5 Star Chef EJ Kaga Becomes Full-Time Amazon Seller

Meet EJ Kaga, 5-Star Chef now turned Amazon Seller, who has been traveling all over Asia.  EJ has masterfully designed his business systems to free him up to travel, all while continuing to build his successful international Amazon business.  Find out how he does it, in this episode of the Amazon Seller Podcast!
EJ  

———-FULL SHOW TRANSCRIPT———-

Andy: (00:03) Hey everyone, this is Andy Slamans here from Amazing Freedom. Thanks for hanging out with us today. If you’re watching the show live or if you listening to it on the podcast, this is another real seller interview. I believe this is the ninth of the 10th and I’m going to attempt to do 100 over a 2020. EJ and I were just laughing about it. Yes. So I have a lot to go. These have been super helpful for me. I hope that you are enjoying watching them or listening to them. Every time I do an interview I was just sharing with EJ, I learned something that I want to add to my business and I’m sure this interview will be no different.
So this is EJ Kaga. He is an awesome Amazon seller. I’ve known him for two to three years now. Have spent some time with him traveling, have been to a number of retreats with them, super excited about what he’s been doing in his Amazon business as well as what he’s doing in his life. I envy the systems that he set up, he’s actually been traveling the world over the last year in Asia and he’ll be traveling a little more in a few weeks. I believe he said he’s going to Florida and then he’s gonna return to Asia all while his Amazon business is humming. So EJ thanks for taking time out of your day to day to hang out with us and share your expertise.

EJ Kaga Former Chef in New York City

EJ: (01:30) Yeah, thanks Andy. So yeah like Andy said we’ve known each other for years. I guess we’ve been selling on Amazon since 2016 and things have been going great. You know, like he said, we are traveling at the moment in New Jersey, just visiting family, but we’ll be back in Asia in a few months to get back to the one over there. Andy: (01:52) Awesome. So you EJ tell us a little bit about your background. I, I made a post and in the Amazing Freedom Facebook group, and I shared how you were your former life or you were a chef and then somehow you stumbled onto Amazon. How did that happen? EJ: (02:08) So yeah, I was a chef before that was I guess my career first career. So we, I was a chef in New York. I went to culinary school, all that good stuff. And then I kind of fell into Amazon just out of nowhere, kind of a, I saw some videos on YouTube and you know, like a lot of other people I wanted to get some extra income or have like a little side hustle. So, you know, I started seeing about Amazon and then I started selling books that I had from school. And things just automatically sold.  Then, you know, I took some time off work actually to, you know, vacation time off work to kind of see if this business made sense. And that’s where it kind of fell in. I started just doing RA/OA and then slowly migrated to private label after that. Andy: (02:59) Oh, that’s awesome. So There’s been a number of people that I’ve interviewed who really started the same way. That’s how I started. That’s actually the way that for folks that are just starting on Amazon, that’s the way that I suggest they start. Just to kind of learn the platform and and understand, you know, how the marketplace works and understand creation of shipments. EJ: (03:20) I would recommend you at least at least a few, you know, if you have a few things laying around or, or just go to a store and do some RA, even if you lose money, just to understand how the whole system works. Cause I’ve, I’ve tried to talk to a few people that were interested in doing it and until you do that, you don’t realize how much you know and how much it really takes to like sell on Amazon. So definitely would recommend that also. Andy: (03:47) Yeah. that’s a great point. One of the things I guess that kind of pushed me to do this interview series is a lot of times people make it sound way too easy. Like selling on Amazon is, you know, kind of like baking a cake and that’s absolutely not the truth. And when you do RA, you actually, you know, your back is going to be hurting from prepping those shipments.  And you really understand like what it means to run a physical product inventory based business. That’s what I think a lot of people don’t understand. And a lot of people come into the space like they want passive income. This is not passive income. It’s far from it. When you are operating a physical product, inventory based business, it is a whole different animal. Would you agree with that? EJ: (04:37) Oh yeah, totally. I mean, you know, we, we’re so disconnected sometimes now because we ship most of our stuff from, from overseas. But you’re shipping over containers and like, you know, if I were to receive a container in my house, it’d be crazy. You know, you don’t realize, you know, how much product you’re going through, how much, you know, actually back end stuff that Amazon takes care of. Also. but it’s, it’s, it’s kinda crazy to be honest to be doing what we’re doing. Especially people like myself that were not even location-based. So it’s, it’s, you know, I think it’s definitely, there’s a lot to learn. I’ve, I’ve constantly learned, I think that’s the good and bad. So you have to like learn if you want to be wanting to jump in. Andy: (05:24) So, so you’re doing RA/OA and then you, I imagine maybe wholesale and then you saw private label. What, what made you, you know, decide like, Hey look, I think this is the sourcing model I want to do. EJ: (05:36) Yeah, I mean for me I guess the RA/OA I think always had a [inaudible] cap. And then obviously we needed people, domestic people. And you needed a warehouse. Wholesale obviously, maybe not so much, but I just saw the best opportunity and private label. I think the learning curve to do labels probably there’s more moving parts, you know, because I think you have to add in the marketing side of everything also. And it’s something that, you know, I think in the long run you could, it’s an, it’s a better asset to that sell-able. You know, you can sell off Amazon and all this other stuff. So I think that’s why private label was probably the best choice. And I think it still is. For me at least, you know, I know other people that are doing super well and RA or wholesale. So it really just depends what, what speaks to you I think.

