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Ephraim Interview With Nick Shucet

Nick (00:04)

Hey, what's up, everyone? Welcome to the Million Dollar Sellers podcast. I'm your host, Nick Shucet. Today we have Ephraim on the call. He's been a partner of MDS for a little bit now, so it's always fun to get a partner on the call and talk business. So welcome, man. We're excited to have you.

Ephraim (00:25)

Hi, Nick, how are you? Good to see you again.

Nick (00:28)

Yeah, you as well, man. How's— how's business, been?

Ephraim Talks on Challenges and Growth in the Supply Chain Market

Ephraim (00:32)

Business has been amazing. Obviously supply chain is a challenging market right now, but it's doing… we're doing great.

Nick (00:39)

Yeah. It's been interesting to see what's unfolded and continues to unfold in that space. It seems like things are really changing a lot.

Ephraim (00:49)

It is.

Nick (00:50)

I'm sure you guys have a lot to stay on top of…

Ephraim (00:53)

Yeah, it is. Every few weeks, there's something new that comes up. So there's something going on every couple of weeks. So as long as we think like, oh, things are better, and then there's a new surprise. So yeah. Thank God for that. But we're— we're trying to help everyone out— everybody in their issues, but yeah, it's just unpredictable right now. 

That's— that's the timing right now we’re living in.

Nick (01:16)

Well, it's definitely gonna be interesting to get into some details on, you know, what's really going on in the industry right now. But first man, let's— let's get to know you a little bit. Like how did you end up where you are now? And— and where are you guys based? I know you're the— you're the chief logistics officer at the company— company, right?

Ephraim (01:38)

So our headquarters is in New Jersey.

Nick (01:40)

Okay. In Jersey and you guys are operating, you guys have some warehouses in a few other places though, right?

Ephraim (01:47)

Yeah. We have right at the back of me where you see the window, you can see pallets stacked up there. And then we have a facility in California right now, half a million square feet. And then we are almost signing the new lease for another half a million square feet. So we're— we're growing pretty rapidly around the e-commerce Amazon space.

Nick (02:07)

Nice. Congrats on that.

Ephraim’s Story and His Amazon Journey

Ephraim (02:11)

So I'll go into a little bit, my history, how I'm sitting on this chair right now. So in 2011, I started working for a candy company. They sold bulk candy and chocolate. They had their own website and they have five retail stores. And I came in there. It was before one of the Jewish holidays, and I came in there to help because we have the holiday of Purim. It's like Halloween. 

Part of it's not like trick or treating, but cool adults and kids give gifts to each other. So it's like candy, chocolate cake, like cookies, anything people think of— wine, whiskey, everybody with their own twist, how they wanna do it. So they sold thousands of gift baskets in that Purim season. That's in March, usually. So I came in there, it was my first job. I was like desperate to start working.

So I— I applied for the job something, yeah, you're just gonna take phone calls, take orders, do things like that. So I did that for like a month before the holiday. And then the owner said like, “I wanna keep you here”. So like, what am I gonna do? Like this holiday's over. So he said like… we started Amazon 2010. It didn't work for us. We closed the account. Like, would you start Amazon again? 

And so like, yeah, I have some friends that started Amazon recently. So I could definitely jump into that and see what is gonna happen. So I started their Amazon account and I just started listing basically, I think I listed 5,000 SKUs total by the end of… within like four or five months and... 

Nick (03:38)

What year was that? That was…

Ephraim (03:51)

That was 2011.

Nick (03:51)

2011? Wow. Okay.

Amazon Product Listing

Ephraim (03:52)

So I listed a ton of products and I started finding different service providers to help with keywords. There were not that many companies that we have today.

Nick (04:03)

Who was around back then?

Ephraim (04:05)

It was merchant words, it was new then.

Nick (04:07)

Okay. I remember merchant words.

Ephraim (04:08)

Right. So merchant words. And there was one more company. I can't remind myself of the name. I think ‘canopy’ today was the original owner of that.

Nick (04:18)

Okay. Okay.

Using Keywords

Ephraim (04:20)

I forgot. Yeah. I forgot the name. It wasn't that popular. I used that one and liked it. Cause in the beginning it was like, I listed a few hundred products, and like there's no sales, like what's going on? And like still I started to learn like you gotta put in keywords, you can't leave over… Like you can't leave the fields empty. So I started filling them in with different keywords. 

So it was a very interesting journey. Like the first four or five months, I really felt like I worked my ass off, like sitting and listing stuff and like nothing's happening. 

Leveraging Amazon PPC

Ephraim (04:51)

So at that time, I learned Amazon PPC came out. It was a new thing there. And at that time I remember I told my boss like, “Hey, we're going to start advertising our product”. He’s like, “Hey, like it's gonna be expensive. Don't do that.” So I say like, no, it's very cheap. So I think we spent $16 the first week and it brought us $5,000 in revenue. 

So like, if you tell that to someone today, you spent $16, and happens to PPC and it brings you 5,000, they'll tell you like, you're kidding. Like it's not happening, but yeah, that was brand new then. So we started doing a lot of PPC then and we really… from like the first four months we had literally 10-15 dollars a day. So like literally one unit sold within nine months since I started, we did almost a million in revenue, with help… the help of Amazon PPC. 

So I did that for the first year. And then the next year we really started growing a lot. And I came to the owner and said like, “Hey, we wanna— I wanna try to work something out. Maybe I could get a commission, a promotion, something”. Because I started at $10 an hour cash when I started before Amazon. And then he told him like, “Hey I can't give you cash anymore.

Cause that was just a temporary thing for a month. Like we're a legit company. If you wanna have full employment, you gotta go on the books.” So he gave me 12 bucks an hour. And…

Nick (06:10)

How old were you then?

