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Welcome back to another episode of the Resellers Mindset Podcast.

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My name is Mike, also known as the used book guy on YouTube,

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along with my friend and fellow full-time reseller, Johnny B.

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We help people start and grow their reselling businesses from the ground up.

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We also have a weekly zoom call and private discord for all YouTube members.

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Head on over to youtube.com backslash use book guy to join the channel and gain

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access to the full length podcast zoom call and private discord today.

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Let's get into this week's episode.

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What is up everybody?

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Welcome into another episode of Resellers Mindset Podcast.

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Mike next to Johnny, if you're watching over here on YouTube, I am

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pointing at this man right now.

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Today's conversation is going to be around basically business

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partnerships and reselling.

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I think a lot of people on the outside think, Hey, this is going to be a great idea.

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If I moved to Texas, me and Johnny, we could conquer the world as media sellers.

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Right.

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And on the, on the surface, everything seems great.

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Right.

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All of a sudden I get down there and I put in my 20 hours of work and I'm like,

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all right, Johnny, I'm done for the week.

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You know me 20 hours.

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I'm gone.

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That's my limit.

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And Johnny's the guy that's like, wait a minute, I'm working 80 and you're

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working 20 and all of a sudden Johnny hates me.

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He never hosts the podcast again and it all blows up.

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But a lot of people think this is like, Oh, you know, if I can get around somebody

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that's doing the same thing, all of a sudden, you know, things are just

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going to take off for me.

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That's not the case.

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I know a lot of resellers are like, it sucks doing this on your own.

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Well, it can actually suck a lot more if you partner it up with somebody else.

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Because listen, what's the big change here going from one person to two person?

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I mean, I don't know.

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Like what's your take on this type of type of business model?

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It's a very doable model.

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If you know what a partnership entails, I mean, I've been in part of partnerships

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before and they are a blessing and a curse at the same time.

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And everybody focuses in on the pros and not necessarily the cons.

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There are some major cons and there's also some major pros and you have to live with it.

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To me, a partnership is just like a marriage.

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It's all shiny upfront.

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Like when you're dating and stuff, you're in lovey dovey.

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But you know what happens in marriages and in dating, everybody fights.

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Not everything is the Disney Channel 100% of the time.

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There's going to be fundamental disagreements and then concessions,

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which nobody really wins in a concession.

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Somebody has to give up or it's not exactly what everybody wants just to keep the peace

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and status quo. Partnerships are the exact same way.

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Usually in a partnership, you don't want somebody exactly like you.

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You actually want somebody who's doing something completely different that you have no knowledge on.

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And they'll want that same thing from you.

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And when you combine together, that's when you really have a successful partnership.

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Is there bringing something to the table that there's no possible way that you could do

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without spending an exorbitant amount of time to learn it, whatever it is they have a knowledge base in?

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I think if we'll just throw ourselves out there as an example, right?

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So me and you committed to all right, we're going to go into business together.

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Okay.

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I would think along the routes of, okay, well, you have experience with employees, right?

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So, you know, you have some experience hiring people, having a little facility there.

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Like, I think our route would be you can correct me if I'm wrong.

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I think I roll up down there.

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We buy one of those scanner conveyor belts. We hire a lot of employees and then we just, we just get the sources

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and, you know, keep the sources coming.

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So we always have inventory to scan and, you know, maybe you can manage employees or I can manage the employees or vice versa.

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And then the other person focuses on, you know, getting better sources all the time.

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But like, if me and you partnered up, that would be my idea of like, Johnny, we're going to get one of those conveyor belts with one of those conveyor belts.

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We're going to spend a hundred K, whatever it takes to get a property and just, and just go that way.

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I agree with that.

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The slight modification of I would keep you on YouTube just for networking purposes of getting opportunities from people you meet on the Internets.

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I don't like throwing my face out there that much, despite me doing this in this group.

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That's you like that more than I do.

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And I know this and I know that you like that more than I do.

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And I know this and we have to cater to your strengths there, I think.

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But yeah, I would have, I would be very happy in the warehouse is managing employees and the day to day logistics of things coming in and things going out.

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You would probably actually, I'd actually like you to go out and find more local sources or opportunities for us.

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You like not necessarily huge amount of drive time, but you like going out more than I.

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I like staying in the warehouse, making sure the warehouse is working.

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So yes, there would be that dichotomy.

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You're more of the face and going out kind of person.

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I'm more of let's keep the machine going.

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And then I let you know when we're having a problem and I need you, we need more.

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Go get us more.

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Me and Deb will be like the pharmaceutical like drug sale reps, like we'll drive like a Porsche and pull up to these little rat hole, you know, thrift stores and be like, hey, we'll take everything you got on a, on a single day.

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On a seasonal basis, right?

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Like I'm wearing a tux, you know, she's got on like some kind of gown and everything.

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You're like, who the hell are you?

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I'm like, we just want your media.

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But I do think it does bring in what happens here with these relationships and why a lot of them form and why they're guaranteed to fail is one person feels like they need more capital to grow their business.

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So they're willing.

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It's kind of like selling a stake of your business, right?

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If I wanted to buy 5% equity of Johnny B's books, you hope book business, you think you need more capital to kind of grow faster.

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Personally, I think it's I think that's like the biggest mistake people make is, OK, I'm going to go and partner with this person because they have money and they can supply me the money so I can buy the items.

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And then the person that's just supplying the money who really has no idea how business works or things like that, they just expect to get paid when all they're doing is writing you a check.

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Yeah, I mean, in that case, it's more like a silent partner that offers you.

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Not necessarily a loan, but they're they're venture capitalists, more or less, they're injecting cash flow into your business in hopes that they can have some kind of rate of return later.

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It's an investment to them, plain and simple.

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A lot of people like that idea.

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I don't think it's a great idea because if you need the cash to make it work, you haven't figured out how to make it make it work pretty much where you don't need that cash injection or getting a loan is essentially a loan.

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It's just it's just worded and replayed differently.

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It's worse off for you if you're going to give up a part of your business instead of like you said, if you prove that your business is viable, you can get a loan.