EJ’s International Amazon Business Venture

Andy: (06:29) Awesome. So let’s talk a little bit about what you just mentioned that right now you’re really location independent. So you run your Amazon business from anywhere in the world. That’s where a lot of us would like to be fed up those systems, you know, where we can travel. And really that’s the beauty of eCommerce and the Amazon sales platform, right? That you know, they do FBA, so you can ship products and, but what are some things, like what did you have to do? Like when you decided, Hey, you know what, I want to set up the systems. Like what are some of the first things that you started to work on? EJ: (07:04) I would say number one is understanding the system yourself and then getting a team. Secondly, and then making sure that team understands your systems. You know, we have a team about five people. Everything from like operations, inventory, graphics, customer service those are the big ones that we do or we have. And making sure that they understand the system that you’re trying to execute and keeping on that system. So we have, you know, SOPs, we have we use, you know, things like Loom and, and video recorders to make sure that they know the process. I think for me the hardest part is making sure they understand what we’re trying to do. Because you know, if your instructions aren’t good or your SOP is not that great or your results are not going to be that great either. And then, you know, I think that’s the biggest thing is making sure you have good staff, good procedures that are easy to understand. And that’s, you know, that way you can easily scale. You know, for myself, I still work a good amount even though I’m traveling. It’s not like we travel every week or every other week. So, you know, making sure that everybody knows what their job is and checking up on them basically. Andy: (08:16) So where are you spending the majority of time in your business right now? Is it in, is it in sourcing? Logistics? Is it in product development? You know, like where do you see your most important role? EJ: (08:31) For me, I think product development or new product sourcing is probably the biggest. And then managing my team the new product, I’ve tried to unload that a bunch of times. But I, I don’t know, I mean, maybe it’s, maybe I’m just tied down to it, you know, I, I assume other people can do it. It’s, it might just be something I like to do also. But that’s where I spend most of the, and then obviously just, you know, managing the team to make sure we’re progressing. Andy: (09:00) So let’s, let’s just talk a little bit about product development. I think, again, this is something that doesn’t get mentioned enough. You know, in, in, in the groups are, you know, on YouTube. This I honestly think is the biggest portion of the time that Nate and I spend now with the brand that, that we’re developing. Can you just, you know, kind of unpack, you know, for folks that are watching this, they want to get into private label but they don’t understand the timeline, you know, for product of, I’m just unpack for us all the things that go into the product development process. EJ: (09:37) Oh, I mean it’s a lot. So you know, we always, cause we already have a few brands we always branch out from our existing brands to look at you know, things that we can add onto our brand. First if we’re looking for new products outside our brand, then, you know, we use a different software, you know, looking through Amazon just to kind of find potential products. And then even from there, it’s, it’s how do you differentiate your product? You know, how can you actually get this at a cost that’s, that’s going to be good for Amazon. How can it be differentiated? I mean the competition, it just keeps on increasing on Amazon. But if you’re innovative, you can make something different. I think it’s, you know, there’s potential there. It’s just you have to do your due diligence. And it takes time. I mean for us, some products might take six months just to go from like concept to, to actually start production. So it just takes effort. And I think for, for most people you have to just keep to your guidelines. So whatever your guidelines are for your product just stick to it. Cause I think there’s so many products out there that we get the shiny object syndrome. You want to jump on everything. So, you know, it’s making sure that you do the work that it takes to, to get the products live basically. Andy: (11:00) Yeah. So I just want to reiterate what, what he just said there’s, six months, I would say that that’s very accurate. And, and, and this is coming from, you know, seasoned sellers who have launched multiple products. So, you know, think about that for the timeline. If you’re a newer seller, if you’re newer, it’s really going to be six to seven, maybe even six to eight months from the time that you identify that product. And and a lot of times I work in with manufacturers can be a frustrating process. Right? So share with us a little bit. I’m sure that you’ve worked on some products and then, you know, you spend time on them and then sometimes they just, they never come, you know, come about. EJ: (11:42) Oh yeah. I mean, you know, depending on the supply, like I think there’s so many moving parts, you know, just from one Amazon marketplace, you know, does it, does it change, you know, did you, when you looked at the product, they looked like a good deal and then five months later, you know, a lot of more competition came in or the price went down. Or just manufacturers, you know, like sometimes we have manufacturers we’ve worked with I don’t too many now, but luckily we’ve always had pretty good manufacturers. Both. There have been times that, you know, you just unfortunately haven’t manufactured, that doesn’t pull through or you just have different expectations and things just don’t work out. But it’s like anything, I think that’s why you need to make sure that you have a proper checklist or you work with somebody that has, has done this before. To kind of show you what you need to look for. Because in the beginning you just, sometimes you just don’t know. Right. And when you don’t know, you don’t know. And it’s, it’s hard to, you know, foresee something that might come about and you know, not, not, not actually be in your favor, you know.

