Selling Over $10 Million a Year Doing Online Arbitrage on Amazon with Jeff Storch

Can you make money doing online arbitrage selling on Amazon? One hundred percent!  I'm a huge fan of online arbitrage (which is buying on one website and selling on another) and this is my primary business.  On this episode, I had the pleasure of chatting with my friend Jeff Storch about scaling his business from a side hustle at night to a full-time business with massive growth year over year selling over $11 million with a small team.

If your interested in the Online Arbitrage business, be sure to check out my course which I have spent almost a year putting together that will take you from beginner seller to intermediate with no fuff, only the exact strategies I use every day to make money selling on amazon all while living in Costa Rica!

OAmasterclass.com https://www.oamasterclass.com 

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Transcript

Rob Cosman
Can you make money doing online arbitrage on Amazon? One hundred percent. I'm a huge fan of online arbitrage and this is my primary business. On this episode, I had the pleasure of chatting with my friend Jeff Storch about scaling his business from a side hustle at night to a full time business with massive growth year over year. Let's hit the intro. Welcome to the selling from the Beach podcast, where we talk about selling online, making money and creating a lifestyle that you want recording from the white sandy beaches of Costa Rica. Here's your host, Rob Cosman.

Rob Cosman
Hi, Jeff, welcome to the show.

Jeff Storch
How was going, Rob, thanks for having me.

Rob Cosman
Good I'm I'm I'm excited to finally agree to this, to able to just let me in your busy schedule between, you know, your massive warehouse and everything else that you got going on. So I appreciate it. And I've got all kinds of questions ready to go. But before we dive a little deeper in, I know who you are and we've had a weird path cross then along that way that that we'll get into, but for anybody else who doesn't know Jeff, could you just give us a little background of where you live right now, what your main business model and, you know, what did you do before you actually started selling on Amazon?

Jeff Storch
Yeah, OK, I'm in New Jersey, right outside of Philadelphia. So I was a CPA, but I worked more in first I was in consulting and then I eventually moved into technology and finance,  finance compliance. I worked for Comcast here in the States is the big one, big cable TV and Internet providers. And I worked in the compliance department making sure they were compliant with Sarbanes-Oxley and credit card of all kinds of exciting stuff. So I was I was the director or in new direct.

Jeff Storch
I forget what I was, but  pretty nice payroll job, nice office in the in the city. And I got tired of going in every day. So I started to explore a little bit with Amazon and like many people started with a little on the side type of gig. And then eventually I did it for about two years, went diving, then a little bit more, but it ended for about two years as a side gig and then eventually took the plunge to do it full time.

Rob Cosman
OK, so what's your main model now?

Jeff Storch
Yes, yes that and I skip that. So

Rob Cosman
No

Jeff Storch
In 2018 and 2019 we were split evenly. All three models of OA, RA and wholesale was in the thirties. It was almost equal like thirty three, thirty five, thirty seven, something like that. 2020 was a little different because when Covid hit we brought our RA team off the streets and drove them towards, towards OA and as as we started to focus on OA, we, we even as Covid started to lessen people bit more and more in the stores, we just we stuck with OA.

Jeff Storch
So we were a little heavier split. More like 80%. OA  yeah, probably 80% OA now 70% OA and 10% RA and what does that mean, 20% wholesale, something like that probably what the year numbers came up somewhere around that mostly OA a lot of arbitrage and a little bit of wholesale in there.

Rob Cosman
You're a good accountant like me, I'm always counting on my fingers.

Rob Cosman
But OK, so when did you start dabbling? Was it like 2014 maybe 2015?

Jeff Storch
My wife was nine months pregnant and I had like a 20 months old running around the house and said, why isn't this I'm start a business. So. So in 2015 June 2015 and getting ready for my, my second one and here comes all the packages and start start started the Amazon business. At that point I think my wife was look at me, how are you doing. But that's when we decided to start the 2015.

Rob Cosman
We are about probably about the same time we kind of I started doing the same thing, we got kids like my kids are eight and six they close the same age

Jeff Storch
yeah I have seven yeah.

Rob Cosman
So

Jeff Storch
You have the same crazy idea of starting this as you had little little ones right?

Rob Cosman
Well, yeah. You're also like, I need more money and my job isn't going to give me more money.

Jeff Storch
Yeah.

Rob Cosman
So how do I make more money for all this other stuff I need right  and the time like I'm sure that was your what are your goals and considerations. Right.

Jeff Storch
Yeah, yeah. I mean I was lucky enough to have a good job. My wife had a good job and it was, it was,you know it was necessary as money. As much as I hated going into the office every day nine to five. Oh my wife's got a doctor's appointment, you know. So I need to miss a couple of hours now. I've got to ask my boss and she's going to give me a hard time. And and yeah, of course, this was pretty covid back when, you know, telecommuting was like frowned upon because I sat in my office all day because I was like the head of the compliance that managed four different divisions across the country.

Jeff Storch
So I don't work with anybody in my office, in my building. So like everybody else was all scattered around the country. And I'm sitting in my office. I'm like, why do you need to be here? Because I would spend two and a half hours a day commuting and then, you know, my my kids would wake up. I'd like say good morning, see you later and come home for dinner and put them to bed. And that was my my life.

Jeff Storch
And I just you know, I didn't mind what I did. I just didn't like the time commitment of it and the lack of having time with my kids and the wife I only hang out with after the kids went to bed. But I got home, the kids were falling asleep at the table, like especially during busy time. So so it was a big push for getting more time freedom.

Rob Cosman
Totally, it's depressing, right? You're like, this is all I'm doing, I'm a slave literally to this job and to go into the office of being there and oh, you can't leave before, you know, your boss leaves.

Rob Cosman
You got to be working late. And this. Is that right? Yes.

Jeff Storch
Yeah. I was always a big back then. I was a very big fire guy, you know, financially independence, retire early and try to get myself set up that as in my forties, I could retire you know now I actually like what I do. So it's a different that's a different story. And I already have to have that flexibility of working when I want need to. First the nine to five.

Rob Cosman
I want to get to that. So when you when did you you started in 2015, 2016. And you said you started growing. When did, when did you kind of make the jump and you say, OK, you know, it's getting large enough and I can't do it out of my house anymore. Or you start use the prep centers which we could talk about.

Jeff Storch
Yeah. Yeah, yeah. So as I said I started in 2015, I was doing a little bit RA but I was actually started pretty much right with OA and you know at the time I was doing a lot of sears and tools and I was getting, you know, you know, stacks of boxes, toys, tools everywhere trying to do them in the house. And it's just you know when you're working, you're leaving the house at seven thirty and getting home at six thirty at night time to to do do it.

Jeff Storch
So I was pretty quick to outsource you know. I was big and like the Facebook groups and I heard about prep centers and I was like, OK, I can send this to someone instead of paying sales tax to 7% on. Yes, I'm paying three hours in tax on an item. I can send it to a place in a tax free area, let's say New Hampshire, and not pay sales tax. And I just pay them a buck or a buck fifty to prep it.

Jeff Storch
And I'm saving money and I don't have to deal with it. So I was very quick with my OA model to shift to OA to prep centers when I first started. I wasn't doing shoes at that point time, so it was a big tax savings and of course it took it out of my hands. So so that's how I first started to able to scale while balancing a full time job and a life with the family, because I still wouldn't work too much on the weekends.

Jeff Storch
What I do is I wake up early, work a couple hours before and work stay work late, but I still try to keep my weekends open as much as I could have the time with the family.

Rob Cosman
Right so you started outsourcing. You were using the prep centers and I think this is when we cross. So we in a Facebook group somewhere along the way and we started using this this Prep center we ship was in the

Jeff Storch
yeah we ship USA or something like that.

Rob Cosman
Yeah. And they had great sales guys that they were doing good rates and that was in New Hampshire. And then then it all went sideways like

Jeff Storch
yes, it did

Rob Cosman
what happened? I remember like people were all complaining that they weren't hearing anything. We're sending messages and nothing was happening. And then I think a few of us started talking on Facebook like, OK, you guys use them, too. Are you getting ignored? Is that how

Jeff Storch
Yeah. Yeah, we I forget. I know I promoted them a little bit and and a bunch of new people sort of signed up and at the same time that like new people were on boarding. I think their main person I think her name is Gina who essentially ran the show, she laughed. And of course, we didn't know all this at the time, but she laughed and she actually went to a competing prep center across the street. And and she was like they were like a one man show, or at least she did everything.

