The E-commerce Leader

Michael: The number you come up with is often, you know, the money you need to put in at the front end’s often much bigger than you think. And it’s okay, how do we get that? And one of the things was just to go through. And get a clean profit and lost by by. Hey folks, this is Michael VII from Amazing F b A podcast for Amazon Sellers.
I’d like to introduce an episode from our sister podcast, the e-commerce leader, which has got a slightly broader remit for all e-commerce sellers. In this deep dive episode, Jason Miles and I deep dive into a key e-commerce topic. Hope you enjoy the show.
Jason: What will 2023 hold for? In large part that depends on what you bring to the party.
And in this episode we’re gonna talk all about three things you can do to bring effective strategies to your 2023. And Michael, you ready to jump into this one topic? I am,
Michael: yes. Mine just begin to get my head above water in terms of having just moved house into sort of recovering from the low point of the year.
So I think now is actually a perfect point of year for a lot of people. If you haven’t planned it in November or [00:01:00] whatever it was. To get cracking with this. So perfect timing, I think. Yeah, let’s get into this. Never too late, is it? Yeah. No, I don’t think so. I mean, it’s certainly better to plan late than never.
So you’ve got a great outline here. Let’s dive into it. What’s your approach
Jason: to this? Yeah, I’ve got a little three part plan. The first thing is bring a plan. The second thing is to bring a team, and the third thing is to bring a toolkit. So that’s our little outline. We’re gonna walk through the click notes version of it.
So plan a team a toolkit, and we’ve got some thoughts and ideas around each of. And so, yeah, the idea for 2023 for me is what’s my plan? And I’ve been thinking a lot about that. And for, for me personally, that means what’s my business model that I’m going to continue to lean into? Is it working, is it not working?
I think a framework for doing this conversation for what to bring into your plan for 2023. A good framework is to ask the question, what do you wanna keep? What do you wanna start and what do you wanna stop? That’s a. Planning frame that people use. I don’t know if you’ve heard of that one before or [00:02:00] like that one, or don’t like it, but it’s
Michael: 2000.
Yeah, I’ve heard it before. I mean, somebody taught me that in, I dunno, 2009 in a conference and we went through the exercise. It’s really simple and really robust. I like it a lot because we’ve always got stuff we’re doing. and the tendency is often to just keep doing stuff unless there’s a violent problem.
like you’ve lose so much money or it’s so problematic, you have to stop. But I think it’s really healthy to build in at a stop list, particularly because a lot of things we’re doing we shouldn’t be doing. And equally, if we are doing stuff and we should keep it, quite often we should do more of it or you know, and expand it.
And that’s a very deceptively powerful exercise I say. So I’m a massive fan of that.
Jason: Yeah, I think it’s really probably keep and tweak. Yes. Or start and stop. It’s really about if you’re gonna keep something, is it working well? You know, do you wanna refine it? That’s kind of the mindset I have for what I’m doing, is I’m not gonna throw a lot out in 2023 in my planning or my plan that I’m model, that I’m implementing, [00:03:00] buddy.
I’m gonna tweak things that I’m keeping, you know, and I’m gonna start a few new things. So how about you? What’s your personal reflection on 2023? Starting scenes or are you stopping things or are you just keeping what you got and doubling down? What’s your approach?
Michael: Well, I mean, I feel very behind the curve because basically we moved in December and we’ve just still sort of been taking the exact boxes.
Like literally this office is only available to work in today for the first time without, you know, feeling crowded in it’s tough. So I need to stop quite a few things. I’ve got a lot of things I wanna start, like a lot of entrepreneurs. That’s standard and indeed exciting. But I think I need to stop doing a few things just to clear some space.
I haven’t decided where the ax is gonna fall in the short. But I think in a medium term, for me personally, I’m happy to manage other people’s physical products, businesses, but I no longer have the enthusiasm myself to develop physical products or things take a lot of money to develop. They take a lot of money to store and own, and then they take a lot of money to ship around the world.
And those are all vulnerability points, [00:04:00] financial and logistical, and going into a choppy time where, you know, interest rates are higher, so the cost of money is. And the logistics of the world are quite uncertain. China, for example, is whipped from Covid lockdown, which affected a lot of my clients who sourcing China to now covid infections, which are affecting some of them but not others.
