#107: How to Build a Success E-Commerce Business
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Welcome back to another episode of the richer geek. Excited to have Neil Twa. Neil is the founder, CEO of voltage digital marketing, I'm really excited about having him on.
He has been launching, operating, and growing private label e-commerce businesses for the last 9 years. As of today, he and his clients have sold over $100 million+ in physical products primarily through the Amazon FBA sales channel. Neil shares his blueprint for how to build an online business that can generate a passive six-figure income in just 12 months while setting up the business for potentially millions in sales within 18 months.
In this episode, we’re discussing…
[1:12] How he started on digital online commerce and his aptitude on computers and technology to help others
[5:14] Why online business will generate a passive potentially six-figure income in about 12 months on Amazon
[7:04] Helping, giving resources and a plan to someone to build an e-commerce business on Amazon
[13:19] Can I do an outside website?
[17:34] Pros, Cons, and advantages of e-commerce
[19:35] How does he get people to those products?
[21:15] Sponsored ads or Sponsored brand and traffic marketing through brand marketing
[22:57] How Amazon works
[25:28] How long does the process take until product launch
[31:58] Some of the startup’s costs and the cash flow and profit margins average
[36:15] How to choose a product vs. competitors and the advantage of the Amazon system
Resources from Neil
+ Read the transcript
Mike Stohler
What if you could be doing something smarter with your money that creates income. Now, if you're wanting to get ahead financially, and enjoy greater freedom of choice, if you want a comfortable retirement, and you know you'll have more choices, if you can do more with your money. Now, if you've wondered who else is creating ways to make their money work for them, and you want actionable ideas, with honest pros and cons, and no fluff. Welcome to the richer geek podcast. We're here helping people find creative ways to build wealth and financial freedom. I'm Mike Stohler, and in this podcast, you'll hear from others who are already doing these things, and learn how you can too.
Alright, welcome back to another episode of the Richard geek. Excited to have Neil Twa. Neil's the founder, CEO of voltage digital marketing, I'm really excited about having Neil on. This is something we haven't talked about. He is launching, operating and growing a private label ecommerce business for the last nine years. How're you doing, Neil?
Neil Twa I'm doing great. Thanks for having me on.
Mike Stohler Now, I want you to share a little bit. It's like where to start, you know, because this is such a unique thing. Yeah. So you've developed this blueprint on how to build and how our listeners can build an online business. And I think that that is going to raise some eyebrows, because a lot of our listeners are in tech. So it's an online business that will generate a passive potentially six figure income in about 12 months time. And on top of that, you get to set up the business for I mean, who knows, you know, shoot for the moon right? Before the moon. Yeah, shoot for the moon, shoot for the moon. Tell us about it. I mean, yeah. What are you doing?
Neil Twa
Well, let's go back and answer some questions probably in people's minds first, because the last thing I ever want in these conversations is is to ever sound like I'm pitching my business or what I do, because it's very the opposite of the way we approach everything. So let's talk about what is ecommerce maybe what is the opportunity, because that typically tries to edify one major component that everybody comes to me with. And that is the time and energy it takes to get this kind of thing done right, especially to the people we're speaking with. And you and I were joking about a podcast that we that you had just recently with a couple guys in terms of passive income and stuff and how they're sort of doing it. And you know, how we have interacted with them. Literally, we didn't know until five minutes ago that we even knew these guys. And that's how tight this network can get. But it has to do with understanding the business and the opportunity. Like just to go back in time and the wayback machine here for just a second. Give me some context to this conversation without going too far outside of the realm of answering your question. Literally, I dropped out of school to go into E commerce, I got into my third year of college. And as the internet was exploding and things were happening so fast, there was no school track or any other mechanism that I could get to learn how to do digital online commerce. And that's what I wanted to do. I had gone to school on a full route music scholarship, literally full ride music scholarship, playing classical Trump trumpet as they refer to it, and literally didn't receive the end result being anything but living in a van down by the river. So I'm like, Okay, I got to do something different.
So having an aptitude and computers and technology, I jumped into a little job literally for 25 An hour learning how to put the computers together because the school was getting them all in. I'm dating myself, and they were putting them together. Nobody knew what the heck they were doing, right? And then Windows three one showed up and all of a sudden I'm like, Oh my gosh, this like this is gonna become something this is amazing. I want to know, no one could teach me twice. I'm jumping out I'm gonna go figure this out. So I started teaching myself programming business ended up in sprint, got very successful within that enough that IBM literally offered me a job and hired me how to sprint. Again, no degree, really taught me the business of networking. Always had the entrepreneurial bug. I like to joke that I was like one of the four Robert wrote the book I had a Rich Dad, Poor Dad. My dad was a hard working man. 28 years mechanic used to climb out of the cars with him. God loved him. He was a hard working man taught me about ethics and all kinds of wonderful things about life. But he didn't really understand entrepreneurialism, he didn't understand big business.
