Dan Brownsher is the President, CEO and Co-Founder at Channel Key; a full service amazon account management and advertising agency.
He is a national thought leader in Amazon retail strategy and emerging e-commerce trends. He is a commentator on Amazon practices, policies, and technologies as well as a sought-after opinion source for media outlets across the country.
Dan has spoken on panels, at tradeshows, conferences and industry think tanks, advising everyone from multi-million-dollar corporations to fast-paced entrepreneurial start-ups on how to navigate the complex landscape of Amazon retail, and the broader world of e-commerce in general.
Dan, along with his two partners, is also co-founder of Trend Nation, a top 200 Global Amazon Seller, selling $1 Billion in revenue. He is a member of TAAN – the worldwide alliance of, and incubator for, independently owned marketing agencies as well as a member of Vistage, the global organization for entrepreneurship and executive coaching and YPO.
Dan tells clients the secret to helping everyone succeed with Amazon is real-world experience, learned and perfected the hard way. As he says: “I made the mistakes with Amazon, so you don’t have to.”
What you will learn
- How a bachelor party led to the inception of a multi-million dollar e-commerce empire
- The secrets behind Dan’s leap from selling spine implants to dominating the Amazon marketplace
- The wild west days of Amazon selling, where lack of advertising and FBAs created untapped opportunities for early entrants
- Hear about the strategic pivot from trading commodities on Amazon to establishing an exclusive distribution model with major brands
- The challenges and breakthroughs of building a business on the constantly shifting sands of online retail
- The moment Dan’s leadership team “fired” him, a pivotal turning point that underscores the value of delegation and building a strong team dynamic
- Gain insights into navigating the complexities of Amazon’s ecosystem
- Plus loads more!
Transcript
Jeff Bullas
00:00:04 – 00:00:18
Hi, everyone and welcome to the Jeff Bullas show today I have with me, Dan Brownsher. Oh Brownsher, sorry, we’ll start that again. How do I pronounce it?
Dan Brownsher
00:00:18 – 00:00:24
Brownsher. You had it, Brownsher just so you could spell it. You got it. Ok.
Jeff Bullas
00:00:24 – 00:01:01
Right. So I thought that name would actually be relatively easy to say, but it’s ok. Thanks Dan for being on the show. It’s an absolute pleasure and let me introduce a little bit about Dan. Dan is the present CEO and co-founder of Channel Key, which is based in Las Vegas, Nevada. Dan is a national thought leader in Amazon retail strategy and emerging e-commerce trends. He’s a commentator on Amazon practices, policies and technologies as well as a sought after opinion source of media quoted by Bloomberg, Forbes, msn.com, LA Times, Reuters and other key specialist trade and business media outlets across the country.
Jeff Bullas
00:01:02 – 00:01:54
Dan Brownsher has spoken on panels at trade shows, conferences and industry think tanks. At this moment in time, he’s actually cocooned in his home office to protect himself from catching diseases from trade show people. He advises everyone from multimillion dollar corporations, the fast paced entrepreneurial start ups on how to navigate the complex landscape of Amazon retail and the broader world of ecommerce in general. Dan along with his two partners is also co-founder of Trend Nation, a top 200 global Amazon selling, selling 1 billion in revenue. But he has now exited that business. He’s also a member of Tan, the Worldwide alliance of an incubator for independently owned marketing agencies as well as a member of vs the global organization for entrepreneurship and exempted coaching. Dan tells clients a secret to help everyone succeed with Amazon.
Jeff Bullas
00:01:55 – 00:02:28
He has experienced, learned and perfected the hard way. As he says, I made the mistakes with Amazon. So you don’t have to. Dan, welcome to the show. It’s an absolute blast to have you here, mate or as they say in the US. Welcome here, buddy. So we say mate in Australia. So I don’t know if you know much about Australia, but we the English sent the original Australians who were not the original, it was original before the original, but the uh we were sent as convicts.
Dan Brownsher
00:02:28 – 00:02:44
I didn’t know that Jeff, that’s good to know. I appreciate that nugget. I watch a lot of bluey uh with my kids and it’s a great Australian export right now, you know it is for us kids.
Jeff Bullas
00:02:44 – 00:02:49
Yeah, we’re teaching Hollywood. How to do animation now. Really? So, um, yeah,
Dan Brownsher
00:02:50 – 00:02:59
you guys have nailed it Convict, uh, you know, child cartoon, uh, you know, curators. It’s amazing.
Jeff Bullas
00:02:59 – 00:03:17
Yeah. Well, with two twin, six year olds, um, I’m sure that you’ve watched Bluey quite regularly. Sounds so good to know they’ve actually adopted a little bit of Australian. Uh, but, you know, the reality is that, you know, you started Trend Nation. Well, um, Australia’s known as the Crime Nation really? Um I’m
Dan Brownsher
00:03:17 – 00:03:21
joking, I didn’t know that either. This is, I’m learning a lot from you already. This is great.
Jeff Bullas
00:03:22 – 00:04:15
No, no, we’re not a crime nation. We’re actually very safe here. In fact, compared to America, I think we’re doing. OK. So, um be right, I digress and I don’t know where we, how we got there, but let’s go back to e-commerce. Um So Dan, um I, I got involved with e-commerce about, you know, working for an agency building, e-commerce stores a long time ago, actually back in 2000 and 9 to 2013. So I actually have some experience in e-commerce building stores, but you’ve taken it to a whole new level. So let me ask the question, what motivated you um to actually start an ecommerce business like you go to college. So, um was there an intrinsic? Was it over a beer? What happened?
