Developing Passive Income Through eCommerce

Will Basta is the Partner and Chief Business Officer at ACV (Accelerated eCommerce Ventures), an e-commerce growth agency driving innovative solutions for its portfolio companies. As an entrepreneur and venture capitalist, he has more than 10 years of experience spearheading startups and driving growth in the digital space. Will also advocates for clean water initiatives and Pit Bull rescue programs.

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

• [1:17] How e-commerce entrepreneurship enables lifestyle freedoms and travel opportunities
• [5:34] Will Basta shares how he maintains a competitive edge in the e-commerce space
• [9:33] The importance of networking and partnerships in early entrepreneurship
• [12:49] Key takeaways from Will’s failed ventures
• [16:12] eCommerce’s global appeal and its potential for expansion
• [20:24] The investment range for partnering with e-commerce businesses
• [24:51] eCommerce profit margins and ROI
• [27:01] What accelerates e-commerce business growth and returns?

In this episode…

Some people stuck in the 9-5 grind want a “get-rich-quick” solution. While such shortcuts don’t exist without hard work, e-commerce provides opportunities to live life on your terms through its global reach. How can you leverage this growing space to begin developing passive income?

Seasoned e-commerce entrepreneur Will Basta can travel, live, and work in various countries at his leisure. He’s achieved this freedom by identifying and capitalizing on profitable opportunities in the digital market. Yet entrepreneurship in this space has its failures, so Will emphasizes evaluating these opportunities carefully and diversifying your risk across multiple markets. When you expand your product and market horizons, you can build an automated enterprise that gives you personal and professional freedoms.

In the latest episode of The Guts and Glory Show, Luis Scott welcomes Will Basta, the Partner and Chief Business Officer at ACV, who talks about building an e-commerce business for passive income. Will discusses the mindset shifts, investment strategies, and risk-reward balances for entrepreneurship in this space.

Resources mentioned in this episode: 

• Luis Scott: Website | LinkedIn
• 8 Figure Firm
• Will Basta: Website | LinkedIn 
• ACV: Website | Instagram | YouTube

Quotable Moments:

• “There’s always going to be consumers, and there’s always going to be new markets that have new access to new products.”
• “eCommerce is still in its infant stages; we’re so early on in terms of where it’s going.”
• “You have to understand that e-commerce will have a lot of ups and downs, just like any business.”
• “If you’re making money by putting money in, of course, you’re going to put more money in.”
• “It’s not about the single product; it’s about what markets can I go into outside of the US now?”

 Action Steps:

1. Start networking within entrepreneurial circles to build connections and gain insights: Networking with successful individuals can offer diverse perspectives and potential collaborations, essential for entrepreneurial growth.

2. Be patient and allow your e-commerce business time to mature: Organic growth takes time but is crucial for establishing a sustainable and reputable online presence.

3. Diversify your e-commerce platforms to global markets: Tapping into different international platforms can multiply revenue streams and reduce market-specific risks.

4. Scrutinize every business opportunity rigorously before committing: Precise evaluation of new ventures is necessary to avoid impulsivity and mitigate potential losses.

5. Reinvest profits strategically for accelerated business growth: Reinvesting earnings into quality product sourcing or market expansion can compound success more quickly.

Sponsor for this episode…

This episode is brought to you by 8 Figure Firm.

Founded by Luis Scott, 8 Figure Firm helps transform your law firm into a seven-figure or even eight-figure firm. 

After spending years searching for the ideal law firm consulting program, Luis started 8 Figure Firm to use his hands-on experience to help other law firms achieve exponential growth. 

Visit www.8figurefirm.com to receive a consultation call and start scaling your business today.

Episode Transcript

Intro 0:01

Get ready to be amazed. Get ready to be transformed. Get ready to believe it is possible you’re entering the growth zone on The Guts and Glory Show with your host, Luis Scott, Hey guys,

Luis Scott 0:22

Welcome to The Guts and Glory Show, a show dedicated to helping you learn just a little more so you can be bigger and better than you were before. Today, I’m excited to welcome an e-commerce phenom, nine figures in revenue being led through this entire organization. I’m excited to get into this because if you’re like me, you probably want to know, how can I develop passive income? How can I make money doing something other than my primary way of making money? So with that, welcome to the show. Will Basta awesome.