We had a discussion the other day at the Mastermind, and so I’d like to be kind of freer of that game myself. So that’s one of the things that I think I’ll be stopping us even the idea for me personally, starting a new physical product business. On the flip side of that, I wanna start using the skills that I have developed in that area to start working with clients more hands-on instead of just advising to actually run things for people as well.
So I’m just in the final negotiations with somebody to do that, which I’m looking forward to doing a lot because it’s a way of using the skills, staying in the game, but with having, without having that footprint of inventory that I personally own. Let’s put it
Jason: that way. Okay. Yeah, that’s really interesting.
That’s a big. It is a big
Michael: change. I mean, I think I’ve been sort of moving in that direction for a while. Uh, I guess some [00:05:00] part of me felt like I should be owning my own physical products business in some way. Because
Jason: you leave a mastermind or because Yeah, exactly. Yeah. People are
Michael: like, exactly Right. Which, which is not wrong.
But I mean, if I’m working with other people as businesses, you actually learn a heck of a lot, which you bring to the table in a slightly different way anyway. But also I think I need to start. Something which have been meaning to start for two or three years. Hence why I think I need to stop something.
I haven’t decided what that’s gonna be. Creating digital products, both because I have an enthusiasm for that, which I don’t feel for physical product creation and development. And also because I want those characteristics that are less susceptible to the physics of the real world. You know, that moving things around the planet basically atoms, Exactly.
Moving electrons, not ato. Yeah, exactly. Moving electrons, not atoms, as I say. Yeah, yeah. Gives them the bits. Yeah. Yeah, exactly. And what about you? What are you starting in 2023?
Jason: Well, a couple things. I mean, I think my mantra going into the year is refine my model, refine my model, refine my [00:06:00] model. And so that implies that I would do some new things.
My, my model, in case you’re not familiar, is I operate in business so that I can serve in ministry and our charities growing really quickly. 2022, our charity passed a million dollar mark in terms of total revenue. . So it’s a seven figure charity. I can’t, I don’t hear a lot of people talking or bragging about I, I started a seven figure charity.
But nonetheless, that’s sort of the reason behind what we do in business. And so we just wanna get better and better at how do we operate our businesses for the purpose of taking, you know, that money. Leaning into our charities. And so that’s the goal I think on the business side. In terms of what I’m gonna start, there’s a few things.
It’s really captivated by Robert Kiyosaki’s four quadrant grade recently. Again, that grid, if you’re not familiar with it, the, uh, the rich dad, I don’t know what he called it. He basically has, uh, in the [00:07:00] box on the left, it’s. and then self-employed, I guess it’s a cashflow quadrant or something like that based on the lab, been self-employed, and then business owner and an investor.
And I think we’re all on that journey. You know, we came from being employed by other people to basically employing ourselves to then, uh, maybe having a business where we literally don’t do work. We just manage it, you know, and, and have the benefits of a business. Many of us are in that gap somewhere between.
The bit that I’m fascinated by personally is this idea of the investor space and the investments that I can hold. And what I kind of been thinking about lately is how do I turn my investor quadrant into a six-figure revenue stream or income stream in 2023? So that’s my personal goal, is my investor quadrant to six figure.
Because a lot of us, I think, have mindsets around that [00:08:00] are like, well, I’ll do that someday. Or, well, this has to be linear. I have to be completely out of self-employed and completely into business owner before I can, you know, then move into investor. And I don’t think it’s has to be linear. I think we can lean into each of these and release steward, you know, our, our assets and our resources in each one.
So to me that’s sort of been an interesting one and that’s a whole different journey. We could talk about some other podcasts. Sort of how to do that, where to do it, you know, the techniques or strategies. But I do think that’s an interesting, um, mental model that I’ve been trying to focus on a bit is exciting for 2023 for me.
Michael: Yeah, I like that a lot, for a couple of reasons. I think first of all, Very simple and yet subtle mindset slash business thinking change that comes with that isn’t there? Cuz Warren Buffet says, the better investor I become better businessman and vice versa, however he puts it. So yeah, I think the way that people steward their money as operators is often.
To what an average or [00:09:00] basic level investor would do. Very primitive. And we were talking about this the other day at the Mastermind, which is again a completely different conversation I’d love to have with you. But it was basically one of the chats was saying, how do I organically grow my business without needing to invest more money myself or you know, he’s prepared to do that but not getting out external debts cuz he’s somewhat debt averse.