Dan Brownsher
00:04:16 – 00:05:12
Yeah, that’s a good question. So, I, um let’s see, I went to Ohio State, the Ohio State university. Ok. It’s a big university here in the States, the Buckeyes. Um, and let’s see, always was involved in various things, activities, uh, businesses, money making streams, entrepreneurship, et cetera. So I graduated from university and immediately got a job, uh, working, um, in a space not at all related to ecommerce. I was, uh, I was selling spine implants to neuro and orthopedic surgeons and I spent years of my life, uh, and hours of my days standing in the operating room watching spine surgeries, uh neck surgery, spine surgery. So that was what I did. Um And so I never had a, a major interest in, in ecommerce or never thought to myself. Hey, I want to be in the Ecommerce business. But,
Dan Brownsher
00:05:13 – 00:06:02
um I was on uh a train uh in Munich, Germany in about 2007, 2008. And I was uh um at a buddy’s bachelor party uh in Europe. And we, at that moment in time was on a train and my, my friend at the time. Uh and uh really my um just an entrepreneurial, um I don’t know, inspiration. It is my partners name. His name is Brad. He had started a business with his then girlfriend who became his wife and they were sourcing jewelry on uh Alibaba and selling it on ebay. And so we were on this train and we were having a good time and I said, hey, why don’t we do the same type of business. But why don’t we source uh I don’t know, uh Cuff Ls or money clips?
Dan Brownsher
00:06:02 – 00:06:20
Ok. So we said, sure, let’s do that right. And it was a complete side hustle. And so we started doing that. Uh We were again, like the intent for me was it was a total side thing to learn how to sell stuff on the internet like that literally was it.
Jeff Bullas
00:06:20 – 00:06:27
Did you, did you go to vast research on the market size and competitors of cufflinks?
Dan Brownsher
00:06:27 – 00:07:13
No, zero research. Uh Jeff, we were on ebay. Uh What, what was cool though is we, we were on Alibaba, right? And like we were, we were talking to, I was talking to factory owners in China. I never even thought about, I’ve done this before and uh lo we started buying um products, you know, and I don’t know, there was minimal strategy other than what we thought is very subjective and perhaps some trademark infringement at the time and, you know, sourcing things we thought people might like um and started receiving these boxes of cuff links to my home and started selling these things on ebay. We spun up a bunch of micro websites and in my uh off time, I would be packaging up orders in my basement
Dan Brownsher
00:07:13 – 00:07:43
uh and dropping him off at the U SPS in Columbus, Ohio. And it was fun. It was interesting. It was again a side a side project. And so that was my first foray at the Ecommerce. Um and then my, my friend slash partner moved to Las Vegas and around 2009 ish um started taking uh a more active role in the business and saying, hey, there’s actually something here. Maybe this could be my full time job.
Dan Brownsher
00:07:43 – 00:08:31
Um started attending a bunch of trade shows in Las Vegas for categories, right? Could be the pet show or the magic was a big one for us, which is the fashion kind of soft leather good show and started going to these shows and talking to all these brands directly and said, you know what, uh why don’t I start trying to sell like this brand name merchandise on these platforms. And so we started on ebay, spun up a bunch of micro websites and started selling on Amazon and started selling other brand name merchandise. So, you know, Tommy Hilfiger as an example, Kenneth Cole, uh Betsy Johnson. So these brands that are sold in department stores that people know about. We started selling those on Amazon in like 2010. Um
Jeff Bullas
00:08:32 – 00:08:38
So the, so the question I have on that is do the brands have their own ecommerce stores at that stage or not?
Dan Brownsher
00:08:39 – 00:09:20
You know, this was like 2010. Uh It was like, it was like the wild wild west on Amazon. Ok. So there was no advertising, right? Their ad business today is tens of billions of dollars. No ads. Right. It was the early FB a days and nobody knew how to sell. Um, and nobody knew what they were doing. Brands certainly didn’t know what they were doing and we quite frankly didn’t know how prolific it was going to be. So, uh, at that time, a lot of what was happening was the brands did not have a store. Right. And, or if they did, they were selling their products to Amazon at wholesale and Amazon was their retailer, but it was really early.
Dan Brownsher
00:09:20 – 00:09:46
And I remember walking these trade shows and I didn’t officially rejoin the company until 2012, 2013, walking these trade shows talking to these brands and they didn’t have any idea what was happening on Amazon with regards to their products in a lot of cases. So the answer is no right. There was no products just ended up there. We were a reseller. Uh and a lot of cases, we would walk into these brands trade show booths and have an ipad
Dan Brownsher
00:09:47 – 00:10:19
and we pull up the ipad and we’d show them exactly what was happening on Amazon with their brands and their products and who was selling it. And at what price point? Um And we had a pretty good idea of what was happening on Amazon. At that point, we would use the ipad and the data we had and walk into the trade show booth and say, hey, listen, I wanna buy this wallet this wallet and this wallet. I don’t care about the 50 other wallets you have. I only want those three wallets and I’m gonna write you a $10,000 po right now. Right, because we saw it, we had the information, we knew what was selling
Dan Brownsher
00:10:20 – 00:10:51
and, uh, that was pretty unique, right? These brands are well established. Like, who are you? Like, I’ve never heard of Trend Nation. I’ve never heard of any of your companies. And you all of a sudden showed up in my booth immediately picked out the top three best selling items and agreed to write me a $10,000 po on the spot. Like, that’s pretty crazy. Um, and that’s what happened and in 2010, the early days, um, and our business absolutely exploded at that point as well. So, um, it,
Jeff Bullas
00:10:51 – 00:11:04
it was the wild West, wasn’t it? Because Shopify didn’t exist. Uh, big Bigcommerce didn’t exist. It was all build your own store. Usually something like, you know, wordpress, wasn’t it? With an Ecommerce plug in?
Dan Brownsher
00:11:05 – 00:11:20
Yeah, exactly. Right. So there was minimal scale, there was minimal tools out there. Um, and people just had to, they had to figure it out and it was very clunky. So, yeah. Presh Shopify early Amazon. Yeah. And things have changed quite a bit. They
Jeff Bullas
00:11:20 – 00:11:45
have and, uh, I’ve spent four years in an Ecommerce agency, actually building websites. Um, and they’re all custom built. And, uh, yeah, so it’s it was the Wild West. Everyone was still trying to work it out. There was a lot of like that’s why I asked the question about major brands. Did these even major brands have an Ecommerce store? And the answer, I it was almost a rhetorical question because the answer I knew was gonna be no.
Dan Brownsher
00:11:47 – 00:11:51
Yeah, it was now, right? Which was an opportunity for us at the time.
