How to Grow Amazon Business with a Tailor-Made Funding Approach AccrueMe
Dr. Amazon Podcast with Donald Henig
Donald Henig is an inspiring businessman who has been involved in different professional backgrounds in his life. His recent venture AccrueMe aims to fund Amazon Sellers with a unique approach.
AccrueMe doubles a Seller’s capital and does not require any monthly payments, and does not take any permanent ownership. In return, they receive a % of profit for as long as Sellers use their money.
About the speaker
Donald Henig was the President of and established the 6th largest wholesale mortgage lender in the nation, set up an entertainment company, developed an app to help people buy, sell and lease properties. And that’s not all. But now, Don is helping small and medium-sized businesses to grow. His recent venture AccrueMe aims to fund Amazon Sellers with a unique approach.
- 00:35 Are you sure that additional funds will help your FBA business to grow? This topic is special and here Amazon sellers need not only funds but mentors and the right mindset. That’s why we will dive deeper into this topic with Don Henig from AccrueMe. Welcome back to the Dr. Amazon podcast.
- 00:59 Hello, everybody. Thanks for joining us today. You have really a great time for today because we have an amazing guest. Today we have Donald Hening, Co-founder of AccrueMe and the great person with a unique experience in growth capital for Amazon sellers especially. And I really like this podcast today. And Donald, I guess that we will share a really unique stories and the unique questions we’ll describe. And go on. So welcome!
- 01:32 Thank you! I’m excited. I’m excited. It’s always fun.
- 01:38 Yeah, exactly. And you have a lot of interviews. So for you, it’s like not new. So let’s start and I guess we will start with a general questions. I know that you have covered different spheres during all of your life. And could you please tell me more, what is the best one? I know that you are a big fan of the creation and you worked a lot with finance. So what should you choose?
- 02:03 Oh, it’s a good question, because I did entertainment. I did publishing, I started a franchise from scratch. All these businesses, mortgage businesses, technology, real estate, bought and sold three hundred houses in 18 months. All I’ve done so many different things. What’s my favorite? Now in the mortgage industry I have a lot of money, so that was literally ridiculous amounts of money. So that was, that was very nice. But I would have to say as crazy as this might sound, my favorite was publishing. So I published. My kids were young. I had sold two businesses already. And I was taking some time off. And I decided to do something. So I love being out on the soccer fields with my kids and lacrosse fields. So I started a soccer newspaper publication. And I was the only employee and built it very quickly within a few months to one hundred and sixty seven thousand copies per month. And I did everything, the whole thing. And yeah, and it was profitable from the first month on. The first month. You don’t typically, you’re going to lose money. The first month I made publishing.
- 03:23 Well I, you know, I, I made all the sales, I sold all the ads, I got all the pictures, all the stories. I got it printed. I got to put together the whole bit, everything. And it made a net profit of over 4000 dollars, almost 5000 dollars in the first month. And so that was good. And it went up from there quite a bit. And then I became the official soccer publication for New York State Soccer. One hundred and sixty to try delivering one hundred and sixty seven thousand copies of a full newspaper. It’s an undertaking. But it was so much fun. Working my ass off, getting to know people in a new industry that I was never in before, being very successful at it. And then I was looking to buy other soccer newspapers around the country. I wanted to create a big soccer network. And then go into other sports as well. It just seemed natural to me. Anyway, long story short, somebody offered me money for it. And I sold it.
- 04:11 I guess you started thinking about the network. I mean, like to build a network for these, like, publishing stories. You have built a network for the people inside. You have built your and improve your communication skills. I guess it’s, like, it’s also the one more plus for you. It’s one more plus for you I guess.
- 04:51 Yeah. I’ve always been good at communicating with people because I’m very open. You know, I have a lot of stories. My life is filled with a lot of things that happened, a lot of fun and a lot of success. I was very fortunate. So I enjoy telling the stories. And if I can help people in any way, I do it. And that’s, that’s why in my whole life has gone, I just help people, help people, help people. And somehow it works for me.
- 05:22 And right now you do the same. I mean, if we just make some steps back in the case of AccureMe. And right now you do the same. But for e-commerce, Amazon sellers, and it’s like your life motto “to help people”.
- 05:40 You’re… it is, without questions. I’m a firm believer when something bad happens to you, do something good for someone else. So there was a time when I lost, you know, literally in one day, lost over four million dollars. Bad day. Well, the next day I went out and I gave a ton of money to charity. And, you know, personally, you had to go. Because I just believe, if you thinking about yourself and the bad things that happen to you, you’re not thinking reality. You have to go out and help other people. And you don’t worry about yourself. You feel good about it afterwards. And you know that. I went from the worst day to a good day. And then, you know, I helped tons of people, like over eleven hundred people get jobs over the next week that I didn’t get paid for it. I actually lost money doing it. I paid people to help me do it. But it was the right thing to do and it was a good thing to do. And I felt great about it. And, you know, these things come back. Somehow they all come back. I’m a firm believer in the Universe. You treat people well, it all comes back – karma.