Will Basta 0:50

Luis, thanks for having me. I’m happy to be here

Luis Scott 0:52

Absolutely. So you’ve been traveling like crazy before the show, you were telling me about being in Spain for two months, and I know that that is or in Europe. Sorry, you may not have said Spain, but in Europe, and I know that that’s a dream of so many people, is to be able to have that type of freedom and flexibility. So tell me a little bit about what you do and how you’re able to have that sort of lifestyle. Yeah, absolutely,

Will Basta 1:17

you were right. I was in Spain as a base, but sort of hopped around a little bit from there. But, yeah, traveling has always sort of been in my blood regardless. But in terms of, I take a couple, you know, sets back in terms of where my career sort of started, I actually started in your regular nine to five fortune 500 company. I was working at Health Tech for about four years. On the side, I always got involved, or had a, I should say, sort of, there was a bug that I had that was liking the fast paced type of environment. So I left there, and I went into the startup environment. And the startup environment has a lot of different parallels to being an entrepreneur. You get to work with the entrepreneur as the founder, a lot of the times, whether it’s the CEO, etc, you know, stuff’s coming out of left field all the time. It’s fast paced. Things were always changing. I did that for a while, and while I was actually working for multiple different startups who were doing innovative things in tech, I was getting involved sort of early on in e-commerce, around 2014 is when I first opened up an Amazon business. It’s crazy. That was 10 years ago. At this point, didn’t have the most successful product, but I got to get involved in it on the early side. And when you do it yourself, and you don’t have people to help you with it directly, it’s a lot of it’s a lot of time, and it’s a lot of learning, right? And that’s a lot of money lost and a lot of different things. But to me, it was an educational point, right? Got to learn the logistics front, you know, developing products, research, all that kind of stuff. We fast forward a few years from there, had a few different successful ventures in e-commerce. And my business partner and I essentially came together around 2019 where we noticed that there was a couple organizations out there that are essentially providing e-commerce services for people who have zero experience and just want to tap into the market. Obviously, it’s, it’s been a huge boom over the last 10 years. There’s been a lot of, you know, VC firms that have gotten involved in the private equity bad taste in their mouths. You know, some have good experiences. Some have bad. Obviously, it’s very, very it’s in its empathy stages, still, I would say. But during that period of time, we were noticing that that was a great model, right? But what we also noticed is that it wasn’t effectively executed by the companies that were doing it, and so that’s sort of where the light bulb turned on. We said, Hey, we can do this better. We can come into this. We can bring our experience in, and we can actually start an organization of our own. But, you know, build out, focus on true infrastructure and build out the company in a way where it actually turns e-commerce into a sustainable asset that people can be confident in when they’re partnering with someone. And if we cut you know now here we are. We’re four and a half years in. We’ve built over 1000 different e-commerce assets for clients, primarily in the US, but now we’re in the UK market, Canadian market. We’ve just opened an office in the UAE. So Dubai, that’s a mess of the emerging Amazon market. And essentially what we do clients come to us, and they can have all different backgrounds. Essentially, they’re financially comfortable, and they’re looking to diversify. And they come to us as a partner in this space, and they pay a startup fee, and we take 99% of the operation away from them. We start, launch, scale and operate an entire e-commerce business for them on multiple different platforms, growing it into something that potentially is an exit value down the line, but at the end of the days, is producing cash flow month over month, and we do it in sort of a profit sharing model. And that’s that’s essentially the heart of what the business model is that we do for clients. There’s a lot of different layers of that. Layers than that. But,

Luis Scott 4:44

yeah, yeah, you know, you know, one of the things that happens is that when you don’t know the business, you don’t know the industry, you become very fearful of kind of, yeah, you know, dipping your toes into something. Several years ago, I had somebody contact me about starting up an e-commerce Store. And it was, it was kind of like what you said, that it was unknown. There were companies out there who were not doing it the right way, or who were not getting the right results, and so I was kind of like, very timid. I never did it. I should have done it and just lost some money, like you said, you know, in the beginning, you always got to lose money. But what is it that you’re doing different that is giving you kind of that edge that’s that’s allowing you to be more successful. You know, you’re talking about opening up 1000 of these stores. What has given you the edge in this space that maybe some of those other other companies didn’t have?

