Grow Your Amazon Business with AccrueMe
Kris and Dustin are joined by Don Henig and Rob Stanley from AccrueMe to which helps Amazon sellers with zero interest funding to grow their Amazon business.
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Zero Interest Amazon Funding: Grow Your Amazon Business with AccrueMe
– Hello everyone and welcome to episode 44 of Two Amazon Sellers and a Microphone. Today, Kris and I have two great guests on with us. We’ve got Don Henig and Rob Stanley from AccrueMe. Guys, how you doing?
– Doing great.
– Hey Dustin, how’s it going?
– It’s going great. Yeah, thanks for coming on. We were talking before we came on about all of our different football allegiances, and we’re all over the place. We got Raiders, Jets, and Chiefs out here. So it was a fun conversation. But Kris and I are excited to have you guys on, because I mean this is such an interesting topic for a lot of our listeners is, you know, funding. Funding is tricky and there’s, I’ve got some interesting stories about my own issues with funding and ways that I’ve made mistakes and done things well. So I’m really excited to talk to you guys about that. But before we dive in, do you guys just want to give us a real quick background on sort of how you got into this space, a little bit about you guys, and then touch on AccrueMe and what it does?
– Sure, Rob, do you want me to kick-off?
– Yeah, go ahead, Don.
– All right, so I was doing a whole bunch of other things in my career from finance to entertainment to publishing. In fact, I had a tennis publication.
– Crazy. A soccer publication, a whole bunch of different things. And then I, you know, took my third retirement, and I took five years off. And I thought I was actually done, and hooked up with an old friend of mine from the mortgage industry. And we started talking about different ideas, and he kept, you know, pitching me on different ideas. I kept saying, “No, my life is too good. “I’m not doing this.” And we came up with talking about the Amazon seller world. And like that really interests me, because I love helping young entrepreneurs. I love mentoring people. I don’t get paid for it. I just try to help people wherever I can. And so I love the whole idea of the Amazon seller space. And so we looked at it and talked to a bunch of sellers. We found there was one similar problem for everybody. The smallest guy, I mean, literally with $2,800 of inventory to the largest that I could talk to at the time with hundreds of thousands of dollars of monthly sales, and they all had the same thing. “I need more capital. “I can’t grow.” And like, holy shit. So we looked at it, and then we looked at the financing options and ran spreadsheets and everything. I’m like, “Oh my God, these sound great, “but they’re really bad for the seller. “But the seller is not going to know about it “until it’s too late.” So, my partner, Eric said, “Well, “why don’t we partner with the sellers?” I’m like, “What do you mean?” So we just brainstormed the idea. And we came up with this, you know, very unique, it’s never been done before the idea of investing money in the seller in your business with no interest, no required monthly payments, which is really a big thing and no loss of ownership. So we don’t actually take ownership of the company. We just get a percentage of profits. So with that, it was so unique. We started talking about it and building on it and building technology. We went out to one hedge fund, literally one time. And I love telling the story that, you know, standing out on Broadway in Manhattan before we went in, I said to my partner Eric, I said, “Do you know what 242 is?” And Robby knows this because he and I have talked about it, but you know what 242 is? He said, “No, what?” Do you guys know what 242 is?
– So it’s the number of pitches that Howard Schultz from Starbucks made before anybody put money into Starbucks.
– So I said to Eric, I go, “We’re not going in there to get money. “Nobody’s giving us money today. “We’re going in here to pitch this really brilliant, “very large hedge fund “with the smartest people in the room.” Literally, they had their smartest people in the room, and the owner of the hedge fund was there. A really interesting conversation. And I said, “We’re just gonna get battered with questions “that we never thought of. “They’re gonna pick our model apart “in ways that we didn’t think of. “And hopefully they’ll invite us back in a couple of weeks “to fill in the gaps and that’s the goal. “And it should be fun.” And it was fun. We didn’t have that many holes, to be honest with you, but we did get invited back. And six weeks later, not only did they invest in the company, but they gave us $100 million to invest in Amazon sellers.
– So they kind of believe in it. So you know, Howard Schultz, 242, AccrueMe, one, baby.
– There you go.
– And then I’ll turn it over to Robby because he’s got an interesting story, not only his background but also how we joined AccrueMe, which I think is great.