Jeff Bullas
00:11:52 – 00:12:24
So, so trend Nation, obviously you got in at the right time, didn’t you? At the embryonic Wild West time of the evolution and revolution of ecommerce? So tell us a little bit about the journey. Um You, you, you’re going there, you spoke to these brands, you start to sell it on Amazon on their behalf or you said it was selling your own products, their products, buying it from them. Yeah.
Dan Brownsher
00:12:25 – 00:13:15
Yeah. So we started, we started as a private label company, right? We would buy cuff links or purse hooks or whatever it was and we’d slap our brand on it, logo and say, hey, we’re gonna sell you, you know, customer, we’re gonna sell you this product. Um but we own the brand, right? We bought it directly from the factory when we started becoming a reseller or, and or distributor, we would buy um products directly from the brands or from their official distributors at wholesale. We would store the goods in our warehouse, we would pick pack and ship the goods either direct to consumer for an order or uh into FB A OK. Because we were a third party seller. So Trend Nation was a third party seller had multiple third party seller or seller central accounts at the time. And so we sold
Dan Brownsher
00:13:15 – 00:14:11
uh on Amazon, you have a storefront as a seller. So we would sell ourselves as our, the name of our storefront. But the brand would be Tommy Hilfiger. We’re selling the brown Tommy Hilfiger wallet. Here’s the, here’s, here’s the, the product detail page and we’re one of a handful of sellers that are trading that item uh and um competing, right? And what happened was, is, you know, in the early days, that was an amazing business, right? We were one of the early entrants into that market and we might be the only seller of the Brown Tommy Hilfiger wallet. Ok. And our business exploded, right? It doubled every single year for like 3 to 4 years straight. Um And what we, what we, what happened was is uh what Amazon created was this ecosystem that removed the barriers to entry
Dan Brownsher
00:14:11 – 00:14:58
and allow for entrepreneurs to create businesses. And we were one of those businesses, right? And the business model we chose was to become a distributor and or reseller. Uh Well, guess what? Right. Other people caught on to that and started doing something very similar. So after 23 years, what we found ourselves doing in 2012, 2013 is uh we hired a bunch of people. We had a big buying team and we had categories and we go to, you know, the pet show or we’d go to the sports show, the outdoor show or the, or the fashion show and we had buyers and they were buying product for Amazon. Um, and what we found ultimately, what we became or what we were doing was trading commodities because the way Amazon works is everybody then started to compete on price. Yeah.
Dan Brownsher
00:14:58 – 00:15:36
Ok. So we said, how do we build a business like this if we buy into a SKU that we really like for based on our data? But the SKU only lasts for 30 days because 15 other people then get the same skew and everybody’s competing on price. It doesn’t work. Margin falls out. There’s zero control. Everybody is literally trading commodities. So he said, ok, uh this was great and it worked, but there’s no mode around this business. How do we protect? Right? If we want to build an ecom business via Amazon as the primary platform. Well, how do we, how do we do that? And so one of the pivots we made was we said, all right,
Dan Brownsher
00:15:37 – 00:16:10
the key element to Amazon is control, right? And controlling distribution and controlling the product or the U PC or the Ain because you wanna make sure you win the business if the customer comes through to buy that product. So he said, we know all these brands. We’ve got this whole infrastructure, we have the ability to cut big P Os and work with big brands. Why don’t we build out an exclusive distribution model? So then we would go to Tommy Hilfiger and say, hey, Tommy, let us be your exclusive seller of your assortment or these products on Amazon.
Dan Brownsher
00:16:11 – 00:16:44
OK. And in exchange for that exclusivity, we’re gonna hold your price, right? So we’re not gonna violate any sort of pricing policies. We want to keep a clean marketplace, we’ll hold price. We will build out your Amazon storefront. We’ll build out all your product pages on Amazon. We’ll manage your advertising on Amazon. Let’s try and create a cohesive strategy for you guys to win on Amazon. OK? But you can’t sell to anybody else, right? So we’re gonna buy your inventory and we’re gonna sell, we’re gonna be your seller of record, can’t sell to anybody else. And so we pivoted to that
Dan Brownsher
00:16:45 – 00:17:27
and I, and we did that for a few years. We simultaneously started doing a lot more private label as well back to this element of control. Well, how do we build a long term business on Amazon? Well, what if we own the brand? What if we got, what if we got the product directly from the manufacturer and built it out that way? So we simultaneously did that. OK. And I think what we realized over time was that uh given the complexity and working with brands and their ability to control their distribution. OK. Meaning even if we signed an exclusivity deal with a brand, uh and they tried to abide by it. They had a wholesales network, they had distributors everywhere. They could never keep a clean channel.
Dan Brownsher
00:17:27 – 00:18:01
And so what ultimately happened was is we said we agreed to do all these things for you. We’re doing them. We, you also agreed to give us exclusivity, but it’s hard for you to control your exclusivity. So we’re actually not winning any business. So all these other people that have your products are actually selling more than we are because we agreed to hold price. And so he said, all right, this is a, we’re onto something here with providing more value and more additional um services to brands, but the model is incorrect, right? We’re buying inventory. So we are we the customer, are they the customer because they gave us exclusivity. We said, all right, hold up
Dan Brownsher
00:18:02 – 00:18:33
moving forward. If we’re going to work with any other brands on Amazon, the best way to do that is via an agency model or a service based model where we don’t have to buy their inventory, touch their inventory, store, their inventory, ship their inventory. We can teach them how to do all of that. It’s better for them because they have more control, they make more margin. Uh And it’s a platform that they can leverage with channel key or with anybody else. So Trend Nation pivoted 100% a private label
Dan Brownsher
00:18:33 – 00:19:11
and then any brands we worked with over time, we baited this this agency concept and officially rolled Channel Key out in January of 2017. So we basically bifurcated the businesses, two separate companies. The product company was Trend Nation was all private label. And then Channel Key developed the service based model and worked with all the brands and um fast forward to today. That’s what I’ve been doing that since day one, I’ve got, you know, 85 people on my team, we’re a fully remote shop, we some some of the biggest brands all over the world. And uh that was the, that was the genesis right? Of, of where I’m at
Jeff Bullas
00:19:11 – 00:19:26
today. Ok, cool. So trend nations sold. So that was your typical business, you make margin on your product when you sell it, for example. Ok. So, so the agency model is that fee for service and depending on the level of service, is that the business model for?