- 06:50 Yeah. I really like that. It’s fair enough. And I really could agree with that. So according to that, you spent a lot of time during your life working with finance. Could you tell more about the idea of going inside e-commerce. How it was?
- 07:08 Yeah, I didn’t want to do it. I was rich. I didn’t, I was retired. I was golfing multiple times every week. I was boating all the time. My wife and I and our family were traveling all over the world. It was great. It was really wonderful. I had no desire to start another business. But I started talking to an old friend of mine who I hadn’t talked to in about 20 years. And he started talking to me about different business ideas. And I kept saying, no, no, I don’t want to do it. No, but when he brought it to Amazon, I know you know, I learned a little bit at the time, and I know about all these Amazon sellers. The majority of them are young and small businesses. And I love helping people grow businesses and I love mentoring young people. And if you talk to half of our sellers, they would tell you that I get on the phone with them a lot, just, you know, out of the blue just to help in any way possible. And so that interested me.
- 08:08 So I took it to the next step and I called my accountant and asked if he had any Amazon sellers and he did. So I called those Amazon sellers and it was a small, small one with like five thousand dollars of inventory. It was one was about one hundred thousand dollars of inventory and it was one with well over a million dollars in inventory. And they all talked to me and they all when I asked them, what do you need? They all said the same thing. I need capital. I need money to grow. I have opportunities, but I don’t have the money. So I’m like, wow, OK, well, that’s right up my alley. Let’s figure out a way to do it. And then we figured out a way that’s different from anything else that’s ever been done that they can’t lose. How crazy is that? We set it up so that the seller can’t lose. There’s only one way they can lose. Is if they take our money and just leave it in the bank, then they’re right? They have no good reason. That’s the only way they can lose.
- 09:05 I guess that’s when you start working with any Amazon seller or any small business. It doesn’t matter. They get from you not only financial help. They also get mentor help. It’s like some mindset that they need in the beginning, because I guess, like one of the main problems for the most of Amazon sellers, it’s like the way of thinking or what they should do and why they should do that. And according to you, I guess it’s like the great opportunity to do so.
- 09:38 Yeah, absolutely. You know, I’ve seen it with different sellers. I’ll give you an example, like a young guy, great guy on doing wholesale in Amazon wholesale model. And he just wasn’t making enough phone calls to get the suppliers that he needed. And I had to sit down with him. I talked to him every Friday. We would get on the phone. Just to coach him a little bit. And I would tell him, you have to make ten calls every day and even better make ten calls before the morning is out. So I would say ten by ten, so ten calls by ten o’clock in the morning. And if you do that, I guarantee you you’ll be successful. You’re going to get a lot of knows. You’re going to people tell you, tell you we don’t want any more Amazon sellers. You’re going to get all of these. Let’s work on the objections, the answers to the objections, and then you’re going to overcome them. And eventually you’re going to get one, then you’re going to get two. Then you’re going to have more than you need and you’re going to need more money because you have so many opportunities. But you have to get up and go to work. And that wasn’t in his, you know, it’s not what he did. So it is what it is. But we’re still friends. He doesn’t use our money anymore, but we’re still friends. We stay in touch. He still refers other sellers to us.
- 11:00 You know, I guess the referral system for you is like one of the main working systems. Because it’s like the main thing that shows how people trust your brand. And how could you, for example… Should you use marketing or not? Because if you have a really good work of mouths, you don’t need any marketing the general one with or something like that.
- 11:28 And that’s really what’s happening to us. I’ll give you an example, last week. It’s amazing. We talked to a seller about a month ago and great guy and he wanted to go forward, but he didn’t go forward with us yet. So, you know, things happen. You know, he just wasn’t ready. But without talking to us, he talked to another seller who was ready to do a different deal. And he said, are you crazy? You have to call AccrueMe! And so this other seller calls us and he goes, I’m hearing this. It sounds amazing. It sounds too good to be true. What’s the catch? Where’s the asterisk. Is what he’s said. And we go through the whole thing. We’re laughing with him the whole bit and we explain the whole thing. You know, it’s not too good to be true. It just sounds that way. It’s real. Anyway, he ends up on the call saying, “this is a miracle”, “this is a miracle”. “Thank you so much for bringing this to the sellers. This is fantastic. It’s a miracle”. I said to him, well, will you do me a favor? Will you tell your friends who are sellers? And he said, “of course, I’m going to tell everybody, this is a miracle”. Anyway, he just closed with us. So that was fantastic. And he’s a big account, very large account. And the guy who referred him also just closed, so that both of them.
