot of times, so, or they’re doing it themselves.
[00:08:17] Eric Castellano | CEO of AmazonLit: And I mean, realistically, the way I see it, Todd is like, let’s just say you take on one small brand and it’s bringing in 50 K a month, right. In sales revenue. I mean, it’s not unrealistic for brand partnerships to operate, you know, 10, 12, 15 percent net because the margins you maintain them and you’re the only seller on all the listings.
So, I mean, one brand at 15 percent net 50 K a month, that’s 7, 500 a month, you know, times 12 months. Talking 90 K a year, just with one brand, you get two or three of those. You you’re multiple six figure business
[00:08:53] Todd Welch | CEO & Founder of Welch Products LLC: owner. Absolutely. And so you guys have been able to maintain higher margins like that because, uh, companies like pattern, I’ve heard that they’re doing like maybe 3 percent margin on some of their big brands that they’re working with.
[00:09:11] Eric Castellano | CEO of AmazonLit: Yeah. Yeah. I mean, it’s obviously not the same for every single brand. Certain brands you could obviously get a higher premium for, but definitely the brand direct relationships, 10 to 15 percent is definitely par for the course. Yeah, now obviously general wholesale. Yeah. I mean, we’re 3, 5%, you know, 6 percent on a good day.
Yeah. And
[00:09:35] Todd Welch | CEO & Founder of Welch Products LLC: so for your general wholesale, you guys have kind of seen an increase in competition there and that’s why you’re moving away
[00:09:43] Eric Castellano | CEO of AmazonLit: though. No, we’re not moving away. I mean, we’re still very heavily invested. I mean, it’s probably four and a half million of our monthly sales is still wholesale. So I mean, it drives a lot of the business growth.
It drives the capital that we use to put up for brand direct relationships and private label. So absolutely. We use it as like the cash cow to keep the operation moving.
[00:10:06] Todd Welch | CEO & Founder of Welch Products LLC: Yeah, for sure. I, in, in the last year I’ve seen about a, a 10 percent drop in my ROI in the general whole with an increase in the brand partnerships, because then you’re not having to compete directly on price.
You got to keep the brand happy, obviously. So you can’t sell it at astronomical prices. Uh, you got to find that balance of profit and quantity sold.
[00:10:31] Eric Castellano | CEO of AmazonLit: Yeah, and and then the real goal would be like to get them to pay for ads, right? Like I have some brands right now giving me seven eight nine thousand dollars a month in ad spend So, I mean that’s massive because now they’re invested and now Optimization as long as the ads are running smooth.
I mean the sky’s the limit
[00:10:52] Todd Welch | CEO & Founder of Welch Products LLC: Yeah, yeah, I think running ads is a big problem that people have and you want to try to get the brand to pay for it because that can really cut into your profit
[00:11:02] Eric Castellano | CEO of AmazonLit: otherwise. A hundred percent. I mean, when you look at some of the brands we manage and you take away ads, it’s like, all right, maybe, I mean, it’s still healthy, but it’s like, all right, maybe this is, this is, but then you put that, you know, 10K a month in ad spent back in and you’re like, all right, this is actually really fucking good.
Okay. Yeah,
[00:11:20] Todd Welch | CEO & Founder of Welch Products LLC: for sure. So on the, the brand side, uh, why do you think the brands decide to work with someone like you or myself instead of just doing it themselves?
[00:11:35] Eric Castellano | CEO of AmazonLit: Um, because it’s a lot of work, I think, you know, as you know, you operate an Amazon business and I’m sure most people who listen to this operate Amazon businesses and it’s not simple.
It’s not like one day you just open up a seller’s. Storefront and start creating all these optimized listings and shipping your inventory and manage your returns properly and deal with customer feedback. And like, it’s, it’s a lot of work and most brands don’t have the knowledge on how to do it or don’t care enough to want to do it themselves.
