Doug Levin and Chicago, Arbitrage and Lifestyle Design

CJ sat down with Doug Levin. Doug is living his best life thanks to a successful private label business he built from the ground up. Even so, he never considered himself the entrepreneur type. He shared his interesting trajectory from musician to wholesaler to product development specialist in a matter of seven years in our conversation. Enjoy!  

Doug and CJ Discuss Chicago, Arbitrage and Lifestyle Design

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Connect with Doug

  • Email: douglas@morningmarketingmachine.com

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Full Conversation Transcript 

CJ Maurer:

Hey, everybody. CJ back here with another episode of the podcast, maybe I'll come up with a good name for it someday. I'm here with Doug Levin and this is actually another fun first for me. That's the good thing. When you start doing something like this, you're always faced with a bunch of firsts. Doug is the first person who I've never met before, who found my podcast online and said, "Hey, this sounds cool. I'd love to come on and talk about some stuff." so here we are meeting one another for the first time, obviously we exchanged a few emails in advance of this, but Doug has some cool things to talk about. I said, "Hey, let's do it." first of all, Doug, thank you so much for joining us. How are you?

Doug Levin:

I'm great. Thank you so much for having me on the show.

CJ Maurer:

Why don't you indulge me and everybody else and explain how you found this and why you decided to reach out.

Doug Levin:

I was looking on Apple Podcasts and you guys came up, I've been around the business side a lot more in terms of getting out there, looking for people, especially with the virus going on, where you can't really network as much. You can't talk to people as much. Honestly you guys came up. I was looking around interesting places, interesting people to talk to and came up, so it seemed

CJ Maurer:

This is a great case study, because quite frankly, I do this for fun. I also happen to own a marketing agency. I don't really talk about my business a ton, because I haven't quite figured out yet how associated I want this to be with my business, but part of what I do with my marketing agency is I help businesses produce content. That helps them get found online, that they could provide to their sales team to help differentiate the business that they could share with their customers and add more value. There's a tremendous amount of virtue and benefits, tangible benefits in producing original quality content. It can be used in a variety of ways. It can benefit a variety of people and audiences. I advocate for producing content and making podcasts.

CJ Maurer:

This is a really good, I think, a really good axiom for the benefit of podcasting. Here I am, only been doing this for a short period of time and I'm having people find me on Apple Podcast and reach out and want to be a guest. It's a really good example of why making stuff like this is fun and also useful, so thank you. You are in Greater Chicago?

Doug Levin:

In the suburbs. Lived in Chicago all my life until I met my wife. It was the one bad part about meeting her. I'm no longer in the city anymore.

CJ Maurer:

You very much city, proper pride.

Doug Levin:

I was for most of my life. Yes.

CJ Maurer:

Where in the city?

Doug Levin:

North Side, probably about five, 10 minutes away from the [inaudible 00:03:25] played. If you knew Andersonville, that's where I grew up.

CJ Maurer:

I've actually been out that way. I grew up in Connecticut about an hour from New York city and now I live in Buffalo, New York. It's about six hour drive from there, but I've been to Chicago twice. One of my best friends from high school lives up there with her husband and two girls. Before she got married, she was living right in Wrigleyville. I think it was Clark and Addison, somewhere around there. I'm so familiar with that area a little bit. I remember renting bikes and my then girlfriend, now wife, we biked around the area. What's the street where there's all the different NFL bars for different cities? Lincoln or? I don't really remember, but I remember we happened to be there on opening day, NFL Sunday. We're biking up and down this street and every other block, there's a bar with one team's flag on it. It's all a bunch of ex-pats. Here's all the Cleveland people rooting for the Browns. Here's all the New York people rooting for the Giants. Watch and not Chicago, but you get the idea. It was really cool.

Doug Levin:

It's always been a huge sports town in general. Since it's a big city, obviously not as big as New York, but it's one of the bigger cities. A lot of people they're like. When the Bulls were great, obviously when the Bears, once every 30 years, are great, it goes crazy. It's a huge sports town in general.