And that was my uncle. My uncle understood big business. He understood, managing understood his own thing. He wrote a book shop that he'd created out of San Diego. He was building his own companies on boats and he gave me a whole different perspective on the way to think about business and life and entrepreneurialism, so I always knew that that's where I wanted to go. I always wanted to go bigger. And so as I got through IBM and realizing I wanted to, obviously continue down the track of E commerce I was running an intrapreneur as we like to refer to it. I'm not an entrepreneur because technically I was in a corporation, but I was building something outside of the I knew eventually I was going to exit in 2007. We parted ways, and I went out on my own. But eventually I learned how to understand business and branding and online and lead generation, and how do people buy products and how, why they want to buy products.
And I stumbled across Amazon, because it was such a unique opportunity in 2010, to realize what this could potentially become, it was another moment of opportunity and time, and I jumped full bore into it. And because of that, you know, nine years later, we've grown a system that's launched brands, it's acquired, companies sold companies, it builds and launches and grows, we chose the E commerce vehicle because it's so big. In the last 24 months, it was one of the only double digit growth industries out there. And we started to see it like a virtual real estate play, because it had the literally the ability to stake your claim online, inside of this marketplace, prove the product in the brand have physical inventory we deploy capital into because we weren't just doing a virtual thing. And then tie those things together and then start to serve a brand start to serve people. And we watched that take off and just go like crazy. And we learned the major question to go back to what you were at was what the hell do I sell? You know, outside of time, I have this great meal. That's all fun and good. But what do I sell somebody? Like? How do I actually sell something? And we had a lot of people asking us that questions many years ago and got into the process of coaching and mentoring, and have continued to elevate into the business levels not the mic online make money nonsense, like the pipe dreams, Scratchers, lottery mindset junk, it is the building, the real business with the end of mind exiting these businesses, for multiples is where we go. So cradle to grave from launching to exiting through the entire portfolio of our business is what we do. And we've adapted that now. And as Jim Collins says, In Good to Great, we're hedgehogs. We went into this, and we just kept chugging down into it, and developing opportunities and optimizing and continuing to just keep growing in that until we've had multiple, multiple, multiple success stories beyond ourselves, of people who have gone through the business launched it exit in our building right now.
Mike Stohler
Now. And all that you're you're just talking about, you're actually walking people through, you're giving them the resources, the plan. Yeah. And I think you know, what you're talking about is allowing someone to build an E commerce business on Amazon, right?
Neil Twa
That's correct. Amazon what's called Fulfilled by Amazon FBA, as it's referred to.
Mike Stohler
Yeah. And so all right, someone calls you up, or emails, your whatever. Cool. I want to do this. Well, do you take anything? You know, I want to sew widget?
Neil Twa
No, no, there's a criteria. So, to answer the question, what do I sell, you actually have to get into the business and financial side of this. And this is where we have kind of moved over nine years into really the business coaching component. And one of the things we learned that was creating success for others, okay, we had successful stores, we built successful brands, we understood how to systematize it and build companies. That's what we did in the past. And we built companies at IBM i built companies within companies. That's what I did when I was there, right. And so as I learned to adapt that into my own business model, we had learned how to help other companies build themselves and so we set up this whole thing to basically become like a no ownership No, like a franchise, but no ownership and no, you know, requirements from that component, but they can leverage my infrastructure, my people, my processes, my technology, our experience and knowledge and our business coaching to literally just replicate the process, like don't go out of the lines is paint by numbers, you follow the process, because my ultimate we ready for this evil capitalistic agenda is you get a successful business and my portfolio is groupie there's acquires it or helps you sell it. And that's where the real money is made. Right? Absolutely, absolutely. To set you up from the very beginning with the end in mind is really the whole component. So I won't just let you sell anything. You don't have to be particularly passionate about it. But you there is a criteria and an avatar that we take you to we call it Gold Mountain. So you're not over here in dry Gulch.
And in Amazon, if you've been around it at all, or even understood the concept that you could sell on it. Many of the concerns that I get when people come to me and say, well, two to three years, I've been looking at this opportunity, haven't done it five years, I've been looking at this opportunity and haven't done anything. And the lady a minute ago came in and she's gonna she's gonna sign up and they're a good fit for it. But she spent the last year doing due diligence and before choosing to work with us. And it is because they understand the business opportunity. They understand they've chosen to work with EECOM they understand it as a huge upside potential in the future. And they're looking for somebody to help them avoid the pitfalls. They're looking to stay in the lines, be accountable, you know, understand the system and processes, become a CEO of that company, right.