[00:12:06] Todd Welch | CEO & Founder of Welch Products LLC: Yeah, I would, I would agree, especially for those middle size, small to medium sized brands, right. That maybe don’t have enough profit or income in their business to hire a full team. Yeah. And learn Amazon. It can be a, a real nightmare. Just dealing with seller support as I’m sure, you know, can just be
[00:12:26] Eric Castellano | CEO of AmazonLit: ridiculous.
Yeah. And that’s a huge selling point, right? Because it’s like, Hey, listen, you have a phenomenal product. Your brand is amazing. You focus on the brand, creating a few new SKUs, optimizing your current SKUs. I’ll focus on the Amazon side, selling the product.
[00:12:43] Todd Welch | CEO & Founder of Welch Products LLC: Exactly. Yeah. Take that all off of them. Allow them to just treat Amazon like any other retail store that they’re selling to and not have to worry
[00:12:53] Eric Castellano | CEO of AmazonLit: about it.
He’s got to think about it like this, right? If I can, let’s say 10 X their sales over the course of the next 12 to 18 months, right? It’s like, how much more? All right. So they could do it themselves and keep a little bit of the margin that right now I’m keeping and have a 10th of the sales, right? Or let’s just say they double it and have a fifth of the sales or they can.
Eliminate that additional margin that they’d keep by operating themselves. Sell it to me wholesale, not have to deal with anything and sell 10 times more of the inventory.
[00:13:28] Todd Welch | CEO & Founder of Welch Products LLC: Yep. Yep. And they get their money, you know, a lot quicker in bulk, whatever the net terms you are, you have. Do you typically do net terms or you do any kind of consignment?
Um,
[00:13:39] Eric Castellano | CEO of AmazonLit: both, both. So interestingly enough, we just got our largest consignment shipment is three containers. So, I mean, it’s, it’s like over 70 pallets and we just got it last week. And they basically said, Hey, just take this inventory, sell it as it goes. When you sell it. And the month you pay us for it. So yeah,
[00:13:59] Todd Welch | CEO & Founder of Welch Products LLC: I think that’s kind of the the holy grail if you’re able to do it because that really helps the cash flow because that’s typically the hardest thing in a in a wholesale business is managing
[00:14:09] Eric Castellano | CEO of AmazonLit: cash flow.
Um, but the extended net terms with typically you’ll be able to push, you know, 45 days, sometimes even 60. I mean, most wholesalers, they’re going to start you. Maybe 14, you know, bump you to 21, some will get you to 28, 30, but I mean, the brands are a little
[00:14:28] Todd Welch | CEO & Founder of Welch Products LLC: more generous. Yeah. Yeah. I’ve got a lot of net thirties, some net 45, some net sixties, even a couple net nineties.
So the further you can push that out, the hell better it’s going to help with your cashflow.
[00:14:43] Eric Castellano | CEO of AmazonLit: What would be your main, uh, I know we talked about SmartScout and leveraging existing relationships. What, is there any additional ways that you’re currently locking in some of these brands,
[00:14:53] Todd Welch | CEO & Founder of Welch Products LLC: Todd? Uh, definitely SmartScout.
We’ve started using that a lot, uh, being able to filter, you know, on the, the quality of the listings and stuff like that is really nice. Uh, but in addition to that, I’ve just had, uh, going to trade shows. Can be really good, research them in advance and find the ones that their products are selling good on Amazon, but their listings are really bad.
And, you know, you can easily double their sales. So that’s worked really well for us as well. But otherwise just, you know, like you said, distributors and finding products that you can sell well, and then trying to build those relationships.
[00:15:31] Eric Castellano | CEO of AmazonLit: Yeah, a hundred percent. Yeah,
[00:15:35] Todd Welch | CEO & Founder of Welch Products LLC: for sure. So once you’re getting these brand exclusives, are you signing some type of agreement?
With them
[00:15:44] Eric Castellano | CEO of AmazonLit: in a perfect world. Yeah. We’d love an agreement, but not every company’s open to signing one. You know, we’ve, we actually just had a phone call right before this meeting with one of our larger brand directs, uh, we’ve had an exclusive with them for nearly three years and they just, they just won’t sign a contract and we’re okay with it because the relationship is very solid.