– Yeah, so I mean, Kris and I, I’ve had Kris on my podcast. So Kris knows quite a bit about me, but anybody who doesn’t know too much about me, so I actually come from a background of being a seller. Prior to that, back in the ’90s, I was in IT for all the big companies, Apple, Hewlett-Packard, all that stuff. But about 2001, I started a company selling electronics online, which eventually by 2007 turned into selling iPhone parts, because that’s when it launched, Was one of the very, I was the very first person and company to put a how to take apart your iPhone in July of 2007 video up on YouTube. And that blew up. Within a few months, it was over a million views on it, which back then was huge on YouTube. And that just kept evolving into more and more videos. And I think at some point we had 48 million views on our videos. I ended up actually selling that company in 2018. Backing up slightly in 2013, a business partner of mine had started an Amazon company, what we called import company back then, because they weren’t really called Amazon companies. And I ended up buying half of that company. And we took that from being a six-figure within a year to a seven-figure. The iPhone company was seven-figure. So, and those, I ended up actually negotiating a deal with my partner to buy me out. And I exited pretty much the same time, 2018. So this to kind of move on from that, I ended up taking the summer off, and when my kids went back to school, my wife goes, “I’m gonna do real estate.” And I looked and she goes, “You gonna start another company?” I go, “I don’t want to start another company. “I’ve been through that.” Plus there’s NDAs in place and stuff like that. You know, NDAs, no competes. So I actually got ahold of Henson over at FeedbackWhiz, and he ended up hiring me as chief marketing officer. And as people know, I’ve been around for a couple of years for FeedbackWhiz. I had Don on the show, gosh it’s been probably four or five months now, and I just absolutely fell in love with what AccrueMe was.
– Robby, only two months, it was September.
– Oh, was it?
– Time flies.
– You’ve been working hard, man.
– It’s all those hours. Yeah, so I had Don on and absolutely fell in love. ‘Cause, it really, and I’m not saying FeedbackWhiz wasn’t like this, but AccrueMe is so much about helping the seller. It really is hyper-focused on helping sellers and not really all about what’s our bottom line. I mean, it’s not that we don’t need to keep an eye on our bottom line, but it really is all about trying to help them grow. And so you’re gonna hear that talked about a lot. We’re gonna talk a lot about growth, and that’s one of the things that separates us from a lot of the other companies. We are here to help people grow their company, make it bigger, and keep going. So what ended up happening is I had Don on the podcast, and I just totally fell in love with it. And after he and I talked for quite a while after the podcast, and I basically pursued Don for a job. And now I’m about, what four weeks ago, I became chief marketing officer for AccrueMe and absolutely love it. So it’s been just amazing and yeah. Happy to tell you guys more about AccrueMe and how it works and how we’re different. And I’m sure you got a bunch of questions. So I’ll kind of throw it back there. You know I’ll just take over the podcast, the whole episode.
– Yeah, I’m itching here. And I want to kind of, I want to go back to Don, and we’ll go back to Rob. But when Don you were telling that story, I was like envisioning being in like the Shark Tank.
– Oh yeah.
– And like you’ve got these investors sitting there and you’re like pitching it. What was that like? That had to be an experience in itself.
– Well, it was an experience, but luckily I was fairly comfortable there because the billionaire owner, and I mean multiple billionaire owner, you know, he has approached me at numerous times in my career to run businesses for him. And every time I’ve turned him down. Literally getting on his private jet to go to California or getting on his private jet to go here, we became friends. And so the door was open to me, which was very nice. I was able to make the one call and get right to the guy, but then we’re sitting in the room with the general counsel, the head of investing, as far as investing in companies. And these guys are brilliant, and you know, one guy didn’t like the model, and one guy liked the model. And then, you know, we had to overcome everything, and we did. And it was nerve-racking but also fun and exciting. I’ll tell you. When I was about 30 years old, I testified before the House and the Senate. And when I was before the Senate, it was a similar situation where there were all these senators. It was like a free for all, just throwing questions at you from around the room. It wasn’t, you know, this senator has five minutes. It’s boom, boom, boom. It was crazy. And I remember looking at my watch because I was like a focal point in this hearing at the time. And I looked down at my watch thinking I must have been here for at least an hour, hour and a half, and only 10 minutes had gone by. I’m like, “Oh my God, how am I going to survive?” All I was worried about was that on camera, you know, my shirt was, it was a brand new shirt. It was a little too tight. I was worried that my vein was gonna explode and that would be embarrassing on TV. So there’s a little bit of that. So it was a combination of both. But by the end you walk out, you’re friendly, and you get a call back to come in. And here are some questions and some concerns that we have, and we know what they are. And now we have to work over the problems and come back in and overcome that. So it was a series of about three or four meetings, and it altogether over six weeks when we got the letter of intent for the investment and the hundred million.
– That’s awesome.
– It was pretty cool.
– Yeah, I can just imagine. And the adrenaline was probably pumping and you’re feeling like, you gotta explain the business model. ‘Cause I’m sure not everybody understands the business model of an Amazon seller and how this really works. So I’m sure there was some education there.
– That’s cool. That’s awesome stuff.
– Not only that, but I’ve never done it. You guys have all done, you know, built Amazon businesses. I’ve never done this. I had to learn this and learn as much as I could so that I could go and speak intelligently and, you know, call people like yourselves and Robby and others to be able to answer the questions honestly. ‘Cause, the last thing in the world you ever want to do is answer a question that’s not true. Then game over forever.
– That’s a good point. Especially Amazon sellers. We can really like figure out if somebody knows what they’re talking about or not. And if you don’t know what you’re talking about, you kind of lose trust really fast, so-
– Oh yeah, in anything, in anything.