Ephraim on Starting His Own Amazon Business 

Ephraim (06:12)

I was 21. So I told him like 12 bucks an hour after a couple months, like I said, it's not gonna work for me. Like you're taking off from paycheck taxes and everything. Like I'm making peanuts, and I'm putting a lot of work in and you're starting to really see results. So after he gave me a little bit of a raise after a year or so, I felt like it was not for me.

I really learned about the Amazon business. Well, I'm going to do it on my own. So I did not— I did some of it like… he was focused more on the Jewish holidays and on bulk candy and chocolate. So I decided I'm gonna go into the secular world, like any holiday, like Christmas, Easter Valentine's Day, Mother's Day, Father's Day. So I started my own business doing those gift baskets. 

Obviously, Christmas was the biggest, like we— I sold around 35,000 to 40,000 gift baskets in a six-week period. And then the other seasons were more of a smaller season. So by doing that, I was fully focused on that. I did… I was doing— I was a seven-figure seller. For… I did that for two and a half years. 

Trying Out 3PLs

Ephraim (07:17)

Then I figured out that, Hey, there's 3PLs out there. Let me try to use the 3PL. But obviously, with food, you need to have a special 3PL. So I found a company that was gonna put together my gift baskets: do the 3PL for me, ship it out at all to Amazon FBA. We did that for another two and a half years then basically I felt like I was very bored because Valentine's Day was a pretty good season, but from Valentine's on was really very little. 

Inventory Performance Index, IPI

Ephraim (07:49)

At the same time, Amazon introduced the IPI— Inventory Performance Index. So you had to have a… sell-through really well to be able to have like unlimited amount of storage. So for me, summer, from May till the end of the year until, I mean, November, there was nothing going on. So I wasn't selling much. 

So Amazon basically did not let me send in my 35,000 units for the Christmas season because I wasn't selling even close—I was selling maybe 5,000 units from May till November. That was all I sold. So I had a big issue. So what I did was at that time I emailed Jeff at Amazon. Telling them like, “Hey, my job is on the line. My business is on the line. I have a family of kids.” 

I just, like, I send them pictures for my kids. Like a really sob story, that's saying like, Hey, I need your help. And like, you guys are not letting me in. And I put an email tracker on it to see if anybody read the email. So the first 40 minutes, nothing going on from minutes 40 to like 45 minutes in, after the email, we got around 45 notifications that somebody read my email.

Nick (09:00)

Nice. Okay.

Selling Off His First Amazon Business

Ephraim (09:01)

Two hours later, I got a call from apparently Amazon's Jeff Bezos’ executive office saying that “we received the inquiry. We're gonna look into that. We will— we will have a resolution within three to four hours.” And thank God they gave me unlimited storage. But at that time I really felt like I was really taking a risk. Who said, it's gonna work right now? Work. It doesn't work anymore. 

If you speak to people today that email Jeff at Amazon does not, not like that. Not like that. It doesn't work like that. So I decided to… I had a friend who sold bulk nuts, like different types of nuts. And I asked him like, do you want to have a separate brand? Like, do you wanna buy it? So he decided he wanted to buy it off me like this. He has an all-year-round business and the holiday season.

So he bought that business off me, was before the aggregators were out there. Was before people were paying 3, 4, 5, 6, 7 X on… profits. But I sold it to my friend. And at that time, my father owned a 3PL for a while. And he said like, he wants to grow into the Amazon business. He had no knowledge. Cause we were a 3PL for traditional retailers, I sold to Walmart Target, and CVS. 

So at the time I joined, I started like, like how could I get Amazon sellers? Like I know the Amazon business really well. 

Changing His Line of Business

Ephraim (10:18)

So we came up that we're going to go for ocean freight, like a freight forwarding license. So we added that. So within a year, we added a freight forwarding license. We became a licensed trucking broker. So we came up with this thing that, Hey, we're gonna do import warehousing and deliveries to Amazon for Amazon sellers. So it took us probably… from there, I would say the last three years is really where we started growing a lot. 

The first year and a half was more like a proof of concept. Like, Hey, I have a concept. Let's see if it works. And then it started really working out for us. 

COVID: A Blessing in Disguise

Ephraim (10:54)

And then when COVID came two years ago, Amazon shut down its warehouses, right? There were the unit restrictions, the fulfillment restrictions, and storage restrictions that had so many different restrictions. And these big sellers were forced to use a 3PL that they never used before. So that's when we really got a big push and we really got into a lot of— a lot of Amazon bigger— Amazon sellers started using us. 

That's when we got introduced to MDS back then like we had started getting MDS members interested in our services.

Branching Out to New Locations

Ephraim (11:26)

And then… from then a lot of sellers learned like, Hey, you need to have product sitting in the US. Or in other marketplaces, just in case you sell out, you don't wanna be in the case where you don't have enough inventory, you have to air them in, or just go crazy if the port is congested and you're running out stock. 

So a lot of bigger sellers came up with that, that they need to sit a fleet on six— three to six months of supply in the US, or just in case they do well— they sell well, they could just send it in right away. So that's basically my— my story— my own story, how I got into this. 

What pulled me into it was because I, myself used the 3PL, I used freight forwarder, I used truckers when I was an Amazon seller and a lot of them didn't have any Amazon knowledge at all. Some of them that did have knowledge were very like bits and pieces. 

My freight forwarder had no knowledge of Amazon. My 3PL I gave them lessons, but Amazon was all about now. They're doing pretty well actually with Amazon sellers in the food— in the food district. So they, so for me, I came up with that point, for an Amazon seller, most Amazon sellers are not huge, right? They're not like big-buck retailers. 

They're bringing 5— 6,000 containers a year. There are smaller, medium size companies that bring 100 containers, 50 containers, 25, 200, 300. It's more in that number. That's the majority of the Amazon community— the sellers on Amazon. So I came up with an idea like, Hey, we take care from A to Z for you. 

Like, you… you build your product. You focus on PPC, growing your product, growing your SKU list, and whatever you need to do to grow your business. Like we will handle the— the logistics part of it. And we're doing pretty well with that. People are really happy with that.