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If your business is viable, you can go to the bank with your P&L and they'll they'll give you a SBA loan.

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Right. But if you're just going to be like, OK, hey, Uncle Bob, you got five thousand dollars.

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I'm selling used t-shirts, vintage t-shirts, and I know I can make lots of money and I'll I'll give you some kind of repayment or if you want, you know, some kind of monthly stipend or a percentage of the company.

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I don't even want to know the crazy deals that go on behind the scenes with resellers, because, listen, resellers have some of the highest margins and most of them are dead broke.

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That's just the reality of the situation.

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So I know people are out there hitting up friends, hitting up family members like, hey, you got money when they got all this crap sitting around that isn't sold.

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That's just the reality of it.

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I remember used to have this this one guy, I think his YouTube handles like Mega Man something.

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And he actually had a business partner. And what happened was he was working in his he felt like he was working a lot more than his business partner.

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Right. And what and I think that's like always everybody.

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You can't expect nobody else to work as hard as you. It just never happens.

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Right. When I was in retail, it's kind of like a thing.

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You can't expect somebody else to work as hard as you, because in your mind, you're working harder than everybody else.

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And when you get in a partnership, Johnny's going to think, hey, he's working.

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I'm working harder than Mike. Like he's barely been here 20 hours a week.

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Like I'm going to be like, I'm working smarter than Johnny.

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He wants to sit here for 100 hours a week. I don't care.

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I'm only here 20 hours. Right.

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Now, a partnership, here's the best example or the easiest example that most people can extrapolate and understand.

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You have a. 20 cars and then another person has a car lot.

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You need a car lot to sell the cars.

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The car lot guy needs cars to, well, make money.

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Those two go in partnership together. One had something the other didn't have.

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And when they combine, they have the whole piece of the pie.

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And now they're able to run a business.

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Now, what a lot of people do is they form partnerships to meet a need like let's hire a lawyer in house, give them some equity and they'll handle all our legal.

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That's another benefit to a partnership.

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That's a good way to go or the bookkeeper or the logistics guy or that's what CFOs are for.

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They're in charge of how the money is spent. They make the decisions there.

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Then you have the CEO who keeps the grand vision going and then talks to the CFO is like, OK,

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I'm going to spend this money smartly to achieve the CEO's vision is usually how it goes.

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Now, they talk to each other. It's not just a yes, sir.

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You're going to go do it, sir, like, no, Bob, that's a stupid idea.

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We need to sit down, hash that out.

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You think that's a great idea. But here's all the financial reasons why it's wrong.

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So that's the other benefit of partnership is you can see things differently from different perspectives.

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The guy just has a great idea.

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The guy knows the expenses that go in that and tells the other guy, this is a bad idea for we're going to go broke if we do that, even though there is a huge gain.

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We cannot do that right now. Six months later. Yes, we can pull off that idea.

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So this is just a these are just loose examples of what partnerships really are.

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You got to be straight up with other people, too, right?

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Because a lot of people like to know that nobody wants to offend anybody.

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Nobody wants to, you know, I don't want to make Johnny made because I'll be sitting here, you know,

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next Sunday morning reporting the podcast by myself because he's pissed off.

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I think there is something to be said about just being straight up with somebody, right?

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Just being like, hey, this ain't going to work.

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This is this is a bad decision. I don't think we should do this.

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And what happens here, if it's just you and one other person like who's the tiebreaker, right?

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Say if me and you, we got this crazy idea and I'm like, this is the greatest idea.

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And you're like, this is the worst idea.

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How do you find that middle ground?

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And most people can't get to the middle ground.

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It's got to be my way or the highway.

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And that's when you really start getting in the headaches and troubles when it comes to partnerships.

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Right. And it's kind of like I was talking about in the whole marriage thing.

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You've got to compromise or you've got to make concessions.

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And it may not be that exact vision you had in mind, but to make the partnership work,

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you had to come down a little bit. They had to go up a little bit.

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And then you decided to go forward.

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And it's not really the best of both worlds.

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It's just a satisfactory to keep the peace and the relationship going.

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It is a relationship.

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And speaking of that, since I have experience of this,

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you're going to get a call at 2 a.m.

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Mike wants to cry how we're making no money.

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And I have to reassure Mike that give it three months, man, and we're going to be fine

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because I'm looking at the numbers and the projections.

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We're on track, but I got no money right now.

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Mike, you need to give it three months.

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We're going to get there, man. Just be patient.

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You're going to get those calls and a partnership.

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Because when it comes to money comes high stress.

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Everybody is stressed out when you're going on a big adventure, that everybody's scared.

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We're enough time in. Everybody's scared shitless.

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They don't know if it's really going to work or not.

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But everything on paper says it is.

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You have to really, really believe it.

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And you have to have the numbers to reassure you along the way.

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But while you're trying to generate those numbers,

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man, your heart's beating a million miles a minute.

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I want to take it a kind of different direction with business partnerships.

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And a lot of resellers, they do commissions.

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You give me your stuff, I'll sell it for X percent.

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This is another thing that might sound fine and dandy on the surface level.

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Johnny's going to start taking my CDs and sell them.

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And we're going to split it 50-50-50.

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So send Johnny my box of CDs.

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And a month passed and nothing sold.

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So all of a sudden, Johnny starts looking like the bad guy, right?

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Because you're thinking to yourself, well, if I would have listed these myself,

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they probably would have sold already.

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So I think the commission thing is dangerous ground to get into personally.

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I would never do anything like that.

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Just be like, hey, here, either I'll buy them from you outright at X percent.

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Or I don't want any parts of it.

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I think the commission stuff, man, it's a slippery slope.

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And it can be, it's not good.

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I don't like it.

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I don't like the model at all.

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I know some people thrive on, oh, my whole business is commissions.

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And I think it's just, I don't know.

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I would just rather, I personally rather buy it outright from you and say, here goes 50%.

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And then I can make the other 50% when I sell it versus me taking something and promising you,

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you can't guarantee it's going to sell for X amount of dollars, right?

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I can't take something from you, one of those books and say, hey, I guarantee you I can sell this for $30.

