612 Kirsty Verity:
Online shopping. It was big before the Pandemic and now it’s a way of life – and the first word that pops that pops into our heads when we think of something we need … is Amazon. It has become THE place to go when you need anything, and it’s been built in large part by the thousands of individual entrepreneurs who sell products via Amazon – some making 7 figures or more doing it.
I’m Melinda Wittstock and today on Wings of Inspired Business we meet an inspiring entrepreneur who radically changed her life from corporate marketing director to multi-million-dollar Amazon entrepreneur.
Kirsty Verity is CEO and co-founder of REAL Coaching. She has sold over $17M in physical products on Amazon since 2013 and has coached over 1000 Amazon sellers to build their businesses with real results since 2015.
I can’t wait to introduce you to Kirsty! First…
Kirsty Verity spent 20 years climbing the ranks in corporate as a strategic branding expert, her works associated with some of the world’s most recognized household brands, whether Aquafresh, Sensodyne, Durex, Pedigree or Whiskas. Coming up to her 40th birthday she knew she wanted a change – and before long she discovered Amazon.
Kirsty now runs her own successful multi-million-dollar Amazon business and co-founded REAL with Isaac Kuhlman. REAL is dedicated to coaching Amazon sellers to develop their businesses with the right strategies to achieve their lifestyle and financial freedom goals. They specialize in taking sellers who are stuck or plateaued in their business and break through to reach the real success they desire. Kirsty has hosted and spoken at many ecommerce events, including the ecommerce Launch Summit and SellerCon 2019.
Kirsty is a serial traveller and adventurer and loves to fuel her life with her business. She has moved from the UK to live in Australia and now to Canada, where she also hosts the Sprint to Profit podcast.
Today you’ll hear about the life of an Amazon entrepreneur and the keys to starting and sustaining your own business with Amazon – even selling it for millions.
Let’s put on our wings with the inspiring Kirsty Verity.
Melinda Wittstock: Kirsty, welcome to Wings.
Kirsty Verity: Thanks Melinda. Thanks for having me.
Melinda Wittstock: I’m excited to talk to you. I think the Amazon space has been really interesting to watch over the years and you’ve sold over $17 million worth of physical products since you started out in 2013. I want to start at the origin story. What led you to become an Amazon entrepreneur?
Kirsty Verity: Yeah. Before I even thought about going into the entrepreneur space, and to be honest, when I actually did that, I probably wasn’t thinking of myself as an entrepreneur. I mean, I had a 20 plus year career in corporate. I was in marketing. So I worked on big global brands like, you’ve probably heard it, like Sensodyne, Aquafresh toothpaste, all the oral health space, also things like Durex condoms, Pedigree, Whiskas. So very, very different brands, very different consumers. But essentially once you’re in that marketing space, it’s really all about understanding the customer, understanding the consumer, their insights, et cetera, and building out those brands.
And I loved doing that, but I got to this point where I was getting higher up in my career, as you might call it, but you kind of don’t get to do the fun stuff anymore. And when you’re working in a big corporate organization like that, there’s so many more miles to feed, obviously, but there’s also so many conflicting objectives. So, you’ve kind of got the shareholders who want a certain amount from the total business. And then that kind of filters down into the marketplace. I’m originally a Brit, as you can probably tell, but I’ve moved to Australia. So, my marketplace was Australia and then it was New Zealand.
So, you kind of have targets that you have to meet, but then there are specifics within those markets that don’t make sense, but yet you’ve got a mandate from global that you have to execute. And I was kind of one of those people that annoyed a lot of people that was kind of, “Yeah, but this just doesn’t … It’s just not the right thing.” And I just wasn’t enjoying it. And I just thought, I’m not really going to be doing this. I was coming up to my 40th birthday. I was like, am I really going to be doing this for the rest of my life, trying to please everyone, but I’m just not being fulfilled in what I’m doing?