EJ’s 5-Member Team

Andy: (12:47) So how, how are you managing your supplier communication? Do you do that yourself? Do you have a team member? EJ: (12:55) Oh, no, no. I would say a team members, probably my best bet is just the time zone difference. So most of my team, or one of my two team members, probably handed managers dealing with the suppliers. We do try to meet them over video sometimes just to build that relationship a bit better and to kinda just for us, I mean we haven’t been to China unfortunately, but just to kind of get that face to face contact with them and you know, see what they’re working with because they might be working out of a shack and you don’t know it. Andy: (13:29) So just a nuts and bolts question. When you do like those supplier chats, are you using Skype or any other platform? EJ: (13:36) WeChat I would say is the number one nowadays. For us we do, I don’t know if my employees use anything else, but we chat is usually the number one contact way. Andy: (13:47) Awesome. So those of you that are watching, I’d definitely suggest that if you’ve not been to China to visit your factory, you know, ask them for a, WeChat, a live WeChat call or a Skype. Another thing that I would ask too, and this is kind of video based, when you are getting your production when you’re getting your product produced, I would ask the supplier to send you videos, you know, or even send you videos of their factory. Now you’re just kind of fingers crossed that it is their factory. So I’ll give a quick story here. We were working, we were ordering a product for a year and a half. I actually went to China, visited this factory, thought it was, you know, the company, the company had offices in there, or at least I thought they were their offices. You know, they take me to or me around the factory. Well, a year and a half later I find out they’re just a trading company that has a, that, you know, leases out an office, you know, in that factory. And so, which it’s not, again, it’s not necessarily a bad thing if you’re working with a trading company or an factory. But I definitely was duped into thinking that it was their factory. EJ: (14:57) Yeah. I mean, fortunately we haven’t had any big issues like that, but definitely we’ve had a supplier one time that it just it was a trading company and they were saying they were a manufacturer but it actually worked out. But Andy: (15:10) What are your thoughts on that? Like do you do you prefer one or the other? Do you use both? EJ: (15:16) We, so usually when we’re sourcing products now we try to get several different I guess sources. So, we obviously reach out to manufacturers that we think are manufacturers. We have a sourcing agent also that kind of goes out and Scouts for us. So this way we’re able to kind of vet different you know, see who might be the best. Because at the end of day, if you’re not there, you don’t really know. That’s why sourcing agent usually helps out a lot cause you know, they could go and visit the factory. But I would use a trading agent if you know, if the price is right and the quality is good you know, why not? It’s, that’s what it comes down to. I think, you know, making sure you have good quality, good relationship and a good product. Andy: (15:57) Yeah, definitely. That’s something that we say too, that if you’re working with a trusted agent, I’ve actually had a relationship with an agent for about six years now and she does a lot of sourcing, a lot of work for me now. You know, and as long as you’re okay with the margins and the quality, like you said, you know, I think it’s okay. Yeah. Share with us, you know, some of the, the bigger challenges that you’ve faced, you know, just say over the last 12 months. Again, the reason for these interviews is we want to give folks, you know, a reality check that run in a physical product business, not all unicorns and rainbows and and you will have losses and you will have loser. So, you know, if you’re okay with this, share with us some, some of the struggles that you’ve had. EJ: (16:43) Besides cash. I think cash obviously is a big concern for most people. I think creating the systems and the team was my, one of my biggest challenges. It’s just something that I was not used to or not, not, I don’t want to say, not comfortable with, but just something I didn’t have experience with. And I think that was the biggest turning point in our company’s, you