Dan Brownsher
00:19:28 – 00:19:56
Yeah, yeah, there’s a couple of different models, but in essence, we’re a full service. Channel management agency. Ok. At our core. So on average eight or different nine people on my team will touch our client accounts each month, right? That have a specific job or a function. It could be somebody on our leadership team that’s building out a strategic business plan for a brand. It could be uh a graphic designer, building out graphics for a storefront or for a plus content could be an analyst doing forecasting.
Dan Brownsher
00:19:56 – 00:20:20
Uh It could be uh a digital marketer that’s running search ads for our clients on the Amazon platform, could be our head of DS P that’s running programmatic for our clients on our DS P seat on Amazon. OK. And so we’ve got varying degrees of service, but in essence, our job is to sell product and or deploy media. And so we work on a kind of a retainer revenue share model,
Jeff Bullas
00:20:20 – 00:20:54
right? So you do take a cut of sales as part of what you do because you say we know we’re so confident in what we do that we know that we can take a percentage as well as a retainer. OK? Cool. So in terms of competitors for you is because you’re doing this for big companies, but you obviously have very deep and broad knowledge in terms of how to operate on Amazon because what started as the Wild West has become a very algorithmic driven business model, isn’t it now?
Dan Brownsher
00:20:54 – 00:20:57
Absolutely 100%.
Jeff Bullas
00:20:57 – 00:21:13
So in a sense you need, you’re almost in a race to keep ahead of a brand actually having more, having expertise, but you have more expertise. So they come to you continually to uh I suppose be optimal on Amazon. Is that correct?
Dan Brownsher
00:21:13 – 00:21:52
Yeah, I, you know, I think it’s like a classic make or buy service, service based business model, right? So brands need to figure out who they want to be and what they want to be good at and some of them want to be really good at Shopify and and, and they want to leave Amazon to somebody else, right? Some of them want to be really good at Amazon and want to build that strength in house. Some of them are too big and say, hey, listen, we’re good at building product and branding. We don’t wanna be Amazon experts, right? And so that’s where we come in. So sometimes brands want to take it in house and manage it in house and sometimes sometimes they don’t, right. It’s like a,
Dan Brownsher
00:21:53 – 00:22:03
I don’t know, it could be an attorney for a business. Do you wanna have in house counsel or do you wanna, if you wanna do, you wanna send it out to an outside party? It’s I think it’s the same, it’s the same concept. Yeah.
Jeff Bullas
00:22:04 – 00:22:22
So what have been some of the biggest challenges for you? One thing that crossed my mind as you were talking about the growth was doubling every year. Um Growth is great, but you’ve got to fund the growth, you’ve got to hold stock. How did you manage that growth in terms of, you know, basically funding it?
Dan Brownsher
00:22:23 – 00:23:04
Yeah. So on the, on the product, on the trend nation side, that was a big issue, right? As we had to fund growth uh via inventory acquisition. And I think that’s one thing that people don’t always think about or talk about right here. There’s a lot of, I don’t know, you go on youtube and find out about how to grow a, you know, FB, a business on Amazon for like serial entrepreneurs and you can do that and that exists. But, but I think one thing that’s always lost is that, hey, listen, just because you made $100,000 in sales doesn’t necessarily mean you have $100,000 right? You’ve, you’ve got to figure out how to build a sustainable model. So for us,
Dan Brownsher
00:23:05 – 00:23:20
um we, we had a line of credit, right? We had a good track record and a and a history uh on selling and we had a good relationship with our bank and we had a line of credit that was personally guaranteed by the owners of the business and personally
Jeff Bullas
00:23:20 – 00:23:22
guaranteed. Now, that’s a risk.
Dan Brownsher
00:23:22 – 00:23:59
That’s a risk, right? And so, and it was such a cue for heavy business, seasonally based business. It was really like se you know, September October, you’re coming into the end of the year, you’ve got all your capital deployed, you’ve, you’re waiting on goods inventory and you’re waiting for a 60 day period to sell through all your inventory to pay off your line of credit so you can pay yourself. It was really um stressful, right? Very stressful. So, uh for that business to grow, yes, you need access to capital 100% to fund your inventory.
Jeff Bullas
00:23:59 – 00:24:19
Yeah. Yeah, because I’ve had that experience before. I, I was a good salesperson and I learned very quickly when I started a business that despite growing from 0 to 2 million turnover in two years that came with the funding of the stock and uh that led to a lot of pay. So that’s why I asked the question.
Dan Brownsher
00:24:20 – 00:24:58
Yeah. And to scale an agency or a service based business is, is different, right? You don’t necessarily have those capital requirements, but you’ve got different issues to contend with and different issues to deal with by adding people or technology or to your earlier question, you gotta stay ahead. Well, how do you do that? So, um the capital model and the funding model is very different between a product based business and a service based business, especially one that doesn’t, I, I don’t have trucks. I don’t have a, I don’t have a manufacturing facility. I don’t need capital. It’s literally people and contracts and technology. So it’s just a different scale model.