– Yeah, anything. And then Rob, so to AccrueMe and how it’s different, what makes you guys separate from other funding things out there? Because Dustin and I, we’ve been involved with, you know, there’s other companies out there. And sometimes you get caught with your pants down a little bit, and you’re like, “What the heck’s going on?” But what makes you guys different? Why would an Amazon seller choose you guys over some other options out there?
– Yeah. Yeah. So what really sets us apart is we’re not like a general loan, right? A lot of the other ones are kind of general loans. They’re giving you money for your entire company. And it’s not always focused necessarily on growth, right? Because every month they want their percentage of interest that they have. They want a minimum monthly payment every month. Well, every time they do that, they’re taking a chunk of your money. And with us, what we’re doing is we’re investing in your inventory. We’re helping you grow. You can take that money that you got from us along with your capital, and when you’ve sold all your inventory, you could go buy 100% of the inventory again. So we didn’t just take a chunk. We took nothing at that point if that makes sense. So I’ll give you a little bit of a scenario, right? So if you have $100,000 in capital, and we fund you a $100,000, you got $200,000. So you take that $200,000, you buy your inventory. Let’s say in 90 days you sold it all, and you made approximately 30% net profits, right. Which is $60,000. You have the option to take that $260,000 and go buy inventory again. And then three more months, buy it again. So there’s never a chunk taken out. So instead of like these other investors or funding or loans or whatever you want to call them, I mean, they’re basically taking chunks. So you have less and less to keep going and buying more inventory with. That’s what really, that’s the basics of what sets us apart. And Don could probably go into more detail or if anybody, you know, if you have another question, Kris regarding more details of it,
– You know, just to chime in on that, but you hit it all. You know, it’s all about growth. If a seller is looking and they need money to go from, you know, from I’m not gonna get paid for two weeks, I need some money to cover my bills, we are not that. We are just not that at all. We are for the guys and the girls and the entrepreneurs that want to blow the shit out of your business if you will. I don’t know if that’s allowed on this podcast, but it is what it is.
– Damn right it is.
– I am from New York, you know. But seriously, I’ve built many businesses, and you guys have too. And you get to that point where you say, “I have something special. “I can do something here, but I need some capital to do it.” Well, there’s nobody that’s gonna give you the capital to do it like that. They’re gonna give you capital, as Robby said. They’re gonna take a chunk of it back every month, and you’re gonna be, you know, just keep treading water. I’m sorry, but it doesn’t really help a hell of a lot. You know where with what we’re doing, we’re saying, look, Amazon, being a seller on Amazon and in the e-commerce world, where’s it gonna be in five years or seven years? I don’t know. Nobody knows. Everybody can assume. We all assume everything’s going to continue along like everything has in the past. It never works that way. Something will change this. There’ll be, you know, something that we don’t even see today will change this for many people in this industry. You see the opportunity in front of you, go get it. Go get it. This is it. It’s just before January, right? You know this is when you make those decisions of what am I going to do next year. Either I’m gonna, you know, tread water and continue and everything’s good, or I’m gonna blow this out. And so anyway, I get excited. That’s what we’re about.
– Keep going, it’s good stuff.
– It is great stuff, and I love the passion that you guys have for this. And what’s so intriguing to me is I was that guy that took the more traditional loan and struggled, and I mean, I could go onto forever on stories like this, but that’s the tough part about being an Amazon seller and running your own e-commerce businesses. It’s very different. I mean, the scalability, you can scale faster than you can imagine. And your initial investment’s never gonna be enough because your next order is gonna have to be double or triple if everything’s going well. And if you’re having to pay lump sums back in the middle of that, and not to mention the fact that it could be a long time to get your money back. I mean, if you’re investing in inventory, it could be 60 days out before you get your first sale or get that money back. And so there’s so many challenges. And I, I’ve had sleepless nights over traditional lending. I mean, I had quit my job. I was all in, I was doing all the right things except for the type of financing I chose. And it stifled me. And it took a lot of things to do this. I mean, I’m so intrigued by what you guys are doing, and we’ll be having many conversations after this podcast, for sure, because this is what I think sellers have always been looking for. They just didn’t know it was possible. I mean, you talk about all the things that I tried to do is to make partnerships with friends and family, but then you’re talking about investment, giving up some of your, and it’s being beholden to them. And it’s nervous and all that. So explain how the partnership works with you guys. I mean, obviously, I mean, you guys have skin in the game to some degree. But how does that partnership work? And when you talk about being able to keep reinvesting and reinvesting, the longer we stay with you, I’m assuming that that’s more and more profits that we’re splitting. Is that sort of how the arrangement works?