Nick (13:16)

Yeah, man, that's a great niche to be in. And someone with your background is— is perfect to be of assistance to an Amazon seller who needs some help with logistics. I mean, it's, it's clear that, you know, the ins and outs and, and have a good pulse on you know, probably like how to get inventory and the fastest way to Amazon and you know, handle any issues with prepping and packaging and stuff like that to get it into Amazon. 

And it's definitely convenient because a lot of— a lot of times, like you said, when you talk to people to get inventory in, they're like, what, how do you do the labels? What is that? You know, what does that mean? And, like, if you miscommunicate on a label, that can be an expensive fee. You know, someone misunderstands you and accidentally labels, you know, 5,000 units at, you know, 20 cents a label or something, and, you know, you didn't need it. And there's just a miscommunication along the way. 

Like, I'm sure that happens often. I know personally, I go outta my way to make sure they know what we're referring to if they— if they don't, but…

Ephraim Explains What Happens After Mislabeling Your Amazon Products

Ephraim (14:26)

100 percent. It's also like, I remember when I was a seller myself and like we made once a huge mistake. My staff labeled 5,000 units with the wrong FNSKU label. So back then I called Amazon, put up the case and they changed all the labels for me.

Nick (14:41)

Okay.

Ephraim (14:42)

Now it's— it's already a couple of years. They don't do that anymore. If you mislabeled something, you gotta do a removal order. Removal order takes eight weeks— nine weeks, sometimes three months, sometimes depending on what time of the year until you get all your units back. And a lot of times they come in like one Z… like a one in a box, two in a box.

They come in hundreds of boxes, they get damaged in transit. So definitely like if— if you— your supplier made a mistake or anything like that, or Amazon made— made by… like the last three years, they really crack down on inserts. Right? How you write the inserts is a violation. They shut down your account. They could shut down your listing. 

Like if you don't have a reliable 3PL that could do that for you or your own warehouse, whatever people sell— some sellers have their own warehouse. You really— it's really could be really costly. And you could just wipe out your profit, just like that by making that such a mistake. 

So that's why it's important to have… whoever you work with, whether it's your own staff or you use other staff, that are knowledgeable with the Amazon requirements, tools, and changes that happen. So that's really important.

Nick (15:51)

Do you guys help with returns at all?

Ephraim (15:54)

Yeah. The returns are not as much. It's more the removal orders, but yeah. I mean, definitely, there are a lot of companies out there that do returns. Like they're good at it. They— we sell a few stuff like that. Check if it's good. The majority of our returns are more removal orders from Amazon, but definitely we have returns as well.

Nick (16:18)

Okay. Nice man. So I didn't know you had that deep of background on— on the selling side especially that early on, like you know, you're, you're an OG in the game, man. You've been around for a while.

Ephraim (16:32)

I've known so many people that were— used to be very famous, like influencers, and now, like nobody knows about them and like, I got to know the new generation of new influencers and new speakers. And so it's really yeah. It's— I'm 11 years in the game. Yeah. So…

Nick (16:48)

And I feel like New York has been a real hotspot for selling on Amazon. I mean, there's a lot of people coming out of New York with like strong Amazon businesses, from what I've seen over the years.

Influence of Location in Building a Thriving Amazon Business

Ephraim: (17:02)

Right. Especially in the community where I live closely, it is like the Jewish-specific community. So how we grow up—we're— we're very like a sheltered, like the… with… from the world, like we don't have TV. A lot of the homes don't have TV. A lot of them don't even have smartphones, they have flip phones still. Like there's a lot of people that— that's what they…believe in. Again, I… everybody has their different beliefs. 

So within Judaism, there are probably 50, or 60 different types. So a lot of them didn't have a proper education on the English side. Right? Speaking English, doing business. So for them, Amazon was like a huge game changer. Cause you don't have to talk to anyone. You don't have to deal with anyone. All you gotta know is how to list products. Do PPC and sell.

So yeah. That's why it blew up so strongly in Brooklyn in the area where I live. There's a lot of, a lot of people that sell on Amazon. Probably, I think somebody came up with that number, 20% of Amazon sellers on the East Coast are from like New York, New Jersey area. So— so that's probably the reason why there were so many, like when I got married and I started the business all my friends were like, “Oh, we're doing Amazon.” 

So that was like the thing right now. It's like, don't touch. If you wanna start an Amazon, you really have to have money for that. You really gotta know what you're doing. 

You really have to use the right partners. It's very different than 11 years ago.

Nick (18:38)

Nice man. Well, I, we see that you have your, you know, beautiful family up on the wall back there. You know, how, how is life at home for you guys now? I mean are— are your, is your family like pretty dialed into what you're doing and— and are you re how are you raising them based on what you've been through and have accomplished with your own stuff?

Ephraim Talks on His Family’s Position in the Business

His Wife

Ephraim (19:00)

So it's very interesting actually. Like my wife is a partner in First Choice Shipping, so we're both in logistics. So that's a little like… people like go crazy, like, “Hey, how do you guys do it?” Like, so like she's more on the export side. Like anybody that sells overseas, any Amazon facility outside of the US, that's what she focused on and I'm more inside the US and import to the US.

Nick (19:27)

You say, “Honey, you can only do the exports. I'll pull them down the imports.”

Ephraim (19:31)

Yeah, they actually did some imports and then they shut down that thing because she felt like it was a conflict of interest and we work a lot together. Cause we— we introduce each other, a lot of customers all the time. They were— they're preferred by Amazon, themselves. Amazon sends them sellers every single day that they want to expand globally. 

So they're pretty big with Amazon in the global expansion team, but definitely so… We both… it's weird—it's interesting how she got the job and everything that happened. So we got married, and I started my Amazon business a little late at first.

