Brad DeGraw has published a successful book on Amazon selling call The FBA Hotlist. In it, he helps to coach sellers of all levels on the ins and outs of marketplace selling. DeGraw spoke with Appeagle about his belief in FBA, his journey as a seller, and more.
Appeagle: What motivated you to become an e-seller and specifically an Amazon seller?
Brad DeGraw: I started selling online two and a half years ago after my former employer and I decided to go our separate ways. Without warning, I had to make money. I knew I was an entrepreneur and they don’t make the best employees. I was referred to retail arbitrage by Chris Green and that got me started. I began with $100 and a Wi-Fi connection. The Walgreens clearance bin was one of my go-to places. In the beginning, I started sourcing in drug stores while targeting health and beauty products—cosmetics mostly. I didn’t know the first thing about cosmetics but because of seasonal clearance, I got things cheap. Then I moved from drug stores to Big Lots, then to wholesale—Sam’s Club, Costco. Today, I go on my sourcing route once a week.
Appeagle: What would you say your selling philosophy is?
Brad DeGraw: We run five businesses so the arbitrage business is baseline profit. We strive to make money and give people exactly what they expect. As far customer service, we go above and beyond. We refund even a year after purchase but that’s just part of the process. You have to take care of the customer.
Appeagle: How did you get into the business of being a selling coach?
Brad DeGraw: It was by demand. People kept asking, “What are you doing?” and “How do you do it?” It was hard to explain over and over why people would rather pay more on Amazon than in a local store, so the motivation was to shorten the conversations and say, “Here are the lessons I learned.” And even to this point we still make new products and training docs. When we get asked enough, we create the training material. It’s a lot of fun. I love speaking and hosting live events. It’s great to interact with people face to face. There’s a lot of distance and layers to people. There’s a synergy that happens and its addictive.
Appeagle: Who are some people who have inspired your path as a selling coach?
Brad Degraw: Lisa Suttora, Kat Simpson, Bob Willey, Chris Green, Skip McGrath, Steve Weber, and Jim Cockrum. The biggest lesson I’ve learned is that there’s room to make mistakes. Things are non-linear. Your business doesn’t depend on one bad day or one good day. During Q4 it can seem like every day is Christmas. Sellers have to take a longer approach to things. There’s a natural evolution. In the beginning you’re looking at margin—spending $5 to make $10. It moves from, “How much did I send?” to “How much do I have in the bank?” You’re forced to evolve. I encourage sellers to attend events and conferences. It’s a big deal so you realize you’re not alone. Most people work solo. We wear all the hats. We do packing, shipping, and even customer service. To meet people that are doing the same thing is a game changer. You keep your mind right when you realize you’re part of a community.
Appeagle: What are some of the primary concerns you hear from sellers you work with?
Brad DeGraw: Everyone is complaining about the competition. Price erosion is a big deal. It messes with people’s minds. With Amazon being non-linear, Wednesday’s sales don’t match Sunday’s sales. It’s the loss of control that people freak out about. When you do arbitrage, you’re a glorified personal shopper. You make it easier for people to get what they want at a premium. If there’s no distinguishing factor between what you offer and what others offer, then it is a commodity.
Appeagle: What do you think the perception is about repricers amongst sellers?
Brad DeGraw: You either love it because it works for you, or hate because you do it poorly. You need the right software. Every time I reprice, my sales go up. It doesn’t matter if I reprice up or down, which may sound crazy, but when you’re the only seller you can raise the price. It affects Amazon’s cart abandonment. We’ve doubled our sales because by repricing. I personally choose to manually reprice. It’s time consuming but we have less than 100 SKUs and we have a system. We have found that $0.99, $0.88, $0.77, $0.50 cents convert better than any other price points—and we’ve tested all of them. Something priced at $35 flat will sell less than something priced at $35.99. It’s like we’ve been programmed as consumers. We’re repricing advocates. We reprice twice a week and that’s our sweet spot.
Appeagle: What is your best advice to sellers out there today?
Brad DeGraw: Get started and prove that you’re going be successful. Try a lot of things and look at what’s working and what’s not working. Be prepared to fail and change every week. When you do that, your business will evolve very quickly. Everyone’s afraid to fail. If you’re prepared to fail and ready try new things, you’ll stumble onto game changers—new software, multi-channel, or a new category. Try it and see what happens. It’s about driving change and innovating. “Imitate before you innovate.” It’s OK to do the “me too” model. “Me too” will get you started. That’s short term. You have to be distinct or you will be a commodity. Be the innovator.
Appeagle: In closing, tell us about your book, The FBA Hot List.
Brad DeGraw: It’s really about keeping your mind right and keeping you focused on the right things. It’s a series of two-line tips. No paragraphs. The book discusses moving from margin to cash flow, being kind and generous to the people who help you source, among other things. Just simple points to keep your mind right.