– So let me chime in first, Robby, and then it’s yours. But I want to go back to what Dustin said because anybody that’s ever owned their own business has had sleepless nights. I don’t care. You know, I’ve had a very successful career, as you guys have as well, but it doesn’t matter who you are. You’ve had some rough times. I remember I’m looking out over a lake right now. This is where I live. It flows down into the ocean. And I remember when my kids were younger, I remember looking out over the lake saying to myself, “Oh my God, if something doesn’t change, “I’m gonna lose all of this.” And it was a very scary time. And I had to get to that point to make some tough decisions. And within six months I was making over a million dollars again. But I had to get to that point. And there’s a sign I remember seeing on somebody’s kitchen refrigerator that I think every entrepreneur can associate with. And the sign, this is like 40 years ago. The sign said, “Sometimes owning your own business “is as overrated as mom’s apple pie.” And when you have those bad sleepless nights, that’s exactly what it is. So, you know, I’m just gonna come back to your question, and I’m gonna read into the question a little bit, like hey, you know, come on, no payments? Like when do we have to pay you? And here’s what we say to that. Pay us when it’s right for you and your business. So we see with a lot of our clients is in Q3 and Q4, they’re not making any payments. They need every dollar they can get and more, and they’re growing. Good for them. But now, you know, January also, busy, busy, busy. They don’t have a lot of capital. By February, March, April, they’re pretty flush. They’re paying us chunks of money. So instead of paying us, you know, X-amount every month, they’re paying us what they want when it’s right for them. They might send us $2,000, $5,000, $10,000, $20,000 in some cases because they have the cash sitting there. Why let it sit there? Pay us down. We earn a smaller percentage of the profit, and everybody wins. And so it just goes, you know, goes along that way. And the second thing that some of the clients are doing, which is great is they’re not making any payments. They’re growing and growing and growing with the whole plan of selling the business or selling their brands in a year, year and a half, two years. And they’re, at first, they’re very concerned. Are you guys really okay with this? You know, we’re not gonna be making any payments. Yeah, we are. So what do we get at the end? So we have our percentage of profits that we earn, that changes every month, by the way, depending on how much we have invested versus how much they have invested. But now they sell the business, not at a two-multiple, but now they’re much larger. They’re much stronger. They’re in a better position. And they can negotiate with whoever they want. So they’re selling it at a four or five or maybe even a six-multiple, a much bigger business at a better multiple. You know, these guys are gonna retire in a big way. Well, what do we get? We get the capital that we invested plus whatever our accrued profits are over that period of time, that’s it. They keep all the upside. We had none of the upside, and every single person I’ve ever told this to has said to me, “You guys are crazy. “You’re making a big mistake. “At least take,” I think Robby said the same thing to me, “At least take one or 2% of the company “so that when they all sell out, “you know, you get this windfall down the road,” and we just don’t want to be in their pockets. We’re gonna do very well. We’re gonna tag along with your success, but we don’t want to be in your pockets any more than that. We want to help you grow. We only win when you win. And that’s it. It’s a true win-win. Robby, what’d I miss?
– Hey, you didn’t miss much, but let me get, let’s give everybody a scenario here, and let’s follow it through. Ready?
– Let’s go with that $100,000 scenario. You have 100,000 in capital. We match it with 100,000. That’s a 50/50 at that point. Okay, we never, AccrueMe never wants to be more than 50% with you on any of this. Okay, so let’s just use that same scenario. You could be less, you can always take less than a $100,000 and I’ll explain that in a little bit. So we have the 200,000. We went through this scenario. At the end of the three months, you’ve made the 30%, $60,000. Okay, you got two options at the end of that three months. And I’m just using three months as a basic example. Most of us know that the inventory rotates every approximately three months. You hope it rotates faster because you make more money. But at the end of that three months, you turn around and you can have one option. You want us out of your picture? Fine. We represented 50% of it. We asked for 25% of the net profits or half of what we represented. So at the end of that, you would end up giving back our a $100,000 and 25% is $15,000. But remember you also made an extra 15,000 using our $100,000. Okay, so that’s the first scenario if you would want us out of the picture. There’s no extra fees or costs or interest on that. That’s it, period. And there’s no, like, it’ll take 30 days for us to process this for you. It’s done pretty quickly. So you got to watch those types of things-
– It’s done immediately. Yeah, we don’t play any of that.