The Kids

Ephraim (20:11)

I worked for the candy company, so we had our first son, so my son was turning 10. Then we have two daughters, a five year… one that's turning five on May 5th. And then a daughter that just turned two. So we're a family of five all together. Three kids. So my son really grew up with that journey. Like he knows everything about Amazon. 

He knows a lot about logistics, even though he is only nine, or 10 years old, but he knows a lot of it. Like he hears me talking on the phone a lot of times and things like that. But..

Her First Job

Ephraim (20:45)

So my wife was like— like working for a car company when I did Amazon. And she was leasing cars, selling cars. That was her— that was her first job. And like she told me she hates the car industry. It's just really tough. People were really rude and it wasn't like a community-based type of business.

It's more of a “rough business”, she called it and I was just like looking classified without her knowledge, even just looking classified, like job offers and like something like this First Choice Shipping pose.

From Part-Time to Partner

Ephraim (21:20)

I got my eyes like it's a part-time job. She wanted to work part-time so I just had my… I had a resume in my email. I just submitted the resume for her and she just got a call like two weeks later, like, “Hey, did you apply for a job at First Choice Shipping? And she's like, “No, but.. not that I'm aware of, but I'm in to come down for an interview.” 

So— so she went out for an interview and that's what happened. She started working as a part-time employee and she got in… she became a partner a year and a half ago, almost three years away. So— so that's how we both became like— like I had the Amazon experience. She learned a lot from me. Cause I was selling them. I was selling Amazon, UK.

I was selling on Amazon Germany. I was selling in Canada. So it helped out a lot between me and her growing her business first. And then after, she was fully like they were doing great, they got connected with Amazon, and Amazon referred them. That's when I started working here at Tactical. So it was a really interesting journey, but like we're both really happy. 

Balancing Business and Family

Ephraim (22:31)

…for me the first hour and a half I come home, we’re completely focused on the kids and the family. And then afterward we could just catch up or spend some time.

We're happy we have a beautiful family. We make sure that… she does it from five to eight. There's no work. Basically, a phone goes away, emails go away for me. I come a little later, but for me the first hour and a half, I come home we’re completely focused on the kids and the family. And then afterward we could just catch up or spend some time. So that's, that's on the family side.

Nick (22:53)

Nice, nice man. Yeah. You know, I think those blocks of time with the family are critical. I went through a weird phase where I was like, it...it felt weird to do that to my family. Like, oh, I'm gonna schedule time for my family. And I was like, but then it was weird. Cause I'm like, well, on the other side of this coin, it's like in— in work and stuff, we're proud of this. And it's like, good. And it's important and right. 

But on the family side it's like, oh, you shouldn't have to do that. And then—and then I realized like, well, whatever I need to do for me… need to have that time scheduled. And it does…

Ephraim (23:29)

Yeah, I have, I have two numbers. So one is my personal number one is my business number, but they are usually on one phone. So I have my iPhone. That's where both numbers go into. But when I…before I come home for the first hour and a half I change— like I forward my number to a flip phone. Like the old-fashioned flip phone. All I have is a phone.

If anybody needs me in an emergency, I'm available for a phone call. But like no emails, no WhatsApp, no messenger. Like no… nothing else could like— like distract me for the first hour and a half. Cause my son, like that's when we really started looking into it, cause my son was like, you're always on the phone. And it's like, what am I doing? Like, it's my son. 

Like I don't wanna teach him things that when he gets older, he's gonna do the same thing. So yeah, the goal is to make sure our kids are happy and they feel safe in the house environment and they get the attention. What do they need, they’re kids after all. So they— they need their daddy and mommy time all the time.

Nick (24:26)

Yeah. 100% man, the phone thing. It's— it's one of those things that can become a habit. And like, you don't realize you're doing it. And you're like….You're like, “Oh, I'm gonna go take a walk with my son”. But you know, five minutes of the time he's talking, I'm looking at my phone, you know? And I'm like, what am I doing? You know? So I just leave it, you know, like you said, I just put it away for a certain amount of time.

Ephraim (24:47)

Yeah. That's amazing.

Nick (24:48)

Be focused…

Ephraim (24:49)

Yeah. We don't know cause like when we were kids, right? Our parents didn't have smartphones. Right? So we never experienced parents that were fully focused on social media or electronic devices. Cause they were not connected to it at all. Today's generation is very different. So we don't know how our kids will grow up to be when they're 20 or 22 years old. 

But at least when they're home, they feel like they have parents who care for them and they feel safe. That's me— that's my ultimate goal.

Nick (25:21)

100% man. Definitely— definitely something good— to have. I've got three kids myself and one of the most important things man is raising those kids. Right.

Ephraim (25:32)

Exactly.

Nick (25:33)

It's good for everyone in the long run, man. You don't wanna…

Ephraim (25:37)

Definitely.

Nick (25:39)

Yeah. I— I ran my parents through the ringer man. So, I'm not trying to do that to myself.

Ephraim (25:47)

Exactly.

Nick (25:49)

Well, good man. That— that was cool to get some background on how family life is for you guys, like do with— with the way that you guys work. Are— are you able to like kind of do things when you want, like take a vacation, you know, pick the kids up from school take them out to lunch? Like what's, what's that look like for you?

Creating Time for Fun with Family

Ephraim (26:07)

Sure. So we have, yeah, we have… in the winter, I usually go away with my wife solo on vacation. Then in the summer, we have like the kids are off school for like eight weeks. So I rent out a cottage in upstate New York where it looks like we're like a group of 23 families. So we go up there for six to eight weeks straight. They have… the kids have them, like a camp where they could go swim, enjoy themselves, activities. 

Like there's very little studies, like maybe like two, three hours a day, that's it. Instead of a full day. So they do some studying in the morning, Jewish studies, English studies, whatever they need to do. And then they have like activity every day. So they have sometimes sports, swimming, events, they go on trips. So that's… the kids always look forward to that. They love it. 