- 12:50 I really like that. Right now we have the same inside the business model, because it’s typically how people could share and spread information much better and with a better quality. And all these leads they will absolutely know about you, about your service, about everything that you have. And I really like the feedback from your clients, because we had read some of them and it’s amazing. And according to that, I have a question about lifetime value. What is your clients lifetime value, how long they could use your services? Is it the short opportunity, that they could use and everything will be fine or you just build a long term relationship with them?
- 13:37 You know, there comes a point where they get, they outgrow us is really what happens. So we’re going to give them the money. And if you remember the model, we’re not charging any interest. We’re not require you to make monthly payments. So they pay us when it’s right for the business, not when it’s when we want to get paid. That’s when they determine that it’s right and we don’t take any ownership in the business. We just get a profit share for as long as they use our money. Then when they pay us off, we get nothing. So typically they’re going to use our money for about two to three years. Is what we’ve seen, as, you know, pretty, pretty standard. So I got to just give you a couple of stories around that, because it was very interesting. One couple, they were actually our first clients and they’re just fantastic. But they used our money to more than double in the first year, then quadruple in the second year, and then double that in the third year and really over two and a half years. To the point where they went from being very small to being large and where they’re getting all the income that they need to live on every month. And they’re retired and this is their retirement now. And so they never could have built the business without the money. They built the business. We gave them the money to do it. And think of this, they didn’t make a single payment for 18 months, 18 months. Well, zero money they took out of the business over one hundred and twenty five thousand dollars. So they took out profits to live on. We didn’t get anything. Our profits stayed in the business. So they used our profits to just keep growing and growing and growing. And 18 months later, they started making some payments to us. And now over the last six months, they’ve paid us down and they’ll probably pay us off over the next few months because they have the money.
- 15:37 They have the ability to do that.
- 15:39 So that’s exactly what’s happening. But we have other clients that are using our money and may and they plan to make no payments and they’re planning on selling their business in somewhere around 18 months. So they plan to just use our money to grow as fast as they can for the last year or so of their business. So they’re going to have a much bigger business, get a better multiple, and they’re going to make millions of dollars and we get nothing. We get our investment plus our accrued profits. They get all the upside. We get nothing.
- 16:14 That is absolutely cool. You know, I really like that. And to this model, I guess they absolutely work for the most of the Amazon sellers and the e-commerce sellers, that is amazing.
- 16:27 All we do…We’ve tried to make it easy. We’re different from everybody else. All right. So we’re… very different… So if you think about it, you know, we’re not, you know, click a button, give us your information, and we’ll put money in your account the next minute. And you owe us a ton of money every month. No, we don’t work that way. We want to make sure that you know what you’re doing. We want to make sure you understand the model. So we take our time without any pressure. So our first step is we have a questionnaire. It has seven questions. So if it takes you three minutes to fill out those seven questions, maybe it’s two minutes. With those seven questions we know basically what we’re going to be able to give you. So we’ll give you a quick funding offer. So you’ll get it instantly and we’ll ask for access to your account, your MWS. We get the developer access. Yeah. We pull down your inventory. We ask for your cost per unit. And then we give you a complete proposal, including what we call the key terms document. So anything that’s going to be on the legal side is in plain English was written by me. I was born and raised in Brooklyn. So I’m not a lawyer. It’s just plain English so that you would understand everything.
- 17:59 And that whatever is not understood, we can have a great conversation about it. With every single client we, I think, every single one, we have at least two calls. Because we have the call up front. So typically they do the funding estimate and then we give them an opportunity to get on the phone with us if they want. They schedule a call. We go through everything. They give us access. Then when they get the full proposal, we do another call and we go through it line by line to make sure everything is understood. And then if they want to go forward, they go forward.
- 18:35 That is amazing. But on your side, when you do the research, when you do the analysis like these audits, what metrics do you check?
- 18:44 Yeah. So we’re not checking their credit report or anything like that. We’re not doing a soft poll. We’re not asking for their Social Security or their ID numbers or anything like that. All we’re looking at is the inventory. That’s it.
- 19:02 So you need just the COGS like the understanding of the clear… Yeah, the cost of the products. Exactly one. And the number of the units that they have or planning to have in some time.