Yeah.
[00:16:06] Todd Welch | CEO & Founder of Welch Products LLC: Yeah. Definitely agreement is ideal, but as long as you have that good relationship, especially with the owner. You know, you know, like and trust each other that can go a long ways, uh, even further than having an, an agreement in place. Yeah. Yeah, so you’re aiming for the agreements. Uh, are you, uh, then once you sign on and new brand partnership, um, are you immediately just jumping in and starting to optimize all of their listings or how it is that process?
Are you looking for certain listings that you’re focusing on?
[00:16:43] Eric Castellano | CEO of AmazonLit: Yeah, we’re definitely starting with, there’s two things we’re typically looking out for. Obviously the bestsellers, and then the ones that are getting just, what’s the word I’m looking for? I guess just, uh, I guess trashed by other, that’s not the word I’m looking for.
I mean, just demolished, right? The listings just price tanking, thousands of, like, It just where it’s ridiculous, you know, and it needs some cleaning up. Those are the two main focuses. Cause you never want to go too aggressive because you don’t always know that it’s going to be the right fit for you either.
I’ve taken a lot of poor brand relationships on in the past where I spent way too much time enhancing, optimizing PPC, like, and it just wasn’t worth the
[00:17:25] Todd Welch | CEO & Founder of Welch Products LLC: squeeze. Yeah, focus on the the top selling ones for sure. Now, the ones that have a bunch of other sellers on it. How do you guys work to get those sellers
[00:17:35] Eric Castellano | CEO of AmazonLit: off of there?
Oh, well, 1st step would obviously be brand registry, right? You definitely want to because you give you get a little more control. with the listing when you, when you set up brand registry. Um, and then obviously you could go the route, which is the unpreferred route, which is getting a lawyer or an attorney involved in sending the letters and the cease and desist.
You, I know me, I ignore those. I’m sure you ignore those when you get them. I mean, and then the other only really way to, to, uh, Essentially do that would be 2d transparency.
[00:18:06] Todd Welch | CEO & Founder of Welch Products LLC: Okay. Yeah. Perfect. Yeah. Transparency. We’ve started using that as well. Works quite well for the most part. If you can get all of their listings to register in the brand registry, but I found sometimes like half of them will go in and the other half, there’s some problem in the backend and it won’t accept them, but that’s pretty much the only surefire way to, to get all the other sellers off.
[00:18:31] Eric Castellano | CEO of AmazonLit: That’s the only way. And it’s, you’re right. Sometimes those errors do happen. And it’s typically because the brand name doesn’t match the brand name that’s registered with brain
[00:18:41] Todd Welch | CEO & Founder of Welch Products LLC: registry. Yeah, that’s a common one, but I’ve, I’ve also seen them where it’s like, you’ll have a brand store set up, for example, and a majority of the listings will say, you know, click here to visit them.
The brand store and then other ones, the brand name’s exactly the same, but it just says brand colon, the name, and you click on it and it doesn’t go to the store for whatever reason. I’m not sure what the glitch is, but you got to keep hammering seller support over the head to get it to fix or brand registry support,
[00:19:10] Eric Castellano | CEO of AmazonLit: which is a nightmare, which we all know just the back and forth.
[00:19:15] Todd Welch | CEO & Founder of Welch Products LLC: Yep, for sure. So yeah, for sure. So brand partnerships and is probably, is that becoming one of your highest profitable sides of your business or do you see more bundles and private label being more
[00:19:30] Eric Castellano | CEO of AmazonLit: profitable? No, no, definitely. The, the brand partnerships are up there. I mean, the bundling is, is definitely fruitful as well.
That’s why we put a huge focus on it. Um, but I mean, the, the bundling, you’re kind of starting from scratch versus taking, I mean, not necessarily because you’re leveraging brand names that exist already, but I mean, it’s just a little different ballgame than, than the brand.