And use us literally like a board of advisors who come in and help them structure from literally the LLC creation, through the corporate structure through where to get the products, to my agents, to the graphics to the avatar, even down to a beta service we're launching right now that lets them choose products that they register in the inside of Amazon with us that basically get exclusivity to our organization. So they don't compete with anybody else inside of our organization. Because we go compete with the market, we don't want them to compete with each other. Because we've gotten so good at this, when we enter the market, I feel bad for people who are already selling on Amazon. Because in 369 months, we will we will own that market share in that area of Amazon and do very well with it. So we don't have builders competing with each other because of that. So we have this really cool mechanism that allows them to literally just choose a product validate the sourcing in launch within weeks and not months.
Mike Stohler
Yeah, yeah. That's it's a good point that you, you mentioned that you don't have to be in love with the product. You know, it's the same thing with with me in real estate. I'm not going to live in that place.
Neil Twa
I'm going to fumigate and get rid of the cockroaches. But I don't have to drive.
Mike Stohler
Yeah, all I care about is cash flow. Does it make us money? Will it make me muscle if
Neil Twa
Revenue is is what is it revenue is sin or revenue is vanity. Cash flow is king and profit is sanity. That's right. That's the same thing with this business model. Because every two weeks you can get paid by Amazon like clockwork. And you can get cash flowed in these business models relatively fast, very profitably, because we choose the products that are typically higher retail, they're solution driven oriented products. They're not in what I call the Amazon's mosh pit, where you know, you're hanging out with a six foot four, you know, biker guy who's already and slamming around down on the bottom, that's where most of all the sellers go with these online offers and Guru crap. They don't understand the real business is made. When you develop the brand. And you are considering the business in 90 Day Cash Flow plans, your understanding capital deployment and logistics, you actually build up processes and redundancy. Just like you systematize anything, including real estate, or, you know, franchises or multi franchises or multi brand deals or multi apartment complexes, you are going to go through a particular process every time and we do the same thing on this. And we just do it in a virtual format that basically makes us claim virtual real estate on Amazon right now. And then we become the property managers.
Mike Stohler
Well, there you go. Now, it sounds like this is something that someone could do part time, they can still work full time. This is something that you can kind of do on the soccer
Neil Twa
in the intrapreneur state. Like let's say, you know, there's entrepreneurs, one openers intrapreneurs, I might call it voltage printers. Those are kind of the concepts that I'm doing something inside of business, or I'm already working for somebody else. Or maybe I have multiple business franchises, subways, Chick Fil A's, 27, Airbnbs, whatever. I want to deploy capital into another mechanism. I don't you know, it could be passive as I get it running. It doesn't I don't always want to just put it in, you know, Wall Street or some other mechanism. I don't necessarily want to do that, or I've already done that enough. Yeah, you can make it passive. Yeah, you can grow it up relatively quickly. Yeah, it's all about growth and metrics. It's all by the numbers, to really know and understand how to approach this correctly. So there's a predictable outcome in 12 months.
Mike Stohler
Now, let's talk about you know a little bit about the process. So you do you go through the market research? Correct to see if this item meets your criteria? Correct. Right. Very strict criteria. Absolutely. And then you go through and you you help build that brand. Correct. And you know, through FBA? Now, what if someone wanted to do website outside? Do you have anyone that says, hey, you know what, this gadget works? Can I do an outside website?
Neil Twa
Absolutely, you're going to do Yeah, you're actually going to ride multi channel like single channel types of businesses or points of failure. Amazon is the first vehicle we chose to road arrived, just give me because it is fulfilling last mile to the customer, which is great, because then we don't have the warehouses. We have third party logistics companies, and it gets sent into Amazon. So we don't have huge warehouses and employees don't have any employees. And that gets a what's called economies of scale, on the big picture, right. And you know, by choosing those products in such a way where they are highly profitable, the upside potential of the business becomes a real reality, right? And that is where we ensure that each product has chosen correctly. Each product has a profitability index and meets certain criteria. It has to have certain brand affinities you have to registered when on what's called Amazon's brand registry system. And we even go to brand trademark for intellectual property because again, we're building a business it's an asset, putting time money and energy into something that becomes an asset.
We're not just flipping products for profit, right? We're not doing wholesale or retail arbitrage. Are any of these online arbitrage things which are literally against Amazon's Terms of Service. By the way, any of those automation things are literally doomed to fail. I hear horror stories every month, sometimes every week from people who got caught up in that nonsense. We're building a real business in the end, an asset driven model that can become privatized. Now, with the FBA and stuff with Amazon. It is literally answering the question, well, who's going to buy my products, because they're there, they're 200 million people a month, $630 million a day. 70% of that is going to third party sellers, like small Pop Business moms, you know, individuals, couples, single moms, I'm just thinking of all the people that are inside of our group, right 19 year old high school dropouts, kids who are homeschooling and want to learn how to build an alternative income, or lifestyle business or doing this with their parents inside of our group.