Will Basta 5:34

Yeah, I mean, if we look at where we are now, there’s a lot of different factors that play into it. Initially, it was really having, I would say you have to have, obviously, manpower and a team, but it’s really, it initially came down to us being built, actually, as a wholesale distributor for products, and a logistics company, and then an e-commerce management firm. There’s sort of three major pillars of it combined into one. And so if you’re coming in alone, obviously you have to trust a third party supplier. You have to do this, this and this, potentially hire, find a warehouse facility, all of that. We sort of combine it all into one strong powerhouse initially. Now where we’re at is, you know, we’ve got 10 years of data in e-commerce. We’ve tried and tested so many different types of a software’s ways to run facility and warehouses models on these platforms, understanding what platforms to actually sell on, when and where. So it’s a lot of testing that we’ve gone through, a lot of experience that we’ve had that’s really where it brings us today. And now we have strategic partnerships. I mean, we’re a corporate partner of TikTok shop. You know, we’ve been able to test different markets. We obviously, at this point, have a lot of connections when it comes down to manufacturing products, reselling products, and getting connected into true seller or true I should say, distributors and for brands and manufacturers that don’t just open their doors to everyone. And so that’s something that obviously we’re fast tracking clients into that as if they’ve been doing this for the last 10 years, but they haven’t. And so it’s really a mix of all of that. But at the end of the day, the way the company is ran is that it’s in a manner where we keep a lot of the traditional aspects that I’ve always worked with in e-commerce, but make sure we’re also innovating at the same time, keeping a balanced approach with that. Because one way or the other, you keep it too traditional, and you’re not changing with how fast paced industry is, you’re going to fall behind and you’re going to flat line in your margins. And if you, if you obviously innovate too fast, you can be ahead of these things, and you can miss out on and and cause a lot of different you know, when we’re when we’re starting this, we’re using, we’re leveraging our it’s our clients business, right? And so we’re not here to go test anything with our clients money. We run our own stores too, behind the scenes, and we innovate on those with r, d and all this kind of stuff. And once we prove out models, and then we implement those with our clients. And so it’s having a good balance, striking a strong balance between those two, and then everything else I just sort of mentioned, with the years of experience each year that we get deeper into this, we become more experienced, we have stronger connections. And, you know, we obviously leverage everything we’ve done and and that has a trickle down effect to the outcome that the clients and partners have that work with

Luis Scott 8:19

Yeah, I agree. I think that there’s no substitute for experience in the marketplace. And I think people, they undervalue how important that is, because everybody wants to get, like, rich quick. Like, it’s like, you gotta make that money right now. And, yeah, that happens every once in a while, but the the reality is that, like, wine, right? It gets it gets better with age. And I think your company and your knowledge of an industry also gets better with time, the more time you’re in a marketplace. And so I think that that’s that is an edge, you know, having more time in the marketplace. Now you’ve talked about being an entrepreneur, and, you know, you went from nine to five, and I think this is really awesome to hear, because there’s a lot of people in the nine to five who are scared to step out. They’re scared to take that leap. They’re scared to invest money and lose it. You know, recently, I was talking to a friend, and we were talking about entrepreneurship, and he’s not an entrepreneur, and he was saying that, you know, I want to do something that is like a sure bet. And I said, there’s no sure bet. Like, if you want to be an entrepreneur, like, there’s no sure bet. But how did you switch that mindset from like, I have a nine to five, but I know if I want to live in Spain for two months, I need to do something different. What was the thing that got you over the hump? Was there, like, a book? Was there something you listened to? Was there a mentor? Like, how did you make that transition?

Will Basta 9:33

Yeah, you know, it’s, it’s, it’s tough, but it’s a very, very good, very good thing you bring up here, because, you know, that fear is something that will always sort of be there. I still, to this day, when I go into side ventures and different things, you always have that kind of thought process like, uh, but that is just part of what it is, right? And you get thicker and thicker and thicker skin as you get involved and as you have your losses, right? You have your success, and it becomes sort of addicting. Yeah, but that being said to go to your actual question, you know, I’d say there was, there’s a lot of things that are a culmination of it, I will say, you know, a big part of, at least for the origination of this organization, it was really nice to go into it with a partner, right? And so, like, there were times before where I’ve tried to start businesses, there’s not saying that that was the first time ever, you ever, but a venture like this, I was fortunate to be able to meet someone who was at the same stage right, and we connected sort of like yin and yang when it comes down to what, how he approaches business and how I approach business, and our mindsets, which were very, very different, but also very like in a lot of different ways, and it just worked so well. And going into it with someone was not everyone’s gonna have an opportunity. So it’s hard for me to give you that answer. I feel fortunate that I was able to meet my business partner, Jeremy, and do it at the same time. But I think what that leads into is if there’s gonna be a way for someone to overcome this kind of fear, this network, meet people, be out around other entrepreneurs, people that have gone through it, right? That can help you know that confidence can help compound when you hear other stories of success and failure, and you never know who you’re going to meet. And if you meet that one person, then five years down the line, you never know what that’s going to turn into, right? So I’m a really big believer in just, obviously, it’s difficult to say networking, but just people, people, people, right? Everything is difficult to go on alone. You might have to do something alone, obviously, when it comes down to being an entrepreneur, but it’s different when you know you’ve heard stories, and you know you’re constantly out there networking, and you sort of see what’s going on in the environment of an entrepreneur. And I think that is super, super exciting and helps give you a little bit of an edge to actually take that