– Okay, so that’s the first scenario. We’re out of the picture. Goodbye. Good luck. Hope you make a lot of money. Okay, the second scenario, which actually works out even better is you turn around like we talked about. You roll that 260, buy more inventory. Now we’re into that for a $100,000 initially plus the $15,000. Okay, so you actually start representing more and more of the pie the more times you roll it. So I’m telling you right now that it actually is to your advantage to keep rolling that money more and more because our ownership percentage goes down. So it actually works out better in the long run for you to do that. So going back to the first scenario at the end of that month, or I’m sorry, let’s back up even further. You have a $100,000 in capital. You decide you only want to take 50,000. Okay, now we only represent 25%. So what we would get in profits is 12.5% when you’ve sold that. So it’s always half of whatever we represent. And going forward too, if you had that $150,000, and you made that profit, you keep going, it pushes it down more and more. And you can always make payments along the way. That’s your option. It’s not required. Okay, and again, no interest, no monthly payments. We don’t do, no credit checks, no personal guarantees. I mean, how many places say that? So it’s kind of crazy, right? And that’s why when I had Don on my podcast, I was like, “That really helps the seller. “You are helping,” You know, Dustin, I mean, if you guys have sold, anybody who’s watching this has sold, that helps you. You’re looking for, you know, to keep growing the company and get bigger and bigger. So that’s the basics of it. Then one question we get asked, and not to, just because, you know, I’ll just keep talking. But one question we do get asked, which people are gonna ask is I want to start this new line of products. Great. We completely understand that. That’s not us. But the way you could use us to do that is let’s say you’re gonna go buy 50,000 in inventory on a current product you have. It’s FDA. And you’re like, instead of you dishing out the full 50, why don’t you put 25, we’ll put 25. That left an extra 25 in your bank that you could go start your new product and get it going. Maybe once it comes up to speed and you show us that it’s profitable, we’ll help you with that too. We’ll add it to the portfolio. We’ll help you, and we’ll give you more money to keep buying more inventory. So that comes up a lot is how can I use you guys. Another way is, go ahead and take some of the profits off as we sell and take that money over and start that new product. Because we get that a lot, like how can I use you guys to start new products or stuff? We are not part of the new product starting or getting a new product going. You’re the one that’s gonna have to take that risk. We can’t take that risk. So you go ahead and do that. But when you get it going and get it to a point where you can prove to us that it’s making money, you don’t even need to prove to us. We can look and see, right? Because we’ll obviously have MWS access and be able to, ’cause we gotta be able to see everything. So now here’s the whole thing. Everybody goes, “Well, we put in that $200,000, “let’s say that product just fails miserably. “and we get $200,000 back at the end of it.” Okay, we get our $100,000. You get your $100,000. Another scenario, let’s say it’s actually a failure and something really bad happens, and we only get back $150,000 total of that $200,000. Well, we get our $100,000 first. You get what’s left. Okay, we have to protect ourselves, because we’re risking money with you. And that’s why Don keeps mentioning like we grow when you grow or we make money when you make money. So that’s the basic scenario of how it works and how we protect ourselves. And you know, how you can keep making money with our money.
– I don’t know why I’m on this podcast. Robby’s much better than me.
– You both are good.
– Oh, you’re both great, and I just have to touch on that. So this profit share percentage is based on the product, not the full account, right? Or is it everything? So if I launch a brand new product, but I’ve used you guys to fund my existing product, and you know, but my other one rockets to the moon, but I’ve got you attached to this one. Is it at the account level or is it at the product that you’re funding level that that works?
– It would be at the account level. However, that new product would be excluded. So we don’t count that in capital, and we don’t take any profit on it. So 100% of the profit goes through. Now you’re making money with it. You determine, “Hey guys, you know, I’d like this “to be counted as capital,” boom, no problem. As long as it’s profitable, turning in, you know, and we just look for it to be profitable for typically three months is really all we’re looking for. ‘Cause then we have a feel. It’s not gonna be blowout profitable, but it would be okay by then. And then we’re in.
– That’s amazing. I’ve got just another question about because this is, I mean, this is what I’ve always been looking for. I mean, it almost sounds too good to be true.
– And guys, I’ve never seen Dustin this excited.
– Dustin, I’m gonna interrupt you. From day one, the one question that every single person has asked me and has said to me, “This sounds too good to be true.” And so we literally built PowerPoints and presentations around, it sounds too good to be true. It does sound too good to be true, but it’s all real.
– Yeah, I mean, it’s like a best friend coming along who’s wanted to help you out and just put a little, give you some help.
– And it’s just like what you said before with going to a family member, right? You have a rich uncle or a rich cousin or whoever and they’re gonna invest in your business. Wow, that’s wonderful. Would they give you these terms first off? Not a chance, not a chance. And secondly, when you go to Thanksgiving dinner, it’s not gonna be fun. No matter what. I have a business in Vietnam, and some of my friends at one point we opened it up for investment, and some of my friends, these are good friends of mine still from high school. We’re together on a regular basis. We go to my house in Florida a bunch of times. And you know, I didn’t think anything of it. You know, these guys didn’t put a lot of money in, like 20 grand, whatever. And I didn’t think anything of it. We go to Florida, we’re drinking, we’re having, you know, food and everything. “Hey Don, how’s how’s business going?” And like, oh shit, I don’t want to talk about that. You know? So yeah. You wouldn’t get these terms, but man, we don’t give you that kind of aggravation at Thanksgiving or whenever.
– Forget my rich uncle. I’m coming to Christmas dinner with you guys. Sounds like a lot more fun. So you guys create this partnership, and I mean, what sort of like auditing are you doing? What if I did, are you counseling us or helping us? What if I blow too much money on advertising or something of that nature that where it’s not working, but we are a partner in this deal. So how does that, or in my accounting, you got to vet my accounting, I would imagine as well. How does that process look?
– Robby, you want to take it, or you want me to?