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And you'll get $15 and I'll get $15.

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There's no guarantee in reselling.

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And a lot of people think, well, commissions, it's a hack to get more inventory.

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I don't like it at all.

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I hate the business model, honestly.

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I just like it as well.

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And I would never do it as for myself.

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But to play devil's advocate here, let's say you're just starting out.

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And let's say you got lucky.

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You walk into a room.

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It's filled with 500 Eastern Press books.

219
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They want $20 each for them.

220
00:14:31,680 --> 00:14:32,800
You don't got that money.

221
00:14:32,800 --> 00:14:34,000
You don't got that scratch.

222
00:14:34,000 --> 00:14:36,880
But the harebrained idea comes along.

223
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Can I do a commission deal with you?

224
00:14:38,560 --> 00:14:43,040
Oh, and the customer or your client at this point is on board with it.

225
00:14:43,040 --> 00:14:45,640
That gives you an opportunity to get cash flow.

226
00:14:45,640 --> 00:14:51,040
But once that deal is done, you need to get out of commission work because now you have the cash to buy it out, right?

227
00:14:51,040 --> 00:14:52,080
Like Mike say.

228
00:14:52,080 --> 00:14:55,800
So I'd say at a certain stage of your business, commission is OK.

229
00:14:55,800 --> 00:15:00,880
But that needs to be a very short stage of your business because that comes with a lot of paperwork.

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00:15:00,880 --> 00:15:05,680
Like Mike was saying, a lot of disgruntled customers, when their stuff isn't selling, those 3 a.m.

231
00:15:05,680 --> 00:15:10,720
phone calls I'll be that I was talking about a minute ago, they're going to be doing that to you.

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And they're not your partner.

233
00:15:12,040 --> 00:15:13,800
They're your client, more or less.

234
00:15:13,800 --> 00:15:19,040
And they're going to want their money because clients and clients can be more demanding because they've

235
00:15:19,040 --> 00:15:22,080
given you an item with the expectation of you to sell it.

236
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If you haven't sold it, they're going to want to know why.

237
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And they're going to want to yell and scream at you.

238
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And it's just a whole nightmare of things, especially when you

239
00:15:30,800 --> 00:15:31,920
didn't give me any paperwork.

240
00:15:31,920 --> 00:15:35,160
I think paperwork and commission game, you got to be Johnny on the spot in that.

241
00:15:35,160 --> 00:15:37,000
No pun intended.

242
00:15:37,000 --> 00:15:37,920
They're going to want it.

243
00:15:37,920 --> 00:15:42,400
They want to know when it's sold, how much is sold, all the fee breakdown.

244
00:15:42,400 --> 00:15:48,160
They're going to question every single line item to get a justification of why is there a fee for this?

245
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Why is there a fee for this?

246
00:15:49,680 --> 00:15:51,360
You're going to have to be able to explain that.

247
00:15:51,360 --> 00:15:57,280
So you're going to have extra customer service because you're going to have to service your clients.

248
00:15:57,280 --> 00:15:59,040
Money is the root of all evil.

249
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And when people think they're not getting the money they should be getting from you.

250
00:16:04,120 --> 00:16:08,480
And unfortunately, a lot of this happens in business just in general, family, friends.

251
00:16:08,480 --> 00:16:12,480
Like you can burn a lot of bridges, a lot of relationships over money.

252
00:16:12,480 --> 00:16:18,960
And I just feel like there's really, there is something to be said about having a business

253
00:16:18,960 --> 00:16:21,720
partnership in positive light.

254
00:16:21,720 --> 00:16:24,960
But you have to have such a tactical approach.

255
00:16:24,960 --> 00:16:31,320
You both have to be almost on the same page of the vision of where the business is going to go.

256
00:16:31,320 --> 00:16:33,600
But you bring different things to the table.

257
00:16:33,600 --> 00:16:36,680
It's kind of like why me and you host the podcast.

258
00:16:36,680 --> 00:16:38,440
Two completely different business models.

259
00:16:38,440 --> 00:16:40,480
So it works.

260
00:16:40,480 --> 00:16:43,720
If I just had another scanner on here, that'd be kind of cheesy.

261
00:16:43,720 --> 00:16:49,200
But having somebody that actually has a warehouse, a little brick and mortar storefront,

262
00:16:49,200 --> 00:16:52,400
does bulk books, that makes sense.

263
00:16:52,400 --> 00:16:55,160
You can't partner it up with another scanner.

264
00:16:55,160 --> 00:16:57,160
It would just never make sense to me.

265
00:16:57,160 --> 00:17:01,720
If I sold sneakers, partner up with another sneaker seller, it just wouldn't make sense to me.

266
00:17:01,720 --> 00:17:06,280
But I will say this, some positive lights on business partnerships.

267
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I don't know.

268
00:17:07,000 --> 00:17:12,160
I would think if you paid somebody to sit at the bins all day and they were there for their own business,

269
00:17:12,160 --> 00:17:14,800
but they were grabbing the shoes for you.

270
00:17:14,800 --> 00:17:16,840
If you said, hey, grab me all the Nike shoes.

271
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I'll swing by at the end of the day.

272
00:17:18,200 --> 00:17:19,520
I'll pay you for them.

273
00:17:19,520 --> 00:17:24,840
That's kind of a business partnership on a lower level.

274
00:17:24,840 --> 00:17:27,080
No, it very much is.

275
00:17:27,080 --> 00:17:33,480
And even on that, I would still want to pay that person by the piece instead of a commission type of thing

276
00:17:33,480 --> 00:17:34,800
or profit sharing kind of thing.

277
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I'll get to profit sharing in a minute.

278
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I actually am very much proponent of that.

279
00:17:41,440 --> 00:17:45,440
A partner, and people also confuse partnerships up with managers.

280
00:17:45,440 --> 00:17:48,680
You want a manager to do the things you don't want to do.

281
00:17:48,680 --> 00:17:52,080
Or like you were saying, have somebody to run the shop, more or less.

282
00:17:52,080 --> 00:17:54,200
That doesn't necessarily need to be a partner.