And I just started to think of, well, what do I actually want to do? And he took me about two or three years. I’ve never really been good at saying, “This is what I want to be when I grow up.” I would just kind of go, what feels right, right now? And if I’m not enjoying what I’m doing, then I want to switch it up. And I started to look for ways to essentially get an income that gave me a specific lifestyle. And I started to think about that. That for me was a bit more of a pull because I was working you can say 18-hour days, not quite, but some days were a lot, because I had to work across different time zones.
And I just felt like I was just, like I said, just going through the motions. So I was like, okay, what’s the one thing that I really want to do? And I love to travel before I actually moved to Australia, I’ve traveled around Asia for like four or five months. I’ve traveled around Australia for a year in a camper van. And it was one of those times that I just felt the most free. I didn’t really have a lot of money. I was just free to do what I want when I want. And I was like, I want that feeling back.
So, I started to find different opportunities that would kind of give me that freedom. I tried lots of different things, steer trading, real estate, even selling on eBay, also websites, selling digital products, that type of thing. But the problem with those models was that it didn’t ultimately give me the lifestyle that I wanted. One or two of them anchored me in a certain place. And then when I moved into the digital space, there was kind of a lot of hit and miss in terms of driving traffic, converting that traffic. It wasn’t really my wheelhouse at that point.
And then that’s when the Amazon opportunity presented itself. And it was physical products, which is what I was used to doing, building a brand, again, which is what I was used to doing. And it also allowed me to do it from anywhere in the world because Amazon was taking care of all that backend stuff, which is like all the warehousing, the facilitation of the product to the customer. So really, I just had to figure out a great brand, great quality products, brand them, talk to the customer and make sure that I got ranked on Amazon.
And that just seemed like an awesome idea at the time, I’d read the 4-Hour Workweek, which I’m sure a lot of people have. So I wanted that lifestyle dream. And at that point, I wasn’t really thinking about selling $17 million. I was just thinking about how do I replace my current salary or even less than that, how do I just get enough money to be able to travel and do the things that I want to do and make sure that that’s consistent on a monthly basis?
And I believed in it so much because I’ve done all the other things while I was still working, that I actually went to my HR director who was kind of … She was an awesome … well, she still is an awesome lady. She’s still here, but we kept in touch a lot and I kind of said to her, “This is kind of what I’m thinking about doing.” Because in the corporate world, they’re always trying to push you somewhere else. So they were trying to get me to move to Asia and I was like, “You know what? You don’t need to do that. How about I just kind of leave. You guys can figure out my role. Maybe you can spread the role out so you’ve got one less mouth to feed. I’ll take a redundancy.” Which is like a severance package.
So we kind of worked it out together. So I managed to get a year’s salary, which was awesome at the time. And I thought, right, that gives me enough runway to make this work. So I literally did that. I hadn’t even started the business, but I just believed that it was going to work so much. And then I wanted to try out the lifestyle. So as soon as I left my job, I basically got on a plane and went to Bali and lived in Bali for like three months while I kind of got the business up and running and sold. I wanted to sell 6 to $10,000. That’s what was kind of my goal in one month. And when I got to that goal, then that’s when I was going to go back to Australia. So I did that in like two to three months, and then I went back to Australia and then that’s how I started. And I just kind of went from there really.
Melinda Wittstock: So the beauty of entrepreneurship is that you can create a business that suits your lifestyle and what you actually want. And the beauty of Amazon too, is just that nice, once you get that funnel working and the right product or the right product market fit and all your marketing background, it becomes a nice passive income channel.
Kirsty Verity: Yep, absolutely. I was really surprised at how … I don’t want to make it sound easy, but it was easy compared to the other stuff that I’ve tried. And I know there’s a lot more competition on the marketplace now, but in terms of I think where my mindset was, I really started out with the brand in mind. I think a lot of people, when they come into this space, they’re really obsessed about what product they’re going to sell. And for me, I was like, I don’t really care what product I’m going to sell. I just want to be able to create a brand that a customer wants to buy into, because I know if I do that, then they’re going to buy other stuff within that brand.