Partly cuz his father, when he inherited the business, had a just a gigantic overdraft relative to the revenue at the. . And so that kicks off discussions about working capital management and cash flow metrics, which are already cash flow based, not profit and loss based. They relate to each other and you generally have to cross from one statement to another.
And so the way that an investor would habitually analyze the financial statements of a company before investing is quite alien to a lot of operators. And so that’s just one example of where I think the investor mindset or things that are very common in investment. Are incredibly helpful in the business management world.
So I, I love the combination actually. I think that’s really powerful.
Jason: Yeah, I know, I know that before mentally, but I, it didn’t click for [00:10:00] me until recently that my investment portfolio, the goal of it should be cash flow. And I, I guess I’ve always had in my mind, my invest portfolio, the goal of it is to grow the investment portfolio.
But what are you doing well, piling up money? Well, what’s the goal? Pile up more. Quick. Well, , you have a goal of actually extracting money from that portfolio. And so that’s just such an obvious, Laura sort of stupidly obvious like thinking about it, but that was my mindset was wrong, I think. And so now my mindset is how much do I have and how much does it get me on a daily or monthly basis cash in the bank.
Uh, and that’s a very different mindset. It’s like active management of investment portfolio, I guess. I don’t know. , is that obvious to you or does that make any
Michael: sense what I’m Yeah, it does. I mean, I think what’s fascinating is I wouldn’t say you were wrong to, to grow a portfolio nor wrong to go for cash flow, but I think they are very different outcomes and I think what’s important is not so much which [00:11:00] outcome you’ve picked as the fact you’ve picked one.
I, I think that’s always the key, isn’t it? In business like he’s doing stuff because you find a vaguely feel you should, it’s so easy to do. What’s fascinating to me about what you’re saying about investments, Because you were saying it’s better to run them in parallel, be a business owner, a manager, and an investor at the same time.
And I utterly agree with that. The mindset being one of the least. The most. Mm-hmm. one of the most powerful and least tangible assets that comes out of that, if you like. But the other thing is, it’s possible to end up in a situation cuz one of the mastermind guys was doing just that the other day, we’re having a beer or two after the heating, and he sold a business for seven figures in January of last year.
So about a year. and he’s sort of, you know, playing with business ideas but not being quite slow to come back in. He did consciously decide to take a year off, which I think is wise, but what he’s doing is interesting to me in terms of his mindset. He’s having to wrestle with what earth do I do and invest, you know, how much of this money do I keep in cash?
He’ll put some in gold. Is crypto the latest thing? He’s suddenly exposed? A world of decisions, [00:12:00] which when his cash was tied up in an e-commerce business, he didn’t have to make. And so he’s being forced to become an investor. And I can see him kind of struggling with it, if I may say so, from the outside, no more than I would.
And it seems to me also you become prey to some kind of worries, shall we say, about the macro economy or even conspiracy theories if you go far enough. And how do you differentiate between a, a good insight, a conspiracy theory, and conventional thinking? And you know, it do becomes a very problematic question.
So how do you deal with that? I mean, are you looking at investing in e-commerce related stuff? Are you looking at completely outside that? I don’t wanna go completely off piece with an e-commerce podcast.
Jason: Yeah. I mean, I think it’s worthy of its own whole deep dive, but I would say I was looking at what I was doing and I am asking myself the question are, am I nursing these investments or am I growing.
With, you know, specific plan and activity and I would say I was being passive and nursing them along, you know, the portfolio [00:13:00] investments I have. And I didn’t need to do that. I was just doing it because I hadn’t thought it through. And you know, I mean these are, there’s common things you invest in. I know you’re in real estate and London there.
And so real estate is an interesting component. I think the real estate investor’s mind is a great mindset, uh, that can be applied, you know, which is a focus on cash flow basically. Assets, you know, cultivation and growth. But I, I think that same approach can be applied to different areas. And I’ve been in crypto since 2017, so like that space a lot.
But anyways, so that was my mindset was I, I was gonna stop nursing things and either kill it or really actively grow it in the investment portfolio category in the cashflow quadrant as kiosaki. Yeah. That’s sort of, that’s one of my strategies for 2023. Cool.
Michael: So what else are you, what are you gonna stop doing?
This is often, I think, a very revealing question.
Jason: Mm-hmm. , well, the, uh, the long and the short of it is several things that I don’t wanna publicly talk about. [00:14:00] Right. Fair enough. , because, you know, maybe they’re awkward or whatever to, to put out there. Podcast world, but there are some projects and some things that I’ve said, okay, this has to, this has to change.