CJ Maurer:

The Blackhawks have been good in recent years. Actually one of their better players is actually from my neighborhood, Patrick Kane, he's from South Buffalo, New York grew up right down the street from where I'm sitting right now. I love the uniforms. I love the tradition. It's a great sports town in general. Not just the Blackhawks, but.

Doug Levin:

They took over the town for a little while as well. What is it? 2010 to 2015, they were one of the Dynasties, right?

CJ Maurer:

I know they won in 2010, and then maybe a couple of years after that, 2013? They might've won a third. Did they win two or three?

Doug Levin:

They won three. They won in 2015. That was [inaudible 00:05:54] Kane's like an in this town.

CJ Maurer:

Chicago is great. Like I said, when I was there, I actually found a Bill's Bar, so my wife and I, we went in and we watched a Bill's game in Chicago and of course, ran into two people we knew, because Buffalo is not a huge city! Depending on your point of view, it's a really big small town or really small big city, but a lot of people in Buffalo really like Chicago, because the Chicago is like Buffalo on steroids. The cities are built on a great lake, they're aid out the same, on a radial street grid. It's got that like Midwestern feel, but it's also a city come from industry. There's a lot of similar components in their DNA. Chicago's at least 10 times bigger. People from Buffalo, I find generally really like Chicago, but maybe don't feel the same way about New York. Doug, you're an entrepreneur. Tell me about your career trajectory and where it got you to now.

Doug Levin:

I actually was never really an entrepreneur when I started. I was not the typical entrepreneur. I was a musician all the way up to 2014. Didn't know the first thing about business, got into it from there. I was doing traveling, if you know miles and points world at all, I was into that more and I stumbled upon selling online in e-commerce and Amazon specifically in 2014, just from miles and points. I did that and then from there I started to actually get better at it. Started to make some money off of it, started to do what's called arbitrage, where you're buying stuff from Walmart and other big box stores selling it on Amazon for ideally a higher price and netting the profit. From there led me to whole sale and then private label. I've been kind of doing e-commerce in general for about six years.

CJ Maurer:

I loosely follow Gary Vaynerchuk and I hear him talking about the type of hustle, I would say, that you're describing. Arbitrage, buy things off Facebook marketplace, resell them on eBay or somewhere else, Amazon, whatever. Wow, just starting to rain thunder. That type of hustle and he's not the only one, I've heard more people talk about the benefits of making money that way. How did you get into that?

Doug Levin:

Honestly, it was just by chance. I didn't know the first thing about it. I had a friend who had talked about, "Oh yeah, you got to start selling on Amazon. You got to," he was going to do it, but then he was kind of scared. It's well, what happens if they close my account, because I do something bad or something along those lines? I had heard about it and obviously everyone's heard about Amazon even in 2014. At that point I think there was a travel and points blog that, I was always looking for ways to get more cash back or go on my next trip with my girlfriend at the time and her two kids and my wife and two stepsons. It was more just that way, because of it, honestly, I've made so many mistakes along the way that if I would have thought about it, then in terms of how I am now, it's the whole thing, go back in time, but since I didn't know, you don't know what you don't know, so you jump into it. Don't have any idea what you're going to do and you figure it out, in essence what it was.

CJ Maurer:

At the beginning of this, you mentioned arbitrage wholesale and private label. Most people know what arbitrage is. A lot of people follow Gary Vaynerchuk. He says go on Facebook, a marketplace, or go on Craigslist, buy something, pick up free stuff, sell it, or the other way around. That's arbitrage, people are familiar with that. I think that's easy to understand, that can also be applied to Amazon or wherever else. People are familiar with the terms wholesale and private label, but in terms of a strategy that an actual person can use to go out and make money, what does that mean?

Doug Levin:

Obviously in terms of wholesale, all that means is, at least in the way I talk about it, is you would be authorized by a brand. Let's say you were to reach out to say Nike or something and say, "I want to sell your products on Amazon." that would never happen, because Nike would never let you, but in this example, say that were to happen. Then now you are authorized. You have the invoice, you have protections in place in terms of orders and all of the other things, where you are now protected, saying, okay, I am authorized to sell Nike products on Amazon. Then you would place your order, buy in bulk and get it shipped to you. Let's say a third party warehouse and get it prepped and packed and shipped in so that you can sell Nike stuff on Amazon, as you as a seller.