That’s the approach that I took because literally just because of my background. And I think it gives you a kind of a wider opportunity, if something doesn’t work, then you just kind of switch it up and you can find another product that is going to suit that customer.
Melinda Wittstock: Well, that’s the secret of success, I think, on Amazon for Amazon sellers is that branding and the marketing piece, because otherwise you just end up with a commodity that Amazon itself can easily replicate or someone else who’s an Amazon seller.
Kirsty Verity: Exactly. You’re not offering anything different other than it may be cheaper, which is not the best point of difference. And if you’re not offering a great customer experience based on what the customer needs and what they want, then again, you just become another commodity, which is like, yeah, here’s your product. It’s a very transactional process. If you think about Amazon itself, it’s a very transactional process. So as a brand owner and a brand builder, you want to be thinking about ways to actually make that experience a better experience for the customer, even though they’re still buying on Amazon. And that’s, I think, is one of the keys to start in your business with Amazon.
Because number one, they have the majority of customers that they’re waiting. It’s literally like getting your first into Walmart or one of those big department stores. A lot of people make that connection because they’re like, physically I can see it, physically I’ll be able to go and my family can go and see it on the shelf and it feels like an awesome achievement. But I think sometimes you just think of Amazon as this weird thing online that yeah, you buy a lot of stuff from, but it doesn’t feel the same. But it’s exactly the same. In fact, it’s better, because as an entrepreneur, global entrepreneur, I can access marketplaces in the US, Canada, Germany, UK, across Europe, even Japan, if I wanted to, even Australia now is there as well. So you’ve got access to a global marketplace where the majority of people in that marketplace, when they shop online, that’s where they go.
Melinda Wittstock: So you’ve helped more than 1,000 Amazon sellers now get this formula right. What was the spark that made you say, “Okay, I know how to do this. I’m going to teach other people.”
Kirsty Verity: Yeah. Again, I just kind of fell into it. Funnily enough, I met my business partner, Isaac Kulman, and that was at Maverick, Camp Maverick, which is-
Melinda Wittstock: Yeah. That’s where I met you.
Kirsty Verity: Yeah.
Melinda Wittstock: I remember it so well. It was like way back, 2015. We were at this like summer camp for entrepreneurs. It was a blast. And I remember meeting you, Kirsty, and thinking, gosh, this woman has it together. Because she’s just having so much fun, like you’re enjoying life and making money at the same time. It was a real inspiration.
Kirsty Verity: Yeah. It was cool. And I met Isaac over at the silent disco, which was quite funny, but we-
Melinda Wittstock: I remember that. That was great.
Kirsty Verity: Yeah. It was funny. And we just started chatting. So he was also, he had his own business and we kind of bonded over problems. So what happened was around that time, there was a big boom. There were a lot of people wanting to get into the space and I’ve kind of quietly done it. And I went to a conference and I was chatting with … I actually first did a course called Amazing Selling Machine. And I know you know the guys there as well. And I was chatting to Matt and Jason and those are the guys that developed the Amazing Selling Machine. And I was telling him what I was doing. And they were like, “Really?” I was like, “Oh yeah.”
So my first year I got over 1.5 million in my first year. And they were like, “Well, okay, we’ve got this conference coming up. Would you mind talking about that?” I was like, “Yeah, no worries.” I’ve just thought everybody was doing this. I just thought it was like normal. And of course, they didn’t have a lot of women, funnily enough. They had a lot of guys that were always on stage talking about how to grow your business, but they didn’t really have a lot of women. And they were like, “Yeah, we get a bit of not complaints, but they want to see more women on stage. Would you mind talking about it?” So I said, “Yeah, no worries.”
