Barth Getto on Empowering Ecommerce Entrepreneurs With A Cooperative
Our guest wants to live in a world where no eCommerce entrepreneur ever feels alone or has to vehemently defend to friends and family that leaving that corporate job was a good idea. He has created a very unique venture that is completely different than 99.5% of the other business support companies I’ve interviewed. He wants to help independent retailers in particular by leveling the playing field with vendors and arm them with the tools for their businesses to thrive. He’s the president of Empowery eCommerce Cooperative and his mission is to make eCommerce as best as it can possibly be. Welcome, Barth Getto, to the show.
Thanks so much, Mitch. I’m glad to be here.
It’s an interesting path that you’ve taken Barth and I’d love to hear more about it, but I’d like to find out how you got here.
The cooperative world is an interesting one. It’s all around us, it permeates our society, but people don’t know about it often. I came out of college and went to work in the carpet industry at the time. It really wasn’t even flooring at the time. It was more carpet. Hard surfaces have come on greatly in the past few years. My second sales territory was in St. Louis, Missouri. The same month I got there, a large flooring cooperative that’s still in business and thriving now started and one of the owners was an independent retailer there that started it himself with a few other people and that was a flooring cooperative.
It was the serendipitous type of thing. I happened to be in the right place at the right time and this gentleman liked me. He didn’t say it sometimes to my face because he’s a customer. He’s a very intelligent guy but tough. A few years later, he hit me up to put the new flooring stores. It’s a cooperative and members own. Cooperatives or nonprofits are member-owned entities. He asked me to go out and talk to these independent retailers to get them to sign up and become members of the cooperative. That’s where it all started.
What did you do before that?
I was a carpet representative. My father and I both worked for the same company for many years, Armstrong World Industries. I came out of college and I drove around in my vehicle with carpet samples at the back. I had a Ford LTD Station Wagon, so I schlepped carpet samples for about ten or eleven years before I got the opportunity to go into the coop world.
It sounds like that’s probably where you’ve got your thousand clients.
You said earlier about serving your audience and that really, we are walking concurrent paths in many ways because when you look at my whole career, it’s always been helping an independent entrepreneur, solopreneur do better and grow and be able to fight the big boxes and level the playing field. Every one of my positions is just fallen into that. My goal for life is to help independents.
You came onto this show to finally realize what your true mission was.
You are an evangelist in many ways.Money can make you comfortable in life, but the day your heart stops beating, nobody will care about that. Click To Tweet
The reason I wanted to talk to you in particular, we have a lot of people who apply to be guests who provide services to businesses. If I get one more application from an SEO specialist or a Facebook ads guy, I think I’ll shoot myself because they want to be on shows as much as they can and I understand that, but you just can’t have that many people doing that. What I try to do is I try to make the guests that I do have on this show unique. I know that this is somewhat of a new venture for you, but I believe what you started to do is very unique and I also think it’s something that potentially can be very powerful for the small business community. I think it can go beyond independent retailers and it touches just about all small businesses. What is the core purpose of what you’re doing? Is it to save money for the members? How would you explain it?
In the eCommerce world, there are a lot of masterminds where you will join a group of seasoned people who know all the intricacies of selling on Amazon, eBay, Etsy, Jet, Walmart and all that. I’ll be very succinct with what Empowery is. It’s a mastermind on steroids. Information is absolute king in the eCommerce world because doing one little thing could save you from getting in trouble with Amazon and kicked off the site and your business completely falling apart overnight. One little thing that you tweak can end up making you tens of thousands of dollars because your rankings go up and everything just clicks. One of our members told me a story, whereas a competitor went out of business.
He was complaining in a way. He was so busy. He said he went from $50,000 to $200,000 a month in volume on Amazon. I told him, “There are a lot of people I feel bad for in this world. You’re not one of them.” Those kinds of people, when you form a coop as we have in Empowery, you’re bringing all that in mindshare together. Yes, it’s saving money. Everything you said is true but it’s saving money, it is making people not feel alone anymore because being an eCommerce entrepreneur typically is very lonely because you came from maybe Corporate America and had a whole staff around you. All of a sudden, you’re sitting there and you’re the marketing, advertising, merchandising, product specialist, dispute resolver. You’re everything.
We brought together a staff that ends up being like an extension of your staff and we’re out doing things in China, we’re sourcing product. We dispute resolution and we have a 3PL over there. We have photography that can get down over there and start shipping your products back and forth. We have credit card processing here. We have a 3PL in the United States, a third-party logistics company. We try to touch every aspect and make it easier for an eCommerce seller to live a more efficient, easier and more profitable life. That’s our goal.
