Danil Shuvalov and Gasan Mustafaev, are two Russian online entrepreneurs who left affiliate marketing after enduring losses of over $180 000 and opened up a business that would buy and sell high-end products on marketplace websites. Their business now has a yearly turnover of about $45 000 000.
In this article, we have collected the most intriguing remarks from Danil and Gasan in an interview with Nikita Anufriev, a popular YouTuber.
They talked about the;
- The business journey of entrepreneurs
- How the guys started making money on their high-end products buy-and-sell business on different marketplaces
- What is the meaning of social connections and how to build them
- The business model of Danil and Gasan's company
- About losing money in business
- Why do successful millionaires need to constantly learn, and other interesting points about making money with marketplaces.
How Danil Got into the Buy-and-Sell Business
At the beginning of his career, Danil Shuvalov worked as an affiliate and he tried almost all affiliate marketing verticals. He said that he started by promoting toy offers, then he switched to crypto, dating, and more. In the end, he decided to begin a buy-and-sell business that listed different goods on the marketplaces. created affiliate programs with offers that other affiliate marketers and affiliate networks would promote.
"The advantage of a marketplace is that it allows you to turn around huge budgets every 3-5 days. Your capital increases within a few days if you are simply engaged in buying and selling goods.", Danil says.
Danil began to make money with affiliate marketing while still at school. By the time he finished school, Danil had made over $18 000 at the age of 15, making him a rich young man.
Despite his age, he did not spend money carelessly like many of his colleagues would instead he saved and built up his fortune. Shuvalov decided to start investing after realizing that money should work to make more money, and he did that through investments.
Danil
Investments
Danil began to invest in IPOs. One of his first investment projects was Freedom Finance, in which, according to him, his investments have kept doubling every year. He also bought shares from BCS. He says that these investments are now in negatives, but he hopes that in 3 years, there will be a profit.
However, Danil wasn’t satisfied with making such investments because they were slow money and he had less control of the profits. So at this point, he made the decision to invest in starting a huge company where he could foresee and control profits.
Transitioning to Marketplaces
Danil started the business with his friend Gasan a year and a half ago, engaging in wholesale and retail trade of high-end products in their own marketplace business. Things went well for the guys as the company's turnover last year amounted to more than 2.5 billion rubles ($45 000 000). For the current year, the two businessmen say that they aim to increase their company's turnover to 7 billion rubles ($126 000 000).
They attribute their success to the fact that Gasan had already established an offline trading company and established business operations by the time they began their joint ventures. Danil joined him and brought his online marketing firm, which significantly increased revenues.
Gasan
Structure of the Company
The marketplace business of Daniel and Gasan is built on the buying and reselling of highly profitable goods. The guys have a number of supply and distribution points, and the company's operating activities are:
- The logistics procedure (The movement of goods along the supply chain; from the supplier to the warehouse to the consumer)
- Accounting and storage of goods
- Marketing and attracting customers
The team's own IT system constantly monitors the offers of competitors for the goods they sell and also keeps track of the top products in various categories. Due to the fact that the guys have a large sales turnover and excellent business relations with distributors, they get a big discount from them and can offer the consumer a cheaper price than competitors.
"Our principle is that we must reinvest a certain percentage of profit. We load back this percentage into our software development and get data on how much goods need to be purchased in order to sell it all, for example, in 1 month", Gasan said.
In general, the business process can be described as follows:
- The software analyzes and displays the most demanded products on the market;
- The software parses the prices of competitors and gives out the cost for which it is advisable to sell a particular product;
- Company analysts and top management agree on an acceptable margin for a specific product;
- The software calculates the number of goods that must be purchased for its implementation within a certain period.
In addition to these functions, the software developed by the team analyzes the market of goods sold 24/7.
Gasan gave the following example of how the software works:
- One of the big wholesalers decided to have a warehouse sale at night;
- Set a price that, according to the margin criteria, suits the company;
- The software identifies this product and instantly orders the entire batch or a certain, necessary, part of it;
- The software immediately places the ordered goods on all the marketplaces with which the company works.
Thus, the company quickly responds to market conditions and, thanks to its own software, makes profitable deals for itself.
Scaling the Business
Entrepreneurs plan to create their own marketplace for this year. Danil and Gasan see the creation of their ecosystem from a global perspective. It will include, in addition to wholesale and retail trade on the new marketplace, a car rental service, the sale of exclusive goods, and so on.
The guys started their business with the usual “buy-sell,” but today the company has its warehouses, a logistics system has been built, and all business processes are automated.
However, to a greater extent, entrepreneurs evaluate their business as an IT company since it is the presence of their software that allows the business to scale exponentially.
About Motivation and Networking
Danil admitted that he had a fleet of expensive cars and an apartment in one of the new prestigious Moscow buildings. There are benefits of the material world that motivate him but the pleasure is in the drive, the constant desire for success, and the contemplation of the results of their activities.
Danil is motivated by networking with interesting people who have achieved something significant in life.
"Communicating with a person who, for example, bought a large amount of bitcoins at $500 apiece a few years ago, I understand that he could know for sure that the crypto would grow like this — so he has great business intuition. It’s cool to communicate with such people, and they motivate me a lot," Danil said.
About Big Money Losses
Daniil made his first big money on affiliate marketing. Some of the affiliate offers he promoted could make him a ton of profits in a few hours and up to today, they are still being run by his company's marketing wing. The entrepreneur gained experience in long-term investments from the moment of buying shares. In his case, this experience turned out to be negative.
The biggest monetary loss, according to Danil, was the investment of a large amount in USDT. The total loss from investing in this stablecoin is equivalent to one of the entrepreneur’s fleet of supercars.
Ambition
Big money didn't make Gasan and Daniel want to sit on their thrones and think it's all done. The lads still had huge ambitions. We've already mentioned that entrepreneurs' ultimate goal is to build a complete ecosystem around their marketplace. Let us add that they have expressed their desire to compete not only with domestic big businesses, but also with global powerhouses like Amazon, eBay, and others.
The guys believe that great aspirations cannot be achieved without consistent training. As a result, they are always learning new things, not only in business but also in other areas of life.
How Much Can You Earn on Marketplaces Today if You Start from Scratch?
Danil and Gasan claim that the average investment turnover is 4-5 days. But it should be understood that many factors influence this figure. Of course, the overall level of earnings on marketplaces depends on the initial investment. According to Gasan, a newbie can earn between 10% and 20% of the amount invested in the purchase of goods.
Conclusion
Businesses are always on a two-dimensional scale, with risk on one side and profit on the other. This story of these entrepreneurs may inspire many aspiring entrepreneurs to attain their objectives, which do not have to be in the buy-and-sell business.
Affiliates looking to expand their businesses might also benefit from Daniil and Gasan's experience.
