Resources for Buying and Selling Online Businesses

BuyBoxer’s CEO Shares Lessons from $300,000,000 in Amazon Sales

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Scott NeedhamScott Needham is the Co-founder and CEO of BuyBoxer, a brand management and marketing agency for Amazon sellers. BuyBoxer manages over 200 brands, boasts sales of more than $250 million, and is widely recognized as one of the largest Amazon sellers in the industry.

In addition to his work at BuyBoxer, Scott is also the host of The Smartest Amazon Seller podcast.

Here’s a glimpse of what you’ll learn:

  • Scott Needham talks about the marketing and consulting services that his company, BuyBoxer, offers to its clients
  • Scott defines APIs (Application Programming Interfaces) and reveals how they can transform your Amazon business
  • How can smaller Amazon sellers access high-quality APIs?
  • Scott’s favorite tools for inventory management
  • The key to getting 1% of your revenue back from Amazon
  • Scott shares what you need to know about hidden fees, lost inventory, and more

In this episode…

Do you want to increase your profits and master your systems as an Amazon seller? Are you searching for the best marketing hacks to help your Amazon business grow and thrive? If so, this episode of the Quiet Light Podcast is for you.

According to Scott Needham, one of the most important lessons to learn as an Amazon seller is this: you are not the linchpin of your business. In order to create a transferable company, you first need to build systems and incorporate tools that can grow and scale your business—even when you’re out of the picture. Today, Scott shares his best tips and tricks for just that: successfully growing—and transferring—your Amazon business.

In this episode of the Quiet Light Podcast, Joe Valley sits down with Scott Needham, the CEO of BuyBoxer, to talk about Scott’s experience selling more than $300 million as an Amazon seller. Listen in as Scott discusses the importance of APIs when scaling your business, his favorite tools for inventory management, and how you can get up to 1% of your revenue back—right now. Stay tuned to learn how to build a more transferable business today!

Resources Mentioned in this episode

Sponsor for this episode…

This episode is brought to you by Quiet Light Brokerage, a brokerage firm that wants to help you successfully sell your online business.

There is no wrong reason for selling your business. However, there is a right time and a right way. The team of leading entrepreneurs at Quiet Light Brokerage wants to help you discover the right time and strategy for selling your business. By providing trustworthy advice, effective strategies, and honest valuations, your Quiet Light advisor isn’t your every-day broker—they’re your partner and friend through every phase of the exit planning process.

If you’re new to the prospect of buying and selling, Quiet Light Brokerage is here to support you. Their plethora of top-notch resources will provide everything you need to know about when and how to buy or sell an online business. Quiet Light offers high-quality videos, articles, podcasts, and guides to help you make the best decision for your online business.

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Episode Transcript

Intro 0:07

Hi, folks, it’s the Quiet Light Podcast where we share relentlessly honest insights, actionable tips, and entrepreneurial stories that will help founders identify and reach their goals.

Joe Valley 0:29

Hey folks, Joe Valley here with Quiet Light Brokerage in the Quiet Light Podcast. Today’s guest is Scott Needham. Scott is the CEO of buyboxer.com. It’s a company that’s been selling on Amazon since 1999. If you can believe that, an FBA since 2009. They manage over 200 brands, and they believe in unique efficient software tools, which is kind of nice. They actually produce their own and integrate some of the others that you all know about. And then they sharpen both of them to outperform the competition. Scott, some of Scott’s primary focuses are data acquisition, which is API’s, inventory management, everyone has a problem with that, as you know, if you’re growing like crazy on Amazon, and then Amazon refunds management, which is, you know, where Amazon actually makes mistakes, and most people don’t know how to get their money back at five bucks here. They’ve got a team of 150 Amazon professionals out in Logan, Utah, and Scott hosts The Smartest Amazon Seller podcast, where he talks openly about how he sold over 300 million on Amazon. And as always, today’s podcast is brought to you by Quiet Light Brokerage, I am a partner at Quiet Light. And I I thought my number was impressive, where I was going to say yes, I’ve sold close to 100 million in total transactions. But here Scott’s done 300 million in revenue on Amazon. it’s mind blowing. Everybody at Quiet Light is an entrepreneur. We’ve all built, bought sold our own online businesses. And now we act as advisors as well check out our listings at quietlightbrokerage.com and get a free valuation if you are out there thinking about selling your business. Don’t wait until you’re tired, exhausted rundown and say I just got to get rid of this planet in advance. So you’d be prepared and get maximum value for the business and handed great business over to a great buyer at a great price and deal for both you, Scott, welcome to the Quiet Light Podcast. Thank you for joining today. Hey, Joe, thank you for having me. I am impressed, man, that’s 300 million in total revenues on Amazon. I don’t think I’ve ever had it