- 19:18 That’s it. And then we built an engine that will analyze everything instantly. In fact, we’re starting to break that engine out and we’re going to give it out to sellers. Because it’s a one stop you can run your products through it. You’ll see if they’re going to be profitable. You’ll see how quickly they’re going to turn. Instead of going to keep and jungle scout and this one on that one, it’s all done in one fell swoop. There’s a lot of catches in there that will help protect you from things that you wouldn’t see in just one system. So we’ve got them all combined into one system, basically that we built.
- 20:01 You have mentioned that the people will have some success if they get your money, if you understand that’s for both of you the system works. For their business and everything will be great. And one of the things it could be, like, a great mistake if they take your money and put it to the bank. Yeah, if they use the one of the like most trends for in twenty twenty I guess for twenty twenty first and maybe for the next few years, they will put your money into the cryptocurrency?
- 20:35 Well, I don’t know if they’re going to put the money into cryptocurrency, because we’re really looking for them to put it back into business inventory. So cryptocurrency, they might do well, but nobody knows, you know. You know, you could get into Bitcoin at sixty thousand and two days later, the United States could come out with their own federal bitcoin, you know. And bitcoin could be down to three dollars.
- 21:03 I’m just asking, because a lot of Amazon sellers, as we know about them, when they have some profit they would like to put it just to invest. And they use different investment things. Some of them built a marketing strategy. Some of them tried to create a new product to launch. But all of them they would like to use, like the new one, all the old methods on investing, investing their money. So that’s fine. Maybe you’ve had any experience, you know, or any conversations with sellers about that.
- 21:35 Not really. But they can do that, so they can take profits out of the business and invest them however they want. You know, we don’t, we don’t care what they do with it. But, you know, the main idea that we have is that we know that e-commerce is growing and it’s growing now. We know that last year it grew. We know for the last 10 years it grew really nicely. This year it’s growing. But, you know, the big question is, how long is e-commerce going to grow like this? Vitaly, I can tell you from my experience. So things change. The one thing I guarantee you, things will change. Something will happen that we don’t even foresee. And all of a sudden that growth could go off the table. So if I’m in your shoes and every other seller’s shoes, the thing that I would say to you is, you see an opportunity, go for it, grow. You could build a big business and in two years sell it, make millions of dollars. And, you know, and do you want to take all that and put it into Bitcoin or the cryptos? God bless you, do whatever you want, but you have an opportunity to absolutely kill it in this business. Take advantage of it while you can.
- 22:49 According to all this experience that you have right now with Amazon sellers and that are working and have now, what could be the main mistakes, according to the finance, that the Amazon sellers face every time? Or maybe according to this question, your advice for them to finance?
- 23:11 I’ll tell you two mistakes that I see, and these are big mistakes. One is… almost every seller doesn’t know their numbers. There are real numbers down to the month. So if I ask you what your ROI on this block of inventory over a six month period. But think about it as a monthly period. And that’s really what you want to do, because the key is to turn that inventory as fast as you can. As many times as you turn, as many times as you turn, you need less money and you make more money. That’s how you get your profits up. And so turn it fast as quickly as you can. The other big mistake, and it’s a sad one, actually, is I see it all the time, is that, you know, a lot of sellers are using the lending opportunities that are out there. And the problem with them is that… forget the interest. I’m not that concerned with the other higher interest rates. I don’t really care… What really hurts the seller is that they’re all based on a short repayment term. So you have to repay this money, some of them in four months, some of them in six months, some of them, one of them in 12 months. It’s too short. So imagine buying a house for five hundred thousand dollars and you go out and get a mortgage. But the mortgage is for six months. You have to pay five hundred thousand dollars back in six months. You would never be able to do that. You wouldn’t buy the house. Same thing with this. If you’re let’s say you’re making 20 percent. All right. But you have to make a payment on that money that you just borrowed and that equals 20 percent. So think about it. You have. This is really..
- 25:07 I’ll give you an example. The first one that I looked at.. that made me think of a different way because I don’t want to be in something that’s going to hurt people. So the first one I looked at, it said borrowed ten thousand payback 11. It’s that simple. Sounds good. You’re paying it back every two weeks, over six months. So the monthly payment was something like eighteen hundred and fifty dollars a month. If you are earning, if you borrowed ten thousand dollars and you’re paying eighteen fifty. But let’s say you’re earning 15 percent per month, which is not bad. You’re only earning fifteen hundred dollars, you’re paying eighteen fifty every month. You’re in the hole three hundred and fifty dollars. In the end of six months you’re going to need another ten thousand dollars and you’re going to go through the same thing again. It doesn’t make sense. So you want to make sure that the cash flow all matches up, that if you’re going to borrow money, make sure that the payments are less than what you’re earning. You know, and people don’t do that. They don’t think about that.