– I think you need to take that one because I know a little bit, but Don knows more in-depth on that side of the house.
– So the question that you’re asking and I’m going to rephrase it a little bit, what do we count as profit? All right, so what we’re counting as profit is the money that comes in from Amazon, less your cost of goods sold, less all of the expenses from Amazon, including PPC. And what you might call today your gross profit is what we’re calling profit. Okay, that’s what we’re going on, because we can’t see, you’re taking money out to pay your car lease or whatever else it might be. We don’t know what all of that is. And we’re not gonna be able to dig in and analyze all of that. And you know, so that’s the profit number that we go off of.
– Yeah, well, I’ll jump in. Let me just give some of the requirements, Dustin, that we’re looking for and maybe that’ll help a little bit too. So we are, we’re looking for sellers that are at a minimum doing $10,000 a month in gross sales. And we’re also looking for ones that are profitable and if I’m not mistaken, it’s six months, at least. Right, Don?
– So, you know, that’s kind of the minimum that we’re looking for. We find that that’s kind of the starter. And Dustin, I mean, you’ve sold. So you kind of know that those are usually the people that you know, they’ve been on Amazon enough, they understand the process enough. They’re gonna know their product’s doing pretty good and they’re making money, what their cost of goods are, how much they’re putting on PPC, even if they increase it. So, you know, we’re usually dealing with people that already are semi to experienced sellers.
– Interesting, yeah. Well, we see the same thing in our Sellozo. When they come on, people have been in the business for a while, have at least 5,000 or so in monthly sales, they’re gonna stick longer because they understand what our tool is doing for them. And I get that completely.
– And as far as helping them and counseling them, yeah, we do that on a regular basis when needed. So a general rule, and it’s just a good business rule is, you know, I hate to use the word never, but never to use more than 20% of your total capital on one purchase, all right. So sometimes it’s gonna happen. When it happens, we just want to have a conversation. So literally we had one of our clients just two or three weeks ago, and he was making a major purchase. And now he is on the wholesale side of the business. So using like 30, 40% of his capital, altogether capital to buy, you know, some basic items that we all use. I won’t say the items. And so we called him, and we said, “What are you doing?” He goes, “Oh, I got a deal.” And literally, he’s saving one penny on this inventory. We’re like, “No, you’re gonna lose money by doing this. “You’re buying eight months’ worth of this inventory. “You know, we have a system that calculates the whole bit. “You’re buying eight months of this inventory, “and you’re gonna end up going from a great return “of almost 20% per month to down to like 8%. “Why would you do that?” And he just didn’t get it. But when he saw the numbers and we ran the spreadsheet for him, he goes, “I get it, thanks.” You know, we’ve had a number of those situations. We probably would have just let them go ahead and do it. But, you know, we really had to sit down and make sure he understood what he was getting into. And once he understood, he was done. He had no problem with it.
– You’re not gonna find that with traditional loans.
– No, no, no. ‘Cause, they don’t care. They’re getting paid every day. They’re getting paid every month. So, you know, you talk about traditional loans, especially in this industry, and we get to see them on a regular basis. And you know, you borrow, I saw one just recently, just like within the last week. I think the guy took out $50,000, and he got like, I’m just gonna say $45,000. It might’ve been $47,000, somewhere in there. And he had to pay $15,000 a month for three months to pay it back. So he must have gotten $45K out of the $50K, paid it back $15,000 a month. So if you think about it, go back to Robby’s example. This blew my mind when I saw this. This guy gets 50 grand. He actually gets $45K roughly. In month two, he’s got $30,000, because you have to pay 15 grand back. And with us, if you had 50 grand, and let’s just say we were gonna earn three grand, whatever the profit split was at that point, you would have had $53,000. And then plus, let’s say the seller had earned 10 grand. I’m making up a number there. So you would have had $63,000, besides the seller’s capital, versus $30,000. You know, so funding source versus funding source, in month two, you’d have $30,000 versus $63,000. Like which one’s gonna grow bigger? Which one’s gonna grow faster? And the other thing is, who’s gonna have to work harder? The seller who’s getting the funding from the bank or whatever, you know, you just have to make enough to pay the bill. With us, the whole idea is to bust your ass, go to work. You have an opportunity in front of you to kill it, kill it. And we’ll help you in any way we can. Anyway.
– Your guy there you’re talking about was me when I was having my sleepless nights. Seriously. With a $20,000 payment coming up in a couple of days, that’s rough.
– That’s rough.
– And it’s easy to miscalculate that as a seller. I’ll speak from my experience. I mean, I went to business school. I have my MBA. I know all the terms. I know all the numbers, and you get caught up in that growth. Like I was like, “Oh my sales are doubling all the time. “This is gonna be no problem. “I’m pulling in $70, $80,000 in revenue a month.” “So, a $25,000 loan is no big deal,” but it kills you. This is why I’m so intrigued by what you do.
