This is How I Run a Million $$$ e-Commerce Business Passively and Grow 50% YOY

I traveled to China, Japan and then Europe from April to Jun. Despite not working on the business at all for 3 months, our e-Commerce grew 56% yoy!!! I'm going to share how I operate my business passively.

I think there are 5 key pieces about #eCommerce. If you are solid at all 5, you got a golden goose keep delivering golden eggs. But, you don't really have to work on all five of them. There are tasks just better outsourced to someone else.

1. Product Development

This is where you get to connect with your customers, understand their pain point and design a solution to solve their issues.

How I do it: In my opinion, this is the most important part of the business. This is often how American sellers can stay ahead of the game and really getting an competitive edge again oversea sellers. I spend a lot of time getting a good product idea, even trying to patent it when I can, and I get rid of a lot of competitors if they dare to compete.

2. Marketing

For a lot of Amazon sellers, this is just putting together a good listing 5 five bullet points and 9 pictures. But for others, this may also include going on Lives, posting on social media like Ins/Tiktok, and creating a brand story etc.

How I do It:

I primarily sell on Amazon and Shopify. I use a Chinese company for photos with professional east European models. They are professional, but crazily affordable. We are talking about $30-50/set of photos for one product. Then I have my amazing Filipino virtual employees to do the creatives for me. Everything needs my approval before publishing online. In the end, no one knows my customer base or needs better than I do.

I don't do a lot of social media, but I think it is important. This is also how American sellers can compete and win big time. I network with a lot of 8-9 digits Chinese Amazon sellers. Most of them don't speak English, let alone knowing how to communicate their brand value to their customers. They are often amazed how American sellers can sell such cheap stuff for such high prices. They cannot create that brand value easily. So do it if you can.

3. Sourcing & Supply Chain Management

This is where you find factories to make your product idea into reality. Also, you need to ensure you always have the highest quality and best pricing, AND most importantly, never run out of stock.

How I Do it:

Even though I speak fluent Chinese, I don't even try to do this myself. Honestly, no American sellers would be able to compete the Chinese sellers. My business partner in China does it for me. Because he is local, he often gets price 10-20% lower than I could do.

Whenever I bring my super country boy American looking white husband with me to visit factories, the quote I get usually is 20% higher if I negotiate by myself, and pretend I'm a domestic wholesaler. When we do take on clients to help them source from China, my amazing partner can cut down the cost by like 30-50%. I trust him working for me on these.

At the same time, I hire one local Chinese employee, to do factory visits, PO tracking etc. these operational tasks for me. She is the one making sure all my orders can be delivered on time and I will never run out of stock.

4. Ad Operations

This is the whole PPC and ads stuff. You need to pay to get traffic, and hopefully this will also bring your organic traffic to boost sales.

How I do it:

I have a strategy. I thought I was doing it pretty well, at least on Amazon, considering we have about 10% ACOS for our products, our ad spend is very very low compare to other sellers in our category (Our Amazon Ads manager keeps telling us that).

But, when I was in China, I actually spent money and took an in-person ONLY Amazon PPC class for advanced sellers. 3 days and 3 nights, only Amazon PPC. Their strategies opened my eyes. For example in order to launch one product, they will create 5-6 accounts with 2-3 brand names. With each account, they will try a different PPC strategy, usually it's like 10+ campaigns. So in order to launch just one product, they will create hundreds of campaigns. Imagine that workload. They do this because when they launch, they want to launch multiple products under same category, and are trying to occupy the whole category.

After about half day into my 3 days class, I stopped trying to understand the class. Instead, I spent my time networking with others and also recruited the girl sitting next to me away from her company.

She manages a $5M Amazon account for her boss, base + commission together, making about ￥500K RMB a year (which is super super high salary tbh), but that's equivalent of $70K USD/year, for making $5M for her boss!

I don't compete with Chinese sellers's PPC operations. So I hired her away :)

As far as PPC/Ads for Shopify, I use a 3rd party company in the US to run them. We are starting on this soon.

5. Fulfilment

This is the receiving, picking, shipping, packing and also return handling. Honestly, in my opinion, the worst part of e-Commerce. A lot of small businesses spend a lot of time handling this by themselves. If the margin allows, they may go to a 3PL. When the business goes bigger and able to afford a full time employee, they may consider renting their whole warehouse and hire a staff.

How I do it:

This is the part I defer to my 3PL partner. Also, because I'm a real estate investor and developer. It is very hard for me to pay rent to anyone at this point. So I purchase the building my 3PL partner is currently in. They occupy 50% of the space, I rent out the other half, but saving myself one small unit. When I have a shipment coming in, my partner will send workers to work on it. I pay them a service fee, but I don't pay them any storage fee. The rent from other tenants can cover the cost primarily.

I also help with other e-commerce business owners to get their own spaces. For example, I recently started to work for one e-Commerce business who is renting 20K sqft. I raised $2M fund, set up a syndication, acquire $4M debt from the bank, and build a 40K sqft warehouse. 90% of the downpayment is coming from the investors, not the business.

The business will occupy 50% and pay the mortgage, which is basically the same amount they would have paid in rent.

Then I rent out the other 50% to generate rental income. The e-Commerce business can get some rental income, so are the investors. When we exit the investors, the business owns the building with me, without any investors. This will be good passive generational income.

So, how do you manage your e-Commerce business? Share your thoughts!