What you’re doing now is something that I’ve done myself in a different format, but the same idea. When I was the CEO of Tony Robbins and Chet Holmes Business Breakthroughs International, what we did is we had a central group that did just about everything you said. That central group would do all of the email support, all of the credit card processing, all the dispute resolution, handling all the mailing lists to prospects and to customers. It did all of the backend work of a business owner and we’re a closed system. When I created a new division, I created several new divisions. One of them was the recruiting division. At that point, all I had to do was line up my team and drop all of the detailed data into the hands of client services and they did everything else. It sounds like if somebody is out there and they’d like to sell on Amazon or they’d like to be an eCommerce seller, then they should connect with you as well even though they haven’t started yet. Would you agree with that?
I would. We’re building the infrastructure, but we’re currently looking for people that are already doing it. We really do feel we can do a soup to nuts startup type package for someone, so I definitely would love to hear from them and discuss that. I’m looking for a few guinea pigs to try it with and I think it’d be great, but what you described is very similar. We think of us as a central repository for everything that eCommerce person can use, including training. We have a super robust training portal that they have access to when they become a member. There are hundreds and hundreds of courses on there and we add to it every day. Remember too, different than the system you are in, the members actually own this in a cooperative. The members own one share of non-appreciating stock.
The first member and the final member are treated exactly the same and they get cash back on every single solitary thing they use in our system. If they want to use the foreign currency exchange system that we have in place if they’re selling on Amazon Italy, they get cash back on it. If they use the third-party logistics company or the freight company, the international domestic freight companies, they get cash back on it. We negotiate it upfront. We get a contract in place. We vet the company. We have a price upfront and cash back accrual on the back end. All they have to do is when they need it, they don’t have to use it but when they need it, it’s there on the shelf.
I want to talk a little bit about people who would like to sell on Amazon. I’ve got to tell you from my own perspective, I actually bought an inexpensive course on how to sell on Amazon. I was doing it because I thought my wife would enjoy doing it as a side business. We got about halfway through the course and we found that we were unable to do things like locating products that potentially would work well and then find a way to source them. Let’s start with this question first. If someone is interested in learning how, do you either recommend courses or does your system already have starting Amazon seller courses built into your platform?
Those aren’t built into the platform yet, but we definitely can recommend. We have a partnership with a really good one that I’d love to recommend them too and maybe we can get them some special pricing and some perks and things like that too. There are a few good ones out there. We’re close with those people. I’d love to hear from those folks so I could pass them on. There are a lot of people out there selling it and there are good ones and there are bad ones. I’ve attended these myself and I know they’re good. It’s called Amazing Selling Machine, AMZ. That’s one that I would highly recommend. If they go through us, we will help them out and make sure they get connected to the right person.
That was going to be my second question, have you yourself ever sold anything on Amazon?Every Amazon seller has a dream of selling their business. Click To Tweet
I didn’t. I had an eCommerce business that was coming out when Amazon was not that strong yet. I actually was on eBay, believe it or not. It was called Camo Bed. My brother’s a CEO of Berkshire Hathaway company who makes a military uniform. I have direct access. We had entire bedding sets, curtains, pillow shams, comforters all made out of a camo. We had this good business but we just couldn’t get the sales on eBay because they didn’t have the structure to do it at the time. This was eleven or twelve years ago. I hope I can find it all on an old hard drive. If I can dust all that off, I could be in business tomorrow morning. I actually was a little too early.
It’s so funny about being early. I think that goes back and addresses the issue of stuff we’ve tried in the past that didn’t work. Maybe it’s time to dust that course off again and maybe get it started again, but I guess the real issue here and this is from my perspective, I see a lot of people selling courses. Amazing Selling Machine is probably one of the premier courses that people buy to sell on Amazon. I don’t think that just by taking the course you’re going to become a successful seller. I think selling on Amazon is really hard. It’s hard not because you don’t have a product, and you might not or you may, it’s hard because you are accessing Amazon’s audience. You must do all of the prep work to get people to your page. That sounds like it’s complicated. It sounds like it requires a lot of skill and beginners generally don’t have that type of skill. Would somebody be able to come into your coop and acquire that type of skill or is it really the job of the Amazing Selling Machine course to develop that first?