And again, it doesn't come down to me being passionate about the products, it's me understanding that someone else's passion about the products and what's driving, they're interested in that product and literally getting a qualified good product in front of them. That answers that solution that they're seeking, right. And if I do very good at that, and I understand how that works, I don't have to force it. And so to get to an outside website, in brand typically means a lot more cost is a lot more expensive. And you're trying to find your avatar out there in the big wide world. We use Amazon, specifically to your question as an incubator, we use it as a way to test the product, test the brand, test the market. And we can do it in six, seven, multi seven, even eight figures before ever taking it offline to a website, at which point we will do that to a multichannel later on. Because there's more profit, there's another big world out there to talk to, but we'll know the avatar, we'll know the price points, we'll know what resonates about the entire brand will cash flow and make money while we're learning all of that market research, okay. And then we can take it out and hire a group that we use to go do that horse and we have a saying in the country to finalize my answer here. You can write you can write your horses with one ass. So we teach people how to just ride the Amazon horse to success first, and then all that other stuff becomes a lot easier later on. And they should do it in order to open new channels of opportunity and lower risk.
Mike Stohler
But it's you know, what's funny is you're starting a business utilizing the largest platform in the world. You know, which is a pretty cool thing. Very cool. And not only, especially during the pandemic during COVID. I missed how much Amazon hyper hyper hyper growth. And I get a probably by 6pm Today, if I were to it right now.
Neil Twa
And one of the things that, you know, that is a con, let's cover that because I don't want everybody just to think that you know, hey, this is a big pump up. It's not let's go pros and cons for a second. Because I'm always real about this. I want to be real with people. They're not dumb. You know, there's 111 Plus ships setting off the coast of Long Island, excuse me, Long Beach in LA right now, why? What's happening? What's that a problem? How do you overcome that? What's the, you know, what's the gotcha in that model? I mean, at least I can see inventory down the street with houses, how are you dealing with the inventory issues and the logistics, right? We don't go to China unless we absolutely have to, because that's a good proportion of the ships that are hanging out at those ports. And we typically send a lot of stuff into the East Coast, because we come from places like India, and Vietnam and Bangladesh and other sources, even the United States and Mexico. So we got out of China to the most part for like three years ago.
And we took a lot of our people with us saw the writing on the wall during Trump's administration with tariffs and other concerns. They were kind of just you know, indicators of what was going to happen. And because we're in this market, and we live it, and we're daily and breathing in it, we can see and start to forecast patterns, behaviors, we can look down the road a little bit and see certain things others don't see, because we're in the details. And that's one of the benefits I think most people see, when they look at us as business coaches is we have a very good viewpoint on where this is and where it's going, what to avoid, and how to see the future opportunities because we're heavily into it, right. So we ship other places we get from other locations, we are in stock, we are in supply, where others are running out of inventory, and that's creating a whole new opportunity. I gotta be honest with you, it's blood in the streets. And when there's blood in the streets, you know, there's money to be made. And right now, with the holiday season approaching at the time, we're recording this, for those who are paying attention, the inventory levels are going to be a challenge for a lot of sellers. But the opportunity for those to get involved is going to be huge, epic, it's going to be incredible. And it's going to ricochet into 2022 in a big way and ecommerce is not going away if any other industry is going to suffer. In the coming months or a year it certainly is not going to be ecommerce.
Mike Stohler
Yeah. Okay, so let's continue down in through how you're helping people you do the account management. And now, what are some of the ways so I have my product out on Amazon? Yeah. How do you get people to those products?
Neil Twa
So Amazon is a giant traffic source if you just think about it in terms of not as a consumer, but it's like As a business person for just a second, if you look at Facebook as a social media site only for viewing pictures and images, you're missing one component of its opportunity because many people see it as a way to connect with billions of people who are buying stuff. Amazon, unlike Google is people looking for stuff to buy in 30 seconds or left, unless they are literally buying in 30 seconds or less, they are there to buy. So inside of Amazon, in this marketplace, there are 200 million sellers a day to me a month going by buying something every day, all the time, everything you can think of, they are already there. So our goal and our experience has been to basically help our product be seen by this technology, this algorithm inside of this system called Amazon, this filing system of data as the better product that should receive more traffic and more visibility compared to our competitors. And there's a number of techniques we've learned in the last nine years to basically get our product to present itself as the better brand a better product, even a higher price point. And get customers in traffic to literally come to our listing because the system is rewarding us as the better product better brand better opportunity for the customer. And as it starts to validate that data in the system and says yeah, you check this box, you check that box, you check this box, it will just start sending us more and more traffic
Mike Stohler
and said how you get on top and you get off some the sponsored link or you know, you go when I type something in? Sure. And the first ones a pop up.