So I did that, but then of course, you’re in a room with one and a half thousand people, and then they’re like, “Oh, can I pick your brain? How do I do it? How did you do this? How did you do that?” So I ended up helping a lot of people just through Facebook, people contacting me and stuff. And there was a constant problem, which was they didn’t really … Number one, they weren’t building a brand as we just talked about. But number two, they just had no idea about money. They had no idea about how to build a real business that actually made you a profit and made you an income because they were just really focused on, I need to get my product live.
And by some fluke, they’d got sales, because it’s a great platform, you can easily get sales, but they didn’t really understand how do I get the money out of the business to then focus on my next product and then how do I actually grow this business so that it’s a sustainable business for me long-term or maybe I want to sell it one day. So how do I make sure that I’ve got the right financials in the business for it to be attractive to a buyer?
Melinda Wittstock: So all those basics of entrepreneurship that so many people start out as entrepreneurs without really knowing any of this stuff, right?
Kirsty Verity: Yeah, exactly. And the corporate background that annoyed me so much actually came in very handy because that’s what I have to do. It wasn’t just the awesome advertising and things like that. But part of my role was to manage portfolios of brands and then be able to present that to the board and say, “Okay, I need investment for this brand versus this brand. And then as a portfolio, this is how we’re going to help grow the bigger pie. I’m going to grow Australia, New Zealand to this level with doing these strategies and then that’s going to dovetail into the overall business path.”
So I was kind of just used to doing that. I was also used to business planning because we had to present every month, present the numbers, what’s up, what’s down. I also then had to present every quarter and then I had to review what went well, what didn’t go well. So I just have these processes embedded in me and I was doing that in my own business, which allowed me to get really focused really quickly and just focus on the stuff that was going to bring me the biggest impact in the business. People just didn’t have that concept. So I was like, okay, well maybe if we presented that, because there’s so many people out there telling you how to get a product live, but there’s no one really showing someone, well then, how do you turn this into a proper business that’s actually going to pay money.
And Isaac had also kind of had the same revelation. So we said, “Well, why don’t we …” And the other thing that a lot of people were doing, they were just doing courses that were quite, there were great information, but no one had known anybody to talk to. You can imagine, go through a course, you get stuck. And then people were kind of falling off because they just thought, I can’t do this for whatever reason, you know when you get those roadblocks as an entrepreneur.
So we said, “Well, why don’t we do in-person events where we do a workshop and we show them this whole process. And we go really deep on their numbers. We’ll look at their business and we’ll essentially help them put a strategy together.” And that’s what we did. And we love to travel as well. So we kind of dovetailed it with that. So we did something a bit crazy. We went from, we did six workshops, three-day workshops in six weeks. We started in Sydney, in Australia. We flew then to Vegas. We did one there. Then we did one in Austin. Then we did one in Toronto, which is actually where I met my husband now. And then we went to New York and then we went to London. So we did it.
I was completely knocked at the end of it, but it was awesome. And then, of course, we did the workshops and then people were like, “Oh, how do we keep working with you?” So we were like, “Okay, let’s put something together.” And that’s how it all started. And now we’ve been doing it since 2016. And we have a coaching program that essentially we’ll deep dive into everyone’s business and give them that strategic plan as well as, obviously, all the nitty-gritty about Amazon itself, but we’re really focused on what do you want to build in terms of let’s really start out with your why first and then financially what do you want your first goal to be?
Because sometimes you can have this awesome thing of, I’ve got this vision for myself, which is great, but then you don’t know where to start to get that. And that’s where a lot of people can get discouraged. So we really boil it down to, okay, that’s great. We want you to have that vivid vision, but then in the next 12 months, what do we need to achieve for you to get closer to that vision? And that’s what we really focus on.
Melinda Wittstock: Yeah. So this whole point of knowing your number is really important and especially important for women, because I think sometimes we don’t even aim high enough or we don’t really know what these numbers actually mean in our daily lives, like literally just the basics of if I want this number then backward plan what’s the funnel? What’s the conversion rate? How many people do I need to touch to be able to … Right? All those kinds of things. Is that usually the biggest issue for Amazon sellers, of really understanding the kind of the … Knowing their number, knowing what they want? Or is it a mindset issue around money? Talk to me a little bit about what’s going on there and the biggest problem they tend to have.