This is not adding value. I think the main thing that I think about is stewarding time and energy, and then capital, you know, those three things. Just how much time am I spending on something, and this is the first question. And so there’s room for improvement there. I’ve got some things I wanna. , but the truth of it, the long and the short of it is there’s also some just general, like at the highest level ventures might be some of what I’m gonna kill off because honestly I like gardening and I like our charity and the better I get at efficiently funding our life, as you know, this model that we’ve created, the better I can lean into spending time in our charity and in personal things like gardening, that kind of thing.[00:15:00]
We’ll be in Zambia two times this. For sure and maybe more. Yeah. So that, that is taking more and more of my attention, and so therefore the business side of the ledger can be, there’s some things I can stop there. Yeah, that’s
Michael: great. I love the fact that you are making very mindful decisions about this. I mean, James Sch Franco is one that springs to mind as a, a great, great guy who’s the title of his book, which is very good, by the way.
Work Less, make more, very direct, very typical. James Shan. and he aims to go surfing 20 hours a week or something. So he’s not then interested in building some big misses for the sake of it. He wants cash flow and a lifestyle, and he’s got it and he helps other people create the same thing. And so I think being honest about the fact that you don’t work for a Lambo, you don’t care about, but you want the time to go gardening, you wanna help all the people.
You got the seven figure charity as you put it, I guess people don’t brag about that much in the e-commerce workers. They’re all busy trying to create a sort of seven figure personal income or you know, lump sum. Yeah, maybe people in charities don’t boast as much. I have no idea cuz I’m not in that world.
But I think it’s a very, very [00:16:00] worthy thing to do. I mean, you’re not gonna regret on your deathbed going, wow, I wish I had got that Lamborghini, you’re gonna go. I helped lots and lots of people. I mean, if that matters to you, that seems a fantastic thing. I think that’s one of the things I’m gonna not exactly stop the Mastermind.
I think I want to do the opposite. I think it’s kind of killer or cure. I, I think it provides a lot of value for people, but it’s sort of been breaking even in some years, depending on how I’ve run it, because we have expensive components like Hotel Higher in London, et cetera. And, uh, so I wanna really expand that.
Actually, that’s one thing I want to start doing is really expanding it. And the other thing is that I’ve realized that my kind of calling card is e-commerce expert, if you like, especially Amazon. And of course, I’m not gonna throw away my abilities in there, but what I’ve realized that I really want to lean into is my fascination with.
Financial stuff now it’s relatively new to me compared to other things, but it’s not like I haven’t been educating myself in some ways over the years. And I just, for some reason, the inner nerd in me really likes that stuff. And I find when you apply it to businesses you can with fascinating things, which is increasing the growth rate of a business without investing in extra money [00:17:00] in it.
Now, for me, that’s a kind of financial magic, so that’s definitely something that I wanna focus on. The other one is I wanna stop doing in a way, stop and start a two sides of the same coin for me. . I want to bring in experts to work more consciously, creatively, like an academy for basic business skills for entrepreneurs, particularly around finance, because I feel like there’s a lot of easy wins there.
So that’s, that’s one of the things I’m wanting to do at this. I love
Jason: it. I think it, to summarize this first question for 2023 is, you know, like, what’s your plan? Step one, have a. And, you know, whatever that plan might be. What’s your plan for, you know, your, your life and the philosophy of business you’re approaching?
And I would just say this, that a business model is not a plan. Like, so for example, if retail arbitrage is your business model, that’s not a, I mean that’s a business model. Uh, a plan is a higher level thing. It’s the operating system for your life and income strategy and livelihood. Uh, the [00:18:00] operating system is higher level than just the business.
So, you know, you can switch from retail arbitrage to private label to, you know, e-commerce, uh, courses and educational content. All of those are, are, uh, you know, business model level actions. You should have a business model that you’re better, better at, but you also need a top level plan or philosophy, I would say.
And if you don’t have one, uh, then I would say, uh, take a retreat day and go out into the woods and drink some herbal tea and. Figure out you’re planning for life and then crush it in 2023. Uh, cuz there’s nothing worse than just grinding and grinding, grinding. You’re like, what are we doing? What are we doing this for?
You know, why, why, why do I, you know, wake up, do the following activities? Is it just for cash? You know, is it just survival? Is that the plan? Uh, certainly. It’s gotta be more than that. After you’ve done this for a while.