Scott Needham 2:29

Go on, it’s done that revenue and margin are different things, you know, I am embarrassed, you know, like the the volume that we’ve done and like sometimes, like, you know, the year and I’m like, this is all we profited on Amazon is everyone knows the volume is there. And like, you know, I’ve really focused the last 18 months and just like grow it being creative and not hurting sales, but like growing gross margin. Yeah.

Joe Valley 3:02

You know, I often hear revenue is what is it revenue is sanity profits are vanity know, the opposite, right? revenue is vanity. Profit is sanity. And, and the value of the business is not based on revenue, it’s based upon on that bottom line. Now, your business and your gross margin that you’re talking about, is different than what somebody else might be looking at. Because you don’t own all of the brands, yourself that you operate. Can you write with that a little bit?

Scott Needham 3:29

Yeah, so I mean, you could split up, I, I’d say actually, about 80% of what we do is where we just are very transactional, we’re a real, we’re a retailer, you know, we buy from, from brands, you know, have relationships with like, 500, I would say about 20. And then and then 20% of these brands are actually more strategic, where we really work a lot harder on, you know, probably more similar to a private label, where, you know, it’s not our products, like we don’t own it, but like we have, we’re the authorized sellers. And so that means we do the marketing, we do, you know, product page, roll out new products, and we’ve had a good track record of taking, you know, these businesses from say, a quarter million in sales. So they come to us and they’re like, they want to grow on Amazon and we take them to about 2, 3, 4 million on that’s something that we’ve done fairly often. It’s where like, where we see more of the growth of our business and I mean, you’re an entrepreneur yourself like when you figure something out, you know, you want to move on to the next shiny thing and and get that rolling. And so and when I say figured out I mean that like you know you have all the tech in place, you have the systems things are sort of an autopilot and once you get to that I would say you know any entrepreneur or even human being wants to create what’s next. And so clearly on Amazon, you know, bringing new products that meet a market fit is is doing really well right now.

Joe Valley 5:15

Yeah, continually adding new SKUs, new products is really important whether you’ve got, you know, multiple brands with some, like 200 that you manage, or you’re a single owner operator, and you just need to add new SKUs. But Scott, one of the challenges most people have is, is the tech behind doing that properly, so that they can work a little bit less and not do things. So manually. I’ve talked to thousands of entrepreneurs over the last eight years in the role that I’m in. And I find that they’ve got the heart, they’ve got the desire, they’ve got the focus and drive. But sometimes slowing down to learn the tech side of the business to make the business operate more efficiently is a challenge. And that’s an area where your background is is all tech you build it you improve it more than anything else. Can you what, well, what are your like, top few things that you want to talk about in regards to tech that will help an Amazon? Sure.

Scott Needham 6:07

I mean, I’m everything from like, what data is available out there? You know, I could rattle off four API’s that, you know, any developer, you know, within, you know, a few days can like start pulling interesting data off. There’s

Joe Valley 6:22

what is what API stands for? Because I know for sure,

Scott Needham 6:26

yeah. Application Programmer Interface, can you hear API, just think that like, you know, it’s a it’s a data connection between, you know, the, the data provider, say, Amazon, and you know, a software developer. So like, so sellers, generally, you know, many of them actually do some of their own software development. And they can start downloading, you know, their own data. And so API is that connection.