[00:19:53] Todd Welch | CEO & Founder of Welch Products LLC: So let’s dive into the bundles a little bit because I’ve, I have a lot of fun building bundles.
How are you guys finding those and ideas for bundles to build?
[00:20:04] Eric Castellano | CEO of AmazonLit: Yeah, so typically we like to see what customers are shopping for and buying frequently together, you know, to figure out bundles that could potentially crush and also we’re looking for what other people. are doing, right? What are other people bundling with certain products?
Um, and then before we create any bundles, we want to make sure that the sellers on the listing aren’t the brand, aren’t Amazon dominating the buy box to make sure that if I’m going to go through and spend the time to create these listings and get the images and optimize the SEO, that it’s not going to get immediately removed.
After it goes live, you know?
[00:20:41] Todd Welch | CEO & Founder of Welch Products LLC: Yeah, for sure. That’s, uh, I was just talking to a couple, uh, we had a kind of a coaching session and they were selling, uh, some stuff from, I believe it was Fisher Price brand and they kept getting taken down, you know, they were packaging stuff that goes along with it. Um, so yeah, you can, when you start using those trademark terms, the automated bots can take down your listing pretty quickly
[00:21:09] Eric Castellano | CEO of AmazonLit: sometime.
Yes, absolutely, man. Absolutely. You know, but, but I think what, what a lot of people do early on Todd and because we’re talking about a lot of different things, right? The brand partnerships, the wholesale arbitrage in the beginning and now bundles. I think what people do in the beginning is they spread themselves too thin.
You know, they listen to something like this and they’re like, Oh, I need a brand partnership. I need to create, and like, no, just focus on the build a business to a million bucks first and then start branching into these other
[00:21:39] Todd Welch | CEO & Founder of Welch Products LLC: things. Yeah. Yeah. I mean, if I had to coach someone, I would say, start with wholesale because that’s kind of the low hanging fruit and then create some of your own bundles and get experience building listings, creating graphics, doing search engine optimization, PPC.
And then you’ve got all those skills that you can go out and get those brand partnerships. And hopefully you’ve made some relationships along the
[00:22:05] Eric Castellano | CEO of AmazonLit: way. Yes. A hundred percent. A hundred percent. I mean, it teaches you a lot about the industry and how Amazon operates and what a good listing is. Just those initial, you know, multiple months of doing what you just said.
I couldn’t agree more. For
[00:22:20] Todd Welch | CEO & Founder of Welch Products LLC: sure. Now with the bundles that you guys are making, are you putting those under your own brand name or under the brand name of the product? No,
[00:22:27] Eric Castellano | CEO of AmazonLit: no. Typically we, we do our own trademark. Okay. Cool. And a value add.
[00:22:33] Todd Welch | CEO & Founder of Welch Products LLC: Okay. Yeah, and are you typically getting permission from the brands of the products you’re putting in the bundles?
Sometimes. Okay, but otherwise you haven’t had too much of an issue with listings getting taken down? No,
[00:22:47] Eric Castellano | CEO of AmazonLit: about 30 percent of them get removed.
[00:22:50] Todd Welch | CEO & Founder of Welch Products LLC: Yeah, again, it kind of goes back to that sticking with the smaller brands, right? If they’re smaller brands, they’re typically not going to care too much.
[00:22:58] Eric Castellano | CEO of AmazonLit: No, no. And it’s a numbers game, you know, still, even if say you create a hundred listings, 30 of them get removed, but out of the other 70, half of them crush.
I mean, it’s worth it.
[00:23:09] Todd Welch | CEO & Founder of Welch Products LLC: Yeah, for sure. And are you, what’s kind of your profit margin that you’re looking for on a
[00:23:14] Eric Castellano | CEO of AmazonLit: bundle? 20 percent gross. Oh, it’s got to be over that. I mean, I wouldn’t definitely don’t want to take less than that. I mean, if I want to take less than that, just buy more general wholesale.