The kids are out the whole day, so they don't even walk into the cottage. They're just running like, “Oh, I need something to drink. I need something to eat.” And they just run right out. So we do that for eight weeks. So…

Nick (27:10)

Awesome, man.

Ephraim (27:10)

So I— we take turns. So I'm usually here in the office, middle of the week. I go off the weekends and then my wife is there with the kids she works from—from there. And then we change it around for a couple of weeks that I work remotely. So we make sure between both parents like their…that their kids have their full enjoyment, but that's what the kids have. 

And then we have two holidays a year where like right now Passover holiday starts tomorrow night. So it's like it's eight days, a nine-day holiday. And then we have four days in the middle that we don't really work, but we have phones and we're connected to the world. And then like, it's the time where you go out with your kids. But locally, like some people go away we're going locally.

We'll… we're gonna do next week Monday. We're doing Sesame Street in Pennsylvania. We'll go there with the kids one day, we'll go probably to the aquarium or a ride-like arcade place. So like, just like to give the kids enjoyment. So we do that twice a year as well, but locally, and then, yeah, like I said, it's summer. 

So between the full year, kids get some enjoyment, we have some enjoyment, obviously this conferences that we need to go to, we both have— we both go to, so that's a little bit of a break family time, but at the same time it's work. So yeah, we— we mix it up.

Nick (28:28)

Yeah. Between family and work, it's— it's easy to schedule like a whole year.

Ephraim (28:33)

Right, exactly.

Nick (28:35)

Like, oh, man. My whole year is pretty much planned.

Ephraim (28:37)

Right.

Nick (28:40)

Good stuff, man. Well yeah, let's— let's chat a little bit about like what business is like for you at the moment. Things are crazy right now. I feel like it's changing every day it almost feels like, but you know… what—what are some challenges that you're seeing at the moment for your clients and what are some of your bigger clients doing to like work around these challenges that keep popping up?

Ephraim Speaks on Recent Business Challenges

Congested Port

Ephraim (29:05)

Right. So right now there's just a challenge that we just passed, but it's obviously still hurting a lot of sellers. And that is that the port of LA was very congested. I'm sure you were aware of that in the months of October, November, December, and January, and a lot of products came in late and a lot of sellers unfortunately missed their Q4 season with products sitting on the boat. 

So what happened was obviously it overloaded our warehouse at the same time and it's sitting product because that was supposedly was gonna sell Q4. And obviously, you don't have… a lot of— of people don't have the same sales that I have all year round and half Q4. So that was a big deal for us as a company like dealing with that overflow. 

And we're actually… looked like leasing now another building the same size. One of those is because of this— this reason, but at the same time, we're also adding a lot of new customers. So that's the issue that we had.

Covid-19 Effect

Ephraim (30:04)

And the second thing that sellers right now are experiencing is that COVID is raging in China right now in a lot of areas. So apparently I just read yesterday, that I think 25% or 26% of factories are shut down in the Shanghai area. Shanghai is one of the biggest manufacturing and ports in China, and that stuff is going up. 

So what that's probably gonna cause, first of all, you can't get your product out fast enough because if your factory shut down, basically you're kind of screwed at the same time. On the other end, that means that right now we're seeing a drop in rates on the import side. But the minute things get better, it's gonna be that rush again. That we had last year and two years ago where rates shut up and capacity tightened. 

So anyone… I would say any seller that doesn't have that issue currently that their factories are working and they could get stuff out, just plan ahead and try maybe to import your products earlier. Because again, I don't think it will hit the rates of last year where it was 14, 18, 19, $20,000 a container, or even more. I mean, some people paid New York, 30,000. I saw it in the news somewhere. 

Not in my— not in our company, but some people just said they paid 30, 32,000. But my goal is just basically, it might come in July, or August when there's a big push. After they went through that COVID surge and there's gonna be less capacity, rates will go up and then you're paying more and they are at the same risk again. 

At the same time even though you might ship a little bit later, don't do the same thing you did last year where you shipped the product out in October, even beginning of October. Yeah, obviously the port is much better right now. We don't know. As we said, every few weeks, there are no surprises. We don't know what's gonna be November this year. 

The port might be easy and you might ship it in October and you have it beginning of November and you're good and you're safe, but don't plan on that because just in case you… there is congestion, there are issues at the port you're risking your whole Q4 again. And so for some people that could really put them out of business losing that whole quarter and being stuck on the water. 

So that would be my advice on the port side. And that's the— the struggles that some sellers are going through right now. We have stuff that factories are working on, but truckers have to pass certain barriers to get to the port and they have to quarantine. They have to do COVID tests and stuff like that. And truckers are actually doing that. It's just a huge headache for them. 

So they have a problem. That product is ready, the party is ready to go. They just can't get on the boat. So all these issues that our sellers are experiencing right now, whoever's not experiencing now should just jump on it because there are new pockets. There's nation end, there's already closures again, there is near Ningbo, a new closure, again, some areas where they're shutting down. 

So we don't know where this is going. In the next few months, I might surge all over. They might shut down Shanghai, I mean Ningbo port or Sheen port. That has happened for a couple of days right now, Shanghai port is open, but the problem is that getting there is a huge deal. 

Insufficient Truckers

Ephraim (33:36)

So around 19% of containers are not getting there because they can't, there's not enough truckers that wanna go through that hell of going through the whole quarantine process— the test process. So that would be my advice, just really don't think it's only April right now May and Q4 are far away. We only just finished the first quarter, but still, just keep that in mind to have that resolved or have a game plan for how you want to import. That's on the import side.

Post-Covid Implications for Labor and Amazon 

Ephraim (33:36)

On the— on the warehouse side, it's pretty much things are running pretty smoothly. The labor market has gotten much better in the general labor sector. I mean, in the higher positions, I think we all still struggle to hire talent, but in the general labor sector, it got much better. So we had in COVID… we had so many outbreaks and people were not going to work because of unemployment or whatever the reason was. 