It’s a combined effort. We would use those types of services to get them started because they really have thought through it all but then you’re right, where we come in is like the safety net below the umbrella above them. We’re there with subject matter experts on our own staff and then all of our members, we have a private Facebook site where questions can be asked back and forth. We have a monthly all-hands calls where all the members get together and can share ideas and direct us on what they want to do because after all, they own the company. They’re the captain, we’re the sailors. We’re swabbing the decks and setting the sails, but they’re telling us which direction to head.
We have a convention every year, just our members. In the past cooperatives that I have been involved with, it is a family. They’re closer with each other than they are with a lot of their brothers and sisters and mothers and fathers. Once you get a little bit started, then we can sweep you up. I’d love to hear from anybody that wants to get started because we can help them too. When you get into the group, it’s like being in a fraternity, sorority, and mastermind all wrapped up in one because you have people around you that know what they’re doing and have your best interest in mind. When one member succeeds in a coop, everybody succeeds.
I definitely understand that. What I want to know is what do you get out of this? If this is a coop and your members owned the company, you’re not necessarily building equity. You’re not deriving a “profit.” How do you and your family benefit from all your hard work?
I’ve worked for coops for a long time. The way ours does because some don’t pay this much, but for every dollar that comes in, the member gets 51% and the coop gets 49% for operating expenses. If we get 2,000 members in, I can be paid relatively well. When we started it, obviously that’s not the case. I’ve come in because, in any startup, you come in a little lean. In other companies that I’ve been at, like the last company I was at, it was a startup and I got shares and I exercise those shares and now I still have them. In a coop, you can’t do that because the members own them. I love to watch businesses that I convinced the grandfather to come in who was maybe my age. I’m 56, maybe he’s a little older than I was at the time. Now the grandson is running a business and he went from one little subpar location before, unbelievably manicured and beautiful locations. It’s fun to watch people succeed. If we build the group big enough, the pay will be there on just the straight no ownership, but it’s really the satisfaction of making a difference.
I strive to work with an individual. I work with clients every day and there’s nothing I like more than watching a client double or triple in size with my help. I think you feel the same way.
I’ve told my entire family, my epitaph when I go, I want it to be, “No man is a failure who has friends,” and it’s the last line. It’s a wonderful life, but it’s true. Money means something and it makes you comfortable in life, but the day your heart stops beating, nobody cares about that. It’s what impact you have in the world.
I think it might be time for you to tell us a little bit about one of your members. Tell us the story about how one of your members got started with you and how they’ve progressed at this point over the few short months that you’ve been together?
My favorite one is a young lady that came from South Africa and she lives in Kansas now. She and her husband were in corporate jobs doing different things. It’s funny, people that are in the business, they’ll tell you a general category. Even in our case where we’re very close to them, they don’t really volunteer too much the secrets. They’ll volunteer the secrets on how to sell on Amazon and work with the keywords and do all the things you have to do, but they seldom want to talk about their specific niche because of the competition of it. They’re very sharing when it comes to how to do things. When you want to talk to them about the specific niche, they get a little quieter.
This young lady, she and her husband are both in the eCommerce world full-time now. They completely got out of their corporate jobs. They’re working out of their homes doing millions of dollars of business on Amazon. When she joined us, she’s already successful but she has problems in certain areas. There are problems with inventory and financing, having enough cashflow to be able to buy more inventory and to go into other categories, shipping issues and just the fear of what happens. A lot of these people, they get into these businesses like she did and it’s grown so fast and they’re making very good money and they’re a little afraid. They’re like, “What if Amazon comes tomorrow to me and maybe gets into my category?” Amazon sells mouse and computer accessories now. What happens if they go into whatever it is, t-shirts or gifts or anything else and they come straight after them and that’s really what else we’re going to do?
As we get big enough, I think we can start to level the playing field with the giants like Amazon to help this lady makes sure that she doesn’t step on this potential landmine that could be there. I also want to get her. We’re new so I can’t give you really past things that we’ve done more of what we’re going to do for in the future. Almost every Amazon seller wants to sell their business someday. To do so, you have to make it as many times net profit or EBITDA that you possibly can. The way to do that is not to just be on Amazon, you have to have your own eCommerce site, you have to be on Bonanza, Wish, Jet, Walmart, eBay and Etsy. You have to be spread out. That’s what I think we need to do for our members is to get them onto the other platforms where they don’t feel comfortable.
How would you do that? Do you have relationships with those platforms already?