Kirsty Verity: Yeah. I think knowing the number is … It’s funny because we get people that would be like, “Yeah, I want a million bucks a month.” Okay. That’s awesome. That’s kind of like too far ahead. But the majority of people are like, “If I could just make an extra $1,000 a month.” And there’s nothing wrong with that, but I’m like, “Well, how is that going to change anything? What’s it going to change for you?” “Oh, yeah. Well it means I can probably buy a few more groceries.” And I’m like, “Okay, but do you want something more than that? What else do you want?”
And then when we delve a little bit deeper, usually for women, there’s a couple of camps. And the people that we attract tend to be more women that have had either a career or they’ve spent a lot of time at home, raising their kids and it’s almost like they want to contribute back to the family again. That’s almost like the first goal. The second goal is I still want to spend more time with my kids and kind of feel useful. And then the next one is I want to retire my husband. And we’ve had many women do that, which for them it feels so empowering because usually what happens is they’ll start this thing. And the husband’s like, “Yeah, whatever, this is your little side project. Yeah. You can do that. That’s totally fine.” Not in a bad way, but just kind of, “Oh, great. That’s what you want to do. Awesome.”
And then they start making this money and they’re like, “Oh, that’s working well. Maybe I should come into this with you as well.” And then they kind of turn it into a family business or retire the husband, but make sure that they’re looking after the family. So a lot of the people that we attract tend to be like that as well as their first goal. And then we’ve also had women that really build up the business and then they sell it for like three and a half million, $4 million. And that’s like, for them is just an amazing trip. And from there, their confidence is just so big that they’re like, what else can I do with this? Should I now go into something else that I really want to do, if you know what I mean?
So that’s kind of where we kind of find people, is that first off, they’re just thinking about getting some extra cash and we want to turn it into something a bit more of a commitment based. And then we delve deeper into what they truly want. But then the cope problem is when people don’t do that is that they tend to start building something that they don’t really want to create. And I think that’s where we get a lot of people as well as, is that they’ve started something, but they don’t know where it’s going and they don’t realize that they’re actually not making some money.
Because they’re really focused on that top line then, because that’s where a lot of the marketing comes into, to even start this business, is look at all these people that are doing a million dollars a month or a nine-figure business, an eight-figure business. But it doesn’t really mean anything unless you can actually anchor it back to what you want for your lifestyle and what your happiness is. Because you can end up building a nine-figure business, which is awesome, but if you’re not happy building that thing and what it takes to get there, then that’s when you always feel disappointed.
Melinda Wittstock: Absolutely. Yeah, no, it’s so important to be enjoying the journey. And then the other thing too, though, is understanding the profitability. There are so many people that I see in the Amazon world that say, “Oh, man, I had this like amazing year I’m on top line revenue.” But I always wonder, okay, so what was the margin on that? Did you actually make any money?
Kirsty Verity: Exactly. I’ve met people that I’ve … The top line they’re doing over 10 million, but they lost over 100,000 that year. So, it looks awesome. You feel awesome. You think, great. I’m looking at my dashboard. I’m getting all these sales, but then you’re like, “Why don’t I have any money in the bank? It doesn’t make any sense.” So it’s not that great of an achievement. You’d be better off building a business that is a million-dollar business that pays you 250,000 a year.
Melinda Wittstock: Exactly. Just understanding how to make it profitable. So, what are some tips there, for anybody who’s listening, who is somewhere on the journey as an Amazon seller, to really drive the profitability of the products you’re selling?
Kirsty Verity: One thing that we do is we always make sure that we know all the numbers before we even decide to launch a product. This is another problem that people have, is they get in their head that they want to sell this specific thing and they’re going to make it the best widget out there. So, they add a lot of cost into the product itself. And then they’re using Amazon as let’s say the main platform, but then like anything, you’re competing with so many different products out there. And if you can’t demonstrate significantly why you’re better than everyone else, then the volume tends to be a lot lower than those products because you’re charging such a high price and therefore, you’re not going to have the volume that it takes to keep you ranked on the platform.