know, before I was trying to do everything. And then finding the team really just helps, but it takes time. Trying to find the right people and then training them and then getting them up to speed and then, you know, having, let, letting them do the jobs that you’re asking them to do and trust them that they’re going to do it. I would say those, that’s my biggest challenge to date or at least in the past 16 months or something like that. Besides that I would say is letting go of losers. So we, you know, we’re always tied down to our products or we’re married to them. And you know, I’ve, I’ve been, in that case, I probably still have one or two products. I probably should let go. So I think that’s, that’s one of the big things that, you know, reevaluate in your, your product SKUs and then making sure, okay, does this really make sense for me? Is this, is this, you know, being useful for my company or pushing my company forward? Yeah, because sometimes you just, you, you don’t want to accept the fact that you actually launched a bad product or did something bad. Andy: (18:07) Yeah. I love that. And for the, again, those of you that are listening, she take that to heart, let go of your losers. Otherwise they will bleed your company. You know, and that often gets said like, don’t get emotionally tied to your products. It’s hard though when you have products who, which initially are bringing you in thousands and tens of thousands of profit. You know, and then for whatever reason, you know, it kinda goes sideways. It could be for a number of things. You know, to really objectively sit back. Right. And evaluate those. EJ: (18:42) Yeah. I mean, we had to let go a whole brand, almost this Q4, which the previous Q4 we did great on it. And this Q4, it just didn’t work out. And I know, you know, it sucks, but you move on and you keep going. Andy: (18:57) Alright. So again, those of you that are listening you know, just understand that. So he had a brand that was doing phenomenal. But for whatever reasons, like sometimes you got to cut those and then, you know, continue to build another brand or reinvest. So that that’s a reality, right? Like every Amazon seller who’s been in this game for three or more years has faced that, you know and some of us do better than others and some of us don’t. I actually that since you mentioned that, like I have some SKUs that I probably need to let go. EJ: (19:35) Everybody that’s been doing this for a few years probably has at least the one product that they should let go. Andy: (19:41) I know, but like, you know, I’m thinking of one and it like, it nets me like $2 a unit. Now, you know, but yet I’m carrying that inventory for like eight months. And so like that’s one that I just need to cut the losses and not reorder. EJ: (19:57) Yeah, I can today it’s not a lost cause you get the money back, you know, you get your capital back and you can reinvest it in, it can produce more money for you. So it’s, it’s just about cash allocation and what’s going to bring you in the most money, you know? Andy: (20:08) Yes. No, that’s great. And again, that’s something that’s not often talked about is capital allocation. You know, for building a physical product, the inventory based business, there are two things, cash flow that you will always struggle in and deal with. And then capital allocation, right? Like those are kind of the higher level things. Now, are you making those decisions yourself? Are you, you know, getting counseled from your team? EJ: (20:34) So some, we sometimes hire kind of like a on demand CFO. We kind of do the books and we run on a quarterly basis to kind of see, reevaluate each SKU and see if it’s actually like you know, does this really make sense to keep because like you said, there’s products that, you know, over the years, they, the, the profits have been dwindling, so you have to decide, you know, is it worth it for you? I mean, if you have enough capital and it makes sense, then yeah, that makes sense. But it’s a case by case situation, you know, for us, we keep some of them because it makes sense for our brand and we might want to sell that brand one day. So it’s just kind of like, okay, that’s an extra SKU that’s in the brand to make it more full. Right. Make it look a slightly larger. But yeah, I mean, we’ve cut products because of just like you said, like your product was only bringing in $2. We’ve had products