Joe Valley 6:54

So it allows you to pull data from Amazon, that you’re that they allow you to pull, but it’s it’s not just as simple as the information that’s there inside of your seller account and the reports that you’re accessing. goes much to

Scott Needham 7:09

the, I’d say there’s a few different APIs out there. And they have different purposes to them. And specifically, Amazon, I mean, they don’t give all the data that they have access to. Right, you know, everyone knows about, like the business report that’s on. They don’t have that in the API that one has, like, you know, your your sessions data and your buy box percentage. That’s not available in the MWS, the Marketplace Web Services API. And that’s by design. I’ve heard Amazon engineers tell me they’re like, they didn’t want to give this data out in a programmatic way. I, obviously, that’s a long conversation of like, me, as a developer, I always want more data, whatever you can give me like we people can build tools off of that. And the truth is, is you take your Helium 10’s, and Jungle Scouts, and I’m like, whatever other businesses, and some of them are actually sourcing their own data, they’re not using this from Amazon’s, you know, their API, they may be scraping it themselves. And that’s actually kind of a gray area where like, Amazon doesn’t want them to do it. But like, on the other hand, it is publicly available, you know, any, you could teach any robot to go scrape these. And so I’ve heard mixed opinions on these even so much I heard an Amazon employee say that you shouldn’t be using Jungle Scout. But you do. Do you use I’m sorry to interrupt

Joe Valley 8:54

the software. Yeah, Jungle Scout and Helium 10.

Scott Needham 8:57

Um, I mean, I use Helium 10, there’s a few things that they do pretty well. And it kind of, you know, reinforces insights, I would say, I don’t have to use them. I think it’s specifically private label. Your insights can actually be more valuable than you know what a tool tells you. There’s private label sellers that like are killing it, they don’t use tools. I think I’ve been a victim of that, where like, I’m always looking, you know, I hear something I’m like, Okay, how can I incorporate that into my tools? Like, Can I grab this as data, when that might be a distraction from you know, what actually is going to lead to a product success, you know, grabbing all this data doesn’t make your photography better. It doesn’t make your there’s certain aspects that I think you should really rely on your own hunch as a as a marketer, as like understanding, you know, subcategory So I mean, as someone that has downloaded, you know, you know, thousands of gigabytes of data from Amazon, I’m telling you, like, don’t live off of data alone. Don’t be obsessed with that. But there are a way back to the point of like, you know, what API’s are out there like that can help people build interesting tools. Yeah, there’s Amazon’s nws that I keepa actually has a API, it’s actually very expensive. We pay them $2,000 a month for access, you can you can dial that down. I mean, we’re, I’m downloading, you know, almost the entire catalog of Amazon every month from them. And then so they charge us that. Then there is the advertising API, which is separate, and which gives all the very specific advertising data. And then finally, there’s actually one called the product advertising API. That is for affiliates, Amazon affiliates. And that one actually has more interesting data such as, like very specific reviews on a product, and, you know, the offers, they actually, Amazon on their API to sellers doesn’t give, you know, seller specific data, like the offer the the value of all of them. I mean, I can talk about this where I’m already in the weeds, but how does

Joe Valley 11:29

how does a, you know, a mom and pop seller that could be doing two or 3 million in revenue access some of these API’s that you’re talking about other than keepa, which is just

Scott Needham 11:37

okay. Well, I’m happy to tell you that in 2020, it is different than it was five years ago, people have built amazing tools. And it took me years to like, reconcile that, like, I’m not going to build everything, you know, I’m not going to build the best advertiser. And that like you can rent other people’s tools very easily. So I, you know, Mom and Pop that’s doing two or 3 million a year like, congrats, like, that’s awesome. Like, you probably should think first about like renting what’s out there, and getting really good with them before you’re building your own. That’s not going to be true for everyone depends on your type of business. But if you’ve got, say, two SKUs, and you’re doing that significant volume, and you probably don’t need, you know, certain tools that like work for bigger catalogs, right. So, but there, there are over like 100, you know, SaaS tools that focus on the the Amazon, you know, community, I would say just like find out the best ones that work for your business and really implement them, because using tools is what’s going to help your business scale. And you know, how you’re going to replace yourself. So you’re not like the linchpin of the business?