Jeff Storch
She might have had some staff that helped her or whatever, but all some things there was no like communication, but nothing was happened. And I would at least occasionally get a hold of the the owner. And he's like, everything's fine. Don't worry, we're going to get there. We're a little behind. A little behind. And then eventually it was like, OK, we're weeks behind. And you know multiple people started. They started to happen.

Rob Cosman
Yeah, we we started down that conversation. And then I remember I was I was on Google Maps and I was trying to find where they were located and find stores. And I found like a plumbing store that was right next to them. And I called them. But I'm like, this is going to sound really weird, but is there any activity next door? Is anybody been in? And I finally got someone. It's like, yeah, know, the UPS truck just shows up every day and then leaves because there's no one there to pick it up.

Jeff Storch
Yeah.

Rob Cosman
So then that I think we organized. So at the time I had a business partner, we were buying a lot of shoes. So Jonathan jumped on a plane from Texas.

Jeff Storch
Yeah.

Rob Cosman
Flew up and met you. And you guys like rented a U-Haul.

Jeff Storch
Yeah. Yeah we yeah. I was like I don't think we'd ever left my my at least my youngest son at home are my oldest, youngest and everything we had left him. I'm like. Mom and Dad, can you watch the boys, I'm going to drive to me and my wife, we're going to drive to New Hampshire to try to get our inventory back because we have an issue. And yet we we showed up at the doorstep like I drove through the night and Jonathan got there in the morning.

Jeff Storch
And we both met at the at their place unexpect like you know unannounced, showed up at seven o'clock in the morning or whatever. And Jonathan, I just hung out there for an hour, an hour and a half before the worker showed up and they had one one young you know this I think use was like a student or some.

Rob Cosman
I think it's 

Jeff Storch
Yeah, essentially, exactly. It was it was the the guy's nanny for their kid. They had her they're receiving packages and that's it. And you know she must have weighed like 70 pounds soaking wet, like she was not lifting up 50 pound boxes. I don't think she knew how to do anything. And we must scared the hell out of her, too. And me and Jonathan are like, where's our stuff? Yeah, we didn't like or like yelling or whatever, but, you know, and she like wouldn't let us in.

Jeff Storch
But then eventually she let us in and it just it became very clear. The guy kept saying, everything's fine, everything's fine. They weren't doing anything, you know, to get our product out. I mean, the literally the whole warehouse and I don't know what it was. Five thousand square feet. And it was huge. Like it was like height wise, it was it was large. They had power and they had product everywhere. And it was like bursting at the seams.

Jeff Storch
And there's a little girl was like, you know, like she just couldn't like she couldn't get it was mean to do it again. She was just I really think they were paying her just to receive packages. And that's it.

Rob Cosman
Yeah.

Jeff Storch
Maybe get a small hundred unit shipment out or whatever. And it was, it was crazy. And Jonathan had the truck and then we started with our stuff and there was another press center like ten miles down the road.

Jeff Storch
And we we we we must have did like ten, ten runs that day. I've just filled up the truck and ran in the beginning. Jonathan, I know. Was there trying to painstakingly figure out if his inventory was there or not. I don't remember if he gave up or not, but. O

Rob Cosman
Oh so Jonathan is like really good Christian boy, you know, like, no, no, I got to make sure I'm only taking my stuff and not accidentally anybody else's. If he's like like, dude, if there's a rack, it's our stuff, our names like, just grab it you know and then  I remember everybody's like, hey, do you see my stuff? how about my stuff? Hey how about this that all these people like messaging, you're like guys just like get on a plane, come check it out yourself. Right.

Jeff Storch
I will for what its worth we moved I think like six or seven other sellers. We did our best. There was one guy that I know, like he got me at the end. I'm like, I'm sorry, we were already out of there. We can't get it. But we we got like seven or eight sellers moved over and everything that we could find. I mean, we're digging through different stuff like, OK, we know this guy, let's message were there until like seven o'clock at night.

Jeff Storch
And I drove home that night. It was it was an exhausting, exhausting day. And I'm sure it was for Jonathan as well. But it was home to. But we did our best to try to help everybody out. And I do think once we made a dent, I think they brought back employee that quit and was trying to help out. And I don't know, I've heard different stories. He essentially said there was some health problems in his family and he's just, yeah, there's a lot of different excuses.

Jeff Storch
But the big thing was it wasn't being communicated at the time. It now also happened when we showed up. But now there was excuses and that and it just yeah, it was it was it was a difficult situation. It was eye opening situation, especially as much as you can rely on a prep center that, you know, you you think I got a personal recommendation from somebody else and. Yeah, you just there's no it's hard to to know what you're getting into. I guess

Rob Cosman
There's always going to be risk, right? I mean,

Jeff Storch
Yeah

Rob Cosman
people are for you. It's good at the time. And then stuff goes sideways. Employees quit. Yeah. Who knows. So  do you use any prep centers now?

Jeff Storch
We do we have a prep center in Delaware that we utilize. We again, for tax avoidance is one of the main reason, sales tax avoidance. I can still buy items that I would have to pay sales tax on otherwise. Is that a lot of places we buy? A lot of places, but places that we buy buy that we avoid sales tax. We'll ship to our house and we do do a large portion of our business, the shoes and clothes, and those are tax exempt and obviously wholesale.

Jeff Storch
So we'll bring that in-house. But if we're buying stuff that has taxed, it just it just makes sense to ship out to a prep center. And we use it to augment when any times because sometimes it's hard for us to ramp up in time and there's always a constant influx of buying periods and stuff. So like the other day my my VP of Warehouse Operations messaged me and said, hey, can we start selling more stuff to Prep Center because we're a little behind.

Jeff Storch
So we shift off a little bit and as they get caught up, then we shift back to our house, our house, our warehouse.

Rob Cosman
So one thing we haven't we haven't said yet is what is your current operations now? I was getting through the journey, but now let's just get there. You've got a VP of warehouse operations like that's your wife. So

Jeff Storch
I know. So we've we've grown to the point of yeah, we yeah, I started like everybody is you know out of my house with just just me and the wife occasionally helping in the prep center. And yeah, I essentially did that for the first year and a half. And then my second Q4, after all the Black Friday purchasing in the house was like littered with stuff in the basement, was littered with stuff. I'm like, you've got to hire somebody. So I hired a temporary person that, you know, that was able to work my hours because I thought the day job, I get home with the kids to bed and start working on Amazon business nine o'clock and she had a day job.

Jeff Storch
She come at nine o'clock at night and we work 4 hours or 9 to 1 am essentially with me and I'd work and then she'd leave. And then I usually stay until two or three and half the time, fall asleep in my garage and then wake up and go to work at 7:30. So I did that. You know, we did that for that Q4 and then after Q4, she'd come a little bit, but we wouldn't have that same insane hours or whatever, which she'd come occasionally.

Jeff Storch
And then for two years and then I quit. After the essentially right around my two years of doing this. That's that's when we quit, we were doing. And I think we might have just did our first hundred thousand dollar revenue month or somewhere, we're like at eighty thousand, something like that, but we were getting to a point where this is replacing my income. And let's just let's just let's make the jump.

Rob Cosman
So was there any like one or any one moment where you're like, OK, this is it, or we just like hey

Jeff Storch
Yes I do have one moment exactly. That prove it. So so for one thing, when I started this, my wife was nine months pregnant, so she went on maternity leave. And then after the first six months, she would take six months off. Then she was going to go back three or four days a week and that's we essentially retired her or she decided to stay home with the boy. So then my my day job and Amazon became our sole source of income. So that that sort of slowed it down a little bit, but which is good.

Jeff Storch
I wanted her to be able to spend time and and help raise the kids because that's what she wanted to do. And we come to a point where making excuses and not doing it like we're there, but no, let's keep growing and keep growing. The problem is how do you keep growing it when you just have so much limited hours? Right. So I was a director and I had a I had a senior manager that reported up to me.