283
00:17:54,200 --> 00:17:56,280
It could be a well-paid manager.

284
00:17:56,280 --> 00:17:57,600
Yeah, that's an employee.

285
00:17:57,600 --> 00:18:00,960
A salary, a high salary because they have a skill set.

286
00:18:00,960 --> 00:18:04,320
But to me, it's not a partnership level skill set.

287
00:18:04,320 --> 00:18:10,960
They're managing people and personnel or they're managing a portion of your business.

288
00:18:10,960 --> 00:18:11,880
It's a manager.

289
00:18:11,880 --> 00:18:14,960
It's not a partner.

290
00:18:14,960 --> 00:18:18,120
Now, segueing to profit sharing.

291
00:18:18,120 --> 00:18:20,080
I'm actually a big proponent of profit sharing.

292
00:18:20,080 --> 00:18:22,000
Some people do bonuses.

293
00:18:22,000 --> 00:18:23,800
I do profit sharing for my bottle.

294
00:18:23,800 --> 00:18:26,280
I don't really spoken about it publicly.

295
00:18:26,280 --> 00:18:30,840
But it's a piece of the pie that gets shared once a year.

296
00:18:30,840 --> 00:18:33,560
And here's a good job.

297
00:18:33,560 --> 00:18:36,400
Here's your bonus, more or less, for doing that.

298
00:18:36,400 --> 00:18:38,400
And I use that myself.

299
00:18:38,400 --> 00:18:41,960
And I plan on continuing to use it because I've used this in previous businesses.

300
00:18:41,960 --> 00:18:47,600
And people work a little harder, in my opinion, for that bonus or for that reward.

301
00:18:47,600 --> 00:18:49,960
And it's not just here's your weekly check.

302
00:18:49,960 --> 00:18:50,960
Here you go.

303
00:18:50,960 --> 00:18:51,960
Good job.

304
00:18:51,960 --> 00:18:54,200
They say thank yous in the paycheck.

305
00:18:54,200 --> 00:18:56,080
And yes, known that, yes, it's money.

306
00:18:56,080 --> 00:18:57,080
You worked hard.

307
00:18:57,080 --> 00:18:58,600
Here's your money for working hard.

308
00:18:58,600 --> 00:19:01,960
But here's you worked harder than the rest.

309
00:19:01,960 --> 00:19:04,200
Here's the reward for working harder than the rest.

310
00:19:04,200 --> 00:19:07,120
I think that goes a long way in business.

311
00:19:07,120 --> 00:19:11,240
Whether you do it in a bonus model, whether you do it in a profit sharing model, or whether

312
00:19:11,240 --> 00:19:18,920
you do that in buying them something, a physical asset that they desire they can't afford on

313
00:19:18,920 --> 00:19:25,240
their own as a reward, bribe, reward, similar.

314
00:19:25,240 --> 00:19:33,280
Anyway, now, if you want to bring in somebody to do all your bookkeeping, that is not necessarily

315
00:19:33,280 --> 00:19:34,280
manager.

316
00:19:34,280 --> 00:19:39,600
I believe that is a value skill set and or legal that that would qualify in the partnership

317
00:19:39,600 --> 00:19:43,800
realm because you generally wouldn't have any experience in that unless you come from

318
00:19:43,800 --> 00:19:46,360
that background, then you don't need that.

319
00:19:46,360 --> 00:19:49,880
You may need somebody to go out and be the dealmaker.

320
00:19:49,880 --> 00:19:52,000
If you're that person, go get the deals.

321
00:19:52,000 --> 00:19:53,000
I don't know how to do that.

322
00:19:53,000 --> 00:19:54,000
I can sign.

323
00:19:54,000 --> 00:19:58,600
I can make a contract for it, but I have no business networking deals to a high degree

324
00:19:58,600 --> 00:20:01,360
where it's massively profitable.

325
00:20:01,360 --> 00:20:03,120
That's your guy partner.

326
00:20:03,120 --> 00:20:06,560
That would be a justification for partnership in my opinion.

327
00:20:06,560 --> 00:20:11,680
How do you feel about like, you see this in larger businesses, but I know there's some

328
00:20:11,680 --> 00:20:15,880
resellers out there that do this kind of crap.

329
00:20:15,880 --> 00:20:25,720
If you work for me and be my eBay lister, I'm going to give you 10% of the company overall.

330
00:20:25,720 --> 00:20:29,600
You're never going to sell your reselling company.

331
00:20:29,600 --> 00:20:33,520
That's the only way that person would make any kind of gain.

332
00:20:33,520 --> 00:20:37,400
If I give you 10% of my business and I never sell the business, who cares?

333
00:20:37,400 --> 00:20:41,000
It's not like you're getting any money unless there's some kind of royalty attached to it.

334
00:20:41,000 --> 00:20:45,160
But I know for a fact, there are resellers out there that are like, I'll give you 5%

335
00:20:45,160 --> 00:20:47,960
of my business if you list my stuff.

336
00:20:47,960 --> 00:20:48,960
I don't know.

337
00:20:48,960 --> 00:20:49,960
It just rubs me the wrong way.

338
00:20:49,960 --> 00:20:53,520
I think getting 5% of every revenue that comes in the-

339
00:20:53,520 --> 00:20:55,640
No, it's just basically shares.

340
00:20:55,640 --> 00:20:56,640
Shares in the company.

341
00:20:56,640 --> 00:20:57,640
The overall stock shares.

342
00:20:57,640 --> 00:20:58,640
Yeah.

343
00:20:58,640 --> 00:20:59,640
It's pointless.

344
00:20:59,640 --> 00:21:00,640
It's pointless.

345
00:21:00,640 --> 00:21:06,280
It's like Shark Tank where, oh, I'll sell you 5% of my company for X amount of dollars.

346
00:21:06,280 --> 00:21:10,680
But you're really most likely never going to sell your reselling business.

347
00:21:10,680 --> 00:21:13,920
Instead of cash, you're doing labor.