Joe Valley 13:05

I think that’s critical. I think that’s critical. Yeah, using the tools to scale your business. So you can then focus on the things the other things that you do really well, which might be new product launches, and things of that nature. Yeah. Is there a specific tool out there for inventory management, it seems to be the biggest challenge. And some people just say, I tried them all. I’m using a Google Sheet now. And and they they do their own, you know, projections and numbers and guessing all that nature. What do you

Scott Needham 13:34

I don’t have a solid answer to this, because I’ve seen like 10 different tools, we built our own, you know, it’s, it’s using a SQL database, and which allows us to do certain things, you know, synchronized in certain ways and operate on it. But Google Sheets, it does get more complicated if you are dealing with, you know, overseas inventory. I was with someone just a week ago, and he uses Airtable, which is probably like kind of Google Sheets but a little more configurable, and he’s able to like you know, show inventory dripping across, you know, his entire supply chain. And I know like there’s the likes of Skubana which are probably you know, on the more expensive but like really, really feature rich. I don’t know if they have this overseas component is like inbound inventory, that you would really want to be able to forecast and know exactly what’s happening at all times.

Joe Valley 14:39

I think that’s why some people go to the Google Sheets because they can put some guesstimates in there. It’s a challenge. I was hoping to have a perfect answer for me but it’s it’s

Scott Needham 14:47

not everybody watching. If you know if I find one that I think is like an all in one I will not be quiet about it.

Joe Valley 14:56

Will please Thank you. We’ll see if that cone is maybe you can just sell the one that you’ve built. Have you ever thought about doing the is just, you know, in creating this, you know,

Scott Needham 15:05

I, I do have five to 10 sellers that use it. It’s far from like, ideal for everyone. And I’ve considered it but like, I’m I don’t know if it scales very well it’s like, you know, we have a huge catalog. And so every decision I’m making, it’s all about like, okay, you know this supplier we have 500 products with them and how do we manage these 500 in a systemized way? And so it’s around that, does it? Is it really to the minute or to the, to the to the unit, with the different stages of inbound, say, from China to you know, your 3PL it doesn’t actually have that built in? So it’s not a it’s not a deal killer? I’d love to build that.

Joe Valley 15:56

But show, what are your predictions and challenges in q4 2020? With inventory, given new restrictions in Amazon? And how much you can ship into the fulfillment centers?

Scott Needham 16:13

It’s a good question. So challenges I mean, like I’ve just come to terms with what it is, is that, you know, you have to have with your, if you don’t have current sell through on products that that can allow you to like, ship in a ton of things. We’re using our fbm alternative where we have both offers inside, I don’t love that, but like we we’ve got skilled with it, we got even more skilled with it during, you know, peak quarantine, when, you know, we couldn’t send in everything. So, you know, by this time, we have some experience with this. I definitely think that people should have a fbm or 3PL, you know, option,

Joe Valley 16:54

or something we learned, I think in 2020 that if we had the same conversation in 2019, I don’t think Yeah, what do I need to fulfill myself other than other than maybe kidding, and packaging and keeping down your your inventory storage costs. But now the reality is that, you know, they’ve only got so many fulfillment centers, they can only put so many products in there. And, you know, revenue at Amazon has increased, you know, multiple times over since COVID. Head. So, yeah, okay. So get get your 3PL in place fulfilled by merchant, get it, get it up. And if you can do it at this point, for q4, at least you’ll be able to protect yourself in the future. One thing that is in your bio, and your LinkedIn page is interesting. I mean, a lot of it pretty damn impressive. But the the Amazon refunds management that is touched upon there, it’s something that you know, inside and out. And I think a lot of people just accept that Amazon’s either doing the right thing or screwing up and you can’t figure out how much they’re screwing up. But is there a lot of money for owners to get refunds back, I talked to us about this a little bit in terms of,