Amazon is very similar to Google in that way. You’ve got to get ranked for keywords, but the key thing that drives the ranking is the sales. So, there’s got to be a balance between how much volume is needed to be sold every day that’s going to get you top visibility on the platform with all the other major players. So that’s the kind of space that you’re playing in. So, what we do is we make sure that number one, you start with the brand, like we talked about before, and then you’re looking for products that are going to serve that customer. And then you make sure that you do all the market research around those products. And there’s some awesome tools out there.
Now, when I started, it was a bit suck it and see. But now there’s such an industry that’s grown around selling on Amazon, but we use a tool called Jungle Scout, which, it’s like a market research widget. And essentially you can type any keyword into Amazon. What we tend to say is the thing that you want to sell, usually the main keyword that most people are going to buy on is the thing that you would type into Amazon to find it. So, if it’s a tripod stand, you would type in tripod stand. That’s probably going to be your main keyword. And then you’re going to get a ton of other keywords that work as well. But just start with that one.
And you can type that in, you can hit the little Jungle Scout widget, and it will bring up all those sellers that came up on page one. It will actually tell you what they sold in the last 30 days, how much volume, the value, how many reviews they have, et cetera. So, we kind of take all that data and use it as a way to think about, well, how much share do I really believe that I can take from this market, from this keyword. And we kind of work on how you can do that.
As a great rule of thumb, you can start with say 30%. You’re going to take 30% of that top page. And then you can start with, that’s my sales target and that’s my volume target. That’s what I’m aiming for. And then with your pricing, you have to think about how are you going to look compared to the rest of the category. Same thing as what you would do with a physical product if you were going to sell it in Walmart or whatever. So, you then put the pricing in that you think you’re going to be able to command in that marketplace. Then you find the cost of goods, you find the freight costs and then you work that into the P&L, your profit and loss.
Because what a lot of people go wrong is they think, yeah, here’s my cost of goods. Here’s my freight. So, I need to charge this price to get me to a 40% margin. But that means you haven’t taken into account all the other sellers on that marketplace and how you’re going to look to the customer. So, yeah, on paper, it looks awesome. But in the real marketplace, you’re not even going to get close to page one and you’re not going to get the volume. So that’s why that pricing piece is very important. So, you take all those things into account.
And then the next thing we look at is how much stock am I going to need? So, if you’ve got a high volume product, for instance, you want to take 30% of the market, we suggest that you take at least three months stock when you launch. Can you afford that? Can you even afford that first three months’ stock? And the reason we say three months is there’s no point in launching a product if you don’t have the stock to back it up, because it’s going to go well. So, you launch the product, then you run out of stock. Then you’ve got probably a three-month lead time to be able to get more stock in and all that hard work that you’ve done to actually launch the product is gone and you have to start again. You’re just wasting your money. So, you want to buy enough stock that’s going to get you enough to launch it.
Then you want to look at the ROI, so the return on investment. In the same way that you’re going to invest in anything, invest in real estate or invest in a business, you’ve got to think about for that $1, how much am I going to get back? This is an area where a lot of people don’t, they don’t even think about that, but we take that into consideration because that’s really going to be, it’s going to influence your cash flow. So how much cash are you going to get quickly back into the business? And I want as much bang for my buck as that $1 that I’m spending. So, we aim for at least 150% to 200% return on investment on our products.
And then we also then look at, okay, how much … I know what I need to do to be able to rank this product. We usually use Amazon sponsored ads. So very similar to using Facebook ads or using Google ads, you can essentially work out with the keywords how much potentially it’s going to cost me to rank for those specific keywords. And you can build that into the cost of the product as well, because you want to understand ongoing if 20% of my sales is going to come from ads, then this is what it’s going to do to my profitability longer term.