Jeff Storch
I did all my work and he was fantastic. And I could get away with, you know, dabbling on some Amazon stuff at work and have it somewhat stress free job. Again, it was busy that had a stress is, but. And he quit right before he gave me, like, his move into China, and it was like he was like May and he was leaving in September or August just Q4. I can't hire a new person, and train new person in Q4.

Jeff Storch
I'm like, that's not happening. So that was it. If you didn't quit, I don't know. But I'm like, I can't like he does everything for me. I'm like, there's no freaking way that I'm going to be able to train somebody and get them to do all my work for me. And do Q4. So that was where I said so I went to my boss and said, if I'm quitting too. So so we both quit, which we're only really two people in the Department of Run and Compliance.

Jeff Storch
So it sort of drastically and ultimately I was trying to hire his replacement. I said I just can't I need to tell my boss that I'm not going to. This is not I can't do this anymore. I'm going to keep my my focus so that that was that was the springboard. It wasn't because I had some certain revenue level, the day job was going to be way too hard to be able to keep growing the business. So that was sort of the springboard.

Rob Cosman
So then that happened and then when did you actually get your first warehouse?

Jeff Storch
Yes. So that was in July and of 2017. So that Q4 I had the crazy idea of, OK, let's try to achieve for one million dollars in sales in Q4. And I hired a few people we had at this point we had. Turned our garage shortly after I started, we turned out we finished our garage, we put some flooring in, we put in some insulation and we put like a heater/AC unit in there so that we could work comfortably out of there and still four hundred square feet.

Jeff Storch
But, hey, it was at least something that we could work out of. And so I quit in July. That person I was telling you about that was helping me part time at nine o'clock because she had a full time job. I convinced her to come work for me full time. And so it was just me and her. And as we moved into Q4, we hired a couple Part-Time people to help us through Q4. And that first Q4 we did we were prepping outside in the snow because we'd run out of room and we did we did.

Jeff Storch
We we hit the goal. I think we 1.1 million dollars out of the out of the garage, still using Dymo, still using 30 ups. We are still using 30 ups. I listed every single product myself and I purchased every I had. I had somebody that would buy off buy list, but every single item that was purchased was directed by me. I had one person that was out buying a few products for me, and I had a couple couple of preppers and and we had a what we call it a .

Jeff Storch
We had a prep center at that time that was helping as well. But as I'm sure you know, prep center usually collapse come Q4 too. So I don't think we relied on them much past Black Friday because we just didn't trust on them to move stuff  fast enough, especially because Q4 we were heavily focused on hot toys and hot that you can't wait three weeks for a prep center check in. So I was say first Q4 that's when we finally made the plunge and we got a warehouse that February.

Jeff Storch
So it was a twenty five hundred square foot warehouse at the time I had purchased it. It had two like office spaces. It's essentially two office spaces that made up fifteen hundred square feet. And since the office is just big, open rooms, perfect for like retail and like a thousand four square foot warehouse. So I was like. You know, this new warehouse is going to add all these new expenses and Amazon relying just on Amazon a lot, so why don't I do?

Jeff Storch
And you probably saw this in the Facebook groups. Let's open a mattress store. So. So,

Rob Cosman
oh, you're a part of that group?

Jeff Storch
So the thousand square foot was going to be the warehouse and then fifteen hundred square feet was going to be the mattress store and. And I was going through like, I forget I need needed to get referrals, there were something like I asked one of my buddies, I'm like, you've got to fill out this stupid business referral thing for me.

Jeff Storch
And you didn't get it on time. And it's one of these weird things that, like, I had to take, like, every like like if didn't get it in before the board meeting, you had to wait six months. I think it was for my township. I forget what it was. But whatever it is, it delayed me like moving forward with the mattress store for like a month or two. And then finally I'm like, what the hell am I thinking?

Jeff Storch
I'm like, this is barely enough space, the whole thing. How am I going to fit a mattress store? And let alone at the time, I was still doing way too much. So I'm like, yeah, like I'm so involved in the business. How am I going to start another business so that finally I cancel the mattress store. My warehouse is literally that warehouse space is literally painted green and blue, the colors of the mattress store you know that we were going to put in.

Jeff Storch
So it's funny, it has the different different colors, but we never did and we ended up filling it up there. And that was 2015,2017. So that must have been 2018, and we spent three years there, we finally and in January, we moved into a new space, we added a six thousand square foot warehouse space now.

Rob Cosman
So January, January, 2020? 2021?

Jeff Storch
'21.

Rob Cosman
Oh, OK

Jeff Storch
No. This year we worked out of a twenty five hundred square foot warehouse space, which is very difficult for the volume that we've done, and especially when trying to do full trucks and getting full trucked in and whatnot. It was a very

Rob Cosman
what did you what did you sell in 2020? give us the number.

Jeff Storch
I it was like twenty two and a half million, something like that. I don't I admittedly don't know the exact number offhand, but it was a lot

Rob Cosman
 That's disgusting. That's awesome. And all but RA a little bit RA mostly. OA. And some wholesale fantastic.

Jeff Storch
You know, our goal was 10 million in Q4 was our goal, which I drop these goals and I think they're insane. And then we end up doing, I think, a little over 11 million in Q4 alone. Yeah, mostly, oh, everybody makes a mix of everything.

Rob Cosman
Let me just hit the pause button really quickly with our chat with Jeff. I believe online arbitrage is a great business model for selling on Amazon. I've been doing it for years all the way from Costa Rica.

Rob Cosman
It seems my lifestyle very well. And it's a business model can do anywhere in the world as long as you have Internet access. This is why I finally released my online arbitrage masterclass training this training courses packed and what I've learned from a beginner to advance it will get you started quickly this over 10 hours of videos and templates and sources and so much more. And right now I'm offering nine additional bonuses, including six months of my private Facebook group to elevate your business, get your profits rolling fast.

Rob Cosman
If you're interested, check out OAMasterclass.com, To sign up. That's OAMasterclass.com I won't be able to offer all these bonuses for very long. So if you're interested, grab it now before these go away. Now, let's get back to the interview with Jeff.

Rob Cosman
OK, so now I'm going to ask you all the hard hitting questions, because I want to know personally and I know everybody out there listening to you, first of all. How do you finance it?How do you finance to sell that kind of are you still are you on every two week payouts?

Jeff Storch
So that's that's one of the lucky things for me, is back in the early two thousands, I sold textbooks. I didn't sell them for a profit. I sold them because I didn't want to sell them to the school bookstore for pennies. So I was like, I'll get some more money and not get completely slaughtered with the buying this textbook for 150 bucks and getting ten dollars back from my books. So I sold on Amazon just my textbooks in early 2000.

Jeff Storch
So I'm. Grandfather, I guess, into daily payout, so I have daily payout, so that is a huge, huge advantage. Every twenty four hours I have, I got an alert on my outlook that says request payments every twenty four hours I get paid. So it it helps, especially you know in Q4. So when I first heard for the first two years I had a full time job that paid well that I was into into fire finance. You're financially independent, retire early.

Jeff Storch
So I've always lived well below my means. So we always had so we were saving money. So every dime that I got for the first until I quit full time, every dime I got went back into the business. And then also it was just sort of slow growth of growing the business, you know, get some extra profit, put it in. I'm kind of thinking at some point I took an Amazon loan, wants to sort of fund Q4, forget which Q4 for that was, I think that was the year after I went full time.

Jeff Storch
We started to ramp up a little bit and I use the Amazon loan to fund Q4. And then after that, I got a line of credit, so. You know, the first line of credit I got was like seventy thousand dollars from TD Bank, which is a regional bank over here, and, you know, for our level of growth that that was not enough. So I needed a much larger one. And it's not always that easy trying to get people to give you money, especially when you need money that they want you to have lots of money.