Jeff Bullas
00:24:59 – 00:25:20
Yep. So uh what were some of the other challenges find? Um because quite often the other challenge for entrepreneurs is finding the right people to actually um to leverage yourself because basically, you’ve only got a certain amount of time in the week and every day. So was recruiting the right people a, a challenge for you
Dan Brownsher
00:25:21 – 00:26:15
100%. Um And I think especially a channel key in the agency. Um And I think this is probably true for any business type. Um We’re in the people business 100% right. And so a it’s incumbent upon leaders to bring on the right people. Um But sometimes that’s really hard. And so I think one of the key learnings that I had in the earlier days was that um we lacked an operating model. OK. And so we found something called traction or E OS that we implemented. That A helped me understand uh the ideal structure needed to run my company. B subsequently helped me understand the types of people I needed to bring on,
Dan Brownsher
00:26:16 – 00:26:57
right. So in the early days, you kind of do everything. You’re an entrepreneur, you’re, you have to learn how to do everything. Um But at some point, if you continue to grow and scale, there are problems that will get created. And I think the problems that that I saw was where people and specifically me in a lot of cases became the bottleneck and understanding that when that happens and understanding how to get through that. Uh And the way you get, one of the ways you get through that is understanding who what seats should be on the bus. OK. And then what seats are the current people sitting in? And is it right or is it wrong? So,
Jeff Bullas
00:26:58 – 00:27:23
yeah, so with all these challenges, you know, basically trying to make sure you’ve got enough capital to keep the business going as you’re growing and also finding the right people. Did you have anyone that was like a coach or a mentor or was it books you read trade shows? Did you just learn it from the doing as you went along? Who was there anyone that helped you or was there a team of people behind you that helped you?
Dan Brownsher
00:27:23 – 00:28:05
Yeah, I think for me, so I was lucky to have partners. Right. They were all active in the business. Um So, you know, that was always helpful. But um I think as we grew and expanded again, we, you know, we spun out, we spun out Channel Key as a separate company. Um You know, I’ve been a part of various networks over the years and I’ve, I’ve been fortunate to have mentors. And so for me, um and he mentioned at the beginning, I’m a member of Vista, right? So I’ve been a member of Vista for 11 plus years, um which is a, which is an executive CEO group, national and international organization.
Dan Brownsher
00:28:05 – 00:28:40
And I’ve had a mentor and various mentors in that group over the last 11 years, business owners not necessarily related to the business type that I’m in, but business owners that are dealing with the same types of issues that I’m dealing with. And so I’ve had access to that I’m in uh I was in Tan, which you mentioned, I’m in YPO now. So I’ve got these networks that uh I’ve been a part of that are made up of business owners and some of them are related to the business type that I’m in and others are not. Um, and my other partners have had access to those types of networks as well. So I think it’s just a combination of
Dan Brownsher
00:28:40 – 00:29:20
hiring talent, bringing in people that are better at certain job functions than we are establishing networks with people in our space or, or other groups or orgs that are outside of our space and continuously being curious uh about understanding and learning about things that we don’t know. And so I, I have a mentor. His name is Clyde Clyde Horner. He’s been with me forever and his fingerprints are all over. Uh my company from a leadership from a development perspective. He’s not necessarily the the tactical guy. I don’t bring my tactical issues to him. He’s a coach and helps with leadership and development and mindset and these sorts of things.
Jeff Bullas
00:29:20 – 00:29:30
So, yeah. So did you have any challenges um delegating or did you, are you a control freak or you were able to delegate easily?
Dan Brownsher
00:29:31 – 00:30:17
I’ve had challenges with it. Um I think most entrepreneurs when they start, they have to be control freaks, right? Because you need to know what’s happening and you have to do everything. I think I’ve gotten better at delegating over time, through practice uh and learning. Uh And I still struggle with it at times because there’s a there’s an, I think an art two letting things go and being OK with the result that you get. Uh and for me, it’s kind of rooted in this idea of building other leaders and empowerment. Um But also I’ve gotten feedback about this. So I think in 2000 and for my staff, so in 2000 and 19, I think it was my leadership team fired me.
Dan Brownsher
00:30:18 – 00:31:00
They literally fired me, right? I was in four seats on the bus. They’re like, dude, you have to get out of three of those seats or else this is not gonna work, right? So it’s I think creating space and building leadership teams and allowing the safety for your key people to give you feedback has certainly helped me. Uh And that, and in that moment it helped me, right? I mean, they very candidly, this was in front of my mentor fired me. They said you can’t do this anymore. And I needed to hear that as, as hard as it was for me or as much as it stung my ego, right? Uh Hearing that from my team was an unlock for me and a learning experience for me.
Jeff Bullas
00:31:00 – 00:31:02
So what seats did you give up?
Dan Brownsher
00:31:03 – 00:31:39
Well, I was this so OK, so we, we use EO as traction. OK. So I think the seats I was in at the time where I was the visionary. So the CEO in charge of culture, I’m in charge of vision and I manage and own in a lot of cases, the larger relationships that support the business. I was also the integrator or the, or the, the operator of the business, right? The coo or whatever title you want to use. So I was, I had all the department heads rolling into me and all the, a lot of direct reports. So I was operating the day to day of the business. OK, I was the head of sales,
Dan Brownsher
00:31:40 – 00:32:11
right? It was in charge of bringing deals in. Um And so I had to get out of the, the big one was the integrator role because I’m not a great integrator. I’m not a great process guy. I’m not a great finance guy, right? I can go sell and I can build relationships and I can help with culture and, and figure out the vision. That’s what I’m good at, but I’m not the operator. So the big one I got fired from was the, was the operator role, the integrator role. And we brought somebody in to do that and it was a complete unlock for the business
Jeff Bullas
00:32:11 – 00:32:45
because there’s people that actually do enjoy the process. Um I’m not one of those guys either. And uh also I’m not good at uh doing the detailed accounting and bookkeeping. I hate that. So uh yeah. And uh for me, I’m a bit bigger picture and handing that over to someone else. Actually, it wasn’t hard because I’m going, I hate this shit. Yeah. Yeah. So, uh, for me it wasn’t hard to let go of that. I, I suppose the challenge was paying for it going. Oh, now I got to pay someone to do this. Right.
Dan Brownsher
00:32:46 – 00:32:58
Yeah, exactly. So, II, I don’t, I don’t necessarily think I have a challenge delegating, like, from an, er, control perspective. Um, sometimes it’s just realizing when things need to be delegated.
Jeff Bullas
00:32:59 – 00:33:23
Yeah. Well, ok. So you’re growing rapidly, you know, with the company um Trend Nation. And when, when was the moment you said, look, I, we really need to sell this, we need to pivot or did someone turn up with a bucket of money and going, we want to buy the business off you? What happened?