Neil Twa
Yes, that's an ad. Yeah. Okay. It's called. It's called sponsored ads or sponsored brands, it's referred to in the marketing world as pay per click traffic marketing. And inside Amazon, you can do that, it's one of the things we definitely do when we go into organize our brand. And once we go to market, when we targeted like your keyword just now that we're talking about for a product, and you land on that page, our goal is to dominate that entire page, you have no choice, but our product is the best product. And one of the ways we do that is through the brand marketing and product profit development. There's criteria of the numbers that have to match. And once we launched that it is because we are going to dominate that space. And any of the three to four to five competitors are there or not going to be able to keep up with us. And we will stay there until buy up all their traffic and we buy up all their customers, Amazon rewards us for being the best product.
Mike Stohler
Ah, so me, I'm learning so much. And I'm sure the listeners are to us. Yeah, it's a lot. But it's fascinating. It's, it's, it's fascinating, you know how Amazon works.
Neil Twa
It is. And it's the mechanical components, like let's Let's back out of the mechanics for just a second and really stay focused on the business because I want people to understand that, you know, being a CEO of one of these companies isn't that you should be pushing buttons or more importantly, that pushing a bunch of blinky lights for 40 hours a week is going to make you more money. Because that's not really how this works. How it works is if you really get into the head of an avatar, a customer who's buying these products, Okay, who wants to fill a solution, and you present them with a good product, it will take off by itself, it will take off organically, it'll get more reviews, they'll recommend it, people will put it on Subscribe and Save and it will literally with relatively effortlessly start throwing in a lot of traffic and a lot of sales, Amazon conversions on their listings are some of the highest online in terms of conversions, which for cold, unknown traffic to brands is unlike anything we've we've ever experienced in years, which is why we chose it, people just buy a lot more. And they are very convinced that when they want your brand they buy at a very high rate, which is fantastic.
And so we are looking at the profit per unit, not how many units we sell. That's a big misnomer on the online world as well. If I move 2000 products, and I get this bestseller badge or I get into these things on Amazon, those are accolades that will make me more money. And it's actually not true. It is just accolades in the system, it isn't more money, it isn't about the amount of units I move, it's the amount of profit I get out of each unit that ultimately matters, because that creates a profitable brand and as you know, a profitable p&l. So we are targeting products that have a minimum level of profit of $12 in each unit or higher. We know that when we go to market, we can buy our customers literally away from our competitors, and that we will stay there until all other metrics come back down and normalization, and organic traffic and product purchases go up. It's just a predictable cycle every time. And it happens across all the categories in Amazon minus three that we don't sell it because of competition and other issues. But it really again, is process driven as a CEO, you know, as we teach these people how to become the CEOs of this, it's their understanding of that they are dangerous enough to know those things and some of the technicalities, but that's not where they should stay on their focus.
If they really want to grow this, they need to learn how to be the fiscal manager, they need to understand their brand avatar, if they double their understanding of their customer, they're going to double their revenue. And it has nothing to do with how much time you push buttons. That's something we teach people in 10 to 15 hours a week, okay? Because of the systems we give because other people we give in our infrastructure, there's already everybody lined up to do the work. We just hand them off and because we only invite so Many people, so we don't want to overload our system. And we want everybody following the process and staying and accountability, we keep it relatively low to the amount of people we invite to come in and work with us and the other people either get rejected, or they wait till another day. Because we make sure everybody runs the same process.
Mike Stohler
How long? Does it take to give you a call? Yeah. Until product launch, do you think on average, you know, like, When can I start? How long does the process take?
Neil Twa
In this time frame, it'll take anywhere between three to six months for the time you get the product, the brand, the business built, launch your first product, and then see growth or scale. That's a realistic timeframe in today's world, right. And so I set that expectation, it's why our goals and in our time we work with people over 12 months. It's why our structured skin in the game performance pays your performance kind of model that we deployed is done over a 12 month period. Because we literally if you look at all my case studies, or go and investigate my people and talk to them, or go look at all the videos we've gotten from success stories, between six and 12 months is when everybody sees hyper growth, the time the launch the maturity of the brand, Amazon's own systems, just maturing your brand inside of that and seeing and the algo is learning and saying okay, you're the better product, you're the better value, it will mature and grow. And it's like an avalanche. And you can go relatively fast, we have quite a few recorded launches that are you know, zero to 100,045 to 60 days. And that's monthly recurring revenue month one, why don't we keep everything at a minimum 18 to 20% profit margin net on the business.
And that is intended to really stage it up for exit. So we are very tight to make sure the business is good. So again, keeping the end in mind, this is an asset, and like a virtual real estate flip, or a new real estate development that we're going to sell, there's costs, there's time to market, there's a predictable time in which we're going to flip this out. And we're going to make a good profit off the back end. So we have basically taken kind of a real estate complex model, and even put property management into it, if you will, by account management services for our builders at a later date, if they get to a product and running and brand is going good and we have good ROI and good business, we can remove them by taking over full account management and making it 100% passive, and then take that business out to exit for them, at which point my buyers will buy that company because we're managing it and it becomes a passive asset for them. And then we turn around and sell it up from there to we can sell it two to three times beyond that.