Luis Scott 11:44

leap. Yeah. I mean, I think that we can’t underestimate the power of your network. And I know this is so cliche to say, but like, your network is really your net worth, like, that’s that’s really what it’s all about. And when I think about, like, my success, and I’ve started several businesses, and as an entrepreneur, it feels like people were always involved in me getting to the next level. It was very rare, even if it wasn’t a partnership, because you mentioned you may not be, as you know, lucky to find a good partner, but even when it wasn’t a partnership, it was like the right vendor or the right decision, because someone said something to me that, you know, that I took to heart, and so forth, and so I think, totally, really powerful. Now it’s so easy to be on this side of success, and people go, Well, yeah, you can say that because you’re successful, or you’ve already achieved, etc. And I like to tell people it’s not always like that. So I’m curious to hear a story of something you tried, that failed, and then what was the lesson that you learned from that failure? Like, what happened? What did you take away from it?

Will Basta 12:49

I mean, there, there’s been a lot of a lot of different failures, you know, when it comes down, and that’s just the nature of what it is, right? And I the first couple things that come to mind, I’m going to speak to the one that I think is after I actually made it in terms of financial success, with having a successful business. Because once you become successful, obviously you’re around more high net worth people. You’re networking at a different level, right? You are just doing things that you just previously didn’t right, and you get a lot of offers thrown your direction, right? Because you are a business owner, because you’ve had success, because you have a higher net worth, and all of that, right? And, and this sort of is a mix of all of it, but I mean, still to this day, you get investment offers and all of that. And I used to be Mr. Yes man, I’m literally almost everything, right? And I think this is a lesson that a lesson that a lot of people learn. Most everyone learns it right. If they don’t come from initial money, and they start to have it and they want to be involved in everything, right? And, you know, I’ve I put my money, substantial amount of money, in a few different investments, and I’m not going to label specific ones. I’m going to keep that sort of under wraps, but ones where I honestly like was at that point where I was just saying yes, because everything looked like the right opportunity. And what I learned from that is, these days it is very, very different for me, right? And I have more money than I had last time, but I am way more strict when it comes down to the level of how I look into something, and even if I’m going to give it a time of day, it’s a lesson learned when it comes down to, it’s not always a yes with all these things, you really need to understand, you know, allocating your money to different things, and when you start getting more and more success, there’s going to be more stuff thrown at you. And you need to learn to to to honestly, really evaluate things a lot more stricter, and, and, yeah. I mean, I can go on on that topic for a long time. It’s hard to not get specifics of it. But I think learning from it is you can’t always be a yes person. Once you start to be successful, you’re going to get a lot of these kind of propositions and and things thrown in your direction. And it’s important to understand what your time is and where you need to allocate it properly, and also how you need to assess certain opportunities and really step outside of the box.

Luis Scott 15:10

Yeah, I think, I think scrutinize the opportunity is what you’re getting to because the thing is that every opportunity can’t be the can’t miss opportunity. And I used to hear that from other business owners, like, this is a can’t miss. I have to do this. I have to do this. And I’m like, Dude, there’s going to be so many can’t miss opportunities coming your way. Just like, relax. Fruit is the opportunity. Make sure you’ve, like, really vetted it. Because when I look back at my mistakes in business, every single failure that I’ve had was over always because I had, like, an an over optimistic outlook for the for the outcome. And I, and I spent very little time scrutinizing the opportunity. Yeah, every time you end up losing money doing that. And so I think scrutinizing the opportunity is so so clear. What is it that? What is it that really attracts you to e-commerce? I mean, we talked about the flexibility, but what are some key things that e-commerce can do for people who don’t know anything about it, somebody like me, I’m a lawyer. What it like? What is it that? What does that e-commerce to do for us?

