Happy Friday!
As promised, today I’m going to dive deeper on my post that went viral about my friend that makes money live selling on WhatNot. Fun fact, my friend that I reference in that post is the same person named “Jason” in my post about a failed partnership. Yep, same guy. And there will be more posts about him as well. Ya see, that’s why you subscribe to this newsletter, because I don’t make those connections publicly…To this day, Jason has never seen either post (as far as I know). But I wrote them with being okay with him reading them one day, knowing it’s inevitable…
Before I get into it, I’d like to see if any of you are hiring for a customer support or HR role right now. We recently pared down our mining business (out of necessity) and I had to let a rockstar employee go. She’s worked for me for 4 years across two companies and is an insanely hard worker. She has a Master’s degree in HR but managed all of our customer support. If you’d like an intro, please reply to this and let me know. I’d love to see her land on her feet. I wouldn’t recommend her if she weren’t incredible. I said off others that I will not recommend… She lives 10 mins from me and we go to church together.
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Alright, so let’s talk about live selling. Live selling first became popular in China in 2016 with an app called Taobao. Taobao was ahead of the game in that it was an entirely frictionless experience, much like Tiktok and Snapchat today.
4 years later, Taobao sold $7.5 BILLION worth of goods in 30 MINUTES in a single day, the world’s largest shopping event. Today, about 40% of Chinese residents use Taobao regularly!
Live selling becoming popularized in the US was an inevitability, but who’d be the one to do it?
Facebook is dabbling, YouTube and eBay are dabbling, but WhatNot leads the pack. Founded 4 years ago, they’ve raised $500m and is worth 10-15x that. They started off as a place to live sell Pokemon cards and pop culture collectibles.
Ok, back to Jason.
I was at my son’s basketball game a couple months ago (Jason is the coach) and we started chatting about all this live selling he was doing while we waited for the game ahead of us to end. I added it to my “cool stuff to post about” sheet and didn’t revisit until last week.
After the post went viral, I hopped in on an event he was hosting unannounced and started bidding on shirts. I meant to record my screen as he noticed I was in there, but I forgot! And then, I saw a shirt that was SO UGLY I had HAD to have it, so I started recording and bidding. My wife and kids were nearby as I started bidding up the price and we were in tears laughing. I recorded a screenshare of that right here, with a funny surprise as the end. I wish you could hear what we were saying out loud in the room…
After his event ended, we chatted on the phone for about an hour, and that’s where I learned all the alpha. And I’ll admit, I didn’t tell him about the post. I couldn’t do it! But I did tell him I started a tree biz that competes directly with his brother’s!
I’ll just unload the info unceremoniously below, followed by how I think you could make money at this.
He gets the units so cheaply because he buys by the truckload, $20k - $50k at a time. He has an 8,000 square foot warehouse in Richardson that he stores everything in. His average price is $2 per unit, not the $.50 I mentioned in my post. Either he exaggerated when he told me two months ago, or I misremembered. Both are highly likely!
He normally makes $400 - $500 per hour when selling, top line. I kept track on a spreadsheet while he was selling, and it tracks. He even said during the livestream “Chris I bet you’re tracking my sales on a spreadsheet right now aren’t you?” I died.
He sells each unit for $5 - $50, with an occasional $100 - $300 order thrown in. The average sale price is around $13, and he charges $3.99 for shipping. He used to only sell apparel but now he buys cheap watches from Ali Baba and sells those as well.
He’s starting to dabble in wholesale more and more. So instead of selling 1 shirt at a time to consumers, he’ll sell boxes of shirts at a time to competitors. He thinks wholesale live selling will become more and more popular.
He’s a member of a bunch of Facebook groups of other WhatNot live sellers and he’ll grow his followers by hosting “raid trains.” A raid train is when you can click a button in the app to send all your watchers to someone else’s event once yours ends. A group of hosts will do this over and over for hours on end. It’s the equivalent of a retweet.
He said there are multiple companies making 7-8 figures per year selling exclusively on WhatNot, including an adult toy brand that makes $50k/day by live selling 24/7.
WhatNot grows by paying top eBayers to come over to their platform and bring their customers in exchange for $0 fees for a while, similarly to how Twitch grew so fast.
My biggest takeaway? His followers have a 60 day lifespan, on average. He has around 5,000 followers and he said the ones he had over 60 days ago are no longer around. Retention is a major growth challenge for WhatNot.
Along with the above, sadly, users often get addicted and their spending gets out of control. After only purchasing that one shirt, I can definitely see how this would be the case. It’s fun! My heart rate increased, I got nervous and shaky, and all over a $42 ugly shirt that I was literally buying as a joke! Imagine if I actually wanted this stuff?
He also told me a story about an NFL player that was friends with the WhatNot founder that got in trouble for scamming buyers. He’d sell “unbroken” Pokemon sets and then “break” them while live, but they had actually already been broken and resealed. WhatNot refunded every person that had ever purchased from him (millions) to save face.