Jeff Storch
If I had money, I would not be begging you for money. So eventually I went. So I got the Amazon loan the one year I was trying at that point to get them to significantly increase my line of credit they wanted. So I went to Amazon loan for paid it off in January. I didn't get through that cycle that some sellers get into, which is get the loan and then refinance. I just got to use it for a few months, paid it off and moved on.But

Rob Cosman
Because the Amazon loans have are big repayments, because usually, like repaid in nine months or four months, and that's the whole amount, too. I mean, like it's useful the first month and then after that, I mean, you're paying huge amounts of principal and interest and.

Jeff Storch
Yeah, I know. So that's why I like the line of credit is because I only it sits there when I need it or and then I can put it back when I don't need it or whatnot. So, so that's the main means.

Jeff Storch
I mean in 2020, we didn't even use the line of credit. We used it a little bit in 2019. I mean the big thing for us is buying stuff, selling stuff that turns quickly so that we can reinvest our profits. And while wholesale is not a huge portion of our business, those wholesale accounts that we have, a lot of it is on credit. We do. We dabble in some wholesale and a lot of that. Some of our seasonal wholesale type of accounts are dating after the holiday season.

Jeff Storch
So so we may put in fifty thousand hours of seasonal Christmas orders, our seasonal Halloween orders, and you know the Halloween came in terms of pay in November. And the Christmas is, I think, December 15th or something like that. I forget what was paid. But the good thing is we get the product, we sell the product, get paid for the product, and then I pay the bills. So that helps significantly as it relates to sort of funding, especially in the Q4 when everything started hitting at the same time with seasonal wholesale OA RA ramping up, especially sometimes at that point you're ramping up a little early on.

Jeff Storch
So you're maybe not turning in as quickly because you're buying in October knowing you're going to sell in December, but it's not clearing. By the time my credit card bill hits in November or whatever.

Rob Cosman
So you got a little a little bit of a heart attack as you start seeing the American Express bill creep up higher and higher.

Jeff Storch
And yeah, given them a heart attack a few times as well. In Q4 I get like a daily call.

Jeff Storch
OK, you're going to pay some. I don't know. But but I mean, I also have good credit. I mean, we've Amex well, let me put in like seven hundred fifty thousand dollars on the card before they get too nervous or seven hundred thousand dollars before they get better. So we have to.

Rob Cosman
That's the good thing about Amex. I find like if you use it and you repay it, they're real quick to keep increasing your credit rates. I always tell people if you're first starting out with the corporation, whatever, get a card. And then just how you use in it Yeah.

Jeff Storch
Yeah. Amex is class. Yeah we have, we do like like Chase. I think my big it's like an eighty thousand or something like that or ninety thousand and AMEX is like Yeah. So over seven hundred thousand. It floats and changes and stuff and you know I forget but I think in Q4 we got over seven hundred a few times.

Rob Cosman
OK, so you're doing ridiculous amounts. I got to figure out. OK, so you're turning stuff quickly how even though you do sell a lot of shoes, like how quickly you turn in your shoes, would you say you're turning them like two months on? Three months? What?

Jeff Storch
I yeah it varies, I mean, a lot of times we get there, but some of them, it takes some, as you know, here's a huge complicated because you just don't know when you're looking.

Jeff Storch
I mean, you never know. But when you're looking at some of the shoes with the different variations and stuff, you just don't you don't know. So and we try to turn everything within 90 days. But, yeah, some some it doesn't always work out that way as long as they come off of it.

Rob Cosman
Yeah, but I find with shoes sometimes I get guys that sellers that message me because I do a lot of shoes and they're like, hey look, I don't get shoes. And usually the guys that don't get them are the guys that are all very mathematical, very like I don't know which variation. I'm looking at all the keepa charts. I'm looking at this. What do you do it? And I see I always tell them there's a little kind of spark or a skill you like.

Rob Cosman
That's a good looking shoe that'll sell, obviously, the black brown. Sure, we get that. But sometimes, you know, you get to look at it like, oh, the keepa says that this should be one hundred fifty. I'm like, yes, but it's hideous. It is color and it's never going to sell. So you'll sit on that forever, right?

Jeff Storch
Yeah. Now thats I've had some problems with my buyers in the past of buying stuff. Yeah. Like oh well that's good. But yeah, look, it's not going to stop. There is, there is an art to shoes and so you still guess wrong sometimes. Are you, you think this one selling better than it is or you buy, you buy a bunch in the next, you know, it's seventeen people pop on the listing. That was fast.

Jeff Storch
So now we have stuff that takes a while. But again, ideally we're turning enough of our inventory on a monthly basis that we're able to keep keep growing the business without, you know, we're not looking to do, you know, holding stuff. Yeah, I actually was. Yeah, I used to it probably would cause some growing problems, but I used to always be more of one to hold stuff instead of selling it at a loss and moving on as it relates to stuff that would at least recover.

Jeff Storch
But with the whole IPI and storage fees and stuff where more quickly to cut our losses nowadays than wait things out at just Amazon doesn't want you want you to do it like it's just you know and the IPI we we we were below the five hundred threshold when they put the five hundred threshold in there. So so we worked very hard to get ourselves back up there. And it changed some of our our processes of, hey, we can we just we have to cut our losses.

Jeff Storch
If not, Amazon's going to start adding storage restrictions to our account and whatnot.

Rob Cosman
So can I ask you about you said you've got what is your team now? Because you've got your warehouse, you've got peppers, you say you have some shoppers, you have in store, guys that are doing online buying from list. What that look like?

Jeff Storch
Yeah. So we. Know in 2019, we did like eight million dollars and we had I had a solid set of management folks on the team, I guess we'll call them somebody that was running my warehouse as a warehouse manager. I had somebody else that was, you know, a supervisor of our buying team, which I'll get into. And then I had somebody else that I brought in from an operation standpoint. And I really was like, OK, how do I.

Jeff Storch
And it wasn't necessarily how do I grow the business? As much as I stopped working the business so much, how do I get it so that. I don't have to work a hundred hours a week to continue to grow this business and even that, how do I get it so that to grow the business, I'm going to source I can find the products, I can help identify wholesale accounts, I can review and making buying decisions. But if I'm spending all day on repricing and back end stuff and helping with the warehouse, I can't focus on what's going to help grow the business.

Jeff Storch
So I came up with this idea of creating a leadership team with an organization and sort of formally calling out our sort of three pillars of the organization. So I set up with time director of, a director of Warehouse, Operations Director of Purchasing and a director of business operations and wholesale accounts that runs my back end. And she manages the whole staff. And then I said, Look, guys, you guys are awesome. You can make a boatload of money.

Jeff Storch
You've got to get this. Stop making me work so much. You guys are now in charge of your areas and I gave them when they were on salary, but I gave them essentially a nice sized bonus that would have been based off of what the business, the profit of company and said, look, you guys are responsible for this. You guys outlined this. I set up their goals of how what they need to do and said, look, when the years end, we'll look at the business profit.

Jeff Storch
And you'll get X percentage of that. If you hit your goal, so essentially this is the bonus you could get you know if we hit eight million again, your bonus will be twenty five thousand dollars to thirty thousand dollars. But you also have to hit your individual goals that determine how much of that you get. So so we started to build two ways and

Rob Cosman
Right because you have to hold people accountable to the goals that they can achieve and the things that they can control.

Rob Cosman
Because you can't control he or she can't control the overall. I mean.

Jeff Storch
Yeah,

Rob Cosman
top line numbers you need to. Yeah. A two step kind of.

Jeff Storch
Yeah. So that way if somebody slacked and then I had to step up and do all the work for her and then we ended up doing so doing good. Well then you,  your individual bonus. You're not getting anything. We're not getting good payout because you didn't do it. But they, I mean they all just stepped up fantastically. And we have my warehouse, the warehouse team. We have I admittedly I can we probably have a ten different warehouse staff that's all managed again, like I don't even my warehouse person.

Jeff Storch
She when we need to hire somebody, she builds the last things. She recruits them. She tells me, OK, here's the candidate. Can you come in and meet with them or do a zoom with them? These are the people that I like. So she she runs the whole warehouse and and I'm really not involved at all with that. Then we have my operations side, so I hired a former Amazon seller that just add how it happened, but Facebook group saw she posted she was shutting down her Amazon business and trying to figure out what to do with her life.