Will Basta 16:12

It’s I love the global aspect of it, because it’s not location dependent. And internet penetration around the world is becoming more and more common, right? Where people have access to internet, access to shopping, and, you know, platforms like Amazon are going into different markets all the time. And to me, it’s great that you could be located literally anywhere the US or anywhere. And this is depends. It sort of leads into something else I’ll talk about in a second. But essentially, you can sell to someone completely across the world, right? And you can monetize stuff like that. I mean, it’s part of the whole digital age in general, but to me, it’s super exciting, because there’s always going to be consumers, right? And there’s always going to be new markets that have new access to new products and new things that are getting developed, and you’re really facilitating that. And you can monetize things pretty much like globally, right? And it’s not location dependent when it comes down to capitalization, that I think is really awesome. A lot of things aren’t. But e-commerce in general, if we just look at where it’s going and how it’s it’s just, you know, obviously the US build consumerism, right? We are, are huge. You know, when it comes down to Amazon and all this, we’re buying, buying and buying, and people start to forget about, okay, well, you’re making money. And I was on, I was speaking to someone on a podcast last week about this. It’s like, you have successful sellers in the US, right, where it’s their side thing. You could be a lawyer, it could be whatever, and you have a successful Amazon business. But it becomes, becomes the plot, it becomes plateauing, where it’s like, okay, well, what am I going to do next year? Because I’d like to take this to the next level. And historically, people are always thinking of, how do I expand my product? I’ll just give a new product line. I’ll do this, etc. These days, at least, how we look at things in our organization is that, but also, what markets can I go into outside of the US now? Because Amazon Dubai, for example, started around 2000 18,019, it’s like Amazon in the US, around 2015 right? There are these markets of which you have stability, because you know the platform, and they’re growing at a rate that is so substantial. But you have the benefit of the fact that you’ve seen it up in in another market, like the US. And to me, that’s super, super exciting, um, to be able to always see that there’s we’re not even we are in the infant stages of e-commerce. Like people don’t think that Well, we are so early on right now in terms of where it’s going and and honestly, what markets it’s going to go into, what platforms are still to, still to come up into place because, you know, there’s everyone thinks Amazon, but you’ve got your, you know, your Chinese platforms. There’s a bunch of them, not gonna name all of them. You have Mercado Libre in Latin America, which is essentially the Amazon of South America, which is huge, right? You have TikTok shop, social commerce. I mean, I can go on forever. I’ll stop there, but I think you get the gist of where I’m going with it. It’s big on the global front. To me, it’s super exciting.

Luis Scott 19:02

Yeah, I think globalization is really interesting. Because in traditional businesses where you’re you have, you know, brick and mortar, or maybe you have a regional type of business, you don’t have access to a global market. And I think e-commerce does provide that. And I love what you said is you used to have to expand the product to reach more people. You had to go from one product to two products to actually grow your business, and now you can just go into another market. And I think that that’s that is very exciting, but to think that it’s in its infancy, that’s crazy, like to me, like, what else could, what else could Amazon do? I mean, like, you could buy stuff everywhere. I mean, the other day, I bought these little headphones from TikTok shop, and they were, like, a $19 and they’re better. I’m not going to say they’re better, but they’re just as. They feel just as good as, like, the $300 ones that I that I bought. So it’s, it’s, it’s amazing. You know, what you can do out on the market. Talk to me about the investor. Investment. Now you had, you had said that there’s an investment to work with your company, but let’s because I don’t, I don’t want you to be, you know, put on the spot, and have to tell us what it costs to work with you. But what does it cost? Give me a range of what it would cost. Your average person who wants to get into this space maybe wants to work with a company like you, or wants to do it on their own. What are we looking at? Are we talking about $10,000 are we talking $100,000 yeah, it’s