Scott Needham 18:05

well, I can talk about this for quite a lot. You know, I we built a company and ended up selling it that does just this, and which is good. Because like now I’m not biased anymore. I don’t have like a company to like to shell on. So there is a lot of money on the table. And it actually may vary on your product type your SKU count. And that we found that Amazon is more careful with more expensive products. We found that like you know, products are under $25. And sale low number count, where like, say you’re only sending in, you know, 30 units, 50 units, 100 units, that’s more likely to you know, have units damaged and lost than if you’re sending in, you know, 500 it just seems that that that was our study showed that on my company, when we turned on, you know, these tools to like request for reimbursements and find the Amazons gaps. We got about $200,000 in the course of two months back from Amazon. Well, they they make a lot of mistakes. And I have they are improving on this. I think the refunds opportunity isn’t as much as it used to be. But it is it’s free money. And I generally have found that up to 1% of your revenue is just sitting there and

Joe Valley 19:39

it’s there. You just have to learn how to ask for it back. Are we met?

Scott Needham 19:44

Yeah, yeah, you had to learn how to ask for it and actually look for it. So we built a programmatic approach to this. There’s a few companies that you know they’re doing this through spreadsheets and finding this but we saw the money that I sold is called valence they sold to a company called VeriShip. And now VeriShip markets this tool and they you know, they’re looking at all the dimensions and weights of your of their products that you sold and say Amazon changes that. And the FBA fee is now less than what it used to be or maybe more than what it used to be if there’s an opportunity, you could actually create a case with Amazon and say, like, Hey, you know, you overcharged us for this duration of time. And I’ve seen reimbursements of up to, you know, two to $5,000, it’s not incredibly uncommon, we get like one of those a month, I’ve seen as high as $15,000. That’s just for the FBA fee. There’s also the damaged and missing they’re overcharging just the FBA fee. Yeah, um, it

Joe Valley 20:52

I see I thought this was just for damaged and last name

Scott Needham 20:55

So they remeasure your products, semi regularly, depending on I don’t actually know that the how often they do it, but it’s not uncommon for them to re measure and something happens and it changes on and, or maybe even you change your packaging, and they are slow to you know, change the FBA fee along with that. And so, if there’s an opportunity, like this system requests it and and that’s like, just that’s the opportunity alone, there are. There’s about it, companies will tell you there’s like 25 audit types, there’s really about six that really get money for sellers. And it’s, um, if a product, say you have a return, and there’s a first few return types that an Amazon supposed to cover a certain parts of the fees like the return shipping fee. Or like if you just have to look at the data, like if it’s like, if it says like, it’s like shipper damaged it or you know, fulfillment center lost it, or damaged it. And they don’t reimburse you for that, then you can request it.

Joe Valley 22:21

Let me let me do some math to the people that are listening, just so you understand how important and how valuable what Scott just talked about is, let’s just say you’re doing 3 million a year in revenue. Okay, we had a conversation like this on the team the other day, if that business is doing a half a million in discretionary earnings, it’s roughly 15%. You know, what’s it worth, right? It’s probably depending upon growth and defensibility and, and how many SKUs if you get here, excuse things of this nature, you’re probably let’s call it in that three and a half time multiple range these days, that doesn’t include inventory, add the inventory in and you’re over four times. If Scott’s 1% figure works out, you’re at 3 million so you get $30,000 in found money that goes to the bottom line, right, there’s no product cost built in there it goes to your discretionary earnings figure. Now you’re selling that business for a three and a half time multiple, just by using a tool like Valence say the name of the tool it’s got

Scott Needham 23:22

it’s now called VeriShip

Joe Valley 23:25

VeriShip, just by using a tool like VeriShip, you’re adding what 30,000 times 3.5 so $105,000 to the list price of your business now VeriShip cost 100 bucks a month few hundred bucks a month do they get a percentage of the revenue they get back they

Scott Needham 23:42

do again they do a game share model and it’s about you know 20 to 25%

Joe Valley 23:50

oh my god there are a number

Scott Needham 23:54

there are I’m gonna be totally transparent. There’s other companies that do it some that may do it for cheaper. There’s virtual assistants that like advertise I do this for you. So I’m using a few different options some of them may be a little bit less expensive but at the very least like you just just just do it. You know when we first found this we actually use someone else’s tool and you know within two weeks is like four or $5,000 and and that’s when we like started like okay there’s more to this and