- 26:17 On this part I would be glad to know more about you, you personally, and to understand what is your main hobby? Because you have tried different spheres. You also… I saw your photo in social media somewhere in the mountains. So could you please tell me more about your hobbies?
- 26:38 That’s interesting. You’re the first one that has ever asked me this, and it’s great. Well, my hobbies are basically… I’m married. I have two great kids. They’re both married. So my number one hobby is to hang out with my wife and my kids and we go boating. We live on Long Island. We’re surrounded by water. So we’re out on the boat all the time. And we’ll go away for a week or two weeks at a time on the boat, which is great. Yeah, I really love it. We just have a baut. And then the second favorite thing would be to travel with the kids. So the picture you’re talking about is me and my wife and my kids and they’re husband and wife. And we were in Austria and Germany just outside of Salzburg. So that picture was at Eagle’s Nest. Just a beautiful spot, very historical, but a beautiful spot. And, you know, so we went all over Germany and Austria, just absolutely magnificent. Our favorite place was a town called Hallstatt between Salzburg and Vienna. Magnificent. Unbelievable. You know, so we travel all over the place like that. So those are my main things. But I like to stay healthy. So I’m a health nut. I’m always reading and learning new things about health and alternative therapies on how you can improve and not take drugs and not ever need anything along those lines. You know, go to the gym. We have a red sauna in our house, you know, all things like that. So I love health and staying in shape and playing racquetball and golfing as well. So I have a lot of hobbies.
- 28:23 Yeah, that is amazing. You know, it’s really cool just to hear that. Because I guess you are the first person in Dr. Amazon Podcast, who have mentioned the healthy lifestyle like the main hobby, or the part of the interest that you have. And I really like that. Because it’s some kind of our culture inside our company. We also do the lifestyle. We also try to be like vegetarians, like most of us, I guess. I hope. Well, to have the point about the drugs and alcohol, that we do not like to appreciate it. You know, that is amazing.
- 29:04 So you’re a vegetarian? Do you take B12?
- 29:08 Yeah. Yeah. No worries about that. IHerb. It’s some kind of a promo. OK, so according to the maybe podcasts or the books or films that you really like, what will be like your recommendations or do you like to do like the stuff?
- 29:35 So as a recommendation on a book or something like that? I’m going to tell you a book that people probably don’t know, but it’s called The Compound Effect. Have you read it? It’s a short book. It’s a very short book. And it’s got an audio book, too, that goes it’s very, very well done. It’s written by a guy by the name of Darren Hardy, and Darren Hardy, if you’ve ever read Success magazine, it’s filled with stories of people like you and me, that have overcome obstacles and have become very successful in different things. And it’s very motivational and it’s very educational and it’s all about business and success. And it’s been around for like one hundred years. And so he’s the publisher of it now. He’s a young guy and very, very well, well off and a really nice guy. So he wrote this book, The Compound Effect, and it applies to everything you do in your life. It’s the little changes if you do that little positive change over and over and over again. The results are massive. If you try to skip the steps, you’ll never get there. Just keep taking those little steps.
- 30:52 Donald, according to that… I know you spend a lot of time inside the e-commerce sphere, what trends in finance maybe or e-commerce you see during 2021?
- 31:09 I would say a couple of things. The first is – a lot of opportunities around. And you need a capital. So when you see the oppotunities, stop stupid. Just start, just go out and do it.You see these opportunities, there is no excuse. Take those opportunities. If you make enough money, make more, build your business bigger and give it to other people. Help other people. Just do it, because these opportunities are not going to be here forever. So take the opportunities and run as far as you can. And it is a short period of time everyone of e-commerce sellers if they go their direction, they have capital they need, they work hard, they build their business, in a very short period of time they can cash out. Think about it when everybody starts cashing out. The little guys are going to be an advantage, because big guys, who are buying all little guys now, are going to be so huge, they are going to control things. So you better grow now. And be prepared to sell your business. It’s some point of making a lot of money. Because the opportunities are gone before you do it.
- 32:44 We have catchet this trend in 2020. And I guess yes, that will be really true for this year. And I guess the last question for today, who could be the next guest for the Dr. Amazon Podcast, what is your recommendation?
- 33:05 Oh, interesting. I`ll give you an e-commerce guy. I really like and I like his business model, and because his business model looks like our, because it’s positive for sellers. It’s not negative anyway. People would like more about his business and about him. That’s Yoni from Getida, Yoni Mazor.
- 33:53 Perfect, great recommendation. I like spending time with Yoni. We had some events with him and that is amazing. Thank you so much for today’s podcast and all this advice.
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