Will Basta 20:24

gonna vary. So if our clients are generally professional business professionals, entrepreneurs that don’t really have time, they have money and they wanna diversify in. And then someone does have time and they are gonna do it themselves. It’s still gonna cost money. I mean, you can go to some platforms, you know, for as little as $30 and open it up and do all your research and spend a bunch of time and then spend a bunch of money on ads, etc. But for looking at partnering with, you know, a firm that can do it on behalf of you, where you own the the asset, and they’re operationally handling it for you. We start around 25,000 at our lowest tier, and we go upwards of over six figures. It depends on how diverse you want the asset to be, multiple different platforms, multi channel, multi country, all of that. A lot of different factors that play into it. And so there’s a startup capital for that, and then there’s a few different models that can be run underneath it. Essentially, there’s obviously your traditional where you’re buying purchase, purchasing products up front, and that might be two to 5k of inventory in the beginning. Or there’s some models where we essentially that we run, where we do a hybrid base. We’ve got facilities throughout Florida and the US, and we essentially have product on hand where clients actually will bill the clients once it’s sold, just to get a store moving. So you could call it drop shipping, but it’s we call it fulfillment on demand, and it’s actually from our facilities, and so it helps get traction on the business. But to truly scale a business, you want to have working capital to buy product upfront, because you’re going to get better margins, right? The ad piece is, is something that varies based on a lot of different factors. If you’re doing TikTok, like TikTok shop, for example, you said you just bought a product off that. I bet you that you probably saw someone using them on TikTok, and then that intrigued you to click further and then go to the shop. That is, you know, user generated type of micro influencer or affiliate type marketing, which is different than your traditional obviously, where it’s pay for ads. Specifically, what’s great about the TikTok algorithm is you can actually partner with people like that, and honestly have, depending on the actual collaboration, only pay when sales actually are happening. And you can also leverage the algorithm the way, we’re not spending a lot of marketing, but generally, historically, on Amazon stuff we’re running off the foot traffic that’s already there. So some huge marketing budget isn’t generally necessary. If you’re looking at, I would say, somewhere between 25 and $100,000 to get started, and then leveraging, you know, a working capital line, like, I don’t pay for my flights anymore because I run my e-commerce businesses on a business credit card. And obviously you have the points and all of that aspect. And the one last thing I want to touch on, which goes back to the initial thing you mentioned. I don’t have the exact data on this because the last time I looked, was around 18% but in terms of all retail transactions, e-commerce is only about 20, let’s say 25% of all of those. And NASDAQ predicts it’s going to be around 90% by 2040 so that gives you something to look at. Engage of the infancy stages that I was messaging about. There’s a lot of market to be capitalized on still, but that’s genuine. It’s people pay more money to this is a partnership that we look for a long term with our clients. Could have one business, you could have 10 with us, but obviously it’s not cheap to get started with us. But if you compare it to something like real estate, getting returns earlier and you’re getting margins that are probably 2x that, if not maybe 3x in terms of your regular, regular percentage. So yeah,

Luis Scott 23:47

when you think about that, in the next 16 years, it’s going to go to 90% is and it’s going to be 90% of a much bigger population size. So you know, you know, the upside from a revenue perspective, is totally now, I will tell you the 25,000 as a startup, for any business is really not that much, right, like but, and so it’s not, it’s not chump change, but it’s not so cost prohibitive that people can’t exactly get in. And so working with with a company like yours, you put in the money, and then you buy some product up front, and you market it, and then you guys run the operations on the back end and do a profit share split on the after things are sold. And what could, what does an e-commerce business like expend in terms of profit margin? Because I know that some, like restaurants are like, they’re like, 7% and then, you know, legal, you may be able to get like an attorney. A small law firm may be able to turn a 35 40% profit margin, but that’s with them working as a lawyer. So what does e-commerce do? Like, what would be, yeah, it would be great if I was into

Will Basta 24:51

there is, I mean, if you look at traditional wholesale, which we don’t necessarily run, we operate that if someone has a lot of Cal. Bottle. Because obviously, the more you spend, the more volume discounts you’re getting on sourcing product. You know, for example, we’ve got a product that we sell out of Florida where we buy massive pallets of it at $300,000 at a time. So only some clients who can afford that are getting that, and they’re getting 30% margins on that. But if you’re doing traditional wholesale, which a lot of some other companies just offer and you just have your basic 30, 40,000 I mean, your margins are gonna be lower, like eight to 10% we are seven to 10% even lower. That’s on the high side. What we run is privately that’s on Amazon. What we run is private label, which is a branded version of essentially free purchasing product and getting it manufactured. And that runs between 25 and 40% in terms of margins. But if we will look at it overall, you’re looking for e-commerce, if it’s executed right, depending on the platform that you’re on. Because my question has a lot of different answers to it. Because we run five different platforms in multiple different markets, we shoot for essentially over 20% on almost everything. And that is the average of, obviously, that’s the aggregate of all you might have some products that are doing 5% that’s a lot of volume of units. And the next one has a 70% margin. But our goal is, is we’re taking only a piece of the profit margin, and so we want you to be above 20% and that’s conservative for us to actually make, you know, a decent percentage of what that is, which is, obviously it’s not more than half, it’s only 30% and that essentially is for you as a client to sit back and have it completely operated for you. So it’s a 99% operational business. You’re just the financial driver of it.