Jeff Storch
Where did she go? She she'd only ever had her Amazon business because she was younger and said

Rob Cosman
she's a lady with unique skills.

Jeff Storch
Yeah. So I was like, OK, this person might be able to do like my back end, like run my back and Amazon stuff. She knows Amazon and she's been doing this forever. So I sent her a message on Amazon and said, hey, would you be interested in what I'm trying to hire? I don't know. I made up a title this time because I really hadn't fully, though it was just something I was in the back of my mind of, hey, I need somebody to deal with the customers.

Jeff Storch
I need somebody to do with the repricing. I need somebody to do all this. But I hadn't fully documented yet. But then she yeah, she posted that. So I message her on Facebook, did an interview with her and it just it was perfect because what I needed is I I'm a very data geek and I have a lot of spreadsheets and we do all are like repricing with spreadsheets. And she loves spreadsheets more than I do. So like it was just like a match made in heaven, like.

Jeff Storch
So she had all the Amazon background. She loved spreadsheets, she's good with spreadsheets. And she just took over all that. She she joined us. Was 2019, I guess, in Q4, like right before like September, like, OK, we're going to try to get you going right here. So it was hard for all of us, but so she ran back and again another one that I brought on. She said, OK, I need a VA.

Jeff Storch
I said, OK, lets's hire a VA you know two weeks later, she's like, OK, this guy's hired. This person hired like I have no idea what she did, how she did it. She just did it. And the person is great. This person doing good. Can we give him a laptop? OK, yes. If she was able to really help take huge, I mean, that's a huge portion.

Jeff Storch
And when you especially talk to some of the lower level, the people that struggle with like how do we go to the next level, you ask him who's running?

Jeff Storch
They're like, they're back end they're all doing it themselves. Like everybody spending 40 hours a day dealing with the back end issues, the IP complaints like you know and then they're spending another 40 hours trying to source and prep like she does that all for me. And now she has a team. We recently hired her first full time US based person. So we've hired sort of somebody to help help her. But when she does, all my repricing again loops me in of she does all the base repricing, meaning we have sort of ways that we set up the repricing.

Jeff Storch
That's all the Oa we decide. When we purchase the wholesale, we decide the mins and max when we purchase. All right is a little different and we set it based on store, but it's all it's all laid out for her. And then she sets it up on the system she reviews. And then when there's things that need my higher level look. She looks , but she has the skills to manage that all. Now she has a staff person on her to do it.

Jeff Storch
And then on my my Buyer team, we have we have two buyers that focused on shoes and clothes, I should say. We have two people that are paid to find and purchase shoes and clothes. We have one person that's paid to find none shoes and clothes items. We have two people that I call like our list buyers. So based on stuff that I find or my director of purchasing or now she's VP of purchasing, I'll get to that.

Jeff Storch
Tells her what to buy. So so we've we have three that they they're paid to source and then they purchase and then we have two that hey, I found this great item but I can only buy X amount but I want more. We give it to the list buyer and they're compensated differently, but it allows us to get past limits. It's also like say. Say a certain store has a sale. I'll use target as  example. Target has a sale and offer 50 and I want to get in.

Jeff Storch
I want to buy. I shouldn't started just break a limit, but whatever, some store has a ten dollars off  50 coupon and the item costs twenty five dollars, so two dollar to two units per transaction, I want to buy a hundred I can do fifty transactions. It's not worth my time to do it. So I pay the last buyer to buy it or whatever. So it's not that I'm so that's what they do. They buy stuff that's more annoying or they buy stuff that I can't go ask limits.

Rob Cosman
And whose credit card are they using?

Jeff Storch
They use my credit card.

Rob Cosman
They're using your credit card like buyers card with their name on it or something.

Jeff Storch
 I should say they're using their name tied to my account.

Rob Cosman
Right.

Jeff Storch
So and so. Then I have the the VP of Purchasing that oversees that group and actually manages all the buyers. I'm still a little bit more involved with some of that just because that's my area of expertise. But again, that's one of the things that we're working in. One of our twenty one  twenty one strategic initiatives is how do we get. How do we make it and for all three of my leaders, how do we make their lives easier so that they can also start to look at things more strategic and not be so in the weeds, like my VP of warehouse operations she preps 40 hours a week.

Jeff Storch
And then at night, she's doing more of a strategic stuff. We're trying to get it so that we get her some help, some help. And we have lots of people are trying to get some middle management is where we we lack and we're trying to build up a team that will be comfortable with the middle management type of role.

Rob Cosman
So you've got people that go out and buy. They're using, again, a credit card that's tied to your company. It's all coming back to the same place. But those people are going to different websites and purchasing on your criteria and their experience and whatnot. Right? and then

Jeff Storch
 From the OA perspective for the OA buyers, we myself or my VP of Purchasing approves every single order. So nobody is making a purchase without our. So they have criteria, but it has to be approved by us, the RA buyers. And we only have one left at this point in time that they're making it their decisions based on criteria without approval from us because it's based on criteria. But the OA we do require everybody to be approved before they make purchase.

Rob Cosman
So how do you logistically do that? Like just messaged you like on Facebook, like Jeff, found some good here's the.

Jeff Storch
Like I said, we got off of Facebook because I did not want to be, you know, go into Facebook to answer a question and then be distracted by cat videos or whatever crazy Facebook drama that might be going on. So so we use slack right now and we have channels like channels for the buyers and anytime they have a buy. They they they give us the two links, the Amazon link in the store Link Costa and I think they say how much they think we should purchase and then we review it and approve it.

Jeff Storch
And I mean, that's what she started as a supervisor of purchasing and now she's VP of Purchasing. But that's our main. One of our main tasks is making sure that that it's buying. That makes sense for us to purchase. Again, this one of those things that if we have them working independently and buyer A buys enough for, say, two months or something and then buyer B buys enough for two months, and it's the same thing now. We've got four months of it.

Rob Cosman
Right

Jeff Storch
And so so that's why we've put this in place where we have a single approval person OA it's not time sensitive so somebody can post it and she can get to it later. And it's not it doesn't take long to review and approve. So so is the system we put in place to help. That works for us.

Rob Cosman
So your OA buyers are paid hourly or do they pay them what they're purchased or how does that work?

Jeff Storch
Well, we do commission based on what's purchased for the OA buyers, OA buyers we have a percentage of profit model mixed in with some hourly and whatnot. The big thing, too, with OA with the buyers, too, is they get to go through the cash back for themselves. So so they get to keep all the cash back that they earned those credit card rewards. And so using my credit card will be under my name. But a you know, they find a site that's paying 10% and spend a thousand dollars there that they're going to get paid.

Jeff Storch
What was that? Hundred dollars? One hundred dollars for

Rob Cosman
that things like my 10%. That's my cup of like that's for the day of living in this Web site.

Jeff Storch
Yes so so while they make some good money through us, they will also make good money. Not from us. And it helps. It's a it's a it's a good way to it's a good gig. I'm jealous that I'm

Rob Cosman
as you say are you hiring? Can you do it for the beach?

Jeff Storch
You can do it from anywhere.

Rob Cosman
OK, so that's awesome. I want to you talked a little bit about the lady was helping you with all the other IP's and all that crap. Like, how do you deal with that? Because now we're seeing the CPC we see in the IP's you know these guys are always getting crap. I mean, how worried you get about some of this suspensions and what's your what's your take what your experience.

Jeff Storch
It is that's a good question. It's something that is is hard to control. It really is. You just don't know it, it has become a huge, huge part of my VP of operations. That's a large portion of what she spends all day you know dealing with with these things and gathering the receipts. We're in process of rolling out a new system that any time and OA purchase is done nightly the the receipt, the the email receipt or confirmation is going to be PDF nightly so that when we get these things, we don't have to because right now we get an IP complaint, then we're reaching out to the buyers, trying to track down all the emails and then PDF'ing them.

Jeff Storch
But now we're just going to have a process where our VA pdf's, each of our or all of our order confirmations on a nightly basis so that they're sitting there and then we can pull them that way. But yeah, I mean, she yeah, it is a huge task. We are constantly fighting them. We win some, you lose some. I don't know what the right answer is of how many is too many. We yoou know a lot of people, if they saw our account healthy, they probably have a heart attack.