So, we look at that cost as well, because again, that’s another area where people launch a product. It looks all great when you’re looking at your cost of goods, et cetera. But when it comes to actually launching the product in the way that you should be launching a product, they can’t afford it. The cost per clicks are way too high based on how much profit they’ve actually got. So, we look at all those areas before we even launch a product. And then when it looks good and we kind of give it the tick in terms of parameters, I’d be looking at a gross profit margin before any advertising at 40%. And then if you’re looking at after advertising, you want to be around 25% after ads.
Melinda Wittstock: This is such a numbers-driven business. And there seems to be a real formula. So, I can imagine your course is super popular because why go and reinvent the wheel yourself if you can just go and figure out this formula. Does the formula deviate much for people?
Kirsty Verity: No, that is kind of like the parameters that we work with, but sometimes what we’ll do is if we know, for instance, that FBA fees are … That’s another consideration, is FBA fees because that’s the model that we recommend. FBA is fulfilled by Amazon, where basically Amazon does everything. They warehouse the product, they ship it to the customer. As a lifestyle entrepreneur, you don’t need to solve any of that, which is awesome. You can just get, as a CEO, you just focused on the customer and the sales.
But those FBA fees, they go up every year. So, you always want to be looking at that. So, the parameters might change depending on the costs that are built into the model that we have. One year you can get away with 80% gross margin and 25% after ads. But then as the FBA fees might grow, the model might shift slightly. So, the principles are the same, but the parameters might change a little bit, if that makes sense.
Melinda Wittstock: Yeah, absolutely. During COVID, I can imagine this was a really great time to be building an Amazon business because everybody’s … Did your business just boom hugely during COVID?
Kirsty Verity: Yes, absolutely, because I’m in fitness as well. So that just went crazy because all the gyms were closed. I sell jump ropes. Everybody wanted to jump rope. Everybody wanted to get fit at home. It was crazy. It was better than Christmas. That’s another thing about Amazon. The Christmas period is like a crazy, crazy period. My husband, his Amazon business, on average he might be selling 8,000 a day, $8,000 dollars a day just in one market. But just over that Christmas period, he sold a million bucks, like just in Christmas.
It’s a great time to just kind of sit back and reap those rewards. And then with the influx of people shopping online with things being closed down, they’ve acquired a lot more customers. Even though Amazon already has a lot of customers, the acquisition was massive over that period. A lot more Amazon Prime members, all that kind of stuff, which basically means the retention is going to be a lot higher.
So even though Amazon was always a great space to be in, it’s just growing exponentially, not just in the US, but globally as well. Even those marketplaces where it was kind of almost like a fledgling market for Amazon, a lot more customers are purchasing from Amazon ongoing now.
Melinda Wittstock: Did anything kind of go wrong, though, with the supply chain? Was it harder to source products or?
Kirsty Verity: Yeah, totally, because there was actually a knock-on effect. So not just the actual product, manufacturing the product itself because, of course, with COVID, the origin is China, right?
Melinda Wittstock: Yeah.
Kirsty Verity: So Chinese manufacturing shut down first before we did. So, we had that backlog going on, but they did open up and start manufacturing again. But then the problem was the source materials. So, there was a shortage of a lot of source materials that was having an impact on the supply chain, but also then had an impact on freight because everything was stopped. Not just obviously our products, but everything in the world, trying to manufacture masks, all the essential products, that was getting, obviously, as it should be getting priority on freight and things like that.
So yeah, it did have a knock-on effect, but with that planning in mind, again, with this mindset of I need to plan things in my business before I just do it, we were able to, especially with our people, able to kind of switch them up from well, let’s part air freight things in, because that wasn’t as backlogged as a shipping. Yeah, it’s going to cost you more, but it’s better than going out of stock. So, let’s air freight some stuff in and then let’s get stuff on a ship and let’s kind of work out what the shipping timelines are and things like that. So that’s the kind of thinking that you have to do.