Luis Scott 26:35

Yeah. I mean, I think in 20% if you think about investing 100,000 and you make 20% and then you reuse that 100 and make another 20% and you reuse, I mean, the sky’s the limit when you think about reinvesting the profits. Yeah, exactly. The money churn rate is really powerful. So what else do I need to know if I’m going to get into e-commerce? What would be the three things that you’ve learned that I should know upfront? Like, what are the three things?

Will Basta 27:01

Yeah, that’s a great that’s a great thing to bring up, obviously, because it’s always even just bringing on clients. But just in general, you know, it’s good to set the right expectations. There is, you know, we get requests for financial models all the time of what exactly can I expect and all of this, and we try to give as much of a blueprint as possible in terms of what we see historically, what we’re going to be doing, and what we can expect, to some extent, without saying you’re going to make this this and this, because e-commerce in general, there are consumer trends that change. There are platform updates that happen. There are a lot of things that happen. And so John Doe and Jane Doe started the same day, and John might have an explosive month starting month four, Jane might be month seven. So every trajectory is going to be different. People always ask us, Hey, why don’t you just do it all yourself, get a loan from the bank and build 1000 stores yourself, or something? That question has been asked historically all the time, and there’s a lot of different reasons why, but essentially, each store is its own asset, like real estate, will appreciate at a different rate and will actually have a different trajectory in terms of its starting. So to really know is and to understand is that you’re going to have a lot of ups and downs, and there’s not an exact time for when you’re a you’re going to get your first sale, which people know that, but it’s good to reinforce that when you’re going to have your first $10,000 a month and all of this, our big goal is to make people their money back as soon as possible for them that can get all profit. And historically, we do that within 12 months, roughly. And so being patient in the beginning and understand that there is a maturity timeframe, just like any kind of investment that’s huge also that you know, and how we also do that to make it sustainable is make sure we sell on multiple platforms, like your TikTok, like your Amazon, because they have different consumers, there’s different products that do well also, it’s a fast moving environment, and things change. And so just like anything, you come on with a business model, and we’re running it a certain way, we know that it’s it’s doing well here, but there’s always going to be opportunities to make a shift. If we know you’re going to make more money doing that, because, in turn, we make more money. And so expect change in e-commerce, right? This is something that always is going to evolve, right? I

Luis Scott 29:14

think, I think thanks for laying out that. It’s like a 12 month thing, because I have a follow up question to that point, and is there a way to accelerate that 12 months? Like, is more ads, more money into the investment? Like, or is this 12 month thing, regardless of what level you come in at, I’ve

Will Basta 29:31

seen people break even as early as nine months, there is a way to accelerate it. We can, on the Amazon front, we can actually purchase a pre opened asset, so a store that was opened a minimum, a calendar year earlier, so it doesn’t it passes sort of the maturity algorithm, kind of process that happens in the first six months. And so, as opposed to six months in, or four months in, maybe two months in, we can deploy more capital, but ultimately into product. Ultimately, what’s going to add? After your first six months, historically, the more money you’re putting in a product at that point. Obviously, if you’re making a 20% margin, you buy 100k a product is more than you spend $10,000 you’re going to make more money. I’m not saying you put a million dollars in your we can sell through that in a month. But within reason, if you have more money to deploy, be prepared to have the right working capital, because when, when I see stores hit a point where it’s hitting a ceiling and it’s a client, it’s generally because they didn’t prepare enough for that kind of success, and we had to stop buying products when we could have taken it to the moon. And so if you have the right resources behind you, prepare for that. And we actually know, based on the client, we do sort of a profile where we sit down with them during onboarding. You know, realistically, in this case scenario, what are you able to potentially deploy if you’re comfortable doing it right and knowing that we can fast track things depending on, like I mentioned before, certain products that we know there’s a high MOQ minimum quantity of something that you can’t get your hands on. If you spend 50k but if you spend 100 we can source a few. It’s going to sell fast. Those things. We bucket certain clients in based on what they can do in terms of the financial deployment in the products. And so I say 12 months, because that’s historically. And we like to under promise and over deliver, but deliver, but deliver. But we have clients that come in that have deeper pockets and are ready to deploy more. Those clients break even much earlier, and we know sort of how to approach it, because we know we can go down this route, and if we hit a point where they are doing really well, we’re not going to get hit with a roadblock from not having the right working capital, which in turn, can affect your store’s trajectory for months after that, because Amazon and these platforms don’t like it when you run out of inventory, or you just stop selling something, or whatever it may be, there’s a lot of factors that play into the algorithm that is always the most important part, or one of the most important parts, of being successful in these platforms. And so we want to keep the store healthy products in place, and obviously, as success happens, making sure you can compound on that. And you need money to do so

Luis Scott 32:08

if you’re spending $100,000 in inventory, essentially, the goal would be to sell that inventory in that month and then reuse that same money to sell, to buy and sell again, correct? Like, you don’t need a million dollars to buy a million dollars of inventory in this system.