When I posted the link to WhatNot I used a referral link that they provide front and center in the app. I thought “Hey, why not use a referral link if this is going viral anyway?” What happened? 3,479 clicks, 267 signups and only 1 person spent money on the app, returning me a whopping $10 in store credit! So I imagine they also must struggle converting users, in addition to retaining them. Side note, Jason was wondering out loud on the livestream how I already had 260 followers on the app. The reason was because WhatNot automatically adds any referrals to your follower list. I let him keep wondering…he doesn’t know about the post.
Ok, so is there still money to be made here?
That’s what you’re thinking now, right? It’s ok, I was thinking the same, but the answer is yes, and here’s a few different ideas:
WhatNot SaaS Ideas
Mr. Beast just launched a YouTube analytics SaaS tool. I think dozens of these could be launched on top of WhatNot, both for buyers and sellers.
Buyers could see what’s trending, and which sellers are undiscovered and have the best prices.
Sellers could tap into what categories or sellers are growing the fastest and go compete with them. Similarly to what Jungle Scout does for Amazon.
You could advertise organically in the many WhatsApp and Facebook groups for WhatNot users.
Sell Directly on WhatNot, Because WhyNot?
Go spend some time in the app, and try to notice what categories WhatNot is pushing you towards. Those are the categories that are trending and/or growing the fastest.
What could you sell on wholesale? What if you simply perused high ticket items on Alibaba and sold those? If I could make 8 figures simply acting as an iPhone parts middleman between store owners and Ali Baba, you can do the same on WhatNot.
Be a Liquidator for the Liquidators (or just sell to them)
Hire a VA to mass DM every WhatNot seller you can in a specific category. Start collecting their emails and building relationships with them. Learn from them. What are their pain points? They’re likely all struggling with the same stuff, and there’s opportunity there.
Maybe you can offer to take any dead inventory off their hands and re-sell it all yourself in a wholesale channel.
Maybe you can create a newsletter for WhatNot sellers. That’d be a high value audience.
Or shoot, maybe you can sell them that SaaS tool mentioned above.
Or, go post to Upwork looking for VAs that have worked for Upwork sellers in the past. Interview them and learn even more alpha that you can monetize.
Think Small.
Use Whatnot as a way to teach your kids how to sell, or to unload stuff in your garage. You’ll never learn a platform better than by simply transacting on it.
WhatNot as a service.
Liveselling isn’t going away, and Jason has some serious skills at this.
Sometimes he outsources livestreams to his employees, and they literally make half as much selling the exact same stuff. He’s good! You have to have energy and just keep talking and engaging the whole time.
I told him on the phone he should partner with bigger liquidation companies to train and/or do this for them in exchange for a cut of revenue generated. Or shoot, partner with ANY company that needs to offload crap.
Liquidation is big business, and holding on to dead inventory is a serious problem for companies across a variety of industries.
We have $120k in dead Texas Snax inventory that we now plan to offload on WhatNot. We’re already selling below cost, so why not try this? We have over 100k emails that we could drive to their platform as well.
Conclusion
This was a fun rabbit hole, and I hope you enjoyed it as much as I did.
Shaan Puri once said “I’d rather be known well than well known,” and that immediately resonated with me. My goal for both X and this newsletter is to pull back the curtain a bit on what I’m working on and what’s going on in my life and mind. That’s the extent of the strategy. I don’t know what it’ll lead to, but I like where it’s going so far.
Let me know if you ever end up doing something here.
How was today's email? Be honest. Click once & be done.
Meh.
Pretty good.
REALLY freaking good.
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What I’m working on.
I’ve got an idea for a post tomorrow that MIGHT go viral. We’ll just have to see…
Much like last week, I’m spending a lot of time on Texas Snax stuff, but I expect that to clear up next week now that the shipping deadline is over. We’re about to more than double our previous best month ever, while still leaving a ton of growth levers left to pull. I went to the warehouse last night and packed orders until 11pm, and that was a blast. I hadn’t done that in literally years, and it gave me a deep appreciation for the people that work for me.
One kid came up and showed me pics of some shirts he’s designing and asked for ideas on how to sell them. I love those conversations so much!
I’m heading to Portland tomorrow to go crabbing and skiing with my 9 year old, and we are both stoked for that.
I’ve got a couple stealth startups I’m working on that are showing some good signs of life. Hopefully those merit a mention here soon.
I’m also working on 2 different MHP consulting projects for people that came from X, and both are going super well. I often get FOMO about not having a massive MHP fund, but I also feel like I’m on the right path. The fund route just doesn’t excite me very much.
As always, thanks for giving me 5-10 minutes of your time every week. Have a great weekend.
Chris Koerner
chrisjkoerner.com