AF247 - Wholesale Bundle Success Story with Snack Hut Creator Mark Davis

On today’s episode, I’m joined by awesome entrepreneur Mark Davis, founder of Snack Hut, his company for wholesale bundles. Mark has over ten years of experience in liquidation, brick-and-mortar, private label, wholesale, retail arbitrage… all the things you guys are interested in. He’s actively, consistently, and profitably on Amazon, and he’s here today to share his expertise on everything from reverse wholesale to packaging decisions to having patience and not giving in too fast. Mark starts off by telling us how he got into liquidation, flipping customer return pallets before moving into retail and online arbitrage and finally deciding to focus on wholesale. He then introduces the concept of reverse wholesaling, which picks on Amazon listings that could be improved and obtains exclusive sales contracts by demonstrating how they could perform better. This has been a really successful approach for Mark, but as he explains next, he wanted to get in on what these manufacturers were doing and started researching private labels, which hooked him with the prospect of owning the buy box and being able to protect your listings. He then tells the story of watching an unboxing video, getting the idea for candy boxes, and—with his wife’s assistance—making the first order that would lead to Snack Hut being born.

Next, Mark talks us through the early days of Snack Hut, from packaging decisions to production processes, before we tackle the challenges we’ve come across in wholesale bundling and ways to overcome them. In particular, Mark emphasizes how getting your production processes in place can save you significant amounts of time per week, which can then be invested in learning how to take the next step in your business. He also stresses the importance of having patience and setting long-term goals, having seen too many people get impatient and quit before they’ve given their business a chance to succeed. As an example, he points out how many people insist that retail arbitrage is dead, despite there still being plenty of money to be made there, then we discuss how wholesale bundling bridges the gap between RA and private label without requiring twelve months and fifteen grand. We also talk about retail distribution as part of building a sustainable, sellable brand and how Mark is using Amazon as a launchpad to build up the Snack Hut brand outside of Amazon, increasing its value and making it more appealing to aggregators when it comes time to sell. And we close the episode out with the great news that Mark will be guest hosting some training in our Amazon Files Hub community in June, so all you wholesale bundle students can learn even more from him!

You can ask Mark more questions by joining the Amazon Files and Mommy Income community. You can join our Facebook group with today’s codeword SNACKHUT to learn more about bundling, ask questions, and participate in the conversation with other sellers. And if you’re ready to take your business to a whole new level, visit MommyIncome.com/Coach to schedule your one-on-one coaching call today.

This week on the Amazon Files:

  • How Mark got into liquidation, retail arbitrage, and online arbitrage
  • Reverse wholesale
  • The dreaded sell-out
  • What Mark likes about bundling
  • How Snack Hut was created
  • Making packaging decisions
  • The challenges of wholesale bundling
  • How wholesale bundling has changed Mark’s business
  • Freeing up time to learn
  • Having patience and putting the work in
  • Planning your exit
  • Remembering retail is an option

One of the things I love about wholesale bundles is really that it’s poor man’s private label, and I’ve been saying that for a really long time. It’s a way to get the benefits of a private-label-style product, owning the buy box, owning a brand, owning these things but without twelve months and fifteen grand.”

- Kristin Ostrander

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Quotes:

I joined a Facebook group called FBA Rockstars. And it was there that I first learned about Amazon. And I learned the hard way that you can’t, or you’re not supposed to sell liquidated product on Amazon.”

Reverse wholesale is, basically, you’re gonna ignore the big guys. You want to find manufacturers’ products, that they’re not necessarily private label, so there’s going to be multiple sellers on the listing more than likely, usually three or more. But they’re going to be a lesser-known brand.”

A lot of manufacturers, they’re good at what they do. They’re good at developing products, and they’re good at marketing their products, but they are terrible at Amazon.”

Our first three products did great for the first two weeks, and then they tanked. We sent in, I want to say, fifteen units of each one. And within the first week, we were sold out. It took us another week to get the product and get it put together and sent back in, and we could never gain traction on those listings again.”

 I don’t care if you have $10 million in the bank, do you have six to twelve months to tie up said capital, to wait and see and launch your product? Because let’s be honest, most… right now, I wish it weren’t this way, but it is just a reality that most manufacturing and things are done outside of the US, you know, just that we have to outsource manufacturing.”

Wholesale bundles is not just sunshine and rainbows. There are still, what we’ve said over and over in this episode, it’s a lot of work. This is a lot of work. That’s a lot of work. Guess what? Business is a lot of work.”

It’s a short dip of investment to where, yes, it goes negative for a time. But then, from then, you see that double, triple, or dare I say, more return on your investment. So you didn’t lose money, you were just willing to invest in something that you believed in time would get you there, and proof of concept exists right because I’m holding a snack box.”

I can tell you, my payroll has gone from having two employees working seventy-five plus hours a week combined. They’re now working maybe twenty, twenty-two hours a week each. So about forty, forty-four hours combined.”

That’s what you’re doing, you’re freeing up time in this process so that you can learn. Why? Because when you learn more, you earn more. It’s a natural process, if you free up five hours a week, you can learn something in three of those hours, implement it in two, and now that’s gonna make you so much more money. It’s exponential growth for your bottom line.”

I think a key element for people starting out: patience. Gotta have patience, you can’t expect to jump into Amazon, create a bundle, and make $10,000 in the next week, you know? Make long-term goals, not set short-term goals, and be patient, and take your time, and really learn and learn from others.”

Taking the time to learn, listen to other people, and being patient, and honestly, try to enjoy the journey. Don’t hate it so much. It’s frustrating because, as sellers, Amazon doesn’t really care about us, but that’s fine. You know, they give us a wonderful opportunity, and too many times, I’ve run across people that are just so impatient, they just quit too soon.”

Too many times I’ve heard people say, like, ‘RA is dead. You can’t make any money doing retail arbitrage.’ Well, I have a gentleman in one of my mastermind groups that does fifteen million a year in revenue, and he is strictly 100% RA and has a team of twelve shoppers that travel up and down the East Coast buying his products. So it’s not dead. It just took time to build it.”

Last week, I was in Florida. I did a speaking engagement and then had three days off to go to the beach. Meanwhile, everything’s running smoothly. I’m not out there trying to find my next product at the store. You know, if you think about that, it’s actually ludicrous. I mean, it works, and we make money off of it. But like, Target doesn’t go over to BestBuy and say, ‘Hey, you got any TVs we can buy and mark up?”

We want to build up the website, and the subscription side of it when it comes out, and the other products and build the brand up over time to where it’s not just on Amazon, it’s also outside of Amazon, which raises the value so that when the time comes, we can go to an aggregator and present it and sell it off to him.”

I think that’s what’s great about wholesale bundles, too, is if you’re doing it correctly, and you’re creating your brand, and you’re creating a decent box to put it in and things like that, retail is actually an option. To go into retail stores and say, ‘Hey, is your sales team willing to carry this at a few select stores and see how it does? And if it does, we could create a relationship.’ You could be nationwide, you could be global, and not just with Amazon.”

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Grow Your Amazon Business!

Thanks for tuning into this week’s episode of The Amazon Files, the show to help Amazon sellers along their business journey one step at a time with Amazon expert and your host, Kristin Ostrander. If you enjoyed this episode, head over to Apple Podcasts, subscribe to the show, and leave us your honest review. Don’t forget to share your favorite episodes with your friends on social media! Use the codeword SNACKHUT to join us on Facebook. Each week, Kristin hosts a live discussion on how to grow your Amazon business. Don’t forget to check out our website and subscribe to our mailing list for even more resources.

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