Dan Brownsher
00:33:24 – 00:34:08
So there’s a time period here. So starting in 2017, I was not active in the day to day at Trend Nation. My two partners ran that business, right? So they ran that business and I ran the service business. I ran Channel key, right? So from 2017, 2021 that period, I was not active, I was an owner and investor, right? And so I think what we saw was that um we had been running that business for a long time, you know, 10 plus years, I brought up this idea to you of funding inventory and the amount of risk that all the partners had to let we had to leverage our families to pay for inventory.
Jeff Bullas
00:34:09 – 00:34:16
The personal guarantee is a big thing because that’s why you have companies because you don’t do personal guarantees generally.
Dan Brownsher
00:34:17 – 00:34:49
Yeah, but we, we didn’t have a choice. Right. And so that was required and it, you know, a lot of us grew up, we had young families, we’ve got kids in schools and it’s like, man, we’re taking on this risk every single year. Um And so I think it reached a point where we said, you know what, we’ve been doing this for a long time. It’s a really nice business. We had just gotten through COVID. Um and the business was doing really well and there was a lot of in, in 2020 2021 there was a lot of interest um in buying kind of Amazon based brands.
Jeff Bullas
00:34:50 – 00:34:57
There was a lot of big venture capital companies were actually to actually acquire and build a group, didn’t they?
Dan Brownsher
00:34:57 – 00:35:20
That’s right. Yeah. So they were called Aggregators. Um And there was a bunch of them and there was a lot of money that flew into the market. And the idea was they’re going to aggregate the spa it brands, Amazon native brands and build the next Proctor and Gamble, right? And so we were kind of caught up in that and fortunately it was a good time for us and somebody came through and we just thought it was the right thing to do at that moment in time
Jeff Bullas
00:35:21 – 00:35:23
how the aggregators doing today.
Dan Brownsher
00:35:23 – 00:36:23
Uh, well, the big one, it’s interesting. So the big one for ASIO just declared for bankruptcy. Um, and there, um, others have Straw as well, but others actually seem to be doing ok. Um, and so I think the ones that chose a Lane and, or a category that they want to participate in are the ones that are doing well. Um, because it’s, it’s hard. I mean, if you think about it, how do you aggregate 300 brands that are unrelated to each other and find any sort of economies of scale? They’ve got different manufacturers, they’ve got different warehouses. The category dynamic is different. The competitors are all different. Like I think that to financially engineer a business like that on paper, you can maybe wrap your head around it, but in reality and practicality, it’s really hard. And
Dan Brownsher
00:36:24 – 00:37:13
um you know, I think one of it became really hard to run that business type because the costs for logistics for sourcing for, for everything increased so rapidly post COVID. So A you just bought all these assets uh and B the cost to, to do to, to run that business has dramatically skyrocketed. So your margins go down. Meanwhile, you have to service your debt, right, for all these brands you bought. And I think it was just uh I think it was an over, an over extend right? Valuations maybe got a little too high, there’s a little too much fervor in the market. Um And um some of the aggregators will ultimately do well, but some of them are going to fail. There’s gonna be consolidation, which is already happening. So, um that’s uh that was our exit point.
Jeff Bullas
00:37:14 – 00:37:21
So, did you go looking for uh a buyer or did you go to an agent, uh business agent uh or did you get approached?
Dan Brownsher
00:37:21 – 00:37:28
We hired a, we hired a banker. I uh we hired a banker and, and, and, and ran a process and took it to market, right?
Jeff Bullas
00:37:29 – 00:37:38
Ok. For me, it sounds like your timing might have been quite uh spot on impeccable even in terms of selling at the peak of the market,
Dan Brownsher
00:37:38 – 00:37:46
I think. Uh, certainly hindsight is 2020. And I think, um, it was a good move for, for us. It was, it was the right time for sure
Jeff Bullas
00:37:47 – 00:37:52
because you sold post COVID after the whole COVID thing made e-commerce grow even more rapidly.
Dan Brownsher
00:37:53 – 00:38:28
Yeah. You know, there was a time when people thought like Ecommerce, ecommerce advanced 10 years in adoption over the course of 12 months. Um, and I think it’s reverted back to the norm right back on the original kind of great trajectory. It was, but nobody knew, right. Nobody knew at the time. I mean, Amazon was like the Red Cross for a time, you know, like that was the only way or one of the few ways where you could actually get goods. So nobody knew Um but yeah, the time I think the timing for us was good. It worked out well.
Jeff Bullas
00:38:29 – 00:39:24
Yeah, so timing quite often is everything either entering or selling and uh everything in between. So, alright, so you’ve you’ve there’s an, there’s another thing that’s happening in the middle of uh what you’re doing and I don’t know how it impacts you on e-commerce, but I I’m intrigued by A I is A I impacting what you do like the collect, you’re collecting a lot of data obviously about markets doing research. What’s great about humans are no normally pattern recognition machines, but there’s actually now a tool to help them human be even better at that. And it’s called A I. So, and the foundations of A I are essentially the software, large language models and the apps build on those large language. Well, then you’ve got the actual, the hardware that drives it nvidia and so on the processors and the data centers.
Jeff Bullas
00:39:24 – 00:39:43
And the third part is the actual oil, which is the data, the data is a new oil for e commerce to make sense of it. So how do you see and what are you experiencing? Um the impact of A I and where do you think it’s going to take um e-commerce and, and your industry?