Mike Stohler
And it's how many years do you think between six months
Neil Twa
or less is our predictable goal. So between 12 to 18 months, you're maturing to past a point of seven figures with profitability and you have at least a three to 4x Multiple in that business right now, in 18 to 36 months, you should be able to hit three to 5 million if all things are going correctly, all profit and opportunities are all measuring out correctly in the numbers. That's completely doable. At which point you'll again, you're gonna see a higher end of forex multiples. If you open additional channels after 18 to 36 months, you want to open another paid traffic channel or whatever your multiples could go up to five to 7x.
Mike Stohler
So can they keep it after 18 months? Or
Neil Twa
Is it absolutely no contractual obligations. I don't put anybody in this isn't totally volunteer, you know, there's no, no contracts to what you have to do. At any time frame. What ends up happening is of course, we help people, they get successful, they come back to us, they already trust us, they already know what we're doing. And then we get to, you know, basically represent that business when the time comes for it to mature. And people do you know that I taught three, four years ago who were popping up saying, Hey, would you buy this? Or can you help me sell it? And their brands have matured? So that's, that's, you know, relationship driven is the best way to do it.
Mike Stohler
And I'm sure it's just always fantastic, you know, kind of watching your students, it really is a success.
Neil Twa
Yeah, so one just recently was Patrick Patrick was such a cool guy, Patrick, his first language is not English. And Patrick didn't have an extreme amount of business experience when he came into this. And he self identifies as not having no ecommerce experience, and it's on my YouTube channel to go check it out. You know, he's doing 80,000 A month right now, and eight months, and he is he would be doing 250,000. But one of his primary providers is ran into some troubles with logistics, he's looking at a secondary provider to double up his inventory capacity, because that's his only limitation right now. It's not the opportunity. It's that he's cranking things down a little bit in order to overcome his inventory, which he will and it's totally doable today. Although it doesn't feel like that to some people out there. There's ways to get more inventory faster. And he's working through that and learning how to create redundancy in his business. And then he will easily go past a quarter million a month.
Mike Stohler
Unbelievable. I'm in the wrong business everyone. No, I let me rephrase that. I'm not in the wrong business. I need to diversify.
Neil Twa
Diversification is what we're basically talking about, right? We're doing I'm going to the hotels I'm gonna keep keep those cash flows. You're open another leg of cash flow opportunity to potentially build up a you know, a passive opportunity that did adapt itself to e commerce and it looks at it from the Look at it from a real business perspective. This is a business, it has exit potential. Don't waste your time on just flipping, you know, products for profit. You're not serving anybody, you're making somebody else money. That's not really how this model works. Well,
Mike Stohler
yeah. How do people learn it? Or these? You know, when you go into an agreement with someone, is it an online course? Is it? How are people gaining this knowledge with your company?
Neil Twa
Yep. So we have a, we have a game plan, and that has a documented set of templates and videos that you'll follow. But the most important part is the business coaching component. So we have office hours every week, we stay very tight to our people in our systems of accountability. So we have live calls, we are working with them each week to ensure they meet certain gates, we check in on them, if we haven't heard three or four days, my assistant rings up and says, Hey, where are you at what's happening, let's get going. Accountability is a big component of their getting involved. Because they know that the opportunity is there. And we all things that drive us off at times. And you know, if you're needing accountability my people do, they really love that. And so there's a combination of some learning in online learning. But there's also live conversations. There's weekly live chats, in our community groups, there's monthly live chats with our graduates group. And then we have obviously, those office hours, we're very invested in the small group of people that we work with, because we want the highest percentage of them to succeed at their level of success, which is different for everybody. But we want those businesses to really see an opportunity for maturity. So we work very tightly with him on a place and a very one on one relationship with him.
Mike Stohler
It's, you know, sounds fantastic. It's I have never heard of anyone that does what you do.
Neil Twa
There's not many that are out there. And somebody asked me why that was the other day and not to my own horn. It's because I'm not paying attention to the rest of them. I don't know what I literally don't care. I know what I'm doing. That's right. Right. And I think that's the most important, but I don't know if these other guys are doing I don't care.
Mike Stohler
For our listeners out there. What would you say? Some of the startup costs? Or?
Neil Twa
Yeah, it's good question. Very good question. Expectations. Let's talk that right. Obviously, to create a real business, you know, that 997 kind of crap is really not going to work that's going to be you'd get a coaching and you go by yourself, and good luck with that and see you later. Our business mentoring fees are really geared towards honestly to disqualify the wrong people who are not really serious about the time and capital deployment that has to occur to make this become a real business. And if you're in real estate, if you're around investing, if you're in the business world, if you're buying franchises, then you know, kind of a good estimate of what we're going to talk about, you're gonna be looking at, you know, 50 to $150,000, in the first year of capitalization to your business, through mentoring, through products through growth. You know, if you, it's not just pure capital outlay, and then you got to wait, you know, two months, two years for this to come back. As your business goes to market, as your brand goes out, you're making sales immediately.