Jeff Storch
But I mean, for what it's worth, we get a lot of soft complaints like the Please Review verse we've removed your listings, but we get them just like everybody else. We get these CPC things or whatever, and then we try to track those down. But really, unless you were buying it wholesale, it's yeah, we try to sell the item quickly as we can and we can get out of it before Amazon pulls the listing. And if not, then we yeah, we donate or sell off our items that we can't sell on Amazon.

Jeff Storch
We're trying to move to selling on Walmart as well just to give us another avenue, not necessarily as a main means of revenue, but just as a way to

Rob Cosman
dump stuff,

Jeff Storch
 dump stuff that we can't sell, especially right now I have an agreement with a guy that I sell all of our unsellables at 30% of the cost. So I shouldn't say all of my unsellables. Any of my unsellables that are in good enough condition that he could resell on eBay.

Jeff Storch
He's not going to take my junk or complete trash, but long as he can resell it on eBay, he'll buy it for me for 30%. So he buys it in bulk. So like he's not picking and choosing. It's just OK, there's all the returns we have today. We're going to get 30% the cost. It's not very much, but at least it's out of my my hands. I don't have to worry about it anymore.

Jeff Storch
First, trying to set up a whole team to deal with it so,

Rob Cosman
and when looking at the returns, that was just make me so angry. And I'm like, I know you guys are ripping me off. Like, customers are jerks, like,

Jeff Storch
yeah,

Rob Cosman
it bothers me. So I did the same I've outsourced mine. They don't show up. They're gone. I don't have to see them multiple

Jeff Storch
I dont see returning emails. They go they go hidden and do something like that.

Rob Cosman
But that's using  so you're facing the same, you're the same thing as most of us, you know, like, 

Jeff Storch
yeah

Rob Cosman
you know, you're like, OK,

Jeff Storch
it's just you know we we deal with it a little bit larger scale because we get I mean, one selling shoes in general, as you know, has a higher inauthentic rate. And then on top of that, the volume that we sell, the shoes, it's just, yeah, it's a lot. And it's a going to be a significant job responsibility of my if you have apps new in person, I think I think she's a business analyst.

Jeff Storch
I forget what we what we've settled on her or whatever, but

Rob Cosman
so what about the letters that you get, this ones with the like, hey, you're not an authorized retailer seller. We don't know. The warranty is invalid. If you're not purchased from an authorized, you should stay off it and or tell us who you got it from so that they can go to them and shut them down.

Jeff Storch
Yeah. Yeah. Sorry. Good.

Rob Cosman
No, you know like  which ones are serious. Which ones. You just say, you know what is this brand really important. Do I just sell through whatever I have or you know am I going to just tell them to suck it and not respond and yeah I did,

Jeff Storch
yeah. So we do handle them on a case by case basis. You know, sometimes some of  you can actually respond and say, hey, I bought this at what a retail store, and they're fine, they're really just looking for counterfeits like people that can't even produce any type of receipt. So sometimes we can get waitlisted just with our retail receipts. Other times we tell them that and they're like, nope, you just had the warranty is not good.

Jeff Storch
Or they start threatening lawsuits. And then we just evaluated case by case basis. We made a pretty big decision as of late to stop selling North Face branded products, which includes vans, Timberland, Altra, the north face. We had we had over seven figures in revenue with them in 2020 and we've decided to stop because they've sent a couple of threatening letters and one of my my seller buddies got sued by them. So so we know there, we know they're serious about it and

Rob Cosman
they're looking at we're looking to make a couple of examples.Right.

Jeff Storch
So so before they try to make an example out of us, we've. We've moved away from selling them for. Well, I just say we moved away from buying them right now. We still probably have some in our inventory and we're trying to sell out so out of it. But we're not we're no longer purchasing products from them.

Rob Cosman
OK, so awesome, I love this, and it blows my mind the amount of growth you've had and the size you've gotten, it's fantastic in the way you're going.

Rob Cosman
So if someone was just starting a brand new seller right now, knowing what you know, what would you recommend that they start with? What do you think is a good model? What do you think is a good approach? But, you know, that's some advice, that brand new I just opened up my seller account. What am I going to do?

Jeff Storch
It's hard. It's I mean, one thing I would say is, you know, research the different methods, you know, the sourcing methods, private label arbitrage and see what makes sense for. Your your personality. It sounds strange, but like some people just love going into a store and doing retail arbitrage. That wasn't me, I like to be working on on the computer and doing it at night when the stores aren't close. And I don't like people so are dealing with people.

Jeff Storch
Maybe I should say so. It's just easier for my personality to be on the computer and buying stuff. And it was something that I was good at because it sort of goes back to that fire thing of just being frugal, trying to save for retirement. And I always looked for deals online, for buying for my personal. So I was able to utilize for this business. So it was something I was good at where somebody else maybe they have you know have connections or have a little bit more background about how they could manufacture a product to bring something in for China and maybe you know private label is a better fit for them.

Jeff Storch
I mean, there's there's a lot of, I don't know, private label at all. But there's a lot of good things about establishing a brand and being able to sell that brand. And, you know, if I try to sell my business, it'd be very difficult. But if somebody with a private label business was trying to sell it, they have you know a product and a brand and whatnot. So so it really to me is to figure out what might fit for your life cycle, lifestyle and what might match your skill sets and and start slow.

Jeff Storch
Again, I know I didn't go from where I am now. I spent two years, you know, at a day job doing this, working 9:00 at night to 3:00 in the morning to make this work and to grow. And another big thing is when you do start to grow, start to figure out how to outsource, how to if you want to scale your business, you need to outsource again other people are happy where they are, which is also good.

Jeff Storch
Some people say, I want to deal with employees that don't look at my business model and say, what do you do? And you're turning yourself into you're giving yourself more stress. Just, you know, just go back to a one man operation prep centers. And and again, it just sort of what what works for you. But if you do if you do want to scale, you need to outsource. And you also need to look for ways, you know, like I was again, back to my frugal nature.

Jeff Storch
I spent the first year to managing my books on Excel, like I didn't even buy inventory labs, and it just is laughable, it's 40 dollars a month or something like that, and I don't want to pay it. And I think I went through a couple of Q4's where I was manually replacing because, again, I want to pay the 40 dollars a month or whatever. And it's you know that that would be one of my recommendations for early especially

Jeff Storch
 Inventory Labs come up with a better system than spreadsheets from day one, like just get that in place. And obviously inventory labs, I should say, inventory lab is not an accounting solution we use quickbooks as well, but even just as a starting point of an inventory management system. You don't want receipts as a long term solution.

Rob Cosman
No, I totally agree, and that's what I always stress to people like, look, quickbook's is your bookkeeping software.

Rob Cosman
That's for your tax reporting. That's the overall business. But the management analysis is, you know, whether it's inventory lab, whether it's seller legend, whether it's Fetcher, whether any of these things, that's the management analysis that you need to do and make sure you're actually making money on all these sales and not just continuing. Bye bye. Bye bye bye Okay

Jeff Storch
Yeah. Now know for sure. So that's definitely something that was implied to me. It probably slowed some of my growth was just being slow to pay to make my life easier. So they're sitting there trying to record my sales on a spreadsheet and all that to save a few bucks. And I could have been making a lot more money, purchasing more inventory if I wasn't wasting my time with that stuff. And and then you have to outsource if that's where you want to.

Jeff Storch
Scale your business.

Rob Cosman
Let me ask you then about kind of the lifestyle you talked about fire a still into the fire thing you kind of like has been even working insane hours. But I feel like you're at that tipping point and you're starting, you know, just talking to them where you're outsourcing, growing the team and management structure and you have the warehouse and like a bunch of days. I guess that's changing now. And you're starting to realize the fruits of the labor, right?

Jeff Storch
Yeah. I mean, I have been in the warehouse and almost a month. Yeah. I mean, that was in 2020, beginning in 2020. When I created this sort of leadership team, I said, you guys need to take on more responsibility and you'll get a portion of the business profits. But I want to work less hours. And without a doubt this was the least amount of hours that I've worked this year. I've been selling it to beach like you, but I've been selling from the mountains.