Doug Levin:

That's the wholesale side of it. Then private label is completely different in the fact that you're the one creating the product. You're the one creating the brand. It can be something as simple as you find something in China, you make a few little tweaks, put your brand's name on it and bring it to the States and sell it on Amazon. That's private label. It could be something more complicated where it's something that's never been out there before you came up with this idea, you came up with everything about it. You're going to patent it. It's your product. It's your brand. Nobody else has any has ever thought of this before it's yours. It can be any of those kinds of things for private label. In terms of all three models as well, they have their own pluses and minuses, like any other business model.

Doug Levin:

honestly, that's why everyone seems to want to start with arbitrage, or I usually recommend it if you were to start selling online, just-

CJ Maurer:

Why?

Doug Levin:

Specifically, you don't have to deal with as much capital, in terms of raising it, in terms of dealing with a lot of the aspects of running a business, because a lot of people get started with organizers. They don't really know how to run a business. There are some that do, but in general it's that way to get started selling online. It helps you in terms of build up your, I talk about mindset all the time. It helps with get a positive reinforcement. Basically it's immediate gratification, because you could find something at Walmart, say for 10 bucks, sell it on Amazon for 30 or 40 bucks, pocket the difference. In like a week or two, you have money in your account. Right away, you can start to see, oh, wow, this works. That can start to scale from there. Keep getting better with-

CJ Maurer:

Is there any benefit to learning a lot by being that much in, you're nose deep into actual commerce, at its most basic level. A lot of people are more further removed from that. We work for companies that are part of larger systems that produce and market and sell products. We're not as close to, unless you're in sales, you're not as close to how that works. Even if you are in sales, you're basically shortening the feedback loop between cost of doing business and profit. Do you think there's a lot of benefit in learning how commerce works by doing arbitrage?

Doug Levin:

Oh, definitely. Like I said, I didn't know the first thing at all about how to run a business or anything along those lines when I started. It's an amazing way to, obviously like you were saying, you get that feedback really quickly, so you can make changes. It's a great thing in general, about small businesses as well, versus when you get into big corporate structures, it's one of the great benefits. Is that you can make changes a lot quicker. You don't have to run it by 10 different people, figure out how that's going to look compared to everything else that you have planned for the quarter or for the year or anything like that. It's usually a one or two man operation, where it's like, okay, this didn't work, let's try this, let's try this. It's on you at that point and you get that feedback a lot quicker. In essence, you can scale it easier as well. You don't have to run it by a lot of different people. if you see something that works, you can take advantage of it a lot better than say bigger companies.

CJ Maurer:

You can identify the certain products where there is more demand than the actual retail price suggests. It's almost surprising to me that Walmart would, considering how large of a company it is, that it would not know that people would gladly pay 30 or $40 for something that they're selling in their store for 10, but that has to exist everywhere, because.

Doug Levin:

Because everyone always thinks that Amazon is the cheapest price or Walmart trying to do the same thing, but I think a lot of that is more in terms of the image that they've cultivated towards their customers. A lot of times, if you actually look at some of their stuff, they're not, but they're always trying to be, you don't know exactly. When you get to be that level as well, you've got your systems in place. Sometimes it is you think it's cheaper. Think it's whatever it is. In a lot of cases, Walmart and Amazon's value proposition is more about lowest price. You can take advantage of that if you're selling arbitrage or anything like that, to get the gap and start to make money off of it.

CJ Maurer:

Do you have any interest in encouraging more people to consider this opportunity for themselves?

Doug Levin:

Definitely, I think obviously, I was saying, there's pluses minuses to both arbitrage and wholesale and private label. I think you probably will hear if you were interested at all in terms of if I'm coming from a corporate background, I think honestly, you would be able to crush this in terms of, if you have enough capital available to you to actually start doing it, it's not honestly too complicated. Especially with the way the world's been working in terms of e-commerce becoming more and more the standard it's a great way in terms of to make a good income, potentially scale better where you can get to seven, eight figures pretty quickly and you're the head of the operation. I definitely think it's still an amazing opportunity.