And each of those products, as I already said, is profitable. So if your products are targeting our 100% margins, okay, then, you know, in 90 to 120 days, you'll recoup all the money you spent into it. And that's sort of our expectation is without, you know, within 120 days after launching a product that meets all of our criteria, the market expectation is we return that because we're doing the same thing. As we go out 90 days with each product, we expect it to produce a certain amount of time, sales, velocity, profitability, etc. And we hold that same standard to our builders. So to get involved, we have an upfront fee, that they will pay for the first five months, we spread it out in installments, because I make it really not too complicated.
And then I have a performance bonus, it says when you get to a certain amount of sales in 12 months or less, then you're going to pay me a bonus, right, you're gonna pay me a bonus, and that's my skin in the game, I'm gonna hang on to that, not gonna charge you but we're gonna get to work together. And then when we hit that, and you get your first 100,000 in profits, then you're gonna pay me 15% of that, but you're not gonna pay me that until we get there. So we're stuck together to get this thing done. And that's really that's it. I mean, it's not more complicated in that we have a percentage we get like any other broker does when the relationship occurs at the brokering level. It's typically 10%. And so we make it relatively easy for the right people to say yes and more hard for those who really aren't committed to the product and capitalization requirements. You got to inventory this right. You can buy a franchise for that much that takes you a lot more time to get going at scooping ice cream and hiring 15 year olds, no one's asking you to do any of that here.
Mike Stohler
No, no, especially in today's job markets.
Neil Twa
This in today's job market. No, you don't have to open a pizzeria or I want 100 got junk. Oh, this is this is a totally different ball of wax. No, we're dealing in high product affinity product lines that are 50 to $300 in retail price, averaging 99. Our customer product brands for our brand builders are typically averaging 30 to $45 in profit per unit to their pocket after every unit sold. So we're running a whole different level of brand affinity with our products and of course the profitability becomes an opportunity. The ability to dominate the market is really the opportunity and the exit potential of that is much much greater.
Mike Stohler
You know, it sounds like actually out here where I live. I mean, that's cheaper than one single family rental.
Neil Twa
It is. That's right. And the cash flow off of that is what, $500 A month after all expenses and profits, I'm talking about, you know, making 10, grand 20 grand 50 grand a month.
Mike Stohler
Yeah, yeah, I like that. And I don't have to deal with tenants,
Neil Twa
no tenants, no employee, no warehouses, you will touch the product when you first qualify it and get it to you to ensure that it's a good quality product. And it matches up because we are private label. And just be very clear, that's not called white label that is not somebody else's product that you're stamping a logo on or whatever. This is your product engineer becoming your intellectual property, as your value. It's innovation over invention. And that means you own this product, it is yours, no one else has one like you. And you can brand trademark it. And that's part of that intellectual property. So you're creating a really value added situation here to yourself and to obviously the business as well as the customer who's purchasing the product. So that is private label to be very clear, we're not following around in that mosh pit of retail arbitrage white label nonsense. Yeah, we're going after solution oriented people, right?
Mike Stohler
Wow, you see, that's, that's something I didn't, I just thought that, hey, I'm going to put this product on there and white labeling, you know, stamp it,
Neil Twa
you're going to innovate the product. So it's you know, the customer because understanding that customer avatar is to better understand what your competitors are not doing. So that you can charge 1.2 to 2x, their retail price point. Because your value proposition meets more closely with your avatar. And there's a there's a particular process we go through of training your brain to understand that, so that as we go to market, our builders raise their retail prices, which of course raises their profit above the competition, selling almost the same similar or slightly different variation of the product. But ours is aligned better to the customer avatar and a solution oriented format. Let me give me an example of what I mean visually. So in your mind, you've got a tooth, it's hurting, It's aching, your whole brain is now hurting three days of this and you're like, Okay, that's enough. I need a solution. You call your dentist, what does he say? I got? Sure. One hour process 200 bucks, I'll get it done for you.
And you're thinking Dang, one more hour, this, I've been waiting for three days, I reached my point it has to get done. Now, what's the other solution? Doc? He's like, Okay, I got a 10 minute procedure, it's gonna cost 500 bucks, right, you're like done, I want that solution, give it to me now. That's the avatar we're after. Okay, a majority of people on Amazon who don't really know what they're doing. And we're taught by people who don't really know what they're doing are playing in that mosh pit of the $200. One hour problem, we're playing in the 10 Minute $500 solution, why? Because that person will come back and buy the extra special braces, and the extra special parts, and the 200 or this and a 500,000. And we get to what's called customer lifetime value a lot faster, and a lot higher. So our average customer value is or three to four times what the average Amazon customer value is. It's not the first acquisition of that customer we're after. And that's where everybody else is going. We're into the second and third acquisition of those customers, the back end of the business, that's where the real money is made?