[00:23:24] Todd Welch | CEO & Founder of Welch Products LLC: For sure. Yeah. We do a lot of the bundles as well. It’s a great, great way to kind of increase ROI and profit margin for sure. You can even a lot of times sell bundles at a higher price than the individual products inside, just because you’re making that convenience, especially if you can make an awesome listing.
And the individual products maybe are kind of crappy
[00:23:46] Eric Castellano | CEO of AmazonLit: listings. Yeah, and I mean the way I see it because you you said it best It’s like even if you increase your margins on average across the board across the entire year a couple points I mean a two million dollar business every point your business goes up in margin is 20 grand You know, so you, you make a three point increase.
I mean, you’re talking 60 K. I mean, that’s a nice chunk of change.
[00:24:12] Todd Welch | CEO & Founder of Welch Products LLC: Yeah, absolutely. I mean, it can, it can snowball pretty quickly if you really stick to it and you’re building a lot of bundles over, uh, you know, the course of the year, you could grow that really
[00:24:25] Eric Castellano | CEO of AmazonLit: quickly. And then at the end of the year, all of a sudden, 15%, you know, of your business is a higher margin.
[00:24:35] Todd Welch | CEO & Founder of Welch Products LLC: And it’s more, uh, you know, fortified, I guess you could say, because you’re making those bundles on your own brand. Maybe you’re putting something extra in that bundle that, you know, you have trademarked or copyrighted or something like that, and so you don’t have to worry about other people jumping on those listings and competing with you driving down the price.
[00:24:59] Eric Castellano | CEO of AmazonLit: Which I think is better for everybody. I mean, as far as the customer experience, I know for me, when I shop on Amazon and I like, there’s some things I buy all the time, right? Toothpaste, essentials, the everyday stuff, right? And I don’t like when I go and I buy it one day it’s 14. 99. And then two weeks later, when I go to replant, it’s 19.
99. It’s like, keep the price at least. Somewhat consistent for me, you know? Yeah.
[00:25:21] Todd Welch | CEO & Founder of Welch Products LLC: Yeah, for sure. Or even more frustrating. You buy it at 20 bucks and then you go back and it’s like 10 bucks. It’s like, crap, I got ripped off. And the brands don’t like that either. So the brand is seeing that and their retail customers are seeing that as driving them crazy.
So that’s another reason the brands should partner with, you know, like us and have us do their listings
[00:25:45] Eric Castellano | CEO of AmazonLit: for them. Yeah, and what’s even worse is out of stock. You go back to reorder and it’s not even
[00:25:49] Todd Welch | CEO & Founder of Welch Products LLC: there. Yeah, for sure. Um, so yeah, that actually leads me down another path that we can talk about real quick.
What kind of software stack do you guys use to manage your reordering and restocking Amazon?
[00:26:06] Eric Castellano | CEO of AmazonLit: Yeah, two things. The first one is our repricer. Um, we’ve, we’ve built our own in house repricer, but for years SellerSnap, you know, I think is, I think it’s one of the most robust reporting repricers on the market space.
Um, and then number two would be SourceCorrect, which is, um, our own proprietary software that we built and is available to some members of our, inner circle. Um, and it’s basically a UPC scraper. Purchase order creation, listing creation on Amazon, hazmat check, like everything to printing FN SKUs, 2D box content labels, like the entire process from start to finish.
[00:26:48] Todd Welch | CEO & Founder of Welch Products LLC: Okay, nice. So you built your guys own internal tool that you’re using for all of the reordering and purchase orders. Yeah, correct. All right, cool. Very good for people who obviously don’t have the capital to build their own software. Do you have any recommendations for like inventory management software, stuff like that?
[00:27:11] Eric Castellano | CEO of AmazonLit: Yeah. So seller board is great inventory, uh, management. I mean, to kind of understand your numbers and see where your inventory is. And then when I think about. When it comes to reordering, I mean, seller legends, another option. There’s a lot of the seller, seller board, seller legend, seller cloud. I mean, they all pretty much do the same thing.