Doug Levin:

You will see people that will say, "Oh, well, the best time to do it was 10 years ago." or, "The best time to do it five years ago." there's so much demand out there in general for e-commerce and it's only getting bigger. At this point, Amazon has been doing things on their end to try and bring down sales, because they can't keep up. Amazon, the big behemoth that they are, is having issues trying to keep up with the demand, obviously part because of the virus. I think it's a huge opportunity still. I think if people were interested.

CJ Maurer:

What would you say to somebody who's interested in getting started?

Doug Levin:

I would say start with arbitrage. Even if it's not the model you want to go with. I started with arbitrage. A lot of people, I know as well started that way. It's good to understand the platform itself, because like any other business, there are quirks. Amazon is somewhat forgiving in terms of when you're getting started, however, I will say they don't care about you. It's all about the customer. That's their business model. It's always the customer first, you last. It really helps if you can start with say arbitrage, in this example, you don't have a lot of capital involved. If you make mistakes, you're not going to lose a lot of money. It helps you understand what the process is. If you're doing wholesale or you're doing private label, then you're dealing with other people. Wholesale specifically, you're representing other brands.

Doug Levin:

If you make mistakes, then that could really screw up both capital and your relationships with brands. Private label side, when you're getting started, there's typically a bigger cost to it, because you're the brand, you're having to go through this longer process to bring products to market, so there's typically a bigger overhead. With arbitrage, you can start for as little as 50 or a hundred bucks, if you wanted to learn how the platform works. Then even if you completely screw up, you make the wrong choice as you're trying to find something, you're out a hundred bucks. It's not really that big a deal. Versus wholesale you're routinely placing orders, 20 to $50,000 as you get further up private label, you could have stuff that's as low as say a thousand bucks, but you can start to get up to orders of say 50,000, 100,000 for initial orders. Then if you make mistakes and you don't understand the Amazon platform, then you're out 50, 100,000 dollars versus a hundred dollars. There's a lot less risk to it as you're getting started, you can learn how it works.

CJ Maurer:

Do you have employees or do you do this all yourself?

Doug Levin:

I've done both. I've had US employees. I've had virtual assistants, usually in the Philippines for us. Typically you can do a lot with honestly, just virtual assistants. Where you can be more of a one man operation if you want to. Get most of the day to day stuff done by virtual assistants in another time zone, you can even have it done where say you're working. Say you're going to work eight hours a day. You're working say nine to five, if you wanted to do that. Then your virtual assistant is starting at 5:00 PM. It's continuous cycle. When you wake up, their work is done. You get to start your day fresh. You honestly don't need a lot in terms of employees or anything to get started with it. I know companies that are doing probably eight figures and they have maybe one or two US employees, it's all virtual assistants, because it's a lot of times, like I was saying, in terms of the idea that they work when you don't, as long as your processes and systems are set up in a way that they can understand, then they can basically be you without you having to do anything.

Doug Levin:

It's a much easier way to scale your operation. It's much more cost effective. Unless you're dealing specifically with inventory and other aspects where you need a US-based employee, sometimes I would say if you're doing sales calls for other stuff, if you're trying to sell on your own website or sell other things, then it might be worth having a US-based employee, but otherwise, most of the time you can get away with just having a virtual assistant, paying them a lot less than getting a good job done.

CJ Maurer:

Sorry, I got sidetracked for a second with another thought. I'm familiar with onlinejobs.ph, that's one particular example of virtual assistants in the Philippines, but I've heard a lot of people advocate for virtual assistants. Personally, I am open to the idea, but I have not in my head figured out a way where that would work for me. Maybe that will change someday, but I find that very interesting. Another example, another case study for those interested in maybe exploring the virtual assistant route, what would you say is your proudest moment as an entrepreneur? What excites you?