Dan Brownsher
00:39:44 – 00:40:30
It’s a really good question. So, um let’s see. Uh so functionally running a, a service business or running an agency like we do, there’s a lot of ways that we can leverage A I to create more scale and more efficiency, right? And so we’re doing that with content with ca with um copywriting, right? We’re doing it with, with graphic design in a lot of cases and finding these opportunities to scale, right? And I mean, you could even use it as your, for your sales team. Look that’s, that’s going after new business, right? You can have a, I do a sentiment analysis on the call that I just listened to, right? So there’s a lot of functionality. Um I still think it’s really early. Um
Jeff Bullas
00:40:30 – 00:40:32
it’s, well, still, isn’t it really,
Dan Brownsher
00:40:32 – 00:41:09
it’s really early, right? And so the most of the A I usage for us is um in the form of tools, right? We use a lot of software tools, right? So the best tools that exist on the market and they’re rolling out a, you know, for example, ad spend, right? We, we, we place, you know, a lot of media for our clients on Amazon and some of the tools we use is leverage A I to, to, to help uh with bid adjustments on Amazon, right? So that’s a lot of our exposure. Uh We see it on Amazon like Amazon is aggregating reviews, uh customer reviews and, and
Dan Brownsher
00:41:10 – 00:41:37
um trying to summarize those reviews using A I. So that’s stuff is really interesting and cool and there’ll be more of that sort of thing. I think one of the interesting parts about A I that’s going to happen is it’s gonna change search and how people search, uh and, or browse and, or find products? Ok. So, like I believe at some point every single person is gonna have their own A I assistant that’s gonna
Dan Brownsher
00:41:37 – 00:42:06
be able to accept all the data and all the signals right? From what I search to what I listen to, to what I watch to everything and will be able to curate products for me that most likely will align with my interests. So I think it’s gonna change search, right? So today Amazon is a giant search engine. You pop the name of the thing you’re looking for, you type it in and then it indexes and it, you know, services, products or ideas or brands that,
Dan Brownsher
00:42:07 – 00:42:36
you know, I might be interested in. And I think in the future that’s going to evolve into some sort of A I browsing assistant. Ok. That’s gonna help us. Um And then I think the, the last part of this to me and sorry for being long winded, but you brought up this concept of, of data as the oil and what I see happening right now with Amazon in particular is that yes, a so Amazon’s built this massive flywheel
Dan Brownsher
00:42:37 – 00:43:24
where they’ve got so much commerce happening on their platform. Uh They’ve got a W Aws going, they’ve got this massive advertising business they’ve built and they’ve got this big massive content business. That they’ve either acquired and, or built their own what NGM? Right. They, they have their own streaming TV service at this point. And really, I believe what they’re doing, especially with regards to their ads business as they are leveraging some of the best shopping data that exists on the planet and they are now monetizing that data through their advertising business. Um And it’s really interesting and powerful, especially what they’re doing with DS P and audience building to where
Dan Brownsher
00:43:24 – 00:43:51
brand like companies that don’t even sell a physical product anymore. Uh or, or don’t like, it could be an insurance provider that sells insurance for pets or whatever. You can leverage Amazon’s customer and audience data now programmatically to target consumers that might be interested in using your service. Yes. So that’s new, that’s a newer thing. Uh You have to sell a technical product. So
Jeff Bullas
00:43:51 – 00:43:55
explain the acronym to the audience what DS P means.
Dan Brownsher
00:43:55 – 00:44:09
It’s a demand side platform, right? So it’s programmatic media buying uh through Amazon’s DS P. They have their own DS P, other entities have their own D SPS as well,
Jeff Bullas
00:44:09 – 00:44:27
right. Yeah. The, the, the flywheel they be built is enormous. I read some data the other day that uh 40% of all e-commerce business in the United States is done through Amazon. It’s huge. It’s huge.
Dan Brownsher
00:44:27 – 00:44:32
And like nine, I think it’s like 90% of all marketplace ecommerce business in the United States is through Amazon.
Jeff Bullas
00:44:34 – 00:45:09
Yeah. It’s just staggering. It’s, uh, and, uh, yeah, they’re coming up against some of the anti trust sort of programs that are trying to be brought in so they can’t use their market power. And, you know, the big platforms are like techno states in their own right. They have revenues and equity that actually exceed the GDP of many small nations. Um, and I would be interested in what you think about this. It’s a bit off topic, maybe it’s maybe rabbit hole, don’t you to go down? But
Jeff Bullas
00:45:10 – 00:46:05
in Australia, Facebook and Google were actually brought to the negotiating table to actually um pay for the content that they were actually scraping essentially or sharing off media companies. And then part of the deal was they needed to contribute $250 million to the media companies. And what I mean by that is major media companies. So the media companies like news, um and so on in Australia, uh you know, got given a sh were told Facebook and Google were told to actually by the government to actually, hey, for the content because, and Facebook’s just said, given the middle finger to uh the government going, we’re not gonna pay the media companies a me. So because absolute power corrupts absolutely. And this is where we’ve got to be really careful in looking after, you know,
Jeff Bullas
00:46:05 – 00:46:29
it, we can’t just keep looking after the rich. We’ve got to look after the rest of the people as well as part of a proper democratic society, hopefully and also any, any society. But, um, do you see uh within your very close to Amazon work with them in them, around them? Yeah. What, what are your thoughts on, um, you know, Amazon’s market power and what are some of the downsides and upsides for you?
Dan Brownsher
00:46:30 – 00:47:19
Yeah. Um, obviously we’re very closely involved with that platform, right? And I own the stock, right? Iii I, and I don’t, I’ve owned it for a long time. Um And I think that um there’s already attempts to, to crack down, right? The biggest threat to Amazon right now perhaps is themselves and, or it’s, it’s government intervention, right? You see it a lot in the UK and I think even in the, in, in the States right now there’s antitrust things happening. Um So I can’t speak like politically as to what that means or what should happen. But uh Amazon is really big and massive and they control a lot and they, you know, as they get bigger, they’ll, they’ll have to adopt and, or adjust perhaps certain parts of their businesses that, that the government deems
Dan Brownsher
00:47:20 – 00:47:50
um I don’t know, monopolistic or, or whatever, right? But they have built this whole flywheel in this ecosystem that’s really powerful and the consumer has choice and they’re choosing it. Um And so you can’t deny that right. And brands want to be there and they wanna sell and they’re using their infrastructure and they’re using their advertising and they’re using all these things. Uh, but, you know, I think Amazon would just have to continually be careful about how they’re wielding their power. Right. And,
Dan Brownsher
00:47:51 – 00:48:12
uh, whether or not they’re forcing brands to do something a certain way, um, they just, they have to be careful about it. Um, and then the laws are different in different countries. Right. In the UK is very big on anti trust pricing policies and, and those sorts of things and, you know, they’re pressing on those issues. So, uh I don’t think it’s anything new for them, for Amazon. Um,
Dan Brownsher
00:48:14 – 00:48:42
but as their business continues to expand, there’s more scrutiny, more eyes, more everything politically uh that, um I’m sure they’re fully aware of and they’re smart and they’ve got all their people working on it. But uh uh I think at the end of the day you just can’t deny the power of the platform and the adoption of the platform and that it’s such a good environment for consumption to happen and the consumer is speaking with their wallet.