– So let me just chime in on that. ‘Cause you just hit on one more thing. You know, when we started AccrueMe, we didn’t know anything. You know, we knew the idea. We built the model. We went out and we gave money to about, you know, a little less than a dozen sellers. We had no underwriting criteria. We literally put money in their hands to see what would happen. We had no technology, we had nothing. So, you know, we just had to, how do you learn? You know, I’m a firm believer of start stupid. Don’t just sit back and wait until you know everything. Just get in the game, just start playing. You’ll get good. You’ll figure it out. Anyway, so that’s what we did. We got in the game, we started playing, but then we started realizing and talking about it that wait a minute, you know, I don’t know if they’re getting much value for the first 30 days. So we don’t take any profit for the first 30 days. We made that change about a year ago where we don’t take any profit for the first 30 days. What we did initially, we would ask our sellers to stay in the deal for six months minimum. We don’t require it. We don’t put it in writing. We don’t have it in the contract or anything like that. It’s just a, you know, a gentleman’s agreement if you will. It’s what we would appreciate you doing. If after a few months you say, “This is just not for me,” then you’re out. It is not a problem at all. We don’t want you to do something that’s not good. But now we ask people to stay in for seven months because the first month’s free. So anyway, you get an idea of the mentality. You know you’ll never get that from a bank.
– No, never.
– And what’s it look like as a seller? Like if I go to your site and I’m like, “Hey, I want to go play around with this” and maybe I don’t know how much I want to take out or I don’t have any idea, but I know I need funding. What’s that look like?
– Yeah. Yeah, so we have actually an ROI calculator that you can use on our site that will show you. Like you can enter all the information like you’re talking about, Kris. You go to our website, AccrueMe.com. There’s an ROI calculator. I think we refer to it as the AccrueMe calculator. I’ll have to look. I worked on the site.
– You’re the marketing officer, right?
– I did. Let me tell you-
– He probably renamed it.
– Yeah, I will. I changed a lot on the site, let me tell you.
– Looks good.
– It looks good now. It’s a lot faster. But anyway, there’s an ROI calculator you can play around with. It’ll give you different scenarios. You can put in different numbers, how much you want to borrow, the different things. It’ll scale. It’ll show you all the differences, you know, what it looks like. And you know, one thing I did want to mention and not to get off the subject, ’cause I’ll come back to it. Just so when I was giving that 100,000 example, like you have 100,000 capital and we match it with 100,000, doesn’t mean you have to go straight to that 100,000. You know, in fact, we encourage you to start with a smaller amount. Turn around and maybe start with like 10 or 20. And then a couple of months later, if you need another 10 or 20, grab 10 or 20 more. You don’t necessarily have to go right to that 100,000 immediately. So I just want to make sure people are aware of that. You know, there’s not an instant one number that you have to go to. But yeah, there, Kris is showing the calculator. You can play with our ROI calculator.
– So just to stay on top of that for a second, one more thing on top of what Robby just said, there’s only one way a seller can lose with us. You know, we talked basically with lenders. You know, you have a bad month, you’re screwed. With us you have a bad month, it didn’t cost you anything, zero. We didn’t earn anything. But there’s only one way that a seller actually can lose. And that’s if they take our money and leave it in the bank. So then they’re paying us a percentage of profits and not getting any value. So that just as Robby saying here, that we encourage everybody, just take what you need. The rest of it’s there. Literally, we can turn it around in an hour. It’s not a big deal. So, you know, we’re not forcing money on people. We want them to do what’s right. And you know, so take the least amount you need to use now and then come back next week, next month, two months, whatever it is, get more. So go ahead, Robby, I’m sorry to interrupt you there.
– No, no, that’s exactly it. And besides that calculator being on our site, three minute, a three-minute form and we’ll tell you whether you qualify and how much you qualify for. Now, it could go up, I mean, you know, after we go and kind of look at it. But if you just need an instant quote, three-minute form, go on there, click on the funding. It’ll take you to our form, fill out the form. I think it’s three steps, three steps with a little bit of information, which by the way, that might be one page coming up soon, but I’m working on that. It’ll be really fast. And it’ll instantly tell you whether you’re approved or not approved and how much you’re approved for. And if you’re not approved, don’t freak out. Contact us, if you feel like maybe something was wrong or you misentered something, and we’ll be happy to get ahold of you and recheck on it. There you go, three minutes to funding. So it’s pretty simple.
– Yeah, and we’re happy to talk to everybody. Literally, you can probably tell I’m a people person. I talk to just about everybody that we do business with. Because it’s important, it’s fun. What’s life about, right? You want to get to know who these people are. You want to root for them. You want to, you know, cheer for them, and you want to do whatever you can. If I come across an article that could help you, I mean, I love doing that. Send it out to the person. I literally have one sending out to a seller today on health, something that he had talked to me about, a specific supplement that is very, very good. There’s a whole long article. So that’s going out to him today. You know, little things like that. That’s what life’s about. It’s not just about making money. It’s about building and having fun and helping each other. So yeah.