348
00:21:13,920 --> 00:21:20,800
That works if the company produces enough, but it's hard for that to be produced because

349
00:21:20,800 --> 00:21:24,640
the 5% guy, it's going to take a while to build up a business and you're not going to

350
00:21:24,640 --> 00:21:26,840
see any of that for years, honestly.

351
00:21:26,840 --> 00:21:31,920
You have to do some kind of distribution every year based on what percentage people have

352
00:21:31,920 --> 00:21:32,920
in the company.

353
00:21:32,920 --> 00:21:35,680
But personally for me, I don't know.

354
00:21:35,680 --> 00:21:41,120
How much would somebody have to pay you, Johnny, to get 10% of your business, 10% of your holdings

355
00:21:41,120 --> 00:21:42,120
every single year?

356
00:21:42,120 --> 00:21:46,640
I'm going to have 10% of your business and every year there's going to be a distribution

357
00:21:46,640 --> 00:21:50,000
based off my percentage and how much you made.

358
00:21:50,000 --> 00:21:51,000
I wouldn't do that deal.

359
00:21:51,000 --> 00:21:52,000
Me neither.

360
00:21:52,000 --> 00:21:54,960
I'm glad we think of it like that because I watch Shark Tank.

361
00:21:54,960 --> 00:22:00,960
I'm like, you work so hard to build a business and you're so quick to give it away for X

362
00:22:00,960 --> 00:22:02,760
amount of dollars.

363
00:22:02,760 --> 00:22:07,800
Like we talked about in the beginning, if your business has the P&L to support it, you

364
00:22:07,800 --> 00:22:12,480
can go get a loan if that's the direction you want to go without giving up equity.

365
00:22:12,480 --> 00:22:17,760
Yeah, they might ask for a collateral of some personal items your house, but hey, if your

366
00:22:17,760 --> 00:22:20,560
business is working, then roll the dice.

367
00:22:20,560 --> 00:22:24,760
All you people that love taking on crazy loans and crazy debt, sky's the limit.

368
00:22:24,760 --> 00:22:29,960
You'll be a millionaire off your credit card miles and they'll never take your house when

369
00:22:29,960 --> 00:22:33,680
you put it up as collateral for a small business loan.

370
00:22:33,680 --> 00:22:39,880
For me, I just think grow at the speed of cash, right?

371
00:22:39,880 --> 00:22:45,640
As much cash as you have, that's how you can grow your business and thankfully as resellers,

372
00:22:45,640 --> 00:22:48,640
don't cost a lot to get a lot of inventory.

373
00:22:48,640 --> 00:22:56,680
Even if we all wanted to switch over to basically truckloads of shirts, shoes, books, CDs, DVDs,

374
00:22:56,680 --> 00:23:03,360
maybe $2,000 a truckload shipped from anywhere in the universe to your front door.

375
00:23:03,360 --> 00:23:05,680
So $2,000 a week.

376
00:23:05,680 --> 00:23:09,880
If you can process a truckload in a week, which I highly doubt, I mean, as a reseller,

377
00:23:09,880 --> 00:23:11,480
you should have that type of money.

378
00:23:11,480 --> 00:23:13,240
The margins we have are stupid.

379
00:23:13,240 --> 00:23:14,240
Right.

380
00:23:14,240 --> 00:23:16,760
So let me talk to you about a past partnership.

381
00:23:16,760 --> 00:23:22,120
It was very much since you brought up shares, very much set up like a law firm and everybody

382
00:23:22,120 --> 00:23:26,480
owned shares of the company and you had to pay to have these shares.

383
00:23:26,480 --> 00:23:28,840
So you bought it from the company essentially.

384
00:23:28,840 --> 00:23:35,420
And once a quarter, any revenue left over was distributed by your percentage.

385
00:23:35,420 --> 00:23:36,420
That was your money.

386
00:23:36,420 --> 00:23:41,120
Now you can leave it in there and let it roll over to the next quarter and you could take

387
00:23:41,120 --> 00:23:43,960
a payout whenever you wanted as long as there's money there.

388
00:23:43,960 --> 00:23:47,680
Now there would be some months where that number would be negative because we spent

389
00:23:47,680 --> 00:23:54,560
lots, hundreds of thousands of dollars to make projects go, produce a project.

390
00:23:54,560 --> 00:23:57,040
So sometimes a quarter, you could be in the negative.

391
00:23:57,040 --> 00:24:01,900
Now you didn't have to owe any money on the negative side, but it would balance out based

392
00:24:01,900 --> 00:24:02,900
off the project.

393
00:24:02,900 --> 00:24:06,680
And you wait to the next quarter because the project should have produced money for that

394
00:24:06,680 --> 00:24:09,440
following quarter.

395
00:24:09,440 --> 00:24:12,880
But if you have a bad year all around where it's constantly negative and negative, that's

396
00:24:12,880 --> 00:24:17,360
when people get squirrely and want to leave.

397
00:24:17,360 --> 00:24:23,000
Or say the opposite effect, the whole year was positive, lots of money all around.

398
00:24:23,000 --> 00:24:31,600
So let's say you own 10% and quarterly payout, there's $100,000 on the table.

399
00:24:31,600 --> 00:24:35,680
While you're 10%, you're entitled to $10,000 because that's the money left over.

400
00:24:35,680 --> 00:24:37,840
But that's after all expenses.

401
00:24:37,840 --> 00:24:42,000
That's after paying all the employees, we're a fairly large operation.

402
00:24:42,000 --> 00:24:46,680
That's after paying everybody a salary because partners do get paid a salary.

403
00:24:46,680 --> 00:24:47,680
People forget that.

404
00:24:47,680 --> 00:24:51,160
It's not just the 10,000 I'm talking about right now.

405
00:24:51,160 --> 00:24:55,720
So that cuts into your percentage as well, even though that's your take home, your monthly

406
00:24:55,720 --> 00:24:56,720
salary.

407
00:24:56,720 --> 00:25:01,960
So there's 10K left and you can leave it in or you can take a distribution.

408
00:25:01,960 --> 00:25:04,560
But we had about eight partners in there.