Things are much better on that side. But also with Amazon changing the rules right now, they made it much better for sellers. They opened up the… a lot of restrictions got eased up much more. But my advice on that is don't send a crazy amount of products to Amazon because they let you. 

Because just in case you're not having your sales velocity, right, you're not having the sales cycle, what they want to see you— your IPI score will drop. Right? And at the same time, they might restrict you later on, or they might restrict all sellers in four months. So now they get overloaded. So then you're gonna have to start doing removal loaders. Right? 

And then when Amazon gives you… a lot of sellers that know that— don't know that when Amazon gives you the removal they give you some windows. If you remove from this date to that date, it's free. Right? You cannot send that product again to Amazon. I think you… it used to be six months, I think right now it's 10 months or maybe even more. They can send it back to that SKU.

Nick (35:21)

Yeah… How long it is? But yeah, they do.

Ephraim (35:23)

It's been a while. Right? So you have to be really careful. Some people say like, “Oh, I'm back… I’m— Like I'm not using a warehouse anymore. It just comes straight from the port into Amazon”. Just make sure that you have a plan to sell them out pretty quickly because you don't know what Amazon is gonna do three months from now. So again, it's like, we're living in an unknown time right now. 

Nobody knows where things will shift, but at least to be conservative and cautious of what you're doing, not to screw yourself in the long run. That's really important for Amazon sellers.

Nick (35:59)

So with Amazon, like it— it's clear that they're pushing this burden of storing products onto the sellers, right? They just don't want to deal with those situations like they used to. So with things always changing, how do you work with your clients to kind of remain somewhat flexible and dynamic with what's going on as well as the impacts it has on the sellers when those things happen outta nowhere?

How Ephraim Handles Emerging Challenges in His Amazon Business

Total Commitment

Ephraim (36:28)

Right. So what I do is I tell all my sellers that work with me once we sign a contract, once we move forward that I commit myself to do your work, I commit myself a hundred percent. So if something happens that you need to do a huge removal order, you need to store products right now cause you can't send them to Amazon, like that's my issue. It's not your issue. 

Like if I committed myself to do the work for you, it's my commitment. It's my responsibility. If I need overflow space or I need another building, that's my issue. It's not your issue. So that's what we're trying to do. I mean, we went through a lot of even MDS members called me up in the last couple of months is that my warehouse told me to leave. Like they can't handle me anymore. 

When Amazon gives you the removal, they give you some windows. If you remove from this date to that date, it's free.

Set Policies and SOPs

Ephraim (37:12)

They can't handle more. Like I don't do that. Like I told them like, if I commit to you, that's my issue. It's not your issue. So that's how I work around that. It's like, I'm… we have policies in place. We have SOPs in place. Obviously, that's part of our… anywhere else should have such a process.

Flexibility

Ephraim (37:29)

But obviously, we're flexible. A lot of times, like if somebody is running outta stock today or tomorrow, you need something in an emergency, obviously I'm not gonna say like, “Hey, we have an SOP of two days and we're not gonna do the tax on that.” Like we will try to accommodate, like, I'll try to make sure. Cause I know and I teach that to my staff.

It's like, we pull up amazon.com. We take a listing, “Oh, you see here, this customer, this is their brand. You see it on Amazon. You see, they have 5,000 reviews, a thousand reviews on the product. That's very important. You see at the bottom there's seller ranking. What does that mean?” So if the product goes outta stock, what happens to this listing?

This listing drops right? Then once it goes back in stock, you have to spend a lot more money at PPC. And sometimes people have that death sentence, that product, if they ran outta stock for some period of time and their competition really knocked them out because they were leading for two months, that might be a death sentence for your product forever.

I mean, you might never get to those sales again sometimes. So that's what I try to teach all my management team is to understand what means a stock out on Amazon.

Nick (38:34)

Yeah. That's amazing, man. It's great to have someone on your team like that with that perspective.

Market Insight

Ephraim (38:40)

Right. And that's why I think again I don't like— try to brag about myself about the company, but I think that's what sellers really enjoy working with me is because I speak their language. Like I was a seller. I worked for two years for another company. I worked for almost five years on my own. So I've done it for seven years. I mean, things have changed a lot last year or two.

I get more or less—I hear from sellers what's going on, but it's the same thing. It's still the ranking. It's still running outta stock. It's the same issues that people had seven years ago, five years ago. It's just right now, it's worse. So if you run outta stock right now, you have a bigger problem than you—If you run outta stock five years ago because the— the market is so much more saturated with so many different sellers.

So if you run out of stock, you're giving an opportunity for someone to really come out on top. So all that is— is really important. And I— I try to make sure with my staff that they actually understand the urgency.

A Sense of Urgency

Ephraim (39:29)

So part one of our values of the company as Tactical is urgency. Cause basically we— we understand that there has to be discipline. That means there have to be processes and ways to run our business. True. Any business should have that, but there's also the sense of urgency that if there is an emergency coming up, we know we have to jump to try to help if we can.

And if we can, we should do it. So that's us, that's how we teach our employees. We very much strongly believe in the values that we have. If— if you wanna wait a second, tell you what it is, all of them. And I'll, I'll touch on that base as well. Cause I wanna really elaborate on that—— on the community part as well.

Nick (40:25)

So we've——we've got some core values too for the group. So…

Ephraim (40:29)

Yeah, it's very important. Cause when we hire someone, we really give them that manual. This is what we stand for. Are you— do you feel like you believe in that? Again, that's not for general labor cause general labor like some of them don't even speak English, like they're the general laborers, but anybody in management or leads has to have to basically believe in the values. 

Cause otherwise then you are working just to make a paycheck. A lot of people are doing that. We wanna have people that we grow with and do that. So that's basically what we believe in. 

Ephraim on the Importance of Brand Values

Ephraim (41:05)

Urgency and discipline are really enemies, but you need to have the balance of that. 

So our values are Community, Urgency, Honesty, and Discipline. So urgency and discipline are really enemies, but we… but you need to have the balance of that.

