From eBay Seller to Software Entrepreneur: Seller Labs CEO Paul Johnson (Part 5)

Sramana Mitra: What was the trajectory of the revenue growth? How did you do year after year?

Paul Johnson: 2011 was when we first started doing this. In our first year, which was not a full year, we probably sold $50,000 worth of merchandise. Then in 2012, we were around half a million dollars.

By 2013, we were over a million. By 2014, we were starting to shut the business down. That was when the auction went online. It was time to move on. The next would be the software.

Sramana Mitra: What year is that?

Paul Johnson: 2013. It was overlapping with the auction business. We launched Seller Labs in 2013. We had built all this software, and we decided to release it to the world.

Something very interesting was happening during this time. A lot of people in the e-commerce space were leveraging Amazon’s fulfillment. We started leveraging that.

My business partner and his brother bought a different business that was selling just one SKU and was making a million dollars a year on Amazon. They would get their own branded item. They were the manufacturer and the brand owner. They would go direct-to-consumer on Amazon.

We took our software and released it. We also started liquidating our inventory in our warehouses. We sold the inventory and sold the remaining inventory for pennies on the dollar. We closed the warehouse by 2014. We were officially doing software. We moved to an official office.

We still had physical product brands, but instead of having a warehouse and a team, we were getting stuff manufactured in China or US and having them shipped directly to Amazon fulfillment centers. We were focused on one SKU. The game became how to get reviews and SEO for this product.

In our first year, we did $4,000 a month. In our second year, we were doing $40,000 a month. In our third year, we closed at just over $400,000 in MRR. By 2016, we were about $550,000 in MRR. I exited that in 2017 and spun out one of our products [Snagshout].

When I exited, Seller Labs was doing about $600,000 a month. The year after I left, it was at No. 148 on the Inc 500. Last year, it was on the Inc 5000 as well. It was a software business to support Amazon merchants. The path was Amazon. They’re controlling 49% of the product searches. We grew up as business owners I guess.

In the early days, I was just a kid trying to figure out how to hustle and make money. The focus then became software and physical product brands. I have a physical product brand now that we launched on Amazon. We just signed a distribution deal with Walmart to be in 1,600 stores as well. That’s where the focus switched. 

Sramana Mitra: Interesting. Where are you now revenue-wise?

Paul Johnson: Our new company’s revenue is about $50,000. 

Sramana Mitra: How about the e-commerce business? What level did it reach?

Paul Johnson: The e-commerce business did a million in sales last year and about $1.2 million this year. Seller Labs is at $6 million.

Sramana Mitra: When did you sell Seller Labs?

Paul Johnson: 2017.

Sramana Mitra: I’m confused about this.

Paul Johnson: We started off with guitars and then moved to everything under the sun. That did a couple of million a year. We moved to software. That was in 2013. In 2013, we did $4,000 in MRR. By 2014, we did $40,000 MRR. When I sold Seller Labs, we were doing over $6 million a year. 

Sramana Mitra: What software was that?

Paul Johnson: That was software to help people sell online. We help people do Amazon and sell on Amazon.

Sramana Mitra: Whom did you sell out to?

Paul Johnson: To my business partners.

Sramana Mitra: Thank you for your time.

This segment is part 5 in the series : From eBay Seller to Software Entrepreneur: Seller Labs CEO Paul Johnson
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