Will Basta 32:25

Yeah. And it’s, you know, there’s gonna again, it’s, it’s some of these questions it’s hard to answer, because some platforms are just gonna be a little bit different, but in terms of, like, sell through rates and certain products and all of that, but you get paid out bi weekly by most of these platforms, unless you’re doing like Shopify, right? So every two weeks, and there is a lead time sometimes with products, obviously you spend 100 grand, it might not come all at once. And so if you’re doing large purchases like that, you need to have a cushion, and you need to understand that in the beginning it might take six weeks or seven weeks, and it might come in batches, right? And so those are really more for clients that are more qualified and aren’t going to lose their mind if it doesn’t sell through within three weeks, right? But you can gradually get to that point. We built confidence with clients too. We’ve had a client came in, they said they only had 5k for inventory. And, you know, a month later, I don’t know where they’re like, I got 200k i want to buy all these toys. Like, okay, we didn’t know that. You should have told us earlier that you were that kind of, that kind of client, right? But he just wanted to see it work, right? And so we are flexible when it comes down to, you can get more bullish as you see consistency, right? That’s like, with anything you want to put more if you’re making money by putting money in, of course you’re going to put more money in, right? And we’re not asking people to spend 100 grand up front. It could take three months. It could take six months, and so, but there is that kind of period, and you need to understand too. And we can go into a question you might even ask, like, what are the biggest risks? Right of this? The biggest risk is that you’re on a third party platform. We don’t own the platform, right? It’s not like Amazon is going to go steal all your money, but sometimes they might hold a small reserve, right? If you get a lot, we avoid this by selling products that don’t have high return rates, like electronics. But if you get a lot of returns, they might hold a reserve of what they’re supposed to pay you out and not pay you out biweekly on all of it. They might be holding 10% or something like that. And these kind of things obviously can affect cash flow, right? And so there’s those kind of things. But working with us, we do an inventory guarantee. So if anyone buys inventory with us in that manner, in bulk, we actually have a 90 day or we’ll find you the difference if it doesn’t sell through fully. And then we also do a buy back on the upfront. So if you spend 50k with the contract term, if you don’t make that back at net, at minimum, we pay the difference. We try to mitigate as much risk as possible, because it’s an alternative opportunity. But what we can’t control is Amazon and TikTok and all these platforms, because they’re constantly shifting. But that’s why you pay us. So we can say, ahead of the curve. Of know what policies are there changing? Know exactly how to approach the system and the platform as it evolves.

Luis Scott 35:06

And you obviously have a vested interest in the success, because the business model requires the person

Will Basta 35:12

runs off what we make for you guys. Yeah, exactly. So

Luis Scott 35:15

well, this is awesome stuff, man. I learned a lot today, and I appreciate you being on if somebody want to get in touch with you and learn more about working with your company, how would they reach out to you?

Will Basta 35:25

Totally we got our website. It’s www.ecomwithacvio, and it’s ecomwithacv.io, and then @ecomwithACV is our Instagram as well as our YouTube. We’re all over that, a lot of education stuff, interesting stuff that’s happening in the industry, etc. Our calls are very consultative. We’re not going to push any kind of crazy sales. So it’s more about learning about, essentially, what you’re looking to get into. And if anything, it’s educational on the industry. And then we take it from there,

Luis Scott 35:54

awesome, awesome. Well, we’ll put everything in the show notes and the link so that they can reach out to you. And this has been, it’s been good for me because I didn’t really know much about the insurance. I’ve learned a lot. So I appreciate you being on and I appreciate you guys for listening, because you’ve been listening to The Guts and Glory

Outro 36:13

Show, you’ve been listening to The Guts and Glory Show for more and to learn more about Luis, hit the website at LuisScottjr.com for consulting opportunities, hit 8figurefirm.com that’s the number 8figurefirm.com We hope you enjoyed the show. Make sure to like, rate and review, and we’ll see you next time on The Guts and Glory Show.