– Don, why don’t you also tell them, what type of sellers are we funding right now? So I’ll just take over, Kris. Don’t worry about it.
– Good ones. Good ones.
– But is it FBM? Is it people selling on their own websites? Walmart?
– Yeah, yeah, yeah. So right now it’s FBM. I’m sorry, FBA. So we had to start somewhere. So we’re starting with Amazon. We’re starting with Amazon FBA. We will be expanding to FBM very shortly. We’re building it into our system now. And then we’re gonna expand from there. We’re right now just Amazon.com. We’re starting the process to build for Canada, Mexico. And then we’ll start to do other countries from there. We’re starting to look at Walmart, but that’s months down the road. We have to master this first and make sure everybody’s happy. And so far, so good. But you know, that’s where we are right now. We’re FBA. We will be adding FBM shortly.
– Yeah, and then also to add onto that, Don missed the part that if you’re outside the United States but you’re selling on Amazon’s US market, you do qualify for us. So if you are in Canada and you’re selling on Amazon.com US, you still can qualify for getting AccrueMe funding. So it’s definitely there.
– There is one thing there. So also another thing that we require is that you’re an LLC like some might be corporations but we do an LLC. And the reason we do an LLC, the only way we can do this is as an LLC is we can change the operating agreement of the LLC. And we can make it so that we earn a percentage of profits without taking a percentage of ownership. So if it’s a corporation, the only way we could do that is taking a percentage of ownership. And we didn’t want to do that. So everybody’s gotta be an LLC, which hasn’t been a big obstacle, even for some of the very, very large players, and some of the sellers that have come on board from Canada, some of them already have an LLC in the United States. Some of them didn’t and they just literally got an LLC, got their own EIN in the United States. And where us, it might take one day, it takes like seven to 10 days coming from Canada to do it. But that’s the obstacle, which is not a big obstacle. They literally can’t wait until that EIN comes in so that they can get running. Seriously, they get that excited.
– If you’re gonna sell an Amazon, you need to be doing that in the first place, like that’s the first thing you need to do is one of the first things you need to do is take this seriously and get that LLC because it’s gonna come to your advantage with things like this. Like you’re gonna be able to use that for when you need funding. So if you’re not, if you don’t have an LLC yet, it doesn’t take long to do. It’s an easy process, definitely something to do.
– We’re gonna have you do a video for us. That was good.
– A lot of trial and error.
– That was good.
– Oh man, this has been fantastic, guys. I mean, I’m stoked. Learning more about this-
– He’s speechless. He usually talks more than this.
– I know, I am. I’m speechless. I’m processing all this thinking about how all this plays out. I mean, it is amazing. It is too good to be true and it is true. So that’s pretty good that you guys are doing this. I mean, I encourage everyone out there who’s right now looking for funding, looking for ways to grow their business. We’ve talked to a lot of people that have put a lot of sweat equity into it and got to that point, that criteria point where you’re talking about, and now it’s time to really go to the moon with their company. And you guys are the ones to talk to. I encourage them to go to you. They just go to the website, AccrueMe.com and fill out the form, and that starts the process?
– That’s it. And if anybody wants to communicate directly, Rob and I both, it’s Rob@AccrueMe.com or Don@AccrueMe.com. And on LinkedIn, if they want to reach out and just to get a feel for backgrounds and all that, which is always a smart thing to do, it’s my full name, like my mother would call me, Donald. So Donald Henig. And Robby, I’m not sure.
– Yeah, for me, you could hit me on LinkedIn, or I usually handle more of the Facebook side. You can all find me on Facebook. Message me directly, or again, it’s Rob@AccrueMe.com if you have any questions or anything. And I’d be sure happy to help you or set up an appointment and talk with you or whatever you want. So Don and I are always available.
– I think all you have to do is get on the internet to find you, Rob, right? I mean, you’re everywhere.
– Whatever page you open up, might see you.
– Here’s the funny thing, Dustin. So like all those videos I did when I had my iPhone company, right. Nobody ever saw me. They also my hands. So here, if you want to recognize me, here you go. No, seriously. ‘Cause, it was just me working on an iPhone and talking. Nobody ever knew who I was until I started doing the podcasts and stuff. Yeah, an easy way to find me or Don. We’re all over the place.
– Well, that was fantastic. We can’t thank you guys enough for coming on the show. It’s been amazing. Everyone reach out.
– Thank you.
– Reach out to them. They’re great guys. They’re gonna be your new best friends in business.
– Your rich new friends.
– Your rich new friends, love it. Well, thanks again, guys. We’ll have to have you on sometime down the road. We’ll talk about some stuff-
– Sounds good.
– That you guys are coming out with and we’ll go from there. But everyone, thanks for listening. Hopefully, this has been invaluable. After you’ve got your financing from these guys and you need to ramp up your advertising, talk to Kris next at Sellozo.
– There you go, there you go.
– We’ll help automate that. Take that off your plate as well. Everyone, thanks for tuning in, and we’ll see you next time. Go Chiefs.
– See you guys.