Jeff Storch
In August of 2020, we purchased a mountain house up in Vermont and I've been spending almost half my time there. We have my kids are doing homeschooling because we don't want to deal with like the remote, the semi remote, but we just we didn't want the boys to be on the computer eight hours a day as a means of learning. We didn't want the boys necessarily having to go to school with masks and that we just said we have the ability and I say we my wife has the ability to homeschool them.

Jeff Storch
And so let's do that. So we've been doing that, which has allowed us to spend will go up for two weeks. And so what happens is I go up to Vermont for two weeks, then I come back and then I have to self quarantine before I can go into the warehouse because of quarantine rules. So then I yeah. So I just don't end up being in the warehouse because I come here, then I got to quarantine, then I had a quarantine before I go up.

Jeff Storch
It's just a

Rob Cosman
It's a circle going back and forth right?

Jeff Storch
Quarantining so, so so I don't go in there very often, and yet we, we spend, I think, two and a half weeks up there in January and what schedule would be is nine o'clock. We would be on the slopes. We'd ski until noon, come home. The boys would go to work our work the boys would go to school and I'd go to work. And usually I'd wake up a few hours before we left to go skiing.

Jeff Storch
So I got a couple hours in the morning work, five or six hours at night, maybe get eight hours in for the day. And and that's it. So. You know, that that's sort of

Rob Cosman
but you're still doing the buying, you're still doing some buying. I know you are like you're still finding deals is that you?

Jeff Storch
Well, I am, but I'm not this outside of right now. I was one of our lower buyers in January. Like, well, you know, what it is right now is also a big wholesale period for us, for some of our seasonal wholesale. So that's where I'm I am focusing a little bit more on the seasonal wholesale in Q1 is a big like because that's when you're already getting your Q4 wholesale orders in if you are he's dealing with some wholesale products.

Jeff Storch
We do so. So that's a big focus of mine right now versus the stuff. So right now, admittedly, I have bought very little product to resell immediately. I say that because my boys are obsessed with Legos, which got me into Legos. So now I'm starting to dabble with, OK, let's buy this Lego or sit it in a warehouse now that I have all the space and we'll sell it in three year. So, like, you know, I'm buying stuff that I can sell later, but I'm not necessarily buying quick flips right now because they're obsessed with Legos, which is sort of got me into it.

Jeff Storch
So we're dabbling a little bit of Lego long term, but

Rob Cosman
Dude it's it can be lucrative when you start seeing some of them once they retire. And then, you know, even after six months a year, you start to move. And if it's something you're interested, like I'm sitting in my office and I have the Harry Potter castle already built here. Well, I

Jeff Storch
yup

Rob Cosman
my kids are the same. And then I get it. I've got the James Bond car that I have put together yet.

Jeff Storch
Oh, nice. Yeah, yes. Yes. So that's essentially what has happened is they've become obsessed with it. And then I started looking into it more. And so now we have like family Lego building knights. And and then also the big thing is I much prefer to deal with Lego returns always have returns because I can't do much with a damaged shoe that comes back. Hey but somebody wants to play with the Legos and return it. Hey, I'm annoyed, but hey, at least I can give it to the boys.

Jeff Storch
And hey, look, look what I got for you. So

Rob Cosman
I tell people when they first started to sell stuff that interests you because I need to be more into the category, but also sell stuff that if you get returns there, OK, I got I got the Millennium Falcon. I got a Millennium Falcon. That was the rip box. All the bags are still fine. I'm like, oh darn. This one.

Jeff Storch
Yeah. Yeah. I mean, I used to say, OK, save me all size 12 shoes. That will come as the returns. There's only so many pairs of shoes that I need. So Legos we can. Yeah. And those Legos along is not for fraud and just damage box, you know, we can also save and sell it later you know on another market or whatnot. So.

Rob Cosman
Yeah, exactly. That's that's also added.

Jeff Storch
Yeah.

Rob Cosman
So the only other thing I want to ask you is take it up a ton of your time. What give me something that didn't work this this year in 2020 what, just give me an example of something, because, you know, dude your numbers are awesome. Everything sounds great, but there's got to be something like just that.

Jeff Storch
I'm going to go back to 2019 just because it was more of a pretty large scale failure, I would say is.

Jeff Storch
In 2019 you know, I'm I'm always dreaming up of ways of how do I grow the business, what what crazy thing can I come up with? Some 2019 I came up with the idea of drastically increasing our RA team. So at that point in time, we were a little heavier RA and we had I think I have three buyers. I decided to hire like six RA buyers in like a two month period we hired, what we did was we focused on areas like stores.

Jeff Storch
We try to identify stores that might not exist everywhere. So this is a really good outlet store and there's only three of them in the country. Let's hire somebody in that county and let's hire somebody in this county. So I hired somebody, so I hired all within like a two month period or a month period I hired. Two people in Georgia, two people in Philly, one person in Delaware, one person in Maryland, one person in Georgia, one person in Tennessee and one person in Florida.

Jeff Storch
So I think it was like 9 or 10 people, all in a very short period. And like we have six of them started at the same time. And we had like, RA boot camp. And this is how we're going to ramp up our company. And we were doing we had all of our people that were located in different places and would purchase their products and ship it back to us because we wanted the buyers buying. We don't want them shipping.

Jeff Storch
So they were called. Well, essentially what we came up with was we're going to have. All right, buyers that were local, there were local buyers then we called them semi remote. They would be outside of our area. So I'm right outside of Philly. So I hire somebody in central Jersey and they'd hit the outlets up in central Jersey, hold that inventory at their house for like a week and drop off once a week for cartload or twice a week, depending on their volume.

Jeff Storch
So our semi remote people would focus a little bit outside of our area. So they'd be like an hour to 90 minutes from us and they'd cover areas even further away from us that we're going to cover with our local guys and then drop off. And then we had our remote folks that would ship back to us. And we had what I thought was a very good document processes I hired at that point. That's when I promoted my yeah. My lead buyer to be the supervisor.

Jeff Storch
And they had it like help on board of this. And it just. Yeah, it just didn't work out. Yeah, it it I don't know if it was we were just bad at hiring, I don't know if I need to revamp my OA hiring process or my RA hiring process, I don't know, but. Of all the people that we hired during that time frame, it may have been close 10 of them. Only one of them is still with us.

Jeff Storch
She is freaking fantastic. And it's still but it was it was a big learning, learning curve for us. Hey, maybe, maybe RA isn't our sweet spot. And  you know what we put substantial amount of time and effort to build this team and these processes. And now I have one hour RA person left because the one person that's fantastic she shifted to OA and that's when she really started to shine. But outside of that, we have one RA person that shops like 15 hours a.

Jeff Storch
A week, she's just a part time because she has kids and other commitments and she's fantastic, but she's not this is not all that time and effort we put the growing that side of business sort of just didn't work out. But we learned a lot from it. And we're utilizing as we try to figure out how to in 2021, how we further are sort of buying teams and how we grow. We have a lot of lessons learned.

Jeff Storch
We also learned a lot about our interview process and how we might actually hear about some of the people we choose. Again, at the end of the day, it's not easy getting a feel for somebody, especially something like an RA buyer, because what experience can you possibly have that's going to make you a good fit for you know RA. And I mean, we had I mean, we had this insane process that, like, somebody would email if someone would apply and they'd get like essentially an automated list of questions, but they'd have to answer if they answer those good.

Jeff Storch
Then they would get another email. We will review it and say, OK, we've sent them to a Google form where it had a test, me talking about the company. Tell me a little bit about us and the role and then. Essentially, phone screener questions on a Google form. I want to interview everybody I wanted so and they had all these different questions. I had math questions, I had target math questions, all kinds of stuff.

Jeff Storch
And then they have to finally come for an interview. Then a second interview. And we did all that. And we still found so many people that were freaking terrible. So, needless to say, are still revamping that process. That was a pretty big failure. I mean, again, we just it just didn't work out with, we can't probably hired almost 10 buyers and only one of them are still with us.