409
00:25:04,560 --> 00:25:09,400
And then at the end, before I left, there was like four because people couldn't handle

410
00:25:09,400 --> 00:25:12,600
a partnership level because what we were doing was very high stressed.

411
00:25:12,600 --> 00:25:14,280
It was two AM phone calls.

412
00:25:14,280 --> 00:25:15,600
They happened quite a bit.

413
00:25:15,600 --> 00:25:19,520
It was mainly me answering some of them.

414
00:25:19,520 --> 00:25:23,120
But anyway, and people decide that's not what they want to do.

415
00:25:23,120 --> 00:25:26,120
They want to have entire ownership.

416
00:25:26,120 --> 00:25:31,880
If you go through a partnership, you're going to go through, honestly, it's hell.

417
00:25:31,880 --> 00:25:35,600
And sometimes there's those great glorious moments.

418
00:25:35,600 --> 00:25:39,020
And that's what makes partnerships worth it, is those glorious moments.

419
00:25:39,020 --> 00:25:44,040
But there is a lot of struggle along the way because you're dealing with different personality

420
00:25:44,040 --> 00:25:48,400
types as well and or different ideas that are brought to the table.

421
00:25:48,400 --> 00:25:52,760
And that's going to cause a lot of discussions, some more heated than others, some where everybody

422
00:25:52,760 --> 00:25:58,800
agrees this is a brilliant idea.

423
00:25:58,800 --> 00:26:00,120
It takes up a lot of time.

424
00:26:00,120 --> 00:26:01,120
People forget about that as well.

425
00:26:01,120 --> 00:26:08,200
All these discussions take an exorbitant amount of time to finalize and get through.

426
00:26:08,200 --> 00:26:11,400
Does the shares company share partnership model work?

427
00:26:11,400 --> 00:26:12,400
Yes, it does.

428
00:26:12,400 --> 00:26:17,480
I was part of one of those so I can speak fanatically that it does work great.

429
00:26:17,480 --> 00:26:21,920
Does something where you're just taking a salary and just pumping money back in as fast

430
00:26:21,920 --> 00:26:27,000
as you can also work, meaning you're not planning to take a check till 20 years down the road

431
00:26:27,000 --> 00:26:29,640
where everything is built up, all the infrastructure is there.

432
00:26:29,640 --> 00:26:30,680
Yes, that model works.

433
00:26:30,680 --> 00:26:33,040
I know a couple of people that do that and reselling.

434
00:26:33,040 --> 00:26:34,760
They're just plowing it all back in.

435
00:26:34,760 --> 00:26:37,880
They've assigned themselves a salary.

436
00:26:37,880 --> 00:26:42,720
They take out a small percentage of their equity that gets put into a bank account and

437
00:26:42,720 --> 00:26:45,840
they'll withdraw from that bank account down the road.

438
00:26:45,840 --> 00:26:50,080
Anyway, I'm going on a tangent here.

439
00:26:50,080 --> 00:26:53,760
Partnerships is a fun topic for me because I've done it.

440
00:26:53,760 --> 00:26:54,760
So you go down, Mike.

441
00:26:54,760 --> 00:26:55,800
I've been rambling.

442
00:26:55,800 --> 00:27:01,400
I think the way I look at a partnership is like you said, all right, now there's two

443
00:27:01,400 --> 00:27:02,400
of us.

444
00:27:02,400 --> 00:27:07,800
So now Johnny's also got to feed me, Deb, and the fat cats.

445
00:27:07,800 --> 00:27:13,600
So when I think of a partnership, I think of how many Xs is it going to my business?

446
00:27:13,600 --> 00:27:17,280
If me and Johnny get together, we might be together.

447
00:27:17,280 --> 00:27:19,200
I'm one X, he's one X.

448
00:27:19,200 --> 00:27:23,800
So we got to at least maintain two X for us both to be where we're at today.

449
00:27:23,800 --> 00:27:27,720
But a partnership, I'm not thinking, oh, if me and Johnny get together, maybe we can do

450
00:27:27,720 --> 00:27:28,720
three X.

451
00:27:28,720 --> 00:27:31,400
We're doing at least 10 X, dude.

452
00:27:31,400 --> 00:27:33,080
That's the mentality you have to have.

453
00:27:33,080 --> 00:27:35,720
It can't just be, okay, well, now we're together.

454
00:27:35,720 --> 00:27:37,320
We both can make a little bit more money.

455
00:27:37,320 --> 00:27:41,120
I think partnerships have to be a lot more than a little bit more money.

456
00:27:41,120 --> 00:27:43,360
There's no point doing a partnership if it's just a little bit more money.

457
00:27:43,360 --> 00:27:46,840
You want a little bit more money, work more than 20 hours a week, Mike.

458
00:27:46,840 --> 00:27:47,960
You can get a little bit more money.

459
00:27:47,960 --> 00:27:49,560
It's right there for the taking, right?

460
00:27:49,560 --> 00:27:51,440
We all have opportunities like that in our business.

461
00:27:51,440 --> 00:27:56,440
So why in the world would you want to partner up with somebody just to be like, well, we

462
00:27:56,440 --> 00:28:02,080
can call each other at 2 a.m. on the phone and we'll make a little bit more money together.

463
00:28:02,080 --> 00:28:03,840
That is not a good approach to partnership.

464
00:28:03,840 --> 00:28:09,440
You have to look at it from a business level and realize, hey, this person is expecting.

465
00:28:09,440 --> 00:28:10,440
That's another thing.

466
00:28:10,440 --> 00:28:12,560
Especially if it's another reseller, right?

467
00:28:12,560 --> 00:28:14,380
How much money are they making?

468
00:28:14,380 --> 00:28:16,040
How much money do they need?

469
00:28:16,040 --> 00:28:17,040
How much are you making?

470
00:28:17,040 --> 00:28:18,520
How much do you need?

471
00:28:18,520 --> 00:28:21,960
Johnny might need $10,000 a week to survive.

472
00:28:21,960 --> 00:28:24,200
I only need $1,000 a week to survive.

473
00:28:24,200 --> 00:28:28,680
Then when you see Johnny's taking out 10 grand a week and you're taking out a thousand, there

474
00:28:28,680 --> 00:28:32,640
is so many headaches.