that we’re bringing in, you know, $100 a SKU and went down to zero. So, you know, it’s just, that’s just the name of the game, you know? Andy: (21:30) Right, right. Awesome. All right. I have two more questions for you. A, a one, maybe just a statement. I want to hear your response. Did you ever see yourself, you know, when, when you’re younger obviously you must’ve really liked culinary arts, you know, you’d go into and to a career in it. Did you ever imagine, you know, like, man, I might be selling things online? EJ: (21:55) I don’t know if I ever imagined myself like exactly doing this. But when I was younger I definitely, I still, I always kind of had like a side hustle mentality, you know, I always like to like find, okay, how else can I make money? And you know, we used to sell stuff or I used to sell stuff on eBay back in the day, just random stuff here and there. And I think I, we, I used to flip records and stuff. Definitely. I always thought of it but never thought of it as a business. You know, I, I wish I caught onto it a bit sooner and rode the wave. But it’s no, I mean, I don’t think I would’ve ever imagined that. I think that’s a lot of people that are in certain careers, they think that’s their only option. And I think nowadays everything is so accessible as far as information. You can learn pretty much anything. And if you put the time and effort into it, then you can probably do well. I think that that’s the biggest you know, caveat for everybody is like, are you willing to put in the time, you know, both. I bet you and I have put countless hours, more hours than I’ve put in college, so into this. So it’s at least getting right. So Andy: (23:05) That’s for sure. All right. So, Hey, my last question I ask everyone that’s in the, in the interview for folks that are maybe just getting started out or maybe folks that are, you know, at that medium level, maybe selling 50 to $500,000 a year what’s some advice that you would share with them? You know, on just the ability to scale up, to grow, to not quit. EJ: (23:31) I mean, I guess the biggest thing, and that was the biggest thing for me is, is your product selection has to be on point in regards to, you know, also just the financial side of the business. Know is this going to actually help me grow? Because, you know, we, we picked some products that in the beginning were just not, they weren’t bad products, but they would have been super challenging to grow because of just like the ROI or the profit margin. And then I guess the other one is learning from others. So, you know, networking with other sellers and, and connecting with other people to see what’s working, what’s not working is probably the two biggest things that have helped me push my business forward. I’ve learned from countless people and, you know, smaller sellers, larger sellers you know, conferences, meeting people anywhere. It’s, that’s probably helped my business tenfold. You know, I, I wouldn’t know the things I know if I didn’t, you know, reach out to people or connect with people. Andy: (24:31) Yeah. So I follow you on social and I see you attending like different events. I think there was one in Canada that you attended. And again it just looked like higher level Amazon sellers. So, so that’s you’re still actively engaging, you know, other folks that are kind of at your level. EJ: (24:49) Yeah, exactly. I mean that’s the, I think, you know, especially meeting people in person you’re able to connect and like, you know, most people, not most people, but sometimes people don’t have the time to like, you know, share what they know or do things online. But when you meet people face to face, it’s, it’s a different story. You know, you build a relationship and it’s, it’s easier to connect to other people like that. Andy: (25:09) Awesome. Great. Well thank you again so much EGA for hanging out with us. Those new that are watching this live, those of you that, listen, I hope you’re enjoying these interviews. I only have about 90 more to go. I’m really excited about it though. Every time I leave I get more energized. Just hearing other people. I’m hearing them talk positive about their business as well as their, the share of the struggles that we all go through. So EJ, thank you so much. I’m gonna let you get on with your day. Appreciate you and you know, continued success in 2020.

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