I’ve reached out to all of them. Bonanza is a smaller one but very much like Amazon. They are meeting with our CEO. They have meeting up in Seattle and their founder is meeting with our founder just to discuss possibilities and see what we can do. If we can put something together with them, what we would ask them is, “Do something special for us.” Amazon, a lot of times you have to give them 15% of the sale, maybe its 13%, and they give a perk pack that they don’t give anybody else and we get cash back on the backend. Those are the things we try to negotiate with them. The part of that would be getting the training from them, repurposing it, and putting it on our training portal and actually maybe at our conventions have in-person training. We’ll actually sit them down and walk them through some of this. Taking the training on Bonanza would already have out there and juicing it up and making sure that is right for our membership. I would see us guiding our members from the first step to the full run into the marketplaces other than Amazon.
These relationships can really make a huge difference and I’m thrilled to hear that you’re doing that. I think that’s a key element of what a service and a coop arrangement like yours would and should provide. What about simple stuff like keyword research and figuring out how to write ads for Amazon and getting those ads placed on the Amazon platform? Is that something that your team will handle for your clients or do they have to do that by themselves?We are walking concurrent paths in many ways. Click To Tweet
We can guide them on how to do it. Our training portal is going live. A lot of this stuff is more generic that’s in there. There are 65 courses on lifestyle, human resources, dealing with Millennials. We can create all that, but they really do have to go in and do it themselves. In the last coop I was at when we started, you have to start small and you don’t have that much staff. We did get to the point and we will get to the point here where we will do that. Anybody that joins now, we have twenty members doing $200 million. The next 30 are still considered founders. The first 50 members of Empowery are considered founders. The founders set the course for what we do, those things you’re asking and where we go. There’s a fear of missing out thing. Don’t miss out on this case because those early adopters are the ones that are going to have the most clout.
Let’s turn the tables and talk a little bit about the people who are joining your coop to serve your members. Tell us a little bit about how that works.
Typically, we listen to our members and they say, “We need an inventory finance program. We have a company that when they go to sell their business, we already have a negotiated rate with them.” Basically, a small bank and they will be the liaison between the buyer and the seller of an eCommerce business. We seek out these. We have a Vice President, his name is Ed Carr. We have a vice president of supply chain management. Melissa Simonson is the Director. The two of them as a team go out and any type of supplier we think will fit our members, they go and negotiate. They explain our business first because there are nuances.
A lot of people have never done business with anybody like us. There’s nobody else. There is no other cooperative in the eCommerce business. First, you have to explain it all and then once you explain it, we ask them, we tell them what we want, negotiate the best deal possible and then we let the members know what that deal is. Obviously, we ask them if they are ready to use it. If they’re already happy with their third-party logistics or their freight, stick with it, but the moment something goes wrong, they know that we have that sitting there waiting for them ready to go.
If there’s somebody who believes they have a service that they would want to provide to eCommerce companies, in particular, Amazon sellers, would they get a hold of Melissa?
They can come straight to me and I can pass it along. I love to see that stuff come in so I can gauge it. My email is just Barth@Empowery.com. They can just come straight to me.
Everyone, you are listening to Barth Getto who is the Founder of Empowery eCommerce Cooperative and we’re talking about how to use the power of a cooperative to serve its members, in this case for eCommerce. Barth, the last question I have related to this entire process of sellers and suppliers is the exit. You talked a little bit before about every eCommerce seller, every Amazon seller has a dream of selling their business. Talk a little bit about what that process would be like and how the coop can make that happen faster, easier and better.
First of all, the other absolute about coops is that businesses sell for more when they are in one. I’ll give you an example why. A coop is very similar to a franchise except for the ownership piece. In a franchise, it can be privately or publicly held and the rebate if you will, the cash back, the interest will be paid back to someone else. In the case of a cooperative, it’s paid to the members, but you still have the structure there. If you want to sell a McDonald’s franchise versus a Joe’s Hamburger stand, the franchise always sells for more because the buyers and the lenders both know that there is a better chance of them succeeding due to the national footprint, due to the training that they all share and the buying power that they all have.
The same thing applies to cooperatives. I am absolutely positively seeing businesses sell for more and faster because they knew they were getting this other added benefit. Think about it, we know so many people. We would go to first of all, if one of our members wanting to sell, we would go to the membership itself and say, “Is anybody interested in purchasing a business in tools and outdoor furniture?” or whatever category they’re in. We’d go there first, but then we have a vast network. It’s the network that you’re coming into when you join us. Obviously, we have all the tools. We have the banks in place to help put the sale through and think about the difference. If you go to just an investment bank and try to explain your business, it’s going to take you days or weeks to really have them understand.