475
00:28:32,640 --> 00:28:34,680
It would be a nightmare.

476
00:28:34,680 --> 00:28:35,680
Right.

477
00:28:35,680 --> 00:28:38,360
My overhead is way more than your overhead.

478
00:28:38,360 --> 00:28:41,400
I mean, factoring out the YouTube side of your business because I don't know what you

479
00:28:41,400 --> 00:28:48,240
spend there, but just my operating expenses for an employee in a warehouse is probably

480
00:28:48,240 --> 00:28:49,240
way higher than yours.

481
00:28:49,240 --> 00:28:59,840
I don't know by how much way higher, but it is because I spend a lot in salary and rent,

482
00:28:59,840 --> 00:29:00,840
honestly.

483
00:29:00,840 --> 00:29:01,840
How much is your rent?

484
00:29:01,840 --> 00:29:05,760
Around a thousand a month, but that's before utilities and all that.

485
00:29:05,760 --> 00:29:07,000
Just the rent itself is a grand.

486
00:29:07,000 --> 00:29:10,040
I'm paying 12 grand a year just in rent.

487
00:29:10,040 --> 00:29:11,040
Yeah.

488
00:29:11,040 --> 00:29:14,000
I got one storage unit that's going to be around a hundred bucks a month.

489
00:29:14,000 --> 00:29:15,000
Right there at 10x.

490
00:29:15,000 --> 00:29:16,000
10x.

491
00:29:16,000 --> 00:29:17,000
10x.

492
00:29:17,000 --> 00:29:18,000
Just on the building.

493
00:29:18,000 --> 00:29:19,000
Just on the building.

494
00:29:19,000 --> 00:29:20,000
Right?

495
00:29:20,000 --> 00:29:23,360
It's like your expectations going into these things have to be clear.

496
00:29:23,360 --> 00:29:26,360
I think it's not laid out crystal clear.

497
00:29:26,360 --> 00:29:29,800
If I was going to go into a partnership with somebody, I would want to know all their numbers,

498
00:29:29,800 --> 00:29:34,160
what they're doing, what their business looks like, and get a real overlook of the land

499
00:29:34,160 --> 00:29:36,560
and not just be like, hey, I like this guy.

500
00:29:36,560 --> 00:29:39,240
This Johnny guy is going to make me some extra money.

501
00:29:39,240 --> 00:29:40,240
Sure.

502
00:29:40,240 --> 00:29:41,240
Let's handshake.

503
00:29:41,240 --> 00:29:42,240
Yeah.

504
00:29:42,240 --> 00:29:43,240
50-50.

505
00:29:43,240 --> 00:29:44,240
Then all of a sudden it blows up.

506
00:29:44,240 --> 00:29:49,780
Now, this is probably the most critical piece that I can give anybody.

507
00:29:49,780 --> 00:29:54,920
If you decide to go ahead with a partnership, well, two pieces, never do it with friends

508
00:29:54,920 --> 00:29:56,680
and family, ever.

509
00:29:56,680 --> 00:29:57,680
Never.

510
00:29:57,680 --> 00:30:02,560
That's a good, that's like a Johnny B's signature line.

511
00:30:02,560 --> 00:30:04,480
Never do business with friends or family.

512
00:30:04,480 --> 00:30:05,800
It is just, it's bad.

513
00:30:05,800 --> 00:30:07,440
I mean, listen, I will say this.

514
00:30:07,440 --> 00:30:10,200
My YouTube editor is a lifelong friend.

515
00:30:10,200 --> 00:30:12,960
So I guess it's a little bit different because I just pay him.

516
00:30:12,960 --> 00:30:16,360
He went to school for editing, so this is just a side gig for him to make a few extra

517
00:30:16,360 --> 00:30:17,360
bucks.

518
00:30:17,360 --> 00:30:22,120
But other than that, anything on a more serious level, I don't care if your family falls into

519
00:30:22,120 --> 00:30:24,320
trillions of dollars.

520
00:30:24,320 --> 00:30:29,200
People, and I've experienced this, I think we all have in some sort of way.

521
00:30:29,200 --> 00:30:34,360
People when it comes to money or business, they will hold things over your head until

522
00:30:34,360 --> 00:30:35,360
you're dead.

523
00:30:35,360 --> 00:30:39,320
You didn't pay somebody back that dollar 10 years ago.

524
00:30:39,320 --> 00:30:44,560
You didn't pay your grandma back a dollar, your grandpa back that dollar.

525
00:30:44,560 --> 00:30:48,400
That is going to be held over your head in one way, shape, or form.

526
00:30:48,400 --> 00:30:49,760
And it's just, it's bad, man.

527
00:30:49,760 --> 00:30:50,760
It's bad.

528
00:30:50,760 --> 00:30:52,920
No, it's terrible.

529
00:30:52,920 --> 00:30:58,600
My second biggest piece of advice, if you go ahead with a partnership, and let's just

530
00:30:58,600 --> 00:31:05,640
say you maintain the majority equity, you need to have a buyout clause to buy your partner

531
00:31:05,640 --> 00:31:10,400
out because if they're a bad partnership, like dating, right?

532
00:31:10,400 --> 00:31:13,880
Everybody puts their best foot forward in the dating stages, but once you get married,

533
00:31:13,880 --> 00:31:18,000
everybody gets a bit more relaxed, their true self starts to be revealed.

534
00:31:18,000 --> 00:31:22,680
And you're like, five years later, I hate this son of a bitch.

535
00:31:22,680 --> 00:31:23,680
I want him gone.

536
00:31:23,680 --> 00:31:29,640
I'm going to write him a check for what the company is worth, and I will never have to

537
00:31:29,640 --> 00:31:30,640
see him again.

538
00:31:30,640 --> 00:31:39,640
Imagine if that was a thing in like, you know, relationships, like just normal relationships.

539
00:31:39,640 --> 00:31:41,720
Write a check and be like, adios.

540
00:31:41,720 --> 00:31:44,000
They could just buy me out and send me on my way.