Michael: For sure. Yeah. And it’s very easy to fall into that. I’m gonna, one of the things about simple financial things being quite life changing, I’ve got a client recently who, [00:19:00] I’m not a retail AR specialist, just to be clear, but he’s got a retail arbitrage business.
He wants to create a private label site to his business. So I said, fantastic. That’s my bag. But before we get into that, I guess you’re gonna want to get your RA business. Kicking out enough cash to help fund it because we went through, you know, talking a business model, planning. I went through a financial plan, um, projected the next three years courtesy of my friend Ken Book, who does that as part of his overall business planning.
And the number you come up with is often, you know, the money you need to put in at the front ends often much bigger than you think. And I said, okay, how do we get that? And one of the things was just to go through and get a clean profit and lost by, by product. And guess what? I think fully 50% of the products he sold in the last 12 months haven’t just made no money.
They’ve lost him money. So I said, well, that’s pretty easy, isn’t it? Just stop selling all of those. Mm-hmm. . And, um, he had a, a vehicle, he was driving around collecting half of these. And I said, well, it could be, you could even get rid of the vehicle or working it part-time or whatever, and cut that overhead.
So, uh, it’s another thing about cut, cut, cut in order. Keep the same result with half the effort, which is always [00:20:00] good. Right? Yeah.
Jason: It’s also a, a real honest approach to the business model you’re operating. Sometimes a small business model run efficiently for profit is way better than a 10 times bigger version that, you know, has huge losses.
We all have to be super clear on our, uh, profit loss statements for our businesses to really understand what is happening in our. and that doesn’t matter so much when you’re, you know, smaller business, you’re just starting out. But as soon as it starts to get, you know, high six, seven figures, eight figures, you really have to ask yourself the question is this, but business model doing what I think it’s doing?
And, uh, so anyway, that’s part of it. Well, this is great. Um, so that’s the first, uh, suggestion for 2023 is refine your plan and, uh, get good at your.
Michael: So folks, thank you so much for listening to this, the first of 3 million episodes about planning your year. So the summary today is basically have a plan.
Okay? Keep, [00:21:00] start, continue or keep start or start, stop and continue lists or start, stop and keep, whatever way you wanna call it. Very, very good thing to have. Pretty simple, robust. Make sure you’re not confusing your plan and a business model. You need to have a business model. You need to know, you know, how that works.
Um, and, um, nevertheless, that’s not a plan. It’s, you need both. And, um, if you don’t have one, take some time out and figure it out. It’s, it’s so tempting to just emerge from that sort of post Christmas stupor into Arabia daily. Activity. And if you’ve got an existing business, you’ll be getting buffeted by the needs of your team.
If you have one, your suppliers, the, uh, any platform you’re on will be sending you messages. Maybe Amazon’s trying to suspend some listings, the daily dramas, in other words, and the fire fighting and the daily grind take over, and it’s incredibly easy to forget why you’re doing it all. As Jason articulated so [00:22:00] well.
That’s the first of few parts. Do stay tuned to this miniseries. If you have enjoyed today’s show, don’t forget to subscribe to the e-commerce leader as it sounds, e-commerce with an e hyphen, um, as it’s supposed to be spelled the e-commerce leader at, uh, your nearest. Uh, drugstore. No, I’m kidding.
Obviously on a podcast at Person, Spotify seems to be where we’re growing the most. Apple Podcast, Google. We are on all the major platforms and come and join a, a growing set of people. We’re getting very sort of steady but very consistent growth on our listeners. So obviously it’s been of used to people and hope it’s been of used to you.
Stay tuned. Next we are gonna talk about team and who’s on your team for 2023. And. By the way, if you’re listening to this in 2024, annual planning, exactly the same process, nothing magic, uh, applies every single year. So these are university applicable principles and not just in e-commerce, but obviously we are e-commerce specialists.
So go listen again to this, uh, take notes, check out the show notes at the [00:23:00] e-commerce leader.com, and we hope you have a fantastic year ahead of you. Speak to you soon. Thanks for listening to the e-commerce. That was the E-Commerce Leader Podcast with Michael VII in London, England. Jason
Jason: Miles in Seattle, Washington.
We
Michael: offer you free help on our website, including PDFs, videos, and mini courses on topics like traffic products and sales channels, summer for Amazon. Most are for any sales channel to get those and to stay up to date with our podcast. Go to www dot v e-commerce leader.com. Thanks for listening.