Jeremy Weisz 17:43
Andrew, talk a little bit about, I mean, people are wondering, this sounds great, like, I either would like their experienced entrepreneur, and they’re like, yeah, like, I’ve been meaning to get into the Ecommerce space, or they’re in corporate and they’ve heard this. I mean, we all buy stuff on Amazon. I think I get like, three packages a day from Amazon, so not for me, but for my family members. But talk about how the investment works and we don’t have to get in the nitty gritty of pricing, because I’m sure that can change, and maybe it depends. But like, is there an initial investment. And then does Hive take on a percentage of the company? Like, how did you decide to structure the investment side of things?
Andrew Wu 18:30
Yeah, so, for Hive, we charge a one-time fee up front, so we call it the Hive partnership fee. And inside there the two options: the Pro package and then the EV options. And with that, it takes you all the way that covers, from us, finding the right product, a competitive product on Amazon, to finding a factory that can make this product, to inspection, to getting all the photography really videos of the product done, creating a listing and getting all the products ready into the Amazon warehouse in the US. So we cover all that process, with that one time startup fee. And then afterwards, when they started, the products are selling Amazon, then we really just charge a really, really small monthly management fee, and that really allows the team to service them, continue to optimize the listing and rank the listing well, and then run good PPC campaigns.
So with that, like we have a design in mind that all these costs, there’s a lot of subsidization in the process. So they don’t need to pay the well market fee in terms of that, because we have a scale. And then when it comes to manufacture, they also pay a lower cost, because we order a lot, a lot more product from the same factory. So we always get discounts. So there’s a lot of scale and benefits and pro in that process.
Chad Friesen 20:08
The only thing that I’ll add as well is that there is that equity component as well. And the reason that’s important, and we’ve actually had people joining, that was a big that was a big deal for them is to know that they’re actually getting these Amazon experts on the team and kind of locked in and really invested in growing that store right where there’s an upside for us as well, and hence, the more apt to, when people have that upside, there’s more apt to make sure that you do everything you can to realize success.
Andrew Wu 20:57
Yeah. So we take that 20-30% position in terms of equity, being a smaller shareholder, and then that really ties in the partnership, and then the incentive to really help them grow the business together as a team.
Jeremy Weisz 21:14
Yeah, so there’s a, as of now, as if someone’s listening, it may have changed, but right now, this point in time, there’s a one-time startup fee. Then there’s a small monthly management fee, and then there is an equity component as well.
Andrew Wu 21:31
Correct, monthly fees after the product starts selling. So usually there is a six months kind of prior time to source a product for our team to design our whole product listing.
Jeremy Weisz 21:44
Let’s talk about a few examples, and that will kind of give people a better understanding of how it works. And so I’m just going to pull up there’s several images we see here, which is right now, at this point in time, Pickleball is super popular. As you can see, a pickleball paddle and balls there. There’s some pet related stuff here. There’s some furniture related stuff here, but let’s talk about flight for a second. I know who wants to talk about Flight and what you did there?
Chad Friesen 22:20
Yeah. So, so essentially, with Flight, one thing that we do focus on as well is, we kind of want to limit tech in the products, and the reason that that’s a preference is we want to drive down that return rate and make sure that the partners are as profitable as they can be. So that product with Flight. Flight is kind of the backstop net. So, when you’re playing sports, you don’t want your volleyball going into the creek that a flight net will kind of set that up to stop that from happening. And we essentially, basically work, work the margins, right, with the manufacturers and go back and forth, make sure that and work it through from an Amazon FBA fee, the shipping, all of those things are considered.
And once we find the right manufacturer, we find the right product that also solves some things that competitors are, if competitors are getting low reviews on an item, we’ll look to correct that, right? So say their net is too thin, right? Well, we’ll kind of beef up the net, and all of those things while protecting the margin. So that’s essentially what we’ve done with Flight. It’s been a great example, a great partner to work with. Now he has been more on the entrepreneurial side, so, but, just, yeah, really a great guy and great to see the store doing so well.