It’s just basically user and price preference. Um, but I know a lot of people in our community use seller cloud. And then as far as reordering goes, I think most people overcomplicated. I mean, 95 percent of our reordering. Uh, happens through our repricer. I mean, because the repricer has all the historical sales data of your reordering and what needs to take place, how much inventory you have left, how many estimated days of sales, you know, what’s your profit margin was.
I mean, it has all the information.
[00:28:00] Todd Welch | CEO & Founder of Welch Products LLC: Yeah, that’s true. We use seller snap for the repricer and they’ve got a lot of really good information in there for talking and such. Yeah. Just the filtering and stuff that’s in seller snap makes it worth the, uh, you know, 500 bucks a month or
[00:28:14] Eric Castellano | CEO of AmazonLit: whatever it is. Yeah. The way I see it, it’s like an employee, man.
And you can’t get an employee for 6, 000 a year to do what a software like SellerSnap does.
[00:28:24] Todd Welch | CEO & Founder of Welch Products LLC: Yeah, for sure. Yeah. I definitely recommend SellerSnap. I use BeCool. I recommend BeCool if you want something cheap, 100 to 100. I concur. You can upgrade to SellerSnap. It’s definitely one
[00:28:38] Eric Castellano | CEO of AmazonLit: of the best out there. Yeah, I mean, it’s worth it.
I typically say if you’re doing over 20, 25 K a month, I mean, it’s worth worth the upgrade
[00:28:47] Todd Welch | CEO & Founder of Welch Products LLC: for sure. So let’s see, as far as, um, you know, getting started, someone who’s brand new has never sold anything on Amazon. What would you tell them as far as getting started? Is there still enough opportunity to start now and grow a business or where are you at on that?
[00:29:07] Eric Castellano | CEO of AmazonLit: No, hell yeah. There’s still opportunity, man. I’ve been getting asked that question for years and years and years, ever since I started. And my answer is the same. It was for the past 10 years in a row. Absolutely. It’s not too late. And the best time to start today. And the worst time to wait to start is tomorrow, because I mean, every day you wait to go by, you’re missing out on opportunity.
And most importantly, you’re missing out on those weeks and months that it’s going to initially take to build that momentum, right? So the longer you push it off, the longer it won’t happen.
[00:29:38] Todd Welch | CEO & Founder of Welch Products LLC: Yeah, no, I, I definitely agree. And I, you know, a lot of people don’t like it, but I think it’s a good thing that Amazon is getting more, uh, requirements to open an account.
They’re forcing people to make this a legitimate business. You know, it’s not. Some kind of fly by night to make a million dollars in the next month kind of thing. And they’re forcing people to have insurance and have a business bank account and all this stuff to be more legit. So it’s gonna make it harder for the people who are just trying to take advantage and make a quick buck.
But for anybody looking to build a real business, the opportunity is still there for sure.
[00:30:22] Eric Castellano | CEO of AmazonLit: Yeah, and you see that with their new fee infrastructure as well, basically everything about their new fee changes that are going into place March or February, March and April, everything about them says legitimate business like operate a legitimate business because you treat it like a side hustle.
Some of these removal fees, disposal fees, I mean, they’ll kill new businesses. If you
[00:30:44] Todd Welch | CEO & Founder of Welch Products LLC: don’t know what you’re doing for sure, a hundred percent. And so where do you, where do you see your guys’s business five years from now?
[00:30:55] Eric Castellano | CEO of AmazonLit: Hopefully sold and not do it. No, I’m just kidding. Uh, that would be great if someone gave me a phenomenal, gave us a phenomenal offer.
But I mean, obviously we’d like to continue to grow. I mean, our initial goal for two years out was to break the a hundred million dollar mark. But one thing we’ve realized is as we get bigger, you know, we, this year we wrapped up right around 70. I mean, we noticed that it’s just that much more challenging to manage everything with the margins.
And I mean, so I think now our focus is just to continue to scale profits. And then five years from now, I’d like to mainly be brand exclusive with a lot less skews, um, preferably actually maybe even scaled down, scaled back operation, um, just focusing on the. The key fruitful items.