Joe Valley 24:26

found money people if you if you’re struggling to keep up with you know purchasing more inventory if your business is 24 months old and you haven’t taken any out of it yet which is often the case you know, we know that you’re going to make the most when you exit if you’ve got a young Amazon business, but this can put some extra money back in your pocket calling into the fourth quarter here. Be able to buy yourself something or just you know, get a more profitable business that will be worth more money at the end of the day. Absolutely. Scott. Do you talk about this and all sorts of other things on your on your you’ve got a new YouTube Channel and on your podcast as well.

Scott Needham 25:01

Um, you know, I’ve really lasered in on, just like just the operating, you know, all the tools that are like, when I say tools, I mean, like other features of Amazon. And like from like advertising to the, here’s an example is the on site at the on site associates program, where I brought in a guy that like, you know, he does a bunch of like, horses, like review sites to bring in those reviews on Amazon, like, if you search, you know, dog leash right now, you’ll see like a bunch of organic listings, and then there’ll be like, a, you know, reviews from these other sites that they bring in on the page. And he helps people get those placements. I just, like nerding out about very operational, you know, specific things on Amazon, I’m going to talk way too long about them. But, you know, at the end of the day, like a good a good episode, or, you know, YouTube video or whatever, it’s like, an Amazon seller can leave and like, make their business better. Like, they get an idea to like, how to execute that.

Joe Valley 26:18

And we’ve tried to, we’ve tried to jam in several topics here in our, you know, 25 conversations. So thanks for hanging in there with me. But I think that the nerding out is critically important, right? People have invested so much time and energy and money in in building their own business. And the I think the two things they don’t do enough of is nerding out on the tech side. And that’s what you do very, very well, because you’ve just given an example of how to get 1% of your revenue back. And I gave the example of what that can do to the overall value of their business. Yeah. So you know, nerding out on the tech side, The Smartest Amazon Seller podcast, folks, please, please do it. We talk about it, a lot of things in detail here. But we cover broader things, and get experts in like Scott to focus in on them in detail. But go to his podcast. And listen, I watched one of his one of your YouTube videos that talked about him. Again, we could go off on a tangent here, but talked about the brands and how to get your brand showing up in a wider space all across the Amazon page. And on mobile, I can’t even tell you what it is. But it was it was so impressive. And you visually showed what the search looked like and how that particular brand showed up all across the entire page, and took up two or three times the space on mobile than other brands, which was really, really impressive. And as you said on that video, it was like which one would you click on? It’s the bigger, more impressive one. It’s got some great video in it as well. You even talked about the tool that you shot the video with which took you about four minutes just by dropping images in and dropping some content and can’t remember what the name of it was. Do you remember I’m going to call you out on this. Do you remember the name of the tool?

Scott Needham 28:07

Well, let’s see a loom. That’s what I used to record. It was something else All right.

Joe Valley 28:14

That’s a good reason for people to go to the YouTube channel. And his YouTube channel The Smartest Amazon Seller podcast as well. What’s the name of the YouTube channel?

Scott Needham 28:24

I just Smartest Amazon Seller.

Joe Valley 28:26

Great. Great. All right folks up definitely go and listen to it. He’s got expertise. He’s 300 million in transactions really heavy on the tech side. It’s an area where so many of us need to get better Quiet Light Brokerage included. Can’t can’t say you need to get better without telling the truth, which is we need to get better as well. Scott, I appreciate your time. Thank you so much for sharing your expertise. Appreciate it.

Scott Needham 28:49

Hey, thank you for having me.

Outro 28:52

Today’s podcast was produced by Rise25 and the Quiet Light content team. If you have a suggestion for a future podcast subject or guest Email us at [email protected] Be sure to follow us on YouTube, Facebook, LinkedIn, Twitter and Instagram and subscribe to the show wherever you get your podcasts. Thanks for listening. We’ll see you next week.

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