Doug Levin:

Honestly, it wasn't even my proudest moment, it was the proudest moment that had to do with my wife, because we've done private label for a little while now. We start with arbitrage, did wholesale and now we're primarily doing private label. We brought our first product to market and we use something called ManyChat, which is chatbots where it's an automated process in terms of talking to your customer.

CJ Maurer:

I build chatbots.

Doug Levin:

We had a customer reach out to us and it notified us. My wife is the face of the company. We ended up responding. I think we were both at home at the time or something. We got on our laptop and checked it out and she ends up responding and answering whatever the question was that the customer had.

Doug Levin:

Then as soon as they saw it was her, it's like, "Oh, you're actually responding to this." because she's on the product, because she's the face of the company. She's always the one that gives the content and all the other stuff around it. This customer was like, "Oh my God. You're," thinking of her like the celebrity, like, "Oh, this is amazing. I'm actually talking to you. This is great." and we're looking at each other like, okay, this is so weird. She's just some regular person, nothing extraordinary about either of us or anything. This person thinks she's the greatest thing ever. It was one of those things, all we did was we came up with a specific kind of a product and I guess certain people like it.

CJ Maurer:

What was the product?

Doug Levin:

It's the one thing about Amazon is that they never want to say anything, because you're always scared that people will take your product. It's a digestible product though. It's something that people can take over and over again. She was really excited about it and it was an amazing moment for us specifically, because there was obviously when you're coming up with any product and brand, there's a lot that goes into it. Those are the moments that you're like, okay, this is actually cool. This is really worth it. Where else...

CJ Maurer:

Was the chatbot on Amazon? Or was it on your website?

Doug Levin:

You don't do anything on Amazon and this is why a lot of what we've been doing since then on the private label side is trying to own your customer more. That specifically was either associated with Facebook or our website. I'm not sure which one it was in terms of them reaching out to us, but we use both Facebook and our website to get people onto our list, so that we can reach out to them whenever we want. I'm not quite sure on this example which it was, but I know that she reached out to us.

CJ Maurer:

Do you ever foresee you returning to a normal office job or workforce?

Doug Levin:

Oh never! Obviously there's a lot more stresses in terms of being the business owner. Everything starts and ends with you and ultimately it's on you. There's more pressure obviously, but I love being able to wake up when I want, obviously I have certain things I don't always want to get done. There are certain things I'm looking towards in terms of where I want to go, but I don't have to really answer to anybody. As long as I'm doing everything that I need to, I can't really see myself doing any nine to five job or anything along those lines. It's all fun. Even with the world as it's been now, I love getting up every day. I love working, obviously talking to people like yourself, and helping as many people as I can, and then doing my business. I can't imagine myself doing anything else.

CJ Maurer:

It does certainly afford you some freedoms, but those freedoms always come with a trade off. It does begin and end with you. Certainly starting up is difficult and that's something that I'm going through right now. My agency is only about eight months old, so definitely something I can relate to. Listen, Doug, I really appreciate you reaching out and coming on and chatting. I'm really excited to share this with a lot of people and see what they think. I think the idea of making your own living through arbitrage and Amazon based wholesale and white labeling is very interesting. The fact that you can make a career out of it, it can afford you certain freedoms. I think this idea of lifestyle design is increasing in popularity and people are being, especially now too, with where we're at.

CJ Maurer:

I think people are looking more and more into how they can create additional streams of revenue and maybe that turned into their full time career. I think it's really interesting. I love the fact that you came on and talked about it. I think sometimes for a lot of us in the traditional working world, it's not something that's on our radar, so it's refreshing to hear it. I wonder what lessons that people in the traditional workplace might have. Sometimes I wonder what would happen to businesses started this mindset? I don't know if it exactly maps out, but it's something to think about. Anyways. I'm super thankful to have chatted with you and maybe we can do this again sometime.

Doug Levin:

Thanks for having me on. It was a lot of fun being able to talk to you. I'm happy be on any time that you would like.

CJ Maurer:

Awesome. Doug Levin, thanks so much. Take care.

Doug Levin:

Have a great day.

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