[00:31:42] Todd Welch | CEO & Founder of Welch Products LLC: Yeah, you know, there’s something to be said.
You can sell 100 million and make 5 percent profit versus selling, you know, 25 million and maybe get 10, 15 percent profit on that. Sometimes selling less at a higher profit is better.
[00:31:59] Eric Castellano | CEO of AmazonLit: Yeah, I agree. I agree. And, and, and we’re always, that’s the constant thing. We’re always analyzing in our business, you know, Hey, if we throw an extra 50, 000 orders a month in sales at our company, like what’s it going to do to the impact of inventory management and profit, you know, so it’s like, We always analyze that and then we make decisions and integrate and change as we see the adjustments happening.
[00:32:24] Todd Welch | CEO & Founder of Welch Products LLC: Yep, absolutely. And that just made me think of another good question. When you are bringing on a brand, new brand partnership, are you carrying all of their products? Let’s say they’ve got, you know, 100, 200 different products that are on Amazon, or are you taking just a select
[00:32:43] Eric Castellano | CEO of AmazonLit: few? Definitely depends on the relationship.
You know, it depends on what their requirements are, because it’s not just about, obviously I’m the expert and they’re going to ask for my opinion. Um, but also some brands, they prefer to have their entire product line. Now I typically try to shy away from that as. To any cause possible. I mean, because you know how complicated it is to create hundreds of listings, especially when they don’t sell.
And then you’re faced with the decision. Do you leave them at your warehouse FBM and just slowly when one person a month orders this one product, just so it’s available, or do you send them to FBA and incur storage fees? So, I mean, the preferred method is no. You know, do not take an entire product line unless it’s required to kind of secure the relationship.
And then you have to make that decision if it’s worth it still.
[00:33:32] Todd Welch | CEO & Founder of Welch Products LLC: But for sure, focus on the big ones and kind of work your way down from there.
[00:33:37] Eric Castellano | CEO of AmazonLit: Yeah, yeah. And don’t be shy also to create new listings for the brand. I mean, that’s been one of the most fruitful things for us is they get new products and we immediately take them to market.
You know, before anybody else. And sometimes they do a lot of their testing through Amazon as well for new products to create.
[00:33:54] Todd Welch | CEO & Founder of Welch Products LLC: Yeah, absolutely. And, and a lot of times they’ll have a lot of background data from their retail stores that, Hey, this product is selling really good in the stores and it’s not on Amazon and you can be the one to
[00:34:07] Eric Castellano | CEO of AmazonLit: launch it for them.
Absolutely. Absolutely. And now with like Tik TOK and influencers, I mean, the, the, the limits are really endless.
[00:34:19] Todd Welch | CEO & Founder of Welch Products LLC: For sure. All right. Well, perfect, Eric. This has been really great. Uh, do you have any, uh, final thoughts, uh, for people that are listening that we haven’t touched
[00:34:29] Eric Castellano | CEO of AmazonLit: on? No, I mean, if you’re, if you’re kind of in the beginning phase of your business, I mean, just keep going and take time to kind of get that snowball effect, one or two good brand direct relationships, one or two solid wholesale relationships can really, 10 X in the next 12 months.
So don’t quit before the miracle happens. Then. A great trade show coming up that we will be at. We’d love to see a lot of you at is right around the corner. ASD hopping in, in, uh, in March in Las Vegas.
[00:34:56] Todd Welch | CEO & Founder of Welch Products LLC: Absolutely. Yep. I couldn’t agree more. Where can people connect with you?
[00:35:02] Eric Castellano | CEO of AmazonLit: Uh, amazonlit. com on Google, or you could simply Instagram amazon underscore lit.
We’d love to, you know, send me a message, connect. There’s a support on our, on our website. We’re here for your support.
[00:35:15] Todd Welch | CEO & Founder of Welch Products LLC: Awesome. Sounds good, Eric. Well, I appreciate you coming on. You have a great one.
[00:35:19] Eric Castellano | CEO of AmazonLit: Thanks Todd. I’ll see you.