Mike Stohler 38:00
Absolutely. It's yeah, I agree. It's not them renting a unit from me, it's the add ons, it's the custom this and the custom that and hey, for this, it's, it's the things that help them.
Neil Twa 38:16
And they don't even necessarily have to sell it because Amazon its system is literally telling the people what you need this, and they're looking at it going well, I bought something from that brand, I really appreciate it click, I'm buying that one too well, and then they come back and do it again. And then they put you on Subscribe and Save and all of a sudden your brand affinity and organic affinity goes up. And of course your profit goes up, we go out for a very different group of people again, because our end is exiting with profitability. It isn't just about how many units in the one customer purchase, I'm making that as a way to basically go both broke and this business model. And I watch a lot of people in three to four months, but too much money and fall in the wrong processes by people who don't know what the heck they're doing. And they come up in, you know, marrying their products and their business and are like now I can't get divorced. I'm stuck with her, or him and I can't get out of this relationship. I put too much money in it. And they're limping along terribly in three, four months, and I do not want to play in that ball. That's a wrong way to set people up for failure or failure. The wrong way to handle them.
Mike Stohler
That's right. Well, Neil, it has been absolutely fantastic. I think you've blown our minds you've you've given us something to think about you know on passive income that I think it's will only increase right I mean, Amazon's not going to get any smaller
Neil Twa
Tom rank remember like he can call it a Hugo and put a million in it and not call it a Ferrari at the end of the day. It's just a different vehicle. You know, the Honda Accord can get us there or the Lexus can get us there. But there's two different people we're shooting for at the end of the day, not to criticize what you said. But just to clarify. It is literally you know, a vehicle that we choose to go solve problems for people We're getting started online, and that's getting people to see their products, pay good money for their products, and then actually get them to be successful and profitable. If they go alone to other locations. If they try another vehicle online, a lot of times you hear a lot of failures in that and it literally gets down to, like, no one saw my product, how do I get people to see my product? I don't know anything about Facebook ads, and SEO and Google ads and all this other stuff. Like, go to Amazon, because people are buying everything in 30 Seconds or Less already, try let's get them to see your product. That's the fastest way to make it work. And I got literally, 14 and 16 year old homeschool kids doing this, I got 19 year old high school dropout, like what's your excuse? There's no excuse. I got 70 year old people in here too, that are doing the same thing. It doesn't have anything to do with age or demographic, it has to do with understanding the E commerce opportunity, getting in the vehicle and going for a drive like just get in, get in and go right. And this opportunity is not diminishing ecommerce is going up as a whole. And all components of it are going along for the ride.
Mike Stohler
That's right, Neil, how can people find you? How can people?
Neil Twa
Yeah, absolutely. Sure, just go to voltage vm.com bol, T A gdm.com. I'm sure we'll put a link in this video wherever. Check it out and click the Get Started button. And there is a 45 minute video of me if you haven't already had enough and spend about 4045 minutes listening to the training that I did behind that Get Started link that explains detail actual capitalization numbers in terms of getting started expectations and the whole model. And then should you want to talk a little bit more, there's a link usually below that video, a text number reaches me directly. Don't look a call unless you're really serious for to understand what's going on. If you're still intrigued. Want to know more? Got a few questions, just text me you're going to reach me personally, I'm only interested in those who are serious. So I don't have a sales team. And I'm not I'm only inviting you to take a look. It's not for everyone. I can't help everybody not trying to help everybody. I'm trying to help people who want to be successful. And see E commerce as an opportunity have made the decision or on the path to getting through the decision process and realize that business coaching is really what they want to they need. And they understand that there's a system waiting for them to follow.
Mike Stohler
Fantastic. Well, everybody. Neil Schwab founder and CEO of voltage digital marketing, and it's voltage dm.com. Neil, thanks so much for coming on. Thanks for having me
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ABOUT NEIL TWA
Neil Twa is the founder and CEO of Voltage Digital Marketing. He has been launching, operating, and growing private label e-commerce businesses for the last 9 years. As of today, he and his clients have sold over $100 million+ in physical products primarily through the Amazon FBA sales channel. Neil shares his blueprint for how to build an online business that can generate a passive six-figure income in just 12 months while setting up the business for potentially millions in sales within 18 months.
We've been building eCommerce businesses for ourselves and our clients since 2012. Our priority process helps you dominate the competition and ensure long-term growth. Our goal is to help you build a business that provides nearly automated income but also one that you can eventually sell. With our top-of-class Amazon Account Management, we help you grow your brand and position you for a profitable exit with our network of Amazon Business Buyers without having to do all the heavy lifting yourself. With dozens of successful private coaching students, clients, and $100M+ in Amazon FBA sales, our proven process and mentorship allows you to avoid the costly mistakes so many Amazon sellers fall victim to.