When to Prioritize Urgency

Ephraim (41:23)

So the discipline is yeah, day to day, we need to have the discipline in the warehouse or in the company. But at the same time urgency— sometimes we gotta look at urgency and like try to help out. So that's our— our four core values and our new slogan that we're working on right now is “to deliver our customers' livelihoods.”

So what we're explaining to our employees is that when we ship a box, you put an FBA label on a cart, right? There are 12 units and 14 units. It's gonna generate you 2000, a 100 dollars, whatever the revenue you're gonna generate on that product that is somebody's livelihood.

Putting Your Customer’s Needs Ahead

Ephraim (41:58)

Somebody's paycheck is dependent on that. Somebody's lifestyle, somebody's family, somebody's so much… Cause logistics is boring, right? A warehouse is boring. You come into warehouses, there’s bunches and piles of brown boxes like— it's boring really is. Like, what is it about a brown box?  But if you have that feeling and you believe in that, like, “Hey, I'm doing this right now. We're sending this to Amazon right now because someone else will benefit from it.” 

Like you are doing something that someone else should be able to have a good life, a good family, support people, whatever it is, charity— whatever that person wants to do with it. But it's a livelihood. A box is a livelihood.

More Than Just a Brown Carton

Ephraim (42:33)

It's just not a— it's not a brown carton. So that's really important that we're pushing now a lot is to believe in our values. One of our values is community. And like how I look at Amazon versus retail. Cause we have both customers. Retail is a very— I don't like to talk like that, but it's a very… nobody's allowed to know anything. We need to say like nobody… they don't collaborate.

They don't have networking events. They don't have like MDS does a lot of these events like where you get sellers together and you spend quality time together and you help each other out. Retail doesn't have that. Like you have salespeople. You work with Walmart, Target, Bed Bath and Beyond, TJMX, and whatever the store is. Yu try to get to a Brier, you show him your stuff, you have a showroom and that's it.

Working Together as a Team

Ephraim (43:18)

There's no community— a sense of community versus in the Amazon world, there is a bunch of service providers, hundreds of service providers out there and there are millions of sellers or hundreds of thousands of sellers in the US. And we all work as a team. So we have sellers helping each other out. We have service providers helping other service providers or helping sellers out. 

So the sense of community that we have as e-commerce and Amazon sellers or Walmart sellers— whatever that you sell on is a very different lifestyle than what people that sell just to retailers. So we are very strong. Again, it's my background community, cause I was an Amazon seller. I have gone to every single conference out there— bigger conferences out there in the past. 

I've been to all the prosperous from the beginning till now. And I believe in that, like we— we are here it's not only like you speak this seller. “Oh, I'm having a problem with my PPC. My equals are too high. Like what do I do?” I'm a logistics guy. Right? So if I'm a logistics guy, like I have no idea, like figure it out, like speak to someone. I don't know. 

So the way we work with Amazon, like probably you are in the MDS group, people ask you questions, right? And is what is it like yeah. Speak to this guy— speak to that guy. That person could help you. They're really good. Like that's the sense of community that we as Amazon sellers are and the same thing as service providers, helping sellers. 

So that's what… that's basically our values and, and that's what I love doing what I do is part of sense of community. Like we go to event… you go to an event, right? And you meet these, the MDS members. Right. You're all like, “Hey, what's up buddy? What's going on?” Like it's family.

Nick (44:56)

Yeah.

The Significance of Belonging to a Business, Community, or Family

Ephraim (45:01)

So, I spoke at Prosper. We did a— I did a dinner with TechMetrics together. And I spoke there and I said like, I love going to these events, like at prosper, I think like that because yeah, we have a personal life, and that's family life. Right? But in the workspace, we never had that idea that like in the workspace— in work life, you could also have a family. 

There's nothing wrong with that. And it's beautiful. So I always say like, I love going to Prosper. I love going to different events. It's because I met my family again. It's work family, but it's still family. And— and the same thing here where I work, in here is like, my father is the owner. right? he worked with his father back before we started the 3PL business. 

We're… for our staff here, everyone, it's— it's a very family way of working together. So that's what I love. And I feel like— I feel accomplished with my day because I feel like I'm with— I'm in a family environment and that's what people have to understand. It's like, some people are like, oh, this is business. Like you gotta be really stuck up and like very proper and like corporate. 

Like I don't— I don't… I don't believe in that. I believe that yes, personal family, you have to have fun with them. You have to have a life balance of work-life balance. But even the workspace is beautiful to have that family feel when you work.

Nick (46:19)

Yeah. It's great. It's really, it's— it's like I've looked at it. It's— it's like, you can really have that blending of personal and work life. Like you really can. I think we're taught growing up— at least I was, to have that separation. And— and you really don't need to.I mean, you need to get shit done at work.

You need to do stuff and accomplish things and— and, you know, be true to your word and do what you say, you're gonna do you, you should probably do those things in general, you know, but like at least in business, when you're… when other people are depending on you to work towards a common goal, it— it becomes a little more critical. Right.

But it can be so much fun, man. Like I've— I've had some bad businesses with friends that I grew up with before I got into e-commerce and they went bad. It wasn't just because it was a bad idea to go into business together. It was just like, I wasn't ready. He wasn't ready. We both were making terrible decisions. Like a lot of people just say, “Oh yeah, you know, friends and business don't do that.” 

But you see it all the time in our world, like... People start… in MDS, we see it all the time. People starting new businesses, you know, in other industries and stuff like that. So you know, great things can happen to you when you're able to get to that point

Ephraim (47:41)

100 percent!

Nick (47:41)

And— and I tell you what, like, if you're listening to this episode right now and— and you don't… you need help with logistics and stuff like that and you're in eCommerce, you know, I don't know why you wouldn't be hitting up Ephraim right after this, because he's just got such a great background in its history, truly understands the business and know what it means to not go out of stock on Amazon. 