541
00:31:44,000 --> 00:31:45,000
Right?

542
00:31:45,000 --> 00:31:52,160
I wake up one morning and there's a check for 20 grand and she's like, today is gone.

543
00:31:52,160 --> 00:31:55,160
It is a don't borrow from friends or family.

544
00:31:55,160 --> 00:31:59,400
I don't care if it's $10, $20.

545
00:31:59,400 --> 00:32:02,280
My experience never ends well.

546
00:32:02,280 --> 00:32:07,080
If somebody ever comes along to me and is like, hey, say Johnny needs 20 bucks, right?

547
00:32:07,080 --> 00:32:08,080
He calls me.

548
00:32:08,080 --> 00:32:09,240
He's at a Greyhound station.

549
00:32:09,240 --> 00:32:10,240
He woke up.

550
00:32:10,240 --> 00:32:11,240
He don't know where he is.

551
00:32:11,240 --> 00:32:13,600
He needs 20 bucks for a bus ticket.

552
00:32:13,600 --> 00:32:16,920
I'm going to give Johnny the $20 and it's not going to be a loan.

553
00:32:16,920 --> 00:32:18,800
It's going to be here you go, Johnny.

554
00:32:18,800 --> 00:32:20,160
You find your way back home.

555
00:32:20,160 --> 00:32:26,800
I think the difference is when you just give somebody like a sum of money, there's really

556
00:32:26,800 --> 00:32:28,080
no overhead to it.

557
00:32:28,080 --> 00:32:32,960
Instead of loaning money or having a business transaction, that's never going to go away

558
00:32:32,960 --> 00:32:34,120
until it's paid in full.

559
00:32:34,120 --> 00:32:38,040
And then even when it's paid in full, if it's a family member, like you're still always

560
00:32:38,040 --> 00:32:40,720
going to get like snarky comments or things like that.

561
00:32:40,720 --> 00:32:42,840
Avoid friends and family when it comes to business.

562
00:32:42,840 --> 00:32:43,840
Sure.

563
00:32:43,840 --> 00:32:44,840
You can have them play a part, right?

564
00:32:44,840 --> 00:32:47,040
Like, I can have Deb scan with me every day, right?

565
00:32:47,040 --> 00:32:48,040
I got two scanners.

566
00:32:48,040 --> 00:32:49,400
I try and Tyson her every day.

567
00:32:49,400 --> 00:32:50,400
Yeah.

568
00:32:50,400 --> 00:32:51,400
You want to come scan?

569
00:32:51,400 --> 00:32:52,400
You want to come scan, right?

570
00:32:52,400 --> 00:32:53,400
Like, that's different.

571
00:32:53,400 --> 00:32:56,200
We're talking about next level business partnerships.

572
00:32:56,200 --> 00:32:58,880
Me and Johnny move in together.

573
00:32:58,880 --> 00:33:00,960
We buy a conveyor belt.

574
00:33:00,960 --> 00:33:05,120
Those types of relationships might seem good at face value, but it's really not.

575
00:33:05,120 --> 00:33:09,520
Johnny, you're going to take us away here with the Jerry Springer final thought of the

576
00:33:09,520 --> 00:33:12,120
episode.

577
00:33:12,120 --> 00:33:22,440
If you decide to do a partnership, you need to have not only their business assets evaluated,

578
00:33:22,440 --> 00:33:24,720
but also their personal expenses.

579
00:33:24,720 --> 00:33:29,500
If you have, if they're a hundred K in debt, even though they have all this flash upfront

580
00:33:29,500 --> 00:33:32,680
for their business, that's a bad sign.

581
00:33:32,680 --> 00:33:36,480
That's a red flag not to go in business with this person.

582
00:33:36,480 --> 00:33:41,840
So a full background check on both personal and business to know the numbers on all of

583
00:33:41,840 --> 00:33:46,800
their accounts before you two combine superpowers and become the wonder twins.

584
00:33:46,800 --> 00:33:51,440
That is very critical outside of please have a buyout clause, please, please.

585
00:33:51,440 --> 00:33:55,240
Because you don't know what are you two are going to be feeling on each other in five

586
00:33:55,240 --> 00:33:56,240
years.

587
00:33:56,240 --> 00:34:02,240
You may hate each other's guts or everything may be chim chim true as Mary Poppins would

588
00:34:02,240 --> 00:34:03,240
say.

589
00:34:03,240 --> 00:34:04,840
I hope I quoted that right.

590
00:34:04,840 --> 00:34:06,520
Those are my words of advice.

591
00:34:06,520 --> 00:34:10,960
I don't like, maybe our podcast would be better if we hated each other's guts.

592
00:34:10,960 --> 00:34:13,160
I mean, we're only like a year and a half into this.

593
00:34:13,160 --> 00:34:17,080
So I guess in another three and a half years, you know, we won't even say hi to each other.

594
00:34:17,080 --> 00:34:18,080
We'll just come on here.

595
00:34:18,080 --> 00:34:20,760
I'll just hit the record button and we'll both just like tell each other.

596
00:34:20,760 --> 00:34:23,960
You sit here in silence for five minutes, just stare angrily at each other.

597
00:34:23,960 --> 00:34:24,960
Yeah.

598
00:34:24,960 --> 00:34:27,080
Talk about how wrong the other person's business is.

599
00:34:27,080 --> 00:34:28,920
So yeah, we're going to wrap up there.

600
00:34:28,920 --> 00:34:32,600
We appreciate you listening or watching over on YouTube and we'll talk to you in next week's

601
00:34:32,600 --> 00:34:33,600
episode.

602
00:34:33,600 --> 00:34:37,640
Thanks for listening to another episode of the resellers mindset podcast.

603
00:34:37,640 --> 00:34:42,120
Today's full episode and all previous episodes are available to all YouTube members along

604
00:34:42,120 --> 00:34:44,840
with the weekly zoom call and private discord.

605
00:34:44,840 --> 00:34:49,160
Head on over to youtube.com backslash to use book guy and consider joining for as little

606
00:34:49,160 --> 00:35:09,480
as $2.99 a month.