Rob Cosman
 So what is the give me. Sometimes it works, sometimes it doesn't like especially when you were talking about cutting your losses and getting rid of stuff and getting the capital back and redeploying it. You know, sometimes deals don't work out or things go sideways or Amazon comes in or whatever, and it's like, OK, take it, move on. Right. Get the money back and reinvest it. And I can correct. So what is the what's the sales target for 2021 now? Give me the number.

Jeff Storch
I mean we are our goal is it's ideally where we're actually pushing towards more of a 2022 where we're trying to get to 50 million by 2022 is our, our goal.

Jeff Storch
So working our way. So maybe halfway thirty seven and a half or something like that is where we're pushing towards. Well we'll see things change and we may reevaluate that. But right now that's sort of where we're, where our targets and goals are right now in trying to figure out how to get there. And that's

Rob Cosman
you've got a big warehouse that you have to fill up with a bunch of stuff.

Jeff Storch
And that's I guess that's also sort of a lesson learned that we had was when we got to 2020 and we done in 2019, we did about eight million said OK, we can't do much more than that.

Jeff Storch
That's insane you know 12 million would be a million a month. How you can't do that. So we set our targets just like 10, 11, 12 million when we first started planning for 2020. And finally now we're looking at it like, OK, we need to think bigger and we need to start thinking strategically of how we're going to make it happen, how when we're making hiring decisions, when we're building our processes, they need to be built on the assumption that we are going to be a 50 million dollar company instead of working under the assumptions that, you know, you can't go any bigger.

Jeff Storch
You're already so insanely big. No, it's you know what what do we need to do to get there and then put those systems and processes in place so that they're not constantly breaking and needing to be redesigned for the next big thing that we're putting in place.

Rob Cosman
It's still like you did a million dollars in 2017 right if that's you said

Jeff Storch
 I think in Q4. You know, I think that I think I think that one one seven total and one of that in Q4.

Rob Cosman
So that's 1.7, not quite two. And a few years later. Oh eleven.

Jeff Storch
Yeah. That's

Rob Cosman
where else could you get such insane growth. Right. Like you just buy more stuff, ship it and sell it. Make profits like.

Jeff Storch
Yeah, it's crazy that crazy the world we live in, that we can do it. And the crazy thing is Amazon is just so many ways to do it. Like, you know, the way I do it is different than so many other people.

Jeff Storch
And a lot of people are successful doing it. You have so many different channels. You got arbitrage, you got wholesale, you got private label. And then even with who knows, you got various models and and stuff. And you can even shift off to other platforms and you have people moving to  Shopify and all that stuff, it's it's crazy. A lot of different ways to do it.

Jeff Storch
Just. Lucky to figure out that a bunch of people that are really good at good at putting my vision into place, I guess this is what it is,

Rob Cosman
the hiring the right people is always such a risk and a gamble.

Rob Cosman
And you just never know. And you know what it's right. Oh, I don't know if it's going to work. And then suddenly, no, that's the star and the star who I thought would be the star is nowhere near the star just never know.

Jeff Storch
Yeah. Yeah. One of our hires, she was I think she to be semi remote. And and she nailed the interview and she she answered all the math questions. Right.

Jeff Storch
And she spoke so well and everything was great. And in the first very first training session, she met my at the time, the supervisor of purchasing. And she's like, this girl is a hot mess. And was like like I was like, how did we miss it? And it was just, you know, she was very good at putting, you know, telling us what we wanted to hear. But even on our first day of training, she was already just, you know, every single it was just and that's one of the things that I've learned is we're going to we have more of a promotional promotion for probationary periods put in place now and, you know, even begin to do some potentially some like on the job interview type of situations of like a like you're going to have to see you can actually do some of this stuff in the beginning before we hire you, because it is just the same.

Rob Cosman
But bring in bring in for the day. And just like like you going to work the day, I, I'm going to pay cash. If it works, I'll call you tomorrow and we'll fill out the paperwork. If not,

Jeff Storch
yeah,

Rob Cosman
I just get some cash your day labor. Right.

Jeff Storch
Yeah. So we're figuring it out but yeah it's hard. You never know. And I've got very lucky with the people that I've got that you know, the three leaders I have. You know, if you looked at their background you never would never. See them as being great at what they do, I mean, I have my VP of warehouse operation, she was a stay at home mom for 20, 20 years or whatever, and then was just looking to get back in the workforce.

Jeff Storch
And she started out as prepper one. And she just has a amazing drive to learn and work hard. And at the time, I had somebody else sort of earmarked to be our leader, and she's she just blew that person out and, you know, just continue to just

Rob Cosman
stay at home mom organized in the household and running that. And that that is.

Jeff Storch
Yeah, just amazingly.

Rob Cosman
Exactly

Jeff Storch
And yeah my director in purchasing is similar. I mean, she was a stay at home mom who I was looking for some income as her kids were getting a little bit all over. She still had one that was at home, but two of them were in school. And I'm just again, that nothing in experience. I would say she's going to be an excellent buyer, but the one person at least has some some degree as my director my VP of operations.

Jeff Storch
And she had an amazon background. But again, they're lucky to even start. Yeah, I didn't know. I just saw her on Facebook and knew her from being in groups together, sort of like we knew each other. Of course, we have a little different connection with that. We ship USA type of situation, but you knew of her, but I've never talked to her before. But on having people like that to be able to implement my crazy vision has really helped us.

Jeff Storch
Continue to grow and see our business to levels that would have never seemed. A possible even

Rob Cosman
All I know is that I can't wait to see your 2021 right up after it I think it's awesome what you've done so far and what you've shared with us to get us through and indulging all my questions, because this is all stuff I want to know and hopefully everybody else does. But and it's super impressive. And I just can't thank you enough for coming on the show today and taking us through this.

Rob Cosman
I can't wait hey and know more matress stores or anything else. Just stay in your lane right you know. And I don't know what the crazy idea is now. I don't know.

Jeff Storch
Yeah. Yeah.

Rob Cosman
Covid testing or.

Jeff Storch
Oh, we did branch to some rental properties in 2020 and we're doing that a little bit. But again, nothing, nothing that's going to take up a lot of time. But again, that's part of the amazing thing of having the strong team is we were able to purchase two rental properties and stand up a whole new sort of business and still pick amazing numbers in 2020 because I have the team behind me that's doing that and allowing me to to to get that in place or whatever so,

Rob Cosman
Maybe I'll bring it back in the show later in the year. We'll talk about your rental business.

Jeff Storch
Yeah. So that's, but yeah that's a little small scale. Yeah. We rent out the place I go up to in the mountains when we're not there, so and then we have another one up there. But yeah that's how we. Yeah, are selling from the mountains approach.

Rob Cosman
I like it, I like it, it's a little colder, but I like it. It's remote. Awesome. Jeff, thank you so much for coming on, buddy. I appreciate it. And best place for people to find you just did probably the Facebook groups

Jeff Storch
yeah I have a different Facebook groups, I guess, or send the questions to you,

Rob Cosman
hey, you're my group and every once in a while you pipe it, you're like a

Jeff Storch
yeah sometime you 

Rob Cosman
you drop like a one time. I did know you were talking about stuff that you dropped a screenshot of your sales.

Rob Cosman
It was astronomical. It's crazy. I'm like, yes, Jeff, 

Jeff Storch
that was I want to show you my Canadian sales. And I forgot that it showed my global sales or something like that or whatever

Rob Cosman
yeah

Jeff Storch
it was in dollars. I forget what it was. But it was I really didn't mean to share that much. I was just trying to show my Canadian sales were not very impressive. But

Rob Cosman
I'm like, oh yeah. Just every once in a while I just kept the he's like, oh, I know you guys are playing checkers. Well, I'll just show you the chess move right here. It was awesome. Thanks so much, Jeff. Thanks for your time buddy.

Rob Cosman
Well, that was an awesome episode and pretty inspiring I think you want to learn more about online arbitrage Please check out my website, OAMasterclass.com To get you started on your online arbitrage journey the right way. Again, that's OAMasterclass.com

Rob Cosman
If you want to take your online business further, stop by sellingfromthebeach.com for more episodes, videos, selling tips and tiki drink recipes.