And it sounds like you've kind of baked that into your whole business, like down to your manager level which is great, man. You know, so like, why don't you let… tell people all that you guys do at Tactical. Like I know you mentioned full full-service provider, but what are some of the major things you do and where can people find you?

Ephraim Speaks on What His Business is About

Freight Forwarding

Ephraim (48:25)

Right. So what we do exactly is we do… obviously we're freight forwarders. So we import from mostly…obviously from China, but we bring imports from a lot of different areas from Turkey, Egypt, Israel, Japan, Korea, India, Vietnam, Thailand, like all different places, but obviously, China is always gonna be the leading— the leading area where people import from. 

So we do ocean freight, air freight, not small partial, so anything DHL, FedEx thing like that, I send that my wife's way. 

Custom Clearance and Container Drainage

Ephraim (49:12)

Because I'm… we're not stepping on each other's toes. So anything like that, we do custom clearance and container drainage. That's pick up from the port or if it's an LCL-less container load, we do the pickup with the truck. 

3PL Warehousing

Ephraim (49:15)

And then we offer 3PL warehousing in California, mainly the East Coast right now, where I'm at, we're completely full. You can see in the background, that pallets are stacked up till the— till the ceiling. We're looking to add more space here as well, but first, we're expanding in California.

So we do anywhere between just regular FBA part and labeling, any vast value-added services. That's bundling, QC check, relabeling, removing inserts, adding inserts, anything that's needed for… any prep work to sell on Amazon, we do that. And then we deliver to Amazon. So we make our own appointments. We control that. So Amazon doesn't control us. 

So I'm not competing on pricing with Amazon, obviously. I'm not here to try to compete with their brakes. They're really cheap. But I compete on speed. So in Q4, you schedule a truckload for Amazon. They might show up two weeks late, or even when they show up on time, they just drop the trailer in the Amazon's yard. 

And whenever they get to it, offloaded versus all our carriers are live offloads. So basically they have to live unloaded. We have sometimes our driver was there 2, 4, 18 hours until he got discharged, but that's Amazon, nothing to do about that but at least it got offloaded and it didn't stay in their yard.

Nick: (50:49)

Wow. That's intense. Sorry.

Ephraim (50:51)

Yeah. The record was two years ago for COVID was 23 hours.

Nick (50:56)

Wow. Oh my God. That's intense.

On Future Plans for Expansion

Ephraim (50:59)

yeah, but the majority are around 8, 6,— 8, 10 hours. So that's basically in a nutshell what we do. We are going to expand by the end of this year on QC check and inspection and sourcing from China. That's gonna be probably towards the end of the year. We're in the middle of setting that up. 

Nick (51:21)

All right. I think that's smart, man. I'd be like that. If you can fill that gap too, man, like that's so convenient…

Ephraim (51:26)

That's like the full…

Nick (51:27)

For an Amazon seller. Yeah.

Ephraim (51:29)

And the last piece will be like the B2C cause right now we're not doing direct consumer. Only for basically a partial… some sellers sell bulky products that are one unit in a box. All you gotta do is slap on a label and ship it out. That's what we would do. But if anything, we have to open up boxes and start to keep track of units, like we don't do that yet, but there's a huge demand for that because obviously people want that. 

So that's gonna be the last step probably sometime next year, gonna start beta, like we're gonna start testing it out. So we used to do it the manual way and if we do it again, we go to do it an automatic way. So with robots, machines, conveyor belts, everything digital. So that's— that's our— our next year is hopefully growth. 

But obviously, if sellers are running outta stock and they wanna switch to merchant fulfilled, we do that all the time. There's a process for how to do that in our system, but we do that all the time. Obviously, we're not here to screw you and like, if it needs to be switched on for a day or two days, we'll do that. But it's just not our core business right now.

So it's not like something that I tell people, “Hey, we do it.” Cause we don't. 

Nick (52:40)

And again, like, I bet you can't get that with a lot of other providers right? Where it's like, oh, Hey,

Ephraim (52:46)

They don't do it... 

Nick (52:48)

We know how to be fulfilled by merchants on Amazon. Right. Like, they'll be like, “No, what the hell are you talking about? Get out there man”.

Ephraim (52:53)

Right. Exactly. So that's, that's the part of the, the urgency part. If something like that has to happen, we go away from our SOP and we do the urgency part of just helping out our sellers.

Nick (53:04)

And that's where it's one of those things where the…like at first you said the discipline and the urgency, they kind of can work against each other. But lately, I've had a perspective shift on this where it's like the—the discipline allows you to be urgent properly. Right? Like now you've been disciplined now you're in a position to react to these… these outs of nowhere things that happen. Right.

Ephraim (53:33)

Yeah. Or could be… there could be harmonies or they could really— really blend together and work together as a team. And that's what we try to do. But like, definitely there are two ways I’d look at it and the best way is obviously always to try to blend in versus just knowing we can do it. Like yeah. So… 

Nick (53:50)

Good stuff, man. Well, I know like everyone in the communities had nothing but good things to say about you, which is— which is great. So you know, for anyone listening, definitely hit up Ephraim if you have a need for what Tactical offers. And for those that are just listening in, where— where can they find you if they wanna reach out?

Ephraim (54:08)

They could look for my name on LinkedIn, and Facebook. They could email me at Ephraim@tacticallogistic.com or reach out from the website either way. They'll all come to me at some— at some point.One of my team members will forward it to me. So yeah. Any of these places will get through to me.

Nick (54:27)

Sounds good, man. Well, thanks for coming on the show. It's been good chatting with you.

Ephraim (54:30)

Thank you, Nick. 

Nick (54:31)

And I look forward to talking again soon.

Ephraim (54:33)

Same here. It's good to see you and yeah. Enjoy—enjoy the weekend. It's coming up. Yeah,

Nick (54:38)

You too, man.

Ephraim (54:39)

Take care.

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