Jeff Bullas
00:48:42 – 00:49:22
Yeah, absolutely. Because they, they remove friction. Uh Basically they even patented the one click buy method, didn’t they? Exactly. So, um, just to wrap it up here, like, what are some of the things you’ve learned along the way that you’d like to share with, you know, people that maybe want to sell on Amazon. And um what would you say to, you know, those who want to maybe start a Amazon FB, a store fulfillment by Amazon, uh, or just use Amazon to sell their products, uh, source them. What would be maybe a top two or three tips from your experience.
Dan Brownsher
00:49:22 – 00:50:07
Yeah, I, a couple tips. I think that if you’re uh wanting to build a, a product business or an FB, a business from scratch, there are a ton of tools that exist that are very cheap and in some cases free that will allow you to evaluate different products or product categories or competitors and understand the volume that’s happening, uh and understand the margin, the actual money that you’ll be making. I think that’s critical. Um because in a lot of cases, it can be hard to make money on Amazon, right? There’s certain price points that uh that if you get close to or below, it’s really hard to make money. So if you’re going to get into an FB A business, do your research, do product research and trying to figure out a product category that, you know, can make money um
Dan Brownsher
00:50:08 – 00:50:45
uh for the long haul and long term, right? Before you jump into anything before you buy anything, do a ton of research and to your earlier point or our discussion, understand how to manage your cash flow, right? Because guess what? You can sell the item, Amazon might pay you in 30 days, right? You might, you, you might not get everything. There might be a hold back, you gotta spend money on advertising. Uh, and you have to be able to understand how to keep your product in stock because the moment you stock out is the moment, uh all the work and momentum you’ve built, uh, goes by the wayside and you have to start back from scratch. So that’s one element. And I think for more established brands, um,
Dan Brownsher
00:50:46 – 00:51:32
I don’t know that it’s getting more and more complex. There’s a concept of retail readiness on Amazon. I think that’s critical that Amazon has defined as kind of the, the table stakes are the base minimum requirements to run a proper business on Amazon. Leverage your pre your product detail page, all the uh um all the thumbnail options, video, a plus content storefront, uh quantity of reviews, quality of reviews of prime offering. Uh If you Google retail writing it, you could find it. Uh That’s basic table sticks concepts that, that’s still a lot of big brands fail to achieve, um, and hire an agency that knows all this stuff for you and can manage it for you.
Jeff Bullas
00:51:33 – 00:52:15
Well, I think I know one of those agencies. Um, I think they’re called, uh, let remind me, um, channel key. I think that might be the one. Yeah, cool. All right, Dan, I’ve got one final question for you. Um, and uh I set it up at the beginning if you had all the money in the world. What would you do for free every day or every week? That brings you joy and happiness. And I’m not talking, getting drunk at the pub with your mates. Um, but you can’t, with your six year old twins anymore, you’d be in trouble straight away. So, what brings you deep joy that, um, you would, if you had all the money in the world would do every day and not get paid for it.
Dan Brownsher
00:52:16 – 00:53:07
Yeah, I, I think when I’m at uh when I’m in the right place um from a work perspective, um and what feels the best to me that what brings me the most amount of joy is seeing my team grow, right? So them feeling empowered and them working through issues that they have, right? And whether that’s with their mindset or their emotions or how they speak to a customer or how they manage and prioritize or how they delegate. Um what gives me the most amount of joy is seeing those breakthroughs happen. Uh And I’m very fortunate I get a lot of coaching. I’ve got mentors, I’ve got a lot of people around me that are very successful that I can lean on that help me.
Dan Brownsher
00:53:07 – 00:53:33
Um And when I’m able to share my learnings or share, share my experiences in tips and tricks and quips and sayings and see those breakthroughs happen, that’s what gives me the most amount of excitement, right? Is building connections with people and relationships and being helpful, uh, and hopefully removing barriers for them so they can continue to grow and develop.
Jeff Bullas
00:53:33 – 00:53:50
Yeah. Thank you for sharing that. And you’ve just summed up an 87 year old Harvard study that showed the biggest thing that bring us joy is actually community and people and you love helping your community and your team and your people. And that also leans into family, doesn’t it as well?
Dan Brownsher
00:53:51 – 00:54:06
It does. Yeah, relationships, people, community. I’ve never read that study but, uh, I buy it. It makes sense to me. Yeah, that’s about dollars and cents, right? That’s about dollars and cents. And it’s just about time and relationships.
Jeff Bullas
00:54:06 – 00:54:09
Yeah. Um, things don’t make you happy.
Dan Brownsher
00:54:10 – 00:54:13
They don’t, they never do. It’s a trap 100% a trap and
Jeff Bullas
00:54:14 – 00:54:29
it’s people that bring you deep joy, whether it’s sitting around a dinner table, sharing ideas or jokes or, uh, or helping people. Um, you know, so thank you for sharing that. And, uh, you’ve just actually, you know, summed up an 87 year old Harvard study. There you go.
Dan Brownsher
00:54:31 – 00:54:39
I’m glad I could be helpful Jeff. Thank you. I never read. But, yeah, thank you.
Jeff Bullas
00:54:39 – 00:55:08
You can Google that. Um, so Dan, thank you very much, buddy. It’s been an absolute pleasure and joy. Um This brings me joy as this, having a chat with, um, people all around the world, people who have got a lot of experience, they’re smart. They’ve got the bruises and bumps along the way and they’re willing to share it with the world. Thank you very much for sharing your journey and I look forward to hearing more about channel key and its ongoing success.
Dan Brownsher
00:55:09 – 00:55:10
Thank you Jeff. Appreciate it. It was fun.