Inventory for instance, if you’re selling an FBA, Fulfilled by Amazon, your inventory is in Amazon’s warehouse. That’s a whole different thing than they’re used to. There used to be able to walk into a warehouse and going, “There are fifteen widgets on the shelf. We know exactly what they’re worth.” We can’t do that with Amazon because it’s all over there. We’ve already done all the prep work to make sure that they understand the business and you cut through a lot of red tapes very quickly so we can help someone sell their business for more processes of the structure and faster because of the network we have in place.Do better and grow. Be able to fight the big boxes and level the playing field. Click To Tweet
You said that people would give up 49% of their profit on the purchasing cases.
Not profit at all. Their profit is theirs and we don’t get involved with that in any way. Let’s say the sale of the company, just for sake of argument, a 10% cash back coming back. The way it would work is if they sold it for $100,000 there would be $10,000 coming back. In that $10,000, the coop would get $4,900 and the member would get $5,100. That’s the way all coop work, a lot of times the split is a lot different. It’s a lot worse for the member side, but the member always gets the majority of all the rebate that’s coming back and they see all this. We’re completely transparent. They know when a program comes out, they see exactly what the rebate is. They know what the percentage is. We would only, in that case, publish a 5% rebate for them, so they’d know that the other 49% was coming back to us. That’s how all coops earn their money and pay their bills.
What does it cost to join the coop?
It’s $1,000 down one-time onboarding fee. There’s $1,000 share stock that would get returned to you the moment you’d ever leave. It’s basically $2,000 upfront and then it’s $250 a month. If you’re an active average member and you’re using the dozens of programs we have, you’re going to get a check at the end of the year which is going to be much more than the $250 a month. $250 had some skin in the game and to be supporting the coop as the purchases accrue. At the end of the year, they all get a check based on what they used during the year. All they have to do is use the programs and it’s going to self-liquidate the $250 and they should end up with thousands of dollars back.
It sounds like a very interesting opportunity. Barth, one of the things that we do on every show is we ask a couple of questions that are unique to you. The reason is that it’s how our audience gets to know you better. Here’s the first question. Who, in all of space and time, would you like to have one hour to enjoy a walk in the park, a quick lunch or an intense conversation with?
I know you’ve asked this question many times so there are a million people, but Jesus always comes to mind just to see what he went through. My more contemporary one would be Meriwether Lewis. I’ve always intrigued, my favorite book is Undaunted Courage by Stephen Ambrose and what those guys went through and just dealing with Thomas Jefferson in the beginning as he did. Only losing one person the entire trip over and back and they think that was with appendicitis, to be able to go into that hostile unknown territory and survive all the potential dangers is just amazing. I think William Clark can tag along I guess, but I really do think that would be an interesting discussion to have.
The grand finale question, the change the world question. Barth, what is it that you are doing or would like to do that truly has the potential to literally change the world?
Professionally, I’ve already explained that. It’s helping independent entrepreneurs grow their business. I’m helping the local economy there and I’m helping the United States economy and the world economy. Beyond business, and this is probably why I bet you’ve never had this one before, but I plant chestnut trees. I have a farm in Pennsylvania and it’s a 92-acre farm. Chestnut trees, there were four billion of them in the United States before the blight hit in 1905 and wiped them out. They were everywhere. They were 25% of all the trees in Pennsylvania. They said in the spring it would look like there was snow on the ground because of all the petals that fell to the ground. This blight came along and wiped them all out. I have probably 50 on my property and when I retire from this job, I really want to be in the Chestnut Foundation, I want to work for them. I want to get chestnut trees planted again because they’re a food source, great lumber, great shade tree and they got decimated. It’s the biggest ecological disaster in the history of the United States and most people don’t even know it.
Everyone, if this is your passion as well and I’m sure there’s somebody out there who felt this way before about chestnut trees, get a hold of Barth, you can work together now. Barth, to go on the record here, I love roasted chestnuts. It’s one of my favorite winter treats, I’m so glad you’re doing this work. Barth, it’s a fascinating company and an incredible space that you’re creating for the right type of customer, the right type of client, thank you very much for being on the show with me. I’ve really enjoyed our conversation and I know our audience have too.
I appreciate your time. Everyone, keep at it out there and just keep going and plug in no matter what.
We’ll talk again soon.
Thanks so much, Mitch.
Resources Mentioned in This Episode:
- Empowery eCommerce Cooperative
- Barth Getto
- Armstrong World Industries
- Amazing Selling Machine
- Melissa Simonson
- Undaunted Courage
- Chestnut Foundation
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