Jeremy Weisz 24:33
You mentioned a couple things Chad here. So like, if you’re looking at the page here, there’s, there’s three steps. Obviously, there’s a product selection, listing, creation, launch and rank. There’s a lot obviously that goes into those three things. But talk about and Andrew, if you wanna talk about the mistakes people make with product selection and maybe some of the best practices. What are some of the mistakes you see people make? And you mentioned one, which is Tech. Right? What are some other mistakes or things to avoid, at least, that you avoid, not everyone, but like in your model.
Chad Friesen 25:08
Yeah, for sure, with product selection, I think, from the onset, you go on Amazon and say, you find a lamp, and this lamp is selling for $40 you find that same lamp on Alibaba and use, and I can actually source that for five bucks, right? Look at my margin. But then what you don’t consider is you found that product on Amazon right, that $40 lamp on Amazon probably has upwards of 2000 reviews at about a 4.6 star has incredible like, already has that market cornered, even though you’re just not gonna win, right? You’re gonna go up against them, and you just won’t win.
So the money that you spent on inventory it’ll sit there. You check it into Amazon, and unfortunately, then your fees for you get long term storage. So there’s a bunch of things that really need to be considered with the product selection. Product selection is absolutely key, and that’s why we sweat it so much when we, when we start these stores, right? We can’t guarantee success, but we want to do all we can to give the best chance of success.
Jeremy Weisz 26:48
So, one thing I heard you say, go ahead, Andrew.
Andrew Wu 26:52
Yeah. And just, just to add on that, like a lot of people who come into Amazon, you know, they, first of all, just like Chad said, they didn’t find the right product that’s competitive, or they are competing against products that already have 1000s of reviews, they don’t have any unique design to their product that’s very dangerous. Then a lot of times too, like with Amazon, when you first launch, you get kind of a three-month honeymoon period. So COVID on Amazon, like the Amazon will rank you organically a lot easier. So at that time, then that’s where you should really be spending money to run advertising, to rank the product.
So you get that push from Amazon as well, where a lot of entrepreneurs don’t have experience, then they may just be afraid to spend any money, investing any money into marketing, and that’s when they see themselves, just not moving up, not going anywhere, and then give up. So that’s also where we have a lot of experience. We know when you should give it the push and when you should not, when you should look at the sales re so down this, this is not likely to be a winning product. That’s stop effort on this product, that’s looking to another product and learn from what we have learned last time, on to the next one, next product. So that’s really our team come together to give a lot of that experience to avoid mistakes and do things right from the start.
Jeremy Weisz 28:30
Yeah. So what I’m hearing a little bit is, obviously you want something as lower competition. Some brands corn in the market is just kind of competitive to get into that particular product line, also improvements to the product. Chad, you mentioned, reading a lot of reviews to see what are people complaining about, so you can correct it. And also, Andrew, you mentioned unique design, even provide a unique design, whether it’s an improvement or something different that’s going to help the cost consumer. And then you mentioned about manufacturing, having good, reliable relationships with manufacturing, which makes a difference with even from a volume perspective too. Are there any thoughts and recommendations on tech, tech tools, software that you like in the Ecommerce space, I mentioned Feedback Five is one. What are some of the tech stack that you like in the Amazon world?
Chad Friesen 29:34
So there’s a couple that, kind of jump out. First of all, I think that any Amazon seller, should get to know their Seller Central page really well, right? And understand just the power that’s kind of housed even within that. There’s a software called Seller Board, which you can take a look at, gives you really good reporting on how your store is doing. You can actually get in there and enter your information, get your costs in and have a good understanding of when you’re successful. Empire Flippers is, is another one.
Empire Flippers is kind of like the when the time comes where you want to exit from the store and sell it. They’re essentially, like the RE/MAX of e-commerce stores right. So they do a really great job of putting those sales together. Obviously, there’s the Jungle Scout, and shout out to them, and Helium10 as well, for getting information on what products like. But again, you want to make sure that you’re looking at that with the lens of some knowledge, right? That’s like, I know I’m going to sound like a broken record, but that’s where Hive excels, right? We have the ability to look at the data from a Helium10, from a Jungle Scout, and it’s going to discern whether it’s going to give you a better chance of success or not.
Jeremy Weisz 31:51
What are some other mistakes that you see people making in the Amazon when starting their Amazon business?
Chad Friesen 32:01
I’d say that one big one is going overboard on inventory initially, right, where you just say, you’re finding, again, we’ll use that lamp example at five bucks, and just think, well, I can afford. I’m thinking of putting five grand into this. So I’m going to buy 1,000 right? Well, right there, you have to remember that there’s costs to long term storage in Amazon, if you’re putting these things in and they’re not selling through as quickly as you’d hoped. People not being willing to invest in marketing. Amazon’s really good at rewarding you for using their marketing but you need to have somebody that can set up those campaigns and be effective. So really spending the time to understand where your marketing dollars are going and kind of how best to optimize that.
Andrew Wu 33:24
Yeah, and now I will add another one would be images, like the listing images, because most of people now on Amazon, they just shop off, mainly the images. They look at the first five images and the main image to make it this quick decision, if they’re going to buy the product or not. Like, have good photography. And then every image, listing images they look good, they communicate the benefits of the product, the reliability of the product. Like, don’t just throw on the image. Think someone’s going to buy it. Like, there needs to be proper messaging there that communicate that this is going to be a good product, a useful product for them as well.
Jeremy Weisz 34:09
Yeah, Andrew, that’s a great point. It’s funny, to shop your own or other products, we see a lot different things than if we’re putting it up ourselves, like we’re too close to it, but I know when I’m shopping, I’m like, I am looking exactly you said. I’m clicking on the image. I’m zeroing in. I’m looking to see what actually information text is on there as well. From another standpoint, Go Get Outside. Andrew or Chad. I don’t know if you want to talk about what that product is, and some of the things that worked, that you did with Go Get Outside.
Chad Friesen 34:48
So I’ll speak to that, because that was actually the store that brought me into Hive and so that’s the LED Helmets, with the light front and back and really, the plan, or the idea behind that was just, put out a product that is somewhat unique in the marketplace at a price point that’s affordable, so parents are going to be buying this for the kids or people are going to, just overall there it’s going to be used, right? It also had to be something that was like, brought a bit of novelty, right? Where people want to wear it. You’ve seen all kinds of things when you’re driving down, you see people with lights strapped to their helmets. They’re trying to figure out a way to make these things look good. This was just a stronger design. You wear your helmet, you don’t forget your light, right? So that it just seemed, I’m a logical guy, that it just seemed so logical and like, a good solution. So that’s kind of why we went with that.
Jeremy Weisz 36:18
Do you remember anything with this one? And maybe not in the research phase that stuck out because you mentioned some of the looking at the competition, or some of the listings or reviews of what people were saying, that made this even feasible, because you could have researched this and said, yeah, this isn’t a good fit,
Chad Friesen 36:42
Right. Yeah. I mean, we looked at some of the helmets that had lights with kind of lower lumens. So it’s almost like it didn’t really satisfy that, like actually being able to light up your path. The other thing, they’re also a couple of the other ones that we were looking at where the light actually stuck out from the helmet. So it just looked a bit clunky, right? And those were some of the complaints about it. So this one we just saw as kind of being a better fit, or kind of solving some of the issues that we’re being identified by consumers.
Jeremy Weisz 37:38
I want to ask each of you a question. I have one last question, before I ask it, I want to just point people to the checkout they can check out hive-invest.com to learn more, and if you are interested, you can email them, or they have joined the wait list there. My last question is just mentors. This could be a distant mentor, meaning it’s like a book or resource that was really valuable for you, or it could be an actual business mentor that taught you a lesson in your business career. Andrew, it could be both. Talk about mentor for you, either distant or personal mentor.
Andrew Wu 38:25
I like to share, like, it’s been just incredible. Like, after we started the business for a year, we met Drew Green, who is also the CEO of Ego Chino and Chairman as well. And then later he became the chairman of Hive. And yeah, he said something. It just really stuck out with me right now my mind is like, always give more than you take. And that’s what he always share with us that when it comes to business, it’s just really about finding ways to give to your customer more than you take from them. Obviously, you get rewarded by money or whatever. But just have in mind that you always want to give them more, and always want to get more out of it. And that’s really for Hive that every day we think about how to help our partners more, and how to build a better team to assist them.
Jeremy Weisz 39:25
Awesome. Chad, what about you? Go ahead.
Andrew Wu 39:28
Obviously way to meet you later on, when you have a conversation with Drew as well, you’ll be a great, great mentor to share more of his entrepreneur as well.
Jeremy Weisz 39:41
Love that. Yeah, one of my favorite books is actually Give and Take by Adam Grant, and also Brian Kurtz, one of my friends, colleagues, mentors, wrote Overdeliver, and it’s also one of my favorite books based on very similar premise. So thanks for sharing that, Andrew. Chad, what about you? Mentors? Give? Distant or.
Chad Friesen 40:01
Yeah, I mean, also I’ve been blessed to have really, really, really good mentors in my life. One of them actually was met through our children’s school. And I think the very first time that I had dinner with Mark, Mark Edwards is his name, but very first time I had dinner with him, my daughter who’s anaphylactic to peanuts. We were over there and they were just little kids, and unfortunately, Mark’s son had, very kind, shared his Halloween treats with my daughter. And so first time meeting my mentor was my daughter doing a poltergeist projectile vomit on my chest?
Jeremy Weisz 40:56
That’s scary. Like, did you have to jabber with an EpiPen or something, or?
Chad Friesen 41:01
We did all that, off to the hospital. So it definitely forged a lifelong friendship.
Jeremy Weisz 41:11
The good first impression.
Chad Friesen 41:14
When you leave wearing someone else’s clothes, you know you’re going to be friends for a while. So but, no, and I’d say it’s kind of a theme throughout, right? Is that we’re the people that we work with, the people that have that common theme of wanting to help others, right? And that’s really been key for me, it goes into what I believe is core and yeah, that’s kind of why I wake up excited about growing this business, right and growing up with more and more entrepreneurs.
Jeremy Weisz 42:08
Chad, was there something that stuck out with Mark that he shared with you in particular?
Chad Friesen 42:15
So his is really digging into the numbers, right, making smart decisions, right and not so focused on the product. But kind of strip it down to, is this something in business that we should keep moving forward with? And I think that’s directly applicable to this business, right? Is that if there’s a product that, for whatever reason, is just not hitting, the market demand just doesn’t show up, there’s a point where you need to cut bait and move and pivot, right? So that’s a hard lesson, right? It’s easy to say it’s a hard lesson to actually go through with. A lot of conversations with Mark has kind of helped ingrain that in me.
Jeremy Weisz 43:29
Yeah, no, I love it, yeah. So that’s, that’s a really good one to make data driven decisions, not as emotional, because I could see myself saying, oh, yeah, this product seems amazing. Everyone’s gonna love it. And then when you look at the numbers, if the demand’s not there, the margin is not there, or if it’s too competitive, you’re really making these data driven decisions, as opposed to emotional decisions. Because I don’t know, for me, I find myself easy to make emotionally driven decisions, like, yeah, I’d like that. I think people will like that, but then when you dig into the numbers, they may tell a different story. So I love that. But first of all, I just want to thank both of you for sharing the journey, some lessons along the way, and I want to encourage people to check out hive-invest.com to learn more and more episodes of the podcast, and we’ll see everyone next time. Thanks, everyone. Thanks, Chad, thanks. Thanks Andrew.