It’s different to kind of digital stuff or with a physical product, you literally have to get the source materials, get someone to make it, get someone to ship it, get Amazon to check it in or wherever you’re sending your products to, et cetera, so that there can be a big lead time that can be fluctuated for sure.
Melinda Wittstock: Yeah, I imagine. I’m curious, Kristy, can you build a successful Amazon business on Amazon alone or do you also need to branch out and have your own website, your own Shopify channel, get products into retail as well? How important is that diversification?
Kirsty Verity: It really depends on what you’re building. In terms of building a big business, no, you don’t have to do any of that. One area that, again, we really focus on what is the most simple things that you can do to grow your business to get the biggest impact. And one of the key areas is expansion and diversification through Amazon itself. Like I said, there’s different marketplaces. Once you’ve got a great foundation, and what I mean by a great foundation is your first million dollars, at those metrics that we talked about based out of our marketplace. And you’ve got cashflow coming in and you’ve got great processes in place.
Then I would be looking to diversify through marketplaces. So then looking at the UK, Germany. UK and Germany, kind of great markets to go to first because they’re the most developed. Also, across Europe, a lot of Europeans actually speak German and they buy a lot from the German marketplace. And then I’d be looking at Canada as a great market as well. There’s not a lot of competition because of COVID. And I’m living in Canada right now. You’re from Canada originally?
Melinda Wittstock: Yes, I am. Yes.
Kirsty Verity: Yeah. So, Amazon wasn’t that great of a marketplace before, but because they couldn’t get anything from anywhere so everybody went to Amazon. So that’s a great marketplace at the moment. And then looking at places like Australia as well. So, there’s so much scope within Amazon itself that you can do as a sole entrepreneur and then as you start to build a team and you’ve got more cash flow coming in, that’s when I would look to diversify. Now, I wouldn’t say, not being able to build a community of your customers is not … That’s a great idea to still do, capturing email addresses, finding a way to build a community, but not necessarily selling directly until you’ve been able to master all of those areas.
It’s a completely different business model to then direct traffic to your own website. It’s a very different business model. And I would say we know people that do nine figures on Amazon, just Amazon alone. In terms of the industry around Amazon, right now there is a lot of money that’s coming into the investor space, a lot of money that’s coming into the co-op space. So there’s kind of bigger companies that are buying up sole Amazon businesses and creating a big Amazon business.
Melinda Wittstock: Yeah. There’s a lot of private equity activity around.
Kirsty Verity: I think it was over a billion dollars was invested into that space last year alone. And they don’t want too much diversification for those types of businesses. They don’t want a lot of that noise, if you like. They’ve got their processes. They want to buy Amazon businesses. So as a first great business, you can build up your business and sell it for five million, even 10 million and sell it to a business like that. You don’t have to have had all these other things. If you want to grow beyond that, I would say, and get maybe a 20 million valuation or a 30 million valuation, then adding on those extra channels is a great thing to do.
Melinda Wittstock: That’s amazing. Kirsty, how can people find you and work with you because this is awesome. You know your stuff and it’s amazing, the success you’ve had. What’s the best way?
Kirsty Verity: Yeah. You can come to goteamreal.com and we have some free training on there as well that you can digest a lot of the concepts that we talked about today, I give it in a lot more detail. So you can have a look at that. And you can also email me direct at email@example.com as well. And I’m happy to answer any questions that you’ve got. If you’ve got an idea for an Amazon business, you can run that by me as well and we can go through some of that goal setting that I talked about as well.
That’s usually what I do when people contact me, is just kind of try and figure out what they want from their business and then what it would mean in terms of how many products you can sell, what types of products you should sell and how long it’s going to take you. So we can definitely do that as well.
Melinda Wittstock: Fantastic. Well, thank you so much for putting on your wings and flying with us.
Kirsty Verity